For the fiscal year ended: | Commission file number: | |
December 31, 2010 | 001-34365 |
Delaware
(State of Incorporation) |
41-1990662
(I.R.S. Employer Identification No.) |
|
7800 Walton Parkway
New Albany, Ohio (Address of Principal Executive Offices) |
43054
(Zip Code) |
Title of Each Class
|
Name of Exchange on Which Registered
|
|
Common Stock, par value $.01 per share
|
The NASDAQ Global Select Market |
Large accelerated filer o | Accelerated filer þ | Non-accelerated filer o | Smaller reporting company o |
i
ii
31
Item 1.
Business
1
Table of Contents
2
Table of Contents
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
(Thousands of units)
146
181
182
269
339
376
212
206
118
154
189
202
197
235
253
275
206
158
98
118
335
383
379
504
592
651
418
364
216
272
3
Table of Contents
(In thousands)
Source: ACT Commercial Vehicle OUTLOOK (February 2011).
(In billions)
Source: ACT N.A. Commercial Vehicle OUTLOOK (February 2011).
4
Table of Contents
(In years)
Source: ACT N.A. Commercial Vehicle OUTLOOK (February 2011).
5
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6
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7
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8
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9
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10
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Seats and Seating Systems.
Our seating
operations utilize a variety of manufacturing techniques whereby
foam and various other components along with fabric, vinyl or
leather are affixed to an underlying seat frame. We also
manufacture and assemble the seat frame, which involves complex
welding. Generally, we utilize outside suppliers to produce the
individual components used to assemble the seat frame.
Electronic Wire Harnesses and Panel
Assemblies.
We utilize several manufacturing
techniques to produce the majority of our electronic wire
harnesses and panel assemblies. Our processes, both manual and
automated, are designed to produce complex, low- to
medium-volume wire harnesses and panel assemblies in short time
frames. Our wire harnesses and panel assemblies are both
electronically and hand tested.
Trim Systems and Components.
Our interior
systems process capabilities include injection molding,
low-pressure injection molding, urethane molding and foaming
processes, compression molding, heavy-gauge thermoforming and
vacuum forming, as well as various cutting, sewing, trimming and
finishing methods.
Cab Structures, Sleeper Boxes, Body Panels and Structural
Components
. We utilize a wide range of
manufacturing processes to produce the majority of the steel and
aluminum stampings used in our cab structures, sleeper boxes,
body panels and structural components and a variety of both
robotic and manual welding techniques in the assembly of these
products. In addition, we have facilities with large capacity,
fully automated
E-coat
paint
priming systems allowing us to provide our customers with a
paint-ready cab product. Due to their high cost, full body
E-coat
systems, such as ours, are rarely found outside of the
manufacturing operations of the major OEMs. We also have large
press lines which provide us with the in-house manufacturing
flexibility for both aluminum and steel stampings delivered
just-in-time
to our cab assembly plants.
Mirrors, Wipers and Controls.
We manufacture
our mirrors, wipers and controls utilizing a variety of
manufacturing processes and techniques. Our mirrors, wipers and
controls are primarily hand assembled, tested and packaged.
11
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Seats and Seating Systems.
The principal raw
materials used in our seat systems include steel, aluminum and
foam related products and are generally readily available and
obtained from multiple suppliers under various supply
agreements. Leather, vinyl, fabric and certain components are
also purchased from multiple suppliers under supply agreements.
Typically, our supply agreements are for a term of at least one
year and are terminable by us for breach or convenience.
12
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Electronic Wire Harnesses and Panel
Assemblies.
The principal raw materials used to
manufacture our electronic wire harnesses are cable, connectors,
terminals, switches, relays and various covering techniques
involving braided yarn, braided copper, slit and non-slit
conduit and foam molded via the reaction injection molding
process. These raw materials are obtained from multiple
suppliers and are generally readily available.
Trim Systems and Components.
The principal raw
materials used in our interior systems processes are resin and
chemical products, foam, vinyl and fabric which are formed and
assembled into end products. These raw materials are obtained
from multiple suppliers, typically under supply agreements which
are for a term of typically one year or more and terminable by
us for breach or convenience.
Cab Structures, Sleeper Boxes, Body Panels and Structural
Components
. The principal raw materials used in
our cab structures, sleeper boxes, body panels and structural
components are steel and aluminum, the majority of which we
purchase in sheets and stamp at our Shadyside, Ohio facility.
These raw materials are generally readily available and obtained
from several suppliers, typically under purchase contracts which
fix price and supply for up to one year.
Mirrors, Wipers and Controls.
The principal
raw materials used to manufacture our mirrors, wipers and
controls are steel, stainless steel and rubber, which are
generally readily available and obtained from multiple
suppliers. We also purchase
sub-assembled
products such as motors for our wiper systems and mirrors.
2010
2009
2008
40
%
48
%
44
%
23
15
24
14
14
12
9
10
8
3
4
3
1
1
1
10
8
8
100
%
100
%
100
%
13
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2010
2009
2008
12
%
14
%
12
%
12
7
11
11
10
10
11
16
15
11
9
11
8
8
5
3
2
2
3
2
3
2
2
1
27
30
30
100
%
100
%
100
%
14
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15
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16
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17
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49
Executive Vice President and President & General
Manager of Cab Systems
63
Executive Vice President and President of Seating Systems
57
President, Chief Executive Officer and Director
44
Executive Vice President and President & General
Manager of Electrical Systems
38
Executive Vice President, Chief Financial Officer and Secretary
18
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Item 1A.
Risk
Factors
The agreement governing our revolving credit facility
contains financial covenants, and that agreement and the
agreement governing our second lien term loan (the second
lien term loan), the indenture governing the 11%/13% third
lien senior secured notes (the third lien notes) and
the indenture governing the 8.0% senior notes due 2013 (the
8% senior notes) contain other covenants that
may restrict our current and future operations, particularly our
ability to respond to changes in our business or to take certain
actions. If we are unable to comply with these covenants, our
business, results of operations and liquidity could be
materially and adversely affected.
19
Table of Contents
incur liens;
incur or assume additional debt or guarantees or issue preferred
stock;
pay dividends, or make redemptions and repurchases, with respect
to capital stock;
prepay, or make redemptions and repurchases of, subordinated
debt;
make loans and investments;
make capital expenditures;
engage in mergers, acquisitions, asset sales, sale/leaseback
transactions and transactions with affiliates;
change the business conducted by us or our subsidiaries; and
amend the terms of subordinated debt.
Our substantial amount of indebtedness may adversely affect
our cash flow and our ability to operate our business, remain in
compliance with debt covenants and make payments on our
indebtedness.
make it more difficult for us to satisfy our obligations with
respect to our indebtedness, including the revolving credit
facility, the second lien term loan, the third lien notes and
the 8% senior notes, and any failure to comply with the
obligations of any of our debt instruments, including financial
and other restrictive covenants, could result in an event of
default under the revolving credit facility, the Second Lien
Credit Agreement and the indentures governing the third lien
notes and the 8% senior notes;
make us more vulnerable to adverse changes in general economic,
industry and competitive conditions and adverse changes in
government regulation;
require us to dedicate a substantial portion of our cash flow
from operations to payments on our indebtedness, thereby
reducing the availability of our cash flows to fund working
capital, capital expenditures, acquisitions and other general
corporate purposes;
limit our flexibility in planning for, or reacting to, changes
in our business and the industry in which we operate;
place us at a competitive disadvantage compared to our
competitors that have less debt; and
limit our ability to borrow additional amounts for working
capital, capital expenditures, acquisitions, debt service
requirements, execution of our business strategy or other
purposes.
20
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Our ability to generate cash depends on many factors beyond
our control, and any failure to meet our debt service
obligations could harm our business, financial condition and
results of operations. We may not be able to refinance or
restructure our indebtedness before it becomes due.
Provisions in our charter documents and Delaware law could
discourage potential acquisition proposals, could delay, deter
or prevent a change in control and could limit the price certain
investors might be willing to pay for our stock.
a classified board of directors with staggered terms;
a prohibition on stockholder action through written consents;
a requirement that special meetings of stockholders be called
only by the board of directors;
advance notice requirements for stockholder proposals and
director nominations;
limitations on the ability of stockholders to amend, alter or
repeal the by-laws; and
the authority of the board of directors to issue, without
stockholder approval, preferred stock with such terms as the
board of directors may determine and additional shares of our
common stock.
21
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Volatility and cyclicality in the commercial vehicle market
could adversely affect us.
Our results of operations could be significantly adversely
affected by a continuing, or any future, downturn in the
U.S. and global economy.
Current economic conditions and disruptions in the credit and
financial markets could have an adverse effect on our business,
financial condition and results of operations.
22
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Our profitability could be adversely affected if the actual
production volumes for our customers vehicles are
significantly lower than expected.
Our major OEM customers may exert significant influence over
us.
We may be unable to successfully implement our business
strategy and, as a result, our businesses and financial position
and results of operations could be materially and adversely
affected.
23
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If we are unable to obtain raw materials at favorable prices,
it could adversely impact our results of operations and
financial condition.
We may be unable to complete additional strategic
acquisitions or we may encounter unforeseen difficulties in
integrating acquisitions.
We may be adversely impacted by labor strikes, work stoppages
and other matters.
Our businesses are subject to statutory environmental and
safety regulations in multiple jurisdictions, and the impact of
any changes in regulation
and/or
the
violation of any applicable laws and regulations by our
businesses could result in a material and adverse effect on our
financial condition and results of operations.
24
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We may be adversely affected by the impact of government
regulations on our OEM customers.
Our customer base is concentrated and the loss of business
from a major customer or the discontinuation of particular
commercial vehicle platforms could reduce our revenues.
25
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Currency exchange rate fluctuations could have an adverse
effect on our revenues and results of operations.
We are subject to certain risks associated with our foreign
operations.
the difficulty of enforcing agreements and collecting
receivables through certain foreign legal systems;
foreign customers, who may have longer payment cycles than
customers in the U.S.;
tax rates in certain foreign countries, which may exceed those
in the U.S. withholding requirements or the imposition of
tariffs, exchange controls or other restrictions, including
restrictions on repatriation, on foreign earnings;
intellectual property protection difficulties;
general economic and political conditions in countries where we
operate, which may have an adverse effect on our operations in
those countries;
the difficulties associated with managing a large organization
spread throughout various countries; and
complications in complying with a variety of foreign laws and
regulations, which may conflict with U.S. law.
Our inability to compete effectively in the highly
competitive commercial vehicle component supply industry could
result in lower prices for our products, reduced gross margins
and loss of market share, which could have an adverse effect on
our revenues and operating results.
26
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Our products may be rendered less attractive by changes in
competitive technologies.
If we are unable to recruit or retain skilled personnel, or
if we lose the services of any of our key management personnel,
our business, operating results and financial condition could be
materially adversely affected.
We have only limited protection for our proprietary rights in
our intellectual property, which makes it difficult to prevent
third parties from infringing upon our rights.
Our products may be susceptible to claims by third parties
that our products infringe upon their proprietary rights.
27
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The market price of our common stock may continue to be
extremely volatile.
Our operating results, revenues and expenses may fluctuate
significantly from
quarter-to-quarter
or
year-to-year,
which could have an adverse effect on the market price of our
common stock.
the size, timing, volume and execution of significant orders and
shipments;
changes in the terms of our sales contracts;
the timing of new product announcements;
changes in our pricing policies or those of our competitors;
market acceptance of new and enhanced products;
the length of our sales cycles;
changes in our operating expenses;
personnel changes;
new business acquisitions;
changes in foreign currency exchange rates; and
seasonal factors.
We may be subject to product liability claims, recalls or
warranty claims, which could be expensive, damage our reputation
and result in a diversion of management resources.
28
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Equipment failures, delays in deliveries or catastrophic loss
at any of our facilities could lead to production or service
curtailments or shutdowns.
Our inability to successfully execute any planned cost
reductions, restructuring initiatives or the achievement of
operational efficiencies could result in the incurrence of
additional costs and expenses that could adversely affect our
reported earnings.
A reduction in workforce and the closure of certain
manufacturing, warehousing and assembly facilities. The
facilities closed included an assembly and sequencing facility
in Kent, Washington; seat sequencing and assembly facility in
Statesville, North Carolina; manufacturing facility in Lake
Oswego, Oregon; inventory and product warehouse in Concord,
North Carolina; and seat assembly and distribution facility in
Seneffs, Belgium. The decision to reduce our workforce was the
result of the extended downturn of the global economy and, in
particular, the commercial vehicle markets. We substantially
completed these activities as of December 31, 2009.
The closure of our Vancouver, Washington manufacturing facility.
The decision to close the facility was the result of the
extended downturn of the global economy and, in particular, the
commercial vehicle markets. We substantially completed this
closure as of December 31, 2009.
The closure and consolidation of one of our facilities located
in Liberec, Czech Republic and the closing of our Norwalk, Ohio
truck cab assembly facility. The closure and consolidation of
our Liberec, Czech Republic facility was a result of
managements continued focus on reducing fixed costs and
eliminating excess capacity. The closure of this facility was
substantially completed as of December 31, 2009. The
closure of our Norwalk, Ohio facility was a result of
Navistars decision to insource the cab assembly operations
into its existing assembly facility in Escobedo, Mexico. We
substantially completed the Norwalk closure as of
September 30, 2010.
29
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Our earnings may be adversely affected by changes to the
carrying values of our tangible and intangible assets as a
result of recording any impairment charges deemed necessary.
Item 1B.
Unresolved
Staff Comments
Item 2.
Properties
Approximate
Square Footage
Ownership Interest
Warehouse
20,000 sq. ft.
Leased
Wire Harness Assembly
62,000 sq. ft.
Owned
Wire Harness Assembly
36,000 sq. ft.
Leased
Wire Harness Assembly
60,000 sq. ft.
Leased
Wipers, Switches
87,000 sq. ft.
Leased
Engineering
3,000 sq. ft.
Leased
Cab, Sleeper Box, Assembly
180,000 sq. ft.
Owned
Interior Trim and Warehouse
235,000 sq. ft.
Leased
Injection Molding
155,000 sq. ft.
Leased
Idle
340,000 sq. ft.
Owned/Leased
Stamping of Steel and Aluminum Structural and Exposed Stamped
Components
200,000 sq. ft.
Owned
Interior Trim
62,000 sq. ft.
Owned
Corporate Headquarters/R&D
89,000 sq. ft.
Leased
Interior Trim and Warehouse
91,000 sq. ft.
Leased
Seats, Mirrors
200,000 sq. ft.
Owned
Cut and Sew
148,000 sq. ft.
Leased
Warehouse
15,000 sq. ft.
Leased
Interior Trim and Warehouse
89,000 sq. ft.
Owned/Leased
Interior Trim and Warehouse
18,000 sq. ft.
Leased
Engineering and Warehouse
14,000 sq. ft.
Leased
Wire Harness Assembly
205,000 sq. ft.
Leased
30
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Approximate
Square Footage
Ownership Interest
Seat Assembly
210,000 sq. ft.
Leased
Seat Assembly
50,000 sq. ft.
Leased
Seat Assembly
10,000 sq. ft.
Leased
Seat Assembly
12,000 sq. ft.
Leased
Seat Assembly
76,500 sq. ft.
Leased
Seat Assembly
52,000 sq. ft.
Owned
Wire Harness Assembly
104,000 sq. ft.
Leased
Wire Harness Assembly
46,000 sq. ft.
Leased
Item 3.
Legal
Proceedings
Item 4.
Reserved
Table of Contents
36
106
107
108
109
Item 5.
Market
for Registrants Common Equity, Related Stockholder Matters
and Issuer Purchases of Equity Securities
High
Low
$
18.52
$
9.63
$
11.64
$
8.71
$
13.69
$
7.00
$
7.89
$
4.69
$
8.08
$
4.43
$
7.70
$
4.16
$
1.94
$
0.51
$
1.62
$
0.40
32
Table of Contents
Among
Commercial Vehicle Group, Inc., The NASDAQ Composite index
and Commercial Vehicle Supplier Composite index
*
Based on $100 invested on December 31, 2005 in stock or
index, including reinvestment of dividends.
12/31/05
12/31/06
12/31/07
12/31/08
12/31/09
12/31/10
100.00
116.08
77.21
4.95
31.90
86.53
100.00
111.74
124.67
73.77
107.12
125.93
100.00
120.68
186.99
88.48
136.17
272.19
33
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(c) Total
Number of
(d) Maximum
Shares (or
Number (or
Units)
Approximate
Purchased as
Dollar Value) of
Part of
Shares (or Units)
(a) Total
(b) Average
Publicly
that May Yet Be
Number of
Price Paid
Announced
Purchased Under
Shares (or Units)
per Share
Plans or
the Plans or
Purchased
(or Unit)
Programs
Prgrams
(October 1, 2010 through October 31, 2010)
154,534
$
11.39
(November 1, 2010 through November 30, 2010)
(December 1, 2010 through December 31, 2010)
Shares Issued
3,827
34
Table of Contents
Item 6.
