For the fiscal year ended: | Commission file number: | |
December 31, 2008 | 000-50890 |
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
(Do not check if a smaller reporting company) |
Smaller reporting company o |
i
ii
30
Item 1.
Business
1
Table of Contents
2001
2002
2003
2004
2005
2006
2007
2008
(Thousands of units)
146
181
182
269
341
376
212
205
189
194
188
225
245
275
206
158
335
375
370
494
586
651
418
363
2
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(In thousands)
Source: ACT Commercial Vehicle OUTLOOK (March 2009)
3
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(In billions)
Source: ACT Research Co. (2009).
(In years)
Source: ACT Research Co. (2009).
4
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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.
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, both our Norwalk, Ohio and Kings
Mountain, North Carolina facilities have 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. The major large
press lines at our Shadyside, Ohio facility provide us with the
in-house manufacturing flexibility for both aluminum and steel
stampings delivered
just-in-time
to our cab assembly plants. This plant also provides us with low
volume forming and processing techniques including laser trim
operations that minimize investment and time to manufacture for
low volume applications.
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.
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 wire, connectors,
terminals, switches, relays and braid fabric. These raw
materials are obtained from multiple suppliers and are generally
readily available.
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.
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 at least one year and are terminable by us for
breach or convenience.
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.
2008
2007
2006
44
%
41
%
60
%
24
26
18
12
13
10
8
6
3
3
3
2
1
1
1
8
10
6
100
%
100
%
100
%
13
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2008
2007
2006
15
%
11
%
22
%
12
14
17
11
11
8
11
11
13
10
11
13
5
4
2
3
3
2
3
1
0
2
3
2
28
31
21
100
%
100
%
100
%
14
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Seats and Seating Systems.
We believe that we
have the number one market position in North America supplying
seats and seating systems to the commercial vehicle heavy-truck
market. We also believe that we have the number one market
position in supplying seats and seating systems to commercial
vehicles used in the medium/heavy construction equipment
industry on a worldwide basis. Our primary independent
competitors in the North American commercial vehicle market
include Sears Manufacturing Company, Accuride Corporation,
Grammer AG and Seats, Inc., and our primary competitors in the
European commercial vehicle market include Grammer AG and
Isringhausen.
Electronic Wire Harnesses and Panel
Assemblies.
We believe that we are a leading
supplier of low- to medium-volume complex, electronic wire
harnesses and related assemblies used in the global heavy
equipment, commercial vehicle, heavy-truck and specialty and
military vehicle markets. Our principal competitors for
electronic wire harnesses include large diversified suppliers
such as AFL, Delphi, Leoni, Nexans, PKC, Stoneridge, Yazaki,
Sumitomo and smaller independent companies such as Fargo
Assembly, Schofield and Unlimited Services.
Cab Structures, Sleeper Boxes, Body Panels and Structural
Components.
We believe we are the leading
non-captive supplier in the North American commercial vehicle
heavy-truck market with respect to our cab structural
components, cab structures, sleeper boxes and body panels. Our
principal competitors are Magna , Ogihara Corporation,
Spartanburg Stamping, Able Body and Defiance Metal Products.
Trim Systems and Components.
We believe that
we have the number one market position in the North American
commercial vehicle heavy-truck market with respect to our soft
interior trim products and a leading presence in the hard
interior trim market. We face competition from a number of
different competitors with respect to each of our trim system
products and components. Overall, our primary independent
competitors are ConMet, Fabriform, TPI, Findlay, Superior, Trim
Masters, Inc. and Blachford Ltd.
Mirrors, Wipers and Controls.
We believe that
we are a leading supplier in the North American commercial
vehicle heavy-truck market with respect to our windshield wiper
systems and mirrors. We face
15
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competition from a number of different competitors with respect
to each of our principal products in this category. Our
principal competitors for mirrors are Hadley, Lang-Mekra and
Trucklite, and our principal competitors for windshield wiper
systems are Johnson Electric, Trico and Valeo.
16
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17
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47
President and General Manager of Cab Systems
61
Senior Advisor to the Chief Executive Officer
55
President, Chief Executive Officer and Director
42
Executive Vice President and General Manager for Electrical
Systems
61
Executive Vice President and General Manager for Seating Systems
36
Executive Vice President, Chief Financial Officer and Secretary
62
Vice President of Organizational Development
18
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Item 1A.
Risk
Factors
Our results of operations could be significantly lower as a
result of the severe downturn in the U.S. and global
economy.
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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.
Volatility and cyclicality in the commercial vehicle market
could adversely affect us.
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.
20
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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.
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.
21
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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.
We may be adversely affected by the impact of government
regulations on our OEM customers.
22
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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.
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 United States;
tax rates in certain foreign countries, which may exceed those
in the United States and foreign earnings may be subject to
withholding requirements or the imposition of tariffs, exchange
controls or other restrictions, including restrictions on
repatriation;
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 United States law.
23
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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.
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.
24
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Our products may be susceptible to claims by third parties
that our products infringe upon their proprietary rights.
Our common stock may be delisted from the NASDAQ Global
Select Market if the closing price of our common stock is not
maintained at $1.00 per share or higher.
The market price of our common stock has declined
substantially in recent months and 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
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;
25
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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.
Equipment failures, delays in deliveries or catastrophic loss
at any of our facilities could lead to production or service
curtailments or shutdowns.
26
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The agreement governing our new revolving credit facility
contains financial covenants, and that agreement and the
indenture governing the 8.0% senior notes due 2013 contain
other covenants that may restrict our current and future
operations. If we are unable to comply with these covenants, our
business, results of operations and liquidity could be
materially and adversely affected.
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 indebtedness could adversely affect our financial
condition and make it more difficult to implement our business
strategy.
27
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make it more difficult for us to satisfy our obligations with
respect to our indebtedness, including the 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
indenture governing the notes and the agreements governing such
other indebtedness;
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.
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.
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 in
conjunction with the execution of our periodic asset impairment
assessment and testing policy.
28
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Item 1B.
Unresolved
Staff Comments
Item 2.
Properties
Approximate
Square Footage
Ownership Interest
Warehouse Facility
20,000 sq. ft.
Leased
Wire Harness Assembly
62,000 sq. ft.
Owned
Wire Harness Assembly
36,000 sq. ft.
Leased
Cab Assembly
60,000 sq. ft.
Leased
Wipers, Switches
87,000 sq. ft.
Leased
Engineering
7,000 sq. ft.
Leased
Cab, Sleeper Box, Assembly
180,000 sq. ft.
Owned
Interior Trim, Seats
163,000 sq. ft.
Leased
Injection Molding and Warehouse Facility
208,000 sq. ft.
Leased
Cab, Sleeper Box, Assembly
360,000 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
Warehouse Facility
41,000 sq. ft.
Leased
Corporate Headquarters / R&D
89,000 sq. ft.
Leased
Electronics Assembly
4,000 sq. ft.
Leased
Interior Trim
121,000 sq. ft.
Leased
RIM Process
24,000 sq. ft.
Leased
Seats, Mirrors
245,000 sq. ft.
Owned/Leased
Cut and Sew, Warehouse Facility
148,000 sq. ft.
Leased
Cut and Sew
15,000 sq. ft.
Leased
Interior Trim, Seats
79,000 sq. ft.
Owned
Interior Trim
63,000 sq. ft.
Leased
29
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Approximate
Square Footage
Ownership Interest
Wire Harness Assembly
205,000 sq. ft.
Leased
Seat Assembly
210,000 sq. ft.
Leased
Seat Assembly
35,000 sq. ft.
Leased
Seat Assembly
50,000 sq. ft.
Leased
Seat Assembly
76,500 sq. ft.
Leased
Seat Assembly
52,000 sq. ft.
Owned
Wire Harness Assembly
200,000 sq. ft.
Leased
Wire Harness Assembly
46,000 sq. ft.
Leased
Item 3.
Legal
Proceedings
Item 4.
Submission
of Matters to a Vote of Security Holders
Table of Contents
35
70
76
108
109
110
111
Item 5.
Market
for Registrants Common Equity, Related Stockholder Matters
and Issuer Purchases of Equity Securities
High
Low
$
7.20
$
0.78
$
14.21
$
7.11
$
14.42
$
8.84
$
14.86
$
7.89
$
16.38
$
12.11
$
19.29
$
12.71
$
21.03
$
17.70
$
22.24
$
18.82
31
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*
Based on $100 invested on August 5, 2004 and, for purposes
of the indexes, assumes the reinvestment of dividends.
08/05/04
12/31/04
12/31/05
12/31/06
12/31/07
12/31/08
$
100.00
$
166.64
$
143.36
$
166.41
$
110.69
$
7.10
$
100.00
$
115.11
$
118.04
$
132.29
$
144.44
$
84.15
$
100.00
$
116.59
$
109.70
$
131.37
$
201.30
$
94.38
32
Table of Contents
(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 (or
Plans or
the Plans or
Purchased
Unit)
Programs
Prgrams
(October 1, 2008 through
October 31, 2008)
18,321
$
2.24
(November 1, 2008 through
November 30, 2008)
(December 1, 2008
through December 31, 2008)
33
Table of Contents
Item 6.
