AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 6, 1997
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------------
FORM S-3
REGISTRATION STATEMENT
Under
The Securities Act of 1933
--------------------------
SOUTHERN ENERGY HOMES, INC.
(Exact Name Of Registrant As Specified In Its Charter)
DELAWARE 63-1083246
(State Or Other Jurisdiction Of (I.R.S. Employer
Incorporation Or Organization) Identification Number)
HIGHWAY 41 NORTH, P.O. BOX 390, ADDISON, ALABAMA 35540 (205) 747-8589
(Address, Including Zip Code, And Telephone Number, Including
Area Code, Of Registrant's Principal Executive Offices)
--------------------------
PAUL J. HARTNETT, JR., ESQUIRE
BROWN, RUDNICK, FREED & GESMER
ONE FINANCIAL CENTER, BOSTON, MASSACHUSETTS 02111
(617) 856-8200
(Name, Address, Including Zip Code, And Telephone Number,
Including Area Code, Of Agent For Service)
--------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, check the following box.[ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. |X|
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
check the following box. [ ]
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
===============================================================================================================================
Proposed Proposed
Amount Maximum Maximum Amount of
Title of Each Class of to Be Offering Price Aggregate Registration
Securities to Be Registered Registered Per Share(1) Offering Price(1) Fee
- ------------------------------------- --------------------- ---------------------- ----------------------- --------------------
<S> <C> <C> <C> <C>
Common Stock, $ .0001 par value 347,070 Shares $9.93 $3,446,405.10 $1,044.36
===============================================================================================================================
</TABLE>
(1) Estimated solely for the purpose of determining the registration fee
pursuant to Rule 457(c) under the Securities Act of 1933. Based upon the average
of the high and low price of the Common Stock as reported on the Nasdaq National
Market on August 4, 1997
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
================================================================================
SUBJECT TO COMPLETION, DATED AUGUST 6, 1997
PROSPECTUS
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347,070 SHARES
SOUTHERN ENERGY HOMES, INC.
COMMON STOCK
--------------------
All of the 347,070 shares of Common Stock (the "Common Stock") of Southern
Energy Homes, Inc. (the "Company") covered by this Prospectus are issued and
outstanding shares which may be offered and sold, from time to time, by certain
stockholders of the Company (the "Selling Stockholders"). See "Selling
Stockholders."
The Common Stock of the Company is traded on the Nasdaq Stock Market's
National Market System under the symbol "SEHI." On August 4, the last reported
sale price on the Nasdaq National Market for the Common Stock was $9.75 per
share.
The Selling Stockholders have advised the Company that they may sell, from
time to time, all or part of the shares covered by this Prospectus through any
of several methods, including ordinary brokerage transactions or block
transactions on the Nasdaq National Market at market prices, or in privately
negotiated transactions at prices agreed upon by the parties. See "Plan of
Distribution."
The Company will not receive any proceeds from the sale of the shares
covered by this Prospectus. The Company will bear all expenses incurred in
effecting the registration of such shares, including all registration and filing
fees, and legal and accounting fees for counsel to the Company. The Selling
Stockholder will bear all brokerage or underwriting expenses or commissions, if
any, applicable to the shares.
-------------
SEE "RISK FACTORS" BEGINNING ON PAGE 3 FOR A DISCUSSION OF CERTAIN FACTORS
RELEVANT TO AN INVESTMENT IN THE SHARES OF COMMON STOCK.
-------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE
The date of this Prospectus is August __, 1997.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information filed by the Company can be inspected and
copied at the public reference facilities maintained by the Commission at 450
Fifth Street, NW, Room 1024, Judiciary Plaza, Washington, D.C. 20549, and at the
Commission's Regional Offices at Citicorp Center, 500 West Madison Street, Suite
1400, Chicago, Illinois 60661 and 7 World Trade Center, Suite 1300, New York,
New York 10048, at prescribed rates. In addition, such reports, proxy statements
and information are available through the Commission's Electronic Data Gathering
and Retrieval System at http:// www.sec.gov. The Company's Common Stock is
listed on the Nasdaq National Market, and reports, proxy statements and certain
other information concerning the Company can also be inspected at the offices of
Nasdaq Operations, 1735 K Street NW, Washington, D.C. 20006.
The Company has filed with the Commission a Registration Statement on
Form S-3 under the Securities Act of 1933 with respect to the Common Stock being
offered hereby. This Prospectus, which constitutes a part of the Registration
Statement, does not contain all of the information set forth in such
Registration Statement and the exhibits and schedules thereto to which reference
is hereby made. The statements in this Prospectus as to the contents of such
Registration Statement are qualified in their entirety by such reference. The
Registration Statement, together with its exhibits and schedules, may be
inspected without charge at the Public Reference Section of the Commission in
Washington, D.C. at the address noted above, and copies of all or any part
thereof may be obtained from the Commission upon payment of the prescribed fees.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission pursuant to the
Exchange Act are incorporated herein by reference: (1) the Company's Annual
Report on Form 10-K for the fiscal year ended January 3, 1997; (2) the Company's
Quarterly Report on Form 10-Q for the fiscal quarter ended April 4, 1997; (3)
the Company's Proxy Statement used in connection with the Company's Annual
Meeting of Stockholders held on June 4, 1997; (4) the Company's final prospectus
dated October 30, 1995 and filed pursuant to Rule 424 under the Securities Act
of 1933, as amended; and (5) the description of the Company's Common Stock
contained in the Company's Registration Statement on Form 8-A, originally filed
with the Commission on February 8, 1993, as amended on March 10, 1993.
All reports and other documents subsequently filed by the Company
pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the
date of this Prospectus and prior to the termination of the offering of the
Common Stock hereunder shall be deemed to be incorporated by reference herein
and to be a part hereof from the date of the filing of such reports and
documents. The Company will furnish without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, upon written or oral
request of such person, a copy of any or all of the documents referred to above,
excluding exhibits thereto. Requests for such documents should be submitted in
writing to the Corporate Secretary at the corporate headquarters of the Company
at Highway 41 North, P.O. Box 390, Addison, Alabama 35540, or by telephone at
(205) 747-8589.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein,
or in any other subsequently filed document that also is (or is deemed to be)
incorporated by reference herein, modifies or supersedes such statement. Any
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of the Registration Statement or this
Prospectus.
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No dealer, salesman or any other person has been authorized to give any
information or to make any representations other than those contained in this
Prospectus in connection with the offering described herein, and, if given or
made, such information or representations must not be relied upon as having been
authorized by the Company or the Selling Stockholder. This Prospectus does not
constitute an offer to sell or a solicitation of an offer to buy any securities
other than those specifically offered hereby or of any securities offered hereby
in any jurisdiction to any person to whom it is unlawful to make an offer or
solicitation in such jurisdiction. Neither the delivery of this Prospectus nor
any sale made hereunder shall, under any circumstances create an implication
that the information herein is correct as of any time subsequent to its date.
-2-
THE COMPANY
The Company is a producer of manufactured homes sold primarily in the
southeastern and south-central United States. The Company operates ten
manufacturing facilities (seven in Alabama, one in Texas, one in Pennsylvania
and one in North Carolina) to produce homes sold in 30 states. The Company's
homes are sold under six brand names through approximately 465 independent
dealers at approximately 859 independent dealer locations and through twelve
Company-owned retail centers.
The Company was incorporated in Alabama in February 1982 and
reincorporated in Delaware in January 1993. The Company's principal executive
offices are located at Highway 41 North, Addison, Alabama 35540 and its
telephone number is (205) 747-8589.
RISK FACTORS
In addition to the other information contained in this Prospectus, the
following factors should be considered carefully in evaluating the Company and
its business before purchasing any of the shares of Common Stock offered hereby.
