-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, RzLNlILdYUFZH1v4VDdr18rQJjEl2lT0KAbPgL/rXjgj23awE6ZsryAs+BldUoMb U+yioMmaiyEVIm6RrRn4Ag== 0000950110-98-000312.txt : 19980326 0000950110-98-000312.hdr.sgml : 19980326 ACCESSION NUMBER: 0000950110-98-000312 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 13 CONFORMED PERIOD OF REPORT: 19971231 FILED AS OF DATE: 19980325 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERICAN BUILDINGS CO /DE/ CENTRAL INDEX KEY: 0000799208 STANDARD INDUSTRIAL CLASSIFICATION: PREFABRICATED METAL BUILDINGS & COMPONENTS [3448] IRS NUMBER: 630931058 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K SEC ACT: SEC FILE NUMBER: 000-23688 FILM NUMBER: 98573391 BUSINESS ADDRESS: STREET 1: STATE DOCKS RD STREET 2: P O BOX 800 CITY: EUFAULA STATE: AL ZIP: 36027 BUSINESS PHONE: 3346872032 MAIL ADDRESS: STREET 1: STATE DOCKS ROAD STREET 2: P O BOX 800 CITY: EUFULA STATE: AL ZIP: 36027 10-K 1 FORM 10-K ============================================================================== SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) |X| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 1997 OR | | 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 0-23688 ---------------------- AMERICAN BUILDINGS COMPANY ------------------------------------------------------ (Exact name of registrant as specified in its charter) ---------------------- DELAWARE 63-0931058 - ------------------------------- ---------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 1150 State Docks Road, Eufaula, Alabama 36027 --------------------------------------------- (Address of principal executive offices) (334) 687-2032 ---------------------------------------------------- (Registrant's telephone number, including area code) ---------------------- 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 $.01 per share ---------------------- 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 |X| 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. |X| The aggregate market value of the voting stock held by non-affiliates of the registrant was approximately $152,873,340 as of the close of business on March 16, 1998. The number of shares of Common Stock, $.01 par value, outstanding as of March 16, 1998 was 5,275,087. DOCUMENTS INCORPORATED BY REFERENCE Portions of the registrant's definitive Proxy Statement to be used in connection with its Annual Meeting of Stockholders to be held on April 28, 1998, are incorporated by reference into Part III of this Report. ================================================================================ ITEM 1. BUSINESS American Buildings Company ("ABC" or the "Company") is a diversified manufacturer and marketer of construction products and services for non-residential and residential applications. The Company designs, manufactures and sells metal building systems, which consist of structural framing and wall and roof panels, for industrial, commercial and institutional markets. The Company's metal building systems are generally custom-designed to meet the specific needs of the end-user and to allow for easy on-site assembly by builders and independent erectors. The Company's metal building systems average approximately 12,300 square feet in size, although the Company frequently provides larger buildings of up to one million square feet or more. The Company markets its metal building systems nationwide through approximately 1,120 authorized builder/dealers. ABC has capitalized on its extensive builder/dealer network and engineering expertise to expand into the emerging metal roofing market. The Company has a separate roofing products' sales, engineering and customer service organization, which markets and sells the Company's roofing products to its builder/dealer network and approximately 375 preferred roofing contractors. The Company also provides specialty engineering services for large, complex building structures, manufactures and markets mini-warehouses to serve the growing self-storage market and secondary building components to serve the Company's builder/dealers and roofers as well as the general construction industry, and paints steel coils. In addition, the Company manufactures and markets steel sectional upward acting doors for residential and commercial applications, as well as modular structures and residential steel framing systems. The Company also operates an ICC-licensed trucking subsidiary. ABC markets its products and services throughout North America and in selected international countries. The Company derived 95.0% and 89.5% of its respective 1996 and 1997 net sales from the sale of metal building systems and roofing and architectural products and secondary building components. INDUSTRY OVERVIEW Since the inception of the metal buildings industry in the 1940s, metal building systems have become a highly accepted method of construction for low-rise, non-residential structures, such as factories, warehouses, distribution centers, athletic and event centers, office buildings, retail establishments, banks and schools. Based upon information reported by the Metal Building Manufacturers Association ("MBMA"), an industry trade association, metal building systems accounted, on a square footage basis, for approximately 70% of low-rise, non-residential structures of up to 150,000 square feet constructed in 1997, compared to 65% in 1995 and 54% in 1987. The Company believes the cost of the metal building system generally represents approximately 15% of the total cost of constructing the building. In 1996, the non-residential market for metal buildings consisted primarily of three distinct markets: (1) commercial buildings, which accounted for approximately 35% of metal building systems industry sales; (2) manufacturing buildings, which accounted for approximately 41% of such industry sales; and (3) institutional buildings and other categories, which in the aggregate accounted for approximately 24% of such industry sales. Industry demand for metal building systems is cyclical and highly sensitive to overall economic conditions, dependent to a large degree upon the level of non-residential construction activity, the availability of financing for construction projects, interest rates and other factors that affect the construction industry. According to information reported by the MBMA, metal buildings industry sales increased from approximately $1.0 billion in 1982 to approximately $1.7 billion in 1989, but subsequently declined to approximately $1.3 billion in 1991. Demand -1- in the metal buildings industry was flat in 1992 at approximately $1.3 billion, but increased to approximately $1.5 billion in 1993, $1.9 billion in 1994, $2.2 billion in 1995, $2.3 billion in 1996 and $2.5 billion in 1997.(1) The decline in industry volume during 1990 and 1991 and flatness during 1992 adversely impacted all manufacturers, and caused a number of them to close manufacturing facilities. The five largest manufacturers of metal buildings in the United States, including ABC, collectively accounted for approximately 69% of 1996 industry sales and approximately 68% of 1997 industry sales reported to the MBMA; the balance of the manufacturers are predominantly small or regional competitors. In the early years of the industry, metal building systems were most often used for factories, warehouses, distribution centers and other applications in which the exterior appearance of the building was not as significant a consideration to customers as construction cost, efficiency, speed of construction and other factors. Technological advances in products and materials, as well as the advent of modern computer-aided engineering and design techniques, have led to the development of structural and roofing systems that are compatible with more traditional construction materials. Architects and designers now often combine a metal building system with masonry, glass and wood exterior facades in order to meet the aesthetic requirements of building codes and potential customers while preserving the inherent favorable characteristics of metal building systems. As a result, the uses for metal building systems now include office buildings, showrooms, retail stores, banks, schools and other non-residential buildings for which aesthetics and architectural features are important considerations. The Company believes that competing in markets where customers seek unique aesthetic or functional features for a structure places a premium on the manufacturer's custom design and engineering capabilities, as well as the strength of its distribution network. The Company believes that, as a result of improvements in metal building design and engineering, metal systems construction have become more competitive with the more traditional forms of construction, although some customers may prefer other forms of construction for aesthetic reasons. Nevertheless, the Company believes that metal building systems have gained market share from the more traditional forms of construction for the following reasons: Short Construction Time. In many instances, it takes less time to construct a metal building system in comparison to other building types, in part due to the fact that a contractor can prepare the building site while the manufacturer designs and manufactures the building - ---------- (1) The market share information of ABC in the metal buildings industry (which is measured in terms of sales dollars shipped (as opposed to sales orders received)) and sales information for the metal buildings industry, including the total market and the market share and sales information for competitors of the Company, included herein are derived solely from data reported by the MBMA, an industry trade association, in February 1998. The Company believes that the 32 manufacturers of metal building systems who are currently members of and report information to the MBMA represent approximately 90% of the total industry sales. The sales data which the Company reports to the MBMA, and on which the Company's metal buildings industry market share information included herein is based, consist of sales of the Company's Construction Products Group (which are referred to herein collectively as "the Company's metal buildings industry sales"). In 1996 the Company created a Construction Products Group, which consists of the Company's metal buildings systems, roofing, self storage, heavy fabrication, components and international divisions. -2- system. In addition, since most of the work is done in the factory, the likelihood of construction delays resulting from bad weather is reduced. Low Material Costs. Most metal building system manufacturers use computer-aided analysis and design to fabricate structural members with high strength-to-weight ratios, minimizing raw materials costs. Low Construction Costs. Factory labor rates are generally lower than field construction labor rates. Additionally, building system components produced in a controlled factory environment generally tend to be of higher quality than components built under the sometimes adverse weather conditions in the field. Ease of Expansion and Flexibility. Metal building systems can be modified quickly and economically before, during or after the building system is completed to accommodate expansion. Typically, a building system can be expanded by removing the end or side walls, erecting new framework, and adding matching wall and roof panels. Low Operating Costs. Metal will not deteriorate because of cracking, damp rot and insect damage and metal buildings are easy to insulate. Furthermore, factory applied roof and siding panel coatings resist cracking, peeling, chipping, chalking and fading. Improved Aesthetics. Metal building systems' aesthetic qualities have dramatically improved with advances in design, materials and coatings. Metal building systems can be combined with masonry, glass or wood facades in order to meet customers' aesthetic requirements while maintaining many of the basic advantages of metal buildings. The Company believes that an end-user's decision between metal buildings and buildings constructed with more traditional materials (e.g., wood, brick) is based on personal preferences for aesthetic features and price. The cost of metal building systems compares favorably to conventional construction primarily because the secondary structural framing and covering system are made from cold-formed steel products, thus reducing cost. The rigid primary structural framing is also manufactured in a low labor-intensive process, relying to a large extent on semi-automatic welding machinery to form the various structural parts. Cost competitiveness can vary based on the type and complexity of the building, including bay spacing, loads and cover system requirements. In addition to metal building systems, some metal building systems companies have targeted the non-residential roofing business as an opportunity to expand the applications of their base product. The development of the standing seam roof as an alternative to the traditional through-fastened metal roof and long life panel finishes have accelerated the growth of this market by providing the industry with a product to market as a replacement for built-up and single-ply roofs or as a retrofit over those roofs. Although the upfront costs of a metal roof are 20-25% greater than those of roofs constructed with more traditional materials, ABC believes that the cost savings over the 20-year life of the metal roof exceed 10% per year due to energy efficiencies and lower maintenance requirements. According to the National Roofing Contractors Association, the market for non-residential roofing in 1996 was approximately $13.9 billion, divided between retrofit roofing (approximately $10.7 billion) and -3- new roofing (approximately $3.2 billion).(2) Metal roofing in 1996 accounted for approximately 3.1% of the total non-residential roofing market. The non-residential construction industry is highly sensitive to overall economic conditions, and from time to time has been negatively impacted in numerous geographic regions by unfavorable economic conditions, relatively high vacancy rates, changes in tax laws impacting the real estate industry and the unavailability of financing. Demand for the Company's products may be adversely affected by the weakness of demand within particular customer groups or a recession in the construction industry or particular geographic regions, which may adversely affect the Company's results of operations. The timing and severity of future economic or industry downturns are not currently determinable, and any such downturn could have a material adverse effect on the Company's results of operations and business. COMPANY STRATEGY The Company's business strategy is focused on increasing long-term profitability through enhancement of its strong builder/dealer network, technological innovations, cost efficiencies, internal investment, capacity expansion and expansion into related lines of business. The Company believes that its recent growth and prospects for the future result from its implementation of the following strategies: Strong National Builder/Dealer Network. The Company has established, and continues to enhance, its strong builder/dealer network. ABC focuses on attracting design/build and negotiating contractors, which typically have higher margins than bid-oriented general contractors. In 1996 and 1997, ABC added 184 and 152 builders, respectively, to its builder/dealer network and dropped 198 poorly performing builders in aggregate during these years. In 1996 and 1997, the 184 new builders and 152 new builders accounted for approximately 9% and 7%, respectively, of the Company's metal buildings industry sales. The Company believes that its product mix, which includes roofing and architectural products and its specialty engineering group responsible for the design of large, complex buildings, as well as its national accounts program, which focuses on developing business from large, frequent builders of metal building systems and relationships with major engineering, architectural and construction firms, will assist ABC in attracting and retaining the industry's highest caliber builders as well as establishing relationships with large frequent purchasers of metal building systems. The Company's relationship with its builder/dealers and preferred roofing contractors is non-exclusive. Technology Design Leadership. In 1991 the Company introduced Spectrum, a personal computer-based proprietary design, estimating and ordering software system which allows a builder to rapidly design projects and produce complete cost data and computer generated drawings for most of the Company's metal building systems. The Company believes that Spectrum's ease of use provides a competitive edge to ABC's builders. Approximately 95% of - ---------- (2) The sales information for the roofing industry is derived from data published by the National Roofing Contractors Association ("NRCA"), an industry trade association, in April 1997, which compiles information from roofing contractors and makes certain extrapolations to determine the total market. The NRCA has informed the Company that it does not expect to publish 1997 data until mid-April 1998. The Company does not, and believes other metal buildings systems manufacturers do not, report roofing sales to the NRCA. -4- the Company's builders are currently trained and licensed to use Spectrum. Based upon the success of Spectrum, the Company introduced Summit, a personal computer-based proprietary design, estimating and ordering software system specifically designed for the metal roofing market, in April 1994. Approximately 80% of the Company's preferred roofing contractors are currently trained and licensed to use Summit. The Company intends to continue to enhance its technology to improve its ability to accurately and competitively price the Company's products and use this competitive strength to recruit new builders. Expansion of Non-Residential Metal Roofing Business. The Company has focused on expanding its roofing and architectural products business to take advantage of the rapid growth and acceptance of metal roofing in the $10.7 billion retrofit roofing and $3.2 billion new roofing markets. ABC devotes a separate sales, engineering and customer service organization for the distribution of non-residential roofing products. The Company believes that this division also offers a new product line to its builder/dealer network, and that this product line assists the Company in attracting and retaining the industry's highest quality builders. Internal Expansion. ABC opened the initial phase of its manufacturing facility in Virginia in October 1994, and completed this facility in December 1995. Because of the significance of freight and delivery charges to the delivered cost of metal building systems, the Company believes it is advantageous to sell and deliver its products within a 500 mile radius of its manufacturing facilities. The Company believes that locating a facility in Virginia has allowed it to meet increasing demand in the East Coast market while relieving capacity constraints at the Company's Alabama and Illinois facilities, allowing continued growth in the markets supplied by these facilities. In addition, in late 1996 and early 1997 the Company increased the capacity of its Polymer Coil Coaters division by upgrading the line speed. Improvement of Manufacturing Efficiency and Productivity. Following the Company's recapitalization in January 1993 (see "--Company History"), the Company implemented a capital expenditure program to improve manufacturing efficiency and productivity. The Company spent $10.3 million in 1995 (including $5.3 million for the expansion of its Virginia facility), $9.3 million during 1996 (including $3.6 million of capital expenditures for its Virginia facility, $2.9 million to increase capacity at its Polymer Coil Coaters division and $2.1 million for office expansion) and $10.0 million during 1997 (including $3.6 million for new technical and business systems) and currently intends to spend $11.6 million during 1998, including $2.0 million for new technical and business systems, with the remainder for new equipment, production controls and other capital expenditures which the Company believes will enhance its overall profitability by improving manufacturing efficiency and productivity, reducing costs and increasing capacity to meet increasing demand. ABC is committed to ongoing reductions in its cost of producing metal building systems in order to increase its sales and market share in the metal buildings industry. International Opportunities. The Company intends to pursue international opportunities through export of its products and formation of joint ventures. The Company's joint venture, American Buildings Company Asia, L.P., was formed to pursue the manufacture and sale of metal building systems in The People's Republic of China and certain other countries in Southeast Asia. The Company is also currently marketing its products in Brazil and certain other Latin American countries. See "--International Opportunities." Expansion into Related Lines of Business. The Company intends to expand the construction products and services it offers, both through acquisition and internal -5- development. In November 1996, ABC acquired the Liberty, North Carolina manufacturing facility of American Modular Technologies, L.L.C. for the manufacture of modular buildings. In December 1996, the Company formed a new division to pursue the manufacture and marketing of steel framing for the residential market. In December 1997, the Company acquired the Windsor Door division of United Dominion Industries, Inc., the industry's fourth largest producer/marketer of steel sectional upward acting doors for residential and commercial applications. The Windsor Door division also produces rolling steel doors for industrial uses and has a contract manufacturing business specializing in metal stampings. CUSTOMERS AND DISTRIBUTION NETWORK The Company distributes its metal building systems through a nationwide network of approximately 1,120 authorized builder/dealers. ABC markets to builders through a sales force of approximately 45 persons located throughout the United States. The Company currently has an organization of approximately 375 preferred roofing contractors, including approximately 190 builders which are part of the Company's metal building systems builder/dealer network. The Roofing and Components Group primarily markets roofing products and secondary components through a separate sales force of 27 persons to ABC's builder/dealer network, preferred roofing contractors and components customers. In both cases, the Company's engineering, manufacturing and marketing personnel work directly with the builder and contractor to establish job specifications and modifications, determine the appropriate pricing for the Company's products and services, generate drawings and establish production and delivery schedules. The Company's relationship with its builder/dealers and preferred roofing contractors is non-exclusive. The Company's authorized builder/dealer organization consists of independent contractors who market ABC products to end-users. These builders usually erect the metal building system on the customer's site, and provide contracting and other ancillary services to the completion of the project. The Company prices its products to the builder, which usually marks up the price to its customer as part of the overall construction arrangement or bid with its customer. The Company focuses on developing relationships with the strongest builders in each market and recruiting design/build and negotiating contractors, which typically have higher margins than bid-oriented general contractors. Before a builder can become an authorized ABC builder, the Company performs a market analysis of the builder's region to determine their market share and position, as well as background and credit checks to ensure that the builder meets ABC's standards. ABC believes the reputation of the builder/general contractor, price and the ability to meet customer specifications and deliver on time are key factors utilized by end-users in selecting among competing metal building systems. Geographic location is also important to customer service, helping ensure reliable delivery and minimizing freight expense. During 1996 and 1997, the Company's largest builder accounted for approximately 1.5% of the Company's total metal building systems sales in both years, while the ten largest builders accounted for approximately 11.3% and 8.0%, respectively, of such sales. The Company has written agreements with its authorized builder/dealers which generally grant the builder the non-exclusive right to market the Company's products and are generally cancelable by either party on 90 days' notice (five days in the case of certain specified events). The agreements do not prohibit the builder from marketing metal building systems of other manufacturers, although as a matter of practice most of the Company's builders work only with ABC because of ABC's commitment to its builders. The Company provides its -6- builders with sales and pricing information, design and engineering manuals, drawings and assistance, Spectrum for estimating and quoting jobs, advertising and promotional literature, a full-time customer service representative and training for the builder's personnel. The Company often participates on a limited basis with cooperative advertising arrangements, such as yellow pages advertisements, with its builders. The Company also sponsors periodic builders meetings at which it conducts seminars to assist builders in marketing the Company's products. In 1993, the Company established the Golden Eagle program, designed to recognize and reward the Company's highest caliber, highest volume builders. For these builders, the Company provides special levels of support, including free upgrades on Spectrum, free access to the Company's training seminars, special customer service telephone lines and eligibility for incentive awards. Approximately 215 builders are currently participants in the Golden Eagle program. The builder functions as the Company's direct link to the end-user. The Company provides marketing support and engineering resources for its builders and relies upon each builder's knowledge of the local market. The Company believes that its builder relationships give it prompt and cost effective entry into a local market. The metal buildings industry generally has gravitated toward the builder-manufacturer relationship. However, two of the other three largest national manufacturers each has its own construction company, circumventing local builders in the marketplace. This direct approach allows these manufacturers to compete for large projects without involving the services of a local builder. The Company believes that by not forming a construction subsidiary, it has strengthened its relationship with its builders, because it does not compete with them to construct buildings, and has encouraged builders to pursue a relationship with the Company. The Company continually seeks to enhance its strong builder/dealer network. The following table sets forth information relating to the total number of the Company's authorized builder/dealers, and the number of builder/dealers added to and terminated from its builder/dealer network, in each of the Company's last three fiscal years: Number of Builder/Dealers 1995 1996 1997 --------------- ---- ---- ---- At January 1, ....................... 966 983 1,064 Added ............................... 152 184 152 Terminated .......................... 135 103 95 --- ----- ----- At December 31, ..................... 983 1,064 1,121 === ===== ===== Although some builder/dealers chose not to continue to be part of the Company's authorized builder/dealer network during this period, the substantial majority of builder/dealers who ceased to be part of the Company's authorized builder/dealer network were dropped by the Company for poor performance. In order to enhance its builder/dealer network, the Company began focusing in 1993 on identifying and dropping from its builder/dealer network poorly performing builders. The Company expects that it will continue to enhance its builder/dealer network by actively recruiting strong builders and dropping poorly performing builders. The Company anticipates that it will add approximately as many new authorized builders/dealers to its builder/dealer network as are terminated and, as a result, the Company expects the -7- number of authorized builder/dealers will remain relatively constant over the next two years, although there can be no assurance of this. The Company's Heavy Fabrication division is a specialty engineering group that combines the Company's metal buildings technology with conventional construction techniques and applications to design and engineer large, complex buildings. This division markets primarily to major architectural and engineering firms, large general contractors and ABC builder/dealers. The Company anticipates that its national accounts program will enhance the growth of the Heavy Fabrication division by assisting it in closing orders and developing relationships with prospective partners such as major engineering, architectural and construction firms. The Company also believes that its Heavy Fabrication division offers its builder/dealer network an additional service. The Company's Roofing and Components Group's sales force markets metal roofing products and secondary components to both the Company's authorized builder/dealer network and to preferred roofing contractors. The Company believes that roofing contractors are far more likely to be contacted by a building owner when a new roof is needed, and, accordingly, the Company established a network of preferred roofing contractors to market its metal roofs. The Company devotes a separate sales, engineering and customer service organization to the distribution of non-residential roofing products. By having a separate organization whose compensation is tied directly to the sales of roofing products, the Company believes it has created a more motivated work force than if it used its established metal building systems sales organization. As with its metal building systems builder/dealer network, the Company supports its contractors with sales and pricing information, design and engineering manuals, a full-time customer service representative and training for the roofer's personnel. In late 1992, the Company reinstated its national accounts program, which focuses on developing business from large, frequent builders and users of metal buildings and relationships with major engineering, architectural and construction firms. The Company believes that a national accounts program allows it to establish relationships with large industrial and retail companies on their specific projects, which it can then refer to local builders who may not have a relationship with such company at the corporate level. The Company believes this will further strengthen ABC's relationships with its strongest builders and assist in recruiting new builders. ABC believes this program benefits its Heavy Fabrication, Roofing, Components and Metal Building Systems divisions. Windsor Door markets to the residential and non-residential commercial and industrial door market through a network of approximately 300 independent distributors and 29 Company-owned distribution centers. Products include sectional garage doors and rolling steel doors. Windsor also has a contract manufacturing business specializing in steel stampings. These products are sold by an in-house sales force calling on targeted accounts. AMT markets convenience stores and canopy systems to the petroleum industry through a network of three sales people calling on the large oil companies and the independents. It relies on long established relationships to be successful in this market. Additionally, AMT sells to the commercial and institutional market through a dedicated group of estimators which sell direct to the end user or to intermediate leasing companies. -8- DESIGN AND ENGINEERING The manufacture and marketing of metal building systems depend significantly upon engineering and design capability and capacity. Metal building systems must be designed to meet end-users' requirements and to satisfy applicable local building codes. The Company's metal building systems are typically planned and designed by the builder using Spectrum, which was introduced in 1991 to enhance the productivity of the sales and estimating functions. The Spectrum database, which is periodically updated, includes all local building codes, the Company's products and prices therefor, delivery costs and design features. The Spectrum software system allows a builder to produce complete cost data and computer generated drawings for most of the Company's metal building systems. Spectrum produces purchase order documentation, and supports builders by compiling specification reports, proposals and other sales related documentation designed to support the builder's selling efforts. Since the pricing of the building to the builder is included in the Spectrum software, the calculation of project costs is on-line, thereby eliminating the time consuming process of pricing a building component by component from a catalogue. The system further enables the Company's builder/dealer network to rapidly design projects and allows the Company and its builders to price projects to achieve desired margins. Furthermore, Spectrum provides builders with the flexibility to make modifications to the design of the project and receive instant cost data and project renderings reflecting such changes. Although several of the Company's competitors have also introduced design, estimating and ordering software for use by their builders, the Company believes Spectrum's ease of use provides a competitive edge to ABC's builders. Approximately 95% of ABC's builders are currently trained and licensed to use Spectrum. Typically, a builder estimates a metal building system using Spectrum. However, there may be projects, generally for large or complex buildings, which require the builder to seek estimating and design assistance from the Company. In these cases, the initial Spectrum designs are improved upon by the Company's sales and engineering departments, working in close coordination with the builder, in an attempt to determine the most cost-effective design within the guidelines provided by the end-user or the architect or engineer working on the project. The Company has also developed a personal computer-based proprietary design, estimating and ordering software system, Summit, to enhance the productivity of the sales and estimating functions for the metal roofing market. Summit, which the Company introduced in April 1994, operates similarly to Spectrum. Approximately 80% of the Company's preferred roofing contractors are currently trained and licensed to use Summit. After receipt of an order that has been priced using the pre-design features of Spectrum, the Company's engineering department develops actual engineering design, construction and fabrication drawings to fulfill the order requirements. The engineering department ensures that the order, the drawings and the estimate agree. Change orders are developed to correct any discrepancies and to address any changes after the order is received. The project is then engineered to meet the local building code requirements, job specific characteristics and customer specifications. This includes, but is not limited to, addressing the member sizes needed to resist live loads, collateral loads, snow loads and seismic forces. This design data is then utilized to develop the construction drawings and fabrication drawings. The construction drawings are furnished to the builder for construction and permit purposes. The fabrication -9- drawings are furnished to the plants, either in hard copy or electronically, as needed for fabrication. As part of a strategy to bring engineering services closer to its dealers, ABC operates eleven decentralized engineering services centers across the U.S. to increase the Company's ability to provide value added engineering support and increase flexibility in addressing dealers' and customers' needs. MANUFACTURING Once the specifications and designs of the customer's project have been finalized, the manufacturing process begins. The fabrication of the primary structural framing consists of a process in which pieces of rigid steel plates and bar stock are sheared and punched, routed through a semi-automatic welding machine and sent through further fitting and welding processes. This process is the most labor intensive in the fabrication of metal building systems. The secondary structural framing and the covering subsystem are roll-formed steel products. In roll forming, coils of steel are decoiled and passed through a series of progressive forming rolls which shape the steel into various profiles of medium-gauge structural shapes and light-gauge sheets and panels. The fabrication of the secondary framing and covering subsystems is more automated than that of the primary structural framing. Structural framing members and covering subsystems are shipped to the job site for assembly by local builders or independent erectors. ABC generally is not responsible for any on-site construction, although employees of the Company's marketing and engineering departments may monitor the project until completion. The time elapsed between the Company's receipt of an order and shipment of a completed building system historically ranges from four to eight weeks, depending upon the backlog at each manufacturing facility and the time required for the builder to obtain all required governmental approvals as well as approval of the builder's architect. The Windsor Door manufacturing process involves custom built roll formers for door sections and door track production, spring winders and plastic extrusion equipment. Doors are assembled on automated assembly lines. The manufacturing process for metal stampings involves custom dyes used on metal press equipment. AMT roll forms certain components of its modular buildings and purchases some parts from outside suppliers. Modular structures, which include not only the structure but most of the interior requirements such as HVAC, plumbing and electrical, are then assembled at the plant site. The Company operates 11 manufacturing facilities. Because of the significance of freight and delivery charges to the delivered cost of metal building systems, the Company believes it is advantageous to sell and deliver its products within a 500 mile radius of its manufacturing facilities. Metal building systems and roofing and architectural products are manufactured at the Eufaula, Alabama; El Paso, Illinois; Carson City, Nevada; and La Crosse, Virginia plants. The components division operates out of a leased facility in Birmingham, Alabama. Residential and light commercial metal building systems are manufactured at a leased facility in Atlanta, Georgia. ABC's coil painting plant is located in Birmingham, Alabama. Modular systems are manufactured in Liberty, North Carolina. Doors are -10- manufactured in Little Rock, Arkansas and Olivehurst, California. Metal stampings are manufactured at a leased facility in Little Rock, Arkansas. See "Item 2. Properties." PRODUCTS AND SERVICES The Company conducts its business through 11 operating divisions, Buildings, Roofing, Heavy Fabrication, Self Storage, Components, Polymer Coil Coaters, International, Windsor Door, Modular Buildings, Residential/Light Commercial and Transportation, which are organized by markets. These divisions complement each other through a combination of common distribution channels, common manufacturing facilities or vertical integration of products or services. The Construction Products Group, which consists of the Buildings Group (consisting of the Buildings, Heavy Fabrication, Self Storage and International divisions) and the Roofing and Components Group (consisting of the Roofing and Components divisions) all use as a distribution base the Company's nationwide network of approximately 1,120 authorized builder/dealers, with the Roofing and Components Group expanding from that base to other distribution networks. Products for these Groups are manufactured in the Company's four metal building systems manufacturing facilities. Because the primary structural framing is the most labor intensive portion of the manufacturing process, capacity for roofing and steel component parts exists even when the primary structural lines are operating at full capacity. In addition, the Company has a manufacturing facility devoted solely to the manufacture of components. The Polymer Coil Coaters division paints coils for both the Buildings and the Roofing and Components Groups, and is expected to paint coil for the Windsor Door division. The Modular Buildings division, which was acquired in late November 1996, manufactures and markets modular buildings for the non-residential market. ABC's residential/light commercial division was formed in late 1996 to address the market for residential steel framing. The Windsor Door division produces and markets steel sectional upward acting doors for residential and commercial applications and rolling steel doors for industrial uses and has a contract manufacturing business specializing in metal stampings. The Company intends to use its builder/dealer network to expand the market for the Windsor Door division's door products. The Company also expects to produce roll up doors for the Self Storage division and metal stampings for the Construction Products Group at its Windsor Door facilities. The ABC Transportation division transports raw materials to the Company's manufacturing facilities and delivers finished products to customers throughout the United States. BUILDINGS GROUP The Buildings Group, which consists of the Buildings, Self Storage, Heavy Fabrication and International divisions, designs, engineers, manufactures and sells metal building systems for the low rise, non-residential construction market. Typical structures include factories, warehouses, distribution facilities, public buildings, schools, churches, healthcare facilities, aircraft hangars, showrooms, office buildings, retailing establishments, self-storage mini-warehouses and numerous other private sector and community purposes. The Company's metal building systems are custom-designed and engineered to meet the specific needs of the end-user and to allow for easy on-site assembly by builders or independent erectors. Each building system is manufactured for a specific customer order. The Company's average order size is $50,200, representing a building of approximately 12,300 square feet in size, although the Company frequently provides larger buildings of up to one million square feet or more. The metal building systems manufactured by the Company are comprised of (1) primary structural framing, (2) secondary structural framing, and (3) the covering system, which -11- includes the roof, walls and trim. The building system is designed to support externally applied loads. Primary Structural Framing. The primary structural framing, fabricated from steel plate and bar stock, supports the secondary structural framing, roof and walls. Through the primary framing, the force of all applied loads is structurally transferred to the foundation. Secondary Structural Framing. The secondary structural framing consists of medium-gauge, roll-formed steel components called purlins and girts. Purlins are attached to the primary frame to support the roof. Girts are attached to the primary frame to support the walls. The secondary structural framing is designed to strengthen the primary structural framing and efficiently transfer applied loads from the roof and walls to the primary structural framing. Covering System. The covering system consists of roof and wall panels. These panels not only lock out the weather but also contribute to the structural integrity of the overall building system. Roof and siding panels are fabricated from light-gauge, roll-formed steel. Accessory components, such as doors, windows, gutters and interior partitions, complete the metal building system. The Heavy Fabrication division is a specialty engineering group which is responsible for the design of large, complex building structures such as heavy industrial facilities, exhibition halls, athletic and event centers, airplane maintenance facilities and cogeneration and waste-to-energy facilities. This division's design/build approach combines conventional construction techniques and applications with the advantages of the Company's metal building systems to design and engineer large complex buildings. Typically, over one-half of the fabrication for these projects is done by the Company's plants and the balance by outside structural fabricators. Heavy Fabrication's larger projects included two steel mills (one each in Indiana and Illinois) and a fiberboard plant in Arkansas in 1996 and a second steel mill in Indiana, a large aircraft hanger in Georgia and a mining facility in Chile in 1997. See "--International Opportunities" for a discussion of the Company's International division. ROOFING AND COMPONENTS GROUP The Roofing division manufactures and markets metal roofing systems that can be installed on any type of building, metal systems construction or conventional, new or existing. The Company's engineers work closely with architects and contractors to design custom roofing systems according to exact building specifications. The Company's roofing systems can be adapted to suit a wide variety of architectural and design specifications. ABC's roofing systems consist of secondary framing and roofing panels of coated cold-rolled steel. The roofing panels are galvanized or galvalume coated for higher corrosion resistance. Metal roofing systems can be painted in a number of colors, which is becoming an increasingly important trend in commercial and pubic sector construction. The majority of the Company's roofing systems are standing seam roofs which ABC believes have considerable advantages over conventional roofing materials. Standing seam roofs reduce the potential for leaks because there are fewer through-the-roof fasteners and the seams stand up to three inches above the roof drainage plane. By means of a substructure of light gauge steel members, slope can be imposed on any roof. Panels are locked together as a seam raised above the roof drainage plane. In addition, -12- when required by design, the use of movable clips to attach the roof panels to the structural support system allows the roof surface to "float" over its structural supports, enabling the roof panels to expand and contract with fluctuations in temperature without developing cracks, fissures and other common causes of roof leakage. The increased longevity of standing