(Mark One)
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x
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Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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For the Quarterly Period Ended March 31, 2016
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or
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o
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Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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For the Transition Period from
to
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Delaware
(State or other jurisdiction of
incorporation or organization)
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47-3574483
(IRS Employer
Identification No.)
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Large accelerated filer
o
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Accelerated filer
o
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Non-accelerated filer
x
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Smaller reporting company
o
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(Do not check if a
smaller reporting company)
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March 31,
2016 |
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December 31,
2015 |
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(unaudited)
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Assets
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Current assets:
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Cash and cash equivalents
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$
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18,710
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$
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23,520
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Receivables, net of reserves of approximately $2.8 million and $3.0 million as of March 31, 2016 and December 31, 2015, respectively
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86,150
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63,050
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Inventories
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115,600
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119,470
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Prepaid expenses and other current assets
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7,300
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5,120
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Total current assets
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227,760
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211,160
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Property and equipment, net
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47,540
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45,890
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Goodwill
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4,860
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4,410
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Other intangibles, net
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54,700
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56,020
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Deferred income taxes
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2,910
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4,500
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Other assets
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10,060
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9,600
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Total assets
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$
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347,830
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$
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331,580
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Liabilities and Shareholders' Equity
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Current liabilities:
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Current maturities, long-term debt
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$
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10,300
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$
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10,130
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Accounts payable
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67,620
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78,540
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Accrued liabilities
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38,140
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39,820
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Total current liabilities
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116,060
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128,490
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Long-term debt
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201,460
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178,610
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Deferred income taxes
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2,600
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2,910
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Other long-term liabilities
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20,950
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19,570
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Total liabilities
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341,070
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329,580
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Commitments and contingent liabilities
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—
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—
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Preferred stock, $0.01 par: Authorized 100,000,000 shares;
Issued and outstanding: None |
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—
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—
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Common stock, $0.01 par: Authorized 400,000,000 shares;
Issued and outstanding: 18,157,649 shares at March 31, 2016 and 18,131,865 shares at December 31, 2015 |
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180
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180
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Paid-in capital
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1,860
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1,260
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Retained earnings (accumulated deficit)
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280
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(1,910
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Accumulated other comprehensive income
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4,440
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2,470
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Total shareholders' equity
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6,760
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2,000
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Total liabilities and shareholders' equity
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$
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347,830
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$
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331,580
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Three months ended
March 31, |
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2016
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2015
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Net sales
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$
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146,110
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$
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142,360
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Cost of sales
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(108,500
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(107,060
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Gross profit
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37,610
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35,300
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Selling, general and administrative expenses
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(29,690
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)
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(31,640
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)
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Net gain (loss) on dispositions of property and equipment
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(110
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)
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50
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Operating profit
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7,810
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3,710
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Other expense, net:
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Interest expense
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(4,270
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)
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(120
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Other expense, net
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(610
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(1,250
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)
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Other expense, net
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(4,880
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)
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(1,370
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)
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Income before income tax expense
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2,930
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2,340
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Income tax expense
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(740
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)
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(860
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Net income
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$
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2,190
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$
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1,480
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Net income per share:
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Basic
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$
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0.12
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$
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0.08
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Diluted
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$
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0.12
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$
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0.08
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Weighted average common shares outstanding:
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Basic
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18,095,101
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18,062,027
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Diluted
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18,231,562
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18,134,475
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Three months ended
March 31, |
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2016
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2015
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Net income
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$
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2,190
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$
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1,480
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Other comprehensive income (loss), net of tax:
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Foreign currency translation
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2,030
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(5,240
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)
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Derivative instruments (Note 13)
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(60
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100
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Total other comprehensive income (loss)
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1,970
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(5,140
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)
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Total comprehensive income (loss)
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$
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4,160
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$
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(3,660
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)
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Three months ended
March 31, |
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2016