Selected
Financial Data
Years Ended December 31,
2010
2009
2008
2007
2006
(Dollars in thousands, except share and per share data)
$
597,779
$
458,569
$
763,489
$
696,786
$
918,751
522,982
448,912
689,284
620,145
768,913
74,797
9,657
74,205
76,641
149,838
56,111
47,874
62,764
55,493
51,950
240
389
1,379
894
414
(6,075
)
30,135
207,531
17,272
1,730
3,651
1,433
16,716
(89,664
)
(191,394
)
18,821
97,474
(4,780
)
(11,119
)
13,945
9,361
(3,468
)
16,834
15,133
15,389
14,147
14,829
1,254
149
318
2,902
4,662
(97,834
)
(220,728
)
(4,836
)
85,795
(1,825
)
(16,299
)
(13,969
)
(1,585
)
27,745
$
6,487
$
(81,535
)
$
(206,759
)
$
(3,251
)
$
58,050
$
0.25
$
(3.74
)
$
(9.58
)
$
(0.15
)
$
2.74
$
0.24
$
(3.74
)
$
(9.58
)
$
(0.15
)
$
2.69
26,247
21,811
21,579
21,439
21,151
26,994
21,811
21,579
21,439
21,545
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Years Ended December 31,
2010
2009
2008
2007
2006
(Dollars in thousands, except share and per share data)
$
116,077
$
75,785
$
87,669
$
117,172
$
135,368
286,207
250,509
354,761
599,089
590,822
121,332
125,630
145,924
174,029
163,803
164,987
162,644
164,895
159,725
162,114
(112
)
(37,765
)
43,942
265,335
264,905
$
17,563
$
18,181
$
9,743
$
47,575
$
36,922
(9,955
)
(7,745
)
(10,134
)
(53,292
)
(27,625
)
24,730
(5,616
)
5,043
(2,394
)
(27,952
)
11,564
16,667
19,062
16,425
14,983
10,645
6,140
12,523
17,274
22,389
154,000
118,000
206,000
212,000
376,000
(1)
Source: ACT N.A. Commercial Vehicle OUTLOOK (February 2011).
Table of Contents
Item 7.
Managements
Discussion and Analysis of Financial Condition and Results of
Operations
37
Table of Contents
adjusting our hourly and salaried workforce to optimize costs in
line with our production levels;
sourcing efforts in Mexico, Europe and Asia;
consolidating our supply base to improve purchasing leverage;
eliminating excess production capacity through the closure and
consolidation of manufacturing, warehousing or assembly
facilities;
improving our manufacturing cost basis by locating production in
low-cost regions of the world; and
implementing Lean Manufacturing and TQPS initiatives to improve
operating efficiency and product quality.
38
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39
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40
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discount rate;
expected return on plan assets; and
health care cost trend rates.
1 Percentage
1 Percentage
Point Increase
Point Decrease
$
(339
)
$
513
$
(507
)
$
507
$
(10,346
)
$
13,117
1 Percentage
1 Percentage
Point Increase
Point Decrease
$
11
$
(11
)
$
60
$
(55
)
41
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2010
2009
2008
100.0
%
100.0
%
100.0
%
87.5
97.9
90.3
12.5
2.1
9.7
9.4
10.4
8.2
0.1
0.2
(0.8
)
6.6
27.2
3.8
0.3
0.8
2.8
(19.6
)
(25.1
)
(0.8
)
(2.4
)
1.8
2.8
3.3
2.0
0.3
0.6
0.8
(21.4
)
(28.9
)
(0.3
)
(3.6
)
(1.8
)
1.1
%
(17.8
)%
(27.1
)%
a 30% increase in North American heavy-duty
(class 8) truck production, fluctuations in production
levels for other North American end markets and net new business
awards resulting in approximately $67.8 million of
increased revenues;
increase in production levels due to higher global demand in our
European, Australian and Asian markets resulting in
approximately $73.8 million of increased revenues; and
unfavorable foreign exchange fluctuations from the translation
of our foreign operations into U.S. Dollars resulting in a
decrease of approximately $2.4 million of revenues.
42
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43
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a 42% decrease in North American heavy-duty
(class 8) truck production, fluctuations in production
levels for other North American end markets and net new business
awards resulted in approximately $192.6 million of
decreased revenues;
fluctuations in production levels due to lower global demand in
our European, Australian and Asian markets of approximately
$98.3 million; and
unfavorable foreign exchange fluctuations from the translation
of our foreign operations into U.S. Dollars of
approximately $14.0 million.
44
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45
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$97.8 million of 8.0% senior notes due 2013;
$13.8 million ($16.8 million principal amount, net of
$3.0 million of original issue discount) of 15% second lien
term loan due 2012;
$47.6 million ($42.1 million principal amount, net of
$5.5 million of issuance premium) of 11%/13% third lien
secured notes due 2013; and
$5.8 million of
paid-in-kind
interest on the 11%/13% third lien secured notes due 2013.
Domestic Base
LIBOR
Level
Ratio
Rate Loans
Revolver Loans
£
1.25 to 1.00
2.00
%
3.00
%
³
1.25 to 1.00 but < 1.75 to 1.00
1.75
%
2.75
%
³
1.75 to 1.00
1.50
%
2.50
%
46
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47
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48
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49
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50
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Payments Due by Period
Less Than
More Than
Total
1 Year
1-3 Years
3-5 Years
5 Years
(In thousands)
$
162,566
$
$
162,566
$
$
37,584
17,570
20,014
48,565
10,628
15,451
10,475
12,011
39,707
3,232
6,587
7,280
22,608
$
288,422
$
31,430
$
204,618
$
17,755
$
34,619
Item 7A.
Quantitative
and Qualitative Disclosures About Market Risk
51
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52
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Item 8.
Financial
Statements and Supplementary Data
Page
54
55
56
57
58
59
104
53
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54
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55
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CONSOLIDATED STATEMENTS OF OPERATIONS
Years Ended December 31, 2010, 2009 and 2008
2010
2009
2008
(In thousands, except share and per share amounts)
$
597,779
$
458,569
$
763,489
522,982
448,912
689,284
74,797
9,657
74,205
56,111
47,874
62,764
240
389
1,379
(6,075
)
30,135
207,531
17,272
1,730
3,651
16,716
(89,664
)
(191,394
)
(4,780
)
(11,119
)
13,945
16,834
15,133
15,389
1,254
2,902
4,662
(97,834
)
(220,728
)
(1,825
)
(16,299
)
(13,969
)
$
6,487
$
(81,535
)
$
(206,759
)
$
0.25
$
(3.74
)
$
(9.58
)
$
0.24
$
(3.74
)
$
(9.58
)
26,247
21,811
21,579
26,994
21,811
21,579
56
Table of Contents
CONSOLIDATED STATEMENTS OF STOCKHOLDERS
(DEFICIT) INVESTMENT
Years Ended December 31, 2010, 2009 and 2008
Retained
Accum.
Additional
Earnings
Other
Common Stock
Treasury
Paid-In
(Accum.
Comp.
Shares
Amount
Stock
Capital
Deficit)
Loss
Total
(In thousands, except share data)
21,536,814
$
215
$
(414
)
$
177,421
$
88,818
$
(705
)
$
265,335
227,922
2
2
(18,321
)
(41
)
(41
)
3,782
3,782
(355
)
(355
)
(206,759
)
(206,759
)
(13,077
)
(13,077
)
(4,742
)
(4,742
)
167
167
(224,411
)
(370
)
(370
)
21,746,415
$
217
$
(455
)
$
180,848
$
(118,311
)
$
(18,357
)
$
43,942
408,316
4
4
(84,200
)
(635
)
(635
)
2,831
2,831
2,561
2,561
51
51
(81,535
)
(81,535
)
150
150
(5,134
)
(5,134
)
(86,519
)
22,070,531
$
221
$
(1,090
)
$
186,291
$
(199,846
)
$
(23,341
)
$
(37,765
)
203,565
2
1,124
1,126
567,536
6
6
(154,534
)
(1,761
)
(1,761
)
4,370,000
44
25,315
25,359
2,768
2,768
699,661
7
(7
)
6,487
6,487
212
212
3,456
3,456
10,155
27,756,759
$
280
$
(2,851
)
$
215,491
$
(193,359
)
$
(19,673
)
$
(112
)
57
Table of Contents
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years Ended December 31, 2010, 2009 and 2008
2010
2009
2008
(In thousands)
$
6,487
$
(81,535
)
$
(206,759
)
11,564
16,667
19,062
1,514
1,448
671
1,254
(1,226
)
(550
)
3,569
2,263
(1,977
)
(1,735
)
(2,464
)
2,782
2,831
3,784
(92
)
713
(5,786
)
(29
)
(1,069
)
(4,334
)
(10,965
)
13,751
30,135
207,531
17,272
(17,452
)
28,190
692
(9,155
)
34,462
(533
)
17,456
(5,606
)
(5,497
)
6,291
(19,928
)
(14,349
)
2,165
3,265
709
17,563
18,181
9,743
(10,101
)
(5,605
)
(12,110
)
7,468
102
54
(3,807
)
44
(2,194
)
(1,685
)
(9,955
)
(7,745
)
(10,134
)
25,359
1,132
4
(1,761
)
(635
)
(41
)
51
(355
)
(27,013
)
(210,966
)
12,213
216,535
13,121
(94
)
(130
)
(3,263
)
24,730
(5,616
)
5,043
729
(2,606
)
(7,209
)
33,067
2,214
(2,557
)
9,524
7,310
9,867
$
42,591
$
9,524
$
7,310
$
10,576
$
13,226
$
13,690
$
(20,873
)
$
(4,149
)
$
(3,285
)
$
544
$
535
$
413
58
Table of Contents
1.
Organization
2.
Significant
Accounting Policies
59
Table of Contents
15 to 40 years
3 to 20 years
3 to 7 years
3 to 5 years
60
Table of Contents
2010
2009
$
3,066
$
3,706
1,212
1,811
(1,620
)
(2,459
)
(5
)
8
$
2,653
$
3,066
61
Table of Contents
2010
2009
$
(7,846
)
$
(8,058
)
(11,827
)
(15,283
)
$
(19,673
)
$
(23,341
)
2010
2009
2008
12
%
14
%
12
%
12
7
11
11
10
10
11
16
15
11
9
11
8
8
5
62
Table of Contents
3.
Fair
Value Measurement
2010
2009
Total
Level 1
Level 2
Level 3
Total
Level 1
Level 2
Level 3
$
$
$
$
$
66
$
$
66
$
$
$
$
$
$
4,400
$
$
4,400
$
(1)
Based on observable market transactions of spot and forward
rates.
63
Table of Contents
2010
2009
U.S.
U.S.
U.S. $
Equivalent
U.S. $
Equivalent
Equivalent
Fair Value
Equivalent
Fair Value
$
$
$
(345
)
$
(338
)
$
$
$
12,809
$
15,095
8,004
10,045
$
$
$
20,813
$
25,140
$
$
$
20,468
$
24,802
Asset Derivatives
2010
2009
Balance Sheet
Balance Sheet
Location
Fair Value
Location
Fair Value
Other assets
$
Other assets
$
66
Liability Derivatives
2010
2009
Balance Sheet
Balance Sheet
Location
Fair Value
Location
Fair Value
Accrued liabilities
$
Accrued liabilities
$
4,400
2010
2009
Location of Gain
Amount of Gain
Recognized in Income on
Recognized in Income
Derivatives
on Derivatives
Other Income
$
4,334
$
10,965
2010
2009
Carrying
Carrying
Amount
Fair Value
Amount
Fair Value
$
164,987
$
159,376
$
162,644
$
103,473
64
Table of Contents
Fair Value Measurements Using
Total Gains
Total
Level 1
Level 2
Level 3
(Losses)
$
14,576
$
$
$
14,576
$
(17,272
)
$
1,300
$
$
$
1,300
(4,135
)
$
$
$
$
(26,000
)
$
(47,407
)
4.
Business
Combinations
5.
Inventories
2010
2009
$
46,194
$
41,677
12,477
8,955
13,727
14,433
(5,776
)
(7,014
)
$
66,622
$
58,051
6.
Other
Assets
2010
2009
$
6,995
$
7,654
2,302
3,816
1,991
1,762
298
2,390
29
66
$
11,615
$
15,688
65
Table of Contents
7.
Accrued
Liabilities
2010
2009
$
15,870
$
9,796
6,060
4,066
2,653
3,066
1,491
3,361
648
751
1,014
1,121
4,400
6,394
6,416
$
34,130
$
32,977
8.
Restructuring
A reduction in workforce and the closure of certain
manufacturing, warehousing and assembly facilities. The
facilities closed included an assembly and sequencing facility
in Kent, Washington; seat sequencing and assembly facility in
Statesville, North Carolina; manufacturing facility in Lake
Oswego, Oregon; inventory and product warehouse in Concord,
North Carolina; and seat assembly and distribution facility in
Seneffs, Belgium. The decision to reduce our workforce was the
result of the extended downturn of the global economy and, in
particular, the commercial vehicle markets. We substantially
completed these activities as of December 31, 2009.
The closure of our Vancouver, Washington manufacturing facility.
The decision to close the facility was the result of the
extended downturn of the global economy and, in particular, the
commercial vehicle markets. We substantially completed this
closure as of December 31, 2009.
The closure and consolidation of one of our facilities located
in Liberec, Czech Republic and the closing of our Norwalk, Ohio
truck cab assembly facility. The closure and consolidation of
our Liberec, Czech Republic facility was a result of
managements continued focus on reducing fixed costs and
eliminating excess capacity. The closure of this facility was
substantially completed as of December 31, 2009. The
closure of our Norwalk, Ohio facility was a result of
Navistars decision to insource the cab assembly operations
into its existing assembly facility in Escobedo, Mexico. We
substantially completed the Norwalk closure as of
September 30, 2010.
66
Table of Contents
2010
2009
Facility Exit
Facility Exit
and Other
and Other
Employee
Contractual
Employee
Contractual
Costs
Costs
Total
Costs
Costs
Total
$
337
$
1,454
$
1,791
$
$
$
449
1,281
1,730
1,961
1,690
3,651
(685
)
(1,322
)
(2,007
)
(1,624
)
(236
)
(1,860
)
(51
)
(51
)
$
101
$
1,362
$
1,463
$
337
$
1,454
$
1,791
9.
Debt
2010
2009
$
97,810
$
97,810
13,758
12,650
47,587
49,921
5,832
2,263
$
164,987
$
162,644
16,800
145,766
67
Table of Contents
Domestic Base
LIBOR
Level
Ratio
Rate Loans
Revolver Loans
£
1.25 to 1.00
2.00%
3.00%
³
1.25 to 1.00 but < 1.75 to 1.00
1.75%
2.75%
³
1.75
to 1.00
1.50%
2.50%
68
Table of Contents
69
Table of Contents
70
Table of Contents
71
Table of Contents
10.
Intangible
Assets
December 31, 2010
Amortization
Gross Carrying
Accumulated
Net Carrying
Period
Amount
Amortization
Amount
20 years
$
5,655
$
(1,807
)
$
3,848
December 31, 2009
Amortization
Gross Carrying
Accumulated
Net Carrying
Period
Amount
Amortization
Amount
20 years
$
5,655
$
(1,568
)
$
4,087
72
Table of Contents
$
240
$
240
$
240
$
240
$
240
73
Table of Contents
11.
Income
Taxes
2010
2009
2008
$
(520
)
$
(71,208
)
$
(191,758
)
5,182
(26,626
)
(28,970
)
$
4,662
$
(97,834
)
$
(220,728
)
2010
2009
2008
$
1,632
$
(34,242
)
$
(77,255
)
(622
)
2,516
5,911
(863
)
862
1,479
(66
)
(918
)
(3,347
)
(2,178
)
2,001
1,168
1,018
9,844
37,932
20,253
(465
)
(306
)
(1,400
)
354
841
(160
)
4,133
(475
)
(189
)
449
$
(1,825
)
$
(16,299
)
$
(13,969
)
2010
2009
2008
Current
Deferred
Total
Current
Deferred
Total
Current
Deferred
Total
Provision
Provision
Provision
Provision
Provision
Provision
Provision
Provision
Provision
$
(2,329
)
$
132
$
(2,197
)
$
(10,647
)
$
1,994
$
(8,653
)
$
(11,275
)
$
5,011
$
(6,264
)
315
(417
)
(102
)
(778
)
(1,379
)
(2,157
)
(2,032
)
(4,438
)
(6,470
)
218
256
474
(4,874
)
(615
)
(5,489
)
763
(1,998
)
(1,235
)
$
(1,796
)
$
(29
)
$
(1,825
)
$
(16,299
)
$
$
(16,299
)
$
(12,544
)
$
(1,425
)
$
(13,969
)
74
Table of Contents
2010
2009
$
462
$
512
2,880
3,096
1,495
1,820
1,517
5,045
6,227
104
290
9,986
13,462
(9,987
)
(13,019
)
$
(1
)
$
443
$
25,295
$
29,565
4,712
4,892
23,224
2,897
1,886
1,938
608
1,383
3,417
1,380
59,142
42,055
(59,112
)
(42,498
)
$
30
$
(443
)
75
Table of Contents
76
Table of Contents
2010
2009
2008
$
2,879
$
2,960
$
2,695
379
2,538
46
(2,674
)
(2,700
)
(92
)
168
395
311
(86
)
(314
)
$
666
$
2,879
$
2,960
12.