seam metal roofing systems has led to greater market acceptance. The Company believes that such systems will continue to gain market share from conventional roofing materials. The following are the advantages of metal roofing systems over conventional roofing materials: Lower Lifecycle Cost - The total cost over the life of metal roofing systems is lower than that of conventional roofing systems for both new construction and replacement roofing. For new construction, the cost of installing metal roofing is equal to the cost of conventional roofing, and the longer life and lower maintenance costs of metal roofing make the total cost much more attractive. For replacement roofing, although installation costs are 60 to 70 percent higher for metal roofing due to the need for a sloping support system, the lower ongoing costs more than offset the initial expenditure. Longevity - Metal roofing systems last for twenty to thirty years without requiring major maintenance or replacement, compared to five to ten years for conventional roofs. The cost of leaks and roof failure can be very high, including damage to building interiors and disruption of the functional usefulness of the building. Metal roofing prolongs the intervals between costly and time-consuming repair work. Aesthetics - Metal roofing systems allow architects and builders to integrate colors and geometric design into the roofing of new and existing buildings, providing a new and increasingly fashionable means of enhancing a building's aesthetics. Conventional roofing material is generally unsightly tar paper or a gravel surface, and building designers tend to conceal roofs made with such materials. The Company's roofing systems meet all necessary and appropriate industry codes and specifications. All orders received by ABC for roofing and architectural products are fabricated in the Company's plants. The Components division manufactures and markets secondary components, which consist of wall and roofing panels, trim and other metal building accessories. This division primarily serves the general construction industry, frame fabricators who do not have production capability other than primary frames, and the Company's builder/dealer network. These customers use the components for repair and replacement jobs, or as parts for small buildings. POLYMER COIL COATERS The Polymer Coil Coaters division paints steel coils. This division's facility is located in Birmingham, Alabama, adjacent to the U.S. Steel Division of USX Corp.'s plant, providing the Company with substantial cost advantages with respect to services performed for U.S. Steel. Approximately 30%, 25% and 20% of the division's gross sales for 1995, 1996 and 1997, respectively (before intercompany eliminations), were to the U.S. Steel Division for that division's customers who desired painted (as opposed to unpainted) coil. Approximately 43%, 51% and 55% of Polymer Coil Coaters' gross sales for 1995, 1996 and 1997, respectively (before intercompany eliminations), were to the Company and the balance to industrial customers. -13- In October 1995, the Company began a $3.5 million capital expenditure program for new coater heads and a 40% increase in line speed to increase capacity at the facility, which was completed in January 1997. U.S. Steel recently added a new galvanizing/galvalume line at its Birmingham, Alabama plant. The Company believes its ability to add additional lines at its existing facility is limited by local environmental regulations, particularly those relating to air pollution. See "--Competition." TRANSPORTATION The ABC Transportation division transports raw materials to the Company's manufacturing plants and delivers finished goods to customers around the United States. This division operates approximately 134 leased truck cabs and approximately 340 leased flatbed trailers. The Company believes that operating its own transport service enhances the quality of services provided by it to its builder/dealer network. This division also transports materials for third party customers. The Company's ABC Transportation subsidiary is an ICC-licensed common carrier, licensed to carry all types of materials other than explosives and household goods. MODULAR BUILDINGS In November 1996 the Company acquired the Liberty, North Carolina manufacturing facility of American Modular Technologies, L.L.C. for the manufacture of modular buildings. This acquisition complements ABC's presence in the low-rise non-residential construction market with a modular approach used by major oil companies for convenience stores and canopy systems at their gas stations. The Company intends to expand this division's activities into other segments of the market where modular is an accepted form of construction, such as classrooms and correctional facilities. RESIDENTIAL/LIGHT COMMERCIAL The Company formed this division in December 1996 to pursue the residential steel framing market. Although currently fewer than 70,000 of the approximately 1.4 million annual new housing starts have steel framing, steel framing has slowly been making inroads. Steel frames tend to have less price fluctuation than wood and have the inherent characteristics of added strength, particularly important in seismic and high wind areas. Steel frames are also superior to wood frames in areas where there are termites and high humidity. WINDSOR DOOR In December 1997 the Company acquired substantially all the assets, and assumed certain liabilities, of the Windsor Door division of United Dominion Industries, Inc. The Windsor Door division, headquartered in Little Rock, Arkansas, is the industry's fourth largest producer/marketer of steel sectional upward acting doors for residential and commercial applications. The division also produces rolling steel doors for industrial uses and has a contract manufacturing business specializing in metal stampings. Door products are sold through independent distributors and company-owned distribution centers. The Division operates two plants in Little Rock and a plant in Olivehurst, California, and has 29 Company-owned distribution centers. -14- INTERNATIONAL OPPORTUNITIES As part of its effort to increase the Company's presence in international markets, in August 1995 ABC and China Renaissance Industries, L.P., a partnership formed to invest in non-listed enterprises in The People's Republic of China, formed a joint venture to pursue the manufacture of metal building systems in the PRC and their sale throughout most of Southeast Asia (the "Territory"). ABC has a 30% interest in the joint venture, and exclusively licensed to the joint venture on a royalty-free basis the right to use certain of ABC's technology to pursue the manufacture and sale of metal building systems in the Territory. The joint venture completed its initial manufacturing facility in the PRC in October 1996. ABC will receive a technology license fee of $1.5 million, of which $750,000 was paid in 1995 and the remainder of which is due in late 1998. ABC invested approximately $4.4 million in the joint venture through the end of 1997 and expects to invest up to an additional $0.1 million in 1998. See "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations--Liquidity and Capital Resources." The Company is currently marketing its products in Asia, Brazil and certain other Latin American countries, and is currently developing a dealer network in Latin America to facilitate its sales there. SUPPLIERS The principal raw material used in the manufacture of the Company's metal buildings, metal roofing, doors and components is steel. Components are fabricated from commonly available steel products produced by mills including bars, plates and cold rolled gauge and galvanized sheeting. In 1997, the Company purchased approximately 47% of its steel requirements from two steel companies, the largest of which accounted for approximately 30% of the Company's steel purchases. Since the steel required for the Company's operations currently is available from a number of domestic and foreign suppliers at competitive prices and the Company has not to date experienced any significant quality or delivery problems with its current suppliers, the Company has not traditionally maintained an inventory of steel in excess of its current production requirements. However, there can be no assurance that steel will remain available or that prices will remain stable. If the available supply of steel declines, or if one or more of the current sources for any reason is unable to meet the Company's requirements, the Company could experience price increases, a deterioration of service from its suppliers, or interruptions or delays that may cause the Company to fail to meet delivery schedules to its customers. The Company believes it obtains delivery and service benefits from its suppliers because it concentrates its purchases among a small number of them; nonetheless, there can be no assurance that these benefits will continue to be realized in the future. BACKLOG At December 31, 1997, the total backlog for orders believed by the Company to be firm was $96.6 million, all of which the Company expects to fill during the current fiscal year. This compares with a total backlog of $82.1 million at December 31, 1996, $56.3 million at December 31, 1995 and $76.0 million at December 31, 1994. Job orders, including those believed by the Company to be firm, generally are cancelable by customers at any time for any reason, although the customer is obligated to pay any costs incurred by the Company prior to cancellation of an order. See "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations." -15- WARRANTIES The Company provides three different warranties for its metal building products. First, the fabricated steel portion of the product carries a one-year warranty against defective material and workmanship. Second, an extended material warranty is provided by the Company's suppliers and passed through to the Company's customers. These material warranties relate to long-life paint (20 years), Premium 70, a prepainted galvanized steel (20-25 years), and galvalume aluminized or zincalume steel (20 years). Third, a twenty-year weather-tightness warranty against leaks under normal weather and atmospheric conditions is available for standing seam roofs. Windsor Door has a one-year warranty for defective material or workmanship. Additionally, certain model doors have a limited 10-year or lifetime rust through warranty to the original owner. AMT offers, for components manufactured by it, a one-year warranty against defective materials and workmanship and a 90-day warranty on HVAC systems for its modular structures. Refrigeration and roofing systems are warranted by their respective suppliers. Historically, claims under these warranties have been immaterial. COMPETITION On the basis of data reported by the MBMA, the Company's 1997 sales of metal building systems products constituted approximately 11.4% of reported industry sales, placing it as the fourth largest domestic manufacturer behind the Building Systems division of Butler Manufacturing Company, NCI Building Systems, Inc. and the Varco-Pruden Buildings Division of LTV Steel Corporation, which accounted for approximately 20.6%, 14.4% and 11.9%, respectively, of total 1997 industry sales reported by the MBMA. Other major competitors include the Star and Ceco Divisions of Robertson-Ceco Corp. and Associated Buildings. Several of the Company's competitors have greater financial resources than the Company. The Company believes its American Buildings brand is the third largest brand behind the Butler and Varco-Pruden brands. Competition in the metal buildings industry is intense and is based primarily on price, service, quality of the builder/dealer network and the ability to provide added value in the design of a building. The Company's ability to expand its market share depends in part on its ability to persuade builders to market the Company's products in lieu of those of its competitors, attract conventional contractors to the metal buildings industry and develop a separate network of preferred roofing contractors to market its roofing products. In addition, the Company and others in the metal building systems industry compete with alternative methods of building construction. Although the Company maintains metal building manufacturing facilities in Alabama, Illinois, Nevada and Virginia, the Company's ability to quote competitive prices to customers located more than 500 miles from one of these facilities may be limited because of the significance of freight and delivery charges to the cost of metal buildings. Foreign companies are not presently a significant factor in the domestic marketplace, and the Company does not expect them to be in the near future, mainly because of transportation costs and the short lead times generally required by customers. The Roofing and Components Group competes with numerous suppliers of roofing and component parts as well as other metal buildings systems manufacturers. There are currently four other companies engaged in painting steel coil in the southeastern United States. The Company believes that the recent addition of two of these facilities has resulted in overcapacity for steel coil painting in the southeastern United States and has created competitive pressure. However, the Company believes that its location -16- adjacent to a U.S. Steel plant provides it with substantial cost advantages with respect to services performed for U.S. Steel. In the upward acting, or garage door, manufacturing industry, there are five "full-line" firms which serve a national base of customers. ABC estimates that these companies have about 80% market share. The Windsor Door division's current market share is estimated by ABC to be approximately 8%, ranking it fourth. Wayne Dalton Corporation and Overhead Door Corporation are believed to be the two largest manufacturers, with Clopay Corporation also being larger than Windsor. The Modular Buildings division has two primary competitors in the modular petroleum business, both of which are privately owned. Several other manufacturers compete in the canopy business and the commercial/institutional modular business. REGULATORY MATTERS The Company's manufacturing facilities are subject to many federal, state and local requirements relating to the protection of the environment. The Company believes it is in compliance in all material respects with environmental standards applicable to its operations. The Company does not anticipate material capital expenditures to meet current environmental quality control standards, but there can be no assurance that more stringent regulatory standards will not be established which might require such expenditures. The metal building systems manufactured by the Company must meet zoning and building code requirements promulgated by local governmental agencies. The Company's operations are also governed by laws and regulations relating to workplace safety and worker health, principally the Occupational Safety and Health Act and regulations thereunder which, among other requirements, establish noise and dust standards. Management believes that it is in substantial compliance with these laws and regulations and does not believe that future compliance with such laws and regulations will have a material adverse effect on its results of operations, liquidity or financial condition. PATENTS, LICENSES AND PROPRIETARY RIGHTS The Company has a United States patent on its standing seam roof system. The Company uses various trade names and trademarks in the conduct of its business but has not registered such names or marks with any governmental authorities. EMPLOYEES At December 31, 1997, the Company employed approximately 2,600 people, of whom 135 were general and administrative personnel, approximately 125 were sales personnel, approximately 420 were engineering personnel, and the remainder were production workers (including drivers). The hourly production and maintenance employees of the Company's Polymer Coil Coaters Division and Windsor Door Division's Arkansas and California manufacturing facilities are represented by labor unions; the remainder of the Company's employees are not represented by a labor union or a collective bargaining agreement. The Company regards its employee relations as excellent. -17- COMPANY HISTORY The Company and its predecessors have been engaged in the manufacture and marketing of metal building systems since 1947. In July 1986, a management group led by the Company's chief executive officer at that time, together with a private investment firm, acquired the Company and Polymer Metals, Inc. from Cronus Industries, Inc. in a $106.1 million leveraged buyout (the "1986 LBO"). Financing for the 1986 LBO consisted of $51.5 million of senior debt, $45.0 million of senior and subordinated notes, $4.2 million of cash on hand, and approximately $5.4 million of equity. Following the 1986 LBO, the Company operated under significant cash constraints and, in response thereto, the Company sold certain of its non-core businesses, leased its Texas manufacturing facility, which took the Company out of a significant market and resulted in decreased sales and closed two manufacturing facilities in Iowa and Ohio in order to cut costs. During the period following the 1986 LBO until the Restructuring (defined below) was effected, the Company was able to retire $28.4 million of acquisition indebtedness through sales of assets and cash flow from operations. By the end of 1990, the Company was experiencing significant financial difficulties as a result of its negative net worth and substantial interest payments, which severely limited the Company's capital spending and working capital. As a result of the cash constraints and the general decline in total metal buildings industry sales, the Company's net sales decreased from $162.2 million in 1989 to $117.7 million in 1991, the Company incurred net losses in each of 1989, 1990 and 1991, and the Company's metal buildings industry market share decreased from 8.9% in 1989 to 8.4% in 1990 before increasing to 8.6% in 1991. In March 1991, the Company's debt and equity holders completed a financial restructuring (the "Restructuring"), effective December 31, 1990, pursuant to which the Company restructured its senior term and revolving credit loans and $21.5 million of subordinated debt from the 1986 LBO was converted into 1,644,174 shares of Common Stock, representing 77.5% of the Company's then outstanding Common Stock. In the Restructuring, the subordinated debt holders gained control of the Company's Board of Directors. The Restructuring was accounted for as a "quasi-reorganization," an elective accounting procedure that permits a company emerging from financial difficulty to restate its accounts and establish a fresh start in an accounting sense. The Restructuring permitted ABC to meet all of its debt service obligations, although ABC remained highly leveraged. Despite the Company's continued capital constraints during 1992, the Company's revenues grew from $117.7 million in 1991 to $134.4 million in 1992, and the Company's metal buildings industry market share increased from 8.6% to 9.7%. In January 1993, ABC completed a recapitalization sponsored by Sterling Ventures Limited in conjunction with New Street Capital Corporation (the "Recapitalization"), which reduced interest expense, retired higher rate debt and provided the Company with greater operating flexibility to pursue its growth strategy and to invest in its businesses through its capital expenditures program. In May 1994, the Company completed an initial public offering of an aggregate of 1,825,000 shares of Common Stock at a purchase price of $10.00 per share in an underwritten public offering managed by Dean Witter Reynolds Inc. and Prudential Securities Inc. In addition, certain stockholders of the Company sold an aggregate of 1,016,757 shares of Common Stock in such offering. The net proceeds to the Company of the offering were used to repay long-term debt. The Company incurred an extraordinary loss of $2.4 million (net of applicable income tax benefit of $1.5 million) resulting from the write-off of the deferred financing costs and unamortized discount related to the early extinguishment of debt with the proceeds of the offering. In July 1995, certain stockholders of the Company sold an -18- aggregate of 1,466,250 shares of Common Stock at a price of $22.00 per share in an underwritten public offering managed by Dean Witter Reynolds Inc. and Wheat First Butcher Singer. Beginning in 1992, following the 1991 Restructuring and the appointment of Robert Ammerman as Chief Executive Officer and accelerating in 1993, 1994 and 1995 with the financial flexibility provided by the Recapitalization and the Company's initial public offering, the Company began to pursue several strategic initiatives to strengthen its core operations and to rebuild its metal buildings industry market share. These strategic initiatives initially included aggressive pricing of its products, but subsequently focused on enhancement of ABC's builder/dealer network. The Recapitalization and the initial public offering have enabled the Company to pursue a business strategy focused on increasing long-term profitability through enhancement of its strong builder/dealer network, technological innovations, cost efficiencies, internal investment and capacity expansion. As a result, the Company's metal buildings industry sales increased 14.8% in 1992, while metal buildings industry sales were flat, and the Company's metal buildings industry sales increased 24.8%, 23.9% and 40.3% in 1993, 1994 and 1995, respectively, while metal buildings industry sales increased 16.1%, 26.0% and 18.1%, respectively, as the U.S. economy emerged from the economic recession that began in 1989. The Company's metal buildings industry sales decreased 3.9% in 1996, while metal buildings industry sales were flat, and increased 11.3% in 1997, while industry sales increased 12.2%. Furthermore, ABC's domestic metal buildings industry market share (which is measured in terms of sales dollars shipped as opposed to sales orders received) increased from 8.6% in 1991 to 9.7% in 1992, and 10.4% in 1993, before decreasing to 10.2% in 1994. ABC's domestic metal buildings industry market share increased to 11.9% in 1995, but decreased to 11.6% in 1996 and to 11.5% in 1997. The decrease in market share in 1994 was primarily attributable to the high product demand which exceeded the Company's manufacturing and engineering capacity. The Company believes that the establishment of new engineering service centers as well as the completion of the Company's new Virginia facility in 1995, have alleviated these capacity constraints. The decrease in sales and market share in 1996 was primarily due to lower backlog at December 31, 1995 resulting from increased capacity in 1995 and lowering of sales prices in the first half of 1996 to stimulate new business. In addition, the unusually severe weather in the eastern half of the United States in early 1996 also adversely affected 1996 sales. The slight decrease in metal buildings market share in 1997 was primarily due to the Company's focus on improving margins and optimizing backlog. See "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations." -19- EXECUTIVE OFFICERS OF THE COMPANY The executive officers and key employees of the Company are as follows: Name Age Present Position with the Company - ---- --- --------------------------------- Robert T. Ammerman 58 Chief Executive Officer and Director R. Charles Blackmon, Jr. 48 Executive Vice President--Chief Financial Officer Byron L. Brumfield 54 Vice President--Human Resources William R. Buchholz 54 Vice President--Operations R. Howard Burns 57 President--Windsor Door Division Joseph M. Grigelevich, Jr. 55 President--American Modular Technologies Richard B. Haws 41 President--Residential/Light Commercial Division Barry L. Milling 54 Vice President--Technical Services William W. Riley 65 President of ABC Transportation Company Anne M. Savage 42 Controller Roy L. Smith 59 Vice President--Polymer Division Joel R. Voelkert 49 President--Construction Products Group Mr. Ammerman has been Chief Executive Officer and a director since joining the Company in July 1992, and served as President from July 1992 through August 1996. From 1973 until he joined the Company, Mr. Ammerman was employed by United Dominion Industries, Inc. and its affiliates, including Varco-Pruden Buildings, a manufacturer of metal buildings. Mr. Ammerman served in various capacities, including Vice-President/General Manager Eastern Division of Varco-Pruden Buildings and President of the Buildings segment of United Dominion Industries, Inc., which included Varco-Pruden Buildings, Stran Buildings and AEP/Span. Mr. Ammerman was Chairman and a member of the Executive Committee of the Metal Building Manufacturers Association in 1995. Mr. Blackmon has been Executive Vice President--Chief Financial Officer of the Company since August 1996. Mr. Blackmon served as Vice President--Chief Financial Officer of the Company from October 1994 to August 1996, as Vice President--Finance and Administration of the Company from May 1992 to October 1994, as Controller of the Company from 1982 to May 1992 and as Assistant Controller from 1981 to 1982. Mr. Blackmon is a CPA. -20- Mr. Brumfield joined the Company as Vice President--Human Resources in August 1995. From July 1984 until he joined the Company, Mr. Brumfield served in various human resources corporate positions with Hercules Inc., a major chemical company. Prior to that he was employed in the aerospace, aluminum and hardboard industries for 20 years. Mr. Buchholz has been Vice President--Operations of the Company since January 1991. Mr. Buchholz is responsible for all manufacturing operations and purchasing. From May 1979 to December 1990, Mr. Buchholz served the Company in various capacities, including Manager of Industrial Engineering and plant manager of the Company's former Houston facility. Mr. Burns has been President of the Windsor Door division of the Company since joining the Company in December 1997 in connection with the Company's acquisition of the Windsor Door Division of United Dominion Industries, Inc. Mr. Burns joined the predecessor of the Windsor Door division as President in 1986. Prior to joining Windsor Door, Mr. Burns served in various positions for Ceco Door Products Corporation, a division of The Ceco Corporation, including Vice President--Manufacturing. Mr. Grigelevich has been President of American Modular Technologies since joining the Company in November 1996 in connection with the Company's acquisition of the Liberty, North Carolina manufacturing operations of American Modular Technologies, L.L.C. ("AMT"). Prior to joining the Company, Mr Grigelevich served as a management consultant in 1995, and consulted for AMT. From 1976 to 1995, Mr. Grigelevich served in various positions with Bird Corporation, including Vice President--Finance & Administration from 1993 to 1995 and Treasurer from 1990 to 1993. Mr. Haws joined the Company as President--Residential/Light Commercial Division in December 1996. Prior to joining ABC, he was Manager-Light Construction of American Iron and Steel Institute from October 1990 to November 1996 and Senior Development Engineer for H.H. Robertson from March 1989 to September 1990. Mr. Milling has served as Vice President--Technical Services since joining the Company in October 1992, and is responsible for all functions of the Company's Engineering Department. Prior to joining ABC, Mr. Milling served as Vice President and General Manager of the Eastern Region of the Ceco-Building Division of Robertson-Ceco Corp. since November 1990, and prior thereto held various positions in operations, engineering, research and development, and customer service at Robertson-Ceco Corporation since 1969. Mr. Milling is a Registered Professional Engineer in a number of states. Mr. Riley has been President of ABC Transportation Company since November 1992, and served as Vice President/General Manager of ABC Transportation Company from September 1979 until his election as President. Ms. Savage has been Controller of the Company since January 1994. She joined the Company in April 1993 as Manager of Customer Financial Services. From May 1983 until she joined the Company, Ms. Savage was employed by United Dominion Industries, Inc. and held financial positions at its corporate office and two of its metal building industry operating divisions, Varco-Pruden Buildings and Stran Buildings. Prior to joining United Dominion Industries, Ms. Savage was an audit manager at Ernst & Young. Ms. Savage is a CPA. -21- Mr. Smith has been Vice President--Polymer Division since July 1986 and since January 1981 has also served as President of Polymer Coil Coaters and its predecessors. Prior to joining ABC, Mr. Smith was employed by United States Steel Corporation (now known as USX Corp.) for 15 years in various capacities including General Manager of Galvanizing Finishing. Mr. Voelkert has been President--Construction Products Group of the Company since August 1996. From April 1991 to August 1996 Mr. Voelkert served as Vice President--Sales and Marketing of the Company. Prior thereto, Mr. Voelkert served in various capacities with the Company since joining in 1976, including as General Sales Manager, General Manager of Marketing Services, Director of Marketing and District Sales Manager--Florida and the Caribbean. Mr. Voelkert was responsible for starting the roofing and architectural division in 1987. -22- ITEM 2. PROPERTIES Because of the significance of freight and delivery charges to the delivered cost of metal building systems, the Company believes it is advantageous to sell and deliver its products within a 500 mile radius of its manufacturing facilities. The following sets forth certain information with respect to each of the Company's operating facilities:
OWNED OR LOCATION/PURPOSE AREA LEASED ---------------- ---- -------- Eufaula, Alabama/Executive Office and 295,000 square feet Owned Manufacturing Facility.................................. 48.2 acres Atlanta, Georgia/Manufacturing Facility.................. 30,000 square feet Leased Birmingham, Alabama/Manufacturing 84,000 square feet Owned Facility................................................ 6.0 acres Birmingham, Alabama/Manufacturing Leased Facility................................................ 56,000 square feet Little Rock, Arkansas/Manufacturing 250,000 square feet Owned Facility................................................ 18.3 acres Maumelle, Arkansas/Manufacturing Leased Facility................................................ 181,000 square feet Olivehurst, California/Manufacturing 110,000 square feet Owned Facility................................................ 20 acres 182,000 square feet Owned El Paso, Illinois/Manufacturing Facility................. 10.3 acres Carson City, Nevada/Manufacturing 142,000 square feet Owned Facility................................................ 18.8 acres Liberty, North Carolina/Manufacturing 160,000 square feet Owned Facility................................................ 29.3 acres La Crosse, Virginia/Manufacturing 197,000 square feet Owned Facility................................................ 28 acres
The Company also leases 29 distribution centers for its Windsor Door Products and a 156,000 square foot facility in Jamestown, Ohio which is currently not being utilized in the Company's operations. This facility ceased operations in October 1990 as part of ABC's cost cutting efforts in response to cash constraints resulting from its 1986 leveraged buyout. See "Item 1. Business--Company History." All of the Company facilities are in good operating condition. -23- ITEM 3. LEGAL PROCEEDINGS The Company is involved in various legal proceedings that are incidental to the conduct of its business. The Company is not involved in any pending or threatened legal proceedings which the Company believes could reasonably be expected to have a material adverse effect on the Company's financial condition, liquidity or results of operations. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS Not Applicable. -24- PART II. ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS The Common Stock is quoted on the Nasdaq National Market under the symbol "ABCO". The Common Stock was initially offered to the public on April 28, 1994 at $10.00 per share. The following table sets forth for the periods indicated the high and low reported sale prices per share for the Common Stock as reported by the Nasdaq National Market. High Low ---- --- YEAR ENDED DECEMBER 31, 1996 ---------------------------- First Quarter .......................... $24.375 $19.125 Second Quarter ......................... $34.375 $22.00 Third Quarter .......................... $29.75 $20.75 Fourth Quarter ......................... $26.75 $19.75 High Low ---- --- YEAR ENDED DECEMBER 31, 1997 ---------------------------- First Quarter .......................... $29.00 $23.375 Second Quarter ......................... $29.50 $24.75 Third Quarter .......................... $30.125 $26.00 Fourth Quarter ......................... $30.75 $25.00 The number of stockholders of record of Common Stock on March 16, 1998 was approximately 95. On March 16, 1998, the last reported sale price of the Common Stock as reported by the Nasdaq National Market was $30.00. The Company has never paid cash dividends on the Common Stock. -25- ITEM 6. SELECTED FINANCIAL DATA
Year Ended December 31, --------------------------------------------------------------------- 1997 1996 1995 1994 1993 ---- ---- ---- ---- ---- (in thousands, except per share data) STATEMENT OF OPERATIONS DATA: Net sales .............................................. $323,387 $273,953 $ 281,450 $ 204,666 $ 166,805 -------- -------- --------- --------- --------- Cost and expenses: Cost of sales ........................................ 268,023 229,260 228,088 164,694 140,431 Selling, general and administrative .................. 28,528 24,311 26,567 21,830 18,282 -------- -------- --------- --------- --------- 296,551 253,571 254,655 186,524 158,713 -------- -------- --------- --------- --------- Operating income ....................................... 26,836 20,382 26,795 18,142 8,092 Interest expense (income) .............................. 1,061 143 (175) 1,369 3,362 -------- -------- --------- --------- --------- Income before provision for income taxes, extraordinary item and cumulative effect of change in accounting principle ................................. 25,775 20,239 26,970 16,773 4,730 Provision for income taxes(1) .......................... 9,924 7,792 9,380 6,318 1,921 -------- -------- --------- --------- --------- Income before extraordinary item and cumulative effect of change in accounting principle(1) .............................. 15,851 12,447 17,590 10,455 2,809 Extraordinary loss on early extinguishment of long-term debt(2) ................................. -- -- -- (2,425) (413) Cumulative effect of change in accounting for income taxes ..................................... -- -- -- -- 1,022 -------- -------- --------- --------- --------- Net income(1) .......................................... $ 15,851 $ 12,447 $ 17,590 $ 8,030 $ 3,418 ======== ======== ========= ========= ========= Earnings per share-Diluted(3): Income before extraordinary item and cumulative effect of change in accounting principle(1) ............................ $ 2.81 $ 2.06 $ 2.68 $ 1.81 $ 0.66 Extraordinary loss on early extinguishment of long-term debt(2) ................ -- -- -- (0.42) (0.10) Cumulative effect of change in accounting for income taxes ................................... -- -- -- -- 0.24 -------- -------- --------- --------- --------- Net income per common and common equivalent share(1)(3) ........................ $ 2.81 $ 2.06 $ 2.68 $ 1.39 $ 0.80 ======== ======== ========= ========= ========= Weighted average number of common and common equivalent shares outstanding(3) ....................................... 5,649 6,040 6,554 5,780 4,288 ======== ======== ========= ========= =========
-26-
As of December 31, ----------------------------------------------------------------- 1997 1996 1995 1994 1993 ---- ---- ---- ---- ---- (in thousands) BALANCE SHEET DATA: Working capital ...................................... $ 37,108 $ 13,710 $ 27,116 $18,182 $14,093 Total assets ......................................... 210,051 101,970 101,343 85,149 60,744 Current maturities of long-term debt(4) .............. 13,866 1,051 970 1,863 6,636 Long-term debt, net of current maturities(5) ...................................... 71,407 10,872 7,760 12,376 18,071 Stockholders' equity(6) .............................. 55,796 41,466 53,511 37,075 12,822
- ---------- (1) In 1995, the Company eliminated a valuation allowance on net operating loss carryforwards which resulted in a one-time reduction of its tax provision and corresponding increase in net income of $1,005,000, or $0.15 per share. (2) In 1994, the Company incurred an extraordinary loss of $2,425,000 (net of applicable tax benefit of $1,436,000), resulting from the write-off of the deferred financing costs and unamortized discount related to the early extinguishment of its remaining senior notes with the proceeds from the Company's initial public offering. In 1993, the Company extinguished $4,415,000 principal amount of senior notes prior to scheduled maturity, which resulted in an extraordinary loss of $413,000 (net of income tax benefit of $259,000). (3) The share and per share information for 1996, 1995, 1994 and 1993 has been restated to reflect share and per share information in accordance with Statement of Financial Accounting Standards No. 128, "Earnings per Share," which was required to be adopted by the Company effective with its financial statements for the year ended December 31, 1997. (4) Includes $10,624,000 used to cash collateralize letters of credit issued by its previous lenders until replacement letters of credit are issued. As replacement letters of credit are issued, the cash is being used to pay down the credit facility. (5) Net of unamortized discount of $3,875,000 on the Company's New Class A Notes and New Class B Notes at December 31, 1993, which notes were repaid from the net proceeds to the Company from the Company's initial public offering in 1994. (6) Includes a reduction of $28,451,000, $26,531,000 and $1,071,000 in 1997, 1996 and 1995, respectively, which represents the Company's purchases of Treasury Stock. -27- ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Statements in this Annual Report on Form 10-K concerning the Company's business outlook or future economic performance; anticipated profitability, revenues, expenses or other financial items; and product line growth, together with other statements that are not historical facts, are "forward-looking statements" as that term is defined under the Federal Securities Laws. Forward-looking statements are subject to risks, uncertainties and other factors which could cause actual results to differ materially from those stated in such statements. Such risks, uncertainties and factors include, but are not limited to, industry cyclicality, fluctuations in customer demand and order pattern, the seasonal nature of the business, changes in pricing or other actions by competitors, and general economic conditions, as well as other risks detailed in the Company's filings with the Securities and Exchange Commission, including this Annual Report on Form 10-K. RESULTS OF OPERATIONS 1997 COMPARED TO 1996 Net sales increased 18.0% to $323.4 million in 1997 from $274.0 million in 1996. Backlog at December 31, 1997 of $96.6 million was 17.7% higher than backlog at December 31, 1996. The Company's metal buildings industry domestic market share, which is measured in terms of sales dollars shipped by the Construction Products Group (consisting of the Company's Buildings Group and Roofing and Components Group), decreased slightly to 11.5% compared to 11.6% in 1996. Net sales in the Buildings Group (consisting of the Company's Metal Buildings, Heavy Fabrication, Self-Storage and International divisions) were $237.8 million, up 10.4% from $215.5 million in 1996. This increase was primarily the result of a higher backlog entering the year and good order intake at somewhat higher prices throughout the year as well as the absence of the severe weather conditions which adversely affected the first quarter of 1996. Net sales in the Roofing and Components Group (consisting of the Company's Roofing and Components divisions), increased 15.5% to $51.7 million from $44.8 million in 1996 due to continued increasing acceptance of metal in the roofing market, continued expansion of the preferred roofing contractor network and growth in the components business. Gross sales of the Polymer Group increased 18.8% to $21.8 million from $18.4 million in 1996. This increase was the result of the line speed upgrade completed in early 1997 which significantly increased the production capacity of this Group. Net sales after eliminations in the Polymer Group increased to 10.1% to $9.9 million from $9.0 million in 1996 as the capacity expansion allowed the Group to increase its production for third party customers. Gross sales before eliminations in the Transportation Group increased 12.6% to $23.1 million from $20.5 million in 1996. Net sales after eliminations increased 25.7% to $4.8 million from $3.8 million in 1996 due to increased revenues from hauling of third party loads. On November 26, 1996, the Company purchased certain assets of the North Carolina manufacturing facility of American Modular Technologies ("AMT"), which manufactures modular structures. Net sales of AMT in 1997 were $11.4 million compared to $1.0 million during the one-month period for which it was owned by the Company in 1996. AMT's increase in sales accounted for approximately 4% of the total 18% increase in net sales for the Company in 1997 compared to 1996. -28- On December 4, 1997 the Company completed the acquisition of certain net assets of Windsor Door, which manufactures and markets steel sectional upward acting doors for residential and commercial applications, rolling steel doors for industrial applications and has a metal stampings manufacturing business. The acquisition of Windsor Door contributed $7.8 million to net sales for the one-month period following the acquisition, which accounts for approximately 3% of the total 18% increase in sales in 1997 compared to 1996. Gross profit for 1997 increased 23.9% to $55.4 million from $44.7 million in 1996. Gross margins increased 4.9% to 17.1% in 1997 compared to 16.3% in 1996. This increase was primarily caused by higher volume and somewhat higher selling prices as well as effective cost containment. Gross margins in 1996 had been adversely affected by lower selling prices during part of the year resulting from the Company's strategy to be market and price aggressive in order to build backlog and better utilize expanded production capabilities. Selling, general and administrative expenses for 1997 increased 17.3% to $28.5 million from $24.3 million in 1996. As a percentage of net sales, these expenses decreased slightly to 8.8% in 1997 from 8.9% in 1996. The decrease resulted from the Company's cost containment strategy to reduce costs as much as possible without adversely affecting long-term growth objectives. The Company had net interest expense of $1.1 million in 1997 compared to $.1 million in 1996. The increase in interest expense resulted partially from the Company's purchase of Windsor Door for $58.0 million in December 1997. The transaction was financed by borrowings under its new credit facility which it entered into concurrent with the acquisition. Prior to December, interest expense was higher in 1997 due to higher Revolver borrowings during the year and a lower restricted cash balance on which the Company earned interest income. Net income for 1997 was $15.9 million, an increase of 27.3% compared to $12.4 million in 1996. 1996 COMPARED TO 1995 Net sales decreased 2.7% to $274.0 million in 1996 from $281.5 million in 1995. Backlog at December 31, 1996 was 41.9% higher than backlog at December 31, 1995. The Company's metal buildings industry domestic market share, which is measured in terms of sales dollars shipped by the Construction Products Group (consisting of the Company's Buildings Group and Roofing and Components Group), decreased slightly to 11.6% compared to 11.9% in 1995. Net sales in the Buildings Group (consisting of the Company's Metal Buildings, Heavy Fabrication, Mini-Warehouse (now Self Storage) and International divisions) were $215.5 million, down 4.7% from $226.1 million in 1995. This decrease was primarily the result of lower volume in the first quarter of 1996, which was caused by a combination of a low backlog coming into the year plus the effect of the severe weather conditions across most U.S. markets, which caused customers to delay shipment of their orders as construction sites were not yet prepared. Also contributing to the decrease in net sales was lower per unit selling prices as a result of the pass-through of cost decreases from suppliers, compounded further by the aggressive pricing strategy implemented during the first half of 1996 to rebuild backlog. Net sales in the Roofing and Components Group (consisting of the Company's Roofing and Components divisions), increased 6.8% to $44.8 million from $41.9 million in 1995 due to continued increasing acceptance of metal in the roofing market and continued expansion of the -29- preferred roofing contractor network. Gross sales of the Polymer Group increased .7% to $18.4 million from $18.3 million in 1995. This Group has operated essentially at capacity for the last two years; consequently, a capital project was begun in late 1996 and completed in January 1997 which increased the capacity of this Group by approximately 40%. Net sales after eliminations in the Polymer Group decreased 14.0% to $9.0 million from $10.4 million in 1995 as proportionately more of the Group's resources were directed toward production for other divisions of the Company as opposed to third parties. Gross sales before eliminations in the Transportation Group increased 6.3% to $20.5 million from $19.3 million in 1995. Net sales after eliminations increased 27.6% to $3.8 million from $3.0 million in 1995 due to increased revenues from hauling of third party loads. Gross profit for 1996 decreased 16.3% to $44.7 million from $53.4 million in 1995. Gross margins decreased 14.0% to 16.3% in 1996 compared to 19.0% in 1995. This decrease was primarily caused by lower volume plus lower selling prices which were the result of the Company's strategy through the first half of 1996 to be market and price aggressive in order to build backlog and better utilize expanded production capabilities. Selling, general and administrative expenses for 1996 decreased 8.5% to $24.3 million from $26.6 million in 1995. As a percentage of net sales, these expenses decreased to 8.9% in 1996 from 9.4% in 1995. The decrease resulted from the Company's strategy to mitigate the impact of reduced volume and selling prices by reducing costs wherever possible without adversely affecting its long-term growth objectives. The Company had net interest expense of $.1 million in 1996 compared to net interest income in 1995 of $.2 million. The increase in interest expense resulted primarily from the Company's repurchase of its common stock and, to a much lesser degree, the purchase of certain assets of AMT's Liberty, North Carolina manufacturing operations which has caused it to incur borrowings under its credit facility. Additionally, the Company was earning less interest income on the unused proceeds from its Industrial Revenue Bond transaction which is included on the accompanying Consolidated Balance Sheets in Other Assets, as most of these proceeds have been invested in the Virginia manufacturing facility. Net income for 1996 was $12.4 million, which is comparable to $16.6 million in 1995, which was net income before the $1.0 million one-time tax provision credit for the reversal of a valuation allowance on net operating loss carryforwards. Including this one-time credit, net income in 1995 was $17.6 million. -30- The following table presents the Company's gross sales attributable to each of its operating divisions for the periods indicated:
