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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): March 27, 1998
PALM HARBOR HOMES, INC.
(Exact name of Registrant as specified in its Charter)
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<S> <C> <C>
FLORIDA 0-26188 59-1036634
(State or other jurisdiction of (Commission file number) (I.R.S. Employer
incorporation or organization) Identification Number)
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15303 Dallas Parkway, Suite 800, Dallas, Texas 75248
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (214) 991-2422
Not applicable
(Former name or former address, if changed since last report)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On March 27, 1998, Palm Harbor Homes, Inc., a Florida corporation
(the "Company") purchased all of the outstanding stock of Cannon Manufactured
Housing Group, Inc. ("CMH"), Cannon Mobile Homes, Inc. ("CMHI"), Pleasant
Valley Mobile Homes, Inc. ("PVM"), Countryside Mobile Homes, Inc. ("CMH II"),
Cumberland Homes, Inc. ("CHI"), All Star Mobile Homes, Inc. ("ASMH"), and First
Home Mortgage Corporation ("FHM, and together with CMH, CMHI, PVM, CMH II, CHI
and ASMH shall be referred to herein collectively as the "Cannon Companies").
The Cannon Companies are Georgia-based retailers of manufactured homes with 18
locations. The stock in the Cannon Companies was purchased pursuant to a Stock
Purchase Agreement dated February 9, 1998 and amended March 7, 1998, by and
among the Cannon Companies and Thomas G. Cannon ("T. Cannon"), Dale F. Cannon
("D. Cannon"), Jack H. Coffey ("Coffey"), John G. Blake ("Blake"), Todd R.
Cannon ("T.R. Cannon") and the Estate of Grover R. Cannon (the "Estate," and
together with T. Cannon, D. Cannon, Coffey, Blake and T.R. Cannon shall be
referred to herein collectively as the "Selling Shareholders"). The Stock
Purchase Agreement and Amendment No. 1 thereto are attached hereto as Exhibits
2.1 and 2.2.
In consideration of the merger and the cancellation of the
outstanding shares of the Cannon Companies common stock, the Selling
Shareholders received an aggregate of $26,757,215 and 157,975 shares of the
Company's Common Stock. The Company has undertaken to file a registration
statement registering the shares to be received by the Selling Shareholders
within 30 days from the date of closing.
Effective March 27, 1998, all of the Cannon Companies except First
Home Mortgage Corporation were merged into the Company.
The sources of funds for the cash portion of the acquisition are
internal funds and the Company's line of credit with Chase Bank of Texas.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL STATEMENTS AND EXHIBITS.
EXHIBIT NO.
2.1 Stock Purchase Agreement dated February 9, 1998, by and among
Palm Harbor Homes, Inc., Cannon Manufactured Housing Group,
Inc., Cannon Mobile Homes, Inc., Pleasant Valley Mobile Homes,
Inc., Countryside Mobile Homes, Inc., Cumberland Homes, Inc.,
First Home Mortgage Corporation, Thomas G. Cannon, Dale F.
Cannon, Jack H. Coffey, John G. Blake, Todd R. Cannon and the
Estate of Grover R. Cannon (Incorporated herein by reference
from Exhibit 2.1 to Form 8-K of the Company dated February 9,
1998; File No. 000-24268)
2.2 Amendment Number One to Stock Purchase Agreement dated March
7, 1998, by and among Palm Harbor Homes, Inc., Cannon
Manufactured Housing Group, Inc., Cannon Mobile Homes, Inc.,
Pleasant Valley Mobile Homes, Inc., Countryside Mobile Homes,
Inc., Cumberland Homes, Inc., First Home Mortgage Corporation,
Thomas G. Cannon, Dale F. Cannon, Jack H. Coffey, John G.
Blake, Todd R. Cannon and the Estate of Grover R. Cannon
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: April 7, 1998
PALM HARBOR HOMES, INC.
/s/ Kelly Tacke
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Kelly Tacke, Vice President-Finance
and Chief Financial Officer
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INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION
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2.1 Stock Purchase Agreement dated February 9, 1998, by and among
Palm Harbor Homes, Inc., Cannon Manufactured Housing Group,
Inc., Cannon Mobile Homes, Inc., Pleasant Valley Mobile Homes,
Inc., Countryside Mobile Homes, Inc., Cumberland Homes, Inc.,
First Home Mortgage Corporation, Thomas G. Cannon, Dale F.