Segment
Reporting
Years Ended December 31,
2010
2009
2008
Long-lived
Long-lived
Long-lived
Revenues
Assets
Revenues
Assets
Revenues
Assets
$
468,190
$
52,875
$
387,444
$
56,938
$
587,757
$
80,244
55,395
2,375
34,346
1,460
115,674
4,080
74,194
4,071
36,779
3,917
60,058
6,068
$
597,779
$
59,321
$
458,569
$
62,315
$
763,489
$
90,392
Years Ended December 31,
2010
2009
2008
Revenues
%
Revenues
%
Revenues
%
$
230,836
39
$
142,093
31
$
267,005
35
158,993
27
110,182
24
178,192
23
96,584
16
75,600
17
108,324
14
65,016
11
87,503
19
156,431
21
46,350
7
43,191
9
53,537
7
$
597,779
100
$
458,569
100
$
763,489
100
13.
Commitments
and Contingencies
77
Table of Contents
$
10,628
8,687
6,764
6,255
4,220
12,011
14.
Stockholders
Deficit
78
Table of Contents
2010
2009
2008
$
6,487
$
(81,535
)
$
(206,759
)
26,247
21,811
21,579
747
26,994
21,811
21,579
$
0.25
$
(3.74
)
$
(9.58
)
$
0.24
$
(3.74
)
$
(9.58
)
15.
Share-Based
Compensation
79
Table of Contents
80
Table of Contents
2004
Stock
Option
Grants
$
3.34
4.50
%
23.12
%
36
Weighted-
Weighted-
Average
Average
Remaining
Aggregate
Options
Exercise
Contractual
Intrinsic
(000s)
Price
Life (Years)
Value (000s)
686
$
12.68
4.8
$
147
(204
)
5.54
(5
)
15.84
477
$
15.69
3.9
$
60
477
$
15.69
3.9
$
60
$
$
81
Table of Contents
Nonvested Restricted Stock
Weighted-
Average
Shares
Grant-Date
(000s)
Fair Value
1,226
$
7.60
404
15.71
(568
)
5.67
(39
)
4.61
1,023
$
9.02
16.
Defined
Contribution Plans, Pension and Other Post-Retirement Benefit
Plans
82
Table of Contents
Other
Post-Retirement
U.S. Pension Plans
Non-U.S. Pension Plans
Benefit Plans
2010
2009
2010
2009
2010
2009
$
35,258
$
31,583
$
38,837
$
28,137
$
2,330
$
2,311
227
294
3
8
1,979
1,907
2,147
1,989
119
126
17
(372
)
107
151
271
339
(1,501
)
(1,290
)
(1,397
)
(871
)
(337
)
(506
)
1,426
2,613
(326
)
6,679
(586
)
52
(1,114
)
2,903
37,496
35,258
38,147
38,837
1,445
2,330
22,842
20,295
26,095
21,409
2,934
2,973
3,227
2,477
1,097
864
880
871
320
506
17
(1,501
)
(1,290
)
(1,397
)
(871
)
(337
)
(506
)
(748
)
2,209
25,372
22,842
28,057
26,095
$
(12,124
)
$
(12,416
)
$
(10,090
)
$
(12,742
)
$
(1,445
)
$
(2,330
)
Other
Non-U.S. Pension
Post-Retirement
U.S. Pension Plans
Plans
Benefit Plans
2010
2009
2010
2009
2010
2009
$
$
$
$
$
315
$
573
12,124
12,416
10,090
12,742
1,130
1,757
$
12,124
$
12,416
$
10,090
$
12,742
$
1,445
$
2,330
83
Table of Contents
U.S. Pension Plans
Non-U.S. Pension Plans
2010
2009
2010
2009
$
37,496
$
35,258
$
38,147
$
38,837
$
37,496
$
35,258
$
38,147
$
38,837
$
25,372
$
22,842
$
28,057
$
26,095
Other
Post-Retirement
U.S. Pension Plans
Non-U.S. Pension Plans
Benefit Plans
2010
2009
2008
2010
2009
2008
2010
2009
2008
$
227
$
294
$
323
$
$
$
$
3
$
8
$
13
1,979
1,907
1,831
2,147
1,989
1,987
119
126
139
(1,699
)
(1,514
)
(1,980
)
(1,631
)
(1,418
)
(1,543
)
(75
)
103
107
(13
)
374
183
192
8
(77
)
(63
)
610
794
161
890
754
636
55
57
89
107
151
(101
)
339
$
717
$
945
$
161
$
890
$
754
$
636
$
(46
)
$
396
$
89
Other
Post-Retirement
U.S. Pension Plans
Non-U.S. Pension Plans
Benefit Plans
2010
2009
2008
2010
2009
2008
2010
2009
2008
$
6,459
$
6,372
$
5,326
$
10,449
$
13,123
$
6,968
$
(580
)
$
36
$
(112
)
(298
)
$
6,459
$
6,372
$
5,326
$
10,449
$
13,123
$
6,968
$
(878
)
$
36
$
(112
)
84
Table of Contents
Other Post-Retirement
U.S. Pension Plans
Non-U.S. Pension Plans
Benefit Plans
2010
2009
2010
2009
2010
2009
$
190
$
1,153
$
(1,923
)
$
5,619
$
(585
)
$
52
(103
)
(107
)
(374
)
(183
)
(8
)
77
(372
)
75
$
87
$
1,046
$
(2,297
)
$
5,436
$
(890
)
$
129
Other Post-Retirement
U.S. Pension Plans
Non-U.S. Pension Plans
Benefit Plans
2010
2009
2008
2010
2009
2008
2010
2009
2008
5.31
%
5.84
%
6.13
%
5.70
%
5.80
%
6.50
%
5.31
%
5.84
%
6.13
%
Other Post-Retirement
U.S. Pension Plans
Non-U.S. Pension Plans
Benefit Plans
2010
2009
2008
2010
2009
2008
2010
2009
2008
5.84
%
6.13
%
6.00
%
5.80
%
6.50
%
5.90
%
5.84
%
6.13
%
6.00
%
7.50
%
7.50
%
7.50
%
6.50
%
6.00
%
6.00
%
N/A
N/A
N/A
85
Table of Contents
Target Allocation
Pension Plans
U.S.
Non-U.S.
2010
2009
52
%
54
%
54
%
56
%
33
36
36
34
15
10
10
10
100
%
100
%
100
%
100
%
Quoted Prices in
Active Markets for
Significant
Significant
Identical Assets
Observable Inputs
Unobservable Inputs
Total
Level 1
Level 2
Level 3
$
132
$
132
$
$
3,679
3,679
3,886
3,886
611
611
6,506
6,506
8,408
8,408
2,492
2,492
2,934
2,934
2,695
2,695
3,075
3,075
13,448
13,448
3,472
3,472
2,091
2,091
$
53,429
$
10,631
$
37,235
$
5,563
86
Table of Contents
Quoted Prices in
Active Markets for
Significant
Significant
Identical Assets
Observable Inputs
Unobservable Inputs
Total
Level 1
Level 2
Level 3
$
3,560
$
3,560
$
$
3,677
3,677
524
524
6,432
6,432
9,573
9,573
2,949
2,949
2,618
2,618
2,697
2,697
12,490
12,490
2,435
2,435
1,982
1,982
$
48,937
$
10,186
$
34,334
$
4,417
2010
2009
$
4,417
$
5,456
571
(1,216
)
633
(19
)
(58
)
196
$
5,563
$
4,417
87
Table of Contents
1 Percentage
1 Percentage
Point Increase
Point Decrease
$
11
$
(11
)
$
60
$
(55
)
Other Post-
Retirement
Pension Plans
Benefit Plans
$
2,917
$
315
$
2,913
$
262
$
3,226
$
186
$
3,431
$
163
$
3,571
$
115
$
22,185
$
423
17.
Related
Party Transactions
18.
Consolidating
Guarantor and Non-Guarantor Financial Information
88
Table of Contents
As of December 31, 2010
89
Table of Contents
For the Year Ended December 31,
2010
Parent
Guarantor
Non-Guarantor
Company
Companies
Companies
Elimination
Consolidated
(In thousands)
$
$
452,065
$
183,792
$
(38,078
)
$
597,779
396,969
164,091
(38,078
)
522,982
55,096
19,701
74,797
42,435
13,676
56,111
240
240
(8,214
)
(502
)
8,716
1,730
1,730
8,214
11,193
6,025
(8,716
)
16,716
633
(5,413
)
(4,780
)
1,514
15,148
172
16,834
6,067
(3,955
)
11,266
(8,716
)
4,662
(420
)
(615
)
(790
)
(1,825
)
$
6,487
$
(3,340
)
$
12,056
$
(8,716
)
$
6,487
90
Table of Contents
For the Year Ended December 31,
2010
Parent
Guarantor
Non-Guarantor
Company
Companies
Companies
Elimination
Consolidation
(In thousands)
$
558
$
12,714
$
4,291
$
$
17,563
(8,096
)
(2,005
)
(10,101
)
83
19
102
44
44
(7,969
)
(1,986
)
(9,955
)
25,359
25,359
1,132
1,132
(1,761
)
(1,761
)
6,176
(4,755
)
(1,421
)
30,906
(4,755
)
(1,421
)
24,730
(1
)
730
729
31,464
(11
)
1,614
33,067
9
38
9,477
9,524
$
31,473
$
27
$
11,091
$
$
42,591
91
Table of Contents
As of December 31, 2009
92
Table of Contents
For the Year Ended December 31,
2009
Parent
Guarantor
Non-Guarantor
Company
Companies
Companies
Elimination
Consolidated
(In thousands)
$
$
374,803
$
108,336
$
(24,570
)
$
458,569
360,582
112,900
(24,570
)
448,912
14,221
(4,564
)
9,657
33,758
14,116
47,874
389
389
30,135
30,135
13,058
4,214
17,272
85,889
(296
)
(85,593
)
1,104
2,547
3,651
(85,889
)
(63,927
)
(25,441
)
85,593
(89,664
)
14
(11,133
)
(11,119
)
795
13,981
357
15,133
1,254
1,254
2,902
2,902
(90,840
)
(77,922
)
(14,665
)
85,593
(97,834
)
(9,305
)
(11,576
)
4,582
(16,299
)
$
(81,535
)
$
(66,346
)
$
(19,247
)
$
85,593
$
(81,535
)
93
Table of Contents
For the Year Ended December 31,
2009
Parent
Guarantor
Non-Guarantor
Company
Companies
Companies
Elimination
Consolidation
(In thousands)
$
(128
)
$
22,231
$
(3,999
)
$
77
$
18,181
(4,129
)
(1,476
)
(5,605
)
15
39
54
(2,194
)
(2,194
)
(6,308
)
(1,437
)
(7,745
)
4
4
(635
)
(635
)
51
51
(27,013
)
(27,013
)
12,213
12,213
13,121
13,121
(81
)
(13
)
(94
)
5,649
(15,850
)
10,278
(77
)
(3,263
)
(3,263
)
127
(15,931
)
10,265
(77
)
(5,616
)
1
(1
)
(2,606
)
(2,606
)
(9
)
2,223
2,214
9
47
7,254
7,310
$
9
$
38
$
9,477
$
$
9,524
94
Table of Contents
For the Year Ended December 31,
2008
Parent
Guarantor
Non-Guarantor
Company
Companies
Companies
Elimination
Consolidated
(In thousands)
$
$
568,908
$
226,227
$
(31,646
)
$
763,489
521,113
199,817
(31,646
)
689,284
47,795
26,410
74,205
43,161
19,603
62,764
(6,075
)
(6,075
)
162,225
45,306
207,531
414
965
1,379
198,520
(220
)
(198,300
)
(198,520
)
(151,710
)
(39,464
)
198,300
(191,394
)
159
13,786
13,945
589
14,215
585
15,389
(199,109
)
(166,084
)
(53,835
)
198,300
(220,728
)
7,650
(19,092
)
(2,527
)
(13,969
)
$
(206,759
)
$
(146,992
)
$
(51,308
)
$
198,300
$
(206,759
)
95
Table of Contents
For the Year Ended December 31,
2008
96
Table of Contents
19.
Quarterly
Financial Data
(Unaudited):
Operating
Basic
Diluted
Gross Profit
Income
Net Income
Earnings (Loss)
Earnings (Loss)
Revenues
(Loss)
(Loss)
(Loss)
Per Share
Per Share(1)
$
146,407
$
16,892
$
3,621
$
676
$
0.03
$
0.03
$
142,349
$
17,756
$
2,618
$
693
$
0.03
$
0.02
$
150,950
$
19,864
$
5,109
$
1,142
$
0.04
$
0.04
$
158,073
$
20,285
$
5,368
$
3,976
$
0.14
$
0.14
$
108,530
$
(3,249
)
$
(18,401
)
$
(19,404
)
$
(0.89
)
$
(0.89
)
$
103,503
$
(1,089
)
$
(22,232
)
$
(22,513
)
$
(1.04
)
$
(1.04
)
$
110,811
$
3,612
$
(7,784
)
$
(15,882
)
$
(0.73
)
$
(0.73
)
$
135,725
$
10,383
$
(41,247
)
$
(23,736
)
$
(1.08
)
$
(1.08
)
(1)
See Note 14 for discussion on the computation of diluted
shares outstanding.
(2)
We recorded approximately $1.4 million of restructuring
charges in the second quarter of 2010.
(3)
We recorded approximately $0.2 million of restructuring
charges in the third quarter of 2010.
(4)
We recorded approximately $0.1 million of restructuring
charges in the fourth quarter of 2010.
(5)
We recorded approximately $2.0 million of restructuring
charges and approximately $10.4 million of impairment
charges relating to our intangible and long-lived assets in the
second quarter of 2009.
(6)
We recorded approximately $1.7 million of restructuring
charges and approximately $37.0 million of impairment
charges relating to our intangible and long-lived assets in the
fourth quarter of 2009.
20.
Subsequent
Events.
97
Table of Contents
Item 9.
Changes
in and Disagreements with Accountants on Accounting and
Financial Disclosure
Item 9A.
Controls
and Procedures
98
Table of Contents
Pertain to the maintenance of records that in reasonable detail
accurately and fairly reflect the transactions and dispositions
of the assets;
Provide reasonable assurance that transactions are recorded as
necessary to permit preparation of financial statements in
accordance with generally accepted accounting principles, and
that receipts and expenditures of the company are being made
only in accordance with authorizations of management and
directors; and
Provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use or disposition of our
assets that could have a material effect on the financial
statements.
Chief Executive Officer
Chief Financial Officer
99
Table of Contents
100
Table of Contents
Item 9B.
Other
Information
Item 10.
Directors,
Executive Officers and Corporate Governance
A.
Directors
of the Registrant
69
Chairman and Director
57
President, Chief Executive Officer and Director
54
Director
61
Director
63
Director
70
Director
75
Director
101
Table of Contents
B.
Executive
Officers
C.
Section 16(a)
Beneficial Ownership Reporting Compliance and Corporate
Governance
102
Table of Contents
Item 11.
Executive
Compensation
Item 12.
Security
Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters
Number of
Weighted-Average
Securities
Number of Securities to be
Exercise Price of
Remaining Available
Issued upon Exercise of
Outstanding
for Future Issuance
Outstanding Options,
Options, Warrants
Under Equity
Warrants and Rights
and Rights
Compensation Plans
470,351
(1)
$
15.84
293,484
6,793
$
5.54
477,144
$
15.69
293,484
(1)
Includes options granted under our Third Amended and Restated
Equity Incentive Plan. Does not include 2,161,900 shares of
restricted stock granted under our Third Amended and Restated
Equity Incentive Plan, of which 1,226,519 shares had not
vested as of December 31, 2010.
Item 13.
Certain
Relationships, Related Transactions and Director
Independence
Item 14.
Principal
Accountant Fees and Services
103
Table of Contents
Item 15.
Exhibits
and Financial Statements Schedules
(1)
LIST OF
FINANCIAL STATEMENT SCHEDULES
2010
2009
2008
$
1,812
$
3,419
$
3,758
4,278
2,678
4,772
(3,405
)
(4,280
)
(4,852
)
32
(5
)
(259
)
$
2,717
$
1,812
$
3,419
2010
2009
2008
$
$
$
106
(106
)
$
$
$
2010
2009
2008
$
1,791
$
$
646
1,730
3,651
(206
)
(2,007
)
(1,860
)
(440
)
(51
)
$
1,463
$
1,791
$
104
Table of Contents
2010
2009
2008
$
55,517
$
44,553
$
1,289
13,582
10,964
43,264
$
69,099
$
55,517
$
44,553
(2)
LIST OF
EXHIBITS
2
.1
Agreement of Purchase and Sale, dated February 7, 2004, by
and among, CVG Acquisition LLC, Mayflower Vehicle Systems, Inc.,
Mayflower Vehicle Systems Michigan, Inc., Wayne Stamping and
Assembly LLC and Wayne-Orrville Investments LLC (incorporated by
reference to the Companys annual report on
Form 10-K
(File
No. 000-50890),
filed on March 15, 2005).