Year Ended December 31, ---------------------------------------------------------------------------------- 1997 1996 1995 1994 1993 ---- ---- ---- ---- ---- (In thousands) Buildings Group .......................... $ 237,818 $ 215,456 $ 226,119 $ 157,661 $ 128,569 Roofing and Components Group ................................... 51,737 44,790 41,943 33,313 25,608 Transportation Group(1) .................. 23,120 20,535 19,314 16,272 13,430 Polymer Group(2) ......................... 21,829 18,379 18,251 17,368 16,398 American Modular Technologies(3) ......................... 11,420 962 -- -- -- Windsor Door(4) .......................... 7,783 -- -- -- -- --------- --------- --------- --------- --------- Gross Sales .............................. 353,707 300,122 305,627 224,614 184,005 Eliminations ............................. (30,320) (26,169) (24,177) (19,948) (17,200) --------- --------- --------- --------- --------- Net sales ................................ $ 323,387 $ 273,953 $ 281,450 $ 204,666 $ 166,805 ========= ========= ========= ========= =========
- ---------- (1) Includes intercompany sales of $18.4 million, $16.7 million, $16.3 million, $12.8 million and $10.9 million, respectively. (2) Includes intercompany sales of $12.0 million, $9.4 million, $7.8 million, $7.1 million and $6.3 million, respectively. (3) American Modular Technologies was purchased on November 26, 1996. Data for 1996 represents net sales for the one-month period following the acquisition. (4) Windsor Door was purchased on December 4, 1997. Data for 1997 represents net sales for the one-month period following the acquisition. LIQUIDITY AND CAPITAL RESOURCES The Company has historically funded its operations from cash flows from operations, bank borrowings and sales of its debt and equity securities. Net cash provided by operations was $14.9 million, $14.0 million and $24.2 million in 1997, 1996 and 1995, respectively. Net income plus depreciation and amortization was $21.1 million, $16.6 million and $20.9 million in the same periods, respectively. For 1997, cash provided by continuing operations was lower than net income plus depreciation and amortization due to an increased investment in working capital which was required to support the Company's higher sales volume throughout the year. For 1996, cash provided by continuing operations was lower than net income plus depreciation and amortization due to an increased investment in working capital which was required to support fourth quarter volume. For 1995, cash provided by operating activities exceeded net income plus depreciation and amortization primarily due to further improvement in working capital management which was partially offset by an increase in net noncurrent assets and liabilities. Net cash used in investing activities was $68.7 million, $9.6 million and $5.4 million in 1997, 1996 and 1995, respectively. For 1997, this was primarily the result of the acquisition of the Windsor Door division for $58.7 million, including transaction costs of $1.0 million and -31- excluding $.2 million of cash acquired. Also in 1997, the Company made additions to property, plant and equipment of $10.0 million, increased in investment in its China Joint Venture by $.5 million and applied the remaining $.5 million of Restricted Cash to capital expenditures related to the Virginia manufacturing facility. The Restricted Cash resulted from the proceeds of the Industrial Revenue Bond Financing, which was completed on December 7, 1994, for the construction of the new Virginia manufacturing facility. The Restricted Cash was drawn down as cash was expended and various phases of construction were completed on that facility. For 1996, this was primarily the result of additions to property, plant and equipment of $9.3 million, the purchase of certain assets of AMT for $2.0 million, and the investment in the China Joint Venture of $2.9 million partially offset by the application of $3.6 million of Restricted Cash to capital expenditures related to the Virginia manufacturing facility. For 1995, this was primarily the result of additions to property, plant and equipment of $10.3 million partially offset by the application of $5.5 million of Restricted Cash to capital expenditures related to the Virginia manufacturing facility. Net cash provided by (used for) financing activities was $70.3 million, ($21.5) million and ($6.7) million for 1997, 1996 and 1995, respectively. For 1997 this was largely the result of the incurrence of $59.9 million of debt primarily in connection with the acquisition of Windsor Door. Additionally, the Company drew down $13.2 million on its revolving credit facility, $10.6 million of which was used to collateralize letters of credit which had been issued by its previous lender until replacement letters of credit could be issued by its new lender. As the replacement letters of credit are issued, the revolving facility is being reduced accordingly. Other net proceeds from the revolving facility of $2.6 million were used to finance normal operating activities of the Company. Long term debt repayments of $1.3 million and purchases of treasury stock of $1.9 million were funded by cash provided by operating activities and by borrowings under the Company's revolving credit facility. For 1996, long-term debt repayments of $1.0 million and purchases of treasury stock of $25.5 million were funded by cash provided by operating activities and by borrowings under the Company's revolving credit facility. For 1995, long-term debt repayments, payment of stock registration costs and purchases of treasury stock were funded by cash provided by operating activities. The Company currently has budgeted an aggregate of $11.6 million for capital expenditures in 1998, consisting of $2.0 million for new technical and business systems, $.4 million to complete the Virginia manufacturing facility and $9.2 million primarily for machinery and equipment at its other existing facilities, including the Windsor Door facilities purchased in December 1997. The Company expects to be able to fund these expenditures from cash provided by operations and borrowings under its Credit Facility described below. There can be no assurance that budgeted capital expenditures will be made as planned or that additional capital expenditures will not be required. In December 1997, the Company purchased certain net assets of Windsor Door ("Windsor") for $59.0 million, including transaction costs of $1.0 million. Pursuant to the terms of the purchase agreement, the purchase price is subject to further adjustment once a final determination is made for the amount of working capital transferred as of the date of closing. The transaction was accounted for as a purchase and the cost of the acquisition was allocated to the assets and liabilities based on their estimated respective fair values. The total cost of the acquisition, which was financed by proceeds from the Company's Credit Facility, exceeded the fair value of net assets acquired by $29.7 million which was assigned to goodwill and is being amortized over forty years. -32- Concurrent with the purchase of Windsor in December 1997, the Company replaced its previous revolving credit facility with a revolving credit and term loan facility ("Credit Facility") with Canadian Imperial Bank of Commerce ("CIBC"), as administrative agent, and certain other lenders. The Credit Facility includes a $40 million term loan facility and a revolving credit facility ("Revolver") with maximum borrowings of $75 million, including a $30 million letter of credit sub-facility and a $5 million swingline sub-facility. On December 4, 1997, the full amount of the term loan was borrowed to finance part of the Windsor acquisition. The term loan requires semiannual principal payments commencing July 1998 of $2 million to $9 million, with a final payment due January 2003. Also on December 4, 1997 $19.0 million of the Revolver was borrowed to finance the balance of the Windsor acquisition and $10.6 million of the Revolver was borrowed to cash collateralize outstanding letters of credit which had been issued by the Company's prior lender until replacement letters of credit could be issued by CIBC. This $10.6 million of proceeds are carried as restricted cash on the accompanying Consolidated Balance Sheets. This amount of borrowing has been included in current portion of long-term debt as the Company intends to repay the Credit Facility as soon as the replacement letters of credit are issued and the underlying cash collateral is returned by the previous lender. The Credit Facility expires on January 3, 2003 and bears interest at a rate equal to, at the option of the Company, either (i) in the case of Eurodollar loans, the sum of the interest rate in the London interbank market for loans in an amount substantially equal to the amount of borrowing and for the period of borrowing selected by the Company plus a margin of between one-half percent and one and one-half percent (depending on the Company's consolidated leverage ratio (as defined in the credit agreement) and consolidated interest coverage ratio (as defined in the credit agreement)) or (ii) the higher of (a) CIBC's prime or base rate or (b) one-half percent plus the latest overnight federal funds rate. At December 31, 1997 the interest rate on Eurodollar borrowings under the Credit Facility of $76.7 million was 6.97% and the interest rate on $1.1 million of base rate borrowings was 8.5%. Interest is payable quarterly in the case of base rate loans and on maturity dates or every three months, whichever is shorter, in the case of Eurodollar loans. The Company is required to pay a fee of .25% per year for the unused portion of the Credit Facility and 1.125% per year on outstanding letters of credit. The Credit Facility is guaranteed by all of the Company's domestic subsidiaries and collateralized by substantially all of the Company's assets, and requires the Company to maintain certain financial ratio covenants beginning the first quarter of 1998. The Credit Facility limits the Company's ability to incur debt, to sell or dispose of assets, to create or incur liens, to make additional acquisitions, to pay dividends, to purchase or redeem the Company's stock and to merge or consolidate with any other entity, and provides the banks with the right to require the payment of all amounts outstanding under the Credit Facility, if a change in control of the Company occurs. In December 1994, the Company borrowed $9.7 million from the Industrial Development Authority of Mecklenburg County, Virginia (the "IDA") to finance the construction of the Company's new Virginia manufacturing facility. The IDA financed the loan through the issuance of industrial development revenue bonds ("IDA Bonds"). The loan bears interest at a variable rate equal to the rate necessary to allow the IDA bonds to be sold at 100% of the principal amount thereof; the Company has the option to change the interest rate to a fixed rate for a specified term (which may be the remaining term of the IDA Bonds). The IDA Bonds mature December 1, 2004, are subject to mandatory sinking fund redemption of $.97 million per year, and are subject to mandatory redemption under certain circumstances. The Company has secured its obligations in respect of the IDA Bonds through the issuance of a letter of credit, which reduces each year by the amount of principal payments. -33- At December 31, 1997, the Company's outstanding debt (including current portion) was $85.3 million, which includes $40 million of the term loan, $37.8 million of the Revolver and $6.8 million of IDA Bonds used to finance the Virginia manufacturing facility. On November 26, 1996, the Company acquired certain assets of the Liberty, North Carolina facility of American Modular Technologies ("AMT") for $2.0 million which approximated the fair value of the assets acquired. AMT produces modular structures used for convenience stores which are sold to major oil companies and its technology has also been used for correctional facilities, schools and warehouses. The Board of Directors authorized the Company to repurchase up to 1.3 million shares of its Common Stock to be purchased at any time in the open market, subject to market conditions. At December 31, 1997 and 1996 the Company had repurchased 1.1 million shares costing $28.5 million and 1.0 million shares costing $26.5 million, respectively. These shares are reflected as Treasury Stock on the accompanying Consolidated Balance Sheets and were purchased from a combination of cash provided by operations and borrowings under the Company's revolving credit facility. In August 1995, the Company entered into a joint venture with China Renaissance Industries, L.P. to pursue the manufacture of metal building systems in the People's Republic of China ("PRC") for sale throughout most of Southeast Asia. The Company has a 30% interest in the joint venture and exclusively licensed to the joint venture on a royalty-free basis the right to use certain elements of the Company's technology. The Company will receive a technology license fee of $1.5 million, of which it received $.75 million during 1995. The joint venture completed construction of its initial manufacturing facility in the PRC in October 1996. At December 31, 1997 and 1996 the Company had $4.4 million and $3.8 million, respectively, invested in the joint venture, which was funded by cash provided by operating activities, and may invest up to an additional $.1 million in 1998. The Company believes that the cash generated from operations and borrowings under the Credit Facility will be sufficient to meet its working capital and capital expenditure requirements, as well as the anticipated additional capital to be invested in its joint venture in China, through at least 1998. There can be no assurance that liquidity would not be impacted by a decline in general economic conditions and higher interest rates which would affect the Company's ability to obtain external financing. The Company carries insurance on its activities in scope and amounts which it believes are reasonable in light of the risks of the business. However, there can be no assurance that it will not incur a liability which is not covered or is in excess of coverage, which liability could have a material adverse effect on the Company. INFLATION The Company has from time to time in the past experienced increases in costs of sales and operating costs, including the costs of raw materials, supplies and labor due to inflation. The Company has generally been able to offset the effects of such inflation through periodic price increases. In recent years, the rate of domestic inflation has abated significantly. No assurance can be given, however, that the inflation rate will not increase in future years or that the Company will be able to increase prices to match increases in costs. -34- YEAR 2000 COMPLIANCE The Company is currently in the process of identifying, evaluating and implementing changes to computer programs necessary to address the year 2000 issue. This issue affects computer systems that have date sensitive programs that may not properly recognize the year 2000. Systems that do not properly recognize such information could generate erroneous data or cause a system to fail, resulting in business interruption. The Company does not believe the cost of converting all internal systems to be year 2000 compliant will be material to its financial condition or results of operations. Costs related to the year 2000 issue are being expensed as incurred. The year 2000 issue is expected to affect the systems of various entities with which the Company interacts, including the Company's builder/dealers, suppliers and vendors. There can be no assurance that the systems of other companies on which the Company's systems rely will be timely converted, or that a failure by another company's systems to be year 2000 compliant would not have a material adverse effect on the Company. FLUCTUATIONS OF QUARTERLY OPERATING RESULTS The Construction Products business is seasonal in nature in that shipments are normally lower in the first half of each year compared to the second half because of unfavorable weather conditions for construction, particularly in the northern portion of the United States, and normal business planning cycles affecting construction. This seasonality not only affects sales, but also profitability for the quarter. See Note 10 of Notes to Consolidated Financial Statements for selected unaudited quarterly financial data for the years ended December 31, 1997 and 1996. The quarterly data reflect, in the opinion of the Company, all adjustments (which include only normal recurring adjustments) necessary for a fair presentation of the results of operations for such periods. Results of any one or more quarters are not necessarily indicative of annual results or continuing trends. -35- ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA - -------------------------------------------------------------------------------- The following consolidated financial statements of American Buildings Company and Subsidiaries are filed as part of this report. AMERICAN BUILDINGS COMPANY AND SUBSIDIARIES Report of Independent Public Accountants Consolidated Balance Sheets as of December 31, 1997 and 1996 Consolidated Statements of Operations for the Years Ended December 31, 1997, 1996 and 1995 Consolidated Statements of Stockholders' Equity for the Years Ended December 31, 1997, 1996 and 1995 Consolidated Statements of Cash Flows for the Years Ended December 31, 1997, 1996 and 1995 Notes to Consolidated Financial Statements -36- REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To the Stockholders of American Buildings Company: We have audited the accompanying consolidated balance sheets of AMERICAN BUILDINGS COMPANY (a Delaware corporation) AND SUBSIDIARIES as of December 31, 1997 and 1996 and the related consolidated statements of operations, stockholders' equity, and cash flows for each of the three years in the period ended December 31, 1997. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of American Buildings Company and subsidiaries as of December 31, 1997 and 1996 and the results of their operations and their cash flows for each of the three years in the period ended December 31, 1997 in conformity with generally accepted accounting principles. ARTHUR ANDERSEN LLP Atlanta, Georgia February 10, 1998 37 AMERICAN BUILDINGS COMPANY AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 1997 AND 1996 (IN THOUSANDS, EXCEPT PER SHARE DATA) ASSETS
1997 1996 -------- -------- CURRENT ASSETS: Cash (including restricted cash of $10,624 in 1997) $ 16,560 $ 0 Accounts receivable, net of allowance for doubtful accounts of $4,375 and $3,345 in 1997 and 1996, respectively 61,574 36,332 Inventories 32,159 19,823 Deferred income taxes 4,059 3,333 Prepaid expenses 1,855 1,084 -------- -------- Total current assets 116,207 60,572 PROPERTY, PLANT, AND EQUIPMENT, NET 54,607 33,194 DEFERRED INCOME TAXES 892 1,313 GOODWILL, NET 29,669 0 OTHER ASSETS, NET 8,676 6,891 -------- -------- $210,051 $101,970 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Current maturities of long-term debt $ 13,866 $ 1,051 Accounts payable 44,958 32,306 Accrued liabilities 19,109 12,137 Accrued income taxes 1,166 1,368 -------- -------- Total current liabilities 79,099 46,862 -------- -------- LONG-TERM DEBT, NET OF CURRENT MATURITIES 71,407 10,872 -------- -------- OTHER NONCURRENT LIABILITIES 3,749 2,770 -------- -------- COMMITMENTS AND CONTINGENCIES (NOTE 8) STOCKHOLDERS' EQUITY: Preferred stock, $.01 par value; 4,000 shares authorized, no shares issued and outstanding at 1997 and 1996 0 0 Common stock, $.01 par value; 25,000 shares authorized, 6,339 and 6,312 shares issued at 1997 and 1996, respectively 63 63 Additional paid-in capital 31,448 31,049 Retained earnings 52,736 36,885 -------- -------- 84,247 67,997 Less treasury stock, at cost (1,069 and 1,001 shares in 1997 and 1996, respectively) (28,451) (26,531) -------- -------- Total stockholders' equity 55,796 41,466 -------- -------- $210,051 $101,970 ======== ========
The accompanying notes are an integral part of these consolidated statements. 38 AMERICAN BUILDINGS COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 1997, 1996, AND 1995 (IN THOUSANDS, EXCEPT PER SHARE DATA)
1997 1996 1995 -------- -------- -------- NET SALES $323,387 $273,953 $281,450 -------- -------- -------- COSTS AND EXPENSES: Cost of sales 268,023 229,260 228,088 Selling, general, and administrative 28,528 24,311 26,567 -------- -------- -------- 296,551 253,571 254,655 -------- -------- -------- OPERATING INCOME 26,836 20,382 26,795 INTEREST EXPENSE (INCOME), NET 1,061 143 (175) -------- -------- -------- INCOME BEFORE PROVISION FOR INCOME TAXES 25,775 20,239 26,970 PROVISION FOR INCOME TAXES 9,924 7,792 9,380 -------- -------- -------- NET INCOME $ 15,851 $ 12,447 $ 17,590 ======== ======== ======== EARNINGS PER SHARE: Basic $3.00 $2.18 $2.82 ======== ======== ======== Diluted $2.81 $2.06 $2.68 ======== ======== ======== WEIGHTED AVERAGE SHARES OUTSTANDING: Basic 5,291 5,699 6,231 ======== ======== ======== Diluted 5,649 6,040 6,554 ======== ======== ========
The accompanying notes are an integral part of these consolidated statements. 39 AMERICAN BUILDINGS COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY FOR THE YEARS ENDED DECEMBER 31, 1997, 1996, AND 1995 (IN THOUSANDS)
COMMON STOCK ADDITIONAL ----------------- PAID-IN RETAINED TREASURY SHARES AMOUNT CAPITAL EARNINGS STOCK TOTAL ------ ------ ---------- -------- -------- -------- BALANCE, DECEMBER 31, 1994 6,225 $62 $30,165 $ 6,848 $ 0 $37,075 Net income 0 0 0 17,590 0 17,590 Stock issued to employees 3 0 0 0 0 0 Exercise of stock options 9 0 124 0 0 124 Stock registration costs 0 0 (207) 0 0 (207) Purchase of 46 shares of treasury stock 0 0 0 0 (1,071) (1,071) ----- --- ------- ------- -------- ------- BALANCE, DECEMBER 31, 1995 6,237 $62 $30,082 $24,438 $ (1,071) $53,511 Net income 0 0 0 12,447 0 12,447 Exercise of stock options 75 1 967 0 0 968 Purchase of 955 shares of treasury stock 0 0 0 0 (25,460) (25,460) ----- --- ------- ------- -------- ------- BALANCE, DECEMBER 31, 1996 6,312 $63 $31,049 $36,885 $(26,531) $41,466 Net income 0 0 0 15,851 0 15,851 Exercise of stock options 27 0 399 0 0 399 Purchase of 68 shares of treasury stock 0 0 0 0 (1,920) (1,920) ----- --- ------- ------- -------- ------- BALANCE, DECEMBER 31, 1997 6,339 $63 $31,448 $52,736 $(28,451) $55,796 ===== === ======= ======= ======== =======
The accompanying notes are an integral part of these consolidated statements. 40 AMERICAN BUILDINGS COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 1997, 1996, AND 1995 (IN THOUSANDS)
1997 1996 1995 ------- ------- ------- CASH FLOWS FROM OPERATING ACTIVITIES: ------- ------- ------- Net income $15,851 $12,447 $17,590 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 5,219 4,128 3,353 Gain on sales of fixed assets (47) (64) (102) Changes in operating assets and liabilities, net of acquired businesses: Accounts receivable, net (8,317) (6,859) (984) Inventories (707) (4,119) 1,226 Accounts payable 1,431 8,549 (711) Accrued liabilities and income taxes 3,205 452 5,726 Other working capital changes (1,288) (616) (1,176) Other, net (415) 113 (695) ------- ------- ------- Total adjustments (919) 1,584 6,637 ------- ------- ------- Net cash provided by operating activities 14,932 14,031 24,227 ------- ------- ------- CASH FLOWS FROM INVESTING ACTIVITIES: Additions to property, plant, and equipment (9,955) (9,335) (10,316) Purchase of acquired businesses, net of cash acquired (58,734) (2,037) 0 Decrease in restricted cash 466 3,634 5,537 Investment in China Joint Venture (525) (2,940) (900) Proceeds from sales of fixed assets 47 94 237 Proceeds from sales of nonoperating property, net 0 952 0 ------- ------- ------- Net cash used in investing activities (68,701) (9,632) (5,442) ------- ------- ------- CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from issuance of common stock 399 968 124 Proceeds from issuance of debt, net 59,893 0 0 Long-term debt payments (1,264) (970) (5,509) Changes in revolving credit facility, net 13,221 3,963 0 Payment of stock registration costs 0 0 (207) Purchase of treasury stock (1,920) (25,460) (1,071) ------- ------- ------- Net cash provided by (used for) financing activities 70,329 (21,499) (6,663) ------- ------- ------- NET INCREASE (DECREASE) IN CASH 16,560 (17,100) 12,122 CASH, BEGINNING OF YEAR 0 17,100 4,978 ------- ------- ------- CASH, END OF YEAR $16,560 $ 0 $17,100 ======= ======== ======= SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: Cash paid for interest $ 968 $ 559 $ 808 ======= ======== ======= Cash paid for income taxes $10,328 $ 7,748 $10,562 ======= ======== =======
The accompanying notes are an integral part of these consolidated statements. 41 AMERICAN BUILDINGS COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 1997, 1996, AND 1995 (IN THOUSANDS, EXCEPT PER SHARE DATA) 1. ORGANIZATION AND BASIS OF PRESENTATION The accompanying consolidated financial statements include the accounts of American Buildings Company and its wholly owned subsidiaries (the "Company"), after elimination of all material intercompany items. The Company is a diversified manufacturer and marketer of construction products and services for nonresidential and residential applications. The Company designs, manufactures, and sells metal building systems for industrial, commercial, institutional, and other nonresidential markets. Metal building systems consist of structural framing and wall and roof panels. The Company's metal building systems are generally custom-designed to meet the specific needs of the end user and to allow for easy on-site assembly. The Company markets its metal building systems nationwide through authorized builder/dealers. The Company has a separate roofing products' sales, engineering, and customer service organization, which markets and sells the Company's roofing products to its builder/dealer network and to preferred roofing contractors. In addition, the Company paints steel coils, manufactures and markets building components and self-storage systems, and provides specialty engineering services for large, complex building structures. The Company markets and produces modular structures and residential steel framing systems and also operates an ICC-licensed trucking subsidiary. In December 1997, the Company completed the acquisition of Windsor Door (a division of United Dominion Industries, Inc.) ("Windsor"). Windsor manufactures and markets steel sectional upward acting doors for residential and commercial applications, which are sold nationwide through independent distributors and company-owned distribution centers. Windsor also produces rolling steel doors for industrial uses and has a metal stampings manufacturing operation. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES REVENUE RECOGNITION Revenue is recorded upon delivery of product to the customer. 42 EARNINGS PER SHARE In 1997, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards ("SFAS") No. 128, "Earnings Per Share," effective for fiscal years ending after December 15, 1997. The Company has adopted the new guidelines for the calculation and presentation of earnings per share, and all prior periods have been restated. Basic earnings per share are based on the weighted average number of shares outstanding. Diluted earnings per share are based on the weighted average number of shares outstanding and the dilutive effect of stock options outstanding (using the treasury stock method). For the years ending December 31, 1997, 1996, and 1995, outstanding options of 142, 0, and 100, respectively, have been excluded from diluted weighted average shares outstanding, as the exercise price exceeded the average stock price and, thus, their impact was antidilutive. CASH The Company considers all highly liquid investments with purchased maturities of three months or less to be cash equivalents. In December 1997, the Company canceled its previous credit facility and entered into a new credit facility. As of December 31, 1997, the Company's prior lender required the Company to deposit funds with it to support outstanding letters of credit of $10,624. The Company expects to withdraw the funds and pay down its revolving credit facility as the Company issues replacement letters of credit under its new credit facility. INVENTORIES Inventories are stated at the lower of cost or market. The last-in, first-out ("LIFO") method is used for determining the cost for approximately 62% and 95% of the Company's inventories at December 31, 1997 and 1996, respectively. The first-in, first-out method is used for determining the cost of all other inventories, including direct labor and overhead incurred in the manufacturing process. Market is defined as replacement cost for raw materials and net realizable value for work in process and finished goods. Inventories consist of the following: 1997 1996 ------- ------- Raw materials $20,511 $17,151 Work in process 5,126 2,862 Finished goods 7,239 357 ------- ------- 32,876 20,370 Allowance to state inventories at LIFO costs (717) (547) ------- ------- $32,159 $19,823 ======= ======= 43 PROPERTY, PLANT, AND EQUIPMENT Property, plant, and equipment are stated at cost. Depreciation is provided for using the straight-line method over the estimated useful lives of 20 to 40 years for buildings, approximately 7 to 15 years for machinery and equipment, and 3 to 15 years for all other items. Leasehold improvements are amortized over the shorter of the useful life of the asset or the term of the lease. Property, plant, and equipment, at cost, consist of the following: 1997 1996 ------- ------- Land $ 1,923 $ 938 Buildings and leasehold improvements 26,594 20,710 Machinery and equipment 69,500 50,232 ------- ------- 98,017 71,880 Less accumulated depreciation 43,410 38,686 ------- ------- $54,607 $33,194 GOODWILL Goodwill is amortized on a straight-line basis over the lesser of its estimated life or 40 years. Amortization expense was $78 in 1997. LONG-LIVED ASSETS The Company periodically reviews the values assigned to long-lived assets, such as property and equipment and goodwill, and reviews the amortization periods on an annual basis. Recoverability is measured based on the anticipated undiscounted cash flows from operations. Management believes that the long-lived assets in the accompanying balance sheets are appropriately valued. OTHER ASSETS The Company is the beneficiary of life insurance policies covering certain current and former management employees to fund the Company's obligations to such employees under a noncontributory retirement and death benefit plan (Note 7). The cash surrender value of these life insurance policies is $2,179 and $1,899 at December 31, 1997 and 1996, respectively, and is included in other assets in the accompanying balance sheets. In December 1994, the Company obtained proceeds of $9,637, net of closing costs of $63, related to the issuance of industrial revenue bonds (Note 4). The proceeds were restricted to purchases of property, equipment, and buildings for the Company's Virginia manufacturing facility. At December 31, 1997 and 1996, $0 and $466, respectively, of the proceeds were available for future purchases of property, equipment, and buildings and have been included in other assets in the accompanying balance sheets. 44 ACCRUED LIABILITIES The Company accrues estimated insurance claims for the self-insured portion of its workers' compensation, property, casualty and health insurance plans. At December 31, 1997 and 1996, insurance claim reserves of $5,592 and $4,711, respectively, were included in accrued liabilities. CONCENTRATIONS OF CREDIT RISK Concentrations of credit risk with respect to trade receivables are limited due to the wide variety of customers and markets for which the Company's services are provided, as well as their dispersion across many different geographic areas. As a result, as of December 31, 1997, the Company does not consider itself to have any significant concentrations of credit risk. USE OF ESTIMATES The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. RECLASSIFICATIONS Certain prior year amounts have been reclassified to conform with the current year presentation. 3. ACQUISITIONS On December 4, 1997, the Company completed the acquisition of certain net assets of Windsor for $57,950 in cash, including an estimated working capital adjustment. Pursuant to the terms of the purchase agreement, the purchase price is subject to further adjustment once a final determination is made for the amount of working capital transferred as of the date of close. The transaction was financed from proceeds from the Company's credit facility (Note 4) and was accounted for as a purchase. The cost of the acquisition has been allocated to assets and liabilities based on their estimated respective fair values. Total consideration of $58,950, including transaction expenses of $1,000, exceeded the fair value of net assets purchased by $29,747, which has been assigned to goodwill. The results of the operations of Windsor are included in the accompanying financial statements since the date of acquisition. The following unaudited pro forma information was prepared assuming that the transaction was consummated on January 1, 1996: 45 1997 1996 -------- -------- Revenue $412,004 $361,047 Net income 15,403 12,317 Earnings per share: Basic $2.91 $2.16 Diluted 2.73 2.04 This pro forma information is not necessarily indicative of the results of operations that would have been attained had the acquisition been consummated on January 1, 1996 or that may be attained in the future. During November 1996, the Company acquired certain assets of the Liberty, North Carolina, facility of American Modular Technologies ("AMT") for $2,037, which approximated the fair value of the assets acquired. The transaction was accounted for as a purchase. The financial statements include the operating results of AMT from the date of acquisition. AMT provides specialty modular building structures for the retail petroleum industry and for certain commercial applications. 4. LONG-TERM DEBT Long-term debt consists of the following: 1997 1996 ------- ------- Term loan $40,000 $ 0 Revolving credit facility 37,809 3,963 IDA of Mecklenburg County, Virginia; Industrial Revenue Bonds 6,790 7,760 Other 674 200 ------- ------- 85,273 11,923 Less current maturities 13,866 1,051 ------- ------- $71,407 $10,872 ======= ======= The annual maturities of long-term debt are as follows: 1998 $13,866 1999 5,248 2000 5,094 2001 7,970 2002 14,970 Thereafter 38,125 ------- $85,273 ======= Concurrent with the Windsor acquisition in December 1997, the Company canceled its previous revolving credit facility and entered into a comprehensive credit facility ("Credit 46 Facility") with a bank. The Credit Facility includes a $40,000 term loan and a revolving credit facility with maximum borrowings of $75,000. The term loan requires semiannual principal payments, commencing July 1998, of $2,000 to $9,000, with a final payment due January 2003. Interest is payable monthly at the Eurodollar rate plus 1% (6.97% at December 31, 1997). The revolving credit facility availability is based on borrowings outstanding as well as amounts outstanding under letters of credit. At December 31, 1997, borrowings outstanding on the revolving credit facility were $37,809, outstanding letters of credit were $2,398, and $34,793 was available under the revolving credit facility. As discussed in Note 2, the Company intends to pay down the revolving credit facility upon the withdrawal of restricted cash. Accordingly, $10,624 of the revolving credit facility is reflected in the current portion of long-term debt. The facility expires January 2003. Interest is payable at the Eurodollar rate plus 1% (6.97% at December 31, 1997) for $36,700 of the outstanding balance and 8.5% for the remaining $1,109 of the outstanding balance of the revolver. The Company is required to pay a fee of .25% per year for the unused portion of the facility and 1.125% per year on outstanding letters of credit. The Credit Facility is collateralized by substantially all of the Company's assets and requires the Company to maintain certain financial ratio covenants beginning the first quarter of fiscal year 1998. In December 1994, the Company closed a $9,700 industrial revenue bond transaction with the Industrial Development Authority ("IDA") of Mecklenburg County, Virginia, for the purpose of financing its new manufacturing facility located in Virginia. The bonds bear interest at a variable rate (4.12% at December 31, 1997). Additionally, the Company pays a .25% remarketing fee on the bond balance. The bonds mature on December 1, 2004 and are subject to a mandatory sinking fund redemption of $970 per year and to a mandatory redemption under certain circumstances. The Company has secured its obligation with respect to the IDA bonds through the issuance of a letter of credit. The carrying amount of the bonds is assumed to approximate fair value due to the bonds' variable rate structure. 5. STOCKHOLDERS' EQUITY STOCK OFFERING In July 1995, the Company completed a secondary public offering of its common stock that consisted of 1,275 shares (excluding the underwriters' overallotment option from a certain stockholder) of common stock which were sold by certain stockholders at a public offering price of $22 per share. The Company incurred offering expenses of $207 and did not receive any proceeds from the sale of the shares of common stock. Subsequently, a certain stockholder sold 191 shares to the underwriters to cover overallotments. PREFERRED STOCK In February 1994, the board of directors authorized 4,000 shares of preferred stock with $.01 par value. The board of directors has the authority to issue these preferred shares and 47 to fix dividends, voting and conversion rights, redemption provisions, liquidation preferences, and other rights and restrictions. TREASURY STOCK The board of directors has authorized the Company to repurchase up to 1,300 shares of its outstanding common stock, as deemed appropriate by management. At December 31, 1997 and 1996, repurchases of 1,069 and 1,001 shares, respectively, had been effected at prevailing market prices from time to time on the open market. These repurchased shares represent additions to treasury stock and are carried at cost in the accompanying balance sheets. STOCK OPTION PLANS In January 1993, the Company adopted the American Buildings Company Management Incentive Plan. The Company reserved 223 shares for issuance under the plan. Stock incentives granted pursuant to the plan may include (a) nonqualified stock options, (b) incentive stock options, or (c) restricted stock awards. All options were issued at an exercise price no less than fair value as of the date of grant. Cancellation of options granted under the plan are not available for future grants. In February 1994, the board of directors approved the 1994 Employee Stock Option Plan. The plan, as amended, provides for the issuance of incentive and nonqualified stock options to acquire up to 580 shares of common stock. Options become exercisable as determined at the date of grant by a committee of the board of directors. Options expire ten years after the date of grant unless an earlier expiration date is set at the time of grant. To date, the exercise prices of all issuances of options have been at fair market value at the date of grant. In addition, the Company has a stock option plan for nonemployee directors which authorizes options to purchase up to 160 shares of common stock. The option price for future grants is to be determined by the board of directors but shall not be less than the fair market value of the common shares on the date the stock option is granted. 48 Transactions under the Company's stock option plans during each of the three years ended December 31, 1997 are summarized as follows: WEIGHTED NUMBER AVERAGE OF PRICE SHARES PER SHARE ------ --------- Outstanding at December 31, 1994 617 $ 9.71 Granted 115 23.66 Exercised (9) 7.48 Canceled (1) 10.00 --- Outstanding at December 31, 1995 722 11.91 Granted 19 21.22 Exercised (75) 8.87 Canceled (14) 20.01 --- Outstanding at December 31, 1996 652 12.35 Granted 221 27.12 Exercised (27) 10.15 Canceled (2) 10.00 --- Outstanding at December 31, 1997 844 16.32 === Exercisable at December 31, 1997 501 11.53 === At December 31, 1997, options to purchase 42 shares were available for future grant under the above option plans. Additionally, the Company has granted 38 options subject to shareholder approval of an increase in the authorized shares under the plans. The following table sets forth the number of shares, weighted average exercise price, and remaining contractual lives by groups of similar price and grant date:
OPTIONS OUTSTANDING OPTIONS EXERCISABLE --------------------------------------- --------------------- WEIGHTED WEIGHTED WEIGHTED NUMBER AVERAGE AVERAGE NUMBER AVERAGE RANGE OF OF EXERCISE CONTRACTUAL OF EXERCISE EXERCISE PRICES SHARES PRICE LIFE SHARES PRICE --------------- ------ -------- ----------- ------ --------- $ 5.18--$ 6.89 186 $ 5.92 5.1 years 186 $ 5.92 $10.00--$16.38 321 $12.20 6.4 years 243 $12.19 $18.06--$28.25 337 $26.02 8.9 years 72 $23.97 --- --- $ 5.18--$28.25 844 $16.32 7.1 years 501 $11.53 === ===
The Company accounts for the stock purchase and stock option plans under Accounting Principles Board ("APB") Opinion No. 25, which requires compensation costs to be recognized only when the option price differs from the market price at the grant date. SFAS No. 123 allows a company to follow APB Opinion No. 25 with additional disclosure 49 that shows what the company's net income and earnings per share would have been using the compensation model under SFAS No. 123. The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model with the following weighted average assumptions used for grants: 1997 1996 1995 ------- ------- ------- Risk-free interest rate 5.98% 6.16% 6.16% Expected dividend yield 0.00% 0.00% 0.00% Expected lives 5 YEARS 5 years 5 years Expected volatility 35% 35% 35% The total values of the options granted during the year ended December 31, 1997, 1996, and 1995 were computed as approximately $2,407, $133, and $962, respectively, which would be amortized over the vesting period of the options. If the Company had accounted for these plans in accordance with SFAS No. 123, the Company's reported pro forma net income and pro forma net income per share for the years ended December 31, 1997, 1996, and 1995 would have been as follows: 1997 1996 1995 ------- ------- ------- Net income: As reported $15,851 $12,447 $17,590 Pro forma 15,529 12,285 17,540 Basic earnings per share: As reported $3.00 $2.18 $2.82 Pro forma 2.93 2.16 2.82 Diluted earnings per share: As reported 2.81 2.06 2.68 Pro forma 2.75 2.03 2.68 Because the SFAS No. 123 method of accounting has not been applied to options granted prior to January 1, 1995, the resulting pro forma compensation cost may not be representative of that to be expected in future years. 50 6. INCOME TAXES The provision for income taxes for each of the three years ended December 31, 1997 consists of the following: 1997 1996 1995 ------ ------ ------- Current: Federal $9,180 $7,197 $10,194 State 1,049 823 1,020 Deferred benefit (305) (228) (829) Change in valuation allowance 0 0 (1,005) ------ ------ ------- $9,924 $7,792 $ 9,380 ====== ====== ======= The provision for income taxes differs from the amounts resulting from multiplying the income before income taxes by the statutory federal income tax rate. The reasons for these differences are as follows: 1997 1996 1995 ---- ---- ---- Federal income tax provision at statutory rate 35.0% 35.0% 35.0% State income taxes, net of federal benefit 4.0 4.0 4.0 Other (0.5) (0.5) (0.5) Valuation allowance 0.0 0.0 (3.7) ---- ---- ---- 38.5% 38.5% 34.8% ==== ==== ==== The sources of the difference between the financial accounting and tax bases of the Company's assets and liabilities which give rise to the deferred tax assets and liabilities and the tax effects of each are as follows as of December 31, 1997 and 1996: 1997 1996 ------ ------ Deferred tax assets: Accrued liabilities $2,412 $1,706 Deferred compensation 1,209 1,138 Allowance for doubtful accounts 1,128 1,288 Reserves on nonoperating assets 422 417 Net operating loss carryforwards 257 497 Other 436 339 ------ ------ 5,864 5,385 ------ ------ Deferred tax liabilities: Property, plant, and equipment (881) (496) Other (32) (243) ------ ------ (913) (739) ------ ------ Net deferred tax asset $4,951 $4,646 ====== ====== 51 As of December 31, 1997, net operating losses of approximately $668 are available for carryforward through 2007. As of December 31, 1997, the Company has recorded a net deferred tax asset of $4,951. Realization is dependent on generating sufficient taxable income in future periods. Although realization is not assured, management believes it is more likely than not that the deferred tax asset will be realized. 7. EMPLOYEE BENEFIT PLANS SAVINGS PLAN The Company has a contributory 401(k) plan, the American Buildings Company Savings Plan, under which all full-time employees are eligible to participate. The Company matches at least $.25 per $1 of eligible employee contributions and can make an additional contribution at the discretion of the board of directors. The plan requires a minimum company contribution of 1% of eligible gross payroll annually. Company contributions to this plan were $1,913, $996, and $1,214 for 1997, 1996, and 1995, respectively. RETIREMENT PLAN The Company has a noncontributory retirement and death benefit plan which covers certain management employees. The plan provides a death benefit prior to obtaining retirement age, as defined by the plan, to be paid over a minimum ten-year period and a mutually exclusive retirement benefit, after obtaining the defined retirement age, to be paid over a ten-year period. Benefits under this plan do not vest until retirement, and the Company has the right to modify or terminate this plan at any time. The Company's liability for benefits under this plan was $3,141 and $2,955 as of December 31, 1997 and 1996, respectively. This liability is based on the estimated present value of the retirement obligation accrued over the estimated service period and is included in other noncurrent liabilities in the accompanying balance sheets. PENSION PLANS In connection with the Windsor acquisition (Note 3), the Company became the sponsor of three defined benefit plans covering hourly and salaried employees. Benefits are based on years of service and/or compensation. The Company's funding policy is to contribute annually an amount that can be deducted for federal income tax purposes and meets minimum funding standards, using an actuarial cost method and assumptions which are different from those used for financial reporting. Plan assets are invested primarily in equity and income securities. Net pension expense from the date of acquisition through December 31, 1997 was $29. 52 The following table sets forth the plans' funded status and amounts recognized as other noncurrent liabilities in the accompanying balance sheet at December 31, 1997:
