UNITED
STATES SECURITIES AND EXCHANGE COMMISSION
Washington,
D.C. 20549
Amendment
No. 1
to
FORM
10-K/A
FOR
ANNUAL AND TRANSITION REPORTS PURSUANT TO SECTIONS 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
(Mark
One)
ý
ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the
fiscal year ended March 26, 2010
OR
o
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the
transition period from ____ to ____
Commission
File Number 0-24268
PALM
HARBOR HOMES, INC.
(Exact
name of registrant as specified in our charter)
Florida
|
59-1036634
|
(State
or Other Jurisdiction of
|
(I.R.S.
Employer Identification No.)
|
Incorporation
or Organization)
|
|
15303
Dallas Parkway, Suite 800, Addison, Texas
|
75001
|
(Address
of Principal Executive Offices)
|
(Zip
Code)
|
Registrant's
telephone number, including area code: (972) 991-2422
Securities
registered pursuant to Section 12(b) of the Act: None
Securities
registered pursuant to Section 12(g) of the Act:
Common
Stock, par value $0.01 per share
(Title of
Class)
Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act. Yes __ No
ü
Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Act. Yes __ No
ü
Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days. Yes
ü
No
___
Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files). Yes
[__] No [__]
Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not be contained, to the best
of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [
ü
]
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company. See definitions of “large accelerated filer”, “accelerated
filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act (check
one):
Large accelerated filer
___ Accelerated
filer
___ Non-accelerated
filer___ Smaller
reporting company
ü
Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act). Yes ___ No
ü
The
aggregate market value of the registrant's common stock held by non-affiliates
of the registrant as of September 26, 2009, was $32,515,711 based on the closing
price on that date of the common stock as quoted on the Nasdaq Stock
Market. As of June 8, 2010, 22,980,093 shares of the registrant's
common stock were issued and outstanding.
DOCUMENTS
INCORPORATED BY REFERENCE
None
EXPLANATORY NOTE
We are
filing this Amendment No. 1 on Form 10-K/A to our Annual Report on Form
10-K for the fiscal year ended March 26, 2010 to amend and supplement the
following items of Part III of the Report to read in their entirety as
follows:
ITEM
10.
|
Directors,
Executive Officers and Corporate Governance
|
ITEM
11.
|
Executive
Compensation
|
ITEM
12.
|
Security
Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
|
ITEM
13.
|
Certain
Relationships and Related Transactions, and Director
Independence
|
ITEM
14.
|
Principal
Accountant Fees and Services
|
As a
result of this amendment, we are also filing as exhibits to this Form 10-K/A the
certifications required under Section 302 of the Sarbanes-Oxley Act of
2002. Because no financial statements are contained within this Form
10-K/A, we are not including certifications pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
Any items
in the Form 10-K that are not expressly changed hereby shall be as set forth in
the Form 10-K and are not updated or amended. All information contained in this
Amendment No. 1 and the Form 10-K is subject to updating and supplementing
as provided in our periodic reports filed with the Securities and Exchange
Commission, or SEC, subsequent to the filing of the Form 10-K.
PALM
HARBOR HOMES, INC.
AMENDMENT
No. 1
to
ANNUAL
REPORT ON FORM 10-K
For
the Fiscal Year Ended March 26, 2010
CONTENTS
Item
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Page
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Part
III
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|
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10.
|
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Directors,
Executive Officers and Corporate Governance
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3
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11.
|
|
Executive
Compensation
|
6
|
12.
|
|
Security
Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
|
13
|
13.
|
|
Certain
Relationships and Related Transactions, and Director
Independence
|
16
|
14.
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Principal
Accountant Fees and Services
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17
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|
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Part
IV
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|
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15.
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Exhibits
and Financial Statement
Schedules
|
17
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PART
III
ITEM
10.
DIRECTORS,
EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Directors,
Executive Officers and Other Management
A brief
biography of each person who serves as a director or executive officer follows
below.
Larry H.
Keener
, Chairman of the Board of Directors since March
2005. Director since 1995. Chief Executive Officer since June 1997
and President since June 1994. Chief Operating Officer from June 1994 to June
1997. Division President from June 1989 to May 1994. Director from 1980 to May
1994. Mr. Keener does not, and has not during the past five years, served on the
Board of Directors of any other public company. Age: 60.
William M.
Ashbaugh
, Director since 2007. Vice President from August 2001
to July 2005 and Senior Vice President of Capital Southwest Corporation and
Capital Southwest Venture Corporation since July 2005. Managing
Director of Hoak Breedlove Wesneski & Co. from April 1998 to August
2001. Managing Director of Principal Financial Securities, Inc. from
March 1997 to February 1998. Managing Director of Southwest
Securities from October 1995 to March 1997. Director of the following
private companies CMI Holding Company, Inc., Trax Technologies, Inc., Cinatra
Clean Technologies, Inc. and iMemories, Inc. Mr. Ashbaugh has not
served on the Board of Directors of any other public company in the past five
years. Age: 55.
Frederick R.
Meyer
, Director since 1994. Mr. Meyer serves as our lead
independent director. Since March 2005, Mr. Meyer has handled his
personal portfolio. Chairman of the Board of Aladdin Industries LLC
from July 1985 to March 2005. President and Chief Executive Officer of Aladdin
Industries LLC from October 1995 to May 1999 and from May 1987 to September
1994. President of Tyler Technologies, Inc. from July 1983 to December
1986. Lead independent director of SWS Group, Inc. Mr.
Meyer has not served on the Board of Directors of any other public
company in the past five years. Age: 82.
A. Gary
Shilling
, Director since 1995. President of A. Gary Shilling & Co.,
Inc., economic consultants since 1978. Registered Investment Advisor
since 2009. Senior Vice President and Chief Economist of White, Weld
& Co., Inc. from 1972 to 1978. Mr. Shilling does not, and has not
in the past five years, served on the Board of Directors of any other public
company. Age: 73.