Selected
Financial Data
Years Ended December 31,
2008
2007
2006
2005
2004
(Dollars in thousands, except per share data)
$
763,489
$
696,786
$
918,751
$
754,481
$
380,445
689,284
620,145
768,913
620,031
309,696
74,205
76,641
149,838
134,450
70,749
62,764
55,493
51,950
44,564
28,985
10,125
1,379
894
414
358
107
(6,075
)
207,531
1,433
(191,394
)
18,821
97,474
89,528
31,532
13,945
9,361
(3,468
)
(3,741
)
(1,247
)
15,389
14,147
14,829
13,195
7,244
149
318
1,525
1,605
(220,728
)
(4,836
)
85,795
78,549
23,930
(13,969
)
(1,585
)
27,745
29,138
6,481
$
(206,759
)
$
(3,251
)
$
58,050
$
49,411
$
17,449
$
(9.58
)
$
(0.15
)
$
2.74
$
2.54
$
1.13
$
(9.58
)
$
(0.15
)
$
2.69
$
2.51
$
1.12
21,579
21,439
21,151
19,440
15,429
21,579
21,439
21,545
19,697
15,623
34
Table of Contents
Years Ended December 31,
2008
2007
2006
2005
2004
(Dollars in thousands, except per share data)
$
102,469
$
117,172
$
135,368
$
119,104
$
41,727
354,761
599,089
590,822
543,883
225,638
145,924
174,029
163,803
150,797
60,667
164,895
159,725
162,114
191,009
53,925
43,942
265,335
264,905
202,077
111,046
$
15,179
$
25,736
$
115,607
$
103,808
$
38,741
9,743
47,575
36,922
44,156
34,177
(10,134
)
(53,292
)
(27,625
)
(188,569
)
(8,907
)
5,043
(2,394
)
(27,952
)
188,547
(28,427
)
19,062
16,425
14,983
12,064
7,567
12,523
17,274
22,389
20,669
8,907
205,000
212,000
376,000
341,000
269,000
(1)
Share-based compensation expense in 2004 is related to options
issued in conjunction with our initial public offering that
vested immediately. Subsequent share-based compensation is
recorded in selling, general and administrative expenses.
(2)
Earnings (loss) per share has been calculated giving effect to
the reclassification of our outstanding classes of common stock
into one class of common stock and, in connection therewith, a
38.991-to-one stock split.
(3)
Adjusted EBITDA is a non-GAAP financial measure that is
reconciled to net income, its most directly comparable GAAP
measure, in the accompanying financial tables. Adjusted EBITDA
is defined as net earnings before interest, taxes, depreciation,
amortization, gains/losses on the sale of long-lived asset and
goodwill and intangible asset impairment. In calculating
Adjusted EBITDA, we exclude the effect of gains/losses on the
sale of long-lived asset and goodwill and intangible asset
impairment because our management believes that these items may
not occur in certain periods and these items do not facilitate
an understanding of our operating performance. Our management
utilizes Adjusted EBITDA, in addition to the supplemental
information, as an operating performance measure in conjunction
with GAAP measures, such as net income and gross margin
calculated in conformity with GAAP.
(ii)
facilitate managements internal comparisons of our
historical operating performance of its business operations;
(iii)
facilitate managements external comparisons of the results
of its overall business to the historical operating performance
of other companies that may have different capital structures
and debt levels;
(iv)
review and assess the operating performance of our management
team and as a measure in evaluating employee compensation and
bonuses;
(v)
analyze and evaluate financial and strategic planning decisions
regarding future operating investments; and
(vi)
plan for and prepare future annual operating budgets and
determine appropriate levels of operating investments.
Table of Contents
Years Ended December 31,
2008
2007
2006
2005
2004
(In thousands)
$
(206,759
)
$
(3,251
)
$
58,050
$
49,411
$
17,449
19,062
16,425
14,983
12,064
7,567
15,389
14,147
14,829
13,195
7,244
(13,969
)
(1,585
)
27,745
29,138
6,481
(6,075
)
207,531
$
15,179
$
25,736
$
115,607
$
103,808
$
38,741
$
13,751
$
9,967
$
(4,203
)
$
(3,793
)
$
(1,290
)
(584
)
750
149
318
1,525
1,605
194
(22
)
(15
)
52
43
1,433
10,125
(4)
Source: ACT N.A. Commercial Vehicle OUTLOOK (March 2009)
36
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Item 7.
Managements
Discussion and Analysis of Financial Condition and Results of
Operations
37
Table of Contents
sourcing efforts in Europe and Asia;
consolidating our supply base to improve purchasing leverage;
eliminating excess production capacity through the closure and
consolidation of manufacturing or assembly facilities; and
implementing Lean Manufacturing and Total Quality Production
System (TQPS) initiatives to improve operating
efficiency and product quality.
38
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39
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40
Table of Contents
Costs associated with setting up a new production line,
including tooling costs, are typically cost prohibitive in a
competitive pricing environment;
The risk associated with potential production delays and a
disruption to the supply chain typically outweighs any potential
economic benefit;
Significant initial outlays of capital and institutional
production knowledge represent a significant barrier to entry.
Due to the asset-intensive nature of the businesses, a new
competitor would require a substantial amount of initial capital;
Changeover costs are high both from an economic and risk
standpoint;
The highly complex nature of successfully producing electronic
wiring harnesses and complete cab structures in accordance with
OEM quality standards makes it difficult for a competitor to
enter the business; and
There is significant risk in operating the businesses as a
result of the highly customized nature of the business. For
example, production runs in the commercial vehicle business are
significantly smaller and are more build to order in
nature which requires the systems, expertise, equipment and
logistics in order to be successful.
Mayflowers and Mononas customers typically make
purchasing decisions through a team approach versus a single
decision maker. Mayflower and Monona have historically
maintained strong relationships with individuals at all levels
of the decision making process including the engineering,
operations and purchasing functions in order to successfully
minimize the impact of any employee turnover at the customer
level.
Mayflower has had relationships with Volvo/Mack, Daimler Trucks
and International since 1965, 1997 and 2001, respectively. We
and/or
our
predecessor entities, had pre-existing relationships with these
same customers since 1949, 1954 and 1950, respectively. These
customers comprised approximately 89%, 89% and 88% of
Mayflowers revenues for fiscal years 2008, 2007 and 2006,
respectively.
Monona has had relationships with Deere & Co.,
Caterpillar and Oshkosh Corporation since 1969, 1970 and 1985,
respectively. We
and/or
our
predecessor entities, had pre-existing relationships with these
same customers since 1987, 1958 and 1950, respectively. These
customers comprised approximately 85%, 84% and 85% of
Mononas revenues for fiscal years 2008, 2007 and 2006,
respectively.
41
Table of Contents
The revenue projections that we relied upon to substantiate the
economic consideration paid for the businesses is almost
exclusively tied to the existing customer base. With regard to
the valuation process, we projected less than 1% of total
revenue in 2005 and 2006 to be lost due to core customer
attrition and no core customer attrition thereafter.
Contributory asset charges were deducted for assets that
contribute to income generation including: (i) net working
capital; (ii) personal property; (iii) real property;
(iv) tradename and trademarks; and (v) an assembled
workforce.
The cash flows associated with the customer relationships
acquired in the Mayflower and Monona transactions were
discounted at a rate of return of 25.0% and 29.5%, respectively,
which was approximately equal to the equity rate of return.
42
Table of Contents
discount rate;
expected return on plan assets; and
health care cost trend rates.
43
Table of Contents
1 Percentage
1 Percentage
Point Increase
Point Decrease
$
(326
)
$
176
$
(478
)
$
478
$
(7,330
)
$
9,320
1 Percentage
1 Percentage
Point Increase
Point Decrease
$
26
$
(25
)
$
96
$
(90
)
44
Table of Contents
2008
2007
2006
100.0
%
100.0
%
100.0
%
90.3
89.0
83.7
9.7
11.0
16.3
8.2
8.0
5.7
0.2
0.1
(0.8
)
27.2
0.2
(25.1
)
2.7
10.6
1.8
1.3
(0.4
)
2.0
2.0
1.6
(28.9
)
(0.6
)
9.4
(1.8
)
(0.2
)
3.0
(27.1
)%
(0.4
)%
6.4
%
increased acquisition related revenue of approximately
$49.7 million from the full year impact of PEKM and Gage,
which were acquired in October 2007;
fluctuations in production levels and net new business awards
for our European, Australian and Asian markets of approximately
$12.1 million;
fluctuations in productions levels, net new business awards and
raw material surcharge recovery for our North American end
markets were offset by a 3% decrease in North American
Heavy-duty (class 8) truck production levels, resulting in
approximately $11.8 million of net increased revenues; and
unfavorable foreign exchange fluctuations from the translation
of our foreign operations into U.S. Dollars of
approximately $6.9 million.
45
Table of Contents
a 43.9% 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 $270.4 million of
decreased revenues.