PLAN ASSETS ABO EXCEED EXCEEDS ABO PLAN ASSETS ----------- ----------- Actuarial present value of benefit obligations: Vested benefit obligation $ 718 $ 880 Nonvested benefit obligation 157 220 ------ ------ Accumulated benefit obligation 875 1,100 Effect of future compensation levels 455 0 ------ ------ Projected benefit obligation for service rendered to date 1,330 1,100 Plan assets at fair value 965 670 ------ ------ Plan assets less than the projected benefit obligation/accrued liability at December 31, 1997 $ (365) $ (430) ====== ======
For the period presented, the discount rate used to determine the projected benefit obligation was 7%, the assumed growth in compensation is 5%, and the expected long-term rate of return on plan assets is 8.5%. The Company does not provide any other significant postretirement or postemployment benefits. 8. COMMITMENTS AND CONTINGENCIES RELATED-PARTY TRANSACTION The Company has an agreement with an entity controlled by two of the Company's directors to provide financial and management consulting services. The Company paid $275 in 1997, 1996, and 1995 for annual consulting services. In November 1997, the agreement was amended whereby the annual fee was increased to $375 and the term was extended until March 2002. In addition to the annual fee, the entity is to receive $488 related to services rendered in connection with the Windsor Door acquisition. This amount is included in accrued liabilities in the accompanying balance sheet as of December 31, 1997. INSURANCE The Company participates in self-insured workers' compensation, general liability, and health insurance plans. Reserves are estimated for both reported and unreported claims using industry loss development factors. Revisions to estimated reserves are recorded in the period in which they become known. Estimated self-insurance reserves as of December 31, 1997 and 1996 totaling $5,592 and $4,711, respectively, represent management's best estimate. In the opinion of the Company's management, any future adjustments to estimated reserves will not have a material impact on the financial statements. 53 LEASES The Company leases certain property, plant, and equipment under operating leases. Minimum future lease payments under operating leases with initial or remaining noncancelable lease terms in excess of one year are as follows: 1998 $ 2,829 1999 2,156 2000 1,589 2001 1,418 2002 1,418 Thereafter 5,310 ------- Total $14,720 ======= Total rent expense for all operating leases was $4,296, $3,811, and $3,249 in 1997, 1996, and 1995, respectively. EMPLOYMENT AGREEMENTS The Company has entered into employment agreements with six senior executives for terms expiring December 31, 2000. The agreements provide for severance, up to the longer of the remaining term of the agreement or one year, for termination of employment for any reason other than good cause. LITIGATION The Company is involved in various claims and lawsuits incidental to its business. In the opinion of management, the ultimate resolution of such claims and lawsuits will not have a material effect on the Company's financial position, liquidity, or results of operations. 9. JOINT VENTURE In August 1995, the Company entered into a joint venture with China Renaissance Industries, L.P. to pursue the manufacture and sale of metal building systems in the People's Republic of China ("PRC") and certain countries in Southeast Asia (the "Joint Venture"). The Company has a 30% interest in the Joint Venture and exclusively licensed to the Joint Venture on a royalty-free basis the right to use certain elements of the Company's technology. The Company will receive a technology license fee of $1,500, of which it received $750 during 1995. The Company's portion of the Joint Venture's cumulative loss is $587 as of December 31, 1997 and is offset by deferred revenue from the technology license fee received during 1995. The Joint Venture completed construction of its initial manufacturing facility in the PRC during October 1996. At December 31, 1997 and 1996, the Company had $4,365 and $3,840, respectively, invested in the Joint Venture and has been included in other assets at December 31, 1997 and 1996, respectively. 54 10. QUARTERLY FINANCIAL DATA (UNAUDITED) 1997 -------------------------------------------- FIRST SECOND THIRD FOURTH QUARTER QUARTER QUARTER QUARTER ------- ------- ------- ------- Net sales $57,604 $78,509 $84,888 $102,386 Operating income 2,690 7,350 7,950 8,846 Interest expense 225 266 131 439 Net income 1,515 4,357 4,809 5,170 Earnings per share: Basic $0.29 $0.82 $0.91 $0.98 Diluted 0.27 0.77 0.85 0.92 1996 ----------------------------------------- First Second Third Fourth Quarter Quarter Quarter Quarter ------- ------- ------- ------- Net sales $48,180 $66,302 $78,171 $81,300 Operating income 1,849 5,690 5,917 6,926 Interest (income) expense (175) 2 164 152 Net income 1,245 3,499 3,537 4,166 Earnings per share: Basic $0.20 $0.60 $0.65 $0.78 Diluted 0.19 0.56 0.61 0.74 55 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE - -------------------------------------------------------------------------------- Not applicable. PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT - -------------------------------------------------------------------------------- Directors The information set forth under the caption Proposal No. 1 - Election of Directors in the Company's definitive Proxy Statement to be used in connection with the 1998 Annual Meeting of Stockholders is incorporated herein by reference. Executive Officers See "Part I - Executive Officers of the Company." ITEM 11. EXECUTIVE COMPENSATION - -------------------------------------------------------------------------------- The information set forth under the caption "Executive Compensation" in the Company's definitive Proxy Statement to be used in connection with the 1998 Annual Meeting of Stockholders is incorporated herein by reference. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT - -------------------------------------------------------------------------------- The information set forth under the caption "Principal Stockholders" in the Company's definitive Proxy Statement to be used in connection with the 1998 Annual Meeting of Stockholders is incorporated herein by reference. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS - -------------------------------------------------------------------------------- The information set forth under the captions "Compensation Committee Interlocks and Insider Participation" and "Certain Transactions" in the Company's definitive Proxy Statement to be used in connection with the 1998 Annual Meeting of Stockholders is incorporated herein by reference. -56- PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K - -------------------------------------------------------------------------------- (a) DOCUMENT LIST 1. Financial Statements The financial statements of the Company filed herewith are set forth in Part II, Item 8 of this Report. 2. Financial Statement Schedules The following financial statement schedule and opinion thereon are filed as a part of this Report: Schedule II - Valuation and Qualifying Accounts All other schedules for which provision is made in the applicable accounting regulations of the Securities and Exchange Commission are not required under the related instructions or are inapplicable and therefore have been omitted. 3. Exhibits Required by Securities and Exchange Commission Regulation S-K (a) The following exhibits are filed as part of this report or are incorporated herein by reference (Exhibit Nos. 10.1, 10.3, 10.17, 10.18, 10.19, 10.20, 10.21, 10.22, 10.29, 10.30, 10.31, 10.32, 10.33 and 10.34 are management contracts, compensatory plans or arrangements): Exhibit No. Description - ----------- ----------- 2.1 Agreement of Purchase and Sale of Assets, dated as of October 24, 1997, by and between Windsor Door, Inc., as Purchaser, and United Dominion Industries, Inc. and WCGD, Inc., as Seller.(1) 2.2 Amendment to Agreement of Purchase and Sale of Assets, dated November 19, 1997, between Windsor Door, Inc. and United Dominion Industries, Inc. and WCGD, Inc.(2) 3.1 Restated Certificate of Incorporation, as amended.(3) 3.2 Amended and Restated By-laws.(3) 4. Form of Common Stock Certificate.(3) 10.1 Stock Option Agreement, dated November 9, 1992, between Robert T. Ammerman and the Company, as amended.(3) -57- 10.2 Amended and Restated Registration Rights Agreement, dated as of January 19, 1993, among the Company and certain of the Company's stockholders.(3) 10.3 Amended and Restated Management Agreement, dated as of November 25, 1997, between the Company and Sterling Ventures Limited. 10.4 Loan and Security Agreement, dated as of January 19, 1993, among the Company, as Borrower, StanChart Business Credit, Inc. and Continental Bank N.A., as Lenders, and StanChart Business Credit, Inc., as Agent for the Lenders.(3) 10.5 Amendment No. 1 to Loan and Security Agreement dated as of May 6, 1994, among the Company, LaSalle Business Credit, Inc. (successor-in-interest to StanChart Business Credit, Inc.), Continental Bank, N.A. and LaSalle Business Credit, Inc., as Agent for the Lenders.(4) 10.6 Amendment No. 2 to Loan and Security Agreement dated as of December 6, 1994, among LaSalle Business Credit, Inc. (successor-in-interest to StanChart Business Credit, Inc.), Bank of America Illinois (successor-in-interest to Continental Bank, N.A.) and LaSalle Business Credit Inc., as Agent for the Lenders.(5) 10.7 Net True Lease Agreement, dated September 22, 1986, between ABC Transportation Company and PACCAR Leasing Corporation and related Schedules.(3) 10.8 Master Maintenance Agreement between ABC Transportation Company and Eufaula Trucking Company.(3) 10.9 Term Lease Master Agreement, dated June 11, 1984, between American Buildings Company and IBM Credit Corporation and related Lease Supplements and Schedules.(3) 10.10 Commercial Building Lease, dated February 1, 1992, between USX Corporation and Polymer Coil Coaters, Inc. relating to Fairfield, Alabama leased real property.(3) 10.11 Commercial Building Lease, dated April 1, 1992, between USX Corporation and Polymer Coil Coaters, Inc., relating to Fairfield, Alabama leased real property.(3) 10.12 Commercial Building Lease, dated April 17, 1985, between USX Corporation and Polymer Coil Coaters, Inc., relating to Fairfield, Alabama leased property.(3) 10.13 Form of Spectrum Software License Agreement.(3) 10.14 Form of Builder Agreement.(3) 10.15 Form of Roofing Contractor Agreement.(3) 10.16 Form of Indemnity Agreement.(3) 10.17 1994 Stock Option Plan, as amended. -58- 10.18 Form of Stock Option Agreement under 1994 Stock Option Plan.(3) 10.19 Stock Option Plan for Non-Employee Directors.(4) 10.20 Incentive Bonus Plan.(3) 10.21 Management Security Plan.(3) 10.22 Form of Non-Plan Stock Option Agreement.(3) 10.23 Industrial Development Authority of Mecklenburg County, Virginia Purchase Contract dated November 22, 1994, with the Company and Merchant Capital Corporation.(4) 10.24 Loan Agreement between Industrial Development Authority of Mecklenburg County, Virginia and the Company dated December 1, 1994.(4) 10.25 Form of Note (included in Loan Agreement).(4) 10.26 Remarketing Agreement dated as of December 1, 1994, among the Company, Merchant Capital Corporation, NationsBank of Virginia, N.A. and the Industrial Development Authority of Mecklenburg County, Virginia.(4) 10.27 Indenture of Trust between Industrial Development Authority of Mecklenburg County, Virginia and NationsBank of Virginia, N.A., as Trustee.(4) 10.28 Pledge Agreement, dated as of December 1, 1994, between the Company and LaSalle National Bank.(4) 10.29 Employment Agreement, dated as of January 1, 1998, between the Company and Robert T. Ammerman. 10.30 Employment Agreement, dated as of January 1, 1998, between the Company and Joel R. Voelkert. 10.31 Employment Agreement, dated as of January 1, 1998, between the Company and Roy L. Smith. 10.32 Employment Agreement, dated as of January 1, 1998, between the Company and Barry L. Milling. 10.33 Employment Agreement, dated as of January 1, 1998, between the Company and William R. Buchholz. 10.34 Employment Agreement as of January 1, 1998, between the Company and R. Charles Blackmon. 10.35 Amendment No. 3 to Loan and Security Agreement, dated May 10, 1995, between the Company and LaSalle Business Credit, Inc.(5) 10.36 Second Amended and Restated Loan Note, dated May 10, 1995, in principal amount of $35 million.(5) -59- 10.37 Mortgage Modification Agreement, dated May 10, 1995, between the Company and LaSalle Business Credit, Inc.(5) 10.38 Limited Partnership Agreement of American Buildings Company Asia, L.P., dated August 15, 1995.(6) 10.39 Technology License Agreement between American Buildings Company Asia, L.P. and American Buildings Company International, Inc., dated August 15, 1995.(7) 10.40 Credit Agreement, dated as of December 4, 1997, among American Buildings Company, as Borrower, the several lenders from time to time party hereto, and Canadian Imperial Bank of Commerce, as Administrative Agent.(1) 10.41 First Amendment, dated as of December 15, 1997, to the Credit Agreement, dated as of December 4, 1997, among American Buildings Company, as Borrower, the several lenders from time to time party hereto, and Canadian Imperial Bank of Commerce, as Administrative Agent.(1) 10.42 Guarantee and Collateral Agreement, dated as of December 4, 1997, made by American Buildings Company and certain of its subsidiaries in favor of Canadian Imperial Bank of Commerce, as Administrative Agent.(1) 10.43 Mortgage from American Buildings Company, Mortgagor, to Canadian Imperial Bank of Commerce, Mortgagee (Eufaula, Alabama).(1) 10.44 Mortgage from American Buildings Company, Mortgagor, to Canadian Imperial Bank of Commerce, Mortgagee (Fairfield, Alabama).(1) 10.45 Mortgage from American Buildings Company, Mortgagor, to Canadian Imperial Bank of Commerce, Mortgagee (El Paso, Illinois).(1) 10.46 Mortgage from American Buildings Company, Mortgagor, to Canadian Imperial Bank of Commerce, Mortgagee (Carson City, Nevada).(1) 10.47 Mortgage from American Buildings Company, Mortgagor, to Canadian Imperial Bank of Commerce, Mortgagee (La Crosse, Virginia).(1) 10.48 Mortgage from AMT/Beaman Corporation, Mortgagor, to Canadian Imperial Bank of Commerce, Mortgagee (Liberty, North Carolina).(1) 10.49 Mortgage from Windsor Door, Inc., Mortgagor, to Canadian Imperial Bank of Commerce, Mortgagee (Little Rock, Arkansas).(1) 10.50 Mortgage from Windsor Door, Inc., Mortgagor, to Canadian Imperial Bank of Commerce, Mortgagee (Oliverhurst, California).(1) 11 Computation of Earnings Per Share. 21 Subsidiaries of the Company. 23 Consent of Arthur Andersen LLP. -60- (b) Reports on Form 8-K. Current Report on Form 8-K, dated December 4, 1997, reporting the Company's acquisition of the Windsor Door Division of United Dominion Industries, Inc. and the Company's new credit facility. (c) Exhibits. See (a)(3) above. - ---------- (1) Incorporated by reference to Exhibits to the Quarterly Report on Form 10-Q for the quarter ended September 30, 1997. (2) Incorporated by reference to Exhibits to the Current Report on Form 8-K dated December 4, 1997. (3) Incorporated by reference to Exhibits to the Registration Statement on Form S-1 (Registration No. 33- 76054). (4) Incorporated by reference to Exhibits to the Annual Report on Form 10-K for the year ended December 31, 1994. (5) Incorporated by reference to Exhibits to the Registration Statement on Form S-3 (Registration No. 33- 94082). (6) Incorporated by reference to Exhibits to the Quarterly Report on Form 10-Q for the period ended September 30, 1995. -61- 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 its behalf by the undersigned, thereunto duly authorized. AMERICAN BUILDINGS COMPANY By: /s/ ROBERT T. AMMERMAN --------------------------------------- Robert T. Ammerman, President and Chief Executive Officer March 23, 1998 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 in the capacities and on the dates indicated. Signature Title Date --------- ----- ---- /s/ ROBERT T. AMMERMAN - ---------------------------- Robert T. Ammerman Chief Executive March 23, 1998 Officer and Director /s/ R. CHARLES BLACKMON, JR. - ---------------------------- R. Charles Blackmon, Jr. Executive Vice President - March 23, 1998 Chief Financial Officer (principal financial officer) /s/ ANNE M. SAVAGE - ---------------------------- Anne M. Savage Controller (principal March 23, 1998 accounting officer) /s/ WILLIAM L. SELDEN - ---------------------------- William L. Selden Chairman of the Board March 23, 1998 and Director /s/ HAROLD LEVY - ---------------------------- Harold Levy Director March 23, 1998 /s/ DOUGLAS L. NEWHOUSE - ---------------------------- Douglas L. Newhouse Director March 23, 1998 - ---------------------------- Ralph Saul Director March __, 1998 -62- /s/ ROBERT F. SHAPIRO - ---------------------------- Robert F. Shapiro Director March 23, 1998 /s/ KENDRICK R. WILSON, III - ---------------------------- Kendrick Wilson, III Director March 23, 1998 -63- ARTHUR ANDERSEN LLP REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To the Stockholders of American Buildings Company: We have audited, in accordance with generally accepted auditing standards, the consolidated balance sheets of AMERICAN BUILDINGS COMPANY AND SUBSIDIARIES as of December 31, 1997 and 1996 and the related consolidated statements of operations, stockholders' equity, and cash flows for each of the three years in the period ended December 31, 1997 and have issued our report thereon dated February 10, 1998. Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The schedule listed in Item 14(a)(2) hereof is the responsibility of management and is presented for the purpose of complying with the Securities and Exchange Commission's rules and is not a required part of the basic financial statements. This schedule has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, fairly states in all material respects, the financial data required to be set forth therein in relation to the basic financial statements taken as a whole. /s/ ARTHUR ANDERSEN LLP - -------------------------- ARTHUR ANDERSEN LLP Atlanta, Georgia February 10, 1998 SCHEDULE II AMERICAN BUILDINGS COMPANY AND SUBSIDIARIES VALUATION AND QUALIFYING ACCOUNTS FOR THE YEARS ENDED DECEMBER 31, 1997, 1996, AND 1995
Additions --------------------------------------- Charged (Credited) Balance at to Costs Charged Balance Beginning and to Other at End of Year Expenses Accounts Deduction(2) of Year --------------------------------------------------------------------------------------- YEAR ENDED DECEMBER 31, 1997: Allowance for doubtful accounts $3,345 $ (183) $1,405(1) $(192) $4,375 --------------------------------------------------------------------------------------- YEAR ENDED DECEMBER 31, 1996: Allowance for doubtful accounts $2,589 $1,067 $ 0 $(311) $3,345 --------------------------------------------------------------------------------------- YEAR ENDED DECEMBER 31, 1995: Allowance for doubtful accounts $1,768 $1,577 $ 0 $(756) $2,589 ---------------------------------------------------------------------------------------
- ---------- (1) Represents the allowance recorded in conjunction with acquired companies. (2) Charges to the allowance for purposes for which the allowance was created. -64- EX-10.3 2 AMENDED AND RESTATED MANAGEMENT AGREEMENT AMENDED AND RESTATED MANAGEMENT AGREEMENT Amended and Restated Management Agreement, dated as of November 25, 1997 (the "MANAGEMENT AGREEMENT"), between Sterling Ventures Limited, a Delaware corporation ("STERLING"), and American Buildings Company, a Delaware corporation (the "COMPANY"). PREAMBLE WHEREAS, the parties hereto are parties to a Management Agreement, dated as of January 19, 1993 and amended as of March 11, 1994 (the "ORIGINAL MANAGEMENT AGREEMENT"), pursuant to which STERLING is providing financial and management consulting services to the Company; WHEREAS, the Company is currently pursuing the acquisition of the Windsor Door division of United Dominion Industries, Inc. (the "WINDSOR DOOR ACQUISITION"); WHEREAS, the Company and STERLING desire to amend and restate the Original Management Agreement to extend the term thereof and, if the Windsor Door Acquisition is consummated, to increase the management fee in recognition of the increased size and complexity of the Company following such acquisition; and WHEREAS, the Company desires to compensate STERLING for its services provided and to be provided to the Company in connection with the Windsor Door Acquisition and the financing therefor if such acquisition is consummated. NOW, THEREFORE, in consideration of the foregoing premises and the respective agreements hereinafter set forth and the mutual benefits to be derived herefrom, STERLING and the Company hereby agree as follows: TERMS 1. Engagement. The Company hereby engages STERLING as a financial and management consultant, and STERLING hereby agrees to provide financial and management consulting services to the Company, all on the terms and subject to the conditions set forth below. 2. Services of STERLING. STERLING hereby agrees during the term of this engagement to consult with and assist the Company's Board of Directors (the "BOARD") and management of the Company in such manner and on such business and financial matters as may be reasonably requested from time to time by the Board or management of the Company, including but not limited to consulting with and assisting the Board and management in the following: (i) developing and implementing corporate strategy; (ii) budgeting future corporate investments; (iii) developing and implementing acquisition and divestiture strategies; (iv) subsequent debt and equity financings; (v) developing relationships with real estate developers and other prospective customers with whom Sterling and its partners and employees have relationships; and (vi) developing international joint ventures or licensing arrangements with prospective partners or licensees with whom Sterling and its partners and employees have relationships. In addition to the business and financial consulting services set forth above, officers and employees of STERLING will be available to serve on the Board, without additional compensation, and will devote such time and attention to the Company's affairs as STERLING determines reasonably necessary to accomplish the purposes of this Agreement. Notwithstanding the foregoing, nothing herein shall preclude the Company from compensating the non-employee directors for their services as directors of the Company to the same extent as non-employee directors were compensated prior to the date hereof. 3. Compensation. The Company agrees to pay to STERLING as compensation for services to be rendered by STERLING hereunder a fee equal to $275,000 per year through the date of closing of the Windsor Door Acquisition and thereafter a fee equal to $375,000 per year. The management fee shall be payable quarterly in four equal installments on each January 1, April 1, July 1 and October 1 of each year commencing April 1, 1998; provided, however, that in the event there exists any default by the Company in the payment of principal or interest on the Company's outstanding revolving credit or term bank loans, the management fee shall not be paid, but shall accrue, until such payment default is cured or waived, at which time the accrued but unpaid management fee shall be paid to STERLING. The Company shall reimburse STERLING for such reasonable travel expenses and other direct out-of-pocket expenses as may be incurred by STERLING and its employees in connection with the rendering of services hereunder. The Company will, within 30 days after receipt of expense reports, reimburse STERLING for such expenses. It is understood and agreed that nothing herein shall preclude STERLING from receiving such additional compensation for additional services rendered by it as may from time to time be mutually agreed by STERLING and the Company. The parties acknowledge that the Company paid to STERLING $68,750 as of November 15, 1997, representing that portion of the management fee due for the period November 15, 1997 through February 14, 1998 under the Original Management Agreement. On January 1, 1998, the Company shall pay to STERLING an amount equal to the sum of (i) the amount equal to the pro rata portion of the increase in the -2- management fee, if any, from the period beginning on the day of the closing of the Windsor Door Acquisition through February 14, 1998 and (ii) the amount equal to the pro rata portion of the management fee for the period from February 15, 1998 through March 31, 1998 ($46,875 in the event of closing of the Windsor Door Acquisition). The Company hereby agrees to pay STERLING as compensation for services rendered and to be rendered by STERLING in connection with the Windsor Door Acquisition and the financing therefor a transaction fee of $487,500 if and when the Windsor Door Acquisition is consummated. Such fee shall be paid on the later of January 1, 1998 or the closing of the Windsor Door Acquisition. 4. Term. This Agreement shall commence on the date hereof and shall continue in effect until the first to occur of (a) March 31, 2002 or (b) STERLING giving the Company 30 days' prior written notice of termination. No termination of this Agreement, whether pursuant to this paragraph or otherwise, shall affect the Company's obligations with respect to the fees, costs and expenses incurred by STERLING in rendering services hereunder and not reimbursed by the Company as of the effective date of such termination. 5. Indemnification. The Company agrees to indemnify and hold harmless STERLING and its employees against and from any and all loss, liability, suits, claims, costs, damages and expenses (including attorneys' fees) arising from their performance hereunder, except as a result of their negligence or intentional wrongdoing. 6. STERLING an Independent Contractor. STERLING and the Company agree that STERLING shall perform services hereunder as an independent contractor, retaining control over and responsibility for its own operations and personnel. Neither STERLING nor its employees shall be considered employees or agents of the Company nor shall any of them have authority to contract in the name of or bind the Company, except as expressly agreed to in writing by the Company. 7. Confidential Information. STERLING acknowledges that the information, observations and data obtained by it and its agents and employees during the course of its performance under this Agreement concerning the business plans and financial data of the Company (the "CONFIDENTIAL DATA") are the Company's valuable, special and unique assets. Therefore, it agrees that it will not, nor will it permit any of its agents or employees to, disclose to any unauthorized person any of the Confidential Data obtained by it during the course of STERLING's performance under this Agreement without the Company's prior written consent, unless and to the extent that (i) the Confidential Data becomes generally known to and available for use by the public otherwise than as a result of its acts or omissions to act or (ii) such disclosure is required by any statute, rule, regulation or law or any judicial or administrative body having jurisdiction. 8. Notice. Any notice, report or payment required or permitted to be given or made under this Agreement by one party to the other shall be deemed to have been -3- duly given or made when delivered, if personally delivered, when transmitted, if sent by confirmed facsimile transmission, or, if mailed, when mailed by registered or certified mail, return receipt requested, postage prepaid, to the party at the following addresses (or at such other address as shall be given in writing by one party to the other): IF TO STERLING: Sterling Ventures Limited 276 Post Road West Westport, Connecticut 06880 Attention: Chairman IF TO THE COMPANY: American Buildings Company 1150 State Docks Road Eufaula, Alabama 36027 Attention: President 9. Entire Agreement; Modification. This Agreement (a) contains the complete and entire understanding and agreement of the Company and STERLING with respect to the subject matter hereof; (b) supersedes all prior and contemporaneous understandings, conditions and agreements, oral or written, express or implied, respecting the engagement of STERLING in connection with the subject matter hereof, including without limitation the Original Management Agreement; and (c) may not be modified except by an instrument in writing executed by the Company and STERLING. 10. Waiver and Breach. The waiver by either party of a breach of any provision of this Agreement by the other party shall not operate or be construed as a waiver of any subsequent breach of that provision or any other provision hereof. 11. Assignment. Neither the Company nor STERLING may assign its rights or obligations under this Agreement without the express written consent of the other. 12. Governing Law. This Agreement shall be deemed to be a contract made under, and is to be governed and construed in accordance with, the laws of the State of Delaware, without application of the conflicts of laws principles thereof. -4- IN WITNESS WHEREOF, the Company and STERLING have caused this Agreement to be duly executed and delivered on the date and year first above written. AMERICAN BUILDINGS COMPANY By: /s/ R. CHARLES BLACKMON, JR. -------------------------------- Its: Executive Vice President STERLING VENTURES LIMITED By: Douglas L. Newhouse -------------------------------- Its: Chairman -5- EX-10.17 3 1994 STOCK OPTION PLAN AMERICAN BUILDINGS COMPANY 1994 STOCK OPTION PLAN 1. Purpose. The purpose of the American Buildings Company 1994 Stock Option Plan (the "Plan") is to enable American Buildings Company (the "Company") and its stockholders to secure the benefits of common stock ownership by employees of the Company and its subsidiaries. The Board of Directors of the Company (the "Board") believes that the granting of options under the Plan will foster the Company's ability to attract, retain and motivate those individuals who will be largely responsible for the profitability and long-term future growth of the Company. 2. Stock Subject to the Plan. The Company may issue and sell a total of 580,000 shares of its common stock, $.01 par value (the "Common Stock"), pursuant to the Plan. Such shares may be either authorized and unissued or held by the Company in its treasury. New options may be granted under the Plan with respect to shares of Common Stock which are covered by the unexercised portion of an option which has terminated or expired by its terms, by cancellation or otherwise. 3. Administration. The Plan will be administered by a committee (the "Committee") consisting of the Board or, at the option of the Board, at least two directors appointed by and serving at the pleasure of the Board. If the Board does not act as the Committee, the members of the Committee shall be "non-employee directors" within the meaning and for the purposes of Rule 16(b)-3 under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Subject to the provisions of the Plan, the Committee, acting in its sole and absolute discretion, will have full power and authority to grant options under the Plan, to interpret the provisions of the Plan, to fix and interpret the provisions of option agreements made under the Plan, to supervise the administration of the Plan, and to take such other action as may be necessary or desirable in order to carry out the provisions of the Plan. A majority of the members of the Committee will constitute a quorum. The Committee may act by the vote of a majority of its members present at a meeting at which there is a quorum or by unanimous written consent. The decision of the Committee as to any disputed question, including questions of construction, interpretation and administration, will be final and conclusive on all persons. The Committee will keep a record of its proceedings and acts and will keep or cause to be kept such books and records as may be necessary in connection with the proper administration of the Plan. 4. Eligibility. Options may be granted under the Plan to present or future officers and employees of the Company or a subsidiary of the Company (a "Subsidiary") within the meaning of Section 424(f) of the Internal Revenue Code of 1986 (the "Code"), and to consultants to the Company or a Subsidiary who are not employees. Options may not be granted to directors of the Company or a Subsidiary who are not also employees of or consultants to the Company and/or a Subsidiary. Subject to the provisions of the Plan, the Committee may from time to time select the persons to whom options will be granted, and will fix the number of shares covered by each such option and establish the terms and conditions thereof, including, without limitation, the -1- exercise price, restrictions on exercisability of the option and/or on the disposition of the shares of Common Stock issued upon exercise thereof and whether or not the option is to be treated as an incentive stock option within the meaning of Section 422 of the Code (an "Incentive Stock Option"). 5. Terms and Conditions of Options. Each option granted under the Plan will be evidenced by a written agreement in a form approved by the Committee. Each such option will be subject to the terms and conditions set forth in this paragraph and such additional terms and conditions not inconsistent with the Plan (and, in the case of an Incentive Stock Option, not inconsistent with the provisions of the Code applicable thereto) as the Committee deems appropriate. (a) Option Exercise Price. In the case of an option which is not treated as an Incentive Stock Option, the exercise price per share may not be less than the par value of a share of Common Stock on the date the option is granted; and, in the case of an Incentive Stock Option, the exercise price per share may not be less than 100% of the fair market value of a share of Common Stock on the date the option is granted (110% in the case of an optionee who, at the time the option is granted, owns stock possessing more than 10% of the total combined voting power of all classes of stock of the Company or a Subsidiary (a "ten percent shareholder")). For purposes hereof, the fair market value of a share of Common Stock on any date will be equal to the closing sale price per share as published by a national securities exchange on which shares of the Common Stock are traded on such date or, if there is no sale of Common Stock on such date, the average of the bid and asked prices on such exchange at the closing of trading on such date or, if shares of the Common Stock are not listed on a national securities exchange on such date, the closing price or, if none, the average of the bid and asked prices in the over the counter market at the close of trading on such date, or if the Common Stock is not traded on a national securities exchange or the over the counter market, the fair market value of a share of the Common Stock on such date as determined in good faith by the Committee. (b) Option Period. The period during which an option may be exercised will be fixed by the Committee and will not exceed 10 years from the date the option is granted (5 years in the case of an Incentive Stock Option granted to a "ten percent shareholder"). (c) Exercise of Options. (1) General. No option will become exercisable unless the person to whom the option was granted remains in the continuous employ or service of the Company or a Subsidiary for at least six months (or for such longer period as the Committee may designate) from the date the option is granted. The Committee may determine and set forth in the option agreement any additional vesting or other restrictions on the exercisability of an option, subject to earlier termination of the option as provided herein. All or part of the exercisable portion of an option may be exercised at any time during the option period. An option may be exercised by -2- transmitting to the Company (a) a written notice specifying the number of shares to be purchased, and (b) payment of the exercise price (or, if applicable, delivery of a secured obligation therefor), together with the amount, if any, deemed necessary by the Committee to enable the Company to satisfy its income tax withholding obligations with respect to such exercise (unless other arrangements acceptable to the Company are made with respect to the satisfaction of such withholding obligations). (2) Securities Laws Compliance Required. Notwithstanding anything in the Plan to the contrary, if the shares of Common Stock issuable upon exercise of options granted under the Plan have not been registered under the Securities Act of 1993, as amended, the Committee may condition the exercisability of options upon compliance with applicable federal and state securities laws. (d) Payment of Exercise Price. The purchase price of shares of Common Stock acquired pursuant to the exercise of an option granted under the Plan may be paid in cash and/or such other form of payment as may be permitted under the option agreement, including, without limitation, previously-owned shares of Common Stock. The Committee may permit the payment of all or a portion of the purchase price in installments (together with interest) over a period of not more than five years. (e) Rights as a Stockholder. No shares of Common Stock will be issued in respect of the exercise of an option granted under the Plan until full payment therefor has been made (and/or provided for where all or a portion of the purchase price is being paid in installments). The holder of an option will have no rights as a stockholder with respect to any shares covered by an option until the date a stock certificate for such shares is issued to him or her. Except as otherwise provided herein, no adjustments shall be made for dividends or distributions of other rights for which the record date is prior to the date such stock certificate is issued. (f) Nontransferability of Options. No option shall be assignable or transferrable except upon the optionee's death to a beneficiary designated by the optionee in accordance with procedures established by the Committee or, if no designated beneficiary shall survive the optionee, pursuant to the optionee's will or by the laws of descent and distribution. During an optionee's lifetime, options may be exercised only by the optionee or the optionee's guardian or legal representative. (g) Termination of Employment or Other Service. If an optionee ceases to be employed by or to perform services for the Company and any Subsidiary for any reason other than death or disability (defined below), then, unless extended by the Committee acting in its sole discretion, each outstanding option granted to him or her under the Plan will terminate on the date three months after the date of such termination of employment or service, or, if earlier, the date specified in the option agreement. If an optionee's employment or service is terminated by reason of the optionee's death or disability (or if the optionee's employment or service is terminated by reason of his or her disability and the optionee dies within one year after such -3- termination of employment or service), then, unless extended by the Committee, acting in its sole discretion each outstanding option granted to the optionee under the Plan will terminate on the date one year after the date of such termination of employment or service (or one year after the later death of a disabled optionee) or, if earlier, the date specified in the option agreement. For purposes hereof, the term "disability" means the inability of an optionee to perform the customary duties of his or her employment or other service for the Company or a Subsidiary by reason of a physical or mental incapacity which is expected to result in death or be of indefinite duration. (h) Incentive Stock Options. In the case of an Incentive Stock Option granted under the Plan, at the time the option is granted, the aggregate fair market value (determined at the time of grant) of the shares of Common Stock with respect to which Incentive Stock Options are exercisable for the first time by the optionee during any calendar year may not exceed $100,000. (i) Maximum Option Grant. The maximum option grant which may be made to an executive officer of the Company in any calendar year shall not cover more than 50,000 shares. (j) Other Provisions. The Committee may impose such other conditions with respect to the exercise of options, including, without limitation, any conditions relating to the application of federal or state securities laws, as it may deem necessary or advisable. 6. Change in Control; Capital Changes. (a) If any event constituting a "Change in Control of the Company" shall occur, all Options granted under the Plan which are outstanding at the time a Change of Control of the Company shall occur shall immediately become exercisable. A "Change in Control of the Company" shall be deemed to occur if (i) there shall be consummated (x) any consolidation or merger of the Company in which the Company is not the continuing or surviving corporation or pursuant to which shares of the Company's Common Stock would be converted into cash, securities or other property, other than a merger of the Company in which the holders of the Company's Common Stock immediately prior to the merger have the same proportionate ownership of common stock of the surviving corporation immediately after the merger, or (y) any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all, or substantially all, of the assets of the Company, or (ii) the stockholders of the Company shall approve any plan or proposal for liquidation or dissolution of the Company, or (iii) any person (as such term is used in Section 13(d) and 14(d)(2) of the Exchange Act), shall become the beneficial owner (within the meaning of Rule 13d-3 under the Exchange Act) of 40% or more of the Company's outstanding Common Stock other than pursuant to a plan or arrangement entered into by such person and the Company, or (iv) during any period of two consecutive years, individuals who at the beginning of such period constitute the entire Board of Directors shall cease for any reason to constitute a majority thereof unless the election, or the -4- nomination for election by the Company's stockholders, of each new director was approved by a vote of at least two-thirds of the directors then still in office who were directors at the beginning of the period. (b) In the event of any stock split, stock dividend or similar transaction which increases or decreases the number of outstanding shares of Common Stock, appropriate adjustment shall be made by the Board of Directors to the number and option exercise price per share of Common Stock which may be purchased under any outstanding Options. In the case of a merger, consolidation or similar transaction which results in a replacement of the Company's Common Stock and stock of another corporation but does not constitute Change in Control of the Company, the Company will make a reasonable effort, but shall not be required, to replace any outstanding Options granted under the Plan with comparable options to purchase the stock of such other corporation, or will provide for immediate maturity of all outstanding Options, with all Options not being exercised within the time period specified by the Board of Directors being terminated. (c) In the event of any adjustment in the number of shares covered by any option pursuant to the provisions hereof, any fractional shares resulting from such adjustment will be disregarded and each such option will cover only the number of full shares resulting from the adjustment. (d) All adjustments under this paragraph 6 shall be made by the Board, and its determination as to what adjustments shall be made, and the extent thereof, shall be final, binding and conclusive. 7. Amendment and Termination of the Plan. The Board may amend or terminate the Plan. Except as otherwise provided in the Plan with respect to equity changes, any amendment which would increase the aggregate number of shares of Common Stock as to which options may be granted under the Plan, materially increase the benefits under the Plan, or modify the class of persons eligible to receive options under the Plan shall be subject to the approval of the Company's stockholders. No amendment or termination may affect adversely any outstanding option without the written consent of the optionee. No Rights Conferred. Nothing contained herein will be deemed to give any individual any right to receive an option under the Plan or to be retained in the employ or service of the Company or any Subsidiary. 8. Governing Law. The Plan and each option agreement shall be governed by the laws of the State of Delaware. 9. Decisions and Determinations of Committee to be Final. Except to the extent rights or powers under this Plan are reserved specifically to the discretion of the Board, all decisions and determinations of the Committee are final and binding. -5- 10. Number of Shares of Common Stock; Reverse Stock Split Required. It is expressly understood and agreed that the number of shares of Common Stock set forth in paragraphs 2 and 5 of the Plan reflects and gives effect to the reverse stock split of the Company's Common Stock approved by the Company's Board on February 25, 1994 (the "Reverse Split"). Notwithstanding anything herein to the contrary, the options granted hereunder may not be exercised unless and until the amendment to the Company's Restated Certificate of Incorporation reflecting the Reverse Split has been filed with the Secretary of State of Delaware. 