Tim Smith
,
Director since 2008. Trustee of the Sally Posey Trust since June
2009. Independent executor of the estate of Lee Posey from February,
2008 to May 2010. Managed his personal portfolio since 2005.
President and Chief Executive Officer of DataSpan, Inc. (formerly known as Media
Recovery, Inc.) from 2001 to 2005. Vice President, Secretary and
Treasurer of Capital Southwest Corporation from 1993-2001. Mr. Smith
does not and has not during the past five years, served on the Board of
Directors of any other public company. Age: 49.
W. Christopher
Wellborn
, Director since July 2005. President and Chief Operating Officer
of Mohawk Industries, Inc. since November 2005. President of Dal-Tile, Inc. from
March 2002 through October 2005. Executive Vice President, Chief
Financial Officer and Assistant Secretary of Dal-Tile, Inc. from August 1997
through March 2002. Senior Vice President and Chief Financial Officer
of Lenox, Inc. from June 1993 to August 1997. Director of Mohawk
Industries, Inc. Mr. Wellborn has not served on the Board of
Directors of any other public company in the past five years. Age:
55.
John H.
Wilson
, Director since 1994. President of U.S. Equity
Corporation since 1983. Director of Capital Southwest Corporation and
Encore Wire Corporation. Mr. Wilson has not served on the Board of
Directors of any other public company in the past five years. Age:
67.
Kelly
Tacke
has served as Executive Vice President since June 2005 and Chief
Financial Officer since October 1993, and as Secretary since March 1997. From
August 1979 through September 1993, Ms. Tacke was employed by
PriceWaterhouseCoopers LLP where she most recently served as a Senior Audit
Manager.
There is
no family relationship between any of our directors or executive
officers.
Skills
and Qualifications of the Members of the Board of Directors.
Each of
our board members brings to us a myriad of skills, education, experiences and
qualifications that can be leveraged in order to benefit us and our
shareholders. Set forth below is a description of certain of such
skills, experiences and/or qualifications associated with each member of the
board. The below listing does not include personal traits such as
candor, integrity, time commitment or collegiality that are essential to a
nominee's qualifications, nor does it contemplate independence issues that are
evaluated separately. The information below merely highlights certain
notable traits of each board member that contributed to their selection as a
member of our Board of Directors.
|
·
|
Larry H.
Keener
.
Mr. Keener
brings to the Board of Directors strong leadership, extensive business and
operating experience and tremendous knowledge of our company, as well as
deep insights into and experiences within the manufactured housing
industry.
|
|
·
|
William A.
Ashbaugh
.
Our company and our board benefits from Mr. Ashbaugh's over
28 years financing experience in the investment banking and private
equity industries.
|
|
·
|
Frederick
R. Meyer
.
The diverse
experiences of Mr. Meyer include his leadership position as Chairman,
President and Chief Executive Officer of Aladdin Industries LLC, the maker
of thermal products for consumers. His experience and
qualifications also includes serving on six public company boards, as well
as a deep understanding of the financial and operational aspects of
businesses.
|
|
·
|
Gary
Shilling
.
As a
world-renowned economist, Mr. Shilling offers us a valuable perspective on
the ever-changing U.S. and global economies, consumer spending, the
housing industry and the mortgage lending
business.
|
|
·
|
Tim
Smith
.
We benefit from Mr. Smith's business and financial
experiences acquired over 17 years of investing in and overseeing
privately-held companies and managing (President and Chief Executive
Officer) a data storage solution company. Mr. Smith was
licensed as a CPA in 1985.
|
|
·
|
W.
Christopher Wellborn
.
As the Chief
Operating Officer of Mohawk Industries, one of the two largest carpet
manufacturers in the world and the former President and Chief Financial
Officer of Dal-Tile, a subsidiary of Mohawk that is the largest ceramic
tile manufacturer in the U.S., Mr. Wellborn brings to use a deep
understanding of the financial and operational aspects of
business.
|
|
·
|
John H.
Wilson
.
Our company and
Board of Directors benefit from the business experiences that Mr. Wilson
acquired over years of managing a
private investment firm and serving on the boards of a publicly traded
private equity firm since 1988 and a publicly-traded company that
manufactures copper electrical building wire cable products since
1989.
|
Section
16(a) Beneficial Ownership Reporting Compliance
Section
16(a) of the Securities Exchange Act of 1934 requires our directors and
executive officers, and persons who own more than 10% of our common stock, to
file reports of holdings and transactions in our securities with the SEC and to
furnish us with copies of all such reports. Based solely upon a
review of the reports furnished to us with respect to the 2010 fiscal year, we
believe that all of our directors, executive officers and greater than 10%
beneficial owners timely complied with all SEC filing requirements.
Committee
Charters and Other Governance Materials
Our board
has adopted a charter for each of our committees and a Code of Conduct for our
managers. All of these materials are available on our web site at
www.palmharbor.com
. These
materials are also available in print to any shareholder (at no cost) who
requests them by submitting a written request to our corporate Secretary, Kelly
Tacke, 15303 Dallas Parkway, Suite 800, Addison, Texas 75001.
Stockholder
Proposals
There
have been no material changes to the procedures by which security holders may
recommend nominees to our board of directors.
Audit
Committee
The Audit
Committee's primary responsibilities are to retain the Company's independent
registered public accountants and to assist the Board's oversight of: (a) the
quality and integrity of our financial statements and related internal controls
over financial reporting; (b) our compliance with legal and regulatory
requirements; (c) the independent registered public accountants' qualifications
and independence; (d) the performance of our internal audit function and the
independent registered public accountants; and (e) the accounting and financial
reporting practices of the Company and audits of the Company's financial
statements. The Audit Committee Charter is available on the Company's
website at
www.palmharbor.com
and is also available in print to any shareholder who requests a
copy. The audit committee met four times during fiscal
2010.