2
.2
Stock Purchase Agreement, dated as of June 3, 2005, by and
between Monona Holdings LLC and Commercial Vehicle Group, Inc.
(incorporated by reference to the Companys current report
on
Form 8-K
(File
No. 000-50890),
filed on June 8, 2005).
2
.3
Stock Purchase Agreement, dated as of August 8, 2005, by
and between Trim Systems, Inc., Cabarrus Plastics, Inc. and the
Shareholders listed therein (incorporated by reference to the
Companys current report on
Form 8-K
(File
No. 000-50890)
filed on August 12, 2005).
2
.4**
Asset Purchase Agreement, dated as of January 28, 2011, by
and among CVG Alabama LLC and Bostrom Seating, Inc.
3
.1
Amended and Restated Certificate of Incorporation of Commercial
Vehicle Group, Inc. (incorporated by reference to the
Companys quarterly report on
Form 10-Q
(File
No. 000-50890),
filed on September 17, 2004).
3
.2
Amended and Restated By-laws of Commercial Vehicle Group, Inc.
(incorporated by reference to the Companys quarterly
report on
Form 10-Q
(File
No. 000-50890),
filed on September 17, 2004).
3
.3
Certificate of Designations of Series A Preferred Stock
(included as Exhibit A to the Rights Agreement incorporated
by reference to Exhibit 4.8) (incorporated by reference to
the Companys current report on
Form 8-K
(File
No. 000-50890),
filed on May 22, 2009.
4
.1
Indenture, dated July 6, 2005, among the Company, the
subsidiary guarantors party thereto and U.S. Bank National
Association, as Trustee, with respect to 8.0% senior notes
due 2013 (incorporated herein by reference to the Companys
current report on
Form 8-K
(File
No. 000-50890),
filed on July 8, 2005).
4
.2
Supplemental Indenture, dated as of August 10, 2005, by and
among the Company, Cabarrus Plastics, Inc., the subsidiary
guarantors party thereto and U.S. Bank National Association
(incorporated by reference to the Companys current report
on
Form 8-K
(File
No. 000-50890)
filed on August 12, 2005).
4
.3
Supplemental Indenture, dated as of November 10, 2006,
among the Company, CVG European Holdings, LLC, the subsidiary
guarantors party thereto and U.S. Bank National Association
(incorporated by reference to the Companys annual report
on
Form 10-K
(File
No. 000-50890),
filed on March 13, 2007).
105
Table of Contents
4
.4
Supplemental Indenture, dated as of November 28, 2007,
among the Company, CVG Oregon, LLC, the subsidiary guarantors
party thereto and U.S. Bank National Association (incorporated
by reference in the Companys annual report on
Form 10-K
(File
No. 000-50890),
filed on March 14, 2008).
4
.5
Supplemental Indenture, dated as of January 7, 2009, by and
among Commercial Vehicle Group, Inc., CVG CS LLC, the subsidiary
guarantors party thereto and U.S. Bank National Association
(incorporated by reference to the Companys current report
on
Form 8-K
(File
No. 000-50890),
filed on January 8, 2009.
4
.6
Supplemental Indenture, dated as of January 27, 2011, by
and among Commercial Vehicle Group, Inc., CVG Alabama LLC, the
subsidiary guarantors party thereto and U.S. Bank National
Association.
4
.7
Registration Rights Agreement, dated July 6, 2005, among
the Company, the subsidiary guarantors party thereto and the
purchasers named therein (incorporated herein by reference to
the Companys current report on
Form 8-K
(File
No. 000-50890),
filed on July 8, 2005).
4
.8
Form of senior note (attached as exhibit to Exhibit 4.1)
(incorporated herein by reference to the Companys current
report on
Form 8-K
(File
No. 000-50890),
filed on July 8, 2005).
4
.9
Commercial Vehicle Group, Inc. Rights Agreement, dated as of
May 21, 2009, by and between the Company and Computershare
Trust Company, N.A. (incorporated by reference to the
Companys current report on
Form 8-K
(File
No. 000-50890),
filed on May 22, 2009).
4
.10
Form of Rights Certificate (included as Exhibit B to the
Rights Agreement) (incorporated by reference to the
Companys current report on
Form 8-K
(File
No. 000-50890),
filed on May 22, 2009).
4
.11
Form of Summary of Rights to Purchase (included as
Exhibit C to the Rights Agreement) (incorporated by
reference to the Companys current report on
Form 8-K
(File
No. 000-50890),
filed on May 22, 2009).
4
.12
Commercial Vehicle Group, Inc. Amendment No. 1 to Rights
Agreement, dated as of March 9, 2011, by and between the
Company and Computershare Trust Company, N.A. (incorporated
by reference to the Companys current report on
Form 8-K
(File
No. 001-34365),
filed on March 9, 2011).
4
.13
Form of Certificate of Common Stock of the Company (incorporated
by reference to the Companys registration statement on
Form S-1
(File
No. 333-115708)).
4
.14
Indenture, dated as of August 4, 2009, by and among the
Company, the subsidiary guarantors party thereto and U.S. Bank
National Association, as trustee (incorporated by reference to
the Companys current report on
Form 8-K
(File
No. 001-34365),
filed on August 5, 2009).
4
.15
Security Agreement, dated as of August 4, 2009, by and
among the Company, the subsidiaries party thereto and U.S. Bank
National Association, as third lien collateral agent
(incorporated by reference to the Companys current report
on
Form 8-K
(File
No. 001-34365),
filed on August 5, 2009).
4
.16
Warrant and Unit Agreement, dated as of August 4, 2009, by
and between the Company and U.S. Bank National Association, as
warrant agent and unit agent (incorporated by reference to the
Companys current report on
Form 8-K
(File
No. 001-34365),
filed on August 5, 2009).
10
.1
Loan and Security Agreement, dated January 7, 2009, by and
among Commercial Vehicle Group, Inc. and certain of its direct
and indirect U.S. subsidiaries, as borrowers, and Bank of
America, N.A., as agent and lender (incorporated by reference to
the Companys current report on
Form 8-K
(File
No. 000-50890),
filed on January 8, 2009).
10
.2
Amendment No. 1, dated as of March 12, 2009, to Loan
and Security Agreement, dated as of January 7, 2009, by and
among Commercial Vehicle Group, Inc. and certain of its direct
and indirect U.S. subsidiaries, as borrowers, and Bank of
America, N.A., as agent and lender (incorporated by reference to
the Companys current report on
Form 8-K
(File
No. 000-50890),
filed on March 12, 2009).
10
.3*
Commercial Vehicle Group, Inc. Third Amended and Restated Equity
Incentive Plan (incorporated by reference to the Companys
current report on
Form 8-K
(File
No. 000-50890),
filed on May 18, 2009).
10
.4
Exchange Agreement, dated as of August 4, 2009, by and
among the Company, the subsidiaries party thereto and certain
holders of the Companys 8% Senior Notes due 2013
(incorporated by reference to the Companys current report
on
Form 8-K
(File
No. 001-34365),
filed on August 5, 2009).
Table of Contents
10
.5
Consent and Amendment No. 2, dated as of August 4,
2009, to Loan and Security Agreement, dated as of
January 7, 2009, by and among the Company, certain of the
Companys subsidiaries, as borrowers, and Bank of America,
N.A. as agent and lender (incorporated by reference to the
Companys current report on
Form 8-K
(File
No. 001-34365),
filed on August 5, 2009).
10
.6
Amendment No. 3, dated as of September 7, 2010, to
Loan and Security Agreement, dated as of January 7, 2009,
by and among the Company, certain of the Companys
subsidiaries, as borrowers, and Bank of America, N.A. as agent
and lender (incorporated by reference to the Companys
current report on
Form 8-K
(File
No. 001-34365),
filed on September 7, 2010).
10
.7
Loan and Security Agreement, dated as of August 4, 2009, by
and among the Company, as borrower, certain of the
Companys subsidiaries, as guarantors, the financial
institutions party to thereto, as lenders, and Credit Suisse, as
agent (incorporated by reference to the Companys current
report on
Form 8-K
(File
No. 001-34365),
filed on August 5, 2009).
10
.8
Intercreditor Agreement, dated as of August 4, 2009, by and
among the Company , certain of the Companys subsidiaries,
Bank of America, N.A., as first lien administrative and
collateral agent under the First Lien Credit Agreement, Credit
Suisse, as second lien administrative and collateral agent under
the Second Lien Credit Agreement and U.S. Bank National
Association, as trustee and third lien collateral agent under
the Third Lien Notes Indenture (incorporated by reference to the
Companys current report on
Form 8-K
(File
No. 001-34365),
filed on August 5, 2009).
10
.9
Intercreditor Agreement, dated as of August 4, 2009, by and
among the Company, certain of the Companys subsidiaries,
Credit Suisse, as second lien administrative and collateral
agent under the Second Lien Credit Agreement and U.S. Bank
National Association, as trustee and third lien collateral agent
under the Third Lien Notes Indenture (incorporated by reference
to the Companys current report on
Form 8-K
(File
No. 001-34365),
filed on August 5, 2009).
10
.10*
Bostrom Holding, Inc. Management Stock Option Plan (incorporated
by reference to the Companys registration statement on
Form S-1
(File
No. 333-15708),
filed on May 21, 2004).
10
.11*
Form of Grant of Nonqualified Stock Option pursuant to the
Bostrom Holding, Inc. Management Stock Option Plan (incorporated
by reference to the Companys registration statement on
Form S-1
(File
No. 333-15708),
filed on May 21, 2004).
10
.12*
Form of Grant of Nonqualified Stock Option pursuant to the
Commercial Vehicle Group, Inc. Third Amended and Restated Equity
Incentive Plan (incorporated by reference to the Companys
annual report on
Form 10-K
(File
No. 000-50890),
filed on March 15, 2005).
10
.13
Form of Non-Competition Agreement (incorporated by reference to
the Companys registration statement on
Form S-1
(File
No. 333-15708),
filed on May 21, 2004).
10
.14
Registration Agreement, dated October 5, 2000, by and among
Bostrom Holding, Inc. and the investors listed on
Schedule A attached thereto (incorporated by reference to
the Companys registration statement on
Form S-1
(File
No. 333-15708),
filed on May 21, 2004).
10
.15
Joinder to Registration Agreement, dated as of March 28,
2003, by and among Bostrom Holding, Inc. and J2R Partners VI,
CVS Partners, LP and CVS Executive Investco LLC (incorporated by
reference to the Companys registration statement on
Form S-1
(File
No. 333-15708),
filed on May 21,2004).
10
.16
Joinder to the Registration Agreement, dated as of May 20,
2004, by and among Commercial Vehicle Group, Inc. and the prior
stockholders of Trim Systems (incorporated by reference to the
Companys quarterly report on
Form 10-Q
(File
No. 000-50890),
filed on September 17, 2004).
10
.17*
Commercial Vehicle Group, Inc. 2007 Bonus Plan (incorporated by
reference to the Companys current report on
Form 8-K
(File
No. 000-50890),
filed on March 9, 2007).
10
.18*
Commercial Vehicle Group, Inc. 2008 Bonus Plan (incorporated by
reference to the Companys current report on
Form 8-K
(File
No. 000-50890),
filed on March 25, 2008).
10
.19*
First Amendment to Commercial Vehicle Group, Inc. 2008 Bonus
Plan dated November 5, 2008 (incorporated by reference to
the Companys annual report on
Form 10-K
(File
No. 000-50890),
filed on March 16, 2009).
10
.20*
Commercial Vehicle Group, Inc. 2010 Bonus Plan (incorporated by
reference to the Companys current report on
Form 8-K
(File
No. 001-34365),
filed on March 11, 2010).
Table of Contents
10
.21*
Commercial Vehicle Group, Inc. 2011 Bonus Plan (incorporated by
reference to the Companys current report on
Form 8-K
(File
No. 001-34365),
filed on February 28, 2011).
10
.22*
Service Agreement, dated March 1, 1993, between Motor
Panels (Coventry) Plc and William Gordon Boyd (incorporated by
reference to the Companys registration statement on
Form S-1
(File
No. 333-125626),
filed on June 8, 2005).
10
.23*
Assignment and Assumption Agreement, dated as of June 1,
2004, between Mayflower Vehicle Systems PLC and Mayflower
Vehicle Systems, Inc. (incorporated by reference to the
Companys registration statement on
Form S-1
(File
No. 333-125626),
filed on June 8, 2005).
10
.24*
Form of Restricted Stock Agreement pursuant to the Commercial
Vehicle Group, Inc. Third Amended and Restated Equity Incentive
Plan (incorporated by reference to amendment no. 1 to the
Companys registration statement on
Form S-4
(File
No. 333-129368),
filed on December 1, 2005).
10
.25*
Change in Control & Non-Competition Agreement dated
April 5, 2006 with Mervin Dunn (incorporated by reference
to the Companys current report on
Form 8-K
(File
No. 000-50890),
filed on April 7, 2006).
10
.26*
Change in Control & Non-Competition Agreement dated
April 5, 2006 with Gerald L. Armstrong (incorporated by
reference to the Companys current report on
Form 8-K
(File
No. 000-50890),
filed on April 7, 2006).
10
.27*
Change in Control & Non-Competition Agreement dated
April 5, 2006 with Chad M. Utrup (incorporated by reference
to the Companys current report on
Form 8-K
(File
No. 000-50890),
filed on April 7, 2006).
10
.28*
Change in Control & Non-Competition Agreement dated
April 5, 2006 with James F. Williams (incorporated by
reference to the Companys current report on
Form 8-K
(File
No. 000-50890),
filed on April 7, 2006.
10
.29*
Change in Control & Non-Competition Agreement dated
May 22, 2007 with Kevin R.L. Frailey (incorporated by
reference to the Companys current report on
Form 8-K
(File
No. 000-50890),
filed on May 25, 2007).
10
.30*
Change in Control & Non-Competition Agreement dated
May 22, 2007 with William Gordon Boyd (incorporated by
reference to the Companys current report on
Form 8-K
(File
No. 000-50890),
filed on May 25, 2007).
10
.31*
First Amendment to Change in Control & Non-Competition
Agreement dated November 5, 2008 with Mervin Dunn
(incorporated by reference to the Companys annual report
on
Form 10-K
(File
No. 000-50890),
filed on March 16, 2009).
10
.32*
First Amendment to Change in Control & Non-Competition
Agreement dated November 5, 2008 with Gerald L. Armstrong
(incorporated by reference to the Companys annual report
on
Form 10-K
(File
No. 000-50890),
filed on March 16, 2009).
10
.33*
First Amendment to Change in Control & Non-Competition
Agreement dated November 5, 2008 with Chad M. Utrup
(incorporated by reference to the Companys annual report
on
Form 10-K
(File
No. 000-50890),
filed on March 16, 2009).
10
.34*
First Amendment to Change in Control & Non-Competition
Agreement dated November 5, 2008 with Kevin R.L. Frailey
(incorporated by reference to the Companys annual report
on
Form 10-K
(File
No. 000-50890),
filed on March 16, 2009).
10
.35*
First Amendment to Change in Control & Non-Competition
Agreement dated November 5, 2008 with James F. Williams
(incorporated by reference to the Companys annual report
on
Form 10-K
(File
No. 000-50890),
filed on March 16, 2009).
10
.36*
Amended and Restated Deferred Compensation Plan dated
November 5, 2008 (incorporated by reference to the
Companys annual report on
Form 10-K
(File
No. 000-50890),
filed on March 16, 2009). .
10
.37
Form of indemnification agreement with directors and executive
officers (incorporated by reference to the Companys annual
report on
Form 10-K
(File
No. 000-50890),
filed on March 14, 2008).
Table of Contents
10
.38*
Terms and conditions of employment for executive officers
(incorporated by reference to the Companys annual report
on
Form 10-K
(File
No. 000-50890),
filed on March 14, 2008).
12
.1
Computation of ratio of earnings to fixed charges.
21
.1
Subsidiaries of Commercial Vehicle Group, Inc.
23
.1
Consent of Deloitte & Touche LLP.
31
.1
Certification by Mervin Dunn, President and Chief Executive
Officer.
31
.2
Certification by Chad M. Utrup, Chief Financial Officer.
32
.1
Certification pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to the Sarbanes-Oxley Act of 2002.
32
.2
Certification pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to the Sarbanes-Oxley Act of 2002.
*
Management contract or compensatory plan or arrangement required
to be filed as an exhibit to this annual report on
Form 10-K.
**
The schedules and exhibits to the Asset Purchase Agreement have
been omitted from this filing pursuant to Item 601(b)(2) of
Regulation S-K.
The Company will furnish supplementally a copy of any such
omitted schedules or exhibits to the SEC upon request.
