SKY Skyline Champion Corporation

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 13, 2023

 

 

SKYLINE CHAMPION CORPORATION

(Exact name of Registrant as Specified in Its Charter)

 

 

Indiana			001-04714	35-1038277
(State or Other Jurisdiction of Incorporation)			(Commission File Number)	(IRS Employer Identification No.)
755 West Big Beaver Road, Suite 1000
Troy, Michigan				48084
(Address of Principal Executive Offices)				(Zip Code)

 

Registrant’s Telephone Number, Including Area Code: (248) 614-8211

 

(Former Name or Former Address, if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock		SKY		The New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

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Introductory Note

This Current Report on Form 8-K is being filed in connection with the completion on October 13, 2023 (the “Closing Date”) of the transactions contemplated by that certain Securities Purchase Agreement, dated as of August 25, 2023 (the “Purchase Agreement”), by and among Skyline Champion Corporation, an Indiana corporation (“Skyline Champion”), Champion Home Builders, Inc., a Delaware corporation and subsidiary of Skyline Champion (“CHB”), Champion Retail Housing, Inc., a Delaware corporation and subsidiary of Skyline Champion (“CRH” and together with CHB, “Buyers”), Regional Holdings Corporation, a Mississippi corporation (“Regional”), Regional Underwriters, Inc., a Saint Kitts and Nevis corporation (“Regional Underwriters”), Heath Jenkins, as beneficial owner of the outstanding equity interests of Regional (collectively, with Regional and the Regional Underwriters, the “Sellers”), Dana Jenkins, as beneficial owner of the outstanding equity interests of Helicon Insurance, LLC, and party thereto solely with respect to the sale of Helicon Insurance, LLC (“Dana Jenkins”), and Heath Jenkins, solely in his capacity as the representative of the Sellers (the “Sellers’ Representative”). Pursuant to the terms of the Purchase Agreement, on the Closing Date, Buyers acquired all of the outstanding equity interests in Regional Enterprises, LLC and related companies (collectively, “Regional Homes,” each being a “Regional Home Company”) from the Sellers and Dana Jenkins (collectively, the “Transaction”).

On the Closing Date, Skyline, through Buyers, paid to Sellers approximately $313,000,000, net of cash acquired, plus assumed debt, primarily related to inventory floor plan liabilities, of $93,000,000. In addition, the Company issued 379,248 shares of common stock in Skyline Champion, par value $0.0277 per share (the “Skyline Common Stock”), equal to $25,000,000 in cash, to Sellers. The transaction is subject to an earnout provision as well as customary net working capital adjustments. The Company also issued 75,850 shares of Skyline Common Stock, equal to $5,000,000 in cash, to Dana Jenkins (the “D. Jenkins Stock Consideration”) for Helicon Insurance, LLC. For each of Sellers and Dana Jenkins, the number of shares of Skyline Common Stock was calculated by dividing the cash equivalent of the Stock Consideration and the D. Jenkins Stock Consideration by the volume weighted average price per share of Skyline Champion Common Stock on the New York Stock Exchange for the thirty consecutive trading days immediately preceding the Closing Date. The Skyline Champion Common Stock was issued to the Sellers and Dana Jenkins in a private placement exempt from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), pursuant to Section 4(a)(2) of the Securities Act (the “Private Placement”).

In addition, certain sales proceeds were deposited with U.S. Bank, N.A. (the “Escrow Agent”) on the Closing Date for the purposes of satisfying any additional post-closing purchase price adjustments owed by the Sellers to Buyers and as security for the Sellers’ indemnification obligations to Buyers and will be released in accordance with the terms and conditions set forth in the Purchase Agreement. As previously disclosed, the Sellers are entitled to all shareholder rights with respect to the Stock Consideration, including, but not limited to, dividends and voting rights, while the Stock Consideration is held in escrow.

 

Skyline Champion funded the Transaction with cash on hand and 455,098 shares of Skyline Common Stock, as stated above.

 

Assumed Indebtedness:

 

On the Closing Date, approximately $93,000,000 of the purchase price was paid by Buyers in the form of assumed indebtedness, pursuant to which Buyers and Skyline Champion agreed to act as guarantors for certain of Regional Homes’ payment obligations under certain promissory notes issued by Regional Homes in favor of the lenders named therein.

Item 1.01 Entry into a Material Definitive Agreement.

The information set forth in the Introductory Note of this Current Report on Form 8-K is incorporated herein by reference.

Purchase Agreement Amendment

 

On the Closing Date, in connection with the consummation of the Transaction contemplated by the Purchase Agreement, the parties thereto entered into that certain Amendment No. 1 to Securities Purchase Agreement and Company Disclosure Schedule, dated as of October 13, 2023 (the “Purchase Agreement Amendment”), which amends the Purchase Agreement to, among other things, include Impact Software, LLC as a Regional Home Company and provide for the entry between Buyers and Helicon Technology, LLC into that certain Transition Services Agreement (as detailed below).

 

Restrictive Covenant Agreement

On the Closing Date, Skyline Champion, Buyers and certain of Sellers’ affiliates (the “Restricted Parties”) entered into that certain Restrictive Covenant Agreement, dated as of October 13, 2023, pursuant to which the Restricted Parties agreed to refrain from competing with, and soliciting service providers to and customers of, Regional Homes for the five years immediately following the Closing Date in order to protect Regional Homes’ business interests and goodwill.

Release Agreement

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On the Closing Date, the Sellers and Dana Jenkins entered into that certain Release Agreement, dated as of October 13, 2023 (the “Release Agreement”), pursuant to which the Sellers and Dana Jenkins released any and all claims arising prior to the Closing against Skyline Champion, Buyers and Regional Homes, including, but not limited to, claims arising out of or relating to the Purchase Agreement.