Any
complaint regarding accounting, internal accounting controls or auditing matters
should be mailed to the Chairman of the Palm Harbor Homes Audit Committee, c/o
Craddock Reneker and Davis LLP, 3100 Monticello Avenue, Suite 550, Dallas, Texas
75205. Written complaints may be submitted anonymously.
Financial
Expertise and Financial Literacy
The Board
of Directors has determined that Messrs. Smith, Wellborn and Wilson, members of
our Audit Committee, satisfy the criteria adopted by the Securities and Exchange
Commission to serve as "audit committee financial experts" and are independent
directors, pursuant to the Securities Exchange Act of 1934 and The Nasdaq Stock
Market Listing Standards. In addition, the Board of Directors has
determined that Messrs. Smith, Wellborn and Wilson, constituting all members of
our Audit Committee, are financially literate within the meaning of The Nasdaq
Stock Market Listing Standards.
Directors
on Multiple Audit Committees
None of
our directors serves on the audit committee of more than three public
companies.
ITEM
11.
EXECUTIVE
COMPENSATION
Compensation
Discussion and Analysis
Overview
of Compensation Program
Our
Compensation Committee of the Board of Directors has responsibility for
establishing, implementing and monitoring adherence with our compensation
philosophy. The Compensation Committee ensures that the total
compensation paid to our executive leadership team is fair and
reasonable. Generally, the types of compensation and benefits
provided to members of the executive leadership team, including the named
executive officers, are similar to those provided to other executive officers at
other manufactured and site-built housing companies. Throughout this
Form 10-K/A, the two individuals who served as President and Chief Executive
Officer and Executive Vice President and Chief Financial Officer during fiscal
2010, are referred to as the "named executive officers." On April 27,
2010 and May 18, 2010, we met to determine fiscal 2011 salaries and guaranteed
bonuses based upon fiscal 2010 performance.
Compensation
Objectives and Philosophy
The
Compensation Committee believes that most effective executive compensation
program is one that is designed to reward the achievement of specific annual,
long-term and strategic goals and one that is designed to align executives'
interests with those of the shareholders by rewarding performance, with the
ultimate objective of improving shareholder value. The Committee
evaluates both performance and compensation to ensure that we maintain our
ability to attract and retain superior employees in key positions and that
compensation provided to key employees remains competitive relative to the
compensation paid to similarly situated executive of our peer
companies. To that end, the Compensation Committee believes executive
compensation packages provided by us to our executives, including the named
executive officers should include both cash and share-based compensation that
reward performance.
Role
of Executive Officers in Compensation Decisions
The
Compensation Committee makes compensation decisions for our President and Chief
Executive Officer. Larry Keener, our Chief Executive Officer,
annually reviews the performance of our Chief Financial Officer. The
conclusions reached and recommendations made by Mr. Keener are based on this
review, including with respect to salary adjustments and annual bonus and equity
award amounts, are presented to the Compensation Committee. The
Compensation Committee can exercise its discretion in modifying any recommended
adjustment or award.
Peer
Groups for Executive Compensation Purposes
In 2010,
the Compensation Committee retained Towers Watson, an outside consulting firm,
to assist it in considering the compensation for the named executive
officers. Towers Watson has not been retained by the company for any
other services.
For
executive compensation purposes, Towers Watson compared our compensation
programs to the compensation programs of our homebuilding services
peers. As of April 23, 2010, the date of Towers Watson’s report to
the Compensation Committee, the homebuilding services companies listed below
comprise our industry peer group. The information provided was based
on 2009 compensation data.
Meritage
Homes Corporation
|
Brookfield
Homes Corporation
|
M.D.C.
Holdings Inc.
|
Skyline
Corporation
|
M/I
Homes, Inc.
|
Cavco
Industries Inc.
|
As of the
end of the peer group’s most recent fiscal year, they had market caps ranging
from $154 million to $1.5 billion. Our market cap at the end of
fiscal 2009 was $50 million. The median revenue for the peer group
was $475 million and our revenue was $409 million at the end of fiscal
2009. The median peer group net income was $20 million and ours was a
net loss of $26 million at the end of fiscal 2009. The median asset
amount was $850 million and ours was $412 million at the end of fiscal
2009.
Total
Compensation
In
setting compensation for our named executive officers, as well as senior
management, the Compensation Committee focuses on total annual
compensation. For this purpose, total annual compensation consists of
base salary, guaranteed quarterly cash bonuses and long-term equity incentive
compensation. In setting compensation, the Compensation
Committee evaluates both the market data provided by Towers Watson, company
performance and each officer’s performance.
Annual
Cash Compensation
We pay
our named executive officers commensurate with their experience and
responsibilities. Cash compensation for our Chief Executive Officer
and our Chief Financial Officer for fiscal 2010 consisted of base salary,
guaranteed quarterly bonus and stock option awards.
Base
Salary
. Each of our named executive officers receives a base
salary to compensate him or her for services performed during the
year. When determining the base salary for each of our named
executive officers, the Committee considers the performance of the company, the
executive officer’s individual performance and the experience of the executive
officer in his or her position. The consideration of company and
individual performance is not based upon established criteria, but rather is
based upon the Compensation Committee’s opinion of their
performance. Although in the Compensation Committee’s opinion, the
performance of the two named executive officers exceeded the expectations of the
committee, solely based on the performance of the company in fiscal 2010, no
annual increase in base salary was granted to our named executive
officers. The Committee did, however, feel that given the efforts
being made by our named executive officers to sustain the company in these tough
economic times, no downward adjustment would be appropriate. Our
Chief Executive Officer's base salary remains at $300,000 and our Chief
Financial Officer's salary remains at $170,000. This base
compensation ranks Mr. Keener at the 20
th
percentile ranking and Ms. Tacke at the 4
th
percentile ranking in the company’s peer group established by Towers
Watson.