46
Table of Contents
increased acquisition related revenue of approximately
$29.0 million from the full year impact of the acquisition
of C.I.E.B. and the partial year impact of PEKM and Gage;
an increase in production levels, fluctuations in content and
net new business awards for our European, Australian and Asian
markets of approximately $8.4 million;
favorable foreign exchange fluctuations from the translation of
our foreign operations into U.S. Dollars of approximately
$11.0 million.
47
Table of Contents
$14.8 million under our prior revolving credit facility and
$0.1 million of capital lease obligations. The weighted
average rate on these borrowings, for the year ended
December 31, 2008, was approximately 7.5% with respect to
the revolving borrowings and;
$150.0 million of 8.0% senior notes due 2013.
48
Table of Contents
49
Table of Contents
a domestic base rate equal to the rate announced by Bank of
America, N.A. from time to time as its prime rate (which rate
shall not be less than the current rate for one-month LIBOR
loans plus 1%), plus 4.00%; or
a LIBOR rate equal to the British Bankers Association LIBOR
rate, plus 5.00%.
EBITDA (as Defined in the Loan
and Security Agreement, as
Amended)
$
(3,250,000
)
$
(3,530,000
)
$
(1,750,000
)
$
1,200,000
$
3,600,000
$
9,200,000
$
13,200,000
$
17,600,000
$
22,000,000
50
Table of Contents
51
Table of Contents
Payments Due by Period
Less Than
More Than
Total
1 Year
1-3 Years
3-5 Years
5 Years
(In thousands)
$
164,895
$
81
$
14
$
164,800
$
32,778
13,113
13,110
6,555
62,029
11,106
17,564
12,015
21,344
33,797
2,499
5,413
6,455
19,430
951
951
$
294,450
$
27,750
$
36,101
$
189,825
$
40,774
52
Table of Contents
Item 7A.
Quantitative
and Qualitative Disclosures About Market Risk
53
Table of Contents
54
Item 8.
Financial
Statements and Supplementary Data
Page
56
57
58
59
60
61
106
55
Table of Contents
56
Table of Contents
57
Table of Contents
2008
2007
2006
(In thousands, except per share amounts)
$
763,489
$
696,786
$
918,751
689,284
620,145
768,913
74,205
76,641
149,838
62,764
55,493
51,950
1,379
894
414
(6,075
)
207,531
1,433
(191,394
)
18,821
97,474
13,945
9,361
(3,468
)
15,389
14,147
14,829
149
318
(220,728
)
(4,836
)
85,795
(13,969
)
(1,585
)
27,745
$
(206,759
)
$
(3,251
)
$
58,050
$
(9.58
)
$
(0.15
)
$
2.74
$
(9.58
)
$
(0.15
)
$
2.69
21,579
21,439
21,151
21,579
21,439
21,545
58
Table of Contents
Accum.
Retained
Other
Additional
Earnings
Comp.
Common Stock
Treasury
Paid-In
(Accum.
Deferred
Income /
Shares
Amount
Stock
Capital
Deficit)
Comp.
(Loss)
Total
(In thousands, except share data)
21,145,954
$
211
$
$
172,514
$
33,957
$
(3,262
)
$
(1,343
)
$
202,077
341,685
4
2,141
2,145
54,328
1
1
(167,300
)
(2
)
(3,262
)
3,262
(2
)
(5,836
)
(115
)
(115
)
2,006
2,006
645
645
58,050
58,050
3,874
3,874
(304
)
(304
)
61,620
(3,472
)
(3,472
)
21,368,831
$
214
$
(115
)
$
174,044
$
92,007
$
$
(1,245
)
$
264,905
68,778
463
463
121,522
1
1
(22,317
)
(299
)
(299
)
3,084
3,084
(170
)
(170
)
(3,251
)
(3,251
)
(589
)
(589
)
1,296
1,296
(167
)
(167
)
(2,711
)
62
62
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
59
Table of Contents
2008
2007
2006
(In thousands)
$
(206,759
)
$
(3,251
)
$
58,050
19,062
16,425
14,983
671
859
895
149
318
3,784
3,084
2,006
(5,786
)
(10
)
(665
)
(3,865
)
(1,069
)
9,691
9,417
13,751
9,967
(4,203
)
207,531
692
28,347
(4,369
)
(533
)
3,809
(16,603
)
(5,497
)
3,071
(21,819
)
(14,349
)
(24,830
)
2,213
(1,755
)
264
564
9,743
47,575
36,922
(12,110
)
(16,981
)
(19,327
)
7,468
549
352
2,032
(3,807
)
(36,049
)
(9,452
)
(1,685
)
(811
)
(1,230
)
(10,134
)
(53,292
)
(27,625
)
464
2,140
(41
)
(299
)
(115
)
(355
)
(170
)
645
(210,966
)
(129,490
)
(74,711
)
216,535
137,521
72,398
(10,295
)
(28,210
)
(130
)
(125
)
(99
)
5,043
(2,394
)
(27,952
)
(7,209
)
(1,843
)
(2,165
)
(2,557
)
(9,954
)
(20,820
)
9,867
19,821
40,641
$
7,310
$
9,867
$
19,821
$
13,690
$
13,185
$
13,869
$
(3,285
)
$
(10,807
)
$
29,197
$
413
$
293
$
3,062
60
Table of Contents
1.
Organization
2.
Significant
Accounting Policies
61
Table of Contents
15 to 40 years
3 to 20 years
3 to 7 years
3 to 5 years
Costs associated with setting up a new production line,
including tooling costs, are typically cost prohibitive in a
competitive pricing environment;
The risk associated with potential production delays and a
disruption to the supply chain typically outweighs any potential
economic benefit;
Significant initial outlays of capital and institutional
production knowledge represent a significant barrier to entry.
Due to the asset-intensive nature of the businesses, a new
competitor would require a substantial amount of initial capital;
Changeover costs are high both from an economic and risk
standpoint;
The highly complex nature of successfully producing electronic
wiring harnesses and complete cab structures in accordance with
OEM quality standards makes it difficult for a competitor to
enter the business; and
62
Table of Contents
There is significant risk in operating the businesses as a
result of the highly customized nature of the business. For
example, production runs in the commercial vehicle business are
significantly smaller and are more build to order in
nature which requires the systems, expertise, equipment and
logistics in order to be successful.
Mayflowers and Mononas customers typically make
purchasing decisions through a team approach versus a single
decision maker. Mayflower and Monona have historically
maintained strong relationships with individuals at all levels
of the decision making process including the engineering,
operations and purchasing functions in order to successfully
minimize the impact of any employee turnover at the customer
level.
Mayflower has had relationships with Volvo/Mack, Daimler Trucks
and International since 1965, 1997 and 2001, respectively. We
and/or
our
predecessor entities, had pre-existing relationships with these
same customers since 1949, 1954 and 1950, respectively. These
customers comprised approximately 89%, 89% and 88% of
Mayflowers revenues for fiscal years 2008, 2007 and 2006,
respectively.
Monona has had relationships with Deere & Co.,
Caterpillar and Oshkosh Corporation since 1969, 1970 and 1985,
respectively. We
and/or
our
predecessor entities, had pre-existing relationships with these
same customers since 1987, 1958 and 1950, respectively. These
customers comprised approximately 85%, 84% and 85% of
Mononas revenues for fiscal years 2008, 2007 and 2006,
respectively.
The revenue projections that we relied upon to substantiate the
economic consideration paid for the businesses is almost
exclusively tied to the existing customer base. With regard to
the valuation process, we
63
Table of Contents
Contributory asset charges were deducted for assets that
contribute to income generation including: (i) net working
capital; (ii) personal property; (iii) real property;
(iv) tradename and trademarks; and (v) an assembled
workforce.
The cash flows associated with the customer relationships
acquired in the Mayflower and Monona transactions were
discounted at a rate of return of 25.0% and 29.5%, respectively,
which was approximately equal to the equity rate of return.
64
Table of Contents
2008
2007
$
3,958
$
5,197
269
3,237
2,155
(3,558
)
(3,691
)
69
28
$
3,706
$
3,958
2008
2007
$
(8,209
)
$
4,868
(10,148
)
(5,406
)
(167
)
$
(18,357
)
$
(705
)
65
Table of Contents
2008
2007
2006
15
%
11
%
22
%
12
14
17
11
11
8
11
11
13
10
11
13
Local
U.S. $
Currency
U.S. $
Equivalent
Amount
Equivalent
Fair Value
31,708
33,404
42,188
432
54
56
2,082,700
15,077
21,607
66
Table of Contents
67
Table of Contents
3.
Fair
Value Measurement
68
Table of Contents
2008
2007
Total
Level 1
Level 2
Level 3
Total
Level 1
Level 2
Level 3
$
32
$
$
32
$
$
$
$
$
1,223
1,223
842
842
$
1,255
$
1,223
$
32
$
$
842
$
842
$
$
$
15,331
$
$
15,331
$
$
1,497
$
$
1,497
$
(1)
Based on observable market transactions of spot and forward
rates.
(2)
Deferred compensation includes mutual funds and cash equivalents
for payment of certain non-qualified benefits for employees.
4.