Restricted Stock Agreement

On the Closing Date, Skyline Champion, Sellers and Dana Jenkins entered into that certain Restricted Stock Agreement, dated as of October 13, 2023 (the “Restricted Stock Agreement”), pursuant to which the parties agreed to be bound by the terms and conditions set forth therein in connection with any transfer of the Skyline Common Stock issued to them in the Private Placement (collectively with any new, substituted or additional securities that may be received in replacement of the Skyline Common Stock, the “Shares”). The Restricted Stock Agreement contains customary representations and warranties from each of the parties, including, among others, that Sellers and Dana Jenkins (together, the “Recipients”) are “accredited investors” within the meaning of Regulation D adopted under the Securities Act.

The Shares are “restricted securities” within the meaning of Regulation D and Rule 144 under the Securities Act and will be subject to certain restrictions, including, but not limited to, (i) a six-month holding period after issuance of the Shares, (ii) limitations on the number of Shares that can be sold in any three-month period by an affiliate of Skyline Champion, (iii) limitations on the encumbrances or liens that may be placed on the Shares within six months following the issuance of the Shares, (iv) compliance with any stock ownership or holding guidelines that may be adopted by Skyline Champion and may be in effect with respect to directors, officers or employees of Skyline Champion, and (v) in the case of Heath Jenkins, compliance with the terms and conditions set forth in Skyline Champion’s Insider Trading Policy. In addition, the Restricted Stock Agreement provides for certain vesting periods, subject to certain exceptions, such that (a) no Recipient may transfer any Shares until the first anniversary of the Closing, (b) from the first anniversary of the Closing to the second anniversary, a Recipient may transfer one-third of the Shares that such Recipient owned beneficially on the first anniversary, (c) from the second anniversary of the Closing to the third anniversary, a Recipient may transfer all but one-third of the Shares that such Recipient owned beneficially on the first anniversary, and (d) from and after the third anniversary, a Recipient may transfer any and all other Shares.

The Restricted Stock Agreement will not obligate Skyline Champion to register the Shares under the Securities Act. That said, Skyline Champion has agreed in the Restricted Stock Agreement to make all information publicly available as required by Rule 144 of the Securities Act and other applicable regulations such that the Recipients may resell the Shares to the public without registration.

The foregoing description of each of the Purchase Agreement Amendment, Restrictive Covenant Agreement, Release Agreement and Restricted Stock Agreement does not purport to be complete and is qualified in its entirety by reference to the text of each document, a copy of which is attached hereto as Exhibit 2.1, Exhibit 10.1, Exhibit 10.2 and Exhibit 10.3, respectively, and is incorporated herein by reference.

Item 2.01 Completion of Acquisition or Disposition of Assets.

The information set forth in the Introductory Note of this Current Report on Form 8-K is incorporated herein by reference.

Additional information and details regarding the Transaction were previously disclosed in Item 1.01 of that certain Current Report on Form 8-K filed on August 30, 2023, and are incorporated herein by reference.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

On the Closing Date, Skyline Champion, through Buyers, assumed indebtedness of approximately $93,000,000 under certain loan agreements. Additional available borrowing capacity under the assumed loan agreements totaled $132,000,000 as of the Closing date. In particular, (i) CRH became the guarantor under the loan agreement with Regional Enterprises, LLC and Triad Financial Services, Inc., with available credit of $75,000,000 (the “Triad Guaranty”), and (ii) Skyline Champion and CHB became the guarantors under the loan agreement with Regional Enterprises, LLC and Northpoint Commercial Finance LLC, with available credit of $45,000,000 (the

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“Northpoint Guaranty”). The full text of the Triad Guaranty, the Northpoint Guaranty, and the underlying loan documents will be filed as Exhibits to Skyline Champion’s Annual Report on Form 10-K for the current fiscal year.

Champion Home Builders, Inc. is a party to a joint venture agreement with Triad Financial Services, Inc. Additional information and details regarding the joint venture were previously disclosed in Item 1.01 of that certain Current Report on Form 8-K filed on September 28, 2023, and are incorporated herein by reference.

Item 3.02 Unregistered Sales of Equity Securities.

To the extent required by this item, the information set forth in the Introductory Note and contained under the caption “Restricted Stock Agreement” in Item 1.01 of this Current Report on Form 8-K concerning the Private Placement is incorporated herein by reference. The offers and sales that constitute the Private Placement have been and will be undertaken in reliance upon Section 4(a)(2) of the Securities Act.

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

To the extent required by this item, the information included in Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference.

On the Closing Date, the board of directors of Skyline Champion appointed Heath Jenkins as President, Retail Operations, of Skyline Champion, effective as of the Closing Date. Prior to his appointment, Heath Jenkins was the beneficial owner of Regional Enterprises, LLC, which became an indirect subsidiary of Skyline Champion upon the consummation of the Transaction.

 

In connection with the issuance of the Skyline Common Stock pursuant to the Private Placement, Heath Jenkins also became the indirect beneficial owner of (i) the Stock Consideration, as chief executive officer and controlling shareholder of Regional Holdings Corporation, which in turn was the former majority equityholder of the Regional Home Companies and record holder of the Stock Consideration issued on the Closing Date, and (ii) the D. Jenkins Stock Consideration, as the spouse of Dana Jenkins.

 

Heath Jenkins, age 42, founded Regional Enterprises, LLC in 2005 and served as the Chief Executive Officer from inception until the closing of the Transaction.

Item 8.01 Other Events.