Table of Contents
By:
Chairman and Director
March 15, 2011
President, Chief Executive Officer (Principal Executive Officer)
and Director
March 15, 2011
Director
March 15, 2011
Director
March 15, 2011
Director
March 15, 2011
Director
March 15, 2011
Director
March 15, 2011
Chief Financial Officer (Principal
Financial and Accounting Officer)
March 15, 2011
110
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PAGE | ||||
1. DEFINITIONS
|
4 | |||
|
||||
2. BASIC TRANSACTION
|
4 | |||
|
||||
2.1. Purchase and Sale of Assets
|
4 | |||
2.2. Assumption of Liabilities
|
4 | |||
2.3. Preliminary Purchase Price
|
5 | |||
2.4. Closing
|
5 | |||
2.5. Deliveries at Closing
|
5 | |||
2.6. Preparation of Closing Date Balance Sheet
|
7 | |||
2.7. Post-Closing Date Adjustment to Preliminary Purchase Price
|
8 | |||
2.8. Third-Party Consents
|
8 | |||
2.9. Allocation
|
9 | |||
|
||||
3. SELLERS REPRESENTATIONS AND WARRANTIES
|
9 | |||
|
||||
3.1. Organization of Seller
|
10 | |||
3.2. Authorization of Transaction
|
10 | |||
3.3. Non-contravention
|
10 | |||
3.4. Brokers Fees
|
11 | |||
3.5. Title and Sufficiency of Assets
|
11 | |||
3.6. Subsidiaries
|
11 | |||
3.7. Financial Statements
|
11 | |||
3.8. Events Subsequent to June 30, 2010
|
12 | |||
3.9. Undisclosed Liabilities
|
13 | |||
3.10. Legal Compliance
|
14 | |||
3.11. Tax Matters
|
14 | |||
3.12. Real Property
|
15 | |||
3.13. Intellectual Property
|
17 | |||
3.14. Tangible Assets
|
19 | |||
3.15. Inventory
|
19 | |||
3.16. Contracts
|
19 | |||
3.17. Notes and Accounts Receivable
|
21 | |||
3.18. Powers of Attorney
|
21 | |||
3.19. Insurance
|
21 | |||
3.20. Litigation
|
22 | |||
3.21. Product Warranty
|
22 | |||
3.22. Product Liability
|
23 | |||
3.23. Employees
|
23 | |||
3.24. Employee Benefits
|
24 | |||
3.25. Guaranties
|
26 | |||
3.26. Environmental, Health, and Safety Matters
|
26 | |||
3.27. Business Continuity
|
27 | |||
3.28. Computer and Technology Security
|
27 |
i
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PAGE | ||||
3.29. Certain Business Relationships with Seller
|
27 | |||
3.30. Customers and Suppliers
|
27 | |||
3.31. Solvency
|
28 | |||
|
||||
4. BUYERS REPRESENTATIONS AND WARRANTIES
|
28 | |||
|
||||
4.1. Organization of Buyer
|
28 | |||
4.2. Authorization of Transaction
|
28 | |||
4.3. Brokers Fees
|
28 | |||
4.4. Non-contravention
|
28 | |||
4.5. Sufficiency of Funds
|
29 | |||
4.6. Litigation
|
29 | |||
4.7. No Reliance
|
29 | |||
|
||||
5. POST-CLOSING COVENANTS
|
29 | |||
|
||||
5.1. General
|
29 | |||
5.2. Litigation Support
|
30 | |||
5.3. Transition
|
30 | |||
5.4. Confidentiality
|
30 | |||
5.5. Covenant Not to Compete
|
31 | |||
5.6. Non-Hire
|
32 | |||
5.7. Use of Name
|
32 | |||
5.8. Employees
|
32 | |||
5.9. Tax and Accounting Assistance
|
33 | |||
5.10. Accuride Guaranty of Performance
|
34 | |||
5.11. Prohibited Transfers of Acquired Assets
|
35 | |||
5.12. Notification of Claims
|
35 | |||
5.13. Post-Closing Insurance
|
36 | |||
5.14. Payment of PL Assumed Liabilities and
WC Assumed Liabilities
|
36 | |||
|
||||
6. REMEDIES FOR BREACHES OF THIS AGREEMENT
|
36 | |||
|
||||
6.1. Survival of Representations and Warranties
|
36 | |||
6.2. Indemnification by Seller
|
37 | |||
6.3. Indemnification by Buyer
|
37 | |||
6.4. Certain Limitations
|
37 | |||
6.5. Matters Involving Third Parties
|
39 | |||
6.6. Determination of Adverse Consequences
|
40 | |||
6.7. Recoupment Against Escrow Agreement
|
40 | |||
6.8. Net of Insurance
|
40 | |||
6.9. Exclusive Remedy
|
40 | |||
|
||||
7. MISCELLANEOUS
|
41 | |||
|
||||
7.1. No Third-Party Beneficiaries
|
41 | |||
7.2. Entire Agreement
|
41 | |||
7.3. Succession and Assignment
|
41 | |||
7.4. Counterparts
|
41 | |||
7.5. Headings
|
41 |
ii
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PAGE | ||||
7.6. Notices
|
41 | |||
7.7. Governing Law
|
42 | |||
7.8. Amendments and Waivers
|
43 | |||
7.9. Severability
|
43 | |||
7.10. Expenses
|
43 | |||
7.11. Construction
|
43 | |||
7.12. Incorporation of Schedules
|
44 | |||
7.13. Submission to Jurisdiction
|
44 | |||
7.14. Tax Matters
|
44 | |||
7.15. Public Announcements and Press Releases
|
44 |
iii
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4
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(a) | Sellers Deliverables |
(i) | Seller shall execute, acknowledge (if appropriate), and deliver to Buyer |
(A) | The Escrow Agreement; | ||
(B) | a transition services agreement attached hereto as Exhibit B (the Transition Services Agreement ); | ||
(C) | assignments (including a bill of sale with respect to the Acquired Assets, an assignment of contract rights, a special warranty deed with respect to the Real Property, a title policy for the benefit of Buyer with respect to the Real Property and an assignment of the Intellectual Property), each attached hereto as Exhibits C-1 through C-5 ; | ||
(D) | such other instruments of sale, transfer, conveyance, and assignment as Buyer and its counsel may request. |
(ii) | Seller shall deliver to Buyer a non-foreign affidavit dated as of the Closing Date, sworn under penalty of perjury and in form and substance required under the Treasury Regulations issued pursuant to Code §1445 stating that Seller is not a foreign person as defined in Code §1445 (the FIRPTA Affidavit ); | ||
(iii) | Seller shall deliver to Buyer a copy of the certificate of incorporation of Seller certified on or soon before the Closing Date by the Secretary of State (or comparable officer) of the jurisdiction of Sellers incorporation; |
5
CONFIDENTIAL | EXECUTION COPY |
(iv) | Seller shall deliver to Buyer copies of the certificate of good standing of Seller issued on or soon before the Closing Date by the Secretary of State (or comparable officer) of the jurisdiction of Sellers organization and of each jurisdiction in which Seller is qualified to do business; | ||
(v) | Seller shall deliver to Buyer a certificate of the secretary or an assistant secretary of Seller, dated the Closing Date, in form and substance reasonably satisfactory to Buyer, certifying: (A) no amendments to the certificate of incorporation of Seller since March 1, 2010; (B) the bylaws of Seller; (C) the resolutions of the board of directors (or other authorizing body) (or a duly authorized committee thereof) of Seller authorizing the execution, delivery, and performance of this Agreement and the transactions contemplated hereby; and (D) incumbency and signatures of the officers of Seller executing this Agreement or any other agreement contemplated by this Agreement; | ||
(vi) | Seller shall deliver to Buyer the consents set forth on Schedule 2.8(a). |
(b) | Buyers Deliverables |
(i) | Buyer shall deliver to Seller the Closing Payment by delivery of cash in the amount of the Closing Payment payable by wire transfer or delivery of other immediately available funds; | ||
(ii) | Buyer will deliver to the Escrow Agent the consideration specified in Section 2.3 above. | ||
(iii) | Buyer shall deliver to Seller a copy of Buyers certificate of formation certified on or soon before the Closing Date by the Secretary of State (or comparable officer) of the jurisdiction of Buyers organization; | ||
(iv) | Buyer shall deliver to Seller a copy of the certificate of existence of Buyer issued on or soon before the Closing Date by the Secretary of State (or comparable officer) of the jurisdiction of Buyers organization and of each jurisdiction in which each Buyer is qualified to do business; | ||
(v) | Buyer shall deliver to Seller a certificate of the secretary or an assistant secretary of Buyer, dated the Closing Date, in form and substance reasonably satisfactory to Seller, certifying: (A) no amendments to the certificate of formation of Buyer since November 30, 2010; (B) the limited liability company agreement of Buyer; (C) the resolutions of the sole member of Buyer authorizing the execution, delivery, and performance of this Agreement and the transactions contemplated hereby; and (D) incumbency and signatures of the officers of Buyer executing this Agreement or any other agreement contemplated by this Agreement; | ||
(vi) | Buyer shall deliver to Seller a resale certificate for each taxing jurisdiction in which Seller could reasonably be expected to incur any liability or obligation for any Taxes under applicable law due to the absence of such certificate; |
6
CONFIDENTIAL | EXECUTION COPY |
(vii) | Buyer shall execute, acknowledge (if appropriate), and deliver to Seller |
(A) | an assumption in the form attached hereto as Exhibit C-2 ; | ||
(B) | the Transition Services Agreement; (C) the Escrow Agreement; | ||
(D) | acceptance of employment offers by Michael Berta, David Carter, and Peter Bernier in forms reasonably acceptable to such parties; and | ||
(E) | such other instruments of assumption as Seller and its counsel may reasonably request. |
(viii) | Buyer shall be responsible for recording any assignments related to Intellectual Property at the United States Patent and Trademark Office, the U.S. Copyright Office, or any similar foreign offices. |
(a) | Within 90 days after the Closing Date, Buyer will prepare and deliver to Seller a draft balance sheet (the Draft Closing Date Balance Sheet ) for Seller as of the close of business on the Closing Date (determined on a pro forma basis as though Seller and Buyer had not consummated the transactions contemplated by this Agreement). Buyer will prepare the Draft Closing Date Balance Sheet in accordance with GAAP applied on a basis consistent with the preparation of the Financial Statements provided by Seller pursuant to this Agreement. | |
(b) | If Seller has any objections to the Draft Closing Date Balance Sheet, it shall deliver a detailed statement describing such objections to Buyer within 30 days after receiving the Draft Closing Date Balance Sheet. Buyer and Seller shall use their respective commercially reasonable efforts to resolve any such objections themselves. If Seller and Buyer do not obtain a final resolution within 15 days after Buyer has received the statement of objections, however, Buyer and Seller shall select an accounting firm mutually acceptable to them to resolve any remaining objections. If Buyer and Seller are unable to agree on the choice of an accounting firm within 20 days after Buyer has received Sellers statement of objections, they will select a nationally-recognized accounting firm by lot (after excluding their respective regular outside accounting firms). Only the amounts in dispute (the aggregate of all such amounts, the Disputed Amounts ) will be referred to such accountants for final determination. The determination of any accounting firm so selected shall be issued in writing within 45 days of such referral. The final determination of the Disputed Amounts shall be based solely on presentations by Buyer and Seller and shall not involve the accountants independent review. Any determination by the accountants shall not be outside the range defined by the respective amounts in the Draft Closing Date Balance Sheet proposed by Buyer and Sellers statement of objections, and such determination shall be final, binding and non-appealable upon Seller and Buyer. Buyer and Seller shall bear the fees and expenses of the accountants equally. |
7
CONFIDENTIAL | EXECUTION COPY |
(c) | Buyer shall revise the Draft Closing Date Balance Sheet as appropriate to reflect the resolution of any objections thereto pursuant to Section 2.6(c). The Closing Date Balance Sheet shall mean the Draft Closing Date Balance Sheet together with any revisions thereto pursuant to Section 2.6(c). |
(a) | Within 3 Business Days following the final determination of the Net Working Capital pursuant to Section 2.6(c), the Preliminary Purchase Price shall be adjusted as follows: |
(i) | If the Net Working Capital exceeds the Estimated Net Working Capital Upper Collar, Buyer shall increase the Preliminary Purchase Price by an amount equal to such excess and Buyer shall pay such amount by wire transfer or delivery of other immediately available funds. | ||
(ii) | If the Net Working Capital is less than the Estimated Net Working Capital Lower Collar, Buyer shall reduce the Preliminary Purchase Price by an amount equal to such deficiency and Seller shall pay such amount by wire transfer or delivery of other immediately available funds. |
8
CONFIDENTIAL | EXECUTION COPY |
9
CONFIDENTIAL | EXECUTION COPY |
(a) | violate any constitution, statute, regulation, rule, injunction, judgment, order, decree, ruling, charge, or other restriction of any government, governmental agency, or court to which Seller is subject in connection with the Business except as would not have a Material Adverse Effect with respect to Seller or the Acquired Assets; | |
(b) | violate any provision of the charter or bylaws of Seller; or | |
(c) | except as set forth on Schedule 3.3(c), conflict with, result in a breach of, constitute a default under, result in the acceleration of, create in any party the right to accelerate, terminate, modify, or cancel, or require any notice under any agreement, contract, lease, license, instrument, or other arrangement to which Seller is a party or by which it is bound in connection with the Business or to which any of the Acquired Assets are subject (or result in the imposition of any Lien, other than the Assumed Liabilities, upon any of the Acquired Assets) except as would not have a Material Adverse Effect with respect to Seller or the Acquired Assets. |
10
CONFIDENTIAL | EXECUTION COPY |
(a) | Except as set forth on Schedule 3.5(a) and with respect to the Real Property included in the Acquired Assets (which is covered in Section 3.5(b) below), Seller has good and marketable title to, or a valid leasehold interest in, all of the Acquired Assets, free and clear of any Liens or restrictions on transfer, other than such Liens and restrictions related to the Assumed Liabilities. | |
(b) | Except as disclosed in Section 3.5(b) of the Disclosure Schedule, Seller has title to all of the Real Property included in the Acquired Assets. | |
(c) | Except as otherwise indicated on Schedule 3.5(c), the Acquired Assets include all assets necessary for the Business as presently conducted. | |
(d) | Seller owns and possesses or has the right to use pursuant to a valid and enforceable written license, sublicense, agreement, or permission all Intellectual Property necessary for the operation of the Business as presently conducted by Seller. Each item of Intellectual Property owned or used in connection with the Business immediately prior to the Closing will be owned or available for use by Buyer on identical terms and conditions immediately subsequent to the Closing. |
(a) | Attached to the Disclosure Schedule as Exhibit D are the following financial statements (collectively the Financial Statements ): (i) unaudited balance sheets and statements of income, changes in stockholders equity, and cash flow as of and for the fiscal years ended December 31, 2006, December 31, 2007, December 31, 2008, and December 31, 2009 (the Most Recent Fiscal Year End ) for Seller; and (ii) unaudited balance sheets and statements of income, changes in stockholders equity, and cash flow (the Most Recent Financial Statements ) as of and for the ten (10) months ended October 31, 2010 for Seller. | |
(b) | Except as set forth in Section 3.7 of the Disclosure Schedule: (i) the Financial Statements have been prepared in accordance with GAAP throughout the periods covered thereby, subject in the case of the Most Recent Financial Statements to normal and recurring year-end adjustments (the effect of which will not be materially adverse) and the absence of |
11
CONFIDENTIAL | EXECUTION COPY |
(a) | Seller has not sold, leased, transferred, or assigned any of its material assets, tangible or intangible, other than in the Ordinary Course of Business; | |
(b) | Seller has not entered into any agreement, contract, lease, or license (or series of related agreements, contracts, leases, and licenses) involving more than $25,000 outside the Ordinary Course of Business; | |
(c) | no party has accelerated, terminated, modified, or cancelled any agreement, contract, lease, or license (or series of related agreements, contracts, leases, and licenses) involving more than $25,000 to which Seller is a party or by which any Acquired Asset is bound; | |
(d) | except as directly related to the Assumed Liabilities, Seller has not imposed or permitted to exist any Lien upon any of the Acquired Assets, tangible or intangible; | |
(e) | Seller has not made any capital expenditure (or series of related capital expenditures) involving more than $25,000 outside the Ordinary Course of Business; | |
(f) | Seller has not made any capital investment in, any loan to, or any acquisition of the securities or assets of, any other Person (or series of related capital investments, loans, and acquisitions) involving more than $25,000 outside the Ordinary Course of Business; | |
(g) | Seller has not issued any note, bond, or other debt security or created, incurred, assumed, or guaranteed any indebtedness for borrowed money or capitalized lease obligation either involving more than $25,000 singly or $50,000 in the aggregate; | |
(h) | Seller has not materially delayed or postponed the payment of its accounts payable and other Liabilities outside the Ordinary Course of Business; | |
(i) | Seller has not cancelled, compromised, waived, or released any right or claim (or series of related rights and claims) involving more than $25,000 outside the Ordinary Course of Business; | |
(j) | Seller has not transferred, assigned, or granted any license or sublicense of any rights under or with respect to any of its Intellectual Property outside the Ordinary Course of Business; |
12
CONFIDENTIAL | EXECUTION COPY |
(k) | Seller has not experienced any damage, destruction, or loss (whether or not covered by insurance) to the Acquired Assets involving more than $25,000; | |
(l) | Seller has not entered into or terminated any written employment contract or collective bargaining agreement relating to its employees or modified the terms of any existing such contract or agreement; | |
(m) | Seller has not granted any increase in the base compensation of any of its directors, officers, and employees in relation to the Business outside the Ordinary Course of Business; | |
(n) | except as indicated in Section 3.8(o) of the Disclosure Schedule, Seller has not adopted, amended, modified, or terminated any bonus, profit sharing, incentive, severance, or other plan, contract, or commitment for the benefit of any of its directors, officers, and employees in connection with the Business (or taken any such action with respect to any other Employee Benefit Plan); | |
(o) | Seller has not made any material change in employment terms for any of its directors, officers, and employees outside the Ordinary Course of Business; | |
(p) | Seller has not made or pledged to make, nor has any party done so on their behalf, any charitable or other capital contribution in excess of $25,000 outside the Ordinary Course of Business; | |
(q) | there has not been any other occurrence, event, incident, action, failure to act, or transaction outside the Ordinary Course of Business involving Seller or the Business except as would not have a Material Adverse Effect on the Business; | |
(r) | Seller has not discharged a material Liability or Lien related to the Acquired Assets outside the Ordinary Course of Business; | |
(s) | Seller has not made any loans or advances of money in excess of $25,000 singly or $50,000 in the aggregate; and | |
(t) | Seller has not committed to any of the foregoing. |
13
CONFIDENTIAL | EXECUTION COPY |