THE MANUFACTURED HOUSING MARKET AND EFFECTS OF CHANGES IN ECONOMIC
CONDITIONS. The manufactured housing market is highly cyclical and seasonal and
is affected to some extent by the same economic factors which impact the broader
housing market. Historically, most sectors of the home-building industry have
been affected by, among other things, changes in general economic conditions,
levels of consumer confidence, employment and income, housing demand,
availability of financing and interest rate levels.
AVAILABILITY OF HOME BUYER FINANCING. Home buyers normally secure
financing from third-party lenders. The availability, interest rates and other
costs of such financing are important to the Company's sales and are dependent
on the lending practices of financial institutions, governmental policies and
other conditions, all of which are beyond the control of the Company. Interest
rates for manufactured home loans are generally higher and the terms of the
loans shorter than for site-built home loans. The Company has a wholly owned
finance subsidiary, Wenco Finance, Inc. ("Wenco"), which, until February 1997,
had been originating and servicing consumer loans primarily for homes
manufactured by the Company. In February 1997, the Company formed a joint
venture with 21st Century Mortgage Corporation ("21st Century"). The joint
venture, Wenco 21, will continue to offer, through 21st Century, consumer
financing for homes manufactured by the Company, as well as for other homes sold
through its retail centers and independent dealers. In light of the shift in
consumer financing activities to Wenco 21, Wenco has suspended its loan
origination activities. There can be no assurance that Wenco 21 will be able to
provide significant levels of financing for home buyers or that such financing
activities will not adversely impact the Company's profitability.
AVAILABILITY AND PRICING OF RAW MATERIALS. The Company's costs of
operations can be significantly affected by the availability and pricing of raw
materials. While the Company has not experienced any shortages in raw materials,
lumber prices are volatile and are subject to increase on short notice.
Historically, the Company has been able to adjust its prices to reflect a
significant portion of these cost increases, but increases in costs cannot
always be reflected in the Company's prices, and consequently may adversely
impact the Company's profitability.
FOCUS ON SOUTHEASTERN AND SOUTHCENTRAL MARKETS. The Company's primary
market areas are the southeastern region (which includes the states of Florida,
Georgia, North Carolina, South Carolina, Virginia and West Virginia) and the
southcentral region (which includes the states of Alabama, Arkansas, Kentucky,
Louisiana, Mississippi, Missouri, New Mexico, Oklahoma, Tennessee and Texas).
While the Company believes that these two regions historically have been strong
regions for the manufactured housing industry, demographic factors and economic
conditions affecting these regions, such as a decline in employment in the
manufacturing, mining, agricultural, and oil industries, may adversely affect
the Company's sales.
EXECUTION OF EXPANSION PLANS. A significant portion of the Company's
anticipated growth in sales and operating profit is predicated on its expansion
plans. Management believes that sales growth can be achieved by increasing the
Company's presence in its existing geographic markets and by expanding its
market area through the acquisition and development of new retail centers. The
ability of the Company to implement its expansion plans will depend upon the
adequacy of its capital resources, management's ability to oversee expanded
operations, the availability of suitable retail sites
-3-
within the Company's targeted market areas, and general economic conditions. No
assurance can be given that sufficient demand will exist for the Company's
products following such expansion or that these expansion plans will otherwise
be carried out successfully.
LABOR. The ability of the Company to increase its production capacity
is dependent on the availability of semi-skilled workers. If the Company should
need to increase its production capacity, there can be no assurance that the
supply of semi-skilled workers in the geographic areas in which the Company's
facilities are located will be sufficient to permit the Company to do so.
QUARTERLY EARNINGS FLUCTUATIONS. The Company's quarterly earnings are
affected by, among other factors, seasonality in the Company's business, adverse
weather conditions, the timing of new facility openings and the timing of
large-quantity orders from outside the dealer network, which may be received
from time to time. The seasonality of the Company's earnings reflects the buying
patterns of manufactured home buyers, whose purchases generally occur between
April and September. In addition to seasonal fluctuations, the Company's
quarterly earnings fluctuate significantly based on the timing of new facility
acquisitions and large-quantity orders from outside the dealer network.
DEPENDENCE ON KEY PERSONNEL. The Company is dependent upon its senior
management and, in particular, upon its founder, Wendell L. Batchelor. The loss
of the services of any of the Company's executive officers could adversely
affect the Company.
COMPETITION. The manufactured housing industry is highly competitive at
both the manufacturing and retail levels, and the capital requirements for entry
are relatively small. Competition is based upon numerous factors, including
total price to the dealer, customization to homeowner's preferences, product
features, quality, warranty repair service and the availability and terms of
dealer and retail customer financing. The Company does not view any of its
competitors as being dominant in the industry. However, a number of the
Company's competitors are larger than the Company and possess greater
manufacturing and financial resources. In addition, there are numerous firms
producing manufactured homes in the southeastern and southcentral United States,
many of which are in direct competition with the Company in the states where its
homes are sold. Manufactured homes also compete with apartments, townhouses,
condominiums and site-built homes. Certain of the Company's competitors provide
customers with financing from captive finance subsidiaries. While the Company
believes consumer financing has generally become more available in the
manufactured housing industry in recent years, and although the Company has
recently formed its Wenco 21 joint venture to provide consumer financing through
21st Century Mortgage Corporation, a contraction in consumer credit could
provide an advantage to those competitors with established internal financing
capabilities.
REGULATION. Manufactured homes are subject to a variety of federal,
state and local laws. The National Manufactured Home Construction and Safety
Standards Act of 1974 and regulations promulgated by the Department of Housing
and Urban Development ("HUD") thereunder impose comprehensive national
construction standards for manufactured homes. Failure to comply with the HUD
regulations could expose the Company to a wide variety of sanctions, including
the closing of the Company's plants. Certain components of manufactured homes
are subject to regulation by the Consumer Product Safety Commission. Some states
require that manufactured home producers post bonds to ensure the satisfaction
of consumer warranty claims. The description and substance of the Company's
warranties are also subject to a variety of federal and state laws and
regulations. Manufactured homes are also subject to other state and local
regulations, including local zoning restrictions. In addition, the Company's
trucking and finance subsidiaries, MH Transport, Inc. and Wenco, and Wenco 21,
the Company's new finance joint venture, are subject to a variety of federal and
state laws and regulations. Failure to comply with any of these laws or
regulations could have a material adverse effect on the Company's business and
results of operations.
DIVIDENDS. The Company does not intend to pay cash dividends in the
foreseeable future. The Company intends to retain any earnings for use in the
operation and expansion of its business.
POSSIBLE VOLATILITY OF STOCK PRICE. The Common Stock of the Company is
quoted on the Nasdaq National Market. However, there can be no assurance that,
following this offering, a regular trading market for the Common Stock will be
sustained. The market price of the Common Stock could be subject to significant
fluctuations in response to variations in quarterly operating results and other
factors. In addition, the stock market in recent years has experienced extreme
price and
-4-
volume fluctuations that often have been unrelated or disproportionate to the
operating performance of companies. These broad fluctuations may adversely
affect the market price of the Common Stock.
CONTINGENT REPURCHASE LIABILITY WITH RESPECT TO INDEPENDENT DEALER
FINANCING. Substantially all of the Company's independent dealers finance their
purchases through "floor plan" arrangements under which a financial institution
provides the dealer with a loan for the purchase price of the home, and
maintains a security interest in the home as collateral. In connection with a
floor plan arrangement, the financial institution which provides the independent
dealer financing customarily requires the Company to enter into a separate
repurchase agreement with the financial institution under which the Company is
obligated, upon default by the independent dealer, to repurchase the homes at
the Company's original invoice price plus certain administrative and shipping
expenses. At April 4, 1997, the Company's contingent repurchase liability under
floor plan financing arrangements was approximately $91.2 million. While homes
that have been repurchased by the Company under floor plan financing
arrangements are usually sold to other dealers and losses experienced to date
under these arrangements have been insignificant, no assurance can be given that
the Company will be able to sell to other dealers homes which it may be
obligated to repurchase in the future under such floor plan financing
arrangements or that the Company will not suffer losses with respect to, and as
a consequence of, those arrangements.