On the Closing Date, Skyline Champion and Regional Homes issued a joint press release announcing the completion of the transactions contemplated by the Purchase Agreement. A copy of such press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

Forward-Looking Statements

Statements in this Current Report on Form 8-K, including certain statements regarding Skyline Champion’s strategic initiatives, and future market demand are intended to be covered by the safe harbor for "forward-looking statements" provided by the Private Securities Litigation Reform Act of 1995. These forward-looking statements generally can be identified by use of words such as "believe," "expect," "future," "anticipate," "intend," "plan," "foresee," "may," "could," "should," "will," "potential," "continue," or other similar words or phrases. Similarly, statements that describe objectives, plans, or goals also are forward-looking statements. Such forward-looking statements involve inherent risks and uncertainties, many of which are difficult to predict and are generally beyond the control of Skyline Champion. Skyline Champion cautions investors that a number of important factors could cause actual results to differ materially from those expressed in, implied, or projected by such forward-looking statements. Risks and uncertainties include regional, national and international economic, financial, public health and labor conditions, and the following: supply-related issues, including prices and availability of materials; labor-related issues; inflationary pressures in the North American economy; the cyclicality and seasonality of the housing industry and its sensitivity to changes in general economic or other business conditions; demand fluctuations in the housing industry, including as a result of actual or anticipated increases in homeowner borrowing rates; the possible unavailability of additional capital when needed; competition and competitive pressures; changes in consumer preferences for Skyline Champion’s products or Skyline Champion’s failure to gauge those preferences; quality problems, including the quality of parts sourced from suppliers and related liability and reputational issues; data security breaches, cybersecurity attacks, and other information technology disruptions; the potential disruption of operations caused by the conversion to new information systems; the extensive regulation affecting the production and sale of factory-built housing and the effects of possible changes in laws with which Skyline Champion must comply; the potential impact of natural disasters on sales and raw material costs; the risks associated with mergers and acquisitions, including integration of operations and information systems; periodic inventory adjustments by, and changes to relationships with, independent retailers; changes in interest and foreign exchange rates; insurance coverage and cost issues; the possibility that all or part of Skyline Champion’s intangible assets, including goodwill, might become impaired; the possibility that Skyline Champion’s risk management practices may leave Skyline Champion exposed to unidentified or unanticipated risks; the potential disruption to Skyline Champion’s business caused by public health issues, such as an epidemic or pandemic, and resulting government actions; and other

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risks set forth in the “Risk Factors” section, the “Legal Proceedings” section, the “Management's Discussion and Analysis of Financial Condition and Results of Operations” section, and other sections, as applicable, in Skyline Champion’s Annual Reports on Form 10-K, including Skyline Champion’s Annual Report on Form 10-K for the fiscal year ended April 1, 2023 previously filed with the SEC, as well as in Skyline Champion’s Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K, filed with or furnished to the SEC.

If any of these risks or uncertainties materializes or if any of the assumptions underlying such forward-looking statements proves to be incorrect, then the developments and future events concerning Skyline Champion set forth in this Current Report on Form 8-K may differ materially from those expressed or implied by these forward-looking statements. Investors are cautioned not to place undue reliance on these statements, which speak only as of the date of this Current Report on Form 8-K. Skyline Champion anticipates that subsequent events and developments will cause Skyline Champion’s expectations and beliefs to change. Skyline Champion assumes no obligation to update such forward-looking statements to reflect events or circumstances after the date of this Current Report on Form 8-K or to reflect the occurrence of unanticipated events, unless obligated to do so under the federal securities laws.

Item 9.01 Financial Statements and Exhibits.

a)	Financial statements of the businesses acquired

To the extent required by this item, historical financial statements for the Transaction will be filed in an amendment to this Current Report on Form 8-K no later than 71 calendar days after the date this report is due.

 

b)	Pro forma financial information

To the extent required by this item, pro forma financial information relating to the Transaction will be filed in an amendment to this Current Report on Form 8-K no later than 71 calendar days after the date this report is due.

 

d)	Exhibits

The following exhibits are furnished herewith:

Exhibit No.	Description
2.1	Amendment No. 1 to Securities Purchase Agreement and Company Disclosure Schedule, dated as of October 13, 2023, among Skyline Champion Corporation, Champion Retail Housing, Inc., Champion Home Builders, Inc., Regional Holdings Corporation, Heath Jenkins, Regional Underwriters, Inc., Dana Jenkins (for the limited purposes set forth herein), and Heath Jenkins as the Sellers’ Representative
10.1	Restrictive Covenant Agreement, dated as of October 13, 2023, among Skyline Champion Corporation, Champion Retail Housing, Inc., Champion Home Builders, Inc. and the Restricted Parties named therein.
10.2	General Release, dated as of October 13, 2023, among Regional Holdings Corporation, Regional Underwriters, Inc., Heath Jenkins and Dana Jenkins.
10.3	Restricted Stock Agreement, dated as of October 13, 2023, among Skyline Champion Corporation, Dana Jenkins and Regional Holdings Corporation
99.1	Press Release, dated October 13, 2023
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

 

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

			Skyline Champion Corporation
Date:	October 19, 2023	By:	/s/ Robert Spence
			Robert Spence Senior Vice President, General Counsel and Secretary

 

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Exhibit 2.1

AMENDMENT NO. 1

 

TO SECURITIES PURCHASE AGREEMENT AND

COMPANY DISCLOSURE SCHEDULE

 

This Amendment No. 1, dated October 13, 2023 (this “Amendment”), amends that certain Securities Purchase Agreement (the “Purchase Agreement”), dated as of August 23, 2023, by and among Skyline Champion Corporation, an Indiana corporation (“Parent”); Champion Home Builders, Inc., a Delaware corporation and subsidiary of Parent (“CHB”); Champion Retail Housing, Inc., a Delaware corporation and subsidiary of Parent (“CHR” and together with CHB, “Buyers”, and each individually, a “Buyer”); Regional Holdings Corporation, a Mississippi corporation (“Regional”); Regional Underwriters, Inc., a Saint Kitts and Nevis corporation (“Regional Underwriters”); Heath Jenkins, a resident of Mississippi (“Heath Jenkins” and tougher with Regional and Regional Underwriters, “Sellers”, and each individually, “Seller”); Dana Jenkins, a resident of Mississippi (“Dana Jenkins”) solely with respect to the sale of Helicon Insurance, LLC; and Heath Jenkins, as the Sellers’ Representative (the “Sellers’ Representative”).