(a) | Seller has timely filed all material Tax Returns that it was required to file in connection with the Business. All such Tax Returns were correct and complete in all material respects. All material Taxes owed by Seller in connection with the Business (whether or not shown on any Tax Return) have been paid or are the subject of timely filed disputes. Seller is not currently the beneficiary of any extension of time within which to file any Tax Return. In the past three (3) years, no claim has been made by an authority in a jurisdiction where Seller does not file Tax Returns that it is or may be subject to taxation by that jurisdiction. There are no Liens on any of the Acquired Assets that arose in connection with any failure (or alleged failure) to pay any Tax. | |
(b) | Seller has withheld and paid all Taxes required to have been withheld and paid in connection with amounts paid or owing to any employee, independent contractor, creditor, stockholder, or other third party and all Forms W-2 and 1099 required with respect thereto have been properly completed and timely filed. | |
(c) | Neither Seller nor any director or officer of Seller expects any authority to assess any additional Taxes for any period for which Tax Returns have been filed. There is no dispute or claim concerning any Tax Liability relating to the Business either (i) claimed or raised by any authority in writing or (ii) as to which Seller has Knowledge. Section 3.11 of the Disclosure Schedule lists all federal, state, local, and foreign income Tax Returns filed for taxable periods ended on or after December 31, 2007, indicates those Tax Returns that have been audited, and indicates those Tax Returns that currently are the subject of audit. Seller has made available in the Data Room to Buyer correct and complete copies of all income Tax Returns, examination reports, and statements of deficiencies assessed against or agreed to by Seller since December 31, 2007. |
14
CONFIDENTIAL | EXECUTION COPY |
(d) | Seller has not waived any statute of limitations in respect of Taxes or agreed to any extension of time with respect to a Tax assessment or deficiency. |
(a) | Section 3.12(a) of the Disclosure Schedule sets forth the address and description of each parcel of Real Property. With respect to each parcel of Real Property: |
(i) | Seller has fee simple title, free and clear of all liens and encumbrances, except Permitted Liens; | ||
(ii) | Seller has not leased or otherwise granted to any Person the right to use or occupy such Real Property or any portion thereof; and | ||
(iii) | to Sellers Knowledge, there are no outstanding options, rights of first offer or rights of first refusal to purchase such Real Property or any portion thereof or interest therein. |
(b) | Seller has no Leased Real Property. | |
(c) | The Real Property identified in Section 3.12(a) of the Disclosure Schedule comprises all of the real property used or otherwise related to the Business; and Seller is not a party to any agreement or option to purchase any real property or interest therein related solely to the Business. | |
(d) | To Sellers Knowledge, all Improvements are in good condition and repair and sufficient for the operation of the Business. To Sellers Knowledge, there are no structural deficiencies or defects affecting any of the Improvements and there are no facts or conditions affecting any of the Improvements that would, individually or in the aggregate, interfere in any material respect with the use or occupancy of the Improvements or any portion thereof in the operation of the Business as currently conducted thereon. | |
(e) | To Sellers Knowledge, there is no condemnation, expropriation or other proceeding in eminent domain, pending or threatened, affecting any parcel of Real Property or any portion thereof or interest therein. To Sellers Knowledge, there is no injunction, decree, order, writ or judgment outstanding, nor any claim, litigation, administrative action or similar proceeding, pending or threatened, relating to the ownership, lease, use or occupancy of the Real Property or any portion thereof, or the operation of the Business as currently conducted thereon. | |
(f) | To Sellers Knowledge, the Real Property is in compliance with all applicable building, zoning, subdivision, health and safety and other land use laws, including the Americans with Disabilities Act of 1990, as amended, and all insurance requirements affecting the Real Property (collectively, the Real Property Laws ), and the current use and occupancy of the Real Property and operation of the Business thereon does not violate |
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any Real Property Laws. Seller has not received any notice of violation of any Real Property Law and, to Sellers Knowledge, there is no reasonable Basis for the issuance of any such notice or the taking of any action for such violation. To the Knowledge of Seller, there is no pending or anticipated change in any Real Property Laws that will materially impair the ownership, lease, use or occupancy of any Real Property or any portion thereof in the continued operation of the Business as currently conducted thereon. | ||
(g) | All water, oil, gas, electrical, steam, compressed air, telecommunications, sewer, storm and waste water systems and other utility services or systems necessary for the Business as currently conducted on the Real Property have been installed and are operational and sufficient for the operation of the Business as currently conducted thereon. Each such utility service enters the Real Property from an adjoining public street or valid private easement in favor of the supplier of such utility service or appurtenant to such Real Property, and is not dependent for its access, use or operation on any land, building, improvement or other real property interest that is not included in the Real Property. | |
(h) | To Sellers Knowledge, all certificates of occupancy, permits, licenses, franchises, approvals and authorizations (collectively, the Real Property Permits ) of all governmental authorities, board of fire underwriters, association or any other entity having jurisdiction over the Real Property that are required or appropriate to use or occupy the Real Property or operate the Business as currently conducted thereon, have been issued and are in full force and effect. Section 3.12(h) of the Disclosure Schedule lists all material Real Property Permits held by Seller with respect to each parcel of Real Property. Seller has made available in the Data Room to Buyer a true and complete copy of all Real Property Permits. Seller has not received any notice from any governmental authority or other entity having jurisdiction over the Real Property threatening a suspension, revocation, modification or cancellation of any Real Property Permit and, to Sellers Knowledge, there is no reasonable Basis for the issuance of any such notice or the taking of any such action. The Real Property Permits are transferable to Buyer without the consent or approval of the issuing governmental authority or entity; no disclosure, filing or other action by Seller is required in connection with such transfer, and Buyer shall not be required to assume any Liabilities or obligations under the Real Property Permits as a result of such transfer other than the Assumed Liabilities. | |
(i) | To Sellers Knowledge, the classification of each parcel of Real Property under applicable zoning laws, ordinances and regulations does not prohibit the use and occupancy of such parcel and the operation of the Business as currently conducted thereon, and permits the Improvements located thereon as currently constructed, used and occupied. Sellers use or occupancy of the Real Property or any portion thereof or the operation of the Business as currently conducted thereon is not dependent on a permitted non-conforming use or permitted non-conforming structure or similar variance, exemption or approval from any governmental authority. | |
(j) | Seller has not received any notice of violation of any Encumbrance Documents, and, to Sellers Knowledge, there is no reasonable Basis for the issuance of any such notice or, to the extent applicable, the taking of any action for such violation. |
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(k) | To Sellers Knowledge, except as set forth on Section 3.5 (b) of the Disclosure Schedule, none of the Improvements encroaches on any land that is not included in the Real Property or on any easement affecting such Real Property, or violates any building lines or set-back lines, and there are no encroachments onto any of the Real Property, or any portion thereof, that would interfere with the use or occupancy of such Real Property or the continued operation of the Business as currently conducted thereon. | |
(l) | There are no Taxes, assessments, fees, charges or similar costs or expenses imposed by any governmental authority, association or other entity having jurisdiction over the Real Property (collectively, the Real Estate Impositions ) with respect to any Real Property or portion thereof that are delinquent. To Sellers Knowledge, the Title Commitment and Section 3.5(b) of the Disclosure Schedule set forth all Real Estate Impositions that are due and payable with respect to such parcel. | |
(m) | None of the Real Property or any portion thereof is located in a flood hazard area (as defined by the Federal Emergency Management Agency). |
(a) | In the past five (5) years, to Sellers Knowledge (i) Seller has not interfered with, infringed upon, misappropriated, or otherwise come into conflict with any Intellectual Property rights of third parties, and (ii) Seller has never received any charge, complaint, claim, demand, or notice alleging any interference, infringement, misappropriation, or violation of Intellectual Property rights owned by a third party (including any claim that Seller must license or refrain from using any Intellectual Property rights of any third party) that has not been settled to the satisfaction of Seller and the third party. Except as set forth in Section 3.13(a) of the Disclosure Schedule, to the Knowledge of Seller and the directors and officers (and employees with responsibility for Intellectual Property matters) of Seller, no third party has interfered with, infringed upon, misappropriated, or otherwise come into conflict with any Intellectual Property rights of Seller relating to the Business. | |
(b) | Section 3.13(b) of the Disclosure Schedule identifies each issued patent that is currently in force or active trademark registration which has been issued to Seller with respect to any of the Intellectual Property of the Business, identifies each pending patent application or pending application for trademark registration that Seller has made with respect to any of its Intellectual Property, and identifies each license, sublicense, agreement, or other permission that Seller has granted to any third party with respect to any of its Intellectual Property. Seller has made available in the Data Room to Buyer correct and complete copies of all such licenses, sublicenses, agreements, and permissions (as amended to date) and has made available in the Data Room to Buyer correct and complete copies of all other written documentation evidencing ownership and prosecution (if applicable) of each such item should any such written documentation not be available to Buyer on the USPTO website (including the private or public PAIR) as of the Closing Date. Section 3.13(b) of the Disclosure Schedule also identifies each material unregistered trademarks, service marks, trade names, corporate names or Internet domain names, computer software item (other than commercially available off-the-shelf software purchased or |
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licensed for less than a total cost of $5,000 in the aggregate). With respect to each item of Intellectual Property required to be identified in Section 3.13(b) of the Disclosure Schedule: |
(i) | Seller owns and possesses all right, title, and interest in and to the item, free and clear of any Lien, license, or other restriction or limitation regarding use or disclosure; | ||
(ii) | the item is not subject to any outstanding injunction, judgment, order, decree, ruling, or charge; | ||
(iii) | no action, suit, proceeding, hearing, investigation, charge, complaint, claim, or demand is pending or is threatened that challenges the legality, validity, enforceability, use, or ownership of the item, and there are no grounds for the same; and | ||
(iv) | no loss or expiration of the item is threatened, pending, or reasonably foreseeable, except for patents expiring at the end of their statutory terms (and not as a result of any act or omission by Seller relating to the Business, including, without limitation, a failure by Seller to pay any required maintenance fees by the Closing Date). |
(c) | Section 3.13(c) of the Disclosure Schedule identifies each item of Intellectual Property that any third party owns and that Seller uses in connection with the Business pursuant to license, sublicense, agreement, or permission. Seller has made available in the Data Room to Buyer correct and complete copies of all such licenses, sublicenses, agreements, and permissions (each as amended to date). With respect to each item of Intellectual Property required to be identified in Section 3.13(c) of the Disclosure Schedule: |
(i) | the license, sublicense, agreement, or permission covering the item is legal, valid, binding, enforceable, and in full force and effect; | ||
(ii) | the license, sublicense, agreement, or permission will continue to be legal, valid, binding, enforceable, and in full force and effect on identical terms following the consummation of the transactions contemplated hereby (including the assignments and assumptions referred to in Section 2 above); | ||
(iii) | no party to the license, sublicense, agreement, or permission is in material breach or default, and no event has occurred that with notice or lapse of time would constitute a material breach or default or permit termination, modification, or acceleration thereunder; | ||
(iv) | no party to the license, sublicense, agreement, or permission, has repudiated any provision thereof; | ||
(v) | with respect to each sublicense, the representations and warranties set forth in subsections (i) through (iv) above are true and correct with respect to the underlying license; |
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(vi) | to the Knowledge of Seller, the Intellectual Property is not subject to any outstanding injunction, judgment, order, decree, ruling, or charge; | ||
(vii) | to the Knowledge of Seller, no action, suit, proceeding, hearing, investigation, charge, complaint, claim, or demand is pending or is threatened that challenges the legality, validity, or enforceability of the Intellectual Property, and there are no grounds for the same; | ||
(viii) | Seller has not granted any sublicense or similar right with respect to the license, sublicense, agreement, or permission; and |
(d) | Except as set forth in Section 3.13(d) of the Disclosure Schedule, to the Knowledge of Seller and the directors and officers (and employees with responsibility for Intellectual Property matters) of Seller, Seller will not interfere with, infringe upon, misappropriate, or otherwise come into conflict with, any Intellectual Property rights of third parties as a result of the continued operation of the Business as presently conducted and there are no facts that indicate a likelihood of the foregoing. | |
(e) | Seller has complied with and are presently in compliance with all foreign, federal, state, local, governmental (including, but not limited to, the Federal Trade Commission and State Attorneys General), administrative or regulatory laws, regulations, guidelines and rules applicable to any Intellectual Property. |
(a) | any agreement (or group of related agreements) for the lease of personal property to or from any Person providing for lease payments in excess of $25,000 per annum; |
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(b) | any agreement (or group of related agreements) for the purchase or sale of raw materials, commodities, supplies, products, or other personal property, or for the furnishing or receipt of services, the performance of which will extend over a period of more than 1 year, result in a loss to Seller, or involve consideration in excess of $25,000 in any given 12-month period; | |
(c) | any agreement (including any oral agreement) within Sellers Knowledge with any customer involving the pricing of goods or commodities to be bought or sold, or adjustments or discounts of such pricing. | |
(d) | any agreement concerning a partnership or joint venture; | |
(e) | any agreement (or group of related agreements) under which Seller has created, incurred, or assumed any indebtedness for borrowed money, or any capitalized lease obligation, in excess of $25,000 or under which it has imposed a Lien on any of the Acquired Assets, tangible or intangible; | |
(f) | any agreement concerning confidentiality or non-competition except (i) any agreement entered into in connection (directly or indirectly) with any proposed sale of Seller, the Business or substantially all of the assets of the Business and (ii) any agreement entered into in the Ordinary Course of Business; | |
(g) | any agreement to which any Affiliates of Seller is a party; | |
(h) | any profit sharing, stock option, stock purchase, stock appreciation, deferred compensation, severance, or other plan or arrangement for the benefit of the current or former directors, officers, and employees of Seller; | |
(i) | any collective bargaining agreement; | |
(j) | any written agreement for the employment of any individual on a full-time, part-time, consulting, or other basis; | |
(k) | any agreement under which Seller has advanced or loaned any amount to any of the directors, officers, and employees of Seller outside the Ordinary Course of Business; | |
(l) | any agreement under which the consequences of a default or termination could have a Material Adverse Effect with respect to the Business; | |
(m) | any agreement under which Seller has granted any Person any registration rights (including, without limitation, demand and piggyback registration rights); | |
(n) | any settlement, conciliation or similar agreement, the performance of which will involve payment after October 31, 2010 of consideration in excess of $25,000, or imposition of monitoring or reporting obligations to any governmental entity outside the Ordinary Course of Business; |
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(o) | any agreement under which Seller has advanced or loaned any other Person amounts in the aggregate exceeding $25,000; or | |
(p) | any other agreement (or group of related agreements) the performance of which involves consideration in excess of $25,000 in any given 12-month period. |
(a) | the name, address, and telephone number of the agent; | |
(b) | the name of the insurer, the name of the policyholder, and the name of each covered insured; | |
(c) | the policy number and the period of coverage; |
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(d) | an indication of whether the coverage was on a claims made, occurrence, or other basis, and the amount of coverage; and | |
(e) | a description of any retroactive premium adjustments or other loss-sharing arrangements. |
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(a) | With respect to the Business: |
(i) | there is no collective bargaining agreement or relationship with any labor organization; | ||
(ii) | to the Knowledge of Seller, no executive or manager of Seller (A) has any present intention to terminate his or her employment, or (B) is a party to any confidentiality, non-competition, proprietary rights or other such agreement between such employee and any Person besides Seller that would be material to the performance of such employees employment duties, or the ability of Seller or Buyer to conduct the Business; | ||