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2015
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Cash Flows from Operating Activities:
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Net income
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$
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2,190
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$
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1,480
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Adjustments to reconcile net income to net cash used for operating activities:
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(Gain) loss on dispositions of property and equipment
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110
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(50
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)
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Depreciation
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2,580
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2,540
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Amortization of intangible assets
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1,790
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1,860
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Amortization of original issuance discount and debt issuance costs
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460
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—
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Deferred income taxes
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1,290
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(530
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)
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Non-cash compensation expense
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860
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960
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Increase in receivables
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(21,130
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)
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(21,520
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)
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(Increase) decrease in inventories
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5,120
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(8,300
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)
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Increase in prepaid expenses and other assets
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(2,140
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)
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(1,000
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)
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Decrease in accounts payable and accrued liabilities
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(14,770
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)
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(2,130
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)
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Other, net
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60
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(180
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Net cash used for operating activities
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(23,580
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)
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(26,870
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)
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Cash Flows from Investing Activities:
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Capital expenditures
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(3,420
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)
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(2,320
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)
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Net proceeds from disposition of property and equipment
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140
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120
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Net cash used for investing activities
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(3,280
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)
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(2,200
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)
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Cash Flows from Financing Activities:
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Proceeds from borrowings on credit facilities
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23,400
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29,930
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Repayments of borrowings on credit facilities
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(23,730
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)
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(30,040
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)
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Repayments of borrowings on Term B Loan
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(2,500
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)
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—
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Proceeds from ABL Revolving Debt
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51,700
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—
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Repayments of borrowings on ABL Revolving Debt
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(26,700
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)
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—
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Net transfers from former parent
|
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—
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28,610
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Shares surrendered upon vesting of employees' share based payment awards to cover tax obligations
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(260
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)
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—
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Net cash provided by financing activities
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21,910
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28,500
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Effect of exchange rate changes on cash
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140
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|
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—
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Cash and Cash Equivalents:
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Decrease for the period
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(4,810
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)
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(570
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)
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At beginning of period
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23,520
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|
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5,720
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At end of period
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$
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18,710
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$
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5,150
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Supplemental disclosure of cash flow information:
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Cash paid for interest
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$
|
3,740
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$
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90
|
|
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Common
Stock
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Paid-in
Capital
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Retained Earnings (Accumulated Deficit)
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Accumulated
Other
Comprehensive
Income
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Total
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||||||||||
Balances, December 31, 2015
|
|
$
|
180
|
|
|
$
|
1,260
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|
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$
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(1,910
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)
|
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$
|
2,470
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|
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$
|
2,000
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Net income
|
|
—
|
|
|
—
|
|
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2,190
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—
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2,190
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|
|||||
Other comprehensive income, net of tax
|
|
—
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|
|
—
|
|
|
—
|
|
|
1,970
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|
1,970
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|||||
Shares surrendered upon vesting of employees' share based payment awards to cover tax obligations
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|
—
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(260
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)
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—
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|
|
—
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(260
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)
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|||||
Non-cash compensation expense
|
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—
|
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|
860
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|
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—
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—
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|
860
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Balances, March 31, 2016
|
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$
|
180
|
|
|
$
|
1,860
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|
|
$
|
280
|
|
|
$
|
4,440
|
|
|
$
|
6,760
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Horizon North America
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Horizon International
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Total
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||||||
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(dollars in thousands)
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Balance, December 31, 2015
|
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$
|
—
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$
|
4,410
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$
|
4,410
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Foreign currency translation and other
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|
—
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|
450
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450
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Balance, March 31, 2016
|
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$
|
—
|
|
|
$
|
4,860
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|
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$
|
4,860
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March 31, 2016
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December 31, 2015
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Intangible Category by Useful Life
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Gross Carrying Amount
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Accumulated Amortization
|
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Gross Carrying Amount
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Accumulated Amortization
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(dollars in thousands)
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Finite-lived intangible assets:
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Customer relationships, 5 – 12 years
|
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$
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32,860
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|
$
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(27,240
|
)
|
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$
|
32,550
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$
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(26,880
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)
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Customer relationships, 15 – 25 years
|
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105,380
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(79,660
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)
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105,380
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(78,180
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)
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Total customer relationships
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138,240
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(106,900
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)