 

WHEREAS, the parties hereto desire to amend the Purchase Agreement and the Company Disclosure Schedules (as defined in the Purchase Agreement) as set forth in this Amendment.

 

NOW, THEREFORE, in consideration of mutual agreements hereinafter specified, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:

 

 

 

“Company Group” means Regional Enterprises, LLC, Helicon Capital, LLC, Helicon Transport, LLC, Regional Land Company, LLC (including its Subsidiaries Regional Land Company BM, LLC and Regional Land Company LH, LLC), Rogers-Jenkins Properties, LLC, Platinum Homes, LLC, Hamilton Home Builders, LLC (“Hamilton”), Hamilton Property Group, LLC, Winston Housing Group, LLC, Marion Property Group, LLC, Regional Enterprises of AL, LLC, Regional Realty, LLC, Helicon Insurance, LLC, Liberty NMTC, LLC (“Liberty”) and Impact Software, LLC.

 

 

“(ii) the sum of the current liabilities of the Company Group (excluding (A) Selling Expenses (to the extent included in the calculation of the Closing Cash Amount); and (B) Indebtedness (other (y) than any Company Closing

 

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Indebtedness that was not paid in connection with Closing, unless the falure to so pay such Company Closing Indebtedness is related to a breach by Buyer of Section 2.4; and (z) accrued but unpaid interest on the Company Closing Assumed Indebtedness).”

 

 

“(iv) loan modification fees and expenses incurred at or prior to Closing by the holders of the Company Closing Assumed Indebtedness;”

 

 

the Transition Services Agreement by and among Helicon Technology, LLC, a Mississippi limited liability company and Buyers, duly executed by Helicon Technology, LLC;

 

 

 

6.5. Post-Closing Real Estate Covenants. As soon as reasonably possible after the Closing Date, at the Sellers’ Representative’s sole cost and expense but not to exceed $10,000 in the aggregate, Sellers’ Representative shall use his good faith efforts to obtain and deliver to Buyers an encroachment agreement in connection with the Company-Owned Real Property located at 155 County Road 351, Lynn, Alabama 35575 and the driveway encroachment thereon. Such Agreement shall be executed by the fee title owner of the adjacent tax parcels known as APNs: 1601010000023004 and 1601010000023007 and shall be in form and substance reasonably acceptable to Buyers. The Sellers’ Representative and Buyers agree that such encroachment agreement shall, to the extent acceptable to said fee title owner (1) acknowledge that the driveway encroachment exists and is located thereon with the landowner’s consent, (2) prohibits expansion of the encroachment, and (3) requires termination and removal of the encroachment upon the adjacent party’s cessation of use thereof. This Section 6.5 shall survive the Closing Date until the earlier of (i) completion of the Sellers’ Representative’s obligations or (ii) the day that is one hundred twenty (120) days after the Closing Date.

 

 

6.6 Post-Closing. Immediately following the issuance of the Stock Consideration to Regional as set forth in the Funds Flow Memorandum, in accordance with the terms and conditions of this Agreement and the instruction

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letter executed and delivered contemporaneously with Closing by Parent to Parent’s transfer agent, Computershare Trust Company (the “Transfer Agent”), Regional hereby covenants and agrees to execute and deliver to the Transfer Agent an instruction letter in the form attached hereto as Exhibit G (“Sellers’ Instruction Letter”), pursuant to which Regional shall transfer all of its shares of Parent Common Stock issued to it at the Closing to Escrow Agent. In furtherance of the foregoing, promptly following the Closing Date (but in no event later than five (5) Business Days after the Closing Date), Regional shall deliver a “Z” medallion signature guarantee verifying the authenticity of the signature of Heath Jenkins, in his capacity as an officer of Regional, to the Transfer Agent in accordance with the terms and conditions of the Sellers’ Instruction Letter. This Section 6.6 shall survive the Closing Date until completion of Regional’s obligations hereunder.

 

 

 

 

 

 

1. Software License Agreement, dated June 22, 2021, by and between Stealthsync, LLC and Impact Software, LLC.

 

 

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[Signature pages follow.]

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IN WITNESS WHEREOF, the parties have executed this Amendment No. 1 to the Purchase Agreement and Company Disclosure Schedule effective as of the date first set forth above.

PARENT:

 

SKYLINE CHAMPION CORPORATION

 

 

By:

Name: Mark Yost

Title: President and CEO

 

 

 

BUYERS:

 

CHAMPION RETAIL HOUSING, INC.

 

 

By:

Name: Mark Yost

Title: President

 

 

 

CHAMPION HOME BUILDERS, INC.

 

 

By:

Name: Mark Yost

Title: President and CEO

 

 

 

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SELLERS:

 

REGIONAL HOLDINGS CORPORATION

 

 

By:

Name: Heath Jenkins

Title: Chief Executive Officer

 

 

Heath Jenkins

 

 

 

Dana Jenkins

 

 

REGIONAL UNDERWRITERS, INC.

 

 

By:

Name: Heath Jenkins

Title: Director

 

 

 

SELLERS’ REPRESENTATIVE:

 

 

Heath Jenkins

 

 

 

 

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Exhibit A

 