Business
Combinations
69
Table of Contents
2007
(Unaudited)
(In thousands)
$
753,955
$
20,967
$
(4,042
)
$
(0.19
)
$
(0.19
)
2008
2007
$
57,954
$
62,129
19,763
19,811
19,437
19,862
(6,372
)
(5,417
)
$
90,782
$
96,385
2008
2007
$
13,194
$
11,389
5,957
6,039
3,706
3,958
2,634
3,098
2,174
140
10,096
5,656
8,491
$
43,417
$
33,115
7.
Restructuring
and Integration
Table of Contents
Facility Exit
and Other
Employee
Contractual
Costs
Costs
Total
$
646
$
$
646
(206
)
(206
)
(440
)
(440
)
$
$
$
Facility Exit
Employee
and Other
Costs
Contractual Costs
Total
$
$
247
$
247
(141
)
(141
)
106
106
(106
)
(106
)
$
$
$
71
Table of Contents
8.
Debt
2008
2007
$
14,800
$
9,500
150,000
150,000
95
225
164,895
159,725
81
116
$
164,814
$
159,609
$
81
13
1
14,800
150,000
72
Table of Contents
73
Table of Contents
9.
Goodwill
and Intangible Assets
74
Table of Contents
$
151,189
(1,043
)
(5,454
)
(144,692
)
$
December 31, 2008
Weighted-
Average
Amortization
Gross Carrying
Accumulated
Net Carrying
Period
Amount
Amortization
Amount
30 years
$
9,790
$
(1,242
)
$
8,548
7 years
438
(376
)
62
$
10,228
$
(1,618
)
$
8,610
$
26,000
$
$
26,000
$
34,610
75
Table of Contents
December 31, 2007
Weighted-
Average
Amortization
Gross Carrying
Accumulated
Net Carrying
Period
Amount
Amortization
Amount
30 years
$
9,790
$
(915
)
$
8,875
7 years
438
(313
)
125
15 years
14,234
(459
)
13,775
$
24,462
$
(1,687
)
$
22,775
$
151,189
$
$
151,189
74,800
74,800
$
225,989
$
$
225,989
$
248,764
$
389
$
326
$
326
$
326
$
326
Table of Contents
10.
Accounting
for Income Taxes
2008
2007
2006
$
(191,758
)
$
(15,296
)
$
76,336
(28,970
)
10,460
9,459
$
(220,728
)
$
(4,836
)
$
85,795
2008
2007
2006
$
(77,255
)
$
(1,693
)
$
30,028
5,911
1,917
272
1,479
(941
)
(231
)
(3,347
)
961
1,864
(2,169
)
1,168
(1,673
)
(166
)
37,932
1,249
41
20,253
(1,400
)
(2,466
)
(1,275
)
841
449
1,061
(619
)
$
(13,969
)
$
(1,585
)
$
27,745
2008
2007
2006
$
(12,544
)
$
(10,635
)
$
18,328
(1,425
)
9,050
9,417
$
(13,969
)
$
(1,585
)
$
27,745
77
Table of Contents
2008
2007
$
771
$
820
3,521
2,937
2,146
1,859
5,138
524
1,487
3,587
4,942
(1,419
)
420
13,744
12,989
(14,054
)
$
(310
)
$
12,989
$
17,195
$
(33,062
)
4,515
2,076
2,575
1,903
3,106
6,216
1,415
2,003
(2,920
)
30,809
(25,787
)
(30,499
)
(1,289
)
$
310
$
(27,076
)
78
Table of Contents
79
Table of Contents
2008
2007
$
2,695
$
3,944
46
309
(92
)
311
313
(1,871
)
$
2,960
$
2,695
11.
Segment
Reporting
Years Ended December 31,
2008
2007
2006
Long-Lived
Long-Lived
Long-Lived
Revenues
Assets
Revenues
Assets
Revenues
Assets
$
587,757
$
80,244
$
538,116
$
85,817
$
800,069
$
81,930
115,674
4,080
132,972
5,913
106,545
5,861
60,058
6,068
25,698
6,528
12,137
2,597
$
763,489
$
90,392
$
696,786
$
98,258
$
918,751
$
90,388
Years Ended December 31,
2008
2007
2006
Revenues
%
Revenues
%
Revenues
%
$
267,005
35
$
248,098
35
$
266,401
29
178,192
23
130,863
19
103,417
11
156,431
21
150,371
22
317,682
35
108,324
14
109,869
16
158,707
17
53,537
7
57,585
8
72,544
8
$
763,489
100
$
696,786
100
$
918,751
100
80
Table of Contents
12.
Commitments
and Contingencies
$
11,106
9,345
8,219
6,631
5,384
21,344
13.
Stockholders
Investment
81
Table of Contents
2008
2007
2006
$
(206,759
)
$
(3,251
)
$
58,050
21,579
21,439
21,151
394
21,579
21,439
21,545
$
(9.58
)
$
(0.15
)
$
2.74
$
(9.58
)
$
(0.15
)
$
2.69
14.
Share-Based
Compensation
82
Table of Contents
83
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)
750
$
12.45
6.5
$
2,013
(29
)
9.43
721
$
12.58
5.7
$
721
$
12.58
5.7
$
$
$
84
Table of Contents
Nonvested Stock Options
Nonvested Restricted Stock
Weighted-
Weighted-
Average
Average
Options
Grant-Date
Shares
Grant-Date
(000s)
Fair Value
(000s)
Fair Value
$
520
$
16.94
798
1.17
(228
)
18.24
(18
)
10.85
$
1,072
$
8.49
15.
Defined
Contribution Plans, Pension and Other Post-Retirement Benefit
Plans
85
Table of Contents
Other
Post-Retirement
U.S. Pension Plans
Non-U.S. Pension Plans
Benefit Plans
2008
2007
2008
2007
2008
2007
$
31,002
$
30,622
$
47,076
$
47,067
$
2,774
$
2,447
435
420
18
17
2,288
1,739
1,987
2,301
165
139
211
414
(1,577
)
(1,008
)
(1,151
)
(3,365
)
(511
)
(336
)
(565
)
(982
)
(6,940
)
459
(135
)
93
(12,835
)
614
31,583
31,002
28,137
47,076
2,311
2,774
26,256
20,588
35,649
37,013
86
(6,086
)
4,476
(4,132
)
570
1,702
2,200
762
947
425
422
(1,577
)
(1,008
)
(1,151
)
(3,365
)
(511
)
(336
)
(9,719
)
484
20,295
26,256
21,409
35,649
86
$
(11,288
)
$
(4,746
)
$
(6,728
)
$
(11,427
)
$
(2,311
)
$
(2,688
)
Other
Post-Retirement
U.S. Pension Plans
Non-U.S. Pension Plans
Benefit Plans
2008
2007
2008
2007
2008
2007
$
$
$
$
$
442
$
527
11,288
4,746
6,728
11,427
1,869
2,161
$
11,288
$
4,746
$
6,728
$
11,427
$
2,311
$
2,688
86
Table of Contents
U.S. Pension Plans
Non-U.S. Pension Plans
2008
2007
2008
2007
$
31,583
$
31,002
$
28,137
$
47,076
$
31,583
$
31,002
$
28,137
$
47,076
$
20,295
$
26,256
$
21,409
$
35,649
Other Post-Retirement
U.S. Pension Plans
Non-U.S. Pension Plans
Benefit Plans
2008
2007
2006
2008
2007
2006
2008
2007
2006
$
323
$
420
$
628
$
$
$
263
$
13
$
17
$
61
1,831
1,739
1,684
1,987
2,301
2,253
139
139
164
(1,980
)
(1,539
)
(1,649
)
(1,543
)
(2,178
)
(2,030
)
6
(13
)
192
191
263
(63
)
161
620
663
636
314
755
89
156
225
(1,949
)
151
(2,057
)
211
59
414
207
$
161
$
831
$
(1,227
)
$
636
$
314
$
906
$
89
$
570
$
(1,625
)
Other Post-Retirement
U.S. Pension Plans
Non-U.S. Pension Plans
Benefit Plans
2008
2007
2008
2007
2008
2007
$
7,993
$
(3,919
)
$
(1,265
)
$
2,066
$
(135
)
$
93
14
(192
)
(191
)
72
$
8,007
$
(3,919
)
$
(1,457
)
$
1,875
$
(63
)
$
93
87
Table of Contents
Other Post-Retirement
U.S. Pension Plans
Non-U.S. Pension Plans
Benefit Plans
2008
2007
2006
2008
2007
2006
2008
2007
2006
6.13
%
6.00
%
5.75
%
6.50
%
5.90
%
5.00
%
6.13
%
6.00
%
5.75
%
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Other Post-Retirement
U.S. Pension Plans
Non-U.S. Pension Plans
Benefit Plans
2008
2007
2006
2008
2007
2006
2008
2007
2006
6.00
%
5.75
%
5.50
%
5.90
%
5.00
%
5.00
%
6.00
%
5.75
%
5.50-5.75
%
7.50
%
7.50
%
8.50
%
6.00
%
6.00
%
6.00
%
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
3.30
%
N/A
N/A
N/A
Target Allocation
Pension Plans
U.S.
Non-U.S.