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137,930
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(105,060
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)
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Technology and other, 3 – 15 years
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14,510
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(14,200
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)
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14,480
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(14,060
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)
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Total finite-lived intangible assets
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152,750
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(121,100
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)
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152,410
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(119,120
|
)
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Trademark/Trade names, indefinite-lived
|
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23,050
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|
|
—
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22,730
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|
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—
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Total other intangible assets
|
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$
|
175,800
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|
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$
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(121,100
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)
|
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$
|
175,140
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|
|
$
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(119,120
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)
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Three months ended March 31,
|
||||||
|
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2016
|
|
2015
|
||||
|
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(dollars in thousands)
|
||||||
Technology and other, included in cost of sales
|
|
$
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30
|
|
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$
|
60
|
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Customer relationships, included in selling, general and administrative expenses
|
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1,760
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|
|
1,800
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Total amortization expense
|
|
$
|
1,790
|
|
|
$
|
1,860
|
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|
|
March 31,
2016 |
|
December 31,
2015 |
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|
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(dollars in thousands)
|
||||||
Finished goods
|
|
$
|
79,920
|
|
|
$
|
83,870
|
|
Work in process
|
|
7,720
|
|
|
7,080
|
|
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Raw materials
|
|
27,960
|
|
|
28,520
|
|
||
Total inventories
|
|
$
|
115,600
|
|
|
$
|
119,470
|
|
|
|
March 31,
2016 |
|
December 31,
2015 |
||||
|
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(dollars in thousands)
|
||||||
Buildings
|
|
$
|
8,010
|
|
|
$
|
8,330
|
|
Machinery and equipment
|
|
100,200
|
|
|
95,860
|
|
||
|
|
108,210
|
|
|
104,190
|
|
||
Less: Accumulated depreciation
|
|
60,670
|
|
|
58,300
|
|
||
Property and equipment, net
|
|
$
|
47,540
|
|
|
$
|
45,890
|
|
|
|
Three months ended March 31,
|
||||||
|
|
2016
|
|
2015
|
||||
|
|
(dollars in thousands)
|
||||||
Depreciation expense, included in cost of sales
|
|
$
|
2,180
|
|
|
$
|
2,150
|
|
Depreciation expense, included in selling, general and administrative expense
|
|
400
|
|
|
390
|
|
||
Total depreciation expense
|
|
$
|
2,580
|
|
|
$
|
2,540
|
|
|
|
March 31,
2016 |
|
December 31,
2015 |
||||
|
|
(dollars in thousands)
|
||||||
ABL Facility
|
|
$
|
25,000
|
|
|
$
|
—
|
|
Term B Loan
|
|
186,360
|
|
|
188,520
|
|
||
Capital leases and other long-term debt
|
|
400
|
|
|
220
|
|
||
|
|
211,760
|
|
|
188,740
|
|
||
Less: Current maturities, long-term debt
|
|
10,300
|
|
|
10,130
|
|
||
Long-term debt
|
|
$
|
201,460
|
|
|
$
|
178,610
|
|
|
|
|
|
Asset / (Liability) Derivatives
|
||||||
|
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Balance Sheet Caption
|
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March 31,
2016 |
|
December 31,
2015 |
||||
|
|
|
|
(dollars in thousands)
|
||||||
Derivatives designated as hedging instruments
|
|
|
|
|
|
|
||||
Foreign currency forward contracts
|
|
Accrued liabilities
|
|
$
|
(910
|
)
|
|
$
|
(800
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)
|
Total derivatives designated as hedging instruments
|
|
|
|
(910
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)
|
|
(800
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)
|
||
Derivatives de-designated as hedging instruments
|
|
|
|
|
|
|
||||
Foreign currency forward contracts
|
|
Other assets
|
|
—
|
|
|
30
|
|
||
Foreign currency forward contracts
|
|
Accrued liabilities
|
|
(240
|
)
|
|
(190
|
)
|
||
Total derivatives de-designated as hedging instruments
|
|
|
|
(240
|
)
|
|
(160
|
)
|
||
Total derivatives
|
|
|
|
$
|
(1,150
|
)
|
|
$
|
(960
|
)
|
|
Amount of Loss Recognized in
AOCI on Derivatives (Effective Portion, net of tax) |
|
|
|
Amount of Loss Reclassified
from AOCI into Earnings |
||||||||||||
|
|
|
|
Three months ended
March 31, |
|||||||||||||
|
As of
March 31, 2016 |
|
As of December 31, 2015
|
|
Location of Loss Reclassified from AOCI into Earnings (Effective Portion)
|
|
2016
|
|
2015
|
||||||||
|
(dollars in thousands)
|
|
|
|
(dollars in thousands)
|
||||||||||||
Derivatives instruments
|
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency forward contracts
|
$
|
(760
|
)
|
|
$
|
(710
|
)
|
|
Cost of sales
|
|
$
|
(470
|
)
|
|
$
|
(190
|
)
|
|
|
Frequency
|
|
Asset / (Liability)
|
|
Quoted Prices in Active Markets for Identical Assets
(Level 1) |
|
Significant Other Observable Inputs
(Level 2) |
|
Significant Unobservable Inputs
(Level 3) |
||||||||
|
|
|
|
(dollars in thousands)
|
||||||||||||||
March 31, 2016
|
|
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency forward contracts
|
|
Recurring
|
|
$
|
(1,150
|
)
|
|
$
|
—
|
|
|
$
|
(1,150
|
)
|
|
$
|
—
|
|
December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency forward contracts
|
|
Recurring
|
|
$
|
(960
|
)
|
|
$
|
—
|
|
|
$
|
(960
|
)
|
|
$
|
—
|
|
|
|
Three months ended
March 31, |
||||||
|
|
2016
|
|
2015
|
||||
|
|
(dollars in thousands)
|
||||||
Net Sales
|
|
|
|
|
||||
Horizon North America
|
|
$
|
108,730
|
|
|
$
|
103,580
|
|
Horizon International
|
|
37,380
|
|
|
38,780
|
|
||
Total
|
|
$
|
146,110
|
|
|
$
|
142,360
|
|
Operating Profit (Loss)
|
|
|
|
|
||||
Horizon North America
|
|
$
|
10,110
|
|
|
$
|
5,900
|
|
Horizon International
|
|
2,450
|
|
|
2,270
|
|
||
Corporate expenses
|
|
(4,750
|
)
|
|
(4,460
|
)
|
||
Total
|
|
$
|
7,810
|
|
|
$
|
3,710
|
|
|
|
March 1, 2016 Grant
|
||
Weighted-average fair value per option
|
|
$
|
3.93
|
|
Exercise price
|
|
$
|
10.08
|
|
Risk-free interest rate
|
|
1.39
|
%
|
|
Dividend yield
|
|
0
|
%
|
|
Expected stock volatility
|
|
40.59
|
%
|
|
Expected life (years)
|
|
5.5
|
|
|
|
Number of
Stock Options |
|
Weighted Average Exercise Price
|
|
Average Remaining Contractual Life (Years)
|
|
Aggregate Intrinsic Value
|
|||||
Outstanding at December 31, 2015
|
|
218,436
|
|
|
$
|
10.57
|
|
|
|
|
|
||
Granted
|
|
137,372
|
|
|
10.08
|
|
|
|
|
|
|||
Exercised
|
|
—
|
|
|
—
|
|
|
|
|
|
|||
Canceled, forfeited
|
|
—
|
|
|
—
|
|
|
|
|
|
|||
Expired
|
|
—
|
|
|
—
|
|
|
|
|
|
|||
Outstanding at March 31, 2016
|
|
355,808
|
|
|
$
|
10.38
|
|
|
9.6
|
|
$
|
782,647
|
|
▪
|
2,375
time-based restricted stock units that vest on May 1, 2016
|
▪
|
152,113
time-based restricted stock units that vest in equal installments on March 1, 2017, March 1, 2018 and March 1, 2019
|
▪
|
20,787
time-based restricted stock units that vest on February 1, 2018
|
▪
|
40,000
time-based restricted stock units that vest on March 1, 2019
|
▪
|
68,559
market-based performance stock units that vest on March 1, 2019
|
|
|
Number of Restricted Shares
|
|
Weighted Average Grant Date Fair Value
|
|||
Outstanding at December 31, 2015
|
|
372,219
|
|
|
$
|
13.11
|
|
Granted
|
|
283,834
|
|
|
11.49
|
|
|
Vested
|
|
(94,084
|
)
|
|
15.78
|
|
|
Canceled, forfeited
|
|
(4,465
|
)
|
|
10.63
|
|
|
Outstanding at March 31, 2016
|
|
557,504
|
|
|
$
|
11.85
|
|
|
|
Three months ended March 31,
|
||||||
|
|
2016
|
|
2015
|
||||
|
|
(dollars in thousands, except for per share amounts)
|
||||||
Numerator:
|
|
|
|
|
||||
Net income for basic and diluted earnings per share
|
|
$
|
2,190
|
|
|
$
|
1,480
|
|
Denominator:
|
|
|
|
|
||||
Weighted average shares outstanding, basic
|
|
18,095,101
|
|
|
18,062,027
|
|
||
Dilutive effect of stock-based awards
|
|
136,461
|
|
|
72,448
|
|
||
Weighted average shares outstanding, diluted
|
|
18,231,562
|
|
|
18,134,475
|
|
||
|
|
|
|
|
||||
Basic earnings per share
|
|
$
|
0.12
|
|
|
$
|
0.08
|
|
Diluted earnings per share
|
|
$
|
0.12
|
|
|
$
|
0.08
|
|
|
|
Three months ended March 31,
|
||||
|
|
2016
|
|
2015
|
||
Number of options
|
|
265,233
|
|
|
—
|
|
Exercise price of options
|
|
$9.20 - $11.29
|
|
|
—
|
|
Restricted stock units
|
|
23,355
|
|
|
—
|
|
|
|
Derivative Instruments
|
|
Foreign Currency Translation
|
|
Total
|
||||||
|
|
(dollars in thousands)
|
||||||||||
Balance, December 31, 2015
|
|
$
|
(710
|
)
|
|
$
|
3,180
|
|
|
$
|
2,470
|
|
Net unrealized gains (losses) arising during the period
(a)
|
|
(510
|
)
|
|
2,030
|
|
|
1,520
|
|
|||
Less: Net realized losses reclassified to net income
(b)
|
|
(450
|
)
|
|
—
|
|
|
(450
|
)
|
|||
Net current-period change
|
|
(60
|
)
|
|
2,030
|
|
|
1,970
|
|
|||
Balance, March 31, 2016
|
|
$
|
(770
|
)
|
|
$
|
5,210
|
|
|
$
|
4,440
|
|
|
|
Derivative Instruments
|
|
Foreign Currency Translation
|
|
Total
|
||||||
|
|
(dollars in thousands)
|
||||||||||
Balance, December 31, 2014
|
|
$
|
(70
|
)
|
|
$
|
7,460
|
|
|
$
|
7,390
|
|
Net unrealized losses arising during the period
(a)
|
|
(80
|
)
|
|
(5,240
|
)
|
|
(5,320
|
)
|
|||
Less: Net realized losses reclassified to net income
(b)
|
|
(180
|
)
|
|
—
|
|
|
(180
|
)
|
|||
Net current-period change
|
|
100
|
|
|
(5,240
|
)
|
|
(5,140
|
)
|
|||
Balance, March 31, 2015
|
|
$
|
30
|
|
|
$
|
2,220
|
|
|
$
|
2,250
|
|
▪
|
Closed and moved production from our former Goshen, Indiana manufacturing facility to a new lower-cost facility in Reynosa, Mexico in 2013, relocating approximately 420 positions;
|
▪
|
Relocated the supply chain from the Midwestern United States to localized supply near Reynosa;
|
▪
|
As a result of the Goshen manufacturing move, relocated the main U.S. distribution facility from Huntington, Indiana to Dallas, Texas;
|
▪
|
Closed and consolidated two former facilities in Australia into one newer facility;
|
▪
|
Closed and consolidated two former facilities in Brazil into one facility; and
|
▪
|
Initiated the close of our manufacturing facility in Ciudad Juarez, Mexico along with the distribution warehouse in El Paso, Texas, and the transfer of this volume to supply chain partners in China and our existing facilities in Reynosa, Mexico.
|
|
|
Three months ended March 31,
|
||||||||||||
|
|
2016
|
|
As a Percentage
of Net Sales
|
|
2015
|
|
As a Percentage
of Net Sales
|
||||||
|
|
(dollars in thousands)
|
||||||||||||
Net Sales
|
|
|
|
|
|
|
|
|
||||||
Horizon North America
|
|
$
|
108,730
|
|
|
74.4
|
%
|
|
$
|
103,580
|
|
|
72.8
|
%
|
Horizon International
|
|
37,380
|
|
|
25.6
|
%
|
|
38,780
|
|
|
27.2
|
%
|
||
Total
|
|
$
|
146,110
|
|
|
100.0
|
%
|
|
$
|
142,360
|
|
|
100.0
|
%
|
Gross Profit
|
|
|
|
|
|
|
|
|
||||||
Horizon North America
|
|
$
|
30,230
|
|
|
27.8
|
%
|
|
$
|
27,450
|
|
|
26.5
|
%
|
Horizon International
|
|
7,380
|
|
|
19.7
|
%
|
|
7,850
|
|
|
20.2
|
%
|
||
Total
|
|
$
|
37,610
|
|
|
25.7
|
%
|
|
$
|
35,300
|
|
|
24.8
|
%
|
Selling, General and Administrative Expenses
|
|
|
|
|
|
|
|
|
||||||
Horizon North America
|
|
$
|
19,990
|
|
|
18.4
|
%
|
|
$
|
21,530
|
|
|
20.8
|
%
|
Horizon International
|
|
4,950
|
|
|
13.2
|
%
|
|
5,650
|
|
|
14.6
|
%
|
||
Corporate expenses
|
|
4,750
|
|
|
N/A
|
|
|
4,460
|
|
|
N/A
|
|
||
Total
|
|
$
|
29,690
|
|
|
20.3
|
%
|
|
$
|
31,640
|
|
|
22.2
|
%
|
Net Gain (Loss) on Disposition of Property and Equipment
|
|
|
|
|
|
|
|
|
||||||
Horizon North America
|
|
$
|
(130
|
)
|
|
0.1
|
%
|
|
$
|
50
|
|
|
—
|
%
|
Horizon International
|
|
20
|
|
|
0.1
|
%
|
|
—
|
|
|
—
|
%
|
||
Total
|
|
$
|
(110
|
)
|
|
0.1
|
%
|
|
$
|
50
|
|
|
—
|
%
|
Operating Profit (Loss)
|
|
|
|
|
|
|
|
|
||||||
Horizon North America
|
|
$
|
10,110
|
|
|
9.3
|
%
|
|
$
|
5,900
|
|
|
5.7
|
%
|
Horizon International
|
|
2,450
|
|
|
6.6
|
%
|
|
2,270
|
|
|
5.9
|
%
|
||
Corporate expenses
|
|
(4,750
|
)
|
|
N/A
|
|
|
(4,460
|
)
|
|
N/A
|
|
||
Total
|
|
$
|
7,810
|
|
|
5.3
|
%
|
|
$
|
3,710
|
|
|
2.6
|
%
|
Depreciation and Amortization
|
|
|
|
|
|
|
|
|
||||||
Horizon North America
|
|
$
|
2,820
|
|
|
2.6
|
%
|
|
$
|
2,590
|
|
|
2.5
|
%
|
Horizon International
|
|
1,530
|
|
|
4.1
|
%
|
|
1,810
|
|
|
4.7
|
%
|
||
Corporate expenses
|
|
20
|
|
|
N/A
|
|
|
—
|
|
|
N/A
|
|
||
Total
|
|
$
|
4,370
|
|
|
3.0
|
%
|
|
$
|
4,400
|
|
|
3.1
|
%
|
▪
|
global sales growth with our automotive OE customers driven by both new program awards and growth within existing programs;
|
▪
|
the impact of foreign currency, as our reported results in U.S. dollars were negatively impacted as a result of the stronger U.S. dollar relative to foreign currencies in our Horizon International segment; and
|
▪
|
the realization of previously implemented cost savings and productivity initiatives.