LEGAL PROCEEDINGS. The Company is the defendant in a lawsuit filed on March
27, 1996 in Fulton County Superior Court, Georgia by EurAm International, Inc.,
a former sales agent for the Company. On April 29, 1996 the Company removed the
case to the United States District Court for the Northern District of Georgia in
Atlanta. In this lawsuit, the plaintiff alleges that the Company has caused a
breach to a written agreement relating to the sale of the Company's modular
homes in Germany, including alleged misrepresentations and faulty performance,
resulting in damages alleged to amount to $25 million. The Company believes the
claim is without merit and intends to vigorously defend the claim, but the
litigation is currently in discovery and there can be no assurances as to its
likely outcome.
In addition, the Company has been informed by Gesellschoft fur Bauen
Und Wohnen Hannover MbH ("GBH"), a German housing authority, that it has
replaced the Company with a local company to complete a contract that GBH had
entered into with the Company for the purchase and erection of modular housing
in Hannover, Germany. In connection with the contract, the Company posted a
$660,000 letter of credit in favor of GBH. In March 1997, GBH made a claim
against the Company for damages of approximately $800,000 arising from the shift
in suppliers and has attempted to draw upon the letter of credit posted by the
Company. The Company has obtained a temporary restraining order preventing GBH
from drawing upon the letter of credit and the Company is actively negotiating
with GBH to resolve the dispute. There can be no assurances as to the likely
resolution of the GBH claim.
RELIANCE ON INDEPENDENT DEALERS. The Company sells manufactured homes
through approximately 465 independent dealers at approximately 859 independent
dealer locations and through twelve Company-owned retail centers. The Company
believes that the quality of its independent dealer network has been important
to the Company's performance. The Company does not have formal marketing or
other agreements with its dealers, and substantially all of the Company's
dealers also sell homes of other manufacturers. While the Company believes its
relations with its independent dealers are good, no assurance can be given that
the Company will be able to maintain these relations or that these dealers will
continue to sell the Company's homes.
CERTAIN ANTI-TAKEOVER PROVISIONS AFFECTING STOCKHOLDERS. The Board of
Directors has the authority to issue up to 1,000,000 shares of Preferred Stock
in one or more series and, with respect to each series, to fix and determine,
among other things, (i) its dividend rate; (ii) its liquidation preference;
(iii) whether or not such shares will be convertible into or exchangeable for
any other securities or property; and (iv) whether or not such shares will have
voting rights and, if so, the conditions under which said shares will vote as a
separate class. The Company has no current plans to issue Preferred Stock for
any purpose. However, were it inclined to do so, the Board of Directors could
issue all or part of the Preferred Stock with (among other things) substantial
voting powers or advantageous conversion rights. Such stock could be issued to
persons deemed by the Board of Directors likely to support current management in
a contest for control of the Company, either as a precautionary measure or in
response to a specific takeover threat.
Further, provisions of the Company's Certificate of Incorporation and
By-Laws may make a takeover attempt more difficult and therefore may diminish
the likelihood that a potential acquirer would launch such an attempt even if in
a particular case it would be beneficial to the stockholders.
-5-
USE OF PROCEEDS
The proceeds from the sale of the shares of Common Stock offered hereby
will be the property of the Selling Stockholder and will be used by them in
their discretion. No part of the proceeds will be received by the Company.
SELLING STOCKHOLDERS
The Company issued the shares of Common Stock being offered hereby to
the Selling Stockholders as partial consideration for the acquisition by the
Company of BR Holding Corp., of which the Selling Stockholders were the
stockholders. As a result of the acquisition, BR Holding Corp. is now a
wholly-owned subsidiary of the Company. The Company is obligated, under that
certain Agreement and Plan of Reorganization dated November 21, 1996, pursuant
to which the Company acquired BR Holding Corp., to register the shares offered
hereby under the Securities Act of 1933, as amended, for resale by the Selling
Stockholders. The following table sets forth (i) the number of shares of Common
Stock beneficially owned by each of the Selling Stockholders as of June 23, 1997
and (ii) the number of shares of Common Stock that may be offered by each of the
Selling Stockholders under this Prospectus. This information is based upon
information received from or on behalf of the Selling Stockholders.
<TABLE>
<CAPTION>
NUMBER OF
SHARES
NUMBER OF SHARES BENEFICIALLY WHICH MAY BE
NAME OF BENEFICIAL OWNER OWNED PRIOR TO OFFERING OFFERED(1)
- ------------------------- ----------------------- ----------
<S> <C> <C>
W. Thomas Deas 187,201 187,201
W. David Deas 55,607 55,607
James Miller Deas 31,085 31,085
J.M. Deas, Jr. 16,578 16,578
James M. Moore, III 36,133 36,133
Thomas Deas, Jr. 16,924 16,924
Gregory C. Vogel 3,542 3,542
</TABLE>
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(1) Assumes the sale of all shares of Common Stock registered hereunder.
See "Plan of Distribution."
PLAN OF DISTRIBUTION
The price and manner of sale of the shares of Common Stock to be
offered hereunder are in the sole discretion of the Selling Stockholders. The
shares of Common Stock offered hereby may be offered through any of several
methods, such as ordinary brokerage transactions or block transactions on the
Nasdaq National Market at market prices, or in privately negotiated transactions
at prices agreed upon by the parties. Neither the Company nor, to the knowledge
of the Company, any of the Selling Stockholders has any agreement, arrangement
or understanding with any broker or dealer entered into prior to the effective
date of the Registration Statement of which this Prospectus is a part with
respect to the sale of the Common Stock offered hereby.
-6-
MATERIAL CHANGES
For the quarter ended July 4, 1997, total net revenues were $76.9
million, or 9% below analysts estimates, a decrease of 8% from the $83.9 million
in total net revenues for the same period of 1996. Total manufacturing revenues,
including retail revenues, for the second quarter was $76.2 million, or 9% below
analysts estimates, a decrease of 9% from the $83.4 million in total
manufacturing revenues for the same period of 1996. Excluding retail sales,
manufacturing revenues for the second quarter were $64.5 million, or 8.3% below
analysts estimates, compared to $83.8 million for the same period in 1996, a
decrease of 23%. The decline in total revenue is attributable to a decrease in
manufacturing revenues related to reduced shipments, partially offset by retail
sales attributable to the Company's newly acquired retail operations. Total
homes sold in the second quarter of 1997 were 2,403, down 21% from the same
period of 1996. Excluding a $2.1 million non-recurring charge, net income for
the second quarter of 1997 was $3.2 million, or $0.21 per share, which was 22%
below analysts estimates, as compared with a net income of $4.4 million, or
$0.29 per share in the same period of 1996. Net income for the second quarter,
including the $2.1 million non-recurring charge, was $1.8 million, or $0.12 per
share. The decline in the Company's net income was attributable to both the
decline in manufacturing revenues and the non-recurring charge. The $2.1 million
non-recurring charge is associated with the closing of the Company's
manufacturing facility located in Pennsylvania, which the Company plans to close
at the end of the third quarter because such facility is not performing up to
the Company's expectations. During the twenty-six weeks ended July 4, 1997,
revenues from the Pennsylvania facility were approximately $2.2 million and
operating losses were approximately $900,000, excluding the $2.1 million
nonrecurring charge.