(iii) | to the Knowledge of Seller, no labor organization or group of employees has filed any representation petition or made any written or oral demand for recognition; | ||
(iv) | to the Knowledge of Seller, no union organizing or decertification efforts are underway or threatened and no other question concerning representation exists; | ||
(v) | no labor strike, work stoppage, slowdown, or other material labor dispute has occurred, and none is underway or, to the Knowledge of Seller, threatened; | ||
(vi) | there is no workers compensation liability, experience or matter outside the Ordinary Course of Business; | ||
(vii) | except as set forth on Section 3.23(a) of the Disclosure Schedule, there is no employment-related charge, complaint, grievance, investigation, inquiry or obligation of any kind, pending or, to the Knowledge of Seller, threatened in any forum, relating to an alleged violation or breach by Seller (or its officers or directors) of any law, regulation or contract in connection with the Business; and, | ||
(viii) | to the Knowledge of Seller, no employee or agent of Seller has committed any act or omission giving rise to material liability for any violation or breach identified in subsection (vii) above. |
(b) | Except as set forth in Section 3.23(b) of the Disclosure Schedule, (i) there are no written employment contracts or severance agreements relating to the Business with any employees of Seller, and (ii) there are no written personnel policies, rules, or procedures |
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relating to the Business and applicable to employees of Seller. True and complete copies of all such documents have been made available in the Data Room to Buyer prior to the date of this Agreement. | ||
(c) | With respect to this transaction, any notice required under any law or collective bargaining agreement has been given, and all bargaining obligations with any employee representative have been satisfied. Seller has not implemented any plant closing or layoff of employees that could implicate the Worker Adjustment and Retraining Notification Act of 1988, as amended, or any similar foreign, state, or local law, regulation, or ordinance (collectively, the WARN Act ), and no such action will be implemented without advance notification to Buyer. |
(a) | Section 3.24(a) of the Disclosure Schedule lists each Employee Benefit Plan that Seller maintains relating to the Business, to which Seller contributes or has any obligation to contribute in connection with the Business, or with respect to which Seller has any Liability in connection with the Business. |
(i) | Each such Employee Benefit Plan (and each related trust, insurance contract, or fund) has been maintained, funded and administered in accordance with the terms of such Employee Benefit Plan and the terms of any applicable collective bargaining agreement and complies in form and in operation in all respects with the applicable requirements of ERISA, the Code, and other applicable laws. | ||
(ii) | All required reports and descriptions (including Form 5500 annual reports, summary annual reports, and summary plan descriptions) have been timely filed and/or distributed in accordance with the applicable requirements of ERISA and the Code with respect to each such Employee Benefit Plan. The requirements of COBRA have been met with respect to each such Employee Benefit Plan and each Employee Benefit Plan maintained by Seller or an ERISA Affiliate that is an Employee Welfare Benefit Plan subject to COBRA. | ||
(iii) | All contributions (including all employer contributions and employee salary reduction contributions) that are due have been made within the time periods prescribed by ERISA and the Code to each such Employee Benefit Plan that is an Employee Pension Benefit Plan and all contributions for any period ending on or before the Closing Date that are not yet due have been made to each such Employee Pension Benefit Plan or accrued in accordance with the past custom and practice of Seller. All premiums or other payments for all periods ending on or before the Closing Date have been paid with respect to each such Employee Benefit Plan that is an Employee Welfare Benefit Plan. | ||
(iv) | Each such Employee Benefit Plan that is intended to meet the requirements of a qualified plan under Code §401(a) has been timely amended for the requirements of the Tax legislation commonly known as GUST and EGTRRA and has been submitted to the Internal Revenue Service for a |
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favorable determination letter on the GUST and EGTRRA requirements within the applicable remedial amendment period. | |||
(v) | There have been no Prohibited Transactions with respect to any such Employee Benefit Plan, and there have been no Prohibited Transactions with respect to any Employee Benefit Plan maintained by Seller or an ERISA Affiliate for which Buyer could be subject to any Liability following the consummation of this Agreement. No Fiduciary has any Liability for breach of fiduciary duty or any other failure to act or comply in connection with the administration or investment of the assets of any such Employee Benefit Plan. No action, suit, proceeding, hearing, or investigation with respect to the administration or the investment of the assets of any such Employee Benefit Plan (other than routine claims for benefits) is pending or threatened. Seller has no Knowledge of any reasonable Basis for any such action, suit, proceeding, hearing, or investigation. | ||
(vi) | Seller has made available to Buyer correct and complete copies of the plan documents and summary plan descriptions, the most recent determination letter received from the Internal Revenue Service, the most recent annual report (Form 5500, with all applicable attachments), and all related trust agreements, insurance contracts, and other funding arrangements that implement each such Employee Benefit Plan. |
(b) | Except as set forth on Section 3.24(b) of the Disclosure Schedule, none of Seller, any of Sellers Subsidiaries, nor any ERISA Affiliate contributes to, has any obligation to contribute to, or has any Liability under or with respect to any Employee Pension Benefit Plan that is a defined benefit plan (as defined in ERISA §3(35)). No Acquired Asset is subject to any Lien under ERISA or the Code. | |
(c) | Except as set forth in Section 3.24(c) of the Disclosure Schedule, none of Seller, any of Sellers Subsidiaries, or any ERISA Affiliate contributes to, has any obligation to contribute to, or has any Liability (including withdrawal liability as defined in ERISA §4201) under or with respect to any Multiemployer Plan. | |
(d) | Except as set forth in Section 3.24(d) of the Disclosure Schedule, Seller does not maintain, contribute to or has an obligation to contribute to, or has any Liability with respect to, any Employee Welfare Benefit Plan providing health or life insurance or other welfare-type benefits for current or future retired or terminated directors, officers or employees (or any spouse or other dependent thereof) of Seller or any other Person in connection with the Business other than in accordance with COBRA. | |
(e) | Section 3.24(e) of the Disclosure Schedule lists each agreement, contract, plan, or other arrangementwhether or not written and whether or not an Employee Benefit Plan (collectively a Plan )to which Seller or any of Sellers Subsidiaries is a party that is a nonqualified deferred compensation plan subject to Code §409A. Each such Plan complies with the requirements of Code §409A(a)(2), (3), and (4) and any Internal Revenue Service guidance issued thereunder. |
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(a) | Except as set forth in Section 3.26(a) of the Disclosure Schedule, to Sellers Knowledge, Seller has materially complied with Environmental, Health, and Safety Requirements applicable to Sellers operation of the Business at the Real Property during the period of Sellers ownership thereof. | |
(b) | Except as set forth in Section 3.26(b) of the Disclosure Schedule, to Sellers Knowledge, Seller has materially complied with all permits, licenses and other authorizations that are required by applicable Environmental, Health, and Safety Requirements for Sellers operation of the Business at the Real Property. | |
(c) | The list of permits set forth in Section 3.26(c) of the Disclosure Schedule, to Sellers Knowledge, contains the only material permits required by applicable Environmental, Health, and Safety Requirements for Sellers operation of the Business at the Real Property as of the Closing Date. | |
(d) | Except as set forth in Section 3.26(d) of the Disclosure Schedule, to Sellers Knowledge, Seller has not received any written notice regarding any material violation of Environmental, Health, and Safety Requirements applicable to Sellers operation of the Business at the Real Property. | |
(e) | Except as listed on Section 3.26(e) of the Disclosure Schedule, to Sellers Knowledge, none of the following exists at the Real Property: (i) underground storage tanks, (ii) asbestos-containing material in any form or condition, (iii) materials or equipment containing polychlorinated biphenyls, (iv) groundwater monitoring wells, or (v) areas where hazardous substances have been disposed of by Seller. | |
(f) | Except as listed on Section 3.26(f) of the Disclosure Schedule, to Sellers Knowledge, Seller has not treated, stored, disposed of, arranged for or permitted the disposal of, transported from, handled, manufactured, distributed, exposed any person to, or released any hazardous substance at the Real Property in violation of any Environmental, Health, and Safety Requirements or that has resulted in claims of Liability against Seller under the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, the Solid Waste Disposal Act, as amended, or any other Environmental, Health, and Safety Requirements. | |
(g) | Except as set forth in Section 3.26(g) of the Disclosure Schedule, to Sellers Knowledge, Seller has not designed, manufactured, sold, marketed, installed, or distributed products or other items containing asbestos at the Real Property, and Seller is not subject to any claims of Liability with respect to the presence, as of the Closing Date, of asbestos in any product or item or at the Real Property in connection with the Business. |
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(h) | Except as listed in Section 3.26(h) to the Disclosure Schedule, to Sellers Knowledge, Seller has not assumed, undertaken, provided an indemnity with respect to, or otherwise become subject to, a claim of Liability against any other Person for any corrective or remedial action obligation at the Real Property or relating to Environmental, Health, and Safety Requirements applicable to the operations of the Business at the Real Property. | |
(i) | Except as listed in Section 3.26(i) to the Disclosure Schedule, to Sellers Knowledge, Seller is aware of no facts or conditions relating to the Real Property that (i) constitute a material violation of applicable Environmental, Health, and Safety Requirements, (ii) require investigation, remediation, or corrective action pursuant to Environmental, Health, and Safety Requirements in response to a release by Seller of hazardous substances at the Real Property, or (iii) are the subject of a claim of Liability against Seller pursuant to Environmental, Health, and Safety Requirements for a release by Seller of a hazardous substance at the Real Property. | |
(j) | To Sellers Knowledge, Seller has made available in the Data Room to Buyer all material environmental documents relating to the Real Property and that are in Sellers possession, custody, or control. |
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(a) | violate any constitution, statute, regulation, rule, injunction, judgment, order, decree, ruling, charge, or other restriction of any government, governmental agency, or court to which Buyer is subject; | |
(b) | violate any provision of the charter or bylaws of Buyer; or |
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(c) | conflict with, result in a breach of, constitute a default under, result in the acceleration of, create in any party the right to accelerate, terminate, modify, or cancel, or require any notice under any agreement, contract, lease, license, instrument, or other arrangement to which Buyer is a party or by which it is bound. |
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(a) | Except as listed in Section 5.8(a) of the Disclosure Schedule, commencing on the Closing Date Seller shall terminate all employees of the Business on the Closing Date, and, at Buyers sole discretion subject to Buyers obligation under Section 5.8(d), Buyer may |
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offer employment, on an at will basis, to any or all of such employees. Each of Sellers employees who accepts such offer of employment and commences employment with Buyer shall be hereinafter referred to as a Transferred Employee . |
(b) | Buyer shall not adopt or assume any of the Employee Benefit Plans that Seller maintains. Buyer shall have no liability to any Employee Benefit Plan maintained by Seller as a result of this Agreement, including any liability under COBRA to any M & A qualified beneficiaries. Without limiting the foregoing, Seller agrees that it shall retain all Liability with respect to the retiree medical and life insurance benefit plan disclosed in the Disclosure Schedules. Seller further agrees that it shall not terminate such plan prior to December 31, 2015. | |
(c) | Each Transferred Employee who is a participant in Sellers 401(k) plan (the Sellers Savings Plan ) shall cease to be an active participant under Sellers Savings Plan effective as of Closing Date. Effective within sixty (60) days of the Closing, Buyer shall have, or shall cause its Affiliates to have, in effect a defined contribution plan that is qualified under Section 401(a) of the Code, which includes a qualified cash or deferred arrangement within the meaning of Section 401(k) of the Code (the Buyers Savings Plan ). Transferred Employees who meet the age and service requirements of Buyers Savings Plan as of the Closing Date (based on Transferred Employees service with Seller) shall be eligible to participate within such sixty (60) day period. Buyer agrees to cause the Buyers Savings Plan to accept direct rollovers of the account balance, of each Transferred Employee as requested by Transferred Employees. | |
(d) | Unless previously notified by Seller of such a plant closing or layoff, the Seller and Buyer agree that as of the effective time of Closing Seller has not implemented any plant closing or layoff of employees that implicates the WARN Act. Buyer agrees that as of the effective time of Closing and immediately thereafter it shall employ no less than 68% of the employees previously employed by Seller immediately prior to the effective time of Closing. For the avoidance of doubt, under no circumstances shall Seller have any Liability directly or indirectly related to Buyers compliance with the WARN Act following the Closing. |
(a) | At no cost to Seller, Accuride or any Affiliate of Accuride, Buyer shall reasonably cooperate as Accuride or its Affiliates or their respective representatives may reasonably request to facilitate the completion of Sellers Tax filings (to the extent related to the Business) for the tax years 2010 and 2011 and any audit or similar proceeding related thereto including (without limitation), cooperating in the accurate completion of Federal and State Tax Packages for the tax years 2010 and 2011 within a reasonable period of time after receiving such Federal and State Tax Packages in order to meet any applicable federal, state or local tax filing deadlines, or as otherwise agreed by the Parties. Buyer shall retain all supporting materials related to Sellers Tax filings for the tax years 2010 and 2011 in accordance with its internal record retention policies, provided that Buyer shall not dispose of such supporting materials prior the expiration of the applicable statute of limitations periods. |
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(b) | At no cost to Buyer, CVG or any Affiliate of CVG, Seller or its designee(s) shall reasonably cooperate as Buyer or its Affiliates or their respective representatives may reasonably request to facilitate the completion of Buyers Tax filings (to the extent related to the Acquired Assets) for the tax years 2010 and 2011 and any audit or similar proceeding related thereto including (without limitation), cooperating in the accurate completion of Federal and State Tax Packages for the tax years 2010 and 2011 within a reasonable period of time after receiving such Federal and State Tax Packages in order to meet any applicable federal, state or local tax filing deadlines, or as otherwise agreed by the Parties. Seller shall retain all supporting materials related to Buyers Tax filings for the tax years 2010 and 2011 in accordance with its internal record retention policies, provided that Seller shall not dispose of such supporting materials prior the expiration of the applicable statute of limitations periods. | |
(c) | At no cost to Seller, Accuride, or any Affiliate of Accuride, Buyer shall reasonably cooperate with Seller in closing the accounting books and records of the Business with respect to Sellers fiscal year 2010, the first quarter of 2011 and recording the transactions contemplated by this Agreement for the month of January, 2011. Buyers assistance shall include providing reasonable cooperation by the accounting staff located at the Piedmont, Alabama plant (including reasonable cooperation in closing and balancing of subsystems, balancing of general ledger accounts and financial reporting, all consistent with past practice during the 6 month period prior to the Closing Date). | |
(d) | At no cost to Buyer, CVG, or any Affiliate of CVG, Seller agrees to reasonably cooperate, at its own expense, as reasonably requested by Buyer with respect to closing of the accounting books and records of the Business for the month of January 2011 and the first fiscal quarter of 2011. | |
(e) | Buyer and Seller agree to track post-Closing accounting transactions by date or other means such that post-Closing accounting transaction can be segregated from pre-Closing accounting transactions within the respective financial accounting systems being utilized by each of Buyer and Seller. |
(a) | Accuride unconditionally guarantees to Buyer the full and complete performance by Seller of Sellers obligations to indemnify the Buyer Indemnitees pursuant to the terms and conditions set forth in Section 6. Accuride hereby waives diligence, presentment, demand of performance, filing of any claim, any right to require any proceeding first against Seller, protest, notice and all demands whatsoever in connection with the performance of its obligations set forth in this Section 5.10. Accuride further agrees that the obligations of which it guarantees performance under this Section 5.10 may be amended, modified, assigned, extended or renewed by Seller, in whole or in part, without notice or further assent from Accuride, and Accuride will remain bound upon this guarantee notwithstanding any such amendment, modification, assignment, extension or renewal of any such obligation. The obligations of Accuride hereunder shall not be affected by (i) the failure of Buyer to assert any claim or demand or to enforce any right |