11. Term of the Plan. The Plan shall be effective as of February 25, 1994, the date on which it was adopted by the Board, subject to the approval of the stockholders of the Company within one year from the date of adoption by the Board. The Plan will terminate on the date ten years after the date of adoption by the Board, unless sooner terminated by the Board. The rights of optionees under options outstanding at the time of the termination of the Plan shall not be affected solely by reason of the termination and shall continue in accordance with the terms of the option (as then in effect or thereafter amended). -6- EX-10.29 4 EMPLOYMENT AGREEMENT EMPLOYMENT AGREEMENT AGREEMENT made as of January 1, 1998, between AMERICAN BUILDINGS COMPANY, a Delaware corporation with an office at 1150 State Docks Road, Eufaula, Alabama 36027 (the "Company"), and Robert T. Ammerman, residing at Apt. 8B, Oak Hill Apartments, Oak Hill Drive, Eufaula, Alabama 36027 (the "Executive"). W I T N E S S E T H : WHEREAS, the Company desires that Executive be employed to serve in a senior executive capacity with the Company, and Executive desires to be so employed by the Company, upon the terms and conditions herein set forth. NOW, THEREFORE, in consideration of the premises and of the mutual promises, representations and covenants herein contained, the parties hereto agree as follows: 1. EMPLOYMENT. The Company hereby employs Executive and Executive hereby accepts such employment, subject to the terms and conditions herein set forth. Executive shall hold the office of Chief Executive Officer of the Company reporting to the Board of Directors of the Company (the "Board of Directors"). The Company shall nominate Executive for election as a director of the Company for all periods when Executive holds the office of Chief Executive Officer of the Company. 2. TERM. The initial term of employment under this Agreement shall begin on the date hereof (the "Employment Date") and shall continue until December 31, 2000, subject to prior termination in accordance with the terms hereof. Thereafter, this Agreement shall automatically be renewed for successive one year terms unless either party shall give the other ninety (90) days prior written notice of its intent not to renew this Agreement. 3. COMPENSATION. As compensation for the employment services to be rendered by Executive hereunder, including all services as an officer or director of the Company and any of its subsidiaries, the Company agrees to pay, or cause to be paid, to Executive, and Executive agrees to accept, payable in equal installments in accordance with Company practice, an initial annual salary of $400,000. Executive's annual salary hereunder for the remaining years of employment shall be determined by the Board of Directors in its sole discretion; provided, however, that Executive's salary shall be increased each year, effective January 1 of such year, commencing January 1, 1999, by at least the percentage increase, if any, in the cost of living shown on the Consumer Price Index for all items in a Size D South Urban Area (published by the Bureau of Labor Statistics of the United States Department of Labor) between January, 1998 or the month in which the most recent salary increase occurred, as the case may be, and the last calendar month immediately preceding the date of such annual meeting of the Board of Directors of the Company. In addition, Executive shall be entitled to participate in the Company's SVA Management Incentive Plan (or replacement plan approved by the Compensation Committee of the Board of Directors) at a target bonus level equal to up to 100% of Executive's salary, as may be determined by the Board of Directors in its sole discretion. 4. EXPENSES. The Company shall pay or reimburse Executive, upon presentment of suitable vouchers, for all reasonable business and travel expenses which may be incurred or paid by Executive in connection with his employment hereunder. Executive shall comply with such restrictions and shall keep such records as the Company may deem necessary to meet the requirements of the Internal Revenue Code of 1986, as amended from time to time, and regulations promulgated thereunder. 5. OTHER BENEFITS. (a) Executive shall be entitled to four (4) weeks' vacation per year and to participate in and receive any other benefits customarily provided by the Company to its senior management personnel (including any profit sharing, pension, short and long-term disability insurance, hospital, major medical insurance and group life insurance plans in accordance with the terms of such plans) and including stock option and/or stock purchase plans, all as determined from time to time by the Board of Directors of the Company. (b) The Company shall, during the term of Executive's employment hereunder, pay the basic yearly membership fees actually incurred by Executive in connection with Executive's maintaining his current country club membership; provided, however, that such yearly membership fees shall not in any case exceed $2,500 per year. 6. DUTIES. (a) Executive shall perform such duties and functions as the Board of Directors of the Company shall from time to time determine and Executive shall comply in the performance of his duties with the policies of, and be subject to the direction of, the Board of Directors. Executive shall serve as a director of the Company without -2- further compensation. At the request of the Board of Directors, Executive shall serve as an executive officer and director of any subsidiary of the Company and, in the performance of such duties, Executive shall comply with the policies of the Board of Directors of each such subsidiary. (b) During the term of this Agreement, Executive shall devote substantially all of his time and attention, reasonable vacation time and absences for sickness excepted, to the business of the Company, as necessary to fulfill his duties. Executive shall perform the duties assigned to him with fidelity and to the best of his ability. Notwithstanding anything herein to the contrary, Executive may engage in other activities so long as such activities do not unreasonably interfere with Executive's performance of his duties hereunder and do not violate Section 9 hereof. (c) Nothing in this Section 6 or elsewhere in this Agreement shall be construed to prevent Executive from investing or trading in nonconflicting investments as he sees fit for his own account, including real estate, stocks, bonds, securities, commodities or other forms of investments. (d) The principal location at which the Executive shall perform his duties hereunder shall be at the Company's offices in Eufaula, Alabama or at such other location as may be designated from time to time by the Board of Directors of the Company; provided that if the principal location of Executive's duties is transferred from Eufaula, Alabama, the new principal location of Executive's duties shall not be transferred beyond a 25-mile radius of Eufaula, Alabama without Executive's consent. Notwithstanding the foregoing, Executive shall perform such services at such other locations as may be required for the proper performance of his duties hereunder, and Executive recognizes that such duties may involve significant travel. 7. TERMINATION OF EMPLOYMENT; EFFECT OF TERMINATION. (a) Executive's employment hereunder may be terminated at any time upon written notice from the Company to Executive: (i) upon the determination by the Board of Directors that Executive's performance of his duties has not been fully satisfactory for any reason which would not constitute justifiable cause (as hereinafter defined) upon thirty (30) days' prior written notice to Executive; or (ii) upon the determination by the Board of Directors that there is justifiable cause (as hereinafter defined) for such termination upon ten (10) days' prior written notice to Executive. (b) Executive's employment shall terminate upon: (i) the death of Executive; or -3- (ii) the "disability" of Executive (as hereinafter defined pursuant to subsection (c) herein) pursuant to subsection (f) hereof. (c) For the purposes of this Agreement, the term "disability" shall mean the inability of Executive, due to illness, accident or any other physical or mental incapacity, substantially to perform his duties for a period of three (3) consecutive months or for a total of six (6) months (whether or not consecutive) in any twelve (12) month period during the term of this Agreement, as reasonably determined by the Board of Directors of the Company after examination of Executive by an independent physician reasonably acceptable to Executive. (d) For the purposes hereof, the term "justifiable cause" shall mean and be limited to: any repeated wilful failure or refusal to perform any of his duties pursuant to this Agreement where such conduct shall not have ceased within 30 days following written warning from the Company; Executive's conviction (which, through lapse of time or otherwise, is not subject to appeal) of, pleading guilty to, or confession of any crime or offense involving money or other property of the Company or its subsidiaries or which constitutes a felony in the jurisdiction involved; Executive's performance of any act or his failure to act, for which if Executive were prosecuted and convicted, a crime or offense involving money or property of the Company or its subsidiaries, or which would constitute a felony in the jurisdiction involved, would have occurred; any unauthorized disclosure by Executive to any person, firm or corporation other than the Company, its subsidiaries and its and their directors, officers and employees, of any confidential information or trade secret of the Company or any of its subsidiaries; any attempt by Executive to secure any personal profit in connection with the business of the Company or any of its subsidiaries; Executive's engagement in a fraudulent act to the material damage or prejudice of Company or its subsidiaries or in conduct or activities materially damaging to the property, business or reputation of Company or its subsidiaries, all as determined by the Board of Directors in good faith; Executive's illegal use of controlled substances; any material act or omission by Executive involving malfeasance or negligence in the performance of Executive's duties to the material detriment of the Company or its subsidiaries, as determined by the Board of Directors in good faith, which has not been corrected by Executive within thirty (30) days after written notice from the Company of any such act or omission; the entry of an order of a court that remains in effect and is not discharged for a period of at least sixty (60) days, which enjoins or otherwise limits or restricts the performance by Executive under this Agreement, relating to any contract, agreement or commitment made by or applicable to Executive in favor of any former employer or any other person; or the engaging by Executive in any business other than the business of the Company and its subsidiaries which unreasonably interferes with the performance of his duties hereunder. Upon termination of Executive's employment for justifiable cause, this Agreement shall terminate immediately and Executive shall not be entitled to any amounts or benefits hereunder other than such portion of Executive's annual salary and reimbursement of expenses pursuant to Section 4 hereof as has been accrued through the date of his termination of employment. -4- (e) If Executive shall die during the term of his employment hereunder, this Agreement shall terminate immediately. In such event, the estate of Executive shall thereupon be entitled to receive such portion of Executive's annual salary and reimbursement of expenses pursuant to Section 4 as has been accrued through the date of his death. If Executive's death shall occur while he is on Company business, the estate of Executive shall be entitled to receive, in addition to the other amounts set forth in this subsection (e), an amount equal to one-half his then annual salary. (f) Upon Executive's "disability", the Company shall have the right to terminate Executive's employment. Notwithstanding any inability to perform his duties, Executive shall be entitled to receive his compensation (including bonus, if any) and reimbursement of expenses pursuant to Section 4 as provided herein until he begins to receive long-term disability insurance benefits under the policy provided by the Company pursuant to Section 5 hereof. Any termination pursuant to this subsection (f) shall be effective on the later of (i) the date 30 days after which Executive shall have received written notice of the Company's election to terminate or (ii) the date he begins to receive long-term disability insurance benefits under the policy provided by the Company pursuant to Section 5 hereof. (g) Notwithstanding any provision to the contrary contained herein, in the event that Executive's employment is terminated by the Company at any time for any reason other than justifiable cause, disability or death, the Company shall (i) pay Executive, for a period equal to the longer of (1) the remaining term of this Agreement or (2) two years (such period being hereinafter referred to as the "Severance Period"), a monthly payment equal to one-twelfth of his then annual salary, which amount shall be in lieu of any and all other payments due and owing to the Executive under the terms of this Agreement (other than any payments constituting reimbursement of expenses pursuant to Section 4 hereof), and (ii) continue to allow Executive to participate, at the Company's expense, in the Company's health insurance and disability insurance programs, to the extent permitted under such programs, during the Severance Period (collectively, the "Severance Payments"); provided, however, that if such termination occurs within one (1) year following the effective date of a Change in Control of the Company (as hereinafter defined), the Company shall pay to Executive, in lieu of the amounts set forth in clause (i) above, in one lump sum, a severance payment equal to (i) two years' annual salary plus (ii) an amount equal to twice Executive's most recently declared bonus, if any. (h) For purposes of this Agreement, a "Change in Control of the Company" shall be deemed to occur if (i) there shall be consummated (x) any consolidation or merger of the Company in which the Company is not the continuing or surviving corporation or pursuant to which shares of the Company's Common Stock would be converted into cash, securities or other property, other than a merger of the Company in which the holders of the Company's Common Stock immediately prior to the merger have the same proportionate ownership of common stock of the surviving corporation immediately after the merger, or (y) any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all, or substantially -5- all, of the assets of the Company, or (ii) the stockholders of the Company shall approve any plan or proposal for liquidation or dissolution of the Company, or (iii) any person (as such term is used in Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")) shall become the beneficial owner (within the meaning of Rule 13d-3 under the Exchange Act) of 40% or more of the Company's outstanding Common Stock other than pursuant to a plan or arrangement entered into by such person and the Company, or (iv) during any period of two consecutive years, individuals who at the beginning of such period constitute the entire Board of Directors of the Company shall cease for any reason to constitute a majority thereof unless the election, or the nomination for election by the Company's stockholders, of each new director was approved by a vote of at least two-thirds of the directors then still in office who were directors at the beginning of the period. (i) Notwithstanding any provision to the contrary contained herein, in the event the Company elects not to renew this Agreement (other than within one year following a Change in Control of the Company, which is covered in Section 7(g) above) the Company will pay Executive a severance payment equal to one year's annual salary. (j) Executive may terminate his employment at any time upon 30 days' prior written notice to the Company. Upon Executive's termination of his employment hereunder or his election not to renew this Agreement, this Agreement (other than Sections 4, 7, 9, 10, 11 and 12, which shall survive, if at all, in accordance with their terms) shall terminate; provided, however, that Section 9 shall not survive such termination unless the Company pays to Executive during the Severance Period the Severance Payments. In such event, Executive shall be entitled to receive such portion of Executive's annual salary and bonus, if any, as has been accrued to date. Executive shall be entitled to reimbursement of expenses pursuant to Section 4 hereof and to participate in the Company's benefit plans to the extent participation by former employees is required by law or permitted by such plans, with the expense of such participation to be as specified in such plans for former employees. (k) If, in connection with a change of ownership or control of the Company or a change in ownership of a substantial portion of the assets of the Company (all within the meaning of Section 280G(b)(2) of the Internal Revenue Code of 1986, as amended (the "Code")), an excise tax is payable by Executive under Section 4999 of the Code, then the Company will pay to the Executive additional compensation which will be sufficient to enable Executive to pay such excise tax as well as the income tax and excise tax on such additional compensation, such that, after the payment of income and excise taxes, Executive is in the same economic position in which he would have been if the provisions of Section 4999 of the Code had not been applicable. The additional compensation required by this Section 7(k) will be paid to Executive promptly after the date or dates on which the amount of such additional compensation is determinable, in whole or in part. -6- 8. REPRESENTATIONS AND AGREEMENTS OF EXECUTIVE. (a) Executive represents and warrants that he is free to enter into this Agreement and to perform the duties required hereunder, and that there are no employment contracts or understandings, restrictive covenants or other restrictions, whether written or oral, preventing the performance of his duties hereunder. (b) Executive agrees to submit to a medical examination and to cooperate and supply such other information and documents as may be required by any insurance company in connection with the Company's obtaining life insurance on the life of Executive, and any other type of insurance or fringe benefit as the Company shall determine from time to time to obtain. 9. NON-COMPETITION. (a) Executive agrees that during his employment by the Company and during the Severance Period following the termination of Executive's employment hereunder (the "Non-Competitive Period"), Executive shall not, directly or indirectly, as owner, partner, joint venturer, stockholder, employee, broker, agent, principal, trustee, corporate officer, director, licensor, or in any capacity whatsoever engage in, become financially interested in, be employed by, render any consultation or business advice with respect to, or have any connection with, (i) any business which is competitive with products or services of the Company or any of its subsidiaries in any geographic area in the United States of America, Central and South America, Canada, The People's Republic of China and Southeast Asia where, at the time of the termination of his employment hereunder, the business of the Company or any of its subsidiaries was being conducted or was proposed to be conducted in any manner whatsoever or (ii) any business conducted under any corporate or trade name utilized by the Company or any name similar thereto without the prior written consent of the Company; provided, however, that Executive may own any securities of any corporation which is engaged in such business and is publicly owned and traded but in an amount not to exceed at any one time one percent (1%) of any class of stock or securities of such corporation. In addition, Executive shall not, directly or indirectly, during the Non-Competitive Period, request or cause any suppliers or customers with whom the Company or any of its subsidiaries has a business relationship to cancel or terminate any such business relationship with the Company or any of its subsidiaries or solicit, interfere with or entice from the Company any employee (or former employee) of the Company. (b) If any portion of the restrictions set forth in this Section 9 should, for any reason whatsoever, be declared invalid by a court of competent jurisdiction, the validity or enforceability of the remainder of such restrictions shall not thereby be adversely affected. (c) Executive acknowledges that the Company conducts business throughout the United States, that its sales and marketing prospects are for continued -7- expansion throughout the United States, Central and South America and Canada and that, therefore, the territorial and time limitations set forth in this Section 9 are reasonable and properly required for the adequate protection of the business of the Company and its subsidiaries. In the event any such territorial or time limitation is deemed to be unreasonable by a court of competent jurisdiction, Executive agrees to the reduction of the territorial or time limitation to the area or period which such court shall deem reasonable. (d) The existence of any claim or cause of action by Executive against the Company or any subsidiary shall not constitute a defense to the enforcement by the Company or any subsidiary of the foregoing restrictive covenants, but such claim or cause of action shall be litigated separately. (e) In the event Executive's employment with the Company terminates for any reason other than termination by the Company within one year following a Change in Control of the Company, the Company and Executive agree that in consideration of the payments being made to Executive during the Severance Period, Executive shall be available during the Severance Period to advise and consult with the Board of Directors, the President and other officers of the Company and its subsidiaries with respect to the affairs of the Company and its subsidiaries on a part-time basis, in response to requests for such advisory and consulting services by the Board of Directors, or other officers of the Company or its subsidiaries, subject to the conditions that (i) such services shall be performed within the United States of America, (ii) Executive shall not be required to devote a major portion of his time to such services, (iii) such services shall not unreasonably interfere with the performance of other employment or consulting duties Executive may have, (iv) Executive shall not be required to perform such services during usual vacation periods and reasonable periods of illness or other incapacitation, (v) such services shall be performed at times and places as shall be chosen by Executive, and which will result in the least inconvenience to Executive, and (vi) all other provisions of this Section 9 shall apply. The Company shall reimburse Executive for actual out-of-pocket expenses incurred in rendering the services performed by Executive upon the request of the Board of Directors, or other officers of the Company or its subsidiaries, payable at the end of each month during such period. Notwithstanding the foregoing, in the event that Executive seeks full-time employment with a third party and such third party will not accept Executive's services for as long as he is committed under this subsection (e) to provide consulting services to the Company, then if the Board of Directors of the Company determines in its reasonable discretion that Executive's employment with the third party will not cause him to breach the provisions of Section 9 of this Agreement (other than this subsection (e)) and Executive provides the Board of Directors with a letter signed by the third party stating that such third party will not accept Executive's services as described above, the provisions of this subsection (e) shall immediately terminate and be of no further force or effect. (f) Notwithstanding anything herein to the contrary, this Section 9 shall automatically terminate if the Company terminates Executive's employment -8- within one year following the effective date of a Change in Control of the Company, or if the Company fails to make any payments due to Executive under Sections 7(g), 7(i), 7(j) or 9(e). 10. INVENTIONS AND DISCOVERIES. (a) Executive shall promptly and fully disclose to the Company, and with all necessary detail for a complete understanding of the same, all developments, know-how, discoveries, inventions, improvements, concepts, ideas, writings, formulae, processes and methods (whether copyrightable, patentable or otherwise) made, received, conceived, acquired or written during working hours, or otherwise, by Executive (whether or not at the request or upon the suggestion of the Company) during the period of his employment with, or rendering of advisory or consulting services to, the Company or any of its subsidiaries, solely or jointly with others in or relating to any activities of the Company or its subsidiaries known to him as a consequence of his employment or the rendering of advisory and consulting services hereunder (collectively the "Subject Matter"). (b) Executive hereby assigns and transfers, and agrees to assign and transfer, to the Company, all his rights, title and interest in and to the Subject Matter, and Executive further agrees to deliver to the Company any and all drawings, notes, specifications and data relating to the Subject Matter, and to execute, acknowledge and deliver all such further papers, including applications for copyrights or patents, as may be necessary to obtain copyrights and patents for any thereof in any and all countries and to vest title thereto to the Company. Executive shall assist the Company in obtaining such copyrights or patents during the term of this Agreement, and any time thereafter on reasonable notice and at mutually convenient times, and Executive agrees to testify in any prosecution or litigation involving any of the Subject Matter; provided, however, that Executive shall be compensated in a timely manner at the rate of $1,500.00 per day (or portion thereof), plus out-of-pocket expenses incurred in rendering such assistance or giving or preparing to give such testimony if it is required after the Severance Period. 11. NON-DISCLOSURE OF CONFIDENTIAL INFORMATION. (a) Executive shall not, during the term of this Agreement, or at any time following termination of this Agreement, directly or indirectly, disclose or permit to be known (other than as is required in the regular course of his duties (including without limitation disclosures to the Company's advisors and consultants) or is required by law (in which case Executive shall give the Company prior written notice of such required disclosure) or with the prior written consent of the Board of Directors of the Company), to any person, firm or corporation, any confidential information acquired by him during the course of, or as an incident to, his employment or the rendering of his advisory or consulting services hereunder, relating to the Company or any of its subsidiaries, the directors of the Company or its subsidiaries, any client of the Company or any of its subsidiaries, or any corporation, partnership or other entity owned or -9- controlled, directly or indirectly, by any of the foregoing, or in which any of the foregoing has a beneficial interest, including, but not limited to, the business affairs of each of the foregoing. Such confidential information shall include, but shall not be limited to, proprietary technology, trade secrets, patented processes, research and development data, know-how, market studies and forecasts, competitive analyses, pricing policies, employee lists, personnel policies, the substance of agreements with customers, suppliers and others, marketing or dealership arrangements, servicing and training programs and arrangements, customer lists and any other documents embodying such confidential information. This confidentiality obligation shall not apply to any confidential information which thereafter becomes publicly available other than pursuant to a breach of this Section 11(a) by Executive. (b) All information and documents relating to the Company and its affiliates as hereinabove described (or other business affairs) shall be the exclusive property of the Company, and Executive shall use commercially reasonable best efforts to prevent any publication or disclosure thereof. Upon termination of Executive's employment with the Company, all documents, records, reports, writings and other similar documents containing confidential information, including copies thereof, then in Executive's possession or control shall be returned and left with the Company. 12. SPECIFIC PERFORMANCE Executive agrees that if he breaches, or threatens to commit a breach of, any of the provisions of Sections 9, 10 or 11 (the "Restrictive Covenants"), the Company shall have, in addition to, and not in lieu of, any other rights and remedies available to the Company under law and in equity, the right to injunctive relief and/or to have the Restrictive Covenants specifically enforced by an court of competent jurisdiction, it being agreed that any breach or threatened breach of the Restrictive Covenants would cause irreparable injury to the Company and that money damages would not provide an adequate remedy to the Company. Notwithstanding the foregoing, nothing herein shall constitute a waiver by Executive of his right to contest whether a breach or threatened breach of any Restrictive Covenant has occurred. 13. AMENDMENT OR ALTERATION. No amendment or alteration of the terms of this Agreement shall be valid unless made in writing and signed by both of the parties hereto. 14. GOVERNING LAW. This Agreement shall be governed by and construed in accordance with the laws of the State of Alabama applicable to agreements made and to be performed therein. -10- 15. SEVERABILITY. The holding of any provision of this Agreement to be invalid or unenforceable by a court of competent jurisdiction shall not affect any other provision of this Agreement, which shall remain in full force and effect. 16. NOTICES. Any notices required or permitted to be given hereunder shall be sufficient if in writing, and if delivered by hand or courier, or sent by certified mail, return receipt requested, to the addresses set forth above or such other address as either party may from time to time designate in writing to the other, and shall be deemed given as of the date of the delivery or at the expiration of three days in the event of a mailing. 17. WAIVER OR BREACH. It is agreed that a waiver by either party of a breach of any provision of this Agreement shall not operate, or be construed, as a waiver of any subsequent breach by that same party. 18. ENTIRE AGREEMENT AND BINDING EFFECT. This Agreement contains the entire agreement of the parties with respect to the subject matter hereof, supersedes all prior agreements, both written and oral, between the parties with respect to the subject matter hereof, including without limitation that certain employment agreement dated October 21, 1994, between the Company and Executive, and may be modified only by a written instrument signed by each of the parties hereto. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective legal representatives, heirs, distributors, successors and assigns, provided, however, that Executive shall not be entitled to assign or delegate any of his or her rights or obligations hereunder without the prior written consent of the Company. 19. SURVIVAL. Except as otherwise expressly provided herein, the termination of Executive's employment hereunder or the expiration of this Agreement shall not affect the enforceability of Sections 4, 7, 9, 10, 11 and 12 hereof. 20. FURTHER ASSURANCES. The parties agree to execute and deliver all such further documents, agreements and instruments and take such other and further action as may be necessary or appropriate to carry out the purposes and intent of this Agreement. -11- 21. CONSTRUCTION OF AGREEMENT. No provision of this Agreement or any related document shall be construed against or interpreted to the disadvantage of any party hereto by any court or other governmental or judicial authority by reason of such party having or being deemed to have structured or drafted such provision. 22. HEADINGS. The Section headings appearing in this Agreement are for the purposes of easy reference and shall not be considered a part of this Agreement or in any way modify, demand or affect its provisions. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date and year first above written. AMERICAN BUILDINGS COMPANY [CORPORATE SEAL] By: /s/___________________________ ATTEST: By: /s/_______________________________ Name: Title: /s/_______________________________ Robert T. Ammerman -12- EX-10.30 5 EMPLOYMENT AGREEMENT EMPLOYMENT AGREEMENT AGREEMENT made as of January 1, 1998, between AMERICAN BUILDINGS COMPANY, a Delaware corporation with an office at 1150 State Docks Road, Eufaula, Alabama 36027 (the "Company"), and Joel R. Voelkert, residing at 404 St. Francis Point, Eufaula, Alabama 36027 (the "Executive"). W I T N E S S E T H : WHEREAS, the Company desires that Executive be employed to serve in a senior executive capacity with the Company, and Executive desires to be so employed by the Company, upon the terms and conditions herein set forth. NOW, THEREFORE, in consideration of the premises and of the mutual promises, representations and covenants herein contained, the parties hereto agree as follows: 1. EMPLOYMENT. The Company hereby employs Executive and Executive hereby accepts such employment, subject to the terms and conditions herein set forth. Executive shall hold the office of President--Construction Products Group of the Company reporting to the Chief Executive Officer of the Company. 2. TERM. The initial term of employment under this Agreement shall begin on the date hereof (the "Employment Date") and shall continue until December 31, 2000, subject to prior termination in accordance with the terms hereof. Thereafter, this Agreement shall automatically be renewed for successive one year terms unless either party shall give the other ninety (90) days prior written notice of its intent not to renew this Agreement. 3. COMPENSATION. As compensation for the employment services to be rendered by Executive hereunder, including all services as an officer or director of the Company and any of its subsidiaries, the Company agrees to pay, or cause to be paid, to Executive, and Executive agrees to accept, payable in equal installments in accordance with Company practice, an initial annual salary of $210,000. Executive's annual salary hereunder for the remaining years of employment shall be determined by the Board of Directors in its sole discretion, but shall not in any year be reduced below the rate for the previous year. In addition, Executive shall be entitled to bonuses from time to time in such amounts as may be determined by the Board of Directors in its sole discretion. 4. EXPENSES. The Company shall pay or reimburse Executive, upon presentment of suitable vouchers, for all reasonable business and travel expenses which may be incurred or paid by Executive in connection with his employment hereunder. Executive shall comply with such restrictions and shall keep such records as the Company may deem necessary to meet the requirements of the Internal Revenue Code of 1986, as amended from time to time, and regulations promulgated thereunder. 5. OTHER BENEFITS. Executive shall be entitled to such vacations and to participate in and receive any other benefits customarily provided by the Company to its senior management personnel (including any profit sharing, pension, short and long-term disability insurance, hospital, major medical insurance and group life insurance plans in accordance with the terms of such plans) and including stock option and/or stock purchase plans, all as determined from time to time by the Board of Directors of the Company. 6. DUTIES. (a) Executive shall perform such duties and functions as the Chief Executive Officer of the Company shall from time to time determine and Executive shall comply in the performance of his duties with the policies of the Board of Directors, and be subject to the direction of the Chief Executive Officer. At the request of the Board of Directors, Executive shall serve as an executive officer and director of any subsidiary of the Company and, in the performance of such duties, Executive shall comply with the policies of the Board of Directors of each such subsidiary. (b) During the term of this Agreement, Executive shall devote substantially all of his time and attention, reasonable vacation time and absences for sickness excepted, to the business of the Company, as necessary to fulfill his duties. Executive shall perform the duties assigned to him with fidelity and to the best of his ability. Notwithstanding anything herein to the contrary, Executive may engage in other activities so long as such activities do not unreasonably interfere with Executive's performance of his duties hereunder and do not violate Section 9 hereof. (c) Nothing in this Section 6 or elsewhere in this Agreement shall be construed to prevent Executive from investing or trading in nonconflicting investments as he sees fit for his own account, including real estate, stocks, bonds, securities, commodities or other forms of investments. -2- 7. TERMINATION OF EMPLOYMENT; EFFECT OF TERMINATION. (a) Executive's employment hereunder may be terminated at any time upon written notice from the Company to Executive: (i) upon the determination by the Board of Directors that Executive's performance of his duties has not been fully satisfactory for any reason which would not constitute justifiable cause (as hereinafter defined) upon thirty (30) days' prior written notice to Executive; or (ii) upon the determination by the Board of Directors that there is justifiable cause (as hereinafter defined) for such termination upon ten (10) days' prior written notice to Executive. (b) Executive's employment shall terminate upon: (i) the death of Executive; or (ii) the "disability" of Executive (as hereinafter defined pursuant to subsection (c) herein) pursuant to subsection (f) hereof. (c) For the purposes of this Agreement, the term "disability" shall mean the inability of Executive, due to illness, accident or any other physical or mental incapacity, substantially to perform his duties for a period of three (3) consecutive months or for a total of six (6) months (whether or not consecutive) in any twelve (12) month period during the term of this Agreement, as reasonably determined by the Board of Directors of the Company after examination of Executive by an independent physician reasonably acceptable to Executive. (d) For the purposes hereof, the term "justifiable cause" shall mean and be limited to: any repeated wilful failure or refusal to perform any of his duties pursuant to this Agreement where such conduct shall not have ceased within 30 days following written warning from the Company; Executive's conviction (which, through lapse of time or otherwise, is not subject to appeal) of, pleading guilty to, or confession of any crime or offense involving money or other property of the Company or its subsidiaries or which constitutes a felony in the jurisdiction involved; Executive's performance of any act or his failure to act, for which if Executive were prosecuted and convicted, a crime or offense involving money or property of the Company or its subsidiaries, or which would constitute a felony in the jurisdiction involved, would have occurred; any unauthorized disclosure by Executive to any person, firm or corporation other than the Company, its subsidiaries and its and their directors, officers and employees, of any confidential information or trade secret of the Company or any of its subsidiaries; any attempt by Executive to secure any personal profit in connection with the business of the Company or any of its subsidiaries; Executive's engagement in a fraudulent act to the material damage or prejudice of Company or its subsidiaries or in conduct or activities materially damaging to the property, business or reputation of -3- Company or its subsidiaries, all as determined by the Board of Directors in good faith; Executive's illegal use of controlled substances; any material act or omission by Executive involving malfeasance or negligence in the performance of Executive's duties to the material detriment of the Company or its subsidiaries, as determined by the Board of Directors in good faith, which has not been corrected by Executive within thirty (30) days after written notice from the Company of any such act or omission; the entry of an order of a court that remains in effect and is not discharged for a period of at least sixty (60) days, which enjoins or otherwise limits or restricts the performance by Executive under this Agreement, relating to any contract, agreement or commitment made by or applicable to Executive in favor of any former employer or any other person; or the engaging by Executive in any business other than the business of the Company and its subsidiaries which unreasonably interferes with the performance of his duties hereunder. Upon termination of Executive's employment for justifiable cause, this Agreement shall terminate immediately and Executive shall not be entitled to any amounts or benefits hereunder other than such portion of Executive's annual salary and reimbursement of expenses pursuant to Section 4 hereof as has been accrued through the date of his termination of employment. (e) If Executive shall die during the term of his employment hereunder, this Agreement shall terminate immediately. In such event, the estate of Executive shall thereupon be entitled to receive such portion of Executive's annual salary and reimbursement of expenses pursuant to Section 4 as has been accrued through the date of his death. If Executive's death shall occur while he is on Company business, the estate of Executive shall be entitled to receive, in addition to the other amounts set forth in this subsection (e), an amount equal to one-half his then annual salary. (f) Upon Executive's "disability", the Company shall have the right to terminate Executive's employment. Notwithstanding any inability to perform his duties, Executive shall be entitled to receive his compensation (including bonus, if any) and reimbursement of expenses pursuant to Section 4 as provided herein until he begins to receive long-term disability insurance benefits under the policy provided by the Company pursuant to Section 5 hereof. Any termination pursuant to this subsection (f) shall be effective on the later of (i) the date 30 days after which Executive shall have received written notice of the Company's election to terminate or (ii) the date he begins to receive long-term disability insurance benefits under the policy provided by the Company pursuant to Section 5 hereof. (g) Notwithstanding any provision to the contrary contained herein, in the event that Executive's employment is terminated by the Company at any time for any reason other than justifiable cause, disability or death, the Company shall (i) pay Executive, for a period equal to the longer of (1) the remaining term of this Agreement or (2) one year (such period being hereinafter referred to as the "Severance Period"), a monthly payment equal to one-twelfth of his then annual salary, which amount shall be in lieu of any and all other payments due and owing to the Executive under the terms of this Agreement (other than any payments constituting reimbursement of expenses pursuant to Section 4 hereof), and (ii) continue to allow Executive to -4- participate, at the Company's expense, in the Company's health insurance and disability insurance programs, to the extent permitted under such programs, during the Severance Period (collectively, the "Severance Payments"); provided, however, that if such termination occurs within one (1) year following the effective date of a Change in Control of the Company (as hereinafter defined), the Company shall pay to Executive, in lieu of the amounts set forth in clause (i) above, in one lump sum, a severance payment equal to (i) two years' annual salary plus (ii) an amount equal to twice Executive's most recently declared bonus, if any. (h) For purposes of this Agreement, a "Change in Control of the Company" shall be deemed to occur if (i) there shall be consummated (x) any consolidation or merger of the Company in which the Company is not the continuing or surviving corporation or pursuant to which shares of the Company's Common Stock would be converted into cash, securities or other property, other than a merger of the Company in which the holders of the Company's Common Stock immediately prior to the merger have the same proportionate ownership of common stock of the surviving corporation immediately after the merger, or (y) any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all, or substantially all, of the assets of the Company, or (ii) the stockholders of the Company shall approve any plan or proposal for liquidation or dissolution of the Company, or (iii) any person (as such term is used in Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")) shall become the beneficial owner (within the meaning of Rule 13d-3 under the Exchange Act) of 40% or more of the Company's outstanding Common Stock other than pursuant to a plan or arrangement entered into by such person and the Company, or (iv) during any period of two consecutive years, individuals who at the beginning of such period constitute the entire Board of Directors of the Company shall cease for any reason to constitute a majority thereof unless the election, or the nomination for election by the Company's stockholders, of each new director was approved by a vote of at least two-thirds of the directors then still in office who were directors at the beginning of the period. (i) Notwithstanding any provision to the contrary contained herein, in the event the Company elects not to renew this Agreement (other than within one year following a Change in Control of the Company, which is covered in Section 7(g) above) the Company will pay Executive a severance payment equal to one year's annual salary. (j) Executive may terminate his employment at any time upon 30 days' prior written notice to the Company. Upon Executive's termination of his employment hereunder or his election not to renew this Agreement, this Agreement (other than Sections 4, 7, 9, 10, 11 and 12, which shall survive, if at all, in accordance with their terms) shall terminate; provided, however, that Section 9 shall not survive such termination unless the Company pays to Executive during the Severance Period the Severance Payments. In such event, Executive shall be entitled to receive such portion of Executive's annual salary and bonus, if any, as has been accrued to date. Executive shall be entitled to reimbursement of expenses pursuant to Section 4 hereof and to participate in the Company's benefit plans to the extent participation by former -5- employees is required by law or permitted by such plans, with the expense of such participation to be as specified in such plans for former employees. (k) If, in connection with a change of ownership or control of the Company or a change in ownership of a substantial portion of the assets of the Company (all within the meaning of Section 280G(b)(2) of the Internal Revenue Code of 1986, as amended (the "Code")), an excise tax is payable by Executive under Section 4999 of the Code, then the Company will pay to the Executive additional compensation which will be sufficient to enable Executive to pay such excise tax as well as the income tax and excise tax on such additional compensation, such that, after the payment of income and excise taxes, Executive is in the same economic position in which he would have been if the provisions of Section 4999 of the Code had not been applicable. The additional compensation required by this Section 7(k) will be paid to Executive promptly after the date or dates on which the amount of such additional compensation is determinable, in whole or in part. 8. REPRESENTATIONS AND AGREEMENTS OF EXECUTIVE. (a) Executive represents and warrants that he is free to enter into this Agreement and to perform the duties required hereunder, and that there are no employment contracts or understandings, restrictive covenants or other restrictions, whether written or oral, preventing the performance of his duties hereunder. (b) Executive agrees to submit to a medical examination and to cooperate and supply such other information and documents as may be required by any insurance company in connection with the Company's obtaining life insurance on the life of Executive, and any other type of insurance or fringe benefit as the Company shall determine from time to time to obtain. 