For the twenty-six weeks ended July 4, 1997, total net revenues were
$157.0 million, an increase of 1% over the $155.0 million in net revenues for
the same period of 1996. The increase in total revenues was attributable to our
newly acquired retail operation, offset by a decrease in revenues from
manufacturing operations. Total homes sold in the first twenty-six weeks were
4,919, down 13% from 5,650 homes sold during the same period of 1996. Excluding
the $2.1 million non-recurring charge, net income in the first twenty-six weeks
was $6.9 million, or $0.45 per share, down 10% from net income of $7.7 million,
or $0.51 per share in the same period of 1996. Net income, including the $2.1
million non-recurring charge, was $5.6 million for the current year twenty-six
week period. The decline in the Company's net income was attributable to both
the decline in manufacturing revenues and the $2.1 million non-recurring charge.
The Company notes that low backlogs due to increased capacity and higher
inventory levels make it difficult to accurately predict at this time whether
the Company will be able to meet previous projections for manufacturing revenues
and net income for the full 1997 fiscal year.
The Company also announced that through July 22, 1997 it has repurchased
485,000 shares of its common stock since the inception of the 2.0 million shares
buyback program announced April 24, 1997. Approximately $4.4 million has been
expended for these shares.
This Prospectus contains forward-looking statements within the meaning
of the Securities Exchange Act of 1934. These statements reflect the Company's
current view with respect to future events and financial performance. Investors
are cautioned that such forward-looking statements involve risks and
uncertainties, including without limitation: the cyclical and seasonal nature of
housing markets; the availability of financing for prospective purchasers of the
Company's homes; the amount of capital that the Company may commit to its Wenco
21 joint venture to make available consumer loans; the performance of the loans
held by the Company's finance subsidiary; the availability and pricing of raw
materials; the concentration of the Company's business in certain regional
markets; the Company's ability to execute and mange its expansion plans; the
availability of labor to implement those plans; the highly competitive nature of
the manufactured housing industry; Federal, state and local regulation of the
Company's business; the Company's contingent repurchase liabilities with respect
to independent dealer financing; the Company's reliance on independent dealers;
and other risks indicated from time to time in the Company's filings with the
Securities and Exchange Commission.
LEGAL MATTERS
The validity of the securities offered hereby has been passed upon for
the Company by Messrs. Brown, Rudnick, Freed & Gesmer, One Financial Center,
Boston, Massachusetts 02111.
EXPERTS
The audited Consolidated Financial Statements and schedules included or
incorporated by reference in this Prospectus and elsewhere in the Registration
Statement have been audited by Arthur Andersen LLP, independent public
accountants, as indicated in their report with respect thereto, and are included
or incorporated by reference herein in reliance upon the authority of said firm
as experts in giving said reports.
-7-
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION Set forth below is an
estimate of the fees and expenses payable in connection with the distribution of
the Common Stock which will be paid by the Company.
SEC Registration Fee................................ $ 1,044.36
Accounting Fees and Expenses........................ 2,000.00*
Legal Fees and Expenses............................. 10,000.00*
Miscellaneous....................................... 405.64*
------------
TOTAL........................................... $13,450.00*
- --------------------
* Estimated
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Article ELEVENTH of the Certificate of Incorporation of the Company
provides as follows:
No director shall be personally liable to the corporation or
its stockholders for monetary damages for breach of fiduciary duty as a
director notwithstanding any provision of law imposing such liability;
provided, however, that, to the extent provided by applicable law, this
provision shall not eliminate the liability of a director (i) for any
breach of the director's duty of loyalty to the corporation or its
stockholders, (ii) for acts or omissions not in good faith or which
involves intentional misconduct or a knowing violation of law, (iii)
under Section 174 of the General Corporation Law of Delaware, or (iv)
of any transaction from which the director derived an improper personal
benefit.
Section 145 of the General Corporation Law of the State of Delaware
permits the indemnification and insurance of the Company's directors and
officers under certain circumstances.
In addition, Article 10 of the By-Laws of the Company provides as
follows:
ARTICLE 10
INDEMNIFICATION
Section 10.1 Third Party Actions. The Corporation shall
indemnify any person who was or is a party or is threatened to be made
a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the Corporation) by reason
of the fact that he is or was a Director, officer, employee or agent of
the Corporation, or is or was serving at the request of the Corporation
as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against expenses
(including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with
such action, suit or proceeding if he acted in good faith and in a
manner he reasonably believe to be in or not opposed to the best
interests of the Corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was
unlawful. The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon plea of nolo
contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner
which he reasonably believed to be in or not opposed to the best
interests of the Corporation, and,
II-1
with respect to any criminal action or proceeding, had reasonable cause
to believe that his conduct was unlawful.
Section 10.2 Derivative Actions. The Corporation shall
indemnify any person who was or is a party or is threatened to be made
a party to any threatened, pending or completed action or suit by or in
the right of the Corporation to procure a judgment in its favor by
reason of the fact that he is or was a Director, officer, employee or
agent of the Corporation, or is or was serving at the request of the
Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise
against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection with the defense or settlement of such
action or suit if he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the
Corporation and except that no indemnification shall be made in respect
of any claim, issue or matter as to which such person shall have been
adjudged to be liable for negligence or misconduct in the performance
of his duty to the Corporation unless and only to the extent that the
Court of Chancery or the court in which such action or suit was brought
shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, such person
is fairly and reasonably entitled to indemnity for such expenses which
the Court of Chancery or such other court shall deem proper.
Section 10.3 Expenses. To the extent that a Director, officer,
employee or agent of the Corporation has been successful on the merits
or otherwise in defense of any action, suit or proceeding referred to
in Sections 10.1 and 10.2, or in defense of any claim, issue or matter
therein, he shall be indemnified against expenses (including attorneys'
fees) actually and reasonably incurred by him in connection therewith.
Section 10.4 Authorization. Any indemnification under Sections
10.1 and 10.2 (unless ordered by a court) shall be made by the
Corporation only as authorized in the specific case upon a
determination that indemnification of the Director, officer, employee
or agent is proper in the circumstances because he has met the
applicable standard of conduct set forth in Sections 10.1 and 10.2.
Such determination shall be made (a) by the Board of Directors by a
majority vote of a quorum consisting of Directors who were not parties
to such action, suit or proceeding, or (b) if such a quorum is not
obtainable, or, even if obtainable a quorum of disinterested Directors
so directs, by independent legal counsel in a written opinion, or (c)
by the stockholders.
Section 10.5 Advance Payment of Expenses. Expenses incurred by
an officer or Director in defending a civil or criminal action, suit or
proceeding may be paid by the Corporation in advance of the final
disposition of such action, suit or proceeding as authorized by the
Board of Directors in the specific case upon receipt of an undertaking
by or on behalf of such officer or Director to repay such amount unless
it shall ultimately be determined that he is entitled to be indemnified
by the Corporation as authorized in this Article 10. Such expenses
incurred by other employees and agents may be so paid upon such terms
and conditions, if any, as the Board of Directors deems appropriate.
Section 10.6 Non-Exclusiveness. The indemnification provided
by this Article 10 shall not be deemed exclusive of any other rights to
which those seeking indemnification may be entitled under any by-law,
agreement, vote of stockholders or disinterested Directors or
otherwise, both as to action in his official capacity and as to action
in another capacity while holding such office, and shall continue as to
a person who has ceased to be a Director, officer, employee or agent
and shall inure to the benefit of the heirs, executors and
administrators of such a person.