Cannon, Jack H. Coffey, John G. Blake, Todd R. Cannon and the
Estate of Grover R. Cannon (Incorporated herein by reference
from Exhibit 2.1 to Form 8-K of the Company dated February 9,
1998; File No. 000-24268)
2.2 Amendment Number One to Stock Purchase Agreement dated March
7, 1998, by and among Palm Harbor Homes, Inc., Cannon
Manufactured Housing Group, Inc., Cannon Mobile Homes, Inc.,
Pleasant Valley Mobile Homes, Inc., Countryside Mobile Homes,
Inc., Cumberland Homes, Inc., First Home Mortgage Corporation,
Thomas G. Cannon, Dale F. Cannon, Jack H. Coffey, John G.
Blake, Todd R. Cannon and the Estate of Grover R. Cannon
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EXHIBIT 2.2
AMENDMENT NUMBER ONE
TO STOCK PURCHASE AGREEMENT
This Amendment Number One to Stock Purchase Agreement (this
"Amendment") is entered into as of the 7th day of March, 1998, by and among the
undersigned.
In consideration of the mutual covenants, agreements and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged and accepted, the parties hereto agree as follows:
1. The purpose of this Amendment is to amend that certain Stock
Purchase Agreement (the "Agreement") dated as of February 9, 1998, by and among
Purchaser, the Cannon Companies and the Selling Shareholders.
2. The parties hereto agree that Section 2.2(a) shall hereby be
amended to change "March 8, 1998" to "March 27, 1998."
3. The parties hereto agree that Article IV of the Agreement
shall be amended to add the following new Section 6.27:
6.27 Section 338 Election. The parties agree that at
the election of Purchaser, certain or all of the
Cannon Companies which have previously elected to be
taxed as S corporations for federal income tax
purposes and their respective shareholders shall make
an election under Section 1.338(h)(10)-1 of the
Treasury Regulations under Section 338 of the Code to
treat each such S corporation immediately prior to
the purchase of stock hereunder as if it sold all its
assets and liquidated. As consideration for the
parties agreeing to the election, Purchaser agrees to
increase the Purchase Price as to any Selling
Shareholder in an amount equal to (i) the increased
federal income tax liability of such Selling
Shareholders directly caused by the Section 338
election made pursuant to this Section 6.27 (the "Tax
Amount") plus, (ii) the increased federal income tax
liability of such Selling Shareholders directly
caused by the payment of the Tax Amount by the
Purchaser to such Selling Shareholders under this
Section 6.27.
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4. All initial capitalized terms not otherwise defined herein
shall have the meanings set forth in the Agreement.
5. Except as specifically set forth herein, all of the terms of
the Agreement shall remain the same and in full force and effect.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be executed as of the date first above written.
PALM HARBOR HOMES, INC.
/s/ Scott Chaney
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Scott Chaney, Executive Vice President
CANNON MANUFACTURED HOUSING
GROUP, INC.
/s/ Thomas G. Cannon
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Thomas G. Cannon, President
CANNON MOBILE HOMES, INC.
/s/ Thomas G. Cannon
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Thomas G. Cannon, President
PLEASANT VALLEY MOBILE HOMES, INC.
/s/ Thomas G. Canon
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Thomas G. Cannon, President
COUNTRYSIDE MOBILE HOMES, INC.
/s/ Thomas G. Cannon
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Thomas G. Cannon, President
CUMBERLAND HOMES, INC.
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/s/ Thomas G. Cannon
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Thomas G. Cannon, President
ALL STAR MOBILE HOMES, INC.
/s/ Thomas G. Cannon
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Thomas G. Cannon, President
FIRST HOME MORTGAGE CORPORATION
/s/ Thomas G. Cannon
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Thomas G. Cannon, President
SELLING SHAREHOLDERS
/s/ Thomas G. Cannon
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Thomas G. Cannon
/s/ Dale F. Cannon
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Dale F. Cannon
/s/ Jack H. Coffey
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Jack H. Coffey
/s/ John G. Blake
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John G. Blake
/s/ Todd R. Cannon
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Todd R. Cannon
Estate of Grover R. Cannon
By: /s/ Thomas G. Cannon
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Title: Co-Executor
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The undersigned spouses have joined in this Amendment for the sole
purpose of subjecting to the provisions of this Amendment any community
property interest in the Cannon Companies Common Stock that such spouse may
own.
/s/ Martha P. Coffey
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Martha P. Coffey
/s/ Wanda H. Cannon
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Wanda H. Cannon
/s/ Peggy T. Cannon
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Peggy T. Cannon
/s/ Delena D. Blake
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Delana D. Blake
/s/ Virginia G. Cannon
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Virginia G. Cannon
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