9. NON-COMPETITION. (a) Executive agrees that during his employment by the Company and during the Severance Period following the termination of Executive's employment hereunder (the "Non-Competitive Period"), Executive shall not, directly or indirectly, as owner, partner, joint venturer, stockholder, employee, broker, agent, principal, trustee, corporate officer, director, licensor, or in any capacity whatsoever engage in, become financially interested in, be employed by, render any consultation or business advice with respect to, or have any connection with, (i) any business which is competitive with products or services of the Company or any of its subsidiaries in any geographic area in the United States of America, Central and South America, Canada, The People's Republic of China and Southeast Asia where, at the time of the termination of his employment hereunder, the business of the Company or any of its subsidiaries was being conducted or was proposed to be conducted in any manner whatsoever or (ii) any business conducted under any corporate or trade name utilized by the Company or any name similar thereto without the prior written consent of the Company; provided, however, that Executive may own any securities of any corporation -6- which is engaged in such business and is publicly owned and traded but in an amount not to exceed at any one time one percent (1%) of any class of stock or securities of such corporation. In addition, Executive shall not, directly or indirectly, during the Non-Competitive Period, request or cause any suppliers or customers with whom the Company or any of its subsidiaries has a business relationship to cancel or terminate any such business relationship with the Company or any of its subsidiaries or solicit, interfere with or entice from the Company any employee (or former employee) of the Company. (b) If any portion of the restrictions set forth in this Section 9 should, for any reason whatsoever, be declared invalid by a court of competent jurisdiction, the validity or enforceability of the remainder of such restrictions shall not thereby be adversely affected. (c) Executive acknowledges that the Company conducts business throughout the United States, that its sales and marketing prospects are for continued expansion throughout the United States, Central and South America and Canada and that, therefore, the territorial and time limitations set forth in this Section 9 are reasonable and properly required for the adequate protection of the business of the Company and its subsidiaries. In the event any such territorial or time limitation is deemed to be unreasonable by a court of competent jurisdiction, Executive agrees to the reduction of the territorial or time limitation to the area or period which such court shall deem reasonable. (d) The existence of any claim or cause of action by Executive against the Company or any subsidiary shall not constitute a defense to the enforcement by the Company or any subsidiary of the foregoing restrictive covenants, but such claim or cause of action shall be litigated separately. (e) In the event Executive's employment with the Company terminates for any reason other than termination by the Company within one year following a Change in Control of the Company, the Company and Executive agree that in consideration of the payments being made to Executive during the Severance Period, Executive shall be available during the Severance Period to advise and consult with the Board of Directors, the President and other officers of the Company and its subsidiaries with respect to the affairs of the Company and its subsidiaries on a part-time basis, in response to requests for such advisory and consulting services by the Board of Directors, or other officers of the Company or its subsidiaries, subject to the conditions that (i) such services shall be performed within the United States of America, (ii) Executive shall not be required to devote a major portion of his time to such services, (iii) such services shall not unreasonably interfere with the performance of other employment or consulting duties Executive may have, (iv) Executive shall not be required to perform such services during usual vacation periods and reasonable periods of illness or other incapacitation, (v) such services shall be performed at times and places as shall be chosen by Executive, and which will result in the least inconvenience to Executive, and (vi) all other provisions of this Section 9 shall apply. The Company -7- shall reimburse Executive for actual out-of-pocket expenses incurred in rendering the services performed by Executive upon the request of the Board of Directors, or other officers of the Company or its subsidiaries, payable at the end of each month during such period. Notwithstanding the foregoing, in the event that Executive seeks full-time employment with a third party and such third party will not accept Executive's services for as long as he is committed under this subsection (e) to provide consulting services to the Company, then if the Board of Directors of the Company determines in its reasonable discretion that Executive's employment with the third party will not cause him to breach the provisions of Section 9 of this Agreement (other than this subsection (e)) and Executive provides the Board of Directors with a letter signed by the third party stating that such third party will not accept Executive's services as described above, the provisions of this subsection (e) shall immediately terminate and be of no further force or effect. (f) Notwithstanding anything herein to the contrary, this Section 9 shall automatically terminate if the Company terminates Executive's employment within one year following the effective date of a Change in Control of the Company, or if the Company fails to make any payments due to Executive under Sections 7(g), 7(i), 7(j) or 9(e). 10. INVENTIONS AND DISCOVERIES. (a) Executive shall promptly and fully disclose to the Company, and with all necessary detail for a complete understanding of the same, all developments, know-how, discoveries, inventions, improvements, concepts, ideas, writings, formulae, processes and methods (whether copyrightable, patentable or otherwise) made, received, conceived, acquired or written during working hours, or otherwise, by Executive (whether or not at the request or upon the suggestion of the Company) during the period of his employment with, or rendering of advisory or consulting services to, the Company or any of its subsidiaries, solely or jointly with others in or relating to any activities of the Company or its subsidiaries known to him as a consequence of his employment or the rendering of advisory and consulting services hereunder (collectively the "Subject Matter"). (b) Executive hereby assigns and transfers, and agrees to assign and transfer, to the Company, all his rights, title and interest in and to the Subject Matter, and Executive further agrees to deliver to the Company any and all drawings, notes, specifications and data relating to the Subject Matter, and to execute, acknowledge and deliver all such further papers, including applications for copyrights or patents, as may be necessary to obtain copyrights and patents for any thereof in any and all countries and to vest title thereto to the Company. Executive shall assist the Company in obtaining such copyrights or patents during the term of this Agreement, and any time thereafter on reasonable notice and at mutually convenient times, and Executive agrees to testify in any prosecution or litigation involving any of the Subject Matter; provided, however, that Executive shall be compensated in a timely manner at the rate of $500.00 per day (or portion thereof), plus out-of-pocket expenses incurred in rendering such -8- assistance or giving or preparing to give such testimony if it is required after the Severance Period. 11. NON-DISCLOSURE OF CONFIDENTIAL INFORMATION. (a) Executive shall not, during the term of this Agreement, or at any time following termination of this Agreement, directly or indirectly, disclose or permit to be known (other than as is required in the regular course of his duties (including without limitation disclosures to the Company's advisors and consultants) or is required by law (in which case Executive shall give the Company prior written notice of such required disclosure) or with the prior written consent of the Board of Directors of the Company), to any person, firm or corporation, any confidential information acquired by him during the course of, or as an incident to, his employment or the rendering of his advisory or consulting services hereunder, relating to the Company or any of its subsidiaries, the directors of the Company or its subsidiaries, any client of the Company or any of its subsidiaries, or any corporation, partnership or other entity owned or controlled, directly or indirectly, by any of the foregoing, or in which any of the foregoing has a beneficial interest, including, but not limited to, the business affairs of each of the foregoing. Such confidential information shall include, but shall not be limited to, proprietary technology, trade secrets, patented processes, research and development data, know-how, market studies and forecasts, competitive analyses, pricing policies, employee lists, personnel policies, the substance of agreements with customers, suppliers and others, marketing or dealership arrangements, servicing and training programs and arrangements, customer lists and any other documents embodying such confidential information. This confidentiality obligation shall not apply to any confidential information which thereafter becomes publicly available other than pursuant to a breach of this Section 11(a) by Executive. (b) All information and documents relating to the Company and its affiliates as hereinabove described (or other business affairs) shall be the exclusive property of the Company, and Executive shall use commercially reasonable best efforts to prevent any publication or disclosure thereof. Upon termination of Executive's employment with the Company, all documents, records, reports, writings and other similar documents containing confidential information, including copies thereof, then in Executive's possession or control shall be returned and left with the Company. 12. SPECIFIC PERFORMANCE Executive agrees that if he breaches, or threatens to commit a breach of, any of the provisions of Sections 9, 10 or 11 (the "Restrictive Covenants"), the Company shall have, in addition to, and not in lieu of, any other rights and remedies available to the Company under law and in equity, the right to injunctive relief and/or to have the Restrictive Covenants specifically enforced by an court of competent jurisdiction, it being agreed that any breach or threatened breach of the Restrictive Covenants would cause irreparable injury to the Company and that money damages would not provide an adequate remedy to the Company. Notwithstanding the foregoing, nothing -9- herein shall constitute a waiver by Executive of his right to contest whether a breach or threatened breach of any Restrictive Covenant has occurred. 13. AMENDMENT OR ALTERATION. No amendment or alteration of the terms of this Agreement shall be valid unless made in writing and signed by both of the parties hereto. 14. GOVERNING LAW. This Agreement shall be governed by and construed in accordance with the laws of the State of Alabama applicable to agreements made and to be performed therein. 15. SEVERABILITY. The holding of any provision of this Agreement to be invalid or unenforceable by a court of competent jurisdiction shall not affect any other provision of this Agreement, which shall remain in full force and effect. 16. NOTICES. Any notices required or permitted to be given hereunder shall be sufficient if in writing, and if delivered by hand or courier, or sent by certified mail, return receipt requested, to the addresses set forth above or such other address as either party may from time to time designate in writing to the other, and shall be deemed given as of the date of the delivery or at the expiration of three days in the event of a mailing. 17. WAIVER OR BREACH. It is agreed that a waiver by either party of a breach of any provision of this Agreement shall not operate, or be construed, as a waiver of any subsequent breach by that same party. 18. ENTIRE AGREEMENT AND BINDING EFFECT. This Agreement contains the entire agreement of the parties with respect to the subject matter hereof, supersedes all prior agreements, both written and oral, between the parties with respect to the subject matter hereof, including without limitation the employment agreement, dated as of October 21, 1994, between the Company and Executive, and may be modified only by a written instrument signed by each of the parties hereto. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective legal representatives, heirs, distributors, successors and assigns, provided, however, that Executive shall not be entitled to assign or delegate any of his or her rights or obligations hereunder without the prior written consent of the Company. -10- 19. SURVIVAL. Except as otherwise expressly provided herein, the termination of Executive's employment hereunder or the expiration of this Agreement shall not affect the enforceability of Sections 4, 7, 9, 10, 11 and 12 hereof. 20. FURTHER ASSURANCES. The parties agree to execute and deliver all such further documents, agreements and instruments and take such other and further action as may be necessary or appropriate to carry out the purposes and intent of this Agreement. 21. CONSTRUCTION OF AGREEMENT. No provision of this Agreement or any related document shall be construed against or interpreted to the disadvantage of any party hereto by any court or other governmental or judicial authority by reason of such party having or being deemed to have structured or drafted such provision. 22. HEADINGS. The Section headings appearing in this Agreement are for the purposes of easy reference and shall not be considered a part of this Agreement or in any way modify, demand or affect its provisions. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date and year first above written. AMERICAN BUILDINGS COMPANY [CORPORATE SEAL] By: /s/_____________________________ ATTEST: By: /s/_____________________ Name: Title: /s/________________________________ Joel R. Voelkert -11- EX-10.31 6 EMPLOYMENT AGREEMENT EMPLOYMENT AGREEMENT AGREEMENT made as of January 1, 1998, between AMERICAN BUILDINGS COMPANY, a Delaware corporation with an office at 1150 State Docks Road, Eufaula, Alabama 36027 (the "Company"), and Roy L. Smith, residing at 510 Poinciana Drive, Homewood, Alabama 35209 (the "Executive"). W I T N E S S E T H : WHEREAS, the Company desires that Executive be employed to serve in a senior executive capacity with the Company, and Executive desires to be so employed by the Company, upon the terms and conditions herein set forth. NOW, THEREFORE, in consideration of the premises and of the mutual promises, representations and covenants herein contained, the parties hereto agree as follows: 1. EMPLOYMENT. The Company hereby employs Executive and Executive hereby accepts such employment, subject to the terms and conditions herein set forth. Executive shall hold the office of President-Polymer Division of the Company reporting to the Chief Executive Officer of the Company. 2. TERM. The initial term of employment under this Agreement shall begin on the date hereof (the "Employment Date") and shall continue until December 31, 2000, subject to prior termination in accordance with the terms hereof. Thereafter, this Agreement shall automatically be renewed for successive one year terms unless either party shall give the other ninety (90) days prior written notice of its intent not to renew this Agreement. 3. COMPENSATION. As compensation for the employment services to be rendered by Executive hereunder, including all services as an officer or director of the Company and any of its subsidiaries, the Company agrees to pay, or cause to be paid, to Executive, and Executive agrees to accept, payable in equal installments in accordance with Company practice, an initial annual salary of $125,000. Executive's annual salary hereunder for the remaining years of employment shall be determined by the Board of Directors in its sole discretion, but shall not in any year be reduced below the rate for the previous year. In addition, Executive shall be entitled to bonuses from time to time in such amounts as may be determined by the Board of Directors in its sole discretion. 4. EXPENSES. The Company shall pay or reimburse Executive, upon presentment of suitable vouchers, for all reasonable business and travel expenses which may be incurred or paid by Executive in connection with his employment hereunder. Executive shall comply with such restrictions and shall keep such records as the Company may deem necessary to meet the requirements of the Internal Revenue Code of 1986, as amended from time to time, and regulations promulgated thereunder. 5. OTHER BENEFITS. Executive shall be entitled to such vacations and to participate in and receive any other benefits customarily provided by the Company to its senior management personnel (including any profit sharing, pension, short and long-term disability insurance, hospital, major medical insurance and group life insurance plans in accordance with the terms of such plans) and including stock option and/or stock purchase plans, all as determined from time to time by the Board of Directors of the Company. 6. DUTIES. (a) Executive shall perform such duties and functions as the Chief Executive Officer of the Company shall from time to time determine and Executive shall comply in the performance of his duties with the policies of the Board of Directors, and be subject to the direction of the Chief Executive Officer. At the request of the Board of Directors, Executive shall serve as an executive officer and director of any subsidiary of the Company and, in the performance of such duties, Executive shall comply with the policies of the Board of Directors of each such subsidiary. (b) During the term of this Agreement, Executive shall devote substantially all of his time and attention, reasonable vacation time and absences for sickness excepted, to the business of the Company, as necessary to fulfill his duties. Executive shall perform the duties assigned to him with fidelity and to the best of his ability. Notwithstanding anything herein to the contrary, Executive may engage in other activities so long as such activities do not unreasonably interfere with Executive's performance of his duties hereunder and do not violate Section 9 hereof. (c) Nothing in this Section 6 or elsewhere in this Agreement shall be construed to prevent Executive from investing or trading in nonconflicting investments as he sees fit for his own account, including real estate, stocks, bonds, securities, commodities or other forms of investments. -2- 7. TERMINATION OF EMPLOYMENT; EFFECT OF TERMINATION. (a) Executive's employment hereunder may be terminated at any time upon written notice from the Company to Executive: (i) upon the determination by the Board of Directors that Executive's performance of his duties has not been fully satisfactory for any reason which would not constitute justifiable cause (as hereinafter defined) upon thirty (30) days' prior written notice to Executive; or (ii) upon the determination by the Board of Directors that there is justifiable cause (as hereinafter defined) for such termination upon ten (10) days' prior written notice to Executive. (b) Executive's employment shall terminate upon: (i) the death of Executive; or (ii) the "disability" of Executive (as hereinafter defined pursuant to subsection (c) herein) pursuant to subsection (f) hereof. (c) For the purposes of this Agreement, the term "disability" shall mean the inability of Executive, due to illness, accident or any other physical or mental incapacity, substantially to perform his duties for a period of three (3) consecutive months or for a total of six (6) months (whether or not consecutive) in any twelve (12) month period during the term of this Agreement, as reasonably determined by the Board of Directors of the Company after examination of Executive by an independent physician reasonably acceptable to Executive. (d) For the purposes hereof, the term "justifiable cause" shall mean and be limited to: any repeated wilful failure or refusal to perform any of his duties pursuant to this Agreement where such conduct shall not have ceased within 30 days following written warning from the Company; Executive's conviction (which, through lapse of time or otherwise, is not subject to appeal) of, pleading guilty to, or confession of any crime or offense involving money or other property of the Company or its subsidiaries or which constitutes a felony in the jurisdiction involved; Executive's performance of any act or his failure to act, for which if Executive were prosecuted and convicted, a crime or offense involving money or property of the Company or its subsidiaries, or which would constitute a felony in the jurisdiction involved, would have occurred; any unauthorized disclosure by Executive to any person, firm or corporation other than the Company, its subsidiaries and its and their directors, officers and employees, of any confidential information or trade secret of the Company or any of its subsidiaries; any attempt by Executive to secure any personal profit in connection with the business of the Company or any of its subsidiaries; Executive's engagement in a fraudulent act to the material damage or prejudice of Company or its subsidiaries or in conduct or activities materially damaging to the property, business or reputation of -3- Company or its subsidiaries, all as determined by the Board of Directors in good faith; Executive's illegal use of controlled substances; any material act or omission by Executive involving malfeasance or negligence in the performance of Executive's duties to the material detriment of the Company or its subsidiaries, as determined by the Board of Directors in good faith, which has not been corrected by Executive within thirty (30) days after written notice from the Company of any such act or omission; the entry of an order of a court that remains in effect and is not discharged for a period of at least sixty (60) days, which enjoins or otherwise limits or restricts the performance by Executive under this Agreement, relating to any contract, agreement or commitment made by or applicable to Executive in favor of any former employer or any other person; or the engaging by Executive in any business other than the business of the Company and its subsidiaries which unreasonably interferes with the performance of his duties hereunder. Upon termination of Executive's employment for justifiable cause, this Agreement shall terminate immediately and Executive shall not be entitled to any amounts or benefits hereunder other than such portion of Executive's annual salary and reimbursement of expenses pursuant to Section 4 hereof as has been accrued through the date of his termination of employment. (e) If Executive shall die during the term of his employment hereunder, this Agreement shall terminate immediately. In such event, the estate of Executive shall thereupon be entitled to receive such portion of Executive's annual salary and reimbursement of expenses pursuant to Section 4 as has been accrued through the date of his death. If Executive's death shall occur while he is on Company business, the estate of Executive shall be entitled to receive, in addition to the other amounts set forth in this subsection (e), an amount equal to one-half his then annual salary. (f) Upon Executive's "disability", the Company shall have the right to terminate Executive's employment. Notwithstanding any inability to perform his duties, Executive shall be entitled to receive his compensation (including bonus, if any) and reimbursement of expenses pursuant to Section 4 as provided herein until he begins to receive long-term disability insurance benefits under the policy provided by the Company pursuant to Section 5 hereof. Any termination pursuant to this subsection (f) shall be effective on the later of (i) the date 30 days after which Executive shall have received written notice of the Company's election to terminate or (ii) the date he begins to receive long-term disability insurance benefits under the policy provided by the Company pursuant to Section 5 hereof. (g) Notwithstanding any provision to the contrary contained herein, in the event that Executive's employment is terminated by the Company at any time for any reason other than justifiable cause, disability or death, the Company shall (i) pay Executive, for a period equal to the longer of (1) the remaining term of this Agreement or (2) one year (such period being hereinafter referred to as the "Severance Period"), a monthly payment equal to one-twelfth of his then annual salary, which amount shall be in lieu of any and all other payments due and owing to the Executive under the terms of this Agreement (other than any payments constituting reimbursement of expenses pursuant to Section 4 hereof), and (ii) continue to allow Executive to -4- participate, at the Company's expense, in the Company's health insurance and disability insurance programs, to the extent permitted under such programs, during the Severance Period (collectively, the "Severance Payments"); provided, however, that if such termination occurs within one (1) year following the effective date of a Change in Control of the Company (as hereinafter defined), the Company shall pay to Executive, in lieu of the amounts set forth in clause (i) above, in one lump sum, a severance payment equal to (i) two years' annual salary plus (ii) an amount equal to twice Executive's most recently declared bonus, if any. (h) For purposes of this Agreement, a "Change in Control of the Company" shall be deemed to occur if (i) there shall be consummated (x) any consolidation or merger of the Company in which the Company is not the continuing or surviving corporation or pursuant to which shares of the Company's Common Stock would be converted into cash, securities or other property, other than a merger of the Company in which the holders of the Company's Common Stock immediately prior to the merger have the same proportionate ownership of common stock of the surviving corporation immediately after the merger, or (y) any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all, or substantially all, of the assets of the Company, or (ii) the stockholders of the Company shall approve any plan or proposal for liquidation or dissolution of the Company, or (iii) any person (as such term is used in Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")) shall become the beneficial owner (within the meaning of Rule 13d-3 under the Exchange Act) of 40% or more of the Company's outstanding Common Stock other than pursuant to a plan or arrangement entered into by such person and the Company, or (iv) during any period of two consecutive years, individuals who at the beginning of such period constitute the entire Board of Directors of the Company shall cease for any reason to constitute a majority thereof unless the election, or the nomination for election by the Company's stockholders, of each new director was approved by a vote of at least two-thirds of the directors then still in office who were directors at the beginning of the period. (i) Notwithstanding any provision to the contrary contained herein, in the event the Company elects not to renew this Agreement (other than within one year following a Change in Control of the Company, which is covered in Section 7(g) above) the Company will pay Executive a severance payment equal to one year's annual salary. (j) Executive may terminate his employment at any time upon 30 days' prior written notice to the Company. Upon Executive's termination of his employment hereunder or his election not to renew this Agreement, this Agreement (other than Sections 4, 7, 9, 10, 11 and 12, which shall survive, if at all, in accordance with their terms) shall terminate; provided, however, that Section 9 shall not survive such termination unless the Company pays to Executive during the Severance Period the Severance Payments. In such event, Executive shall be entitled to receive such portion of Executive's annual salary and bonus, if any, as has been accrued to date. Executive shall be entitled to reimbursement of expenses pursuant to Section 4 hereof and to participate in the Company's benefit plans to the extent participation by former -5- employees is required by law or permitted by such plans, with the expense of such participation to be as specified in such plans for former employees. (k) If, in connection with a change of ownership or control of the Company or a change in ownership of a substantial portion of the assets of the Company (all within the meaning of Section 280G(b)(2) of the Internal Revenue Code of 1986, as amended (the "Code")), an excise tax is payable by Executive under Section 4999 of the Code, then the Company will pay to the Executive additional compensation which will be sufficient to enable Executive to pay such excise tax as well as the income tax and excise tax on such additional compensation, such that, after the payment of income and excise taxes, Executive is in the same economic position in which he would have been if the provisions of Section 4999 of the Code had not been applicable. The additional compensation required by this Section 7(k) will be paid to Executive promptly after the date or dates on which the amount of such additional compensation is determinable, in whole or in part. 8. REPRESENTATIONS AND AGREEMENTS OF EXECUTIVE. (a) Executive represents and warrants that he is free to enter into this Agreement and to perform the duties required hereunder, and that there are no employment contracts or understandings, restrictive covenants or other restrictions, whether written or oral, preventing the performance of his duties hereunder. (b) Executive agrees to submit to a medical examination and to cooperate and supply such other information and documents as may be required by any insurance company in connection with the Company's obtaining life insurance on the life of Executive, and any other type of insurance or fringe benefit as the Company shall determine from time to time to obtain. 9. NON-COMPETITION. (a) Executive agrees that during his employment by the Company and during the Severance Period following the termination of Executive's employment hereunder (the "Non-Competitive Period"), Executive shall not, directly or indirectly, as owner, partner, joint venturer, stockholder, employee, broker, agent, principal, trustee, corporate officer, director, licensor, or in any capacity whatsoever engage in, become financially interested in, be employed by, render any consultation or business advice with respect to, or have any connection with, (i) any business which is competitive with products or services of the Company or any of its subsidiaries in any geographic area in the United States of America, Central and South America, Canada, The People's Republic of China and Southeast Asia where, at the time of the termination of his employment hereunder, the business of the Company or any of its subsidiaries was being conducted or was proposed to be conducted in any manner whatsoever or (ii) any business conducted under any corporate or trade name utilized by the Company or any name similar thereto without the prior written consent of the Company; provided, however, that Executive may own any securities of any corporation -6- which is engaged in such business and is publicly owned and traded but in an amount not to exceed at any one time one percent (1%) of any class of stock or securities of such corporation. In addition, Executive shall not, directly or indirectly, during the Non-Competitive Period, request or cause any suppliers or customers with whom the Company or any of its subsidiaries has a business relationship to cancel or terminate any such business relationship with the Company or any of its subsidiaries or solicit, interfere with or entice from the Company any employee (or former employee) of the Company. (b) If any portion of the restrictions set forth in this Section 9 should, for any reason whatsoever, be declared invalid by a court of competent jurisdiction, the validity or enforceability of the remainder of such restrictions shall not thereby be adversely affected. (c) Executive acknowledges that the Company conducts business throughout the United States, that its sales and marketing prospects are for continued expansion throughout the United States, Central and South America and Canada and that, therefore, the territorial and time limitations set forth in this Section 9 are reasonable and properly required for the adequate protection of the business of the Company and its subsidiaries. In the event any such territorial or time limitation is deemed to be unreasonable by a court of competent jurisdiction, Executive agrees to the reduction of the territorial or time limitation to the area or period which such court shall deem reasonable. (d) The existence of any claim or cause of action by Executive against the Company or any subsidiary shall not constitute a defense to the enforcement by the Company or any subsidiary of the foregoing restrictive covenants, but such claim or cause of action shall be litigated separately. (e) In the event Executive's employment with the Company terminates for any reason other than termination by the Company within one year following a Change in Control of the Company, the Company and Executive agree that in consideration of the payments being made to Executive during the Severance Period, Executive shall be available during the Severance Period to advise and consult with the Board of Directors, the President and other officers of the Company and its subsidiaries with respect to the affairs of the Company and its subsidiaries on a part-time basis, in response to requests for such advisory and consulting services by the Board of Directors, or other officers of the Company or its subsidiaries, subject to the conditions that (i) such services shall be performed within the United States of America, (ii) Executive shall not be required to devote a major portion of his time to such services, (iii) such services shall not unreasonably interfere with the performance of other employment or consulting duties Executive may have, (iv) Executive shall not be required to perform such services during usual vacation periods and reasonable periods of illness or other incapacitation, (v) such services shall be performed at times and places as shall be chosen by Executive, and which will result in the least inconvenience to Executive, and (vi) all other provisions of this Section 9 shall apply. The Company -7- shall reimburse Executive for actual out-of-pocket expenses incurred in rendering the services performed by Executive upon the request of the Board of Directors, or other officers of the Company or its subsidiaries, payable at the end of each month during such period. Notwithstanding the foregoing, in the event that Executive seeks full-time employment with a third party and such third party will not accept Executive's services for as long as he is committed under this subsection (e) to provide consulting services to the Company, then if the Board of Directors of the Company determines in its reasonable discretion that Executive's employment with the third party will not cause him to breach the provisions of Section 9 of this Agreement (other than this subsection (e)) and Executive provides the Board of Directors with a letter signed by the third party stating that such third party will not accept Executive's services as described above, the provisions of this subsection (e) shall immediately terminate and be of no further force or effect. (f) Notwithstanding anything herein to the contrary, this Section 9 shall automatically terminate if the Company terminates Executive's employment within one year following the effective date of a Change in Control of the Company, or if the Company fails to make any payments due to Executive under Sections 7(g), 7(i), 7(j) or 9(e). 10. INVENTIONS AND DISCOVERIES. (a) Executive shall promptly and fully disclose to the Company, and with all necessary detail for a complete understanding of the same, all developments, know-how, discoveries, inventions, improvements, concepts, ideas, writings, formulae, processes and methods (whether copyrightable, patentable or otherwise) made, received, conceived, acquired or written during working hours, or otherwise, by Executive (whether or not at the request or upon the suggestion of the Company) during the period of his employment with, or rendering of advisory or consulting services to, the Company or any of its subsidiaries, solely or jointly with others in or relating to any activities of the Company or its subsidiaries known to him as a consequence of his employment or the rendering of advisory and consulting services hereunder (collectively the "Subject Matter"). (b) Executive hereby assigns and transfers, and agrees to assign and transfer, to the Company, all his rights, title and interest in and to the Subject Matter, and Executive further agrees to deliver to the Company any and all drawings, notes, specifications and data relating to the Subject Matter, and to execute, acknowledge and deliver all such further papers, including applications for copyrights or patents, as may be necessary to obtain copyrights and patents for any thereof in any and all countries and to vest title thereto to the Company. Executive shall assist the Company in obtaining such copyrights or patents during the term of this Agreement, and any time thereafter on reasonable notice and at mutually convenient times, and Executive agrees to testify in any prosecution or litigation involving any of the Subject Matter; provided, however, that Executive shall be compensated in a timely manner at the rate of $500.00 per day (or portion thereof), plus out-of-pocket expenses incurred in rendering such -8- assistance or giving or preparing to give such testimony if it is required after the Severance Period. 11. NON-DISCLOSURE OF CONFIDENTIAL INFORMATION. (a) Executive shall not, during the term of this Agreement, or at any time following termination of this Agreement, directly or indirectly, disclose or permit to be known (other than as is required in the regular course of his duties (including without limitation disclosures to the Company's advisors and consultants) or is required by law (in which case Executive shall give the Company prior written notice of such required disclosure) or with the prior written consent of the Board of Directors of the Company), to any person, firm or corporation, any confidential information acquired by him during the course of, or as an incident to, his employment or the rendering of his advisory or consulting services hereunder, relating to the Company or any of its subsidiaries, the directors of the Company or its subsidiaries, any client of the Company or any of its subsidiaries, or any corporation, partnership or other entity owned or controlled, directly or indirectly, by any of the foregoing, or in which any of the foregoing has a beneficial interest, including, but not limited to, the business affairs of each of the foregoing. Such confidential information shall include, but shall not be limited to, proprietary technology, trade secrets, patented processes, research and development data, know-how, market studies and forecasts, competitive analyses, pricing policies, employee lists, personnel policies, the substance of agreements with customers, suppliers and others, marketing or dealership arrangements, servicing and training programs and arrangements, customer lists and any other documents embodying such confidential information. This confidentiality obligation shall not apply to any confidential information which thereafter becomes publicly available other than pursuant to a breach of this Section 11(a) by Executive. (b) All information and documents relating to the Company and its affiliates as hereinabove described (or other business affairs) shall be the exclusive property of the Company, and Executive shall use commercially reasonable best efforts to prevent any publication or disclosure thereof. Upon termination of Executive's employment with the Company, all documents, records, reports, writings and other similar documents containing confidential information, including copies thereof, then in Executive's possession or control shall be returned and left with the Company. 12. SPECIFIC PERFORMANCE Executive agrees that if he breaches, or threatens to commit a breach of, any of the provisions of Sections 9, 10 or 11 (the "Restrictive Covenants"), the Company shall have, in addition to, and not in lieu of, any other rights and remedies available to the Company under law and in equity, the right to injunctive relief and/or to have the Restrictive Covenants specifically enforced by an court of competent jurisdiction, it being agreed that any breach or threatened breach of the Restrictive Covenants would cause irreparable injury to the Company and that money damages would not provide an adequate remedy to the Company. Notwithstanding the foregoing, nothing -9- herein shall constitute a waiver by Executive of his right to contest whether a breach or threatened breach of any Restrictive Covenant has occurred. 13. AMENDMENT OR ALTERATION. No amendment or alteration of the terms of this Agreement shall be valid unless made in writing and signed by both of the parties hereto. 14. GOVERNING LAW. This Agreement shall be governed by and construed in accordance with the laws of the State of Alabama applicable to agreements made and to be performed therein. 15. SEVERABILITY. The holding of any provision of this Agreement to be invalid or unenforceable by a court of competent jurisdiction shall not affect any other provision of this Agreement, which shall remain in full force and effect. 16. NOTICES. Any notices required or permitted to be given hereunder shall be sufficient if in writing, and if delivered by hand or courier, or sent by certified mail, return receipt requested, to the addresses set forth above or such other address as either party may from time to time designate in writing to the other, and shall be deemed given as of the date of the delivery or at the expiration of three days in the event of a mailing. 17. WAIVER OR BREACH. It is agreed that a waiver by either party of a breach of any provision of this Agreement shall not operate, or be construed, as a waiver of any subsequent breach by that same party. 18. ENTIRE AGREEMENT AND BINDING EFFECT. This Agreement contains the entire agreement of the parties with respect to the subject matter hereof, supersedes all prior agreements, both written and oral, between the parties with respect to the subject matter hereof, including without limitation the employment agreement, dated as of October 21, 1994, between the Company and Executive, and may be modified only by a written instrument signed by each of the parties hereto. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective legal representatives, heirs, distributors, successors and assigns, provided, however, that Executive shall not be entitled to assign or delegate any of his or her rights or obligations hereunder without the prior written consent of the Company. -10- 19. SURVIVAL. Except as otherwise expressly provided herein, the termination of Executive's employment hereunder or the expiration of this Agreement shall not affect the enforceability of Sections 4, 7, 9, 10, 11 and 12 hereof. 20. FURTHER ASSURANCES. The parties agree to execute and deliver all such further documents, agreements and instruments and take such other and further action as may be necessary or appropriate to carry out the purposes and intent of this Agreement. 21. CONSTRUCTION OF AGREEMENT. No provision of this Agreement or any related document shall be construed against or interpreted to the disadvantage of any party hereto by any court or other governmental or judicial authority by reason of such party having or being deemed to have structured or drafted such provision. 