Section 3.1
Organization and Qualification

Entity	Domestic Jurisdiction and Foreign Qualifications	Managers and Officers
Regional Enterprises, LLC	Domestic Jurisdiction: Mississippi   Foreign Qualifications: Florida, Kansas, Louisiana, North Carolina, South Carolina, Tennessee, Texas, Virginia	Heath Jenkins – Manager Neil Godfrey – Operations Manager
Regional Enterprises of AL, LLC	Domestic Jurisdiction: Mississippi   Foreign Qualification: Alabama	Heath Jenkins – President
Helicon Capital, LLC f/k/a Genesis Capital, LLC	Domestic Jurisdiction: Mississippi   Foreign Qualification: None	Neil Godfrey – Manager Heath Jenkins – Manager
Helicon Transport, LLC	Domestic Jurisdiction: Mississippi   Foreign Qualification: None	Heath Jenkins – Manager
Helicon Insurance, LLC	Domestic Jurisdiction: Mississippi   Foreign Qualification: None	Heath Jenkins – President
Regional Land Company, LLC	Domestic Jurisdiction: Mississippi   Foreign Qualification: None	Heath Jenkins – Manager
Regional Land Company LH, LLC	Domestic Jurisdiction: Mississippi   Foreign Qualification: None	Heath Jenkins – Manager
Regional Land Company BM, LLC	Domestic Jurisdiction: Mississippi   Foreign Qualification: None	Heath Jenkins – Manager
Rogers-Jenkins Properties, LLC	Domestic Jurisdiction: Mississippi   Foreign Qualification: None	Heath Jenkins – President
Platinum Homes, LLC	Domestic Jurisdiction: Alabama   Foreign Qualification: None	Heath Jenkins – President

A-1

 

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Entity	Domestic Jurisdiction and Foreign Qualifications	Managers and Officers
Hamilton Home Builders, LLC	Domestic Jurisdiction: Alabama   Foreign Qualification: Florida	Heath Jenkins – Chief Executive Officer
Hamilton Property Group, LLC	Domestic Jurisdiction: Alabama   Foreign Qualification: None	Heath Jenkins – Chief Executive Officer
Winston Housing Group, LLC	Domestic Jurisdiction: Alabama   Foreign Qualification: Florida	Heath Jenkins – Chief Executive Officer
Marion Property Group, LLC	Domestic Jurisdiction: Alabama   Foreign Qualification: None	Heath Jenkins – Chief Executive Officer
Regional Realty, LLC	Domestic Jurisdiction: Mississippi   Foreign Qualification: Alabama	Neil Godfrey – Manager Heath Jenkins – Manager
Liberty NMTC, LLC	Domestic Jurisdiction: Alabama   Foreign Qualification: None	Heath Jenkins – Chief Executive Officer
Impact Software, LLC	Domestic Jurisdiction: Delaware   Foreign Qualification: None	Heath Jenkins – Chief Executive Officer

 

 

A-2

 

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Exhibit B

 

Section 3.3
Capitalization

(a)

(i)

Company Group Member	Ownership
Regional Enterprises, LLC	100% owned by Regional Holdings Corporation
Regional Enterprises of AL, LLC	100% owned by Regional Enterprises, LLC
Helicon Capital, LLC	100% owned by Regional Holdings Corporation
Helicon Transport, LLC	100% owned by Regional Holdings Corporation
Helicon Insurance, LLC	100% owned by Dana Jenkins
Regional Land Company, LLC	100% owned by Regional Holdings Corporation
Regional Land Company LH, LLC	100% owned by Regional Land Company, LLC
Regional Land Company BM, LLC	100% owned by Regional Land Company, LLC
Rogers-Jenkins Properties, LLC	100% owned by Regional Holdings Corporation
Platinum Homes, LLC	99% owned by Regional Holdings Corporation 1% owned by Heath Jenkins
Hamilton Home Builders, LLC	99% owned by Regional Holdings Corporation 1% owned by Heath Jenkins
Hamilton Property Group, LLC	99% owned by Regional Holdings Corporation 1% owned by Heath Jenkins
Winston Housing Group, LLC	99% owned by Regional Holdings Corporation 1% owned by Heath Jenkins
Marion Property Group, LLC	99% owned by Regional Holdings Corporation 1% owned by Heath Jenkins
Regional Realty, LLC	100% owned by Regional Holdings Corporation
Liberty NMTC, LLC	94% owned by Regional Holdings Corporation 5% owned by Regional Underwriters Inc. 1% owned by Heath Jenkins
Impact Software, LLC	99% owned by Regional Holdings Corporation 1% owned by Heath Jenkins

 

(ii)

(c)

(i)

None.

(ii)

B-1

 

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(iii)

(iv)

B-2

 

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None.

(d)

None.

B-3

 

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Exhibit G

 

Form of Sellers’ Instruction Letter

 

 

 

G-1

 

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Exhibit 10.1

RESTRICTIVE COVENANT AGREEMENT

 

This RESTRICTIVE COVENANT AGREEMENT (this “Agreement”) is entered into as of [●], 2023 (the “Effective Date”) by and between SKYLINE CHAMPION CORPORATION, an Indiana corporation (“Parent”), CHAMPION HOME BUILDERS, INC., a Delaware corporation (“CHB”), CHAMPION RETAIL HOUSING, INC., a Delaware corporation (“CHR” and together with Parent and CHB, “Buyers”, and each individually, a “Buyer”), and the Person listed as the Restricted Party on the signature page hereto (the “Restricted Party”). Capitalized terms used but not otherwise defined herein or in Section 6 hereof, shall have the meaning ascribed to them in the Purchase Agreement (as defined below).

 

RECITALS

 

WHEREAS, Buyers have entered into that certain Securities Purchase Agreement (as amended, supplemented or modified from time to time, the “Purchase Agreement”), dated as of August 25, 2023, by and among Buyers, REGIONAL HOLDINGS CORPORATION, a Mississippi corporation (“Regional”), REGIONAL UNDERWRITERS, INC., a Saint Kitts and Nevis corporation (“Regional Underwriters”), HEATH JENKINS, a resident of Mississippi (“Heath Jenkins” and together with Regional and Regional Underwriters, “Sellers”, and each individually, “Seller”), DANA JENKINS, a resident of Mississippi (“Dana Jenkins”), and HEATH JENKINS, AS THE SELLERS’ REPRESENTATIVE (the “Sellers’ Representative”), pursuant to which Buyers will purchase all of the Securities held by Sellers, on the terms and subject to the conditions set forth in the Purchase Agreement, such that upon the Closing, Buyers shall own all of the Securities of the Company Group;

WHEREAS, as a condition to the Closing, Buyers have required the execution of this Agreement by the parties hereto to provide for certain restrictions on the Restricted Party, provided, that such restrictions shall only be effective upon the Closing;