Section 10.7 Insurance. The Corporation shall have power to
purchase and maintain insurance on behalf of any person who is or was a
Director, officer, employee or agent of the Corporation, or is or was
serving at the request of the Corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture,
trust or other enterprise against any liability asserted against him
and incurred by him in any such capacity, or arising out of his status
as such, whether or not the
II-2
Corporation would have the power to indemnify him against such
liability under the provisions of this Article 10.
Section 10.8 Constituent Corporations. The Corporation shall
have power to indemnify any person who is or was a director, officer,
employee or agent of a constituent corporation absorbed in a
consolidation or merger with this Corporation or is or was serving at
the request of such constituent corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, in the same manner as hereinabove provided
for any person who is or was a Director, officer, employee or agent of
the Corporation, or is or was serving at the request of the Corporation
as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise.
Section 10.9. Additional Indemnification. In addition to the
foregoing provisions of this Article 10, the Corporation shall have the
power, to the full extent provided by law, to indemnify any person for
any act or omission of such person against all loss, cost, damage and
expense (including attorney's fees) if such person is determined (in
the manner prescribed in Section 10.4 hereof) to have acted in good
faith and in a manner he reasonably believed to be in, or not opposed
to, the best interest of the Corporation.
ITEM 16. EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Title
------ -----
<S> <C>
4.1 -- Certificate of Incorporation of the Company, as amended.
5 -- Opinion of Brown, Rudnick, Freed & Gesmer.
23.1 -- Consent of Brown, Rudnick, Freed & Gesmer. (included in Exhibit 5.)
23.2 -- Consent of Arthur Andersen LLP.
24 -- Power of Attorney (Included on Signature Page of this Registration Statement.)
The following Exhibits are incorporated herein by reference.
4.2 -- By-Laws of the Company. (Filed as Exhibit 3.2 to the Registration Statement on Form
S-1, Registration No. 33-57420.)
4.3 -- Specimen of Stock Certificate. (Filed as Exhibit 4.1 to the Registration Statement on
Form S-1, Registration No. 33-57420.)
4.4 -- Southern Development Council, Inc. Promissory Note. (Filed as Exhibit 4.10 to the
Registration Statement on Form S-1, Registration No. 33-57420.)
4.6 -- Stockholders' Agreement, dated as of June 8, 1989 (Filed as Exhibit 4.12 to the
Registration Statement on Form S-1, Registration No. 33-57420.)
4.7 -- Form of First Amendment to Stockholders' Agreement, dated as of January 13, 1993.
(Filed as Exhibit 4.13 to the Registration Statement on Form S-1, Registration No.
33-57420.)
</TABLE>
ITEM 17. UNDERTAKINGS
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
II-3
The undersigned Registrant hereby further undertakes that:
(1) For purposes of determining any liability under the Securities
Act of 1933, each filing of the registrant's annual report
pursuant to Section 13(a) or Section 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section
15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in the registration statement shall
be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such
securities at that time shall be deemed to be initial bona
fide offering thereof.
(2) For purposes of determining any liability under the Securities
Act of 1933, the information omitted from the form of
prospectus filed as part of this registration statement in
reliance upon Rule 430A and contained in a form of prospectus
filed by the Registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of
this registration statement as of the time it was declared
effective.
(3) For the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment that
contains a form of prospectus shall be deemed to be a new
registration statement relating to the securities offered
therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
II-4
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Addison, State of Alabama, on the 5th day of August
1997.
SOUTHERN ENERGY HOMES, INC.
By: /s/ Wendell L. Batchelor
------------------------------------------
Wendell L. Batchelor
Chairman of the Board, President and Chief
Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that each person whose signature appears
below constitutes and appoints Wendell L. Batchelor, Keith W. Brown, Jonathan O.
Lee and each of them, with the power to act without the other, his true and
lawful attorney-in-fact and agent, with full power of substitution and
resubstitution for him or in his name, place and stead, in any and all
capacities to sign any and all amendments or post-effective amendments to this
Registration Statement, and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents or any of them, or their
or his substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Wendell L. Batchelor Chairman of the Board, President, August 5, 1997
- ------------------------------------ Chief Executive Officer
Wendell L. Batchelor (Principal Executive Officer) and
Director
/s/ Keith O. Holdbrooks Chief Operating Officer August 5, 1997
- ------------------------------------ (Principal Executive Officer)
Keith O. Holdbrooks
/s/ Johnny R. Long Vice President and Director August 5, 1997
- ------------------------------------
Johnny R. Long
/s/ Keith W. Brown Chief Financial Officer (Principal August 5, 1997
- ------------------------------------ Financial and Principal Accounting
Keith W. Brown Officer), Treasurer, Secretary and
Director
/s/ Johnathan O. Lee Director August 5, 1997
- ------------------------------------
Jonathan O. Lee
/s/ Paul J. Evanson Director August 5, 1997
- ------------------------------------
Paul J. Evanson
/s/ Joseph J. Incandela Director August 5, 1997
- ------------------------------------
Joseph J. Incandela
</TABLE>
<TABLE>
<CAPTION>
EXHIBIT INDEX
Exhibit
Number
------
<S> <C>
4.1 -- Certificate of Incorporation of the Company, as amended
5 -- Opinion of Brown, Rudnick, Freed & Gesmer
23.1 -- Consent of Brown, Rudnick, Freed & Gesmer (included in Exhibit 5.)
23.2 -- Consent of Arthur Andersen LLP
24 -- Power of Attorney (Included on Signature Page of this Registration Statement.)
The following Exhibits are incorporated herein by reference.
4.2 -- By-Laws of the Company. (Filed as Exhibit 3.2 to the Registration Statement on Form
S-1, Registration No. 33-57420.)
4.3 -- Specimen of Stock Certificate. (Filed as Exhibit 4.1 to the Registration Statement on
Form S-1, Registration No. 33-57420.)
4.4 -- Southern Development Council, Inc. Promissory Note. (Filed as Exhibit 4.10 to the
Registration Statement on Form S-1, Registration No. 33-57420.)
4.6 -- Stockholders' Agreement, dated as of June 8, 1989 (Filed as Exhibit 4.12 to the
Registration Statement on Form S-1, Registration No. 33-57420.)
4.7 -- Form of First Amendment to Stockholders' Agreement, dated as of January 13, 1993.
(Filed as Exhibit 4.13 to the Registration Statement on Form S-1, Registration No.
33-57420.)
</TABLE>
EXHIBIT 4.1
-----------
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
SOUTHERN ENERGY HOMES, INC.
SOUTHERN ENERGY HOMES, INC., a corporation organized and existing under
the laws of the State of Delaware (the "Corporation"), pursuant to Section 242
of the Delaware General Corporation Law, hereby certifies as follows:
1. The Board of Directors of the Corporation, at a meeting duly held
March 27, 1997, at which a quorum was present and acting throughout and in
accordance with the provisions of Section 242 of the Delaware General
Corporation Law, approved the following amendment to the Corporation's
Certificate of Incorporation:
i. To increase the total number of shares of stock which the
corporation shall have authority to issue, from 21,000,000 to
41,000,000 shares, such that the first paragraph of ARTICLE
FOURTH shall be amended to read as follows:
FOURTH: The total number of shares of stock which the
Corporation shall have authority to issue is 41,000,000
shares, which shares shall be divided into two classes
consisting of: (i) 40,000,000 shares of Common Stock (with
$.0001 par value per share) ("Common Stock") and (ii)
1,000,000 shares of Preferred Stock (with $.0001 par value per
share) ("Preferred Stock").
2. The foregoing amendment to the Certificate of Incorporation was duly
adopted by the stockholders at a meeting duly held, at which a quorum was
present and acting throughout and in accordance with the provisions of Section
242 of the General Corporation Law of Delaware, on June 4, 1997.