Quarterly
Bonus
. It is common practice in the manufactured housing
industry to pay quarterly bonuses to management. In order to keep the
management team in place, the Compensation Committee feels strongly that it must
follow industry practice. Because of the low base salaries paid to
our named executive officers, as compared to the company’s peer group, as well
as to reward Mr. Keener and Ms. Tacke for their successes in obtaining a
$20 million loan from the Virgo entities and obtaining a favorable amendment of
the company’s floor plan financing with Textron Financial Corporation, the
Compensation Committee paid Mr. Keener and Ms. Tacke a guaranteed quarterly
bonus of $60,000 and $50,000, respectively during fiscal 2010. These
are the same bonuses paid to them in fiscal 2009. No one factor was
given greater weight when determining bonuses for the two named executive
officers. The $240,000 annual guaranteed bonus to Mr. Keener
ranks him at the 69
th
percentile of his peer group for annual bonuses and Ms. Tacke’s $200,000 annual
guaranteed bonus ranks her at the 59
th
percentile for her peer group for annual bonuses. Considering both
base salary and bonus, Mr. Keener’s total cash compensation places him at the
43
rd
percentile ranking and Ms. Tacke at the 33
rd
percentile ranking.
The
Compensation Committee elected to guarantee the amount of the bonus because (i)
our named executive officers receive a low base salary according to the Towers
Watson report, (2) in order to offer competitive pay to our named executive
officers, we believe it was necessary to pay them this additional compensation
in order to retain them, (3) prior to fiscal 2007, quarterly bonuses were based
solely on the company's profitability, but given the prolonged industry
downturn, neither named executive officer would have received a bonus despite
their significant contributions in keeping the company operating during these
tough economic times. At such time as the company is again
profitable, the committee will review the guaranteed quarterly bonus program and
make any adjustments in its compensation policies as it deems
appropriate.
Long-Term
Equity Incentive Compensation
We
believe that stock-based incentive awards are the best way to align the
interests of the executive officers with those of our
shareholders. Additionally, the Compensation Committee believed that
to retain management, it needed to award stock options to its key officers and
employees. In fiscal 2010, Mr. Keener received
non-qualified stock options to acquire 221,280 shares of common stock at $3.02
per share and Ms. Tacke received non-qualified stock options to acquire 110,640
shares of common stock at $3.02 per share. The number of options
awarded was based solely on the subjective opinion of the committee. The options
were awarded prior to the engagement of Towers Watson by the Compensation
Committee. Using the Black-Scholes valuation method computed by
Towers Watson, the total value of Mr. Keener’s and Ms. Tacke’s stock options on
the date granted was $133,506 (total over fair market value three years,
$400,517) and $66,753 (total fair value over the three years, $200,258),
respectively. Based upon our peer group, Mr. Keener’s and Ms. Tacke’s
awards rank them at the 44
th
and
40
th
percentile, respectively, with respect to stock option compensation awarded in
fiscal 2010 for fiscal 2009 performance.
Perquisites
and Other Personal Benefits
Mr.
Keener receives a $6,000 annual car allowance and both of our named executive
officers, like our other employees, received matching contributions with respect
to 401(k) retirement savings plans. The 401(k) retirement savings
plan employer matching contribution was suspended on January 1,
2010. Executive officers are also eligible to participate in all of
our employee benefit plans, such as medical, dental, group life, disability and
accidental death and dismemberment insurance, in each case on the same basis as
other employees.
Policy
Regarding Recoupment of Compensation
If we are
required to restate our financial results due to material noncompliance with
financial reporting requirements under the securities laws as a result of
misconduct by an executive officer, applicable law permits us to recover
incentive compensation from that executive officer (including profits realized
from the sale of our securities). In such a situation, the Board of
Directors would exercise its business judgment to determine what action it
believes is appropriate. Action may include recovery or cancellation
of any bonus or incentive payments made to an executive during a period of
fraudulent activity or a material misstatement of financial results if the Board
determines that such recovery or cancellation is appropriate due to intentional
misconduct by the executive officer that resulted in performance targets
of the company being achieved that would not have been achieved
absent such misconduct.
SUMMARY
COMPENSATION TABLE
The
following table summarizes the compensation paid by us for the fiscal year ended
March 26, 2010 to our Chief Executive Officer and our other named executive
officer who received a total annual salary and bonus in excess of $100,000 in
fiscal 2010.
SUMMARY
COMPENSATION
Name
|
Fiscal
Year
|
Salary
|
Bonus
(1)
|
Stock
Awards
(2)
|
Option
Awards
(3)
|
Total
|
Larry
H. Keener
Chairman of the Board
and
Chief Executive Officer
|
2010
2009
2008
|
$300,000
300,000
300,000
|
$240,000
265,000
200,000
|
--
--
--
|
$400,517
--
--
|
$946,517
571,000
506,000
|
Kelly
Tacke
Executive Vice President, Chief
Financial Officer and Secretary
|
2010
2009
2008
|
$170,000
170,000
170,000
|
$200,000
225,000
180,000
|
$ 4,970
35,000
32,982
|
$200,258
--
--
|
$575,228
465,000
415,964
|
________________
(1)
"Bonus" refers to quarterly incentive cash payments that are
not performance based.