|
|
|
|
|
Less:
|
|
Add:
|
|
|
||||||||
|
|
Year Ended December 31, 2015
|
|
Three Months Ended March 31, 2015
|
|
Three Months Ended March 31, 2016
|
|
Twelve Months Ended March 31, 2016
|
||||||||
|
|
(dollars in thousands)
|
||||||||||||||
Net income
|
|
$
|
8,300
|
|
|
$
|
1,480
|
|
|
$
|
2,190
|
|
|
$
|
9,010
|
|
Bank stipulated adjustments:
|
|
|
|
|
|
|
|
|
||||||||
Interest expense, net (as defined)
|
|
8,810
|
|
|
120
|
|
|
4,270
|
|
|
12,960
|
|
||||
Income tax expense
(benefit)
|
|
(1,280
|
)
|
|
860
|
|
|
740
|
|
|
(1,400
|
)
|
||||
Depreciation and amortization
|
|
17,080
|
|
|
4,400
|
|
|
4,370
|
|
|
17,050
|
|
||||
Non-cash compensation expense
(1)
|
|
2,530
|
|
|
960
|
|
|
860
|
|
|
2,430
|
|
||||
Other non-cash expenses or losses
|
|
11,350
|
|
|
4,540
|
|
|
310
|
|
|
7,120
|
|
||||
Non-recurring expenses or costs (as defined)
(2)
|
|
5,000
|
|
|
530
|
|
|
370
|
|
|
4,840
|
|
||||
Interest-equivalent costs associated with any Specified Vendor Receivables Financing
|
|
900
|
|
|
200
|
|
|
220
|
|
|
920
|
|
||||
Consolidated Bank EBITDA, as defined
|
|
$
|
52,690
|
|
|
$
|
13,090
|
|
|
$
|
13,330
|
|
|
$
|
52,930
|
|
|
|
March 31, 2016
|
||
|
|
(dollars in thousands)
|
||
Total Consolidated Indebtedness
|
|
$
|
199,620
|
|
Consolidated Bank EBITDA, as defined
|
|
52,930
|
|
|
Actual leverage ratio
|
|
3.77
|
x
|
|
Covenant requirement
|
|
5.25
|
x
|
▪
|
An emerging growth company is exempt from any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor's report providing additional information about the audit and financial statements, commonly known as an "auditor discussion and analysis."
|
▪
|
An emerging growth company is not required to hold a nonbinding advisory stockholder vote on executive compensation or any golden parachute payments not previously approved by stockholders.
|
▪
|
An emerging growth company is not required to comply with the requirement of auditor attestation of management's assessment of internal control over financial reporting, which is required for other public reporting companies by Section 404 of the Sarbanes-Oxley Act.
|
▪
|
An emerging growth company is eligible for reduced disclosure obligations regarding executive compensation in its periodic and annual reports, including without limitation exemption from the requirement to provide a compensation discussion and analysis describing compensation practices and procedures.
|
▪
|
A company that is an emerging growth company is eligible for reduced financial statement disclosure in registration statements, which must include two years of audited financial statements rather than the three years of audited financial statements that are required for other public reporting companies.
|
3.1(b)
|
Amended and Restated Certificate of Incorporation of Horizon Global Corporation.
|
3.2(a)
|
Amended and Restated By-laws of Horizon Global Corporation.
|
10.1
|
Form of Restricted Stock Units Agreement - CEO Award Program - 2016 Grant.
|
10.2
|
Form of Performance Share Units Agreement - Annual Grant.
|
10.3
|
Form of Restricted Stock Units Agreement - Annual Grant.
|
10.4
|
Form of Nonqualified Stock Option Agreement - Annual Grant.
|
10.5
|
Form of Restricted Stock Units Agreement - CEO Grant.
|
31.1
|
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
31.2
|
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
32.1
|
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
32.2
|
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
101.INS
|
XBRL Instance Document.
|
101.SCH
|
XBRL Taxonomy Extension Schema Document.
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document.
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
(a)
|
|
Incorporated by reference to the Exhibits filed with our Registration Statement on Form S-1/A filed on June 11, 2015 (Reg. No. 333-203138).
|
(b)
|
|
Incorporated by reference to the Exhibits filed with our Quarterly Report on Form 10-Q filed on August 11, 2015 (File No. 001-37427).
|
|
|
|
|
|
HORIZON GLOBAL CORPORATION (Registrant)
|
||
|
|
|
|
|
|
|
|
|
/s/ DAVID G. RICE
|
|
|
|
|
|
Date:
|
May 3, 2016
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By:
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David G. Rice
Chief Financial Officer
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3.1(b)
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Amended and Restated Certificate of Incorporation of Horizon Global Corporation.
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3.2(a)
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Amended and Restated By-laws of Horizon Global Corporation.
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10.1
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Form of Restricted Stock Units Agreement - CEO Award Program - 2016 Grant.
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10.2
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Form of Performance Share Units Agreement - Annual Grant.
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10.3
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Form of Restricted Stock Units Agreement - Annual Grant.
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10.4
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Form of Nonqualified Stock Option Agreement - Annual Grant.
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10.5
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Form of Restricted Stock Units Agreement - CEO Grant.
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31.1
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Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
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31.2
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Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
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32.1
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Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
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32.2
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Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
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101.INS
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XBRL Instance Document.
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101.SCH
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XBRL Taxonomy Extension Schema Document.
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101.CAL
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XBRL Taxonomy Extension Calculation Linkbase Document.
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101.DEF
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XBRL Taxonomy Extension Definition Linkbase Document.
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101.LAB
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XBRL Taxonomy Extension Label Linkbase Document.
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101.PRE
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XBRL Taxonomy Extension Presentation Linkbase Document.
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(a)
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Incorporated by reference to the Exhibits filed with our Registration Statement on Form S-1/A filed on June 11, 2015 (Reg. No. 333-203138).
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(b)
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Incorporated by reference to the Exhibits filed with our Quarterly Report on Form 10-Q filed on August 11, 2015 (File No. 001-37427).
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(a)
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The RSUs covered by this Agreement shall become nonforfeitable and payable to the Grantee pursuant to
Section 5
hereof on the second anniversary of the Date of Grant, conditioned upon the Grantee’s continuous employment with the Company or a Subsidiary through such date (the period from the Date of Grant until the second anniversary of the Date of Grant, the “
Vesting Period
”). Any RSUs that do not so become nonforfeitable will be forfeited, including, except as provided in
Section 4(b)
or
Section 4(c)
below, if the Grantee ceases to be continuously employed by the Company or a Subsidiary prior to the end of the Vesting Period. For purposes of this Agreement, “continuously employed” (or substantially similar terms) means the absence of any interruption or termination of the Grantee’s employment with the Company or a Subsidiary. Continuous employment shall not be considered interrupted or terminated in the case of transfers between locations of the Company and its Subsidiaries.
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(b)
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Notwithstanding
Section 4(a)
above, the RSUs shall become nonforfeitable and payable to the Grantee pursuant to
Section 5
hereof upon the occurrence of any of
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(i)
|
all of the RSUs shall become nonforfeitable and payable to the Grantee if the Grantee should die or become Disabled prior to the end of the Vesting Period while the Grantee is continuously employed by the Company or any of its Subsidiaries; or
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(ii)
|
in the event of a Change in Control that occurs prior to the end of the Vesting Period, the RSUs shall become nonforfeitable and payable in accordance with
Section 4(c)
below.
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(c)
|
(i) Notwithstanding
Section 4(a)
above, if at any time before the end of the Vesting Period or forfeiture of the RSUs, and while the Grantee is continuously employed by the Company or a Subsidiary, a Change in Control occurs, then the RSUs will become nonforfeitable and payable to the Grantee in accordance with
Section 5
hereof, except to the extent that a Replacement Award is provided to the Grantee in accordance with
Section 4(c)(ii)
to continue, replace or assume the RSUs covered by this Agreement (the “
Replaced Award
”).
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(ii)
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For purposes of this Agreement, a “
Replacement Award
” means an award (A) of the same type (
e.g.
, time-based restricted stock units) as the Replaced Award, (B) that has a value at least equal to the value of the Replaced Award, (C) that relates to publicly traded equity securities of the Company or its successor in the Change in Control or another entity that is affiliated with the Company or its successor following the Change in Control, (D) if the Grantee holding the Replaced Award is subject to U.S. federal income tax under the Code, the tax consequences of which to such Grantee under the Code are not less favorable to such Grantee than the tax consequences of the Replaced Award, and (E) the other terms and conditions of which are not less favorable to the Grantee holding the Replaced Award than the terms and conditions of the Replaced Award (including the provisions that would apply in the event of a subsequent Change in Control). A Replacement Award may be granted only to the extent it does not result in the Replaced Award or Replacement Award failing to comply with or be exempt from Section 409A of the Code. Without limiting the generality of the foregoing, the Replacement Award may take the form of a continuation of the Replaced Award if the requirements of the two preceding sentences are satisfied. The determination of whether the conditions of this
Section 4(c)(ii)
are satisfied will be made by the Committee, as constituted immediately before the Change in Control, in its sole discretion.