22. HEADINGS. The Section headings appearing in this Agreement are for the purposes of easy reference and shall not be considered a part of this Agreement or in any way modify, demand or affect its provisions. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date and year first above written. AMERICAN BUILDINGS COMPANY [CORPORATE SEAL] By: /s/_______________________________ ATTEST: By: /s/____________________________ Name: Title: /s/___________________________________ Roy L. Smith -11- EX-10.32 7 EMPLOYMENT AGREEMENT EMPLOYMENT AGREEMENT AGREEMENT made as of January 1, 1998, between AMERICAN BUILDINGS COMPANY, a Delaware corporation with an office at 1150 State Docks Road, Eufaula, Alabama 36027 (the "Company"), and Barry Milling, residing at 1816 Fox Ridge Road, Eufaula, Alabama 36027 (the "Executive"). W I T N E S S E T H : WHEREAS, the Company desires that Executive be employed to serve in a senior executive capacity with the Company, and Executive desires to be so employed by the Company, upon the terms and conditions herein set forth. NOW, THEREFORE, in consideration of the premises and of the mutual promises, representations and covenants herein contained, the parties hereto agree as follows: 1. EMPLOYMENT. The Company hereby employs Executive and Executive hereby accepts such employment, subject to the terms and conditions herein set forth. Executive shall hold the office of Vice President-Technical Services of the Company reporting to the Chief Executive Officer of the Company. 2. TERM. The initial term of employment under this Agreement shall begin on the date hereof (the "Employment Date") and shall continue until December 31, 2000, subject to prior termination in accordance with the terms hereof. Thereafter, this Agreement shall automatically be renewed for successive one year terms unless either party shall give the other ninety (90) days prior written notice of its intent not to renew this Agreement. 3. COMPENSATION. As compensation for the employment services to be rendered by Executive hereunder, including all services as an officer or director of the Company and any of its subsidiaries, the Company agrees to pay, or cause to be paid, to Executive, and Executive agrees to accept, payable in equal installments in accordance with Company practice, an initial annual salary of $152,000. Executive's annual salary hereunder for the remaining years of employment shall be determined by the Board of Directors in its sole discretion, but shall not in any year be reduced below the rate for the previous year. In addition, Executive shall be entitled to bonuses from time to time in such amounts as may be determined by the Board of Directors in its sole discretion. 4. EXPENSES. The Company shall pay or reimburse Executive, upon presentment of suitable vouchers, for all reasonable business and travel expenses which may be incurred or paid by Executive in connection with his employment hereunder. Executive shall comply with such restrictions and shall keep such records as the Company may deem necessary to meet the requirements of the Internal Revenue Code of 1986, as amended from time to time, and regulations promulgated thereunder. 5. OTHER BENEFITS. Executive shall be entitled to such vacations and to participate in and receive any other benefits customarily provided by the Company to its senior management personnel (including any profit sharing, pension, short and long-term disability insurance, hospital, major medical insurance and group life insurance plans in accordance with the terms of such plans) and including stock option and/or stock purchase plans, all as determined from time to time by the Board of Directors of the Company. 6. DUTIES. (a) Executive shall perform such duties and functions as the Chief Executive Officer of the Company shall from time to time determine and Executive shall comply in the performance of his duties with the policies of the Board of Directors, and be subject to the direction of the Chief Executive Officer. At the request of the Board of Directors, Executive shall serve as an executive officer and director of any subsidiary of the Company and, in the performance of such duties, Executive shall comply with the policies of the Board of Directors of each such subsidiary. (b) During the term of this Agreement, Executive shall devote substantially all of his time and attention, reasonable vacation time and absences for sickness excepted, to the business of the Company, as necessary to fulfill his duties. Executive shall perform the duties assigned to him with fidelity and to the best of his ability. Notwithstanding anything herein to the contrary, Executive may engage in other activities so long as such activities do not unreasonably interfere with Executive's performance of his duties hereunder and do not violate Section 9 hereof. (c) Nothing in this Section 6 or elsewhere in this Agreement shall be construed to prevent Executive from investing or trading in nonconflicting investments as he sees fit for his own account, including real estate, stocks, bonds, securities, commodities or other forms of investments. -2- 7. TERMINATION OF EMPLOYMENT; EFFECT OF TERMINATION. (a) Executive's employment hereunder may be terminated at any time upon written notice from the Company to Executive: (i) upon the determination by the Board of Directors that Executive's performance of his duties has not been fully satisfactory for any reason which would not constitute justifiable cause (as hereinafter defined) upon thirty (30) days' prior written notice to Executive; or (ii) upon the determination by the Board of Directors that there is justifiable cause (as hereinafter defined) for such termination upon ten (10) days' prior written notice to Executive. (b) Executive's employment shall terminate upon: (i) the death of Executive; or (ii) the "disability" of Executive (as hereinafter defined pursuant to subsection (c) herein) pursuant to subsection (f) hereof. (c) For the purposes of this Agreement, the term "disability" shall mean the inability of Executive, due to illness, accident or any other physical or mental incapacity, substantially to perform his duties for a period of three (3) consecutive months or for a total of six (6) months (whether or not consecutive) in any twelve (12) month period during the term of this Agreement, as reasonably determined by the Board of Directors of the Company after examination of Executive by an independent physician reasonably acceptable to Executive. (d) For the purposes hereof, the term "justifiable cause" shall mean and be limited to: any repeated wilful failure or refusal to perform any of his duties pursuant to this Agreement where such conduct shall not have ceased within 30 days following written warning from the Company; Executive's conviction (which, through lapse of time or otherwise, is not subject to appeal) of, pleading guilty to, or confession of any crime or offense involving money or other property of the Company or its subsidiaries or which constitutes a felony in the jurisdiction involved; Executive's performance of any act or his failure to act, for which if Executive were prosecuted and convicted, a crime or offense involving money or property of the Company or its subsidiaries, or which would constitute a felony in the jurisdiction involved, would have occurred; any unauthorized disclosure by Executive to any person, firm or corporation other than the Company, its subsidiaries and its and their directors, officers and employees, of any confidential information or trade secret of the Company or any of its subsidiaries; any attempt by Executive to secure any personal profit in connection with the business of the Company or any of its subsidiaries; Executive's engagement in a fraudulent act to the material damage or prejudice of Company or its subsidiaries or in conduct or activities materially damaging to the property, business or reputation of -3- Company or its subsidiaries, all as determined by the Board of Directors in good faith; Executive's illegal use of controlled substances; any material act or omission by Executive involving malfeasance or negligence in the performance of Executive's duties to the material detriment of the Company or its subsidiaries, as determined by the Board of Directors in good faith, which has not been corrected by Executive within thirty (30) days after written notice from the Company of any such act or omission; the entry of an order of a court that remains in effect and is not discharged for a period of at least sixty (60) days, which enjoins or otherwise limits or restricts the performance by Executive under this Agreement, relating to any contract, agreement or commitment made by or applicable to Executive in favor of any former employer or any other person; or the engaging by Executive in any business other than the business of the Company and its subsidiaries which unreasonably interferes with the performance of his duties hereunder. Upon termination of Executive's employment for justifiable cause, this Agreement shall terminate immediately and Executive shall not be entitled to any amounts or benefits hereunder other than such portion of Executive's annual salary and reimbursement of expenses pursuant to Section 4 hereof as has been accrued through the date of his termination of employment. (e) If Executive shall die during the term of his employment hereunder, this Agreement shall terminate immediately. In such event, the estate of Executive shall thereupon be entitled to receive such portion of Executive's annual salary and reimbursement of expenses pursuant to Section 4 as has been accrued through the date of his death. If Executive's death shall occur while he is on Company business, the estate of Executive shall be entitled to receive, in addition to the other amounts set forth in this subsection (e), an amount equal to one-half his then annual salary. (f) Upon Executive's "disability", the Company shall have the right to terminate Executive's employment. Notwithstanding any inability to perform his duties, Executive shall be entitled to receive his compensation (including bonus, if any) and reimbursement of expenses pursuant to Section 4 as provided herein until he begins to receive long-term disability insurance benefits under the policy provided by the Company pursuant to Section 5 hereof. Any termination pursuant to this subsection (f) shall be effective on the later of (i) the date 30 days after which Executive shall have received written notice of the Company's election to terminate or (ii) the date he begins to receive long-term disability insurance benefits under the policy provided by the Company pursuant to Section 5 hereof. (g) Notwithstanding any provision to the contrary contained herein, in the event that Executive's employment is terminated by the Company at any time for any reason other than justifiable cause, disability or death, the Company shall (i) pay Executive, for a period equal to the longer of (1) the remaining term of this Agreement or (2) one year (such period being hereinafter referred to as the "Severance Period"), a monthly payment equal to one-twelfth of his then annual salary, which amount shall be in lieu of any and all other payments due and owing to the Executive under the terms of this Agreement (other than any payments constituting reimbursement of expenses pursuant to Section 4 hereof), and (ii) continue to allow Executive to -4- participate, at the Company's expense, in the Company's health insurance and disability insurance programs, to the extent permitted under such programs, during the Severance Period (collectively, the "Severance Payments"); provided, however, that if such termination occurs within one (1) year following the effective date of a Change in Control of the Company (as hereinafter defined), the Company shall pay to Executive, in lieu of the amounts set forth in clause (i) above, in one lump sum, a severance payment equal to (i) two years' annual salary plus (ii) an amount equal to twice Executive's most recently declared bonus, if any. (h) For purposes of this Agreement, a "Change in Control of the Company" shall be deemed to occur if (i) there shall be consummated (x) any consolidation or merger of the Company in which the Company is not the continuing or surviving corporation or pursuant to which shares of the Company's Common Stock would be converted into cash, securities or other property, other than a merger of the Company in which the holders of the Company's Common Stock immediately prior to the merger have the same proportionate ownership of common stock of the surviving corporation immediately after the merger, or (y) any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all, or substantially all, of the assets of the Company, or (ii) the stockholders of the Company shall approve any plan or proposal for liquidation or dissolution of the Company, or (iii) any person (as such term is used in Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")) shall become the beneficial owner (within the meaning of Rule 13d-3 under the Exchange Act) of 40% or more of the Company's outstanding Common Stock other than pursuant to a plan or arrangement entered into by such person and the Company, or (iv) during any period of two consecutive years, individuals who at the beginning of such period constitute the entire Board of Directors of the Company shall cease for any reason to constitute a majority thereof unless the election, or the nomination for election by the Company's stockholders, of each new director was approved by a vote of at least two-thirds of the directors then still in office who were directors at the beginning of the period. (i) Notwithstanding any provision to the contrary contained herein, in the event the Company elects not to renew this Agreement (other than within one year following a Change in Control of the Company, which is covered in Section 7(g) above) the Company will pay Executive a severance payment equal to one year's annual salary. (j) Executive may terminate his employment at any time upon 30 days' prior written notice to the Company. Upon Executive's termination of his employment hereunder or his election not to renew this Agreement, this Agreement (other than Sections 4, 7, 9, 10, 11 and 12, which shall survive, if at all, in accordance with their terms) shall terminate; provided, however, that Section 9 shall not survive such termination unless the Company pays to Executive during the Severance Period the Severance Payments. In such event, Executive shall be entitled to receive such portion of Executive's annual salary and bonus, if any, as has been accrued to date. Executive shall be entitled to reimbursement of expenses pursuant to Section 4 hereof and to participate in the Company's benefit plans to the extent participation by former -5- employees is required by law or permitted by such plans, with the expense of such participation to be as specified in such plans for former employees. (k) If, in connection with a change of ownership or control of the Company or a change in ownership of a substantial portion of the assets of the Company (all within the meaning of Section 280G(b)(2) of the Internal Revenue Code of 1986, as amended (the "Code")), an excise tax is payable by Executive under Section 4999 of the Code, then the Company will pay to the Executive additional compensation which will be sufficient to enable Executive to pay such excise tax as well as the income tax and excise tax on such additional compensation, such that, after the payment of income and excise taxes, Executive is in the same economic position in which he would have been if the provisions of Section 4999 of the Code had not been applicable. The additional compensation required by this Section 7(k) will be paid to Executive promptly after the date or dates on which the amount of such additional compensation is determinable, in whole or in part. 8. REPRESENTATIONS AND AGREEMENTS OF EXECUTIVE. (a) Executive represents and warrants that he is free to enter into this Agreement and to perform the duties required hereunder, and that there are no employment contracts or understandings, restrictive covenants or other restrictions, whether written or oral, preventing the performance of his duties hereunder. (b) Executive agrees to submit to a medical examination and to cooperate and supply such other information and documents as may be required by any insurance company in connection with the Company's obtaining life insurance on the life of Executive, and any other type of insurance or fringe benefit as the Company shall determine from time to time to obtain. 9. NON-COMPETITION. (a) Executive agrees that during his employment by the Company and during the Severance Period following the termination of Executive's employment hereunder (the "Non-Competitive Period"), Executive shall not, directly or indirectly, as owner, partner, joint venturer, stockholder, employee, broker, agent, principal, trustee, corporate officer, director, licensor, or in any capacity whatsoever engage in, become financially interested in, be employed by, render any consultation or business advice with respect to, or have any connection with, (i) any business which is competitive with products or services of the Company or any of its subsidiaries in any geographic area in the United States of America, Central and South America, Canada, The People's Republic of China and Southeast Asia where, at the time of the termination of his employment hereunder, the business of the Company or any of its subsidiaries was being conducted or was proposed to be conducted in any manner whatsoever or (ii) any business conducted under any corporate or trade name utilized by the Company or any name similar thereto without the prior written consent of the Company; provided, however, that Executive may own any securities of any corporation -6- which is engaged in such business and is publicly owned and traded but in an amount not to exceed at any one time one percent (1%) of any class of stock or securities of such corporation. In addition, Executive shall not, directly or indirectly, during the Non-Competitive Period, request or cause any suppliers or customers with whom the Company or any of its subsidiaries has a business relationship to cancel or terminate any such business relationship with the Company or any of its subsidiaries or solicit, interfere with or entice from the Company any employee (or former employee) of the Company. (b) If any portion of the restrictions set forth in this Section 9 should, for any reason whatsoever, be declared invalid by a court of competent jurisdiction, the validity or enforceability of the remainder of such restrictions shall not thereby be adversely affected. (c) Executive acknowledges that the Company conducts business throughout the United States, that its sales and marketing prospects are for continued expansion throughout the United States, Central and South America and Canada and that, therefore, the territorial and time limitations set forth in this Section 9 are reasonable and properly required for the adequate protection of the business of the Company and its subsidiaries. In the event any such territorial or time limitation is deemed to be unreasonable by a court of competent jurisdiction, Executive agrees to the reduction of the territorial or time limitation to the area or period which such court shall deem reasonable. (d) The existence of any claim or cause of action by Executive against the Company or any subsidiary shall not constitute a defense to the enforcement by the Company or any subsidiary of the foregoing restrictive covenants, but such claim or cause of action shall be litigated separately. (e) In the event Executive's employment with the Company terminates for any reason other than termination by the Company within one year following a Change in Control of the Company, the Company and Executive agree that in consideration of the payments being made to Executive during the Severance Period, Executive shall be available during the Severance Period to advise and consult with the Board of Directors, the President and other officers of the Company and its subsidiaries with respect to the affairs of the Company and its subsidiaries on a part-time basis, in response to requests for such advisory and consulting services by the Board of Directors, or other officers of the Company or its subsidiaries, subject to the conditions that (i) such services shall be performed within the United States of America, (ii) Executive shall not be required to devote a major portion of his time to such services, (iii) such services shall not unreasonably interfere with the performance of other employment or consulting duties Executive may have, (iv) Executive shall not be required to perform such services during usual vacation periods and reasonable periods of illness or other incapacitation, (v) such services shall be performed at times and places as shall be chosen by Executive, and which will result in the least inconvenience to Executive, and (vi) all other provisions of this Section 9 shall apply. The Company -7- shall reimburse Executive for actual out-of-pocket expenses incurred in rendering the services performed by Executive upon the request of the Board of Directors, or other officers of the Company or its subsidiaries, payable at the end of each month during such period. Notwithstanding the foregoing, in the event that Executive seeks full-time employment with a third party and such third party will not accept Executive's services for as long as he is committed under this subsection (e) to provide consulting services to the Company, then if the Board of Directors of the Company determines in its reasonable discretion that Executive's employment with the third party will not cause him to breach the provisions of Section 9 of this Agreement (other than this subsection (e)) and Executive provides the Board of Directors with a letter signed by the third party stating that such third party will not accept Executive's services as described above, the provisions of this subsection (e) shall immediately terminate and be of no further force or effect. (f) Notwithstanding anything herein to the contrary, this Section 9 shall automatically terminate if the Company terminates Executive's employment within one year following the effective date of a Change in Control of the Company, or if the Company fails to make any payments due to Executive under Sections 7(g), 7(i), 7(j) or 9(e). 10. INVENTIONS AND DISCOVERIES. (a) Executive shall promptly and fully disclose to the Company, and with all necessary detail for a complete understanding of the same, all developments, know-how, discoveries, inventions, improvements, concepts, ideas, writings, formulae, processes and methods (whether copyrightable, patentable or otherwise) made, received, conceived, acquired or written during working hours, or otherwise, by Executive (whether or not at the request or upon the suggestion of the Company) during the period of his employment with, or rendering of advisory or consulting services to, the Company or any of its subsidiaries, solely or jointly with others in or relating to any activities of the Company or its subsidiaries known to him as a consequence of his employment or the rendering of advisory and consulting services hereunder (collectively the "Subject Matter"). (b) Executive hereby assigns and transfers, and agrees to assign and transfer, to the Company, all his rights, title and interest in and to the Subject Matter, and Executive further agrees to deliver to the Company any and all drawings, notes, specifications and data relating to the Subject Matter, and to execute, acknowledge and deliver all such further papers, including applications for copyrights or patents, as may be necessary to obtain copyrights and patents for any thereof in any and all countries and to vest title thereto to the Company. Executive shall assist the Company in obtaining such copyrights or patents during the term of this Agreement, and any time thereafter on reasonable notice and at mutually convenient times, and Executive agrees to testify in any prosecution or litigation involving any of the Subject Matter; provided, however, that Executive shall be compensated in a timely manner at the rate of $500.00 per day (or portion thereof), plus out-of-pocket expenses incurred in rendering such -8- assistance or giving or preparing to give such testimony if it is required after the Severance Period. 11. NON-DISCLOSURE OF CONFIDENTIAL INFORMATION. (a) Executive shall not, during the term of this Agreement, or at any time following termination of this Agreement, directly or indirectly, disclose or permit to be known (other than as is required in the regular course of his duties (including without limitation disclosures to the Company's advisors and consultants) or is required by law (in which case Executive shall give the Company prior written notice of such required disclosure) or with the prior written consent of the Board of Directors of the Company), to any person, firm or corporation, any confidential information acquired by him during the course of, or as an incident to, his employment or the rendering of his advisory or consulting services hereunder, relating to the Company or any of its subsidiaries, the directors of the Company or its subsidiaries, any client of the Company or any of its subsidiaries, or any corporation, partnership or other entity owned or controlled, directly or indirectly, by any of the foregoing, or in which any of the foregoing has a beneficial interest, including, but not limited to, the business affairs of each of the foregoing. Such confidential information shall include, but shall not be limited to, proprietary technology, trade secrets, patented processes, research and development data, know-how, market studies and forecasts, competitive analyses, pricing policies, employee lists, personnel policies, the substance of agreements with customers, suppliers and others, marketing or dealership arrangements, servicing and training programs and arrangements, customer lists and any other documents embodying such confidential information. This confidentiality obligation shall not apply to any confidential information which thereafter becomes publicly available other than pursuant to a breach of this Section 11(a) by Executive. (b) All information and documents relating to the Company and its affiliates as hereinabove described (or other business affairs) shall be the exclusive property of the Company, and Executive shall use commercially reasonable best efforts to prevent any publication or disclosure thereof. Upon termination of Executive's employment with the Company, all documents, records, reports, writings and other similar documents containing confidential information, including copies thereof, then in Executive's possession or control shall be returned and left with the Company. 12. SPECIFIC PERFORMANCE Executive agrees that if he breaches, or threatens to commit a breach of, any of the provisions of Sections 9, 10 or 11 (the "Restrictive Covenants"), the Company shall have, in addition to, and not in lieu of, any other rights and remedies available to the Company under law and in equity, the right to injunctive relief and/or to have the Restrictive Covenants specifically enforced by an court of competent jurisdiction, it being agreed that any breach or threatened breach of the Restrictive Covenants would cause irreparable injury to the Company and that money damages would not provide an adequate remedy to the Company. Notwithstanding the foregoing, nothing -9- herein shall constitute a waiver by Executive of his right to contest whether a breach or threatened breach of any Restrictive Covenant has occurred. 13. AMENDMENT OR ALTERATION. No amendment or alteration of the terms of this Agreement shall be valid unless made in writing and signed by both of the parties hereto. 14. GOVERNING LAW. This Agreement shall be governed by and construed in accordance with the laws of the State of Alabama applicable to agreements made and to be performed therein. 15. SEVERABILITY. The holding of any provision of this Agreement to be invalid or unenforceable by a court of competent jurisdiction shall not affect any other provision of this Agreement, which shall remain in full force and effect. 16. NOTICES. Any notices required or permitted to be given hereunder shall be sufficient if in writing, and if delivered by hand or courier, or sent by certified mail, return receipt requested, to the addresses set forth above or such other address as either party may from time to time designate in writing to the other, and shall be deemed given as of the date of the delivery or at the expiration of three days in the event of a mailing. 17. WAIVER OR BREACH. It is agreed that a waiver by either party of a breach of any provision of this Agreement shall not operate, or be construed, as a waiver of any subsequent breach by that same party. 18. ENTIRE AGREEMENT AND BINDING EFFECT. This Agreement contains the entire agreement of the parties with respect to the subject matter hereof, supersedes all prior agreements, both written and oral, between the parties with respect to the subject matter hereof, including without limitation the employment agreement, dated as of October 21, 1994, between the Company and Executive, and may be modified only by a written instrument signed by each of the parties hereto. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective legal representatives, heirs, distributors, successors and assigns, provided, however, that Executive shall not be entitled to assign or delegate any of his or her rights or obligations hereunder without the prior written consent of the Company. -10- 19. SURVIVAL. Except as otherwise expressly provided herein, the termination of Executive's employment hereunder or the expiration of this Agreement shall not affect the enforceability of Sections 4, 7, 9, 10, 11 and 12 hereof. 20. FURTHER ASSURANCES. The parties agree to execute and deliver all such further documents, agreements and instruments and take such other and further action as may be necessary or appropriate to carry out the purposes and intent of this Agreement. 21. CONSTRUCTION OF AGREEMENT. No provision of this Agreement or any related document shall be construed against or interpreted to the disadvantage of any party hereto by any court or other governmental or judicial authority by reason of such party having or being deemed to have structured or drafted such provision. 22. HEADINGS. The Section headings appearing in this Agreement are for the purposes of easy reference and shall not be considered a part of this Agreement or in any way modify, demand or affect its provisions. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date and year first above written. AMERICAN BUILDINGS COMPANY [CORPORATE SEAL] By:/s/___________________________ ATTEST: By:/s/________________________ Name: Title: /s/______________________________ Barry Milling -11- EX-10.33 8 EMPLOYMENT AGREEMENT EMPLOYMENT AGREEMENT AGREEMENT made as of January 1, 1998, between AMERICAN BUILDINGS COMPANY, a Delaware corporation with an office at 1150 State Docks Road, Eufaula, Alabama 36027 (the "Company"), and W. Ronald Buchholz, residing at 5151 Yosemite Drive, Columbus, GA 31907 (the "Executive"). W I T N E S S E T H : WHEREAS, the Company desires that Executive be employed to serve in a senior executive capacity with the Company, and Executive desires to be so employed by the Company, upon the terms and conditions herein set forth. NOW, THEREFORE, in consideration of the premises and of the mutual promises, representations and covenants herein contained, the parties hereto agree as follows: 1. EMPLOYMENT. The Company hereby employs Executive and Executive hereby accepts such employment, subject to the terms and conditions herein set forth. Executive shall hold the office of Vice President-Operations of the Company reporting to the Chief Executive Officer of the Company. 2. TERM. The initial term of employment under this Agreement shall begin on the date hereof (the "Employment Date") and shall continue until December 31, 2000, subject to prior termination in accordance with the terms hereof. Thereafter, this Agreement shall automatically be renewed for successive one year terms unless either party shall give the other ninety (90) days prior written notice of its intent not to renew this Agreement. 3. COMPENSATION. As compensation for the employment services to be rendered by Executive hereunder, including all services as an officer or director of the Company and any of its subsidiaries, the Company agrees to pay, or cause to be paid, to Executive, and Executive agrees to accept, payable in equal installments in accordance with Company practice, an initial annual salary of $145,000. Executive's annual salary hereunder for the remaining years of employment shall be determined by the Board of Directors in its sole discretion, but shall not in any year be reduced below the rate for the previous year. In addition, Executive shall be entitled to bonuses from time to time in such amounts as may be determined by the Board of Directors in its sole discretion. 4. EXPENSES. The Company shall pay or reimburse Executive, upon presentment of suitable vouchers, for all reasonable business and travel expenses which may be incurred or paid by Executive in connection with his employment hereunder. Executive shall comply with such restrictions and shall keep such records as the Company may deem necessary to meet the requirements of the Internal Revenue Code of 1986, as amended from time to time, and regulations promulgated thereunder. 5. OTHER BENEFITS. Executive shall be entitled to such vacations and to participate in and receive any other benefits customarily provided by the Company to its senior management personnel (including any profit sharing, pension, short and long-term disability insurance, hospital, major medical insurance and group life insurance plans in accordance with the terms of such plans) and including stock option and/or stock purchase plans, all as determined from time to time by the Board of Directors of the Company. 6. DUTIES. (a) Executive shall perform such duties and functions as the Chief Executive Officer of the Company shall from time to time determine and Executive shall comply in the performance of his duties with the policies of the Board of Directors, and be subject to the direction of the Chief Executive Officer. At the request of the Board of Directors, Executive shall serve as an executive officer and director of any subsidiary of the Company and, in the performance of such duties, Executive shall comply with the policies of the Board of Directors of each such subsidiary. (b) During the term of this Agreement, Executive shall devote substantially all of his time and attention, reasonable vacation time and absences for sickness excepted, to the business of the Company, as necessary to fulfill his duties. Executive shall perform the duties assigned to him with fidelity and to the best of his ability. Notwithstanding anything herein to the contrary, Executive may engage in other activities so long as such activities do not unreasonably interfere with Executive's performance of his duties hereunder and do not violate Section 9 hereof. (c) Nothing in this Section 6 or elsewhere in this Agreement shall be construed to prevent Executive from investing or trading in nonconflicting investments as he sees fit for his own account, including real estate, stocks, bonds, securities, commodities or other forms of investments. -2- 7. TERMINATION OF EMPLOYMENT; EFFECT OF TERMINATION. (a) Executive's employment hereunder may be terminated at any time upon written notice from the Company to Executive: (i) upon the determination by the Board of Directors that Executive's performance of his duties has not been fully satisfactory for any reason which would not constitute justifiable cause (as hereinafter defined) upon thirty (30) days' prior written notice to Executive; or (ii) upon the determination by the Board of Directors that there is justifiable cause (as hereinafter defined) for such termination upon ten (10) days' prior written notice to Executive. (b) Executive's employment shall terminate upon: (i) the death of Executive; or (ii) the "disability" of Executive (as hereinafter defined pursuant to subsection (c) herein) pursuant to subsection (f) hereof. (c) For the purposes of this Agreement, the term "disability" shall mean the inability of Executive, due to illness, accident or any other physical or mental incapacity, substantially to perform his duties for a period of three (3) consecutive months or for a total of six (6) months (whether or not consecutive) in any twelve (12) month period during the term of this Agreement, as reasonably determined by the Board of Directors of the Company after examination of Executive by an independent physician reasonably acceptable to Executive. (d) For the purposes hereof, the term "justifiable cause" shall mean and be limited to: any repeated wilful failure or refusal to perform any of his duties pursuant to this Agreement where such conduct shall not have ceased within 30 days following written warning from the Company; Executive's conviction (which, through lapse of time or otherwise, is not subject to appeal) of, pleading guilty to, or confession of any crime or offense involving money or other property of the Company or its subsidiaries or which constitutes a felony in the jurisdiction involved; Executive's performance of any act or his failure to act, for which if Executive were prosecuted and convicted, a crime or offense involving money or property of the Company or its subsidiaries, or which would constitute a felony in the jurisdiction involved, would have occurred; any unauthorized disclosure by Executive to any person, firm or corporation other than the Company, its subsidiaries and its and their directors, officers and employees, of any confidential information or trade secret of the Company or any of its subsidiaries; any attempt by Executive to secure any personal profit in connection with the business of the Company or any of its subsidiaries; Executive's engagement in a fraudulent act to the material damage or prejudice of Company or its subsidiaries or in conduct or activities materially damaging to the property, business or reputation of -3- Company or its subsidiaries, all as determined by the Board of Directors in good faith; Executive's illegal use of controlled substances; any material act or omission by Executive involving malfeasance or negligence in the performance of Executive's duties to the material detriment of the Company or its subsidiaries, as determined by the Board of Directors in good faith, which has not been corrected by Executive within thirty (30) days after written notice from the Company of any such act or omission; the entry of an order of a court that remains in effect and is not discharged for a period of at least sixty (60) days, which enjoins or otherwise limits or restricts the performance by Executive under this Agreement, relating to any contract, agreement or commitment made by or applicable to Executive in favor of any former employer or any other person; or the engaging by Executive in any business other than the business of the Company and its subsidiaries which unreasonably interferes with the performance of his duties hereunder. Upon termination of Executive's employment for justifiable cause, this Agreement shall terminate immediately and Executive shall not be entitled to any amounts or benefits hereunder other than such portion of Executive's annual salary and reimbursement of expenses pursuant to Section 4 hereof as has been accrued through the date of his termination of employment. (e) If Executive shall die during the term of his employment hereunder, this Agreement shall terminate immediately. In such event, the estate of Executive shall thereupon be entitled to receive such portion of Executive's annual salary and reimbursement of expenses pursuant to Section 4 as has been accrued through the date of his death. If Executive's death shall occur while he is on Company business, the estate of Executive shall be entitled to receive, in addition to the other amounts set forth in this subsection (e), an amount equal to one-half his then annual salary. (f) Upon Executive's "disability", the Company shall have the right to terminate Executive's employment. Notwithstanding any inability to perform his duties, Executive shall be entitled to receive his compensation (including bonus, if any) and reimbursement of expenses pursuant to Section 4 as provided herein until he begins to receive long-term disability insurance benefits under the policy provided by the Company pursuant to Section 5 hereof. Any termination pursuant to this subsection (f) shall be effective on the later of (i) the date 30 days after which Executive shall have received written notice of the Company's election to terminate or (ii) the date he begins to receive long-term disability insurance benefits under the policy provided by the Company pursuant to Section 5 hereof. (g) Notwithstanding any provision to the contrary contained herein, in the event that Executive's employment is terminated by the Company at any time for any reason other than justifiable cause, disability or death, the Company shall (i) pay Executive, for a period equal to the longer of (1) the remaining term of this Agreement or (2) one year (such period being hereinafter referred to as the "Severance Period"), a monthly payment equal to one-twelfth of his then annual salary, which amount shall be in lieu of any and all other payments due and owing to the Executive under the terms of this Agreement (other than any payments constituting reimbursement of expenses pursuant to Section 4 hereof), and (ii) continue to allow Executive to -4- participate, at the Company's expense, in the Company's health insurance and disability insurance programs, to the extent permitted under such programs, during the Severance Period (collectively, the "Severance Payments"); provided, however, that if such termination occurs within one (1) year following the effective date of a Change in Control of the Company (as hereinafter defined), the Company shall pay to Executive, in lieu of the amounts set forth in clause (i) above, in one lump sum, a severance payment equal to (i) two years' annual salary plus (ii) an amount equal to twice Executive's most recently declared bonus, if any. (h) For purposes of this Agreement, a "Change in Control of the Company" shall be deemed to occur if (i) there shall be consummated (x) any consolidation or merger of the Company in which the Company is not the continuing or surviving corporation or pursuant to which shares of the Company's Common Stock would be converted into cash, securities or other property, other than a merger of the Company in which the holders of the Company's Common Stock immediately prior to the merger have the same proportionate ownership of common stock of the surviving corporation immediately after the merger, or (y) any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all, or substantially all, of the assets of the Company, or (ii) the stockholders of the Company shall approve any plan or proposal for liquidation or dissolution of the Company, or (iii) any person (as such term is used in Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")) shall become the beneficial owner (within the meaning of Rule 13d-3 under the Exchange Act) of 40% or more of the Company's outstanding Common Stock other than pursuant to a plan or arrangement entered into by such person and the Company, or (iv) during any period of two consecutive years, individuals who at the beginning of such period constitute the entire Board of Directors of the Company shall cease for any reason to constitute a majority thereof unless the election, or the nomination for election by the Company's stockholders, of each new director was approved by a vote of at least two-thirds of the directors then still in office who were directors at the beginning of the period. (i) Notwithstanding any provision to the contrary contained herein, in the event the Company elects not to renew this Agreement (other than within one year following a Change in Control of the Company, which is covered in Section 7(g) above) the Company will pay Executive a severance payment equal to one year's annual salary. (j) Executive may terminate his employment at any time upon 30 days' prior written notice to the Company. Upon Executive's termination of his employment hereunder or his election not to renew this Agreement, this Agreement (other than Sections 4, 7, 9, 10, 11 and 12, which shall survive, if at all, in accordance with their terms) shall terminate; provided, however, that Section 9 shall not survive such termination unless the Company pays to Executive during the Severance Period the Severance Payments. In such event, Executive shall be entitled to receive such portion of Executive's annual salary and bonus, if any, as has been accrued to date. Executive shall be entitled to reimbursement of expenses pursuant to Section 4 hereof and to participate in the Company's benefit plans to the extent participation by former -5- employees is required by law or permitted by such plans, with the expense of such participation to be as specified in such plans for former employees. (k) If, in connection with a change of ownership or control of the Company or a change in ownership of a substantial portion of the assets of the Company (all within the meaning of Section 280G(b)(2) of the Internal Revenue Code of 1986, as amended (the "Code")), an excise tax is payable by Executive under Section 4999 of the Code, then the Company will pay to the Executive additional compensation which will be sufficient to enable Executive to pay such excise tax as well as the income tax and excise tax on such additional compensation, such that, after the payment of income and excise taxes, Executive is in the same economic position in which he would have been if the provisions of Section 4999 of the Code had not been applicable. The additional compensation required by this Section 7(k) will be paid to Executive promptly after the date or dates on which the amount of such additional compensation is determinable, in whole or in part. 8. REPRESENTATIONS AND AGREEMENTS OF EXECUTIVE. (a) Executive represents and warrants that he is free to enter into this Agreement and to perform the duties required hereunder, and that there are no employment contracts or understandings, restrictive covenants or other restrictions, whether written or oral, preventing the performance of his duties hereunder. (b) Executive agrees to submit to a medical examination and to cooperate and supply such other information and documents as may be required by any insurance company in connection with the Company's obtaining life insurance on the life of Executive, and any other type of insurance or fringe benefit as the Company shall determine from time to time to obtain. 