(2)
The
amounts reported for stock awards represent the full grant date fair value of
the awards based upon the closing price of the stock on the grant
date. The number of shares awarded was based on the subjective
determination of the Compensation Committee based upon our CEO's
recommendation.
(3)
The
amounts reported for option awards represent the full grant date fair value of
the stock option awards granted in fiscal 2010 in accordance with the accounting
guidance on share-based payments.
FISCAL
2010 GRANTS OF PLAN-BASED AWARDS
The
following table summarizes grants of stock options in fiscal
2010. Stock option awards granted in fiscal 2010 recognized fiscal
2009 and the first and second quarter fiscal 2010 performance.
|
|
Estimated
Future Payments
Under
Equity Incentive
Plan
Awards
|
|
|
|
|
Name
|
Grant
Date
|
Threshold
($)
|
Target
($)
|
Maximum
($)
|
All
Other Stock Awards: Number of Shares of Stock or Units
(#)
|
All
Other Option Awards Number of Securities Underlying Options
(#)
|
Exercise
or Base Price of Option Awards
($)
|
Grant
Date Fair Value of Stock and Option Awards
($)
(1)
|
Larry
Keener
|
9-18-09
|
-0-
|
-0-
|
-0-
|
--
|
--
|
$3.02
|
$400,517
|
Kelly
Tacke
|
9-18-09
|
-0-
|
-0-
|
-0-
|
--
|
--
|
$3.02
|
$200,258
|
_____
(1)
The amounts reported represent the aggregate grant date fair
value of stock options granted to named executive officers calculated in
accordance with the accounting guidance on share-based payments.
OUTSTANDING
EQUITY AWARDS AT FISCAL YEAR-END
The
following table lists all outstanding stock option and restricted stock awards
as of March 26, 2010 for our two named executive officers. No stock
options or restricted stock have been transferred by them to any other person,
trust or entity.
Option
Awards
|
Stock
Awards
|
Name
|
Number
of Securities Underlying Unexercised Options
(#)
Exercisable
|
Number
of Securities Underlying Unexercised Options
(#)
Unexercisable
|
Equity
Incentive Plan Awards:
Number
of Securities Underlying Unexercised Unearned Options (#)
|
Option
Exercise Price ($)
|
Option
Expir-
ation Date
|
Number
of Shares or Units of Stock That Have Not Vested (#)
|
Market
Value of Shares or Units of Stock That Have Not Vested ($)
|
Equity
Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights
That Have Not Vested
(#)
|
Equity
Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or
Other Rights
($)
|
Larry
Keener
|
--
|
--
|
221,280
|
$3.02
|
9-8-19
|
--
|
--
|
--
|
--
|
Kelly
Tacke
|
--
|
--
|
110,640
|
$3.02
|
9-8-19
|
--
|
--
|
--
|
--
|
FISCAL
2010 OPTION EXERCISES AND STOCK VESTED
The
following table sets forth certain information with respect to the stock held by
the named executive officers that vested during the fiscal year ended March 26,
2010. No options vested or were exercisable by our two named
executive officers in fiscal 2010.
|
|
Number
of Shares Acquired on Vesting (#)
|
|
Value
Realized on Vesting
(1)
|
|
|
|
|
|
Kelly
Tacke
|
|
2,288
(2)
|
|
$4,622
|
________________
(1)
The
value realized on vesting was determined by multiplying the number of shares
that vested by the closing price of the shares on the vesting date.
(2)
The
shares were awarded to Ms. Tacke in 2008. The number of shares was
subjectively determined by the Compensation Committee after consultation with
our CEO.
Compensation
Arrangements
Our
Chairman Emeritus, Lee Posey, died on February 29, 2008. Pursuant to
the compensation agreement we had with Mr. Posey, Mr. Posey would have received
$100,000 per year for his services to our Company for the eight years from July
1, 2005 through June 30, 2013. In accordance with the agreement, Mr.
Posey’s beneficiary will receive payments in the same amount and frequency from
March 1, 2008 to June 30, 2013.
Indemnification
Agreements
We have
entered into indemnification agreements with certain of our officers and each of
our directors, requiring us to indemnify such persons against judgments, claims,
damages, losses and expenses incurred as a result of the fact that such officer
or director, in his or her capacity as such, is made or threatened to be made a
party to any suit or proceeding, to the maximum extent permitted by Florida law.
The indemnification agreements provide for the advancement of expenses to such
officers and directors in connection with any such suit or
proceeding.
FISCAL
2010 DIRECTOR COMPENSATION
Mr.
Keener, our Chairman of the Board and Chief Executive Officer receives no
additional compensation for serving as a director. Our other six
directors are independent and are compensated for their service as a director as
described below.
Annual
Retainer
. All non-employee directors receive an annual cash
retainer of $20,000. The board's annual retainer has not been
increased since 2005.
Meeting
Compensation
. All non-employee directors receive $2,500 per
board meeting attended and $500 for each committee meeting
attended.
The
following table summarizes the compensation of the non-employee directors for
fiscal 2010. Our directors do not receive or have the option to
receive equity compensation for their service. We do not sponsor any
pension or deferred compensation plans. The only compensation paid to
our directors is paid in cash.
Name
|
Fees Earned or Paid in
Cash ($)
|
|
|
William
M. Ashbaugh
|
$32,500
|
Frederick
R. Meyer
|
31,000
|
A.
Gary Shilling
|
31,000
|
Tim
Smith
|
32,000
|
W.
Christopher Wellborn
|
31,500
|
John
H. Wilson
|
33,000
|
The
Compensation Committee
The
Compensation Committee: (a) oversees the design of our compensation and
benefits programs; (b) oversees the policies of the Company relating to
compensation of our executives and makes recommendations to the board regarding
the compensation of our executive officers and other key executives;
(c) produces a report on executive compensation for inclusion in our Annual
Report or Proxy Statement; and (d) oversees the development and
implementation of succession plans for the Chief Executive Officer and other key
executives.