IN WITNESS WHEREOF, SOUTHERN ENERGY HOMES, INC. has caused this
Certificate of Amendment of its Certificate of Incorporation to be signed by
Wendell L. Batchelor, its President, and attested to by Keith W. Brown, its
Secretary, this 23rd day of June, 1997.
SOUTHERN ENERGY HOMES, INC.
By: /s/ Wendell L. Batchelor
------------------------------------
Wendell L. Batchelor, President
ATTEST:
By: /s/ Keith W. Brown
------------------------------
Keith W. Brown, Secretary
CERTIFICATE OF MERGER
Merging
SOUTHERN ENERGY HOMES, INC.
an Alabama corporation
with and into
SOUTHERN ENERGY HOMES, INC.
a Delaware corporation
Pursuant to the provisions of Section 252 of the General Corporation
Law of the State of Delaware, SOUTHERN ENERGY HOMES, INC., a Delaware
corporation (the "Company"), does hereby certify:
FIRST: That the names and states of incorporation of the corporations
participating in the merger (the "Constituent Corporations") are as follows:
Name State of Incorporation
---- ----------------------
Southern Energy Homes, Inc. Alabama
Southern Energy Homes, Inc. Delaware
SECOND: That an Agreement and Plan of Merger, dated as of January 15,
1993, has been approved, adopted, certified, executed and acknowledged by each
of the Constituent Corporations in accordance with Section 252 of the General
Corporation Law of the State of Delaware.
THIRD: That Southern Energy Homes, Inc., a Delaware corporation, shall
survive the merger.
FOURTH: That the Certificate of Incorporation of Southern Energy Homes,
Inc., a Delaware corporation, shall be the Certificate of Incorporation of the
surviving corporation except that, pursuant to the merger, the first paragraph
of Article Fourth of said Certificate of Incorporation shall be amended by
deleting said first paragraph in its entirety and inserting in lieu thereof the
following paragraph:
FOURTH: The total number of shares of stock which the
Corporation shall have authority to issue is 21,000,000
shares, which shares shall be divided into two classes
consisting of: (i) 20,000,000 shares of Common Stock,
having .0001 par value ("Common Stock") and (ii) 1,000,000
shares of Preferred Stock, having .0001 par value
("Preferred Stock").
FIFTH: That a copy of the executed Agreement and Plan of Merger is on
file with the Company at Highway 41 North, Addison, Alabama 35540.
SIXTH: That a copy of the executed Agreement and Plan of Merger will be
provided, upon request and without cost, by the Company to any stockholder of
either of the Constituent Corporations.
IN WITNESS WHEREOF, Southern Energy Homes, Inc., a Delaware
corporation, has caused this Certificate of Merger to be executed in its
corporate name this 19th day of January, 1993.
SOUTHERN ENERGY HOMES, INC.
By: /s/ Jonathan O. Lee
--------------------------------
Jonathan O. Lee, President
ATTEST:
By: /s/ David M. Morrocco
-----------------------------
David M. Morrocco,
Secretary
CERTIFICATE OF INCORPORATION
OF
SOUTHERN ENERGY HOMES, INC.
FIRST: The name of this Corporation shall be:
SOUTHERN ENERGY HOMES, INC.
SECOND: Its registered office in the State of Delaware is to be located
at 1013 Centre Road, in the City of Wilmington, County of New Castle, 19805, and
its registered agent at such address is CORPORATION SERVICE COMPANY.
THIRD: The purpose or purposes of the Corporation shall be:
To engage in any lawful act or activity for which corporations may be
organized under the General Corporation Law of Delaware.
FOURTH: The total number of shares of stock which the Corporation shall
have authority to issue is 21,000,000 shares, which shares shall be divided into
two classes consisting of: (i) 20,000,000, shares of Common Stock (with $.01 par
value per share) ("Common Stock") and (ii) 1,000,000 shares of Preferred Stock
(with $.01 par value per share) ("Preferred Stock").
The designations and the powers, preferences and rights, and the
qualifications, limitations or restrictions of the Common Stock and the
Preferred Stock shall be as follows:
A. COMMON STOCK
1. Voting Rights. Except as otherwise required by law or this
Certificate of Incorporation, each holder of Common Stock shall have one vote in
respect of each share of Common Stock held by him of record on the books of the
Corporation for the election of directors and on all matters submitted to a vote
of stockholders of the Corporation.
2. Dividends. The holders of shares of Common Stock shall be entitled
to receive, when and if declared by the Board of Directors, out of the assets of
the Corporation which are by law available therefor, dividends payable either in
cash, in property or in shares of capital stock, subject, however, to the
limitations contained in Paragraph B below.
3. Dissolution, Liquidation or Winding Up. After distribution in full
of the preferential amount, if any, to be distributed to the holders of series
of the Preferred Stock (in accordance with the relative preferences among such
series) in the event of involuntary liquidation, distribution, dissolution or
winding-up, of the Corporation, the holders of the Common Stock shall be
entitled to receive all of the remaining assets of the
1
Corporation, tangible and intangible, or whatever kind available for
distribution to stockholders, ratably in proportion to the number of shares of
Common Stock held by them respectively.
B. PREFERRED STOCK
1. Issuance. Shares of Preferred Stock may be issued from time to time
in one or more series as may from time to time be determined by the Board of
Directors, each of said series to be distinctly designated. All shares of any
one series to be distinctly designated. All shares of any one series of the
Preferred Stock shall be alike in every particular, except that there may be
different dates from which dividends, if any, thereon shall be cumulative, if
made cumulative. The voting powers, if any, and the designations, relative
preferences, participating, optional or other special rights or privileges of
each such series, and the qualifications, limitations or restrictions thereof,
if any, may differ from those of any and all other series at any time
outstanding.
2. Authority of the Board of Directors. The Board of Directors is
authorized, subject to limitations prescribed by law and the provisions of this
Article FOURTH, to provide for the issuance of the shares of the Preferred Stock
in series, and by filing a certificate pursuant to the applicable law of the
State of Delaware, to establish from time to time the number of shares to be
included in each such series, and to fix in the resolution or resolutions
providing for the issue of such stock adopted by the Board of Directors of the
Corporation the voting powers, if any, and the designations, relative
preferences, participating, optional or other special rights or privileges, and
the qualifications, limitations or restrictions of such series, including, but
without limiting the generality of the foregoing, the following:
(a) The distinctive designation of, and the number of shares
of the Preferred Stock which shall constitute such series. The
designation of a series of Preferred Stock need not include
the words "preferred" or "preference" and may be designated
"special" or other distinctive term. Unless otherwise provided
in the resolution issuing such series, the number of shares of
any series of the Preferred stock may be increased or
decreased (but not below the number of shares thereof then
outstanding) by the Board of Directors in the manner
prescribed by law;
(b) The rate and times at which, and the terms and conditions
upon which, dividends, if any, on the Preferred Stock of such
series shall be paid, the extent of the preference or
relation, if any, of such dividends to the dividends payable
on any other class or classes, or series of the same or other
classes of stock and whether such dividends shall be
cumulative or non-cumulative and, if cumulative, the date from
which such dividends shall be cumulative;
(c) Whether the series shall be convertible into, or
exchangeable for, at the option of the holders of the
Preferred Stock of such series or the
2
Corporation or upon the happening of a specified event, shares
of any other class or classes or any other series of the same
or any other class or classes of stock of the Corporation, and
the terms and conditions of such conversion or exchange,
including provisions for the adjustment of any such conversion
rate in such events as the Board of Directors shall determine;
(d) Whether or not the Preferred Stock of such series shall be
subject to redemption at the option of the Corporation or the
holders of such series or upon the happening of a specified
event, and the redemption price or prices and the time or
times at which, and the terms and conditions upon which, the
Preferred Stock of such series may be deemed;
(e) The rights, if any, of the holders of the Preferred Stock
of such series upon the voluntary or involuntary liquidation,
merger, consolidation, distribution or sale of assets,
dissolution or winding-up, of the Corporation;
(f) The terms of the sinking fund or redemption or purchase
account, if any, to be provided for the Preferred Stock of
such series; and
(g) Subject to subparagraph 5 of the Paragraph C hereof,
whether such series of the Preferred Stock shall have full,
limited or no voting powers including, without limiting the
generality of the foregoing, whether such series shall have
the right, voting as a series by itself or together with other
series of the Preferred Stock or all series of the Preferred
Stock as a class, to elect one or more directors of the
Corporation if there shall have been a default in the payment
of dividends on any one or more series of the Preferred Stock
or under such other circumstances and on such conditions as
the Board of Directors may determine.