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(iii)
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If, after receiving a Replacement Award, the Grantee experiences a termination of employment with the Company or a Subsidiary (or any of their successors) (as applicable, the “
Successor
”) by reason of a termination
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(iv)
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If a Replacement Award is provided, notwithstanding anything in this Agreement to the contrary, any outstanding RSUs that at the time of the Change in Control are not subject to a “substantial risk of forfeiture” (within the meaning of Section 409A of the Code) will be deemed to be nonforfeitable at the time of such Change in Control.
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(d)
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For purposes of this Agreement, the following definitions apply:
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(i)
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“
Good Reason
” shall mean (A) a material and permanent diminution in the Grantee’s duties or responsibilities; (B) a material reduction in the aggregate value of base salary and bonus opportunity provided to the Grantee by the Company; or (C) a permanent reassignment of the Grantee to another primary office more than 50 miles from the current office location. The Grantee must notify the Company of the Grantee’s intention to invoke termination for Good Reason within 90 days after the Grantee has knowledge of such event and provide the Company 30 days’ opportunity for cure, or such event shall not constitute Good Reason. The Grantee may not invoke termination for Good Reason if Cause exists at the time of such termination.
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(ii)
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“
Cause
” shall mean (A) the Grantee’s conviction of or plea of guilty or
nolo contendere
to a crime constituting a felony under the laws of the United States or any State thereof or any other jurisdiction in which the Company or its Subsidiaries conduct business; (B) the Grantee’s willful misconduct in the performance of the Grantee’s duties to the Company or its Subsidiaries and failure to cure such breach within thirty days following written notice thereof from the Company; (C) the Grantee’s willful failure or refusal to follow directions from the Board (or direct reporting executive) and failure to cure such breach within thirty days following written notice thereof from the Board; or (D) the Grantee’s breach of fiduciary duty to the Company or its Subsidiaries for personal profit. Any failure by the Company or a Subsidiary to notify the Grantee after the first occurrence of an event constituting Cause shall not preclude any subsequent occurrences of such event (or a similar event) from constituting Cause.
|
(iii)
|
“
Disabled
” shall mean (A) the Grantee is unable to engage in any substantial gainful activity due to medically determinable physical or mental impairment expected to result in death or to last for a continuous period of not less than 12 months, or (B) due to any medically determinable physical or mental impairment expected to result in death or last for a continuous period not less
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(a)
|
Payment for the RSUs, after and to the extent they have become nonforfeitable, shall be made in the form of Common Shares. Except as provided in
Section 5(b)
or
5(c)
, payment shall be made as soon as administratively practicable following (but no later than thirty (30) days following) the date that the RSUs become nonforfeitable pursuant to
Section 4
hereof.
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(b)
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If the RSUs become nonforfeitable (i) by reason of the occurrence of a Change in Control as described in
Section 4(c)
, and if the Change in Control does not constitute a “change in control” for purposes of Section 409A(a)(2)(A)(v) of the Code, or (ii) by reason of a termination of the Grantee’s employment, and if such termination does not constitute a “separation from service” for purposes of Section 409A(a)(2)(A)(i) of the Code, then payment for the RSUs will be made upon the earliest of (A) the Grantee’s “separation from service” with the Company and its Subsidiaries (determined in accordance with Section 409A(a)(2)(A)(i) of the Code), (B) the date the RSUs would have become nonforfeitable under
Section 4(a)
had the Grantee remained in continuous employment, (C) the Grantee’s death, (D) the occurrence of a Change in Control that constitutes a “change in control” for purposes of Section 409A(a)(2)(A)(v) of the Code, or (E) the Grantee’s becoming Disabled.
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(c)
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If the RSUs become payable on the Grantee’s “separation from service” with the Company and its Subsidiaries within the meaning of Section 409A(a)(2)(A)(i) of the Code and the Grantee is a “specified employee” as determined pursuant to procedures adopted by the Company in compliance with Section 409A of the Code, then payment for the RSUs shall be made on the earlier of the fifth business day of the seventh month after the date of the Grantee’s “separation from service” with the Company and its Subsidiaries within the meaning of Section 409A(a)(2)(A)(i) of the Code or the Grantee’s death.
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(d)
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Except to the extent provided by Section 409A of the Code and permitted by the Committee, no Common Shares may be issued to the Grantee at a time earlier than otherwise expressly provided in this Agreement.
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(e)
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The Company’s obligations to the Grantee with respect to the RSUs will be satisfied in full upon the issuance of Common Shares corresponding to such RSUs.
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(a)
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The Grantee shall have no rights of ownership in the Common Shares underlying the RSUs and no right to vote the Common Shares underlying the RSUs until the
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(b)
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From and after the Date of Grant and until the earlier of (i) the time when the RSUs become nonforfeitable and are paid in accordance with
Section 5
hereof or (ii) the time when the Grantee’s right to receive Common Shares in payment of the RSUs is forfeited in accordance with
Section 4
hereof, on the date that the Company pays a cash dividend (if any) to holders of Common Shares generally, the Grantee shall be credited with cash per RSU equal to the amount of such dividend. Any amounts credited pursuant to the immediately preceding sentence shall be subject to the same applicable terms and conditions (including vesting, payment and forfeitability) as apply to the RSUs based on which the dividend equivalents were credited, and such amounts shall be paid in cash at the same time as the RSUs to which they relate.
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(c)
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The obligations of the Company under this Agreement will be merely that of an unfunded and unsecured promise of the Company to deliver Common Shares in the future, and the rights of the Grantee will be no greater than that of an unsecured general creditor. No assets of the Company will be held or set aside as security for the obligations of the Company under this Agreement.
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(a)
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Subject to the terms and conditions of this Agreement, the PSUs covered by this Agreement shall Vest on _____________ (the “
Vesting Date
”) to the extent that the performance goals described in the Statement of Performance Goals for these PSUs (the “
2016 Performance Goals
”) are achieved, as determined and certified by the Committee in its sole discretion, conditioned upon the Grantee’s continuous employment with the Company or a Subsidiary through the Vesting Date (the period from ____________ until ______________, the “
Performance Period
” and the period from the Date of Grant until the Vesting Date, the “
Vesting Period
”). Any PSUs that do not so Vest will be forfeited, including, except as provided in
Section 5(b)
or
Section 5(c)
below, if the Grantee ceases to be continuously employed by the Company or a Subsidiary prior to the end of the Vesting Period. For purposes
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(b)
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Notwithstanding
Section 5(a)
above, the PSUs shall Vest pursuant to
Section 6
hereof upon the occurrence of any of the following events at a time when the PSUs have not been forfeited (to the extent the PSUs have not previously Vested) in the following manner:
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(i)
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If the Grantee should die or become Disabled prior to the end of the Vesting Period while the Grantee is continuously employed by the Company or any of its Subsidiaries, the Grantee shall Vest in the number of PSUs in which Grantee would have Vested in accordance with the terms and conditions of this
Section 5
if Grantee had remained in the continuous employ of the Company or a Subsidiary from the Date of Grant until the end of the Vesting Period or the occurrence of a Change in Control to the extent a Replacement Award is not provided, whichever occurs first; or
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(ii)
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in the event of a Change in Control that occurs prior to the end of the Vesting Period, the PSUs shall Vest in accordance with
Section 5(c)
below.
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(c)
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(i) Notwithstanding
Section 5(a)
above, if at any time before the end of the Vesting Period or forfeiture of the PSUs, and while the Grantee is continuously employed by the Company or a Subsidiary, a Change in Control occurs, then the PSUs will Vest (except to the extent that a Replacement Award is provided to the Grantee in accordance with
Section 5(c)(ii)
to continue, replace or assume the PSUs covered by this Agreement (the “
Replaced Award
”)) as follows: the Vesting Period will terminate and the Committee as constituted immediately before the Change in Control will determine and certify the Vested PSUs based on actual performance through the most recent date prior to the Change in Control for which achievement of the 2016 Performance Goals can reasonably be determined. PSUs that Vest in accordance with this
Section 5(c)(i)
will be paid as provided for in
Section 6
of this Agreement.