2008
2007
52
%
58
%
51
%
54
%
33
32
36
24
15
10
13
18
4
100
%
100
%
100
%
100
%
88
Table of Contents
1 Percentage
1 Percentage
Point Increase
Point Decrease
$
26
$
(25
)
$
96
$
(90
)
Other Post-
Retirement
Pension Plans
Benefit Plans
$
2,057
$
442
$
2,229
$
436
$
2,380
$
368
$
2,754
$
347
$
3,026
$
328
$
18,861
$
569
16.
Related
Party Transactions
17.
Consolidating
Guarantor and Non-Guarantor Financial Information
89
Table of Contents
As of December 31, 2008
90
Table of Contents
For the Year Ended December 31, 2008
Parent
Guarantor
Non-Guarantor
Company
Companies
Companies
Elimination
Consolidated
(In thousands)
$
$
569,672
$
226,295
$
(32,478
)
$
763,489
520,839
199,817
(31,372
)
689,284
48,833
26,478
(1,106
)
74,205
43,993
19,603
(832
)
62,764
414
965
1,379
(6,075
)
(6,075
)
162,224
45,307
207,531
(151,723
)
(39,397
)
(274
)
(191,394
)
(1,951
)
15,896
13,945
14,804
2,511
(1,926
)
15,389
(164,576
)
(57,804
)
1,652
(220,728
)
(11,176
)
(2,793
)
(13,969
)
$
$
(153,400
)
$
(55,011
)
$
1,652
$
(206,759
)
91
Table of Contents
For the Year Ended December 31, 2008
92
Table of Contents
As of December 31, 2007
93
Table of Contents
For the Year Ended December 31, 2007
Parent
Guarantor
Non-Guarantor
Company
Companies
Companies
Elimination
Consolidated
(In thousands)
$
$
526,588
$
182,737
$
(12,539
)
$
696,786
475,273
156,065
(11,193
)
620,145
51,315
26,672
(1,346
)
76,641
40,885
15,567
(959
)
55,493
412
482
894
1,433
1,433
8,585
10,623
(387
)
18,821
(573
)
9,934
9,361
14,212
(65
)
14,147
24
125
149
(5,078
)
629
(387
)
(4,836
)
(207
)
(1,378
)
(1,585
)
$
$
(4,871
)
$
2,007
$
(387
)
$
(3,251
)
94
Table of Contents
For the Year Ended December 31, 2007
Parent
Guarantor
Non-Guarantor
Company
Companies
Companies
Elimination
Consolidated
(In thousands)
$
$
(4,871
)
$
2,007
$
(387
)
$
(3,251
)
13,191
3,234
16,425
839
20
859
24
125
149
3,084
3,084
(2
)
(8
)
(10
)
13,482
(3,791
)
9,691
9,967
9,967
2,800
7,474
387
10,661
28,547
19,028
47,575
(13,882
)
(3,099
)
(16,981
)
382
167
549
(12,281
)
(23,768
)
(36,049
)
(26,651
)
124
25,716
(811
)
(52,432
)
(26,576
)
25,716
(53,292
)
464
464
(299
)
(299
)
(170
)
(170
)
(120,500
)
(8,990
)
(129,490
)
130,000
33,237
(25,716
)
137,521
(10,295
)
(10,295
)
(116
)
(9
)
(125
)
9,379
13,943
(25,716
)
(2,394
)
(2,413
)
570
(1,843
)
(16,919
)
6,965
(9,954
)
18,268
1,553
19,821
$
$
1,349
$
8,518
$
$
9,867
95
Table of Contents
For the Year Ended December 31, 2006
Parent
Guarantor
Non-Guarantor
Company
Companies
Companies
Elimination
Consolidated
(In thousands)
$
$
789,952
$
134,978
$
(6,179
)
$
918,751
661,519
112,738
(5,344
)
768,913
128,433
22,240
(835
)
149,838
39,487
13,153
(690
)
51,950
414
414
88,532
9,087
(145
)
97,474
755
(4,223
)
(3,468
)
14,963
(134
)
14,829
282
36
318
72,532
13,408
(145
)
85,795
24,002
3,743
27,745
$
$
48,530
$
9,665
$
(145
)
$
58,050
96
Table of Contents
For the Year Ended December 31, 2006
Parent
Guarantor
Non-Guarantor
Company
Companies
Companies
Elimination
Consolidated
(In thousands)
$
$
48,530
$
9,665
$
(145
)
$
58,050
12,906
2,077
14,983
855
40
895
282
36
318
2,006
2,006
(693
)
28
(665
)
(4,007
)
142
(3,865
)
7,616
1,801
9,417
(4,203
)
(4,203
)
(37,477
)
(2,682
)
145
(40,014
)
30,018
6,904
36,922
(17,070
)
(2,257
)
(19,327
)
332
20
352
2,032
2,032
(634
)
(8,818
)
(9,452
)
(11,080
)
(10,273
)
20,123
(1,230
)
(26,420
)
(21,328
)
20,123
(27,625
)
2,140
2,140
(115
)
(115
)
645
645
(61,300
)
(13,411
)
(74,711
)
61,300
11,098
72,398
(26,590
)
(1,620
)
(28,210
)
(98
)
(1
)
(99
)
20,123
(20,123
)
(24,018
)
16,189
(20,123
)
(27,952
)
(465
)
(1,700
)
(2,165
)
(20,885
)
65
(20,820
)
39,153
1,488
40,641
$
$
18,268
$
1,553
$
$
19,821
97
Table of Contents
18.
Quarterly
Financial Data (Unaudited):
Operating
Income
Net Income
Basic Earnings
Diluted Earnings
Revenues
Gross Profit
(Loss)
(Loss)
(Loss) per Share
(Loss) per Share(1)
$
197,004
$
20,765
$
11,477
$
472
$
0.02
$
0.02
$
209,240
$
23,408
$
6,307
$
3,083
$
0.14
$
0.14
$
192,860
$
16,908
$
546
$
(2,603
)
$
(0.12
)
$
(0.12
)
$
164,385
$
13,124
$
(209,724
)
$
(207,711
)
$
(9.57
)
$
(9.57
)
$
198,801
$
26,269
$
10,612
$
2,959
$
0.14
$
0.14
$
158,566
$
16,619
$
752
$
(231
)
$
(0.01
)
$
(0.01
)
$
160,918
$
17,819
$
2,803
$
(2,682
)
$
(0.13
)
$
(0.13
)
$
178,501
$
15,934
$
4,654
$
(3,297
)
$
(0.15
)
$
(0.15
)
(1)
See Note 13 for discussion on the computation of diluted
shares outstanding.
19.
Subsequent
Events.
98
Table of Contents
EBITDA (as Defined in the Loan
and Security Agreement, as
Amended)
$
(3,250,000
)
$
(3,530,000
)
$
(1,750,000
)
$
1,200,000
$
3,600,000
$
9,200,000
$
13,200,000
$
17,600,000
$
22,000,000
99
Table of Contents
Item 9.
Changes
in and Disagreements with Accountants on Accounting and
Financial Disclosure
Item 9A.
Controls
and Procedures
100
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
101
Table of Contents
102
Table of Contents
Item 9B.
Other
Information
Item 10.
Directors,
Executive Officers and Corporate Governance
A.
Directors
of the Registrant
52
Chairman and Director
55
President, Chief Executive Officer and Director
52
Director
59
Director
60
Director
68
Director
72
Director
67
Director
103
Table of Contents
C.
Section 16(a)
Beneficial Ownership Reporting Compliance and Corporate
Governance
Item 11.
Executive
Compensation
104
Table of Contents
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
492,184
(1)
$
15.84
17,824
228,411
$
5.54
720,595
$
12.58
17,824
(1)
Includes options granted under our Second Amended and Restated
Equity Incentive Plan. Does not include 1,523,750 shares of
restricted stock granted under our Second Amended and Restated
Equity Incentive Plan.
Item 13.
Certain
Relationships, Related Transactions and Director
Independence
Item 14.
Principal
Accountant Fees and Services
105
Table of Contents
Item 15.
Exhibits
and Financial Statements Schedules
(1)
LIST OF
FINANCIAL STATEMENT SCHEDULES
2008
2007
2006
$
3,758
$
5,536
$
6,087
105
119
4,772
5,076
4,246
(4,852
)
(6,915
)
(4,963
)
(259
)
(44
)
47
$
3,419
$
3,758
$
5,536
2008
2007
2006
$
106
$
247
$
317
(106
)
(141
)
(70
)
$
$
106
$
247
2008
2007
2006
$
646
$
60
$
2,013
(206
)
810
(440
)
(224
)
(1,953
)
$
$
646
$
60
106
Table of Contents
(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).
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).
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).
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
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
.7
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).
10
.1
Revolving Credit and Term Loan Agreement, dated as of August 10,
2004, by and among Commercial Vehicle Group, Inc., the
subsidiary borrowers from time to time parties thereto, the
foreign currency borrowers from time to time parties thereto,
the banks from time to time parties hereto, U.S. Bank National
Association, one of the banks, as administrative agent for the
banks and Comerica Bank, one of the banks, as syndication agent
for the banks (incorporated by reference to the Companys
quarterly report on Form 10-Q (File No. 000-50890), filed on
September 17, 2004).