C. OTHER PROVISIONS
1. No holder of any of the shares of any class or series of stock or of
options, warrants or other rights to purchase shares of any class or series of
stock or of other securities of the Corporation shall have any preemptive right
to purchase or subscribe for any unissued stock of any class or series or any
additional shares of any class or series to be issued by reason of any increase
of the authorized capital stock of the Corporation of any class or series, or
bonds, certificates of indebtedness, debentures or other securities convertible
into or exchangeable for stock of the Corporation of any class or series, or
carrying any right to purchase stock of any class or series, but any such
unissued stock, additional authorized issue of shares of any class or series of
stock or securities convertible into or exchangeable for stock, or carrying any
right to purchase stock, may be issued and disposed of pursuant to resolution of
the Board of Directors to such persons, firms, corporations or associations
(including such holders or others) and upon
3
such terms as may be deemed advisable by the Board of Directors in the exercise
of its sole discretion.
2. The relative powers, preferences and rights of each series of the
Preferred Stock in relation to the powers, preferences and rights of each other
series of the Preferred Stock shall, in each case, be as fixed from time to time
by the Board of Directors in the resolution or resolutions adopted pursuant to
authority granted in Paragraph B hereof. The consent, by class or series vote or
otherwise, of the holders of such of the series of the Preferred Stock as are
from time to time outstanding shall not be required for the issuance by the
Board of Directors of any other series of the Preferred Stock whether or not the
powers, preferences and rights of such other series shall be fixed by the Board
of Directors as senior to, or on a parity with, the powers, preferences and
rights of such outstanding series, or any of them; provided, however, that the
Board of Directors may provide in the resolution or resolutions as to any series
of the Preferred Stock adopted pursuant to Paragraph B hereof, the conditions,
if any, under which the consent of the holders of a majority (or such greater
proportion as shall be fixed therein) of the outstanding shares of such series
shall be required for the issuance of any or all other series of the Preferred
Stock.
3. Subject to the provisions of subparagraph 2 of this Paragraph C,
shares of any series of the Preferred Stock may be issued from time to time as
the Board of Directors of the Corporation shall determine and on such terms and
for such consideration as shall be fixed by the Board of Directors.
4. Shares of the authorized Common Stock may be issued from time to
time as the Board of Directors of the Corporation shall determine and on such
terms and for such consideration as shall be fixed by the Board of Directors.
5. The number of authorized shares of Common Stock and of the Preferred
Stock, without a class or series vote, may be increased or decreased from time
to time (but not below the number of shares thereof then outstanding) by the
affirmative vote of the holders of a majority of the stock of the Corporation
entitled to vote thereon.
FIFTH: The name and mailing address of the sole incorporator is as
follows:
NAME MAILING ADDRESS
---- ---------------
Southern Energy Homes, Inc. Southern Energy Homes, Inc.
an Alabama corporation c/o Lee Capital Holdings
One International Place
Boston, MA 02110
Attn: Jonathan O. Lee
4
The name and mailing address of the person who is to serve as director
until the first annual meeting of the stockholders or until a successor is
elected and qualified is as follows:
NAME MAILING ADDRESS
---- ---------------
Jonathan O. Lee Lee Capital Holdings
One International Place
Boston, MA 02110
SIXTH: In furtherance and not in limitation of the powers conferred by
the laws of the State of Delaware:
A. The Board of Directors of the Corporation is expressly
authorized to adopt, amend, or repeal the by-laws of the
Corporation.
B. Elections of directors need not be by written ballot unless
the by-laws of the Corporation shall so provide.
C. The books of the Corporation may be kept at such place
within or without the State of Delaware as the by-laws of
the Corporation may provide or as may be designated from
time to time by the Board of Directors of the Corporation.
SEVENTH: Whenever a compromise or arrangement is proposed between this
Corporation and its creditors or any class of them and/or between this
Corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application in a summary
way of this Corporation or of any creditor or stockholder thereof or on the
application of any receiver or receivers appointed for this Corporation under
the provisions of section 291 of Title 8 of the Delaware Code or on the
application of trustees in dissolution or of any receiver or receivers appointed
for this Corporation under the provisions of section 279 of Title 8 of the
Delaware Code, order a meeting of the creditors or class of creditors, and/or of
the stockholders or class of stockholders of this Corporation, as the case may
be, to be summoned in such manner as the said court directs. If a majority in
number representing three-fourths in value of the creditors or class of
creditors, and/or of the stockholders or class of stockholders of this
Corporation, as the case may be, agree to any compromise or arrangement and to
any reorganization of this Corporation as a consequence of such compromise or
arrangement, the said compromise or arrangement and the said reorganization
shall, if sanctioned by the court to which the said application has been made,
be binding on all the creditors or class of creditors, and/or on all the
stockholders or class of stockholders, of this Corporation, as the case may be,
and also on this Corporation.
5
EIGHTH: The Corporation hereby elects in this original certificate of
incorporation not to be governed by Section 203 of the General Corporation Law
of Delaware.
NINTH: The following provisions shall apply with respect to special
meetings of stockholders of the Corporation and actions to be taken by
stockholders of the Corporation without a meeting.
A. SPECIAL MEETINGS
Special meetings of stockholders of the Corporation may be called only
by the Chairman of the Board of Directors, the President or the Board of
Directors.
B. ACTION BY STOCKHOLDERS WITHOUT A MEETING
Any action required to be taken at any annual or special meeting of
stockholders of the Corporation, or any action which may be taken at any annual
or special meeting of stockholders of the Corporation, may be taken without a
meeting, without prior notice and without a vote, if a consent in writing,
setting forth the action so taken, shall be signed by all of the stockholders
who would have been entitled to vote thereon had such action been duly proposed
at any duly held annual or special meeting of stockholders of the Corporation.
All such written consents shall be filed with the records of the meetings of
stockholders of the Corporation and shall be treated for all purposes as a vote
at a meeting.
C. AMENDMENT OR REPEAL
Notwithstanding any other provision of this Certificate of
Incorporation or the by-laws of the Corporation or the fact that a lesser
percentage may be specified by law or by this Certificate of Incorporation or by
the by-laws of the Corporation, the affirmative vote of this holders of at least
eighty percent (80%) of the outstanding stock of the Corporation entitled to
vote generally in the election of Directors, voting together as a single class,
shall be required to amend, alter, adopt any provision inconsistent with, or to
repeal this Article Ninth.
TENTH: Except as stated in Article Eleventh of this certificate of
incorporation, the Corporation reserves the right to amend or repeal any
provision contained in this certificate of incorporation, in the manner now or
hereafter prescribed by statute, and all rights conferred upon a stockholder
herein are granted subject to this reservation.