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(ii)
|
For purposes of this Agreement, a “
Replacement Award
” means an award (A) of the same type (
e.g.
, performance-based restricted stock units) as the Replaced Award, (B) that has a value at least equal to the value of the Replaced Award, (C) that relates to publicly traded equity securities of the Company or its successor in the Change in Control or another entity that is affiliated with the Company or its successor following the Change in Control, (D) if the Grantee holding the Replaced Award is subject to U.S. federal income tax under the Code, the tax consequences of which to such Grantee under the Code are not less favorable to such Grantee than the tax
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(iii)
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If, after receiving a Replacement Award, the Grantee experiences a termination of employment with the Company or a Subsidiary (or any of their successors) (as applicable, the “
Successor
”) by reason of a termination by the Successor without Cause or by the Grantee for Good Reason, in each case within a period of two years after the Change in Control and during the remaining vesting period for the Replacement Award, 100% of the Replacement Award shall become nonforfeitable and payable with respect to the performance-based restricted stock units covered by such Replacement Award upon such termination.
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(iv)
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If a Replacement Award is provided, notwithstanding anything in this Agreement to the contrary, any outstanding PSUs that at the time of the Change in Control are not subject to a “substantial risk of forfeiture” (within the meaning of Section 409A of the Code) will be deemed to be Vested at the time of such Change in Control and will be paid as provided for in
Section 6
of this Agreement.
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(d)
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For purposes of this Agreement, the following definitions apply:
|
(i)
|
“
Good Reason
” shall mean (A) a material and permanent diminution in the Grantee’s duties or responsibilities; (B) a material reduction in the aggregate value of base salary and bonus opportunity provided to the Grantee by the Company; or (C) a permanent reassignment of the Grantee to another primary office more than 50 miles from the current office location. The Grantee must notify the Company of the Grantee’s intention to invoke termination for Good Reason within 90 days after the Grantee has knowledge of such event, provide the Company 30 days’ opportunity for cure, and terminate employment within two years following the initial existence of such event, or such event shall not constitute Good Reason. The Grantee may not invoke termination for Good Reason if Cause exists at the time of such termination.
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(ii)
|
“
Cause
” shall mean (A) the Grantee’s conviction of or plea of guilty or
nolo contendere
to a crime constituting a felony under the laws of the United States
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(iii)
|
“
Disabled
” shall mean (A) the Grantee is unable to engage in any substantial gainful activity due to medically determinable physical or mental impairment expected to result in death or to last for a continuous period of not less than 12 months, or (B) due to any medically determinable physical or mental impairment expected to result in death or last for a continuous period not less than 12 months, the Grantee has received income replacement benefits for a period of not less than three months under an accident and health plan sponsored by the Company.
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(e)
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Any PSUs that have not Vested pursuant to
Section 5
by the end of the Vesting Period will be forfeited automatically and without further notice after the end of the Vesting Period (or earlier if, and on such date that, Grantee ceases to be an employee of the Company or a Subsidiary prior to the end of the Vesting Period for any reason other than as described in this
Section 5
).
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(a)
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Payment for the PSUs, after and to the extent they have Vested, shall be made in the form of Common Shares. Except as provided in
Section 6(b)
, payment shall be made between ___________ and ____________.
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(b)
|
Notwithstanding Section 6(a), to the extent that the PSUs are Vested on the date of a Change in Control, Grantee will receive payment for Vested PSUs in Common Shares on the date of the Change in Control; provided, however, that if such Change in Control would not qualify as a permissible date of distribution under Section 409A(a)(2)(A) of the Code, and the regulations thereunder, and where Section 409A of the Code applies to such distribution, Grantee is entitled to receive the corresponding payment on the date that would have otherwise applied pursuant to Section 6(a)
|
(c)
|
Except to the extent provided by Section 409A of the Code and permitted by the Committee, no Common Shares may be issued to the Grantee at a time earlier than otherwise expressly provided in this Agreement.
|
(d)
|
The Company’s obligations to the Grantee with respect to the PSUs will be satisfied in full upon the issuance of Common Shares corresponding to such PSUs.
|
(a)
|
The Grantee shall have no rights of ownership in the Common Shares underlying the PSUs and no right to vote the Common Shares underlying the PSUs until the date on which the Common Shares underlying the PSUs are issued or transferred to the Grantee pursuant to
Section 6
above.
|
(b)
|
From and after the Date of Grant and until the earlier of (i) the time when the PSUs Vest and are paid in accordance with
Section 6
hereof or (ii) the time when the Grantee’s right to receive Common Shares in payment of the PSUs is forfeited in accordance with
Section 5
hereof, on the date that the Company pays a cash dividend (if any) to holders of Common Shares generally, the Grantee shall be credited with cash per PSU equal to the amount of such dividend. Any amounts credited pursuant to the immediately preceding sentence shall be subject to the same applicable terms and conditions (including Vesting, payment and forfeitability) as apply to the PSUs based on which the dividend equivalents were credited, and such amounts shall be paid in cash at the same time as the PSUs to which they relate.
|
(c)
|
The obligations of the Company under this Agreement will be merely that of an unfunded and unsecured promise of the Company to deliver Common Shares in the future, and the rights of the Grantee will be no greater than that of an unsecured general creditor. No assets of the Company will be held or set aside as security for the obligations of the Company under this Agreement.
|
(a)
|
The RSUs covered by this Agreement shall become nonforfeitable and payable to the Grantee pursuant to
Section 5
hereof in substantially equal installments on each of _____________, _______ and _______, conditioned upon the Grantee’s continuous employment with the Company or a Subsidiary through such dates (the period from the Date of Grant until __________, the “
Vesting Period
”). Any RSUs that do not so become nonforfeitable will be forfeited, including, except as provided in
Section 4(b)
or
Section 4(c)
below, if the Grantee ceases to be continuously employed by the Company or a Subsidiary prior to the end of the Vesting Period. For purposes of this Agreement, “continuously employed” (or substantially similar terms) means the absence of any interruption or termination of the Grantee’s employment with the Company or a Subsidiary. Continuous employment shall not be considered interrupted or terminated in the case of transfers between locations of the Company and its Subsidiaries.
|
(b)
|
Notwithstanding
Section 4(a)
above, the RSUs shall become nonforfeitable and payable to the Grantee pursuant to
Section 5
hereof upon the occurrence of any of the following events at a time when the RSUs have not been forfeited (to the extent the RSUs have not previously become nonforfeitable) in the following manner:
|
(i)
|
All of the RSUs shall become nonforfeitable and payable to the Grantee if the Grantee should die or become Disabled prior to the end of the Vesting Period while the Grantee is continuously employed by the Company or any of its Subsidiaries; or
|
(ii)
|
In the event of a Change in Control that occurs prior to the end of the Vesting Period, the RSUs shall become nonforfeitable and payable in accordance with
Section 4(c)
below.
|
(c)
|
(i) Notwithstanding
Section 4(a)
above, if at any time before the end of the Vesting Period or forfeiture of the RSUs, and while the Grantee is continuously employed by the Company or a Subsidiary, a Change in Control occurs, then the RSUs will become nonforfeitable and payable to the Grantee in accordance with
Section 5
hereof, except to the extent that a Replacement Award is provided to the Grantee in accordance with
Section 4(c)(ii)
to continue, replace or assume the RSUs covered by this Agreement (the “
Replaced Award
”).
|
(ii)
|
For purposes of this Agreement, a “
Replacement Award
” means an award (A) of the same type (
e.g.