The
Compensation Committee is composed entirely of independent members of the Board
who are "outside directors" for purposes of Section 162(m) of the Internal
Revenue Code and "non-employee directors" for purposes of Section 16 of the
Securities Exchange Act of 1934. The Compensation Committee Report is set forth
on page 13 of this Form 10-K/A. The Compensation Committee Charter is available
on the Company’s website at
www.palmharbor.com
and is also available in print to any shareholder who requests a
copy. The Compensation Committee, held three meetings during the 2010
fiscal year.
Compensation
Committee Interlocks and Insider Participation
No member
of our Compensation Committee is now, or was during fiscal 2010 or any time
prior thereto, an officer or employee. No member of the Compensation Committee
had any relationship with us or any of our subsidiaries during fiscal 2010
pursuant to which disclosure would be required under applicable rules of the
Securities and Exchange Commission pertaining to the disclosure of transactions
with related persons. None of our executive officers currently serves or has
served in the past on the Board of Directors or compensation committee of
another company at any time during which an executive officer of such other
company served on our Board of Directors or Compensation Committee.
REPORT
OF THE COMPENSATION COMMITTEE
The
committee has reviewed and discussed the Compensation Discussion and Analysis
required by Item 402(b) of Regulation S-K with management and, based on such
review and discussions, the committee recommended to the Board of Directors that
the Compensation Discussion and Analysis be included in this Form
10-K/A.
|
Respectfully
Submitted,
Compensation
Committee
William
M. Ashbaugh, Chairman
W.
Christopher Wellborn
A.
Gary Shilling
|
|
ITEM 12.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
AND RELATED
STOCKHOLDER MATTERS
The
following table sets forth certain information regarding the beneficial
ownership of our shares of common stock as of March 26, 2010
[confirm date]
by (1) each
person known by us to own beneficially more than 5% of our outstanding common
stock, (2) each current director and each nominee for director, (3) each
executive officer named in the "Summary Compensation Table," and (4) all current
directors and named executive officers as a group. Unless otherwise indicated,
the shares listed in the table are owned directly by the individual or entity,
or by both the individual and the individual's spouse. Except as otherwise
noted, the individual or entity had sole voting and investment power as to
shares shown or, in the case of the individual, the voting power is shared with
the individual's spouse.
Certain
of the shares listed below are deemed to be owned beneficially by more than one
shareholder under SEC rules. Unless otherwise indicated, the address
of each person listed below is c/o Palm Harbor Homes, Inc., 15303 Dallas
Parkway, Suite 800, Addison, Texas 75001.
Name
|
|
Amount and Nature of Beneficial
Ownership
(1)
|
|
Percent of Class
|
|
|
|
|
|
Sally
Posey
|
|
2,054,507
|
|
8.9%
|
|
|
|
|
|
Sally
Posey
Trust
|
|
2,054,507
(12)
|
|
8.9%
|
|
|
|
|
|
Capital
Southwest Corporation
and
Capital
Southwest Venture Corporation
12900 Preston Road, Suite
700
Dallas, Texas
75230
|
|
7,855,121
|
|
34.2%
|
|
|
|
|
|
Royce
& Associates,
LLC
1414 Avenue of the
Americas
New York, New York
10019
|
|
340,207
(2)
|
|
1.5%
|
|
|
|
|
|
Dimensional
Fund Advisors
LP
1414 Avenue of the
Americas
New York, New York
10019
|
|
1,350,789
(3)
|
|
5.9%
|
|
|
|
|
|
T.
Rowe Price Associates,
Inc.
100 E. Pratt Street
Baltimore, Maryland
21202
|
|
1,222,914
(4)
|
|
5.3%
|
|
|
|
|
|
Wells
Fargo & Company
Wells
Fargo Management Incorporated
Wells
Fargo Funds Management,
LLC
420 Montgomery
Street
San
Francisco, California 94163
|
|
1,965,147
(5)
|
|
8.6%
|
|
|
|
|
|
Barclays
Global Investors, NA
Barclays
Global Fund Advisors
Barclays
Global Investors, Ltd.
Barclays
Global Investors Japan Limited
Barclays
Global Investors Canada Limited
Barclays
Global Investors Australia Limited
Barclays
Global Investors (Deutschland) AG
400 Howard Street
San Francisco, California
94105
|
|
1,122,381
(6)
|
|
4.9%
|
Name
|
|
Amount and Nature of Beneficial
Ownership
(1)
|
|
Percent of
Class
|
Virgo
Investment Group LLC
Virgo
Redwood, LP
Virgo
Magnolia, LP
Virgo
Sierra, LP
Virgo
Willow, LP
Jesse
Watson
667
Madison Avenue, F111
New
York, NY 10065
|
|
1,296,634
(7)
|
|
5.6%
|
|
|
|
|
|
Larry
H.
Keener
|
|
425,760
(8)
|
|
1.9%
|
|
|
|
|
|
Kelly
Tacke
|
|
59,500
(9)
|
|
*
|
|
|
|
|
|
William
M.
Ashbaugh
|
|
--
(10)
|
|
*
|
|
|
|
|
|
Frederick
R.
Meyer
|
|
205,116
(11)
|
|
*
|
|
|
|
|
|
Tim
Smith
|
|
3,406
(12)
|
|
*
|
|
|
|
|
|
A.
Gary
Shilling
|
|
49,024
(13)
|
|
*
|
|
|
|
|
|
W.
Christopher
Wellborn
|
|
50,000
|
|
*
|
|
|
|
|
|
John
H.