ELEVENTH: No director shall be personally liable to the Corporation or
its stockholders for monetary damages for breach of fiduciary duty as a director
notwithstanding any provision of law imposing such liability; provided, however,
that, to the extent provided by applicable law, this provision shall not
eliminate the liability of a director (i) for any breach of the director's duty
of loyalty to the Corporation or its stockholders, (ii) for acts or omissions
not in good faith or which involve intentional
6
misconduct or a knowing violation of law, (iii) under Section 174 of the General
Corporation Law of Delaware, or (iv) for any transaction from which the director
derived an improper personal benefit. No amendment to or repeal of this
provision shall apply to or have any effect on the liability or alleged
liability of any director for or with respect to any acts or omissions of such
director occurring prior to such amendment or appeal.
TWELFTH: The Corporation is to have perpetual existence.
IN WITNESS WHEREOF, the undersigned, being the incorporator
hereinbefore named, has executed, signed, and acknowledged this certificate of
incorporation this 13th day of January, 1993.
Southern Energy Homes, Inc.
an Alabama corporation
As Sole Incorporator
By: /s/Jonathan O. Lee
---------------------------
Jonathan O. Lee, Chairman
of the Board
7
EXHIBIT 5
---------
August 6, 1997
Southern Energy Homes, Inc.
Highway 41 North
Addison, AL 35540
Attn: Keith W. Brown, Chief Financial Officer
RE: Registration Statement on Form S-3 filed on August 6, 1997
Ladies and Gentlemen:
We have acted as counsel to Southern Energy Homes, Inc., a Delaware
corporation (the "Company"), in connection with the preparation and filing with
the Securities and Exchange Commission of a Registration Statement on Form S-3
(the "Registration Statement") pursuant to which the Company is registering
under the Securities Act of 1933, as amended (the "Act"), a total of 347,070
shares of common stock, $.0001 par value (the "Shares"). This opinion is being
rendered in connection with the filing of the Registration Statement.
In connection with this opinion, we have examined the following
documents (collectively, the "Documents"):
(i) the Certificate of Incorporation of the Company, as amended,
certified by the Secretary of the Company;
(ii) the By-laws of the Company certified by the Secretary of the
Company;
(iii) Resolutions adopted by the Board of Directors of the Company
authorizing, among other things, that the Company enter into an
Agreement and Plan of Reorganization by and between, among
others, the Company and BR Holding Corp.;
(iv) the Agreement and Plan of Reorganization by and between, among
others, the Company and BR Holding Corp., dated November 21,
1996; and
(v) a letter from the Company's Transfer Agent dated as of a recent
date as to the issued and outstanding shares of the Company.
Southern Energy Homes, Inc.
Page 2
August 6, 1997
We have, without independent investigation, relied upon the
representations and warranties of the various parties as to matters of objective
fact contained in the Documents.
We have not made any independent review or investigation of orders,
judgments, rules or other regulations or decrees by which the Company or any of
its property may be bound, nor have we made any independent investigation as to
the existence of actions, suits, investigations or proceedings, if any, pending
or threatened against the Company.
With your concurrence, the opinions hereafter expressed, whether or not
qualified by language such as "to our knowledge," are based solely upon (1) our
review of the Documents and (2) such review of published sources of law as we
have deemed necessary.
This firm, in rendering legal opinions, customarily makes
certain assumptions which are described in Schedule A hereto. In the course of
our representation of the Company in connection with preparation of the
Registration Statement, nothing has come to our attention which causes us to
believe reliance upon any of those assumptions is inappropriate, and, with your
concurrence, the opinions hereafter expressed are based upon those assumptions.
For purposes of those assumptions, the Enumerated Parties referred to in
Schedule A is the Company.
We express no legal opinion upon any matter other than those explicitly
addressed in numbered paragraph 1 below, and our express opinions therein
contained shall not be interpreted to be implied opinions upon any other matter.
Our opinions contained herein are limited to the laws of The
Commonwealth of Massachusetts, the Delaware General Corporation Law and the
Federal law of the United States of America.
1. Based upon and subject to the foregoing, we are of the opinion that
the Shares have been duly authorized and validly issued, and are fully paid and
non-assessable.
We understand that this opinion is to be used in connection with the
Registration Statement. We consent to the filing of this opinion as an Exhibit
to said Registration Statement and to the reference to our firm wherever it
appears in the Registration Statement, including the
Southern Energy Homes, Inc.
Page 3
August 6, 1997
prospectus constituting a part thereof and any amendments thereto. This opinion
may be used in connection with the offering of the Shares only while the
Registration Statement, as it may be amended from time to time, remains
effective under the Act.
Very truly yours,
BROWN, RUDNICK, FREED & GESMER
By: BROWN, RUDNICK, FREED & GESMER, P.C., a
Partner
By: /s/John G. Nossiff, Jr.
----------------------------------------
John G. Nossiff, Jr., A Member
Duly Authorized
JGN/SRL/JRS/dmv
Southern Energy Homes, Inc.
Page 4
August 6, 1997
SCHEDULE A
BROWN, RUDNICK, FREED & GESMER
STANDARD ASSUMPTIONS
--------------------
In rendering legal opinions in third party transactions, Brown,
Rudnick, Freed & Gesmer makes certain customary assumptions described below:
1. Each natural person executing any of the Documents has
sufficient legal capacity to enter into such Documents and
perform the Transactions.
2. Each of the Enumerated Parties holds requisite title and rights
to any property involved in the Transactions and purported to be
owned by it.
3. Each person other than the Enumerated Parties has all requisite
power and authority and has taken all necessary corporate or
other action to enter into those Transaction Documents to which
it is a party or by which it is bound, to the extent necessary
to make the Transaction Documents enforceable against it.
4. Each person other than the Enumerated Parties has complied with
all legal requirements pertaining to its status as such status
relates to its rights to enforce the Transaction Documents
against the Enumerated Parties.
5. Each Document is accurate, complete and authentic, each original
is authentic, each copy conforms to an authentic original and
all signatures are genuine.
6. All official public records are accurate, complete and properly
indexed and filed.
7. There has not been any mutual mistake of fact or
misunderstanding, fraud, duress, or undue influence by or among
any of the parties to the Transaction Documents.
8. The conduct of the parties to the Transaction has complied in
the past and will comply in the future with any requirement of
good faith, fair dealing and conscionability.
9. Each person other than the Enumerated Parties has acted in good
faith and without notice of any defense against the enforcement
of any rights created by, or adverse claim to any property or
security interest transferred or created as part of, the
Transaction.
10. There are no agreements or understandings among the parties to
or bound by the Transaction, and there is no usage of trade or
course of prior dealing among such parties, that would define,
modify, waive, or qualify the terms of any of the Transaction
Documents.
Southern Energy Homes, Inc.
Page 5
August 6, 1997
11. The Enumerated Parties will not in the future take any
discretionary action (including a decision not to act) permitted
under any Transaction Document that would result in a violation
of law or constitute a breach or default under that or any other
Transaction Document or court or administrative orders, writs,
judgments and decrees that name any Enumerated Party and are
specifically directed to it or its property.
12. The Enumerated Parties will obtain all permits and governmental
approvals not required at the time of the Closing of the
Transaction but which are subsequently required, and will take
all actions similarly required, relevant to subsequent
consummation of the Transactions or performance of the
Transaction Documents.
13. All parties to or bound by the Transaction Documents will act in
accordance with, and will refrain from taking any action that is
forbidden by, the terms and conditions of the Transaction
Documents.
EXHIBIT 23.2
------------
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated February 20, 1997
(except with respect to the matter discussed in Note 6, as to which the date is
March 27, 1997) incorporated by reference in Southern Energy Homes, Inc.'s Form
10-K for the year ended January 3, 1997 and to all references to our Firm
included in this registration statement.
/s/ ARTHUR ANDERSEN LLP
Birmingham, Alabama
August 4, 1997