107
Table of Contents
10
.2
First Amendment to Revolving Credit and Term Loan Agreement,
dated as of September 16, 2004, by and among Commercial Vehicle
Group, Inc., the subsidiary borrowers from time to time parties
thereto, the foreign currency borrowers from time to time
parties thereto, the banks from time to time parties hereto,
U.S. Bank National Association, one of the banks, as
administrative agent for the banks and Comerica Bank, one of the
banks, as syndication agent for the banks (incorporated by
reference to the Companys annual report on Form 10-K (File
No. 000-50890), filed on March 15, 2005).
10
.3
Second Amendment to Revolving Credit and Term Loan Agreement,
dated as of February 7, 2005, by and among Commercial Vehicle
Group, Inc., the subsidiary borrowers from time to time parties
thereto, the foreign currency borrowers from time to time
parties thereto, the banks from time to time parties hereto,
U.S. Bank National Association, one of the banks, as
administrative agent for the banks and Comerica Bank, one of the
banks, as syndication agent for the banks (incorporated by
reference to the Companys annual report on Form 10-K (File
No. 000-50890), filed on March 15, 2005).
10
.4
Third Amendment to Revolving Credit and Term Loan Agreement,
dated as of June 3, 2005, by and among Commercial Vehicle Group,
Inc., the subsidiary borrowers from time to time parties
thereto, the foreign currency borrowers from time to time
parties thereto, the banks from time to time parties thereto,
U.S. Bank National Association, one of the banks, as
administrative agent for the banks and Comerica Bank, one of the
banks, as syndication agent for the banks (incorporated by
reference to the Companys current report on Form 8-K (File
No. 000-50890), filed on June 8, 2005).
10
.5
Fourth Amendment to Revolving Credit and Term Loan Agreement,
dated as of June 29, 2005, by and among Commercial Vehicle
Group, Inc., the subsidiary borrowers from time to time parties
thereto, the foreign currency borrowers from time to time
parties thereto, the banks from time to time parties thereto,
U.S. Bank National Association, one of the banks, as
administrative agent for the banks and Comerica Bank, one of the
banks, as syndication agent for the banks (incorporated by
reference to the Company s current report on Form 8-K
(File No. 000-50890), filed on July 6, 2005).
10
.6
Fifth Amendment to Revolving Credit and Term Loan Agreement,
dated as of July 12, 2005, by and among Commercial Vehicle
Group, Inc., the subsidiary borrowers from time to time parties
thereto, the foreign currency borrowers from time to time
parties thereto, the banks from time to time parties thereto,
U.S. Bank National Association, one of the banks, as
administrative agent for the banks, and Comerica Bank one of the
banks, as syndication agent for the banks (incorporated by
reference to the Companys current report on Form 8-K (File
No. 000-50890), filed on July 14, 2005).
10
.7
Sixth Amendment to Revolving Credit and Term Loan Agreement,
dated as of December 30, 2005, by and among Commercial Vehicle
Group, Inc., the subsidiary borrowers from time to time parties
thereto, the foreign currency borrowers from time to time
parties thereto, the banks from time to time parties thereto,
U.S. Bank National Association, one of the banks, as
administrative agent for the banks, and Comerica Bank, one of
the banks, as syndication agent for the banks (incorporated by
reference to the Companys current report on Form 8-K (File
No. 000-50890), filed on January 1, 2006).
10
.8
Waiver and Seventh Amendment to Revolving Credit and Term Loan
Agreement, dated as of March 26, 2007, by and among
Commercial Vehicle Group, Inc., the subsidiary borrowers from
time to time parties thereto, the foreign currency borrowers
from time to time parties thereto, the banks from time to time
parties thereto, U.S. Bank National Association, one of the
banks, as administrative agent for the banks, and Comerica Bank,
one of the banks, as syndication agent for the banks
(incorporated by reference to the Companys quarterly
report on Form 10-Q (File No. 000-50890), filed on August 3,
2007).
10
.9
Eighth Amendment to Revolving Credit and Term Loan Agreement,
dated as of June 26, 2007, by and among Commercial Vehicle
Group, Inc., the subsidiary borrowers from time to time parties
thereto, the foreign currency borrowers from time to time
parties thereto, the banks from time to time parties thereto,
U.S. Bank National Association, one of the banks, as
administrative agent for the banks, and Comerica Bank, one of
the banks, as syndication agent for the banks (incorporated by
reference to the Companys quarterly report on Form 10-Q
(File No. 000-50890), filed on August 3, 2007).
Table of Contents
10
.10
Amendment and Waiver Letter to Revolving Credit and Term Loan
Agreement, dated as of August 16, 2007, by and among Commercial
Vehicle Group, Inc., the subsidiary borrowers from time to time
parties thereto, the foreign currency borrowers from time to
time parties thereto, the banks from time to time parties
thereto, U.S. Bank National Association, one of the banks, as
administrative agents for the banks, and Comerica Bank, one of
the banks, as syndication agent for the banks (incorporated by
reference to the Companys current report on Form 8-K (File
No. 000-50890), filed on October 1, 2007).
10
.11
Tenth Amendment to Revolving Credit and Term Loan Agreement,
dated as of September 28, 2007, by and among Commercial Vehicle
Group, Inc., the subsidiary borrowers from time to time parties
thereto, the foreign currency borrowers from time to time
parties thereto, the banks from time to time parties thereto,
U.S. Bank National Association, one of the banks, as
administrative agents for the banks, and Comerica Bank, one of
the banks, as syndication agent for the banks (incorporated by
reference to the Companys current report on Form 8-K (File
No. 000-50890), filed on October 1, 2007).
10
.12
Eleventh Amendment to Revolving Credit and Term Loan Agreement,
dated as of March 10, 2008, by and among Commercial Vehicle
Group, Inc., the subsidiary borrowers from time to time parties
thereto, the foreign currency borrowers from time to time
parties thereto, the banks from time to time parties thereto,
U.S. Bank National Association, one of the banks, as
administrative agents for the banks, and Comerica Bank, one of
the banks, as syndication agent for the banks (incorporated by
reference to the Companys current report on Form 8-K (File
No. 000-50890), filed on March 14, 2008).
10
.13
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
.14*
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
.15*
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
.16*
Commercial Vehicle Group, Inc. Amended and Restated Equity
Incentive Plan (incorporated by reference to the Companys
quarterly report on Form 10-Q (File No. 000-59890), filed on May
11, 2005).
10
.17*
Commercial Vehicle Group, Inc. Second 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 25, 2007).
10
.18*
Form of Grant of Nonqualified Stock Option pursuant to the
Commercial Vehicle Group, Inc. 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
.19
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
.20
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
.21
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
.22
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).
Table of Contents
10
.23*
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
.24*
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
.25*
First Amendment to Commercial Vehicle Group, Inc. 2008 Bonus
Plan dated November 5, 2008.
10
.26*
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
.27*
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
.28*
Form of Restricted Stock Agreement pursuant to the Commercial
Vehicle Group, Inc. 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
.29*
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
.30*
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
.31*
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
.32*
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
.33*
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
.34*
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
.35*
First Amendment to Change in Control & Non-Competition
Agreement dated November 5, 2008 with Mervin Dunn.
10
.36*
First Amendment to Change in Control & Non-Competition
Agreement dated November 5, 2008 with Gerald L. Armstrong.
10
.37*
First Amendment to Change in Control & Non-Competition
Agreement dated November 5, 2008 with Chad M. Utrup.
10
.38*
First Amendment to Change in Control & Non-Competition
Agreement dated November 5, 2008 with James F. Williams).
10
.39*
First Amendment to Change in Control & Non-Competition
Agreement dated November 5, 2008 with Kevin R.L. Frailey.
10
.40*
Amended and Restated Deferred Compensation Plan dated November
5, 2008.
10
.41
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).
10
.42*
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.
Table of Contents
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.
Table of Contents
By:
Chairman and Director
March 16, 2009
President, Chief Executive Officer (Principal Executive Officer)
and Director
March 16, 2009
Director
March 16, 2009
Director
March 16, 2009
Director
March 16, 2009
Director
March 16, 2009
Director
March 16, 2009
Director
March 16, 2009
Chief Financial Officer (Principal
Financial and Accounting Officer)
March 16, 2009
112
F-1
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By: | /s/ Chad M. Utrup | |||
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Name: | Chad M. Utrup | |||
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Title: | CFO | |||
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2
2
3
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By: | /s/ Chad M. Utrup | |||
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|||||
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Name: | Chad M. Utrup | |||
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Title: | CFO |
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/s/ Mervin Dunn | ||
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|||
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Mervin Dunn | ||
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Address: | ||
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4737 Yantis Drive | ||
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New Albany, OH 43054 |
4
1
2
3
COMMERCIAL VEHICLE GROUP, INC. | |||||||
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By: | /s/ Chad M. Utrup | |||||
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Name: | Chad M. Utrup | |||||
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Title: | CFO | |||||
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|||||||
EXECUTIVE | |||||||
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|||||||
/s/ Gerald L. Armstrong | |||||||
Gerald L. Armstrong | |||||||
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|||||||
Address: | |||||||
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7544 North Goodrich Street | |||||||
New Albany, OH 43054 |
1
2
3
COMMERCIAL VEHICLE GROUP, INC. | |||||
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By:
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/s/ Mervin Dunn | |||
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Name:
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Mervin Dunn | |||
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Title:
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President and CEO |
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EXECUTIVE | ||
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/s/ Chad M. Utrup | ||
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Chad M. Utrup | ||
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Address: | ||
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8173 Tillinghast Drive | ||
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Dublin, OH 43017 |
1
2
3
COMMERCIAL VEHICLE GROUP, INC. | ||||||
|
||||||
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By:
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/s/ Chad M. Utrup
|
||||
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Name:
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Chad M. Utrup
|
||||
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Title:
|
CFO
|
|
EXECUTIVE | |||
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||||
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/s/ James F. Williams
|
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|
James F. Williams | |||
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||||
|
Address: | |||
|
||||
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7273 Scioto Chad Blvd.