WHEREAS, upon consummation of the transactions contemplated by the Purchase Agreement, pursuant to the terms and conditions of the Purchase Agreement, the Restricted Party will be the recipient, either directly or indirectly, of substantial, significant and material consideration in connection with the consummation of such transactions and, in exchange therefor, the Restricted Party is agreeing to certain limitations and restrictive covenants as provided herein;

WHEREAS, the Restricted Party acknowledges that the agreements and covenants contained herein are a material inducement to each Buyer’s entry into the Purchase Agreement and agreement to consummate the transactions contemplated by the Purchase Agreement and neither Buyer would have executed the Purchase Agreement or consummated the transactions contemplated thereby without such covenants and agreements; and

WHEREAS, in connection with the Closing, and as an inducement to cause Buyers to enter into the Purchase Agreement, the Restricted Party has agreed to enter into and to be bound by the terms and conditions of this Agreement.

NOW, THEREFORE, the parties hereto agree as follows:

 

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if to the Restricted Party, to the address set forth on the signature page attached hereto.

if to Buyers to:

 

Champion Home Builders, Inc.

755 W. Big Beaver, Suite 1000

Troy, Michigan 48084

Attention: General Counsel

 

with a copy (which shall not constitute notice) to:

 

Foley & Lardner LLP

321 North Clark Street, Suite 3000

Chicago, Illinois 60654

Attention: Patrick Daugherty and Steven Cade

Email: pdaugherty@foley.com and

scade@foley.com

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[Remainder of page intentionally blank]

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IN WITNESS WHEREOF, the parties hereto have caused this Restrictive Covenant Agreement to be executed as of the Effective Date.

 

 

BUYERS:

 

CHAMPION HOME BUILDERS, INC.

 

 

By: ____________________________

Name: ____________________________

Title: ____________________________

 

CHAMPION RETAIL HOUSING, INC.

 

 

By: ____________________________

Name: ____________________________

Title: ____________________________

 

 

SKYLINE CHAMPION CORPORATION

 

 

By: ____________________________

Name: ____________________________

Title: ____________________________

 

 

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IN WITNESS WHEREOF, the parties hereto have caused this Restrictive Covenant Agreement to be executed as of the Effective Date.

 

 

 

RESTRICTED PARTY:

 

 

______________________________________

____________________________

______________________________

Signature

 

 

 

______________________________

Print Name

 

Address:

_____________________

_____________________

_____________________

 

 

 

 

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Schedule 2

Tara Baker is currently an employee of Regional Enterprises. Prior to Closing, Ms. Baker will be transferred to and will serve as an employee of Regional Holdings Corporation. As an employee of Regional Holdings Corporation, upon Buyers’ request from time to time after Closing, Ms. Baker will be made reasonably available to assist and respond to questions based on her historical knowledge of the operations of Regional Enterprises and other members of the Company Group.

Following the Closing, Neil Godfrey will remain an employee of Regional Enterprises and may serve as a consultant and advisor to Regional Holdings Corporation. Upon Sellers’ request from time to time after Closing, Mr. Godfrey will be made reasonably available to assist and respond to questions from Regional Holdings based on his historical knowledge of the operations of Regional Holdings.

 

 

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Exhibit 10.2

GENERAL RELEASE

This GENERAL RELEASE (this “Release”) is made on this [●] day of [●] 2023 by each of Regional Holdings Corporation, a Mississippi corporation (“Regional”), Regional Underwriters, Inc., a Saint Kitts and Nevis corporation (“Regional Underwriters”), Heath Jenkins, a resident of Mississippi (“Heath Jenkins” and together with Regional and Regional Underwriters, “Sellers”, and each individually, “Seller”), and Dana Jenkins, a resident of Mississippi (“Dana Jenkins”), and is being delivered in connection with the closing of the transactions contemplated by that certain Securities Purchase Agreement, dated as of August 25, 2023 (the “Agreement”), by and among Skyline Champion Corporation, an Indiana corporation (“Parent”), Champion Home Builders, Inc., a Delaware corporation and subsidiary of Parent (“CHB”), Champion Retail Housing, Inc., a Delaware corporation and subsidiary of Parent (“CRH” and together with CHB, “Buyers”, and each individually, a “Buyer”), Sellers, Dana Jenkins and Heath Jenkins, as the Sellers’ Representative (the “Sellers’ Representative”). All capitalized terms not otherwise defined in this Release shall have the meanings ascribed to them in the Agreement.

WHEREAS, Sellers and Dana Jenkins own all of the issued and outstanding Equity Interests of the Company Group (collectively, the “Securities”);

WHEREAS, Sellers and Dana Jenkins desire to sell to Buyers, and Buyers desire to purchase from Sellers and Dana Jenkins, all of the Securities held by Sellers and Dana Jenkins upon the terms and conditions set forth in the Agreement, such that upon the Closing, Buyers shall own all of the Securities of the Company Group; and

WHEREAS, the execution and delivery of this Release is a condition to the Closing contemplated by Section 2.11(i) of the Agreement.

 

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[Reminder of page intentionally left blank]

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IN WITNESS WHEREOF, the undersigned have duly executed this Release as of the date first written above.

 

SELLERS:

 

REGIONAL HOLDINGS CORPORATION

 

By: __________________________________

Name:

Title:

 

REGIONAL UNDERWRITERS, INC.

 

By: __________________________________

Name:

Title:

 

______________________________________

Heath Jenkins

 

 

______________________________________

Dana Jenkins

[Signature Page to General Release]

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Exhibit 10.3

RESTRICTED STOCK AGREEMENT

 

This Restricted Stock Agreement (this “Agreement”) is effective as of October 13, 2023 (the “Effective Date”), among Skyline Champion Corporation, an Indiana corporation (the “Company”), Regional Holdings Corporation, a Mississippi corporation (“Regional”) and Dana Jenkins, an individual resident of the State of Mississippi (“Dana Jenkins” and, together with Regional, “Recipients”, each being a “Recipient”). Unless otherwise defined herein, capitalized terms used herein shall have the meanings ascribed to them in the Securities Purchase Agreement (as defined below).