Wilson
|
|
10,000
(14)
|
|
*
|
|
|
|
|
|
All
directors and executive officers as a group (10 persons)
|
|
802,806
|
|
3.5%
|
*
|
Beneficial
ownership of less than 1% of the class is
omitted.
|
(1)
|
The
information contained in this table with respect to common stock ownership
reflects "beneficial ownership" as defined in Rule 13d-3 under the
Securities Exchange Act of 1934.
|
(2)
|
The
address and number of shares of our common stock beneficially owned by
Royce & Associates, LLC are based on the Schedule 13G filed by Royce
with the Securities and Exchange Commission on February 3,
2009. According to the filing, Royce had sole voting and
dispositive power with respect to the 340,207
shares.
|
(3)
|
The
address and number of shares of our common stock beneficially owned by
Dimensional Fund Advisors LP are based on the Schedule 13G/A filed by
Dimensional with the SEC on February 8, 2010. According to the
filing, Dimensional describes a relationship with others but did not
affirm the existence of a group and disclaimed beneficial ownership of the
shares. Dimensional has sole voting power for 1,327,461 shares
and sole dispositive power with for 1,350,789
shares.
|
(4)
|
The
address and number of shares of our common stock beneficially owned by T.
Rowe Price Associates, Inc. are based on the Schedule 13G filed by T. Rowe
with the SEC on February 11, 2010. According to the filing, T.
Rowe has sole voting power for 97,971 shares and sole dispositive power
for 1,222,914 shares.
|
(5)
|
The
address and number of shares of our common stock beneficially owned by the
Wells Fargo entities are based on the Schedule 13G/A filed by them with
the SEC on January 25, 2010. According to the filing: (a) Wells
Fargo & Company has sole voting power for 2,879,145 shares and sole
dispositive power for 2,931,920 shares; (b) Wells Capital Management
Incorporated has sole voting power for 913,998 shares and sole dispositive
power for 2,867,092 shares; and (c) Wells Fargo Funds Management, LLC has
sole voting power for 1,965,147 shares and sole dispositive power for
64,828 shares.
|
(6)
|
The
address and number of shares of our common stock beneficially owned by the
Barclays entities are based on the Schedule 13G/A filed by them with the
SEC on February 3, 2009. According to the filing: (a) Barclays Global
Investors, NA has sole voting power for 343,381 shares and sole
dispositive power for 343,421 shares; and (b) Barclays Global Fund
Advisors has sole voting and dispositive power for 778,960
shares.
|
(7)
|
The
number of shares represents shares that may be acquired upon exercise of
warrants granted to the Virgo entities. The address and number
of shares of our common stock that may be acquired upon exercise of the
warrants by the Virgo entities are based on the Schedule 13G filed by them
with the SEC on February 8, 2010. According to the filing: (a)
Virgo Investment Group LLC has shared voting and dispositive power for
1,296,634 shares; (b) Virgo Redwood LP has shared voting and dispositive
power for 987,998 shares; (c) Virgo Magnolia, LP has shared voting and
dispositive power for 87,389 shares; (d) Virgo Sierra, LP has shared
voting and dispositive power for 62,542 shares; (e) Virgo Willow, LP has
shared voting and dispositive power for 158,705 shares and (f) Jesse
Watson has shared voting and dispositive power for
1,296,634.
|
(8)
|
Includes
an aggregate of 122,270 shares owned by Mr. Keener's spouse and three
daughters, over which shares he exercises voting and investment
power.
|
(9)
|
Pledged
as collateral for a loan.
|
(10)
|
Mr.
Ashbaugh is Senior Vice President of Capital Southwest Corporation and
Capital Southwest Venture Corporation which are our principal
shareholders. Mr. Wilson is a member of the Board of Directors
of Capital Southwest Corporation and Capital Southwest Venture
Corporation. Mr. Ashbaugh and Mr. Wilson may be deemed to share
voting and investment power with respect to the shares of common stock
beneficially owned by Capital Southwest Corporation and Capital Southwest
Venture Corporation. Mr. Ashbaugh and Mr. Wilson each have
disclaimed beneficial ownership of such
shares.
|
(11)
|
Includes
48,829 shares owned by a family partnership over which Mr. Meyer exercises
voting and investment power.
|
(12)
|
Mr.
Smith is the trustee of the Sally Posey Trust which beneficially owns
2,054,507 shares of common stock. Mr. Smith owns 3,406 shares
of common stock in his individual capacity. Mr. Smith has
disclaimed beneficial ownership of the 2,054,507 shares held by the Sally
Posey Trust.
|
(13)
|
Includes
31,132 shares owned by a family partnership over which Dr. Shilling
exercises voting and investment
power.
|
(14)
|
Mr.
Wilson is a member of the Board of Directors of Capital Southwest
Corporation and Capital Southwest Venture Corporation, both of which are
our principal shareholders. Mr. Ashbaugh is an executive
officer of both corporations. Mr. Wilson and Mr. Ashbaugh may
be deemed to share voting and investment power with respect to the shares
of common stock beneficially owned by Capital Southwest Corporation and
Capital Southwest Venture Corporation. Mr. Wilson and Mr. Ashbaugh
have disclaimed beneficial ownership of such
shares.
|
ITEM
13.
CERTAIN RELATIONSHIPS AND
RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
Review
and Approval of Transactions with Related Persons
On an
annual basis, each director and executive officer is required to complete a
questionnaire which requires disclosure of any transactions the director or
executive officer, or their immediate family members, may have with us in which
the director or executive officer, or their immediate family members, has a
direct or indirect material interest. The Audit Committee, which is responsible
for reviewing and approving any related party transactions, considers the
responses in the questionnaires and other information regarding potential
relationships between us and the directors and executive officers. In
determining whether to approve or disapprove a related-person transaction, our
Audit Committee considers all transactions on a case-by-case basis and weighs
all material factors, including, but not limited to, the extent of the related
person’s interest in the transaction, the availability (if applicable) of other
sources of comparable financing, products or services, the terms of the
transaction compared to the terms of a similar unaffiliated transaction, the
benefit to us or the best interests of our shareholders, whether the transaction
would interfere with the objectivity and independence of any related person’s
judgment or conduct in fulfilling his/her duties to us, and the aggregate value
of the transaction.