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Power, OH 43065 | |||
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||||
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4
1
2
3
COMMERCIAL VEHICLE GROUP, INC. | |||||||
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|||||||
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By: | /s/ Chad M. Utrup | |||||
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|||||||
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Name: | Chad M. Utrup | |||||
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Title: | CFO | |||||
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|||||||
EXECUTIVE | |||||||
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|||||||
/s/ Kevin R.L. Frailey | |||||||
Kevin R. L. Frailey | |||||||
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|||||||
Address: | |||||||
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3785 Pembrooke Green East | |||||||
New Albany, OH 43054 |
Page | ||||
Article I
Definitions
|
1 | |||
|
||||
Article II Selection, Enrollment, Eligibility
|
9 | |||
2.1 Selection by Committee
|
9 | |||
2.2 Enrollment and Eligibility Requirements; Commencement of Participation
|
9 | |||
|
||||
Article III Deferral Commitments/Company Contribution Amounts/ Company Restoration Matching Amounts/
Vesting/Crediting/Taxes
|
10 | |||
3.1 Minimum and Maximum Deferral
|
10 | |||
3.2 Timing of Deferral Elections; Effect of Election Form
|
10 | |||
3.3 Withholding and Crediting of Annual Deferral Amounts
|
12 | |||
3.4 Company Contribution Amount
|
12 | |||
3.5 Company Restoration Matching Amount
|
13 | |||
3.6 Vesting
|
13 | |||
3.7 Crediting/Debiting of Account Balances
|
14 | |||
3.8 FICA and Other Taxes
|
15 | |||
|
||||
Article IV Scheduled Distribution; Unforeseeable Emergencies
|
16 | |||
4.1 Scheduled Distributions
|
16 | |||
4.2 Postponing Scheduled Distributions
|
16 | |||
4.3 Precedence of Distributions
|
17 | |||
4.4 Unforeseeable Emergencies
|
17 | |||
|
||||
Article V Change in Control Benefit
|
18 | |||
5.1 Change in Control Benefit
|
18 | |||
5.2 Payment of Change in Control Benefit
|
18 | |||
|
||||
Article VI Retirement Benefit
|
18 | |||
6.1 Retirement Benefit
|
18 | |||
6.2 Payment of Retirement Benefit
|
18 | |||
|
||||
Article VII Termination Benefit
|
19 | |||
7.1 Termination Benefit
|
19 | |||
7.2 Payment of Termination Benefit
|
19 | |||
|
||||
Article VIII Disability Benefit
|
20 | |||
8.1 Disability Benefit
|
20 | |||
8.2 Payment of Disability Benefit
|
20 |
-ii-
Page | ||||
Article IX Death Benefit
|
20 | |||
9.1 Death Benefit
|
20 | |||
9.2 Payment of Death Benefit
|
20 | |||
|
||||
Article X Beneficiary Designation
|
20 | |||
10.1 Beneficiary
|
20 | |||
10.2 Beneficiary Designation; Change; Spousal Consent
|
20 | |||
10.3 Acknowledgment
|
21 | |||
10.4 No Beneficiary Designation
|
21 | |||
10.5 Doubt as to Beneficiary
|
21 | |||
10.6 Discharge of Obligations
|
21 | |||
|
||||
Article XI Leave of Absence
|
21 | |||
11.1 Paid Leave of Absence
|
21 | |||
11.2 Unpaid Leave of Absence
|
21 | |||
|
||||
Article XII Termination of Plan, Amendment or Modification
|
21 | |||
12.1 Termination of Plan
|
21 | |||
12.2 Amendment
|
22 | |||
12.3 Plan Agreement
|
22 | |||
12.4 Effect of Payment
|
22 | |||
|
||||
Article XIII Administration
|
22 | |||
13.1 Committee Duties
|
22 | |||
13.2 Administration Upon Change In Control
|
23 | |||
13.3 Agents
|
23 | |||
13.4 Binding Effect of Decisions
|
23 | |||
13.5 Indemnity of Committee
|
23 | |||
13.6 Employer Information
|
23 | |||
|
||||
Article XIV Other Benefits and Agreements
|
23 | |||
14.1 Coordination with Other Benefits
|
23 | |||
|
||||
Article XV Claims Procedures
|
24 | |||
15.1 Presentation of Claim
|
24 | |||
15.2 Notification of Decision
|
24 | |||
15.3 Review of a Denied Claim
|
24 | |||
15.4 Decision on Review
|
25 | |||
15.5 Legal Action
|
25 | |||
|
||||
Article XVI Trust
|
25 | |||
16.1 Establishment of the Trust
|
25 | |||
16.2 Interrelationship of the Plan and the Trust
|
26 | |||
16.3 Distributions From the Trust
|
26 |
-iii-
Page | ||||
Article XVII Miscellaneous
|
26 | |||
17.1 Status of Plan
|
26 | |||
17.2 Unsecured General Creditor
|
26 | |||
17.3 Employers Liability
|
26 | |||
17.4 Nonassignability
|
26 | |||
17.5 Not a Contract of Employment
|
27 | |||
17.6 Furnishing Information
|
27 | |||
17.7 Terms
|
27 | |||
17.8 Captions
|
27 | |||
17.9 Governing Law
|
27 | |||
17.10 Notice
|
27 | |||
17.11 Successors
|
28 | |||
17.12 Spouses Interest
|
28 | |||
17.13 Validity
|
28 | |||
17.14 Incompetent
|
28 | |||
17.15 Domestic Relations Orders
|
28 | |||
17.16 Distribution in the Event of Income Inclusion Under Code Section 409A
|
28 | |||
17.17 Deduction Limitation on Benefit Payments
|
28 |
-iv-
1.1 | Account Balance shall mean, with respect to a Participant, an entry on the records of the Employer equal to the sum of the Participants Annual Accounts. The Account Balance shall be a bookkeeping entry only and shall be utilized solely as a device for the measurement and determination of the amounts to be paid to a Participant, or his or her designated Beneficiary, pursuant to this Plan. |
1.2 | Annual Account shall mean, with respect to a Participant, an entry on the records of the Employer equal to (a) the sum of the Participants Annual Deferral Amount, Company Contribution Amount and Company Restoration Matching Amount for any one Plan Year, plus (b) amounts credited or debited to such amounts pursuant to this Plan, less (c) all distributions made to the Participant or his or her Beneficiary pursuant to this Plan that relate to the Annual Account for such Plan Year. The Annual Account shall be a bookkeeping entry only and shall be utilized solely as a device for the measurement and determination of the amounts to be paid to a Participant, or his or her designated Beneficiary, pursuant to this Plan. |
1
1.3 | Annual Deferral Amount shall mean that portion of a Participants Base Salary, Bonus, Director Fees and LTIP Amounts that a Participant defers in accordance with Article 3 for any one Plan Year, without regard to whether such amounts are withheld and credited during such Plan Year. | ||
1.4 | Annual Installment Method shall mean the method used to determine the amount of each payment due to a Participant who has elected to receive a benefit over a period of years in accordance with the applicable provisions of the Plan. The amount of each annual payment due to the Participant shall be calculated by multiplying the balance of the Participants benefit by a fraction, the numerator of which is one and the denominator of which is the remaining number of annual payments due to the Participant. By way of example, if the Participant elects a 10-year Annual Installment Method for the Retirement Benefit, the first payment shall be 1/10 of the vested Account Balance, calculated as described in this definition. The following year, the payment shall be 1/9 of the vested Account Balance, calculated as described in this definition. The amount of the first annual payment shall be calculated as of the close of business on or around the Participants Benefit Determination Date, and the amount of each subsequent annual payment shall be calculated on or around each anniversary of such Benefit Determination Date. For purposes of this Plan, the right to receive a benefit payment in annual installments shall be treated as the entitlement to a series of separate individual payments rather than as entitlement to a single payment. | ||
1.5 | Base Salary shall mean the annual cash compensation relating to services performed during any calendar year, excluding distributions from nonqualified deferred compensation plans, bonuses, commissions, overtime, fringe benefits, stock options, relocation expenses, incentive payments, non-monetary awards, director fees and other fees, and automobile and other allowances paid to a Participant for employment services rendered (whether or not such allowances are included in the Employees gross income). Base Salary shall be calculated before reduction for compensation voluntarily deferred or contributed by the Participant pursuant to all qualified or nonqualified plans of any Employer and shall be calculated to include amounts not otherwise included in the Participants gross income under Code Sections 125, 402(e)(3), 402(h), or 403(b) pursuant to plans established by any Employer; provided, however, that all such amounts will be included in compensation only to the extent that had there been no such plan, the amount would have been payable in cash to the Employee. | ||
1.6 | Beneficiary shall mean one or more persons, trusts, estates or other entities, designated in accordance with Article 10, that are entitled to receive benefits under this Plan upon the death of a Participant. | ||
1.7 | Beneficiary Designation Form shall mean the form established from time to time by the Committee that a Participant completes, signs and returns to the Committee to designate one or more Beneficiaries. |
2
1.8 | Benefit Determination Date shall mean the date upon which all or an objectively determinable portion of a Participants vested benefits will become eligible for distribution, as provided. | ||
1.9 | Board shall mean the board of directors of the Company. | ||
1.10 | Bonus shall mean any compensation, in addition to Base Salary, and LTIP Amounts, earned by a Participant under any Employers annual bonus and other cash incentive plans or other arrangements designated by the Committee as further specified on any Election Form. | ||