 

RECITALS

 

WHEREAS, as part of the aggregate purchase price payable by certain subsidiaries of the Company for all of the issued and outstanding equity interest of the Company Group, under that certain Securities Purchase Agreement dated as of the Effective Date among the Company, Champion Home Builders, Inc., a Delaware corporation and subsidiary of the Company, Champion Retail Housing, Inc., a Delaware corporation and subsidiary of the Company, the Recipients, Regional Underwriters, Inc., a Saint Kitts and Nevis corporation (“Regional Underwriters”), Heath Jenkins, an individual resident of the State of Mississippi (“Heath Jenkins” and Heath Jenkins, Regional and Regional Underwriters being the “Sellers”) and Heath Jenkins as Sellers’ Representative (as amended, supplemented or modified from time to time, the “Securities Purchase Agreement”), the Company agreed to issue to the Recipients certain shares (collectively, the “Acquired Shares”) of the Company’s common stock, par value $0.0277 per share (the “Parent Common Stock”), as the Stock Consideration (in the case of Regional) to be deposited into the Indemnification Escrow Fund, to be held and released pursuant to the Securities Purchase Agreement and the Escrow Agreement, and as the D. Jenkins Stock Consideration (in the case of Dana Jenkins); and

 

WHEREAS, the Company and Recipients acknowledge and agree that all of the Shares (as defined below), when and if issued, shall be subject to the terms and conditions set forth in this Agreement.

 

Now, therefore, in consideration of the mutual covenants and representations set forth below, the Company and Recipients agree as follows:

 

1. Shares. All of the Shares, when and if issued, shall be deemed issued to the Recipients as fully paid and non-assessable shares and, subject to Section 2 below, each Recipient shall have all rights of a stockholder with respect thereto, including, but not limited to, all rights to vote the Shares during the period the Shares are held in the Indemnification Escrow Fund. In addition to the Acquired Shares issued pursuant to the Securities Purchase Agreement, the term “Shares” shall include all new, substituted or additional securities received in replacement of the Acquired Shares, whether as a stock dividend or as a result of any stock split, recapitalization, merger, reorganization, exchange for other securities, by reclassification or the like, and all new, substituted or additional securities to which each Recipient is entitled by reason of such Recipient’s ownership of Shares; provided, however, that such new, substituted or additional securities received by reason of Regional’s ownership of Shares held in the Indemnification Escrow Fund shall be held in the Indemnification Escrow Fund subject to the same terms and conditions as the Shares held in the Indemnification Escrow Fund at the time of such receipt.

 

2. Restrictions. The Shares shall be subject, in addition to restrictions imposed by applicable securities laws, to the following transfer restrictions:

 

2.1 (i) The Shares shall be “restricted securities” within the meaning of Regulation D and Rule 144 under the Securities Act of 1933, as amended (the “Act”), and may not be offered or sold unless such offer or sale is registered under the Act or an exemption from registration is available; (ii) the provisions of Rule 144 under the Act in so far as they permit resale of the Shares only under limited circumstances, including that such Shares have been held, fully paid, by the seller for at least six months after issuance of such Shares before resale pursuant to Rule 144 and then may be resold only in accordance with other applicable requirements of Rule 144 (and any other applicable legal requirements), and Recipient shall not offer or sell any such Shares before the delivery to the Company of an opinion of counsel whose identity is acceptable to the Company, which opinion is in form and substance reasonably acceptable to the Company, to the effect that all such requirements have been satisfied; (iii) each Recipient hereby agrees to comply with the requirements of Rule 144 applicable to an affiliate of the Company (even if such Recipient is not an affiliate of the Company under the Act) that impose limitations on the amount of securities sold

 

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in any three-month period by an affiliate of the Company under Rule 144(e); and (iv) Recipient hereby agrees to not permit the Shares to be encumbered by any Lien (as defined in the Securities Purchase Agreement), except for any Liens on the Shares as a result of the Securities Purchase Agreement, within six months following issuance of such Shares;

 

2.2 Heath Jenkins shall be considered a “Section 16 executive officer” for purposes of the Company’s Insider Trading Policy (the “Insider Trading Policy”), shall comply with all time, place and manner restrictions on the sale of Common Stock and other securities set forth in the Insider Trading Policy and, without limiting the foregoing, shall be prohibited from conducting any sale of the Shares or any other shares of Common Stock held by Heath Jenkins other than during a “Window Period” (as defined in the Insider Trading Policy); the Company may, at any time, impose a “blackout” period pursuant to the Insider Trading Policy, during which period buying, selling or otherwise transferring securities by a specified group of insiders, which group of insiders may include Heath Jenkins, would be considered inappropriate; provided, however, that the restrictions stated in this Section 2.2 shall expire with respect to Heath Jenkins upon the earlier of (a) the date of termination of Heath Jenkin’s employment with the Company or any of its affiliates or (b) a Company determination that the Insider Trading Policy no longer applies to Heath Jenkins;

 

2.3 The Shares shall be subject to any stock ownership and holding guidelines that may be adopted by the Company and may be in effect from time to time with respect to directors, officers or employees of the Company (“Ownership Guidelines”); by accepting or being deemed to have accepted the Shares, each Recipient acknowledges and agrees to comply with the terms and conditions of any applicable Ownership Guidelines; and

 

2.4 Regional shall comply with the terms and conditions for resale of the Shares provided for in the Escrow Agreement.

 