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or remedy against Seller under the provisions of this Agreement or any other agreement or otherwise; (ii) any extension or renewal of any provision hereof or thereof to the extent agreed to by Seller or Accuride; (iii) the failure of Buyer to obtain the consent of Accuride with respect to any rescission, waiver, compromise, amendment or modification of any of the terms or provisions of this Agreement or of any other agreement; (iv) the release, exchange, waiver or foreclosure of any security held for the guaranteed obligations or any of them; (v) the failure of Buyer to exercise any right or remedy against any other guarantor of the guaranteed obligations; or (vi) the release or substitution of any guarantor. Accuride unconditionally and irrevocably waives each and every defense and setoff of any nature which, under the principle of guarantee, would operate to impair or diminish in any way the obligations of Accuride under this guarantee, other than any defense or setoff available to Seller, and Accuride shall be entitled to use and benefit from any defenses, rights, setoff or indemnification available to Seller for so long as Seller is a wholly-owned subsidiary of Accuride. Notwithstanding anything to the contrary, express or implied, in this Section 5.10, and to confirm the understanding of the Parties, the obligations and liabilities of Accuride under this guarantee shall not, under any circumstances, exceed the obligations and liabilities of Seller under this Agreement. |
(b) | Accuride shall at all times cause Seller to perform its obligations set forth in this Section 5 pursuant to their respective terms. |
(a) | Except as otherwise set forth in a written consent executed by Accuride, CVG shall prohibit Buyer from transferring any material portion (determined individually or in the aggregate) of the Acquired Assets to any Affiliate of CVG or other third party unless the Liabilities of Buyer, including the Assumed Liabilities, are simultaneously transferred; provided, however, Buyer may transfer the Acquired Assets and the Liabilities of Buyer, including the Assumed Liabilities, to a third party without first obtaining Accurides written consent to the extent such third party has sufficient net worth and resources to satisfy such Liabilities as determined at the time of transfer. | |
(b) | CVG shall at all times cause Buyer to perform its obligations set forth in this Section 5 pursuant to their respective terms. |
(a) | Buyer and CVG agree to notify Seller of any third party claim against any Buyer Indemnitee related, directly or indirectly, to any Assumed Liability within ten (10) calendar days of receipt of notice of such claim. Buyer and CVG shall also provide Seller with a copy of the notice received by the Buyer Indemnitee along with all documents and materials reasonably related to such claim. | |
(b) | Seller and Accuride agree to notify Buyer of any claim against any Seller Indemnitee related, directly or indirectly, to any Assumed Liability within ten (10) calendar days of |
35
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receipt of notice of such claim. Seller and Accuride shall also provide Buyer with a copy of the notice received by the Seller Indemnitee along with all documents and materials reasonably related to such claim. |
36
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(a) | any inaccuracy in or breach of any of the representations or warranties contained in Section 3 this Agreement; | |
(b) | any breach or non-fulfillment of any covenant, agreement or obligation to be performed by Seller pursuant to this Agreement that remains uncured for twenty (20) days following the receipt by Seller of written notice from Buyer of such breach or non-fulfillment; | |
(c) | the fraud of Seller; (d) any Liability arising from or relating to an Excluded Asset; or | |
(e) | any Excluded Liability. |
(a) | any inaccuracy in or breach of any of the representations or warranties of Buyer contained in Section 4 of this Agreement; | |
(b) | any breach or non-fulfillment of any covenant, agreement or obligation to be performed by Buyer pursuant to this Agreement that remains uncured for twenty (20) days following the receipt by Buyer of written notice from Seller of such breach or non-fulfillment; or | |
(c) | any Assumed Liability. |
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(a) | Seller shall not be liable to any Buyer Indemnitee for indemnification under Section 6.2(a), and Buyer shall not be liable to any Seller Indemnitee under Section 6.3(a) (i) unless and until the aggregate amount of all Adverse Consequences in respect of indemnification under either Section 6.2(a) or Section 6.3(a), as applicable, exceeds 1% of the Purchase Price (the Indemnification Threshold ) and then only to the extent that the aggregate amount of all Adverse Consequences exceeds the Indemnification Threshold, or (ii) for any amount of Adverse Consequences in respect of indemnification under Section 6.2(a) or Section 6.3(a), as applicable, in excess of 20% of the Purchase Price (the Indemnification Cap ). Notwithstanding the foregoing, neither the Indemnification Threshold nor the Indemnification Cap will apply to limit indemnification with respect to Adverse Consequences arising (x) by reason of any inaccuracy in or breach of a Fundamental Representation; (y) under Sections 6.2(b), 6.2(c), 6.2(d) or 6.2(e); or (z) under Sections 6.3(b) or 6.3(c). | |
(b) | Seller shall not be liable to any Buyer Indemnitee for indemnification under Section 6.2(e) with respect to any Assumed Liability Excess unless such claim for indemnification is asserted in good faith with reasonable specificity (to the extent known at such time) and in writing by notice from Buyer to Seller on or prior to the date that is the eighteen (18) month anniversary of the Closing Date. | |
(c) | Seller shall not be liable to any Buyer Indemnitee for any Adverse Consequences to the extent such Adverse Consequences are included in the calculation of any adjustment to the Preliminary Purchase Price as finally determined pursuant to Section 2.7 of this Agreement. | |
(d) | Except for (i) indemnification claims pursuant to Section 6.2(c) and (ii) multiple, exemplary, consequential, special, indirect, or other damages that are not compensatory in nature in an aggregate amount not to exceed $1,000,000 in excess of the aggregate of all compensatory damages, Seller shall not be liable to any Buyer Indemnitee for any multiple, exemplary, consequential, special, indirect, or other damages that are not compensatory in nature. In no event shall Buyer be entitled to any punitive damages. | |
(e) | Seller shall not be liable to any Buyer Indemnitee under Section 6.2(a) with respect to any environmental condition or any costs arising out of any environmental condition to the extent caused, created, aggravated or exacerbated by any Buyer Indemnitee or its agents, contractors, or employees. Any monitoring, investigation, characterization, abatement, cleanup, remediation, response, remedial action, corrective action, closure or other similar activity relating to any obligation, if any, of Seller under Section 6.2 arising from any environmental condition shall be conducted in a cost-effective and commercially reasonable manner solely for a continued industrial land use and employing risk-based standards, land use restrictions, environmental covenants, engineering controls, institutional controls, and the like, to obtain a government no further action, completion or closure, as applicable, determination. | |
(f) | Notwithstanding anything to the contrary set forth in this Agreement, under no circumstances shall any Indemnifying Party be liable to any Indemnified Party for indemnification hereunder for any amount in excess of the Purchase Price. |
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(a) | If any third party notifies any Buyer Indemnitee or Seller Indemnitee (each an Indemnified Party ) with respect to any matter (a Third-Party Claim ) that may give rise to a claim for indemnification against either of Seller or Buyer (the Indemnifying Party ) under this Section 6, then the Indemnified Party shall promptly notify the Indemnifying Party thereof in writing; provided, however, that no delay on the part of the Indemnified Party in notifying the Indemnifying Party shall relieve the Indemnifying Party from any obligation hereunder unless (and then solely to the extent) the Indemnifying Party is thereby prejudiced. | |
(b) | The Indemnifying Party will have the right to defend the Indemnified Party against the Third-Party Claim with counsel of its choice reasonably satisfactory to the Indemnified Party (and its insurer, if applicable) so long as (i) the Indemnifying Party notifies the Indemnified Party in writing within 15 days after the Indemnified Party has given notice of the Third-Party Claim that the Indemnifying Party will indemnify the Indemnified Party from and against the entirety of any Adverse Consequences the Indemnified Party may suffer resulting from, arising out of, relating to, in the nature of, or caused by the Third-Party Claim, (ii) the Indemnifying Party provides the Indemnified Party with evidence reasonably acceptable to the Indemnified Party that the Indemnifying Party will have the financial resources to defend against the Third-Party Claim and fulfill its indemnification obligations hereunder, (iii) the Third-Party Claim involves only money damages and does not seek an injunction or other equitable relief, (iv) settlement of, or an adverse judgment with respect to, the Third-Party Claim is not, in the good faith judgment of the Indemnified Party, likely to establish a precedential custom or practice adverse to the continuing business interests or the reputation of the Indemnified Party, and (v) the Indemnifying Party conducts the defense of the Third-Party Claim actively and diligently. | |
(c) | So long as the Indemnifying Party is conducting the defense of the Third-Party Claim in accordance with Section 6.5(b) above, (i) the Indemnified Party may retain separate co-counsel at its sole cost and expense and participate in the defense of the Third-Party Claim, (ii) the Indemnified Party will not consent to the entry of any judgment on or enter into any settlement with respect to the Third-Party Claim without the prior written consent of the Indemnifying Party (not to be unreasonably withheld), and (ii) the Indemnifying Party will not consent to the entry of any judgment on or enter into any settlement with respect to the Third-Party Claim without the prior written consent of the Indemnified Party (not to be unreasonably withheld). | |
(d) | In the event any of the conditions in Section 6.5(b) above is or becomes unsatisfied, however, (i) the Indemnified Party may defend against, and consent to the entry of any judgment on or enter into any settlement with respect to, the Third-Party Claim in any manner it may deem appropriate (and the Indemnified Party need not consult with, or obtain any consent from, the Indemnifying Party in connection therewith), (ii) the Indemnifying Party will reimburse the Indemnified Party promptly and periodically for the costs of defending against the Third-Party Claim (including attorneys fees and expenses), and (iii) the Indemnifying Party will remain responsible for any Adverse |
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Consequences the Indemnified Party may suffer resulting from, arising out of, relating to, in the nature of, or caused by the Third-Party Claim to the fullest extent provided in this Section 6. |
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If to Seller:
|
Copy (which shall not constitute notice) to: | |
|
||
Bostrom Seating, Inc.
|
Snell & Wilmer L.L.P. | |
c/o Accuride Corporation
|
Gateway Tower West | |
7140 Office Circle
|
15 West South Temple | |
Evansville, IN 47715-8235
|
Suite 1200 | |
Facsimile: (812) 962-5429
|
Salt Lake City, UT 84101-1531 | |
Attn: General Counsel
|
Facsimile: (801) 257-1800 | |
|
Attn: John G. Weston, Esq. | |
|
||
If to Accuride:
|
Copy (which shall not constitute notice) to: | |
|
||
Accuride Corporation
|
Snell & Wilmer L.L.P. | |
7140 Office Circle
|
Gateway Tower West | |
Evansville, IN 47715-8235
|
15 West South Temple | |
Facsimile: (812) 962-5429
|
Suite 1200 | |
Attn: General Counsel
|
Salt Lake City, UT 84101-1531 | |
|
Facsimile: (801) 257-1800 | |
|
Attn: John G. Weston, Esq. | |
|
||
If to Buyer:
|
Copy (which shall not constitute notice) to: | |
|
||
CVG Alabama, LLC
|
Kegler, Brown, Hill & Ritter Co., LPA | |
c/o Commercial Vehicle Group, Inc.
|
65 East State Street, Suite 1800 | |
7800 Walton Parkway
|
Columbus, Ohio 43215 | |
New Albany, Ohio 43054
|
Attn: S. Martijn Steger, Esq. | |
Attn: Chad Utrup, CFO
|
||
|
||
If to CVG:
|
Copy (which shall not constitute notice) to: | |
|
||
Commercial Vehicle Group, Inc.
|
Kegler, Brown, Hill & Ritter Co., LPA | |
7800 Walton Parkway
|
65 East State Street, Suite 1800 | |
New Albany, Ohio 43054
|
Columbus, Ohio 43215 | |
Attn: Chad Utrup, CFO
|
Attn: S. Martijn Steger, Esq. |
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(a) | Any agreement between Seller and any Affiliate of Seller regarding allocation or payment of Taxes or amounts in lieu of Taxes shall be deemed terminated at and as of the Closing. | |
(b) | Seller will be responsible for the preparation and filing of all Tax Returns for Seller for all periods as to which Tax Returns are due after the Closing Date (including the consolidated, unitary, and combined Tax Returns for Seller that include the operations of Seller for any period ending on or before the Closing Date). Seller will make all payments required with respect to any such Tax Return. | |
(c) | Buyer and Seller agree to utilize, or cause their respective Affiliates to utilize, the standard procedure set forth in Rev. Proc. 2004-53 with respect to wage reporting. |
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2
CVG ALABAMA, LLC
|
||||
By: | /s/ Chad M. Utrup | |||
Name: | Chad M. Utrup | |||
Title: | Chief Financial Officer | |||
COMMERCIAL VEHICLE GROUP, INC.
|
||||
By: | /s/ Chad M. Utrup | |||
Name: | Chad M. Utrup | |||
Title: | Chief Financial Officer | |||
CABARRUS PLASTICS, INC.
CVG CS LLC CVG MANAGEMENT CORPORATION CVG LOGISTICS, LLC CVG EUROPEAN HOLDINGS, LLC CVG OREGON, LLC CVS HOLDINGS, INC. MAYFLOWER VEHICLE SYSTEMS, LLC MONONA CORPORATION MONONA WIRE CORPORATION MONONA (MEXICO) HOLDINGS LLC NATIONAL SEATING COMPANY SPRAGUE DEVICES, INC. TRIM SYSTEMS, INC. TRIM SYSTEMS OPERATING CORP. |
||||
By: | /s/ Chad M. Utrup | |||
Name: | Chad M. Utrup | |||
Title: | Chief Financial Officer | |||
U.S. BANK NATIONAL ASSOCIATION, as Trustee
|
||||
By: | /s/ Donald Hurrelbring | |||
Name: | Donald Hurrelbrink | |||
Title: | Vice President | |||
1 | For purposes of calculating the ratio of earnings to fixed charges, earnings are defined as income from continuing operations before income taxes and cumulative effect of change in accounting principles plus fixed charges. Fixed charges include interest expense (including amortization of deferred financing costs) and an estimate of operating rental expense, approximately 20%, which management believes is representative of the interest component. | |
2 | Earnings before fixed charges were inadequate to cover fixed charges by $97.8 million, $220.7 million and $4.8 million for the years ended December 31, 2009, 2008 and 2007, respectively. |
Entity | Jurisdiction | |||
|
||||
1.
|
Trim Systems, Inc. | Delaware | ||
|
||||
2.
|
Trim Systems Operating Corp. | Delaware | ||
|
||||
3.
|
CVG International Holdings, Inc. | Barbados | ||
|
||||
4.
|
CVG Vehicle Components (Shanghai) Co., Ltd. | China | ||
|
||||
5.
|
CVS Holdings Limited | United Kingdom | ||
|
||||
6.
|
Commercial Vehicle Systems Limited | United Kingdom | ||
|
||||
7.
|
Bostrom Limited | United Kingdom | ||
|
||||
8.
|
Bostrom Investments Limited | United Kingdom | ||
|
||||
9.
|
KAB Seating, L.L.C. | Delaware | ||
|
||||
10.
|
Bostrom International Limited | United Kingdom | ||
|
||||
11.
|
KAB Seating AB | Sweden | ||
|
||||
12.
|
KAB Seating PTY. LTD. | Australia | ||
|
||||
13.
|
KAB Seating SA | Belgium | ||
|
||||
14.
|
National Seating Company | Delaware | ||
|
||||
15.
|
KAB Seating Limited | United Kingdom | ||
|
||||
16.
|
KAB Pressings Limited | United Kingdom | ||
|
||||
17.
|
KAB Components Limited | United Kingdom |
Entity
Jurisdiction
CVS Holdings, Inc.
Delaware
Sprague Devices, Inc.
Delaware
CVG Management Corporation
Delaware
CVG Logistics, LLC
Delaware
Mayflower Vehicle Systems, LLC
Delaware
T.S. Mexico S. de R. L. de C.V.
Mexico
Monona Corporation
Delaware
Monona Wire Corporation
Iowa
Monona (Mexico) Holdings LLC
Illinois
MWC de Mexico S. de R.L. de C.V.
Mexico
EMD Servicious, S.A. de C.V.
Mexico
Cabarrus Plastics, Inc.
North Carolina
CVG European Holdings, LLC
Delaware
CVG International GP
Bermuda
C.I.E.B. Kahovec, spol. s.r.o.
Czech Republic
CVG Czech Management, s.r.o.
Czech Republic
CVG Global s.a.r.l.
Luxembourg
CVG Czech I s.r.o.
Czech Republic
PEKM Kabeltechnik s.r.o.
Czech Republic
Prettl MKRT Ukraine LLC
Ukraine
CVG Oregon, LLC
Delaware
Entity | Jurisdiction | |||
39.
|
CVG CS LLC | Delaware | ||
|
||||
40.
|
Commercial Vehicle Group Mexico S. de R.L. de C.V. | Mexico | ||
|
||||
41.
|
CVG AR LLC | Delaware | ||
|
||||
42.
|
CVG Alabama, LLC | Delaware |
1. | I have reviewed this annual report on Form 10-K of Commercial Vehicle Group, Inc. and Subsidiaries; | |
2. | Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report; | |
3. | Based on my knowledge, the financial statements, and other information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report; | |
4. | The registrants other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared; | ||
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | ||
(c) | Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this annual report based on such evaluation; and | ||
(d) | Disclosed in this annual report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and audit committee of the registrants board of directors (or persons performing the equivalent function): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and | ||
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
/s/ Mervin Dunn | ||||
Mervin Dunn | ||||
Chief Executive Officer
(Principal Executive Officer) |
||||
1. | I have reviewed this annual report on Form 10-K of Commercial Vehicle Group, Inc. and Subsidiaries; | |
2. | Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report; | |
3. | Based on my knowledge, the financial statements, and other information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report; | |
4. | The registrants other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared; | ||
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | ||
(c) | Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this annual report based on such evaluation; and | ||
(d) | Disclosed in this annual report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and audit committee of the registrants board of directors (or persons performing the equivalent function): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and | ||
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
/s/ Chad M. Utrup | ||||
Chad M. Utrup | ||||
Chief Financial Officer
(Principal Financial and Accounting Officer) |
||||
1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and | |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company as of the dates and for the periods expressed in the Report. |
/s/ Mervin Dunn
|
||
President and Chief Executive Officer
|
||
(Principal Executive Officer)
|
1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and | |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company as of the dates and for the periods expressed in the Report. |
/s/ Chad M. Utrup
|
||
Chief Financial Officer
|
||
(Principal Financial and Accounting Officer)
|