1.11 | Change in Control shall mean the occurrence of a change in the ownership, a change in the effective control or a change in the ownership of a substantial portion of the assets of the corporation, as determined in accordance with this Section, and interpreted in accordance with Code Section 409A. |
3
1.12 | Code shall mean the Internal Revenue Code of 1986, as it may be amended from time to time. | ||
1.13 | Committee shall mean the committee described in Article 13. | ||
1.14 | Company shall mean Commercial Vehicle Group, Inc., a Delaware corporation, and any successor to all or substantially all of the Companys assets or business. | ||
1.15 | Company Contribution Amount shall mean, for any one Plan Year, the amount determined in accordance with Section 3.4. | ||
1.16 | Company Restoration Matching Amount shall mean, for any one Plan Year, the amount determined in accordance with Section 3.5. | ||
1.17 | Director shall mean any member of the board of directors of any Employer. | ||
1.18 | Director Fees shall mean the annual fees earned by a Director from any Employer, including retainer fees and meetings fees, as compensation for serving on the board of directors. | ||
1.19 | Disability or Disabled shall mean that a Participant is either (a) unable to engage in any substantial gainful activity by reason of any medically determinable |
4
physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, or (b) by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than 3 months under an accident and health plan covering employees of the Participants Employer. For purposes of this Plan, a Participant shall be deemed Disabled if determined to be totally disabled by the Social Security Administration. A Participant shall also be deemed Disabled if determined to be disabled in accordance with the applicable disability insurance program of such Participants Employer, provided that the definition of disability applied under such disability insurance program complies with the requirements of this Section. | |||
1.20 | Election Form shall mean the form, which may be in electronic format, established from time to time by the Committee that a Participant completes, signs and returns to the Committee to make an election under the Plan. | ||
1.21 | Employee shall mean a person who is an employee of an Employer. | ||
1.22 | Employer(s) shall be defined as follows: |
1.23 | ERISA shall mean the Employee Retirement Income Security Act of 1974, as it may be amended from time to time. |
5
1.24 | First Plan Year shall mean the period beginning July 1, 2006 and ending December 31, 2006. | ||
1.25 | 401(k) Plan shall mean, with respect to an Employer, a plan qualified under Code Section 401(a) that contains a cash or deferral arrangement described in Code Section 401(k), adopted by the Employer, as it may be amended from time to time, or any successor thereto. | ||
1.26 | LTIP Amounts shall mean any portion of the compensation attributable to a Plan Year that is earned by a Participant under any Employers long-term incentive plan or any other long-term incentive arrangement designated by the Committee. | ||
1.27 | Participant shall mean any Employee or Director (a) who is selected to participate in the Plan, (b) whose executed Plan Agreement, Election Form and Beneficiary Designation Form are accepted by the Committee, and (c) whose Plan Agreement has not terminated. | ||
1.28 | Performance-Based Compensation shall mean compensation the entitlement to or amount of which is contingent on the satisfaction of pre-established organizational or individual performance criteria relating to a performance period of at least 12 consecutive months, as determined by the Committee in accordance with Treas. Reg. §1.409A-1(e). | ||
1.29 | Plan shall mean the Commercial Vehicle Group, Inc. Deferred Compensation Plan, which shall be evidenced by this instrument, as it may be amended from time to time, and by any other documents that together with this instrument define a Participants rights to amounts credited to his or her Account Balance including any Plan Agreement. | ||
1.30 | Plan Agreement shall mean a written agreement in the form prescribed by or acceptable to the Committee that evidences a Participants agreement to the terms of the Plan and which may establish additional terms or conditions of Plan participation for a Participant. Unless otherwise determined by the Committee, the most recent Plan Agreement accepted with respect to a Participant shall supersede any prior Plan Agreements for such Participant. Plan Agreements may vary among Participants and may provide additional benefits not set forth in the Plan or limit the benefits otherwise provided under the Plan. | ||
1.31 | Plan Year shall mean, except for the First Year, a period beginning on January 1 of each calendar year and continuing through December 31 of such calendar year. | ||
1.32 | Retirement, Retire(s) or Retired shall mean with respect to a Participant who is an Employee, a Separation from Service, for any reason other than death or Disability, on or after the attainment of age 55 with 5 Years of Service, and shall mean with respect to a Participant who is a Director, a Separation from |
6
Service. If a Participant is both an Employee and a Director and participates in the Plan in each capacity, (a) the determination of whether the Participant qualifies for Retirement as an Employee shall be made when the Participant experiences a Separation from Service as an Employee and such determination shall only apply to the applicable Account Balance established in accordance with Section 1.1 for amounts deferred under the Plan as an Employee, and (b) the determination of whether the Participant qualifies for Retirement as a Director shall be made at the time the Participant experiences a Separation from Service as a Director and such determination shall only apply to the applicable Account Balance established in accordance with Section 1.1 for amounts deferred under the Plan as a Director. | |||
1.33 | Separation from Service shall mean a termination of services provided by a Participant to his or her Employer, whether voluntarily or involuntarily, other than by reason of death or Disability, as determined by the Committee in accordance with Treas. Reg. §1.409A-1(h). In determining whether a Participant has experienced a Separation from Service, the following provisions shall apply: |
7
1.34 | Specified Employee shall mean any Participant who is determined to be a key employee (as defined under Code Section 416(i) without regard to paragraph (5) thereof) for the applicable period, as determined annually by the Committee in accordance with Treas. Reg. §1.409A-1(i). In determining whether a Participant is a Specified Employee, the following provisions shall apply: |
1.35 | Trust shall mean one or more trusts established by the Company in accordance with Article 16. |
8
1.36 | Unforeseeable Emergency shall mean a severe financial hardship of the Participant resulting from (a) an illness or accident of the Participant, the Participants spouse, the Participants Beneficiary or the Participants dependent (as defined in Code Section 152 without regard to paragraphs (b)(1), (b)(2) and (d)(1)(b) thereof), (b) a loss of the Participants property due to casualty, or (c) such other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant, all as determined by the Committee based on the relevant facts and circumstances | ||
1.37 | Years of Service shall mean the total number of full years in which a Participant has been employed by one or more Employers. For purposes of this definition, a year of employment shall be a 365 day period (or 366 day period in the case of a leap year) that, for the first year of employment, commences on the Employees date of hiring and that, for any subsequent year, commences on an anniversary of that hiring date. A partial year of employment shall not be treated as a Year of Service. |
9
Deferral | Minimum Amount | |||
Base Salary, Bonus and/or LTIP Amounts
|
$2,000 aggregate | |||
Director Fees
|
0 | % |
Deferral | Maximum Percentage | |||
Base Salary
|
80 | % | ||
Bonus
|
100 | % | ||
LTIP Amounts
|
100 | % | ||
Director Fees
|
100 | % |
10
11
12
Years of Plan Participation | Vested Percentage | |
Less than 1 year | 0% | |
At least 1 years but less than 2 years | 33% | |
At least 2 years but less than 3 years | 66% | |
At least 3 years | 100% |
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
Commercial Vehicle Group, Inc.
a Delaware corporation |
||||
By: | /s/ Chad M. Utrup | |||
Title: CFO | ||||
30
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. |
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. A. Stokes Pressings Limited
|
United Kingdom | |
|
||
17. Wilton & Co. Pressings Limited
|
United Kingdom |
Entity
Jurisdiction
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
Delaware
Delaware
Delaware
Delaware
Entity
Jurisdiction
Delaware
Mexico
Delaware
Iowa
Illinois
Mexico
Mexico
North Carolina
Delaware
Bermuda
Czech Republic
Czech Republic
Luxembourg
Czech Republic
Czech Republic
Ukraine
Delaware
Delaware
Mexico
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
|
||
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
|
||
Chad M. Utrup
|
||
Chief Financial Officer
|
||
(Principal Financial and Accounting Officer)
|