, time-based restricted stock units) as the Replaced Award, (B) that has a value at least equal to the value of the Replaced Award, (C) that relates to publicly traded equity securities of the Company or its successor in the Change in Control or another entity that is affiliated with the Company or its successor following the Change in Control, (D) if the Grantee holding the Replaced Award is subject to U.S. federal income tax under the Code, the tax consequences of which to such Grantee under the Code are not less favorable to such Grantee than the tax consequences of the Replaced Award, and (E) the other terms and conditions of which are not less favorable to the Grantee holding the Replaced Award than the terms and conditions of the Replaced Award (including the provisions that would apply in the event of a subsequent Change in Control). A Replacement Award may be granted only to the extent it does not result in the Replaced Award or Replacement Award failing to comply with or be exempt from Section 409A of the Code. Without limiting the generality of the foregoing, the Replacement Award may take the form of a continuation of the Replaced Award if the requirements of the two preceding sentences are satisfied. The determination of whether the conditions of this
Section 4(c)(ii)
are satisfied will be made by the Committee, as constituted immediately before the Change in Control, in its sole discretion.
|
(iii)
|
If, after receiving a Replacement Award, the Grantee experiences a termination of employment with the Company or a Subsidiary (or any of their successors) (as applicable, the “
Successor
”) by reason of a termination by the Successor without Cause or by the Grantee for Good Reason, in each case within a period of two years after the Change in Control and during the
|
(iv)
|
If a Replacement Award is provided, notwithstanding anything in this Agreement to the contrary, any outstanding RSUs that at the time of the Change in Control are not subject to a “substantial risk of forfeiture” (within the meaning of Section 409A of the Code) will be deemed to be nonforfeitable at the time of such Change in Control.
|
(d)
|
For purposes of this Agreement, the following definitions apply:
|
(i)
|
“
Good Reason
” shall mean (A) a material and permanent diminution in the Grantee’s duties or responsibilities; (B) a material reduction in the aggregate value of base salary and bonus opportunity provided to the Grantee by the Company; or (C) a permanent reassignment of the Grantee to another primary office more than 50 miles from the current office location. The Grantee must notify the Company of the Grantee’s intention to invoke termination for Good Reason within 90 days after the Grantee has knowledge of such event and provide the Company 30 days’ opportunity for cure, or such event shall not constitute Good Reason. The Grantee may not invoke termination for Good Reason if Cause exists at the time of such termination.
|
(ii)
|
“
Cause
” shall mean (A) the Grantee’s conviction of or plea of guilty or
nolo contendere
to a crime constituting a felony under the laws of the United States or any State thereof or any other jurisdiction in which the Company or its Subsidiaries conduct business; (B) the Grantee’s willful misconduct in the performance of the Grantee’s duties to the Company or its Subsidiaries and failure to cure such breach within thirty days following written notice thereof from the Company; (C) the Grantee’s willful failure or refusal to follow directions from the Board (or direct reporting executive) and failure to cure such breach within thirty days following written notice thereof from the Board; or (D) the Grantee’s breach of fiduciary duty to the Company or its Subsidiaries for personal profit. Any failure by the Company or a Subsidiary to notify the Grantee after the first occurrence of an event constituting Cause shall not preclude any subsequent occurrences of such event (or a similar event) from constituting Cause.
|
(iii)
|
“
Disabled
” shall mean (A) the Grantee is unable to engage in any substantial gainful activity due to medically determinable physical or mental impairment expected to result in death or to last for a continuous period of not less than 12 months, or (B) due to any medically determinable physical or mental impairment expected to result in death or last for a continuous period not less than 12 months, the Grantee has received income replacement benefits for
|
(a)
|
Payment for the RSUs, after and to the extent they have become nonforfeitable, shall be made in the form of Common Shares. Except as provided in
Section 5(b)
or
5(c)
, payment shall be made as soon as administratively practicable following (but no later than thirty (30) days following) the date that the RSUs become nonforfeitable pursuant to
Section 4
hereof.
|
(b)
|
If the RSUs become nonforfeitable (i) by reason of the occurrence of a Change in Control as described in
Section 4(c)
, and if the Change in Control does not constitute a “change in control” for purposes of Section 409A(a)(2)(A)(v) of the Code, or (ii) by reason of a termination of the Grantee’s employment, and if such termination does not constitute a “separation from service” for purposes of Section 409A(a)(2)(A)(i) of the Code, then payment for the RSUs will be made upon the earliest of (A) the Grantee’s “separation from service” with the Company and its Subsidiaries (determined in accordance with Section 409A(a)(2)(A)(i) of the Code), (B) the date the RSUs would have become nonforfeitable under
Section 4(a)
had the Grantee remained in continuous employment, (C) the Grantee’s death, (D) the occurrence of a Change in Control that constitutes a “change in control” for purposes of Section 409A(a)(2)(A)(v) of the Code, or (E) the Grantee’s becoming Disabled.
|
(c)
|
If the RSUs become payable on the Grantee’s “separation from service” with the Company and its Subsidiaries within the meaning of Section 409A(a)(2)(A)(i) of the Code and the Grantee is a “specified employee” as determined pursuant to procedures adopted by the Company in compliance with Section 409A of the Code, then payment for the RSUs shall be made on the earlier of the fifth business day of the seventh month after the date of the Grantee’s “separation from service” with the Company and its Subsidiaries within the meaning of Section 409A(a)(2)(A)(i) of the Code or the Grantee’s death.
|
(d)
|
Except to the extent provided by Section 409A of the Code and permitted by the Committee, no Common Shares may be issued to the Grantee at a time earlier than otherwise expressly provided in this Agreement.
|
(e)
|
The Company’s obligations to the Grantee with respect to the RSUs will be satisfied in full upon the issuance of Common Shares corresponding to such RSUs.
|
(a)
|
The Grantee shall have no rights of ownership in the Common Shares underlying the RSUs and no right to vote the Common Shares underlying the RSUs until the date on which the Common Shares underlying the RSUs are issued or transferred to the Grantee pursuant to
Section 5
above.
|
(b)
|
From and after the Date of Grant and until the earlier of (i) the time when the RSUs become nonforfeitable and are paid in accordance with
Section 5
hereof or (ii) the time when the Grantee’s right to receive Common Shares in payment of the RSUs is forfeited in accordance with
Section 4
hereof, on the date that the Company pays a cash dividend (if any) to holders of Common Shares generally, the Grantee shall be credited with cash per RSU equal to the amount of such dividend. Any amounts credited pursuant to the immediately preceding sentence shall be subject to the same applicable terms and conditions (including vesting, payment and forfeitability) as apply to the RSUs based on which the dividend equivalents were credited, and such amounts shall be paid in cash at the same time as the RSUs to which they relate.
|
(c)
|
The obligations of the Company under this Agreement will be merely that of an unfunded and unsecured promise of the Company to deliver Common Shares in the future, and the rights of the Grantee will be no greater than that of an unsecured general creditor. No assets of the Company will be held or set aside as security for the obligations of the Company under this Agreement.
|
(a)
|
The RSUs covered by this Agreement shall become nonforfeitable and payable to the Grantee pursuant to
Section 5
hereof on ___________, conditioned upon the Grantee’s continuous employment with the Company or a Subsidiary through such date (the period from the Date of Grant until ___________, the “
Vesting Period
”). Any RSUs that do not so become nonforfeitable will be forfeited, including, except as provided in
Section 4(b)
or
Section 4(c)
below, if the Grantee ceases to be continuously employed by the Company or a Subsidiary prior to the end of the Vesting Period. For purposes of this Agreement, “continuously employed” (or substantially similar terms) means the absence of any interruption or termination of the Grantee’s employment with the Company or a Subsidiary. Continuous employment shall not be considered interrupted or terminated in the case of transfers between locations of the Company and its Subsidiaries.
|
(b)
|
Notwithstanding
Section 4(a)
above, the RSUs shall become nonforfeitable and payable to the Grantee pursuant to
Section 5
hereof upon the occurrence of any of the following events at a time when the RSUs have not been forfeited (to the extent the RSUs have not previously become nonforfeitable) in the following manner:
|
(i)
|
all of the RSUs shall become nonforfeitable and payable to the Grantee if the Grantee should die or become Disabled prior to the end of the Vesting Period while the Grantee is continuously employed by the Company or any of its Subsidiaries;
|
(ii)
|
if the Grantee experiences a termination of employment with the Company or a Subsidiary by reason of a termination by the Company without Cause or a termination by the Grantee for Good Reason that occurs prior to a Change in Control and before the end of the Vesting Period, a pro-rata portion of the RSUs shall become nonforfeitable and payable, with the pro-rata amount calculated by (A) multiplying the total number of RSUs subject to this Agreement by a fraction, (y) the numerator of which is the number of whole calendar months that have elapsed from the Date of Grant to the date of the Grantee’s termination of employment, and (z) the denominator of which is 36, and then (B) subtracting the number of RSUs that have already become nonforfeitable under this Agreement; or
|
(iii)
|
in the event of a Change in Control that occurs prior to the end of the Vesting Period, the RSUs shall become nonforfeitable and payable in accordance with
Section 4(c)
below.
|
(c)
|
(i) Notwithstanding
Section 4(a)
above, if at any time before the end of the Vesting Period or forfeiture of the RSUs, and while the Grantee is continuously employed by the Company or a Subsidiary, a Change in Control occurs, then the RSUs will become nonforfeitable and payable to the Grantee in accordance with
Section 5
hereof, except to the extent that a Replacement Award is provided to the Grantee in accordance with
Section 4(c)(ii)
to continue, replace or assume the RSUs covered by this Agreement (the “
Replaced Award
”).
|
(ii)
|
For purposes of this Agreement, a “
Replacement Award
” means an award (A) of the same type (
e.g.