9. NON-COMPETITION. (a) Executive agrees that during his employment by the Company and during the Severance Period following the termination of Executive's employment hereunder (the "Non-Competitive Period"), Executive shall not, directly or indirectly, as owner, partner, joint venturer, stockholder, employee, broker, agent, principal, trustee, corporate officer, director, licensor, or in any capacity whatsoever engage in, become financially interested in, be employed by, render any consultation or business advice with respect to, or have any connection with, (i) any business which is competitive with products or services of the Company or any of its subsidiaries in any geographic area in the United States of America, Central and South America, Canada, The People's Republic of China and Southeast Asia where, at the time of the termination of his employment hereunder, the business of the Company or any of its subsidiaries was being conducted or was proposed to be conducted in any manner whatsoever or (ii) any business conducted under any corporate or trade name utilized by the Company or any name similar thereto without the prior written consent of the Company; provided, however, that Executive may own any securities of any corporation -6- which is engaged in such business and is publicly owned and traded but in an amount not to exceed at any one time one percent (1%) of any class of stock or securities of such corporation. In addition, Executive shall not, directly or indirectly, during the Non-Competitive Period, request or cause any suppliers or customers with whom the Company or any of its subsidiaries has a business relationship to cancel or terminate any such business relationship with the Company or any of its subsidiaries or solicit, interfere with or entice from the Company any employee (or former employee) of the Company. (b) If any portion of the restrictions set forth in this Section 9 should, for any reason whatsoever, be declared invalid by a court of competent jurisdiction, the validity or enforceability of the remainder of such restrictions shall not thereby be adversely affected. (c) Executive acknowledges that the Company conducts business throughout the United States, that its sales and marketing prospects are for continued expansion throughout the United States, Central and South America and Canada and that, therefore, the territorial and time limitations set forth in this Section 9 are reasonable and properly required for the adequate protection of the business of the Company and its subsidiaries. In the event any such territorial or time limitation is deemed to be unreasonable by a court of competent jurisdiction, Executive agrees to the reduction of the territorial or time limitation to the area or period which such court shall deem reasonable. (d) The existence of any claim or cause of action by Executive against the Company or any subsidiary shall not constitute a defense to the enforcement by the Company or any subsidiary of the foregoing restrictive covenants, but such claim or cause of action shall be litigated separately. (e) In the event Executive's employment with the Company terminates for any reason other than termination by the Company within one year following a Change in Control of the Company, the Company and Executive agree that in consideration of the payments being made to Executive during the Severance Period, Executive shall be available during the Severance Period to advise and consult with the Board of Directors, the President and other officers of the Company and its subsidiaries with respect to the affairs of the Company and its subsidiaries on a part-time basis, in response to requests for such advisory and consulting services by the Board of Directors, or other officers of the Company or its subsidiaries, subject to the conditions that (i) such services shall be performed within the United States of America, (ii) Executive shall not be required to devote a major portion of his time to such services, (iii) such services shall not unreasonably interfere with the performance of other employment or consulting duties Executive may have, (iv) Executive shall not be required to perform such services during usual vacation periods and reasonable periods of illness or other incapacitation, (v) such services shall be performed at times and places as shall be chosen by Executive, and which will result in the least inconvenience to Executive, and (vi) all other provisions of this Section 9 shall apply. The Company -7- shall reimburse Executive for actual out-of-pocket expenses incurred in rendering the services performed by Executive upon the request of the Board of Directors, or other officers of the Company or its subsidiaries, payable at the end of each month during such period. Notwithstanding the foregoing, in the event that Executive seeks full-time employment with a third party and such third party will not accept Executive's services for as long as he is committed under this subsection (e) to provide consulting services to the Company, then if the Board of Directors of the Company determines in its reasonable discretion that Executive's employment with the third party will not cause him to breach the provisions of Section 9 of this Agreement (other than this subsection (e)) and Executive provides the Board of Directors with a letter signed by the third party stating that such third party will not accept Executive's services as described above, the provisions of this subsection (e) shall immediately terminate and be of no further force or effect. (f) Notwithstanding anything herein to the contrary, this Section 9 shall automatically terminate if the Company terminates Executive's employment within one year following the effective date of a Change in Control of the Company, or if the Company fails to make any payments due to Executive under Sections 7(g), 7(i), 7(j) or 9(e). 10. INVENTIONS AND DISCOVERIES. (a) Executive shall promptly and fully disclose to the Company, and with all necessary detail for a complete understanding of the same, all developments, know-how, discoveries, inventions, improvements, concepts, ideas, writings, formulae, processes and methods (whether copyrightable, patentable or otherwise) made, received, conceived, acquired or written during working hours, or otherwise, by Executive (whether or not at the request or upon the suggestion of the Company) during the period of his employment with, or rendering of advisory or consulting services to, the Company or any of its subsidiaries, solely or jointly with others in or relating to any activities of the Company or its subsidiaries known to him as a consequence of his employment or the rendering of advisory and consulting services hereunder (collectively the "Subject Matter"). (b) Executive hereby assigns and transfers, and agrees to assign and transfer, to the Company, all his rights, title and interest in and to the Subject Matter, and Executive further agrees to deliver to the Company any and all drawings, notes, specifications and data relating to the Subject Matter, and to execute, acknowledge and deliver all such further papers, including applications for copyrights or patents, as may be necessary to obtain copyrights and patents for any thereof in any and all countries and to vest title thereto to the Company. Executive shall assist the Company in obtaining such copyrights or patents during the term of this Agreement, and any time thereafter on reasonable notice and at mutually convenient times, and Executive agrees to testify in any prosecution or litigation involving any of the Subject Matter; provided, however, that Executive shall be compensated in a timely manner at the rate of $500.00 per day (or portion thereof), plus out-of-pocket expenses incurred in rendering such -8- assistance or giving or preparing to give such testimony if it is required after the Severance Period. 11. NON-DISCLOSURE OF CONFIDENTIAL INFORMATION. (a) Executive shall not, during the term of this Agreement, or at any time following termination of this Agreement, directly or indirectly, disclose or permit to be known (other than as is required in the regular course of his duties (including without limitation disclosures to the Company's advisors and consultants) or is required by law (in which case Executive shall give the Company prior written notice of such required disclosure) or with the prior written consent of the Board of Directors of the Company), to any person, firm or corporation, any confidential information acquired by him during the course of, or as an incident to, his employment or the rendering of his advisory or consulting services hereunder, relating to the Company or any of its subsidiaries, the directors of the Company or its subsidiaries, any client of the Company or any of its subsidiaries, or any corporation, partnership or other entity owned or controlled, directly or indirectly, by any of the foregoing, or in which any of the foregoing has a beneficial interest, including, but not limited to, the business affairs of each of the foregoing. Such confidential information shall include, but shall not be limited to, proprietary technology, trade secrets, patented processes, research and development data, know-how, market studies and forecasts, competitive analyses, pricing policies, employee lists, personnel policies, the substance of agreements with customers, suppliers and others, marketing or dealership arrangements, servicing and training programs and arrangements, customer lists and any other documents embodying such confidential information. This confidentiality obligation shall not apply to any confidential information which thereafter becomes publicly available other than pursuant to a breach of this Section 11(a) by Executive. (b) All information and documents relating to the Company and its affiliates as hereinabove described (or other business affairs) shall be the exclusive property of the Company, and Executive shall use commercially reasonable best efforts to prevent any publication or disclosure thereof. Upon termination of Executive's employment with the Company, all documents, records, reports, writings and other similar documents containing confidential information, including copies thereof, then in Executive's possession or control shall be returned and left with the Company. 12. SPECIFIC PERFORMANCE Executive agrees that if he breaches, or threatens to commit a breach of, any of the provisions of Sections 9, 10 or 11 (the "Restrictive Covenants"), the Company shall have, in addition to, and not in lieu of, any other rights and remedies available to the Company under law and in equity, the right to injunctive relief and/or to have the Restrictive Covenants specifically enforced by an court of competent jurisdiction, it being agreed that any breach or threatened breach of the Restrictive Covenants would cause irreparable injury to the Company and that money damages would not provide an adequate remedy to the Company. Notwithstanding the foregoing, nothing -9- herein shall constitute a waiver by Executive of his right to contest whether a breach or threatened breach of any Restrictive Covenant has occurred. 13. AMENDMENT OR ALTERATION. No amendment or alteration of the terms of this Agreement shall be valid unless made in writing and signed by both of the parties hereto. 14. GOVERNING LAW. This Agreement shall be governed by and construed in accordance with the laws of the State of Alabama applicable to agreements made and to be performed therein. 15. SEVERABILITY. The holding of any provision of this Agreement to be invalid or unenforceable by a court of competent jurisdiction shall not affect any other provision of this Agreement, which shall remain in full force and effect. 16. NOTICES. Any notices required or permitted to be given hereunder shall be sufficient if in writing, and if delivered by hand or courier, or sent by certified mail, return receipt requested, to the addresses set forth above or such other address as either party may from time to time designate in writing to the other, and shall be deemed given as of the date of the delivery or at the expiration of three days in the event of a mailing. 17. WAIVER OR BREACH. It is agreed that a waiver by either party of a breach of any provision of this Agreement shall not operate, or be construed, as a waiver of any subsequent breach by that same party. 18. ENTIRE AGREEMENT AND BINDING EFFECT. This Agreement contains the entire agreement of the parties with respect to the subject matter hereof, supersedes all prior agreements, both written and oral, between the parties with respect to the subject matter hereof, including without limitation the employment agreement, dated as of October 21, 1994, between the Company and Executive, and may be modified only by a written instrument signed by each of the parties hereto. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective legal representatives, heirs, distributors, successors and assigns, provided, however, that Executive shall not be entitled to assign or delegate any of his or her rights or obligations hereunder without the prior written consent of the Company. -10- 19. SURVIVAL. Except as otherwise expressly provided herein, the termination of Executive's employment hereunder or the expiration of this Agreement shall not affect the enforceability of Sections 4, 7, 9, 10, 11 and 12 hereof. 20. FURTHER ASSURANCES. The parties agree to execute and deliver all such further documents, agreements and instruments and take such other and further action as may be necessary or appropriate to carry out the purposes and intent of this Agreement. 21. CONSTRUCTION OF AGREEMENT. No provision of this Agreement or any related document shall be construed against or interpreted to the disadvantage of any party hereto by any court or other governmental or judicial authority by reason of such party having or being deemed to have structured or drafted such provision. 22. HEADINGS. The Section headings appearing in this Agreement are for the purposes of easy reference and shall not be considered a part of this Agreement or in any way modify, demand or affect its provisions. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date and year first above written. AMERICAN BUILDINGS COMPANY [CORPORATE SEAL] By:/s/___________________________ ATTEST: By:/s/________________________ Name: Title: /s/______________________________ W. Ronald Buchholz -11- EX-10.34 9 EMPLOYMENT AGREEMENT EMPLOYMENT AGREEMENT AGREEMENT made as of January 1, 1998, between AMERICAN BUILDINGS COMPANY, a Delaware corporation with an office at 1150 State Docks Road, Eufaula, Alabama 36027 (the "Company"), and Charles Blackmon, residing at 105 Sunrise Drive, Eufaula, Alabama 36027 (the "Executive"). W I T N E S S E T H : WHEREAS, the Company desires that Executive be employed to serve in a senior executive capacity with the Company, and Executive desires to be so employed by the Company, upon the terms and conditions herein set forth. NOW, THEREFORE, in consideration of the premises and of the mutual promises, representations and covenants herein contained, the parties hereto agree as follows: 1. EMPLOYMENT. The Company hereby employs Executive and Executive hereby accepts such employment, subject to the terms and conditions herein set forth. Executive shall hold the office of Executive Vice President-Chief Financial Officer of the Company reporting to the Chief Executive Officer of the Company. 2. TERM. The initial term of employment under this Agreement shall begin on the date hereof (the "Employment Date") and shall continue until December 31, 2000, subject to prior termination in accordance with the terms hereof. Thereafter, this Agreement shall automatically be renewed for successive one year terms unless either party shall give the other ninety (90) days prior written notice of its intent not to renew this Agreement. 3. COMPENSATION. As compensation for the employment services to be rendered by Executive hereunder, including all services as an officer or director of the Company and any of its subsidiaries, the Company agrees to pay, or cause to be paid, to Executive, and Executive agrees to accept, payable in equal installments in accordance with Company practice, an initial annual salary of $165,000. Executive's annual salary hereunder for the remaining years of employment shall be determined by the Board of Directors in its sole discretion, but shall not in any year be reduced below the rate for the previous year. In addition, Executive shall be entitled to bonuses from time to time in such amounts as may be determined by the Board of Directors in its sole discretion. 4. EXPENSES. The Company shall pay or reimburse Executive, upon presentment of suitable vouchers, for all reasonable business and travel expenses which may be incurred or paid by Executive in connection with his employment hereunder. Executive shall comply with such restrictions and shall keep such records as the Company may deem necessary to meet the requirements of the Internal Revenue Code of 1986, as amended from time to time, and regulations promulgated thereunder. 5. OTHER BENEFITS. Executive shall be entitled to such vacations and to participate in and receive any other benefits customarily provided by the Company to its senior management personnel (including any profit sharing, pension, short and long-term disability insurance, hospital, major medical insurance and group life insurance plans in accordance with the terms of such plans) and including stock option and/or stock purchase plans, all as determined from time to time by the Board of Directors of the Company. 6. DUTIES. (a) Executive shall perform such duties and functions as the Chief Executive Officer of the Company shall from time to time determine and Executive shall comply in the performance of his duties with the policies of the Board of Directors, and be subject to the direction of the Chief Executive Officer. At the request of the Board of Directors, Executive shall serve as an executive officer and director of any subsidiary of the Company and, in the performance of such duties, Executive shall comply with the policies of the Board of Directors of each such subsidiary. (b) During the term of this Agreement, Executive shall devote substantially all of his time and attention, reasonable vacation time and absences for sickness excepted, to the business of the Company, as necessary to fulfill his duties. Executive shall perform the duties assigned to him with fidelity and to the best of his ability. Notwithstanding anything herein to the contrary, Executive may engage in other activities so long as such activities do not unreasonably interfere with Executive's performance of his duties hereunder and do not violate Section 9 hereof. (c) Nothing in this Section 6 or elsewhere in this Agreement shall be construed to prevent Executive from investing or trading in nonconflicting investments as he sees fit for his own account, including real estate, stocks, bonds, securities, commodities or other forms of investments. -2- 7. TERMINATION OF EMPLOYMENT; EFFECT OF TERMINATION. (a) Executive's employment hereunder may be terminated at any time upon written notice from the Company to Executive: (i) upon the determination by the Board of Directors that Executive's performance of his duties has not been fully satisfactory for any reason which would not constitute justifiable cause (as hereinafter defined) upon thirty (30) days' prior written notice to Executive; or (ii) upon the determination by the Board of Directors that there is justifiable cause (as hereinafter defined) for such termination upon ten (10) days' prior written notice to Executive. (b) Executive's employment shall terminate upon: (i) the death of Executive; or (ii) the "disability" of Executive (as hereinafter defined pursuant to subsection (c) herein) pursuant to subsection (f) hereof. (c) For the purposes of this Agreement, the term "disability" shall mean the inability of Executive, due to illness, accident or any other physical or mental incapacity, substantially to perform his duties for a period of three (3) consecutive months or for a total of six (6) months (whether or not consecutive) in any twelve (12) month period during the term of this Agreement, as reasonably determined by the Board of Directors of the Company after examination of Executive by an independent physician reasonably acceptable to Executive. (d) For the purposes hereof, the term "justifiable cause" shall mean and be limited to: any repeated wilful failure or refusal to perform any of his duties pursuant to this Agreement where such conduct shall not have ceased within 30 days following written warning from the Company; Executive's conviction (which, through lapse of time or otherwise, is not subject to appeal) of, pleading guilty to, or confession of any crime or offense involving money or other property of the Company or its subsidiaries or which constitutes a felony in the jurisdiction involved; Executive's performance of any act or his failure to act, for which if Executive were prosecuted and convicted, a crime or offense involving money or property of the Company or its subsidiaries, or which would constitute a felony in the jurisdiction involved, would have occurred; any unauthorized disclosure by Executive to any person, firm or corporation other than the Company, its subsidiaries and its and their directors, officers and employees, of any confidential information or trade secret of the Company or any of its subsidiaries; any attempt by Executive to secure any personal profit in connection with the business of the Company or any of its subsidiaries; Executive's engagement in a fraudulent act to the material damage or prejudice of Company or its subsidiaries or in conduct or activities materially damaging to the property, business or reputation of -3- Company or its subsidiaries, all as determined by the Board of Directors in good faith; Executive's illegal use of controlled substances; any material act or omission by Executive involving malfeasance or negligence in the performance of Executive's duties to the material detriment of the Company or its subsidiaries, as determined by the Board of Directors in good faith, which has not been corrected by Executive within thirty (30) days after written notice from the Company of any such act or omission; the entry of an order of a court that remains in effect and is not discharged for a period of at least sixty (60) days, which enjoins or otherwise limits or restricts the performance by Executive under this Agreement, relating to any contract, agreement or commitment made by or applicable to Executive in favor of any former employer or any other person; or the engaging by Executive in any business other than the business of the Company and its subsidiaries which unreasonably interferes with the performance of his duties hereunder. Upon termination of Executive's employment for justifiable cause, this Agreement shall terminate immediately and Executive shall not be entitled to any amounts or benefits hereunder other than such portion of Executive's annual salary and reimbursement of expenses pursuant to Section 4 hereof as has been accrued through the date of his termination of employment. (e) If Executive shall die during the term of his employment hereunder, this Agreement shall terminate immediately. In such event, the estate of Executive shall thereupon be entitled to receive such portion of Executive's annual salary and reimbursement of expenses pursuant to Section 4 as has been accrued through the date of his death. If Executive's death shall occur while he is on Company business, the estate of Executive shall be entitled to receive, in addition to the other amounts set forth in this subsection (e), an amount equal to one-half his then annual salary. (f) Upon Executive's "disability", the Company shall have the right to terminate Executive's employment. Notwithstanding any inability to perform his duties, Executive shall be entitled to receive his compensation (including bonus, if any) and reimbursement of expenses pursuant to Section 4 as provided herein until he begins to receive long-term disability insurance benefits under the policy provided by the Company pursuant to Section 5 hereof. Any termination pursuant to this subsection (f) shall be effective on the later of (i) the date 30 days after which Executive shall have received written notice of the Company's election to terminate or (ii) the date he begins to receive long-term disability insurance benefits under the policy provided by the Company pursuant to Section 5 hereof. (g) Notwithstanding any provision to the contrary contained herein, in the event that Executive's employment is terminated by the Company at any time for any reason other than justifiable cause, disability or death, the Company shall (i) pay Executive, for a period equal to the longer of (1) the remaining term of this Agreement or (2) one year (such period being hereinafter referred to as the "Severance Period"), a monthly payment equal to one-twelfth of his then annual salary, which amount shall be in lieu of any and all other payments due and owing to the Executive under the terms of this Agreement (other than any payments constituting reimbursement of expenses pursuant to Section 4 hereof), and (ii) continue to allow Executive to -4- participate, at the Company's expense, in the Company's health insurance and disability insurance programs, to the extent permitted under such programs, during the Severance Period (collectively, the "Severance Payments"); provided, however, that if such termination occurs within one (1) year following the effective date of a Change in Control of the Company (as hereinafter defined), the Company shall pay to Executive, in lieu of the amounts set forth in clause (i) above, in one lump sum, a severance payment equal to (i) two years' annual salary plus (ii) an amount equal to twice Executive's most recently declared bonus, if any. (h) For purposes of this Agreement, a "Change in Control of the Company" shall be deemed to occur if (i) there shall be consummated (x) any consolidation or merger of the Company in which the Company is not the continuing or surviving corporation or pursuant to which shares of the Company's Common Stock would be converted into cash, securities or other property, other than a merger of the Company in which the holders of the Company's Common Stock immediately prior to the merger have the same proportionate ownership of common stock of the surviving corporation immediately after the merger, or (y) any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all, or substantially all, of the assets of the Company, or (ii) the stockholders of the Company shall approve any plan or proposal for liquidation or dissolution of the Company, or (iii) any person (as such term is used in Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")) shall become the beneficial owner (within the meaning of Rule 13d-3 under the Exchange Act) of 40% or more of the Company's outstanding Common Stock other than pursuant to a plan or arrangement entered into by such person and the Company, or (iv) during any period of two consecutive years, individuals who at the beginning of such period constitute the entire Board of Directors of the Company shall cease for any reason to constitute a majority thereof unless the election, or the nomination for election by the Company's stockholders, of each new director was approved by a vote of at least two-thirds of the directors then still in office who were directors at the beginning of the period. (i) Notwithstanding any provision to the contrary contained herein, in the event the Company elects not to renew this Agreement (other than within one year following a Change in Control of the Company, which is covered in Section 7(g) above) the Company will pay Executive a severance payment equal to one year's annual salary. (j) Executive may terminate his employment at any time upon 30 days' prior written notice to the Company. Upon Executive's termination of his employment hereunder or his election not to renew this Agreement, this Agreement (other than Sections 4, 7, 9, 10, 11 and 12, which shall survive, if at all, in accordance with their terms) shall terminate; provided, however, that Section 9 shall not survive such termination unless the Company pays to Executive during the Severance Period the Severance Payments. In such event, Executive shall be entitled to receive such portion of Executive's annual salary and bonus, if any, as has been accrued to date. Executive shall be entitled to reimbursement of expenses pursuant to Section 4 hereof and to participate in the Company's benefit plans to the extent participation by former -5- employees is required by law or permitted by such plans, with the expense of such participation to be as specified in such plans for former employees. (k) If, in connection with a change of ownership or control of the Company or a change in ownership of a substantial portion of the assets of the Company (all within the meaning of Section 280G(b)(2) of the Internal Revenue Code of 1986, as amended (the "Code")), an excise tax is payable by Executive under Section 4999 of the Code, then the Company will pay to the Executive additional compensation which will be sufficient to enable Executive to pay such excise tax as well as the income tax and excise tax on such additional compensation, such that, after the payment of income and excise taxes, Executive is in the same economic position in which he would have been if the provisions of Section 4999 of the Code had not been applicable. The additional compensation required by this Section 7(k) will be paid to Executive promptly after the date or dates on which the amount of such additional compensation is determinable, in whole or in part. 8. REPRESENTATIONS AND AGREEMENTS OF EXECUTIVE. (a) Executive represents and warrants that he is free to enter into this Agreement and to perform the duties required hereunder, and that there are no employment contracts or understandings, restrictive covenants or other restrictions, whether written or oral, preventing the performance of his duties hereunder. (b) Executive agrees to submit to a medical examination and to cooperate and supply such other information and documents as may be required by any insurance company in connection with the Company's obtaining life insurance on the life of Executive, and any other type of insurance or fringe benefit as the Company shall determine from time to time to obtain. 9. NON-COMPETITION. (a) Executive agrees that during his employment by the Company and during the Severance Period following the termination of Executive's employment hereunder (the "Non-Competitive Period"), Executive shall not, directly or indirectly, as owner, partner, joint venturer, stockholder, employee, broker, agent, principal, trustee, corporate officer, director, licensor, or in any capacity whatsoever engage in, become financially interested in, be employed by, render any consultation or business advice with respect to, or have any connection with, (i) any business which is competitive with products or services of the Company or any of its subsidiaries in any geographic area in the United States of America, Central and South America, Canada, The People's Republic of China and Southeast Asia where, at the time of the termination of his employment hereunder, the business of the Company or any of its subsidiaries was being conducted or was proposed to be conducted in any manner whatsoever or (ii) any business conducted under any corporate or trade name utilized by the Company or any name similar thereto without the prior written consent of the Company; provided, however, that Executive may own any securities of any corporation -6- which is engaged in such business and is publicly owned and traded but in an amount not to exceed at any one time one percent (1%) of any class of stock or securities of such corporation. In addition, Executive shall not, directly or indirectly, during the Non-Competitive Period, request or cause any suppliers or customers with whom the Company or any of its subsidiaries has a business relationship to cancel or terminate any such business relationship with the Company or any of its subsidiaries or solicit, interfere with or entice from the Company any employee (or former employee) of the Company. (b) If any portion of the restrictions set forth in this Section 9 should, for any reason whatsoever, be declared invalid by a court of competent jurisdiction, the validity or enforceability of the remainder of such restrictions shall not thereby be adversely affected. (c) Executive acknowledges that the Company conducts business throughout the United States, that its sales and marketing prospects are for continued expansion throughout the United States, Central and South America and Canada and that, therefore, the territorial and time limitations set forth in this Section 9 are reasonable and properly required for the adequate protection of the business of the Company and its subsidiaries. In the event any such territorial or time limitation is deemed to be unreasonable by a court of competent jurisdiction, Executive agrees to the reduction of the territorial or time limitation to the area or period which such court shall deem reasonable. (d) The existence of any claim or cause of action by Executive against the Company or any subsidiary shall not constitute a defense to the enforcement by the Company or any subsidiary of the foregoing restrictive covenants, but such claim or cause of action shall be litigated separately. (e) In the event Executive's employment with the Company terminates for any reason other than termination by the Company within one year following a Change in Control of the Company, the Company and Executive agree that in consideration of the payments being made to Executive during the Severance Period, Executive shall be available during the Severance Period to advise and consult with the Board of Directors, the President and other officers of the Company and its subsidiaries with respect to the affairs of the Company and its subsidiaries on a part-time basis, in response to requests for such advisory and consulting services by the Board of Directors, or other officers of the Company or its subsidiaries, subject to the conditions that (i) such services shall be performed within the United States of America, (ii) Executive shall not be required to devote a major portion of his time to such services, (iii) such services shall not unreasonably interfere with the performance of other employment or consulting duties Executive may have, (iv) Executive shall not be required to perform such services during usual vacation periods and reasonable periods of illness or other incapacitation, (v) such services shall be performed at times and places as shall be chosen by Executive, and which will result in the least inconvenience to Executive, and (vi) all other provisions of this Section 9 shall apply. The Company -7- shall reimburse Executive for actual out-of-pocket expenses incurred in rendering the services performed by Executive upon the request of the Board of Directors, or other officers of the Company or its subsidiaries, payable at the end of each month during such period. Notwithstanding the foregoing, in the event that Executive seeks full-time employment with a third party and such third party will not accept Executive's services for as long as he is committed under this subsection (e) to provide consulting services to the Company, then if the Board of Directors of the Company determines in its reasonable discretion that Executive's employment with the third party will not cause him to breach the provisions of Section 9 of this Agreement (other than this subsection (e)) and Executive provides the Board of Directors with a letter signed by the third party stating that such third party will not accept Executive's services as described above, the provisions of this subsection (e) shall immediately terminate and be of no further force or effect. (f) Notwithstanding anything herein to the contrary, this Section 9 shall automatically terminate if the Company terminates Executive's employment within one year following the effective date of a Change in Control of the Company, or if the Company fails to make any payments due to Executive under Sections 7(g), 7(i), 7(j) or 9(e). 10. INVENTIONS AND DISCOVERIES. (a) Executive shall promptly and fully disclose to the Company, and with all necessary detail for a complete understanding of the same, all developments, know-how, discoveries, inventions, improvements, concepts, ideas, writings, formulae, processes and methods (whether copyrightable, patentable or otherwise) made, received, conceived, acquired or written during working hours, or otherwise, by Executive (whether or not at the request or upon the suggestion of the Company) during the period of his employment with, or rendering of advisory or consulting services to, the Company or any of its subsidiaries, solely or jointly with others in or relating to any activities of the Company or its subsidiaries known to him as a consequence of his employment or the rendering of advisory and consulting services hereunder (collectively the "Subject Matter"). (b) Executive hereby assigns and transfers, and agrees to assign and transfer, to the Company, all his rights, title and interest in and to the Subject Matter, and Executive further agrees to deliver to the Company any and all drawings, notes, specifications and data relating to the Subject Matter, and to execute, acknowledge and deliver all such further papers, including applications for copyrights or patents, as may be necessary to obtain copyrights and patents for any thereof in any and all countries and to vest title thereto to the Company. Executive shall assist the Company in obtaining such copyrights or patents during the term of this Agreement, and any time thereafter on reasonable notice and at mutually convenient times, and Executive agrees to testify in any prosecution or litigation involving any of the Subject Matter; provided, however, that Executive shall be compensated in a timely manner at the rate of $500.00 per day (or portion thereof), plus out-of-pocket expenses incurred in rendering such -8- assistance or giving or preparing to give such testimony if it is required after the Severance Period. 11. NON-DISCLOSURE OF CONFIDENTIAL INFORMATION. (a) Executive shall not, during the term of this Agreement, or at any time following termination of this Agreement, directly or indirectly, disclose or permit to be known (other than as is required in the regular course of his duties (including without limitation disclosures to the Company's advisors and consultants) or is required by law (in which case Executive shall give the Company prior written notice of such required disclosure) or with the prior written consent of the Board of Directors of the Company), to any person, firm or corporation, any confidential information acquired by him during the course of, or as an incident to, his employment or the rendering of his advisory or consulting services hereunder, relating to the Company or any of its subsidiaries, the directors of the Company or its subsidiaries, any client of the Company or any of its subsidiaries, or any corporation, partnership or other entity owned or controlled, directly or indirectly, by any of the foregoing, or in which any of the foregoing has a beneficial interest, including, but not limited to, the business affairs of each of the foregoing. Such confidential information shall include, but shall not be limited to, proprietary technology, trade secrets, patented processes, research and development data, know-how, market studies and forecasts, competitive analyses, pricing policies, employee lists, personnel policies, the substance of agreements with customers, suppliers and others, marketing or dealership arrangements, servicing and training programs and arrangements, customer lists and any other documents embodying such confidential information. This confidentiality obligation shall not apply to any confidential information which thereafter becomes publicly available other than pursuant to a breach of this Section 11(a) by Executive. (b) All information and documents relating to the Company and its affiliates as hereinabove described (or other business affairs) shall be the exclusive property of the Company, and Executive shall use commercially reasonable best efforts to prevent any publication or disclosure thereof. Upon termination of Executive's employment with the Company, all documents, records, reports, writings and other similar documents containing confidential information, including copies thereof, then in Executive's possession or control shall be returned and left with the Company. 12. SPECIFIC PERFORMANCE Executive agrees that if he breaches, or threatens to commit a breach of, any of the provisions of Sections 9, 10 or 11 (the "Restrictive Covenants"), the Company shall have, in addition to, and not in lieu of, any other rights and remedies available to the Company under law and in equity, the right to injunctive relief and/or to have the Restrictive Covenants specifically enforced by an court of competent jurisdiction, it being agreed that any breach or threatened breach of the Restrictive Covenants would cause irreparable injury to the Company and that money damages would not provide an adequate remedy to the Company. Notwithstanding the foregoing, nothing -9- herein shall constitute a waiver by Executive of his right to contest whether a breach or threatened breach of any Restrictive Covenant has occurred. 13. AMENDMENT OR ALTERATION. No amendment or alteration of the terms of this Agreement shall be valid unless made in writing and signed by both of the parties hereto. 14. GOVERNING LAW. This Agreement shall be governed by and construed in accordance with the laws of the State of Alabama applicable to agreements made and to be performed therein. 15. SEVERABILITY. The holding of any provision of this Agreement to be invalid or unenforceable by a court of competent jurisdiction shall not affect any other provision of this Agreement, which shall remain in full force and effect. 16. NOTICES. Any notices required or permitted to be given hereunder shall be sufficient if in writing, and if delivered by hand or courier, or sent by certified mail, return receipt requested, to the addresses set forth above or such other address as either party may from time to time designate in writing to the other, and shall be deemed given as of the date of the delivery or at the expiration of three days in the event of a mailing. 17. WAIVER OR BREACH. It is agreed that a waiver by either party of a breach of any provision of this Agreement shall not operate, or be construed, as a waiver of any subsequent breach by that same party. 18. ENTIRE AGREEMENT AND BINDING EFFECT. This Agreement contains the entire agreement of the parties with respect to the subject matter hereof, supersedes all prior agreements, both written and oral, between the parties with respect to the subject matter hereof, including without limitation the employment agreement, dated as of October 21, 1994, between the Company and Executive, and may be modified only by a written instrument signed by each of the parties hereto. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective legal representatives, heirs, distributors, successors and assigns, provided, however, that Executive shall not be entitled to assign or delegate any of his or her rights or obligations hereunder without the prior written consent of the Company. -10- 19. SURVIVAL. Except as otherwise expressly provided herein, the termination of Executive's employment hereunder or the expiration of this Agreement shall not affect the enforceability of Sections 4, 7, 9, 10, 11 and 12 hereof. 20. FURTHER ASSURANCES. The parties agree to execute and deliver all such further documents, agreements and instruments and take such other and further action as may be necessary or appropriate to carry out the purposes and intent of this Agreement. 21. CONSTRUCTION OF AGREEMENT. No provision of this Agreement or any related document shall be construed against or interpreted to the disadvantage of any party hereto by any court or other governmental or judicial authority by reason of such party having or being deemed to have structured or drafted such provision. 22. HEADINGS. The Section headings appearing in this Agreement are for the purposes of easy reference and shall not be considered a part of this Agreement or in any way modify, demand or affect its provisions. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date and year first above written. AMERICAN BUILDINGS COMPANY [CORPORATE SEAL] By: /s/___________________________ ATTEST: By: /s/________________________ Name: Title: /s/___________________________ Charles Blackmon -11- EX-11 10 COMPUTATION OF EARNINGS PER SHARE EXHIBIT 11 AMERICAN BUILDINGS COMPANY AND SUBSIDIARIES COMPUTATION OF EARNINGS PER SHARE (IN THOUSANDS, EXCEPT PER SHARE DATA)
FOR THE YEARS ENDED DECEMBER 31, ------------------------------------------------------------- 1997 1996 1995 -------- -------- ------ Net income $ 15,851 $ 12,447 $17,590 ======== ======== ======= Weighted Average Shares Outstanding - Basic 5,291 5,699 6,231 Add - Dilutive effect of outstanding options (as determined by the application of the treasury stock method) 358 341 323 -------- -------- ------- Weighted Average Shares Outstanding - Diluted 5,649 6,040 6,554 ======= ======= ======= Earnings per share: Basic $ 3.00 $ 2.18 $ 2.82 ======== ======= ======= Diluted $ 2.81 $ 2.06 $ 2.68 ======== ======= =======
EX-21 11 SUBSIDIARIES EXHIBIT 21 SUBSIDIARIES ABC Transportation Company ABC Brokerage Co. American Buildings Cayman Incorporated American Buildings Company International, Inc. ABC Residential Company American Buildings Offshore, Inc. AMT/Beaman Corporation Global Modular, Inc. Windsor Door, Inc. EX-23 12 CONSENT EXHIBIT 23 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the incorporation of our reports included (or incorporated by reference) in this Form 10-K into the Company's previously filed Registration Statements on Form S-8, File No. 33-86556, File No. 33-86558, and File No. 33-86560. ARTHUR ANDERSEN LLP Atlanta, Georgia March 23, 1998 EX-27 13 FDS -- WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONDENSED CONSOLIDATED BALANCE SHEETS AND THE CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND IS QUALIFIED IN ITS ENTIRETY BY RERERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 12-MOS DEC-31-1997 DEC-31-1997 16,560 0 65,949 4,375 32,159 116,207 98,017 43,410 210,051 79,099 71,407 0 0 63 [OTHER] 55,733 210,051 323,387 323,387 268,023 296,551 0 (183) 1,061 25,775 9,924 15,851 0 0 0 15,851 3.00 2.81
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