On
Monday, April 27, 2009, we issued warrants to each of Capital Southwest Venture
Corporation, Sally Posey and the Estate of Leroy Posey, Deceased (which was
subsequently transferred to the Sally Posey Trust) (collectively, the
"Lenders"), to purchase up to an aggregate of 429,939 shares of our common stock
at a price of $3.14 per share which was the closing price of our common stock on
The Nasdaq National Stock Exchange on Friday, April 24, 2009. The
warrants were granted in connection with a loan made by the Lenders to us of an
aggregate of $4,500,000 pursuant to Senior Subordinated Secured Promissory Notes
between us and each of the Lenders. Capital Southwest Venture
Corporation, which holds more than 5% of our outstanding stock, loaned
$3,000,000 and received warrants to purchase up to 286,625 shares of common
stock. Sally Posey, who holds more than 5% of our outstanding stock,
loaned $750,000 and received warrants to purchase up to 71,657 shares of common
stock. The Estate of Leroy Posey, Deceased, which held more than 5%
of our outstanding stock, loaned $750,000 and received warrants to purchase up
to 71,657 shares of common stock. All of the notes were repaid on
June 29, 2009.
The
interest rate for the notes was computed monthly on the amount advanced from the
date of the issuance of the notes at a fluctuating rate of the lesser of (a) the
maximum non-usurious rate of interest permitted by whichever of applicable
federal or Texas laws permits the higher interest rate or (b) the Three Month
LIBOR Rate plus 2%.
Independence
of Directors
Our Board
of Directors has determined that each of the following directors is independent
within the meaning of our independence standards, which reflect exactly SEC and
Nasdaq Stock Market Director Independence Standards, as currently in effect:
Messrs. Ashbaugh, Meyer, Shilling, Smith, Wellborn and Wilson. The
board has determined that Mr. Keener, who is our employee, is not independent
within the meaning of The Nasdaq Stock Market Director Independence
Standards. Furthermore, the board has determined that the members of
each of the governance, audit and compensation committees have no material
relationship with us (either directly as a partner, shareholder or officer of an
organization that has a relationship with us) and is independent within the
meaning established by The Nasdaq Stock Market. None of our
non-management directors receives any fees from us other than those
received in his capacity as a director.
ITEM
14.
PRINCIPAL ACCOUNTANT FEES
AND SERVICES
The
following table presents fees for professional audit services rendered by Ernst
& Young LLP (“E&Y”), our independent registered public accountants for
the audit of our annual financial statements for fiscal years 2009 and 2010, and
fees billed for other services rendered by E&Y.
Aggregate
E&Y fees for the fiscal years ended March 26, 2010 and March 27, 2009
were:
|
|
Fiscal 2010
|
|
|
Fiscal 2009
|
|
Audit
Fees
|
|
$
|
916,500
|
|
|
$
|
1,079,100
|
|
Audit
Related Fees
(1)
|
|
|
55,000
|
|
|
|
55,000
|
|
Tax
Fees
(2)
|
|
|
--
|
|
|
|
16,500
|
|
All
Other Fees
|
|
|
--
|
|
|
|
--
|
|
Total
Fees
|
|
$
|
971,500
|
|
|
$
|
1,150,600
|
|
________________
|
(1)
Fees
related to employee benefit plans and certain other governmental
procedures.
|
|
(2)
Consultations
on various tax matters.
|
In
accordance with its charter, the Audit Committee approves in advance all audit
and non-audit services to be provided by E&Y.
In other cases, the
Chairman of the Audit Committee has the delegated authority from the committee
to pre-approve certain additional services, and such pre-approvals are
communicated to the full committee at its next meeting. During fiscal
year 2010, all non-audit services were pre-approved by the Audit Committee in
accordance with this policy.
ITEM
15.
EXHIBITS AND FINANCIAL
STATEMENT SCHEDULES
1. The
exhibits to this report required to be filed pursuant to Item 15 (b) are listed
below.
Exhibit No.
|
|
Description
|
|
|
|
31.1*
|
|
Chief
Executive Officer certification under Section 302 of the Sarbanes-Oxley
Act of 2002.
|
|
|
|
31.2*
|
|
Chief
Financial Officer certification under Section 302 of the Sarbanes-Oxley
Act of 2002.
|
____________
SIGNATURES
Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, the Registrant has duly caused this Report to be signed on our behalf by
the undersigned, thereunto duly authorized on August 12, 2010.
|
|
PALM
HARBOR HOMES, INC.
|
|
|
|
|
|
|
|
/s/
Larry H. Keener
|
|
|
|
Larry
H. Keener, Chairman of the Board
|
|
Pursuant
to the requirements of the Securities Exchange Act of 1934, this Report has been
signed below by the following persons on behalf of the Registrant and in the
capacities and on the dates indicated.
Signatures
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ Larry H. Keener
|
|
Chairman
of the Board, Director and Chief Executive Officer
|
|
August
12, 2010
|
Larry
H. Keener
|
|
(Principal
Executive Officer)
|
|
|
|
|
|
|
|
/s/ Kelly Tacke
|
|
Executive
Vice President-Finance, Chief Financial Officer and
Secretary
|
|
August
12, 2010
|
Kelly
Tacke
|
|
(Principal
Financial and Accounting Officer)
|
|
|
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