, time-based restricted stock units) as the Replaced Award, (B) that has a value at least equal to the value of the Replaced Award, (C) that relates to publicly traded equity securities of the Company or its successor in the Change in Control or another entity that is affiliated with the Company or its successor following the Change in Control, (D) if the Grantee holding the Replaced Award is subject to U.S. federal income tax under the Code, the tax consequences of which to such Grantee under the Code are not less favorable to such Grantee than the tax consequences of the Replaced Award, and (E) the other terms and conditions of which are not less favorable to the Grantee holding the Replaced Award than the terms and conditions of the Replaced Award (including the provisions that would apply in the event of a subsequent Change in Control). A Replacement Award may be granted only to the extent it does not result in the Replaced Award or Replacement Award failing to comply with or be exempt from Section 409A
|
(iii)
|
If, after receiving a Replacement Award, the Grantee experiences a termination of employment with the Company or a Subsidiary (or any of their successors) (as applicable, the “
Successor
”) by reason of a termination by the Successor without Cause or by the Grantee for Good Reason, in each case within a period of two years after the Change in Control and during the remaining vesting period for the Replacement Award, the Replacement Award shall become nonforfeitable and payable with respect to the time-based restricted stock units covered by such Replacement Award upon such termination.
|
(iv)
|
If a Replacement Award is provided, notwithstanding anything in this Agreement to the contrary, any outstanding RSUs that at the time of the Change in Control are not subject to a “substantial risk of forfeiture” (within the meaning of Section 409A of the Code) will be deemed to be nonforfeitable at the time of such Change in Control.
|
(d)
|
For purposes of this Agreement, the following definitions apply:
|
(i)
|
“
Good Reason
” shall mean (A) a material and permanent diminution in the Grantee’s duties or responsibilities; (B) a material reduction in the aggregate value of base salary and bonus opportunity provided to the Grantee by the Company; or (C) a permanent reassignment of the Grantee to another primary office more than 50 miles from the current office location. The Grantee must notify the Company of the Grantee’s intention to invoke termination for Good Reason within 90 days after the Grantee has knowledge of such event and provide the Company 30 days’ opportunity for cure, or such event shall not constitute Good Reason. The Grantee may not invoke termination for Good Reason if Cause exists at the time of such termination.
|
(ii)
|
“
Cause
” shall mean (A) the Grantee’s conviction of or plea of guilty or
nolo contendere
to a crime constituting a felony under the laws of the United States or any State thereof or any other jurisdiction in which the Company or its Subsidiaries conduct business; (B) the Grantee’s willful misconduct in the performance of the Grantee’s duties to the Company or its Subsidiaries and failure to cure such breach within thirty days following written notice thereof from the Company; (C) the Grantee’s willful failure or refusal to follow directions from the Board (or direct reporting executive) and failure to cure such breach within thirty days following written notice thereof from the Board; or (D) the Grantee’s breach of fiduciary duty to the Company or its
|
(iii)
|
“
Disabled
” shall mean (A) the Grantee is unable to engage in any substantial gainful activity due to medically determinable physical or mental impairment expected to result in death or to last for a continuous period of not less than 12 months, or (B) due to any medically determinable physical or mental impairment expected to result in death or last for a continuous period not less than 12 months, the Grantee has received income replacement benefits for a period of not less than three months under an accident and health plan sponsored by the Company.
|
(a)
|
Payment for the RSUs, after and to the extent they have become nonforfeitable, shall be made in the form of Common Shares. Except as provided in
Section 5(b)
or
5(c)
, payment shall be made as soon as administratively practicable following (but no later than thirty (30) days following) the date that the RSUs become nonforfeitable pursuant to
Section 4
hereof.
|
(b)
|
If the RSUs become nonforfeitable (i) by reason of the occurrence of a Change in Control as described in
Section 4(c)
, and if the Change in Control does not constitute a “change in control” for purposes of Section 409A(a)(2)(A)(v) of the Code, or (ii) by reason of a termination of the Grantee’s employment, and if such termination does not constitute a “separation from service” for purposes of Section 409A(a)(2)(A)(i) of the Code, then payment for the RSUs will be made upon the earliest of (A) the Grantee’s “separation from service” with the Company and its Subsidiaries (determined in accordance with Section 409A(a)(2)(A)(i) of the Code), (B) the date the RSUs would have become nonforfeitable under
Section 4(a)
had the Grantee remained in continuous employment, (C) the Grantee’s death, (D) the occurrence of a Change in Control that constitutes a “change in control” for purposes of Section 409A(a)(2)(A)(v) of the Code, or (E) the Grantee’s becoming Disabled.
|
(c)
|
If the RSUs become payable on the Grantee’s “separation from service” with the Company and its Subsidiaries within the meaning of Section 409A(a)(2)(A)(i) of the Code and the Grantee is a “specified employee” as determined pursuant to procedures adopted by the Company in compliance with Section 409A of the Code, then payment for the RSUs shall be made on the earlier of the fifth business day of the seventh month after the date of the Grantee’s “separation from service” with the Company and its Subsidiaries within the meaning of Section 409A(a)(2)(A)(i) of the Code or the Grantee’s death.
|
(d)
|
Except to the extent provided by Section 409A of the Code and permitted by the Committee, no Common Shares may be issued to the Grantee at a time earlier than otherwise expressly provided in this Agreement.
|
(e)
|
The Company’s obligations to the Grantee with respect to the RSUs will be satisfied in full upon the issuance of Common Shares corresponding to such RSUs.
|
(a)
|
The Grantee shall have no rights of ownership in the Common Shares underlying the RSUs and no right to vote the Common Shares underlying the RSUs until the date on which the Common Shares underlying the RSUs are issued or transferred to the Grantee pursuant to
Section 5
above.
|
(b)
|
From and after the Date of Grant and until the earlier of (i) the time when the RSUs become nonforfeitable and are paid in accordance with
Section 5
hereof or (ii) the time when the Grantee’s right to receive Common Shares in payment of the RSUs is forfeited in accordance with
Section 4
hereof, on the date that the Company pays a cash dividend (if any) to holders of Common Shares generally, the Grantee shall be credited with cash per RSU equal to the amount of such dividend. Any amounts credited pursuant to the immediately preceding sentence shall be subject to the same applicable terms and conditions (including vesting, payment and forfeitability) as apply to the RSUs based on which the dividend equivalents were credited, and such amounts shall be paid in cash at the same time as the RSUs to which they relate.
|
(c)
|
The obligations of the Company under this Agreement will be merely that of an unfunded and unsecured promise of the Company to deliver Common Shares in the future, and the rights of the Grantee will be no greater than that of an unsecured general creditor. No assets of the Company will be held or set aside as security for the obligations of the Company under this Agreement.
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Horizon Global Corporation;
|
2.
|
Based on my knowledge, this 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 report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this 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 report;
|
4.
|
The registrant's other certifying officer(s) 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 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 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 registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's 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 registrant's internal control over financial reporting.
|
|
/s/ A. MARK ZEFFIRO
|
|
A. Mark Zeffiro
Chief Executive Officer
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Horizon Global Corporation;
|
2.
|
Based on my knowledge, this 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 report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this 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 report;
|
4.
|
The registrant's other certifying officer(s) 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 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 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 registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's 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 registrant's internal control over financial reporting.
|
|
/s/ DAVID G. RICE
|
|
David G. Rice
Chief Financial 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 results of operations of the Company.
|
|
/s/ A. MARK ZEFFIRO
|
|
A. Mark Zeffiro
Chief 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 results of operations of the Company.
|
|
/s/ DAVID G. RICE
|
|
David G. Rice
Chief Financial Officer
|