2.5 Except that a Permitted Transfer is permitted under this Section 2.5 in any amount and at any time (subject to compliance with the other provisions of this Agreement), no Recipient shall Transfer any Shares until the first anniversary of the Closing Date; from the first anniversary of the Closing Date to the second anniversary, a Recipient may Transfer one-third of the Shares that such Recipient owned beneficially on the first anniversary; from the second anniversary of the Closing Date to the third anniversary, a Recipient may Transfer all but one-third of the Shares that such Recipient owned beneficially on the first anniversary; and from and after the third anniversary, a Recipient may Transfer any and all other Shares. For the purposes of this Agreement: “Transfer” means (a) sell, offer to sell, contract or agree to sell, pledge, grant any option to purchase or otherwise dispose of or agree to dispose of, directly or indirectly, or establish or increase a put equivalent position or liquidate or decrease a call equivalent position within the meaning of Section 16 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), with respect to any Shares, (b) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any Shares, whether any such transaction is to be settled by delivery of such securities, in cash or otherwise, or (c) publicly announce any intention to effect any transaction specified in clause (a) or (b); and “Permitted Transfer” means (i) a Transfer to the Recipient’s direct or indirect Affiliates or to the estates of any of the foregoing, (ii) a Transfer by bona fide gift to a member of the Recipient’s immediate family or to a trust, the beneficiary of which is such Recipient or members of such Recipient’s immediate family for estate planning purposes, (iii) a Transfer by virtue of the laws of descent and distribution upon the death of the Recipient, (iv) a Transfer pursuant to a qualified domestic relations order, (v) a Transfer to the Company, (vi) a pledge of Shares as security or collateral in connection with a borrowing or the incurrence of any indebtedness by the Recipient, (vii) a Transfer pursuant to a bona fide third-party tender offer, merger, stock sale, recapitalization, consolidation or other transaction (but if such tender offer, merger, recapitalization, consolidation or other such transaction is not completed, then Shares subject to this Agreement will remain subject to this Agreement), or (viii) the establishment of a trading plan pursuant to Rule 10b5-1 under the Exchange Act (provided that such plan does not permit the transfer of Shares in breach of any provision of this Agreement); provided, however, that, in the case of any Transfer pursuant to any of the foregoing clauses (i) through (iv), it will be a condition to any such Transfer that the transferee or donee agrees to be bound by the terms of this Agreement (including the restrictions set forth in the immediately preceding sentence) to the same extent as if such Person were a party hereto. In the case of any Recipient that is an entity, Transfers that are Permitted Transfers pursuant to the immediately preceding sentence will include Transfer(s) by the Person(s) that is (or are) the ultimate beneficial owner(s) of all or a portion of the equity interests in such Recipient, and therefore any such Transfer will be deemed a Permitted Transfer pursuant to this Section 2.5.

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3. Representations and Warranties of the Recipients. In connection with the issuance of the Shares pursuant to the terms of the Securities Purchase Agreement, each Recipient represents, warrants and acknowledges to the Company that:

 

3.1 such Recipient possesses all requisite capacity, power and authority (corporate and other) to execute and deliver this Agreement and to perform its or his obligations hereunder;

 

3.2 neither the execution and delivery by such Recipient of this Agreement, nor the performance by such Recipient of its or his respective obligations hereunder, will (i) require on the part of such Recipient any notice to or filing with, or any permit, authorization, consent or approval of, any governmental entity, or (ii) violate any order, writ, injunction, decree, statute, rule or regulation applicable to such Recipient or any of its or his properties or assets, except, in the case of clause (i) or clause (ii), where any violation or failure to deliver a notice or submit a filing would not cause a material adverse effect;

 

3.3 the Shares to be acquired by such Recipient pursuant to the Securities Purchase Agreement will be acquired for such Recipient’s own account and not with a view to, or for offer or sale in connection with, the distribution thereof, or as direct or indirect participation in any such undertaking, or as a participation in the direct or indirect underwriting of any such undertaking, in violation of the Act or any other applicable securities laws, and the Shares will not be disposed of in contravention of the Act or any applicable securities laws;

 

3.4 such Recipient is an “accredited investor” within the meaning of Regulation D under the Act;

 

3.5 the issuance of the Shares hereunder is exempt from registration under the Act pursuant to Section 4(a)(2) thereof and the rules and regulations promulgated thereunder, and the Company’s reliance on such exemption is predicated on the Recipients’ representations, warranties and acknowledgments set forth herein; and

 

3.6 such Recipient has reviewed with the Recipient’s own tax advisors the federal, state, local and foreign tax consequences of this investment in the Company and the transactions contemplated by this Agreement; such Recipient is relying solely on such advisors and not on any representations, warranties, covenants or other promises of the Company or any of its agent; and such Recipient understands that it or her (and not the Company) shall be responsible for any tax liability of such Recipient that may arise as a result of the transactions contemplated by this Agreement.

 

4. Representations and Warranties of the Company. In connection with the issuance of the Shares pursuant to the terms of the Securities Purchase Agreement, the Company represents, warrants and acknowledges to the Recipients that:

 

4.1 the Company has all requisite capacity, power and authority (corporate or other) to execute and deliver this Agreement, to perform its obligations hereunder, and to issue the Shares to the Recipients;

 

4.2 the execution and delivery by the Company of this Agreement, the performance by the Company of its obligations in this Agreement, and the issuance of the Shares contemplated hereby have been duly and validly authorized by all necessary corporate and other action on the part of the Company;

 

4.3 neither the execution and delivery by the Company of this Agreement, nor the performance by the Company of its obligations hereunder, nor the issuance of the Shares contemplated hereby, will (i) conflict with or violate any provision of the Company’s articles of incorporation, by-laws, voting agreements or similar documents, instruments or agreements relating to the organization or governance of the Company (collectively, the “Organizational Documents”), each as amended or restated to date, (ii) require on the part of the Company any notice to or filing with, or any permit, authorization, consent or approval of, any governmental entity, or (iii) violate any order, writ, injunction, decree, statute, rule or regulation applicable to the Company or any of its properties or assets, except, in the case of clause (ii) or clause (iii), where any violation or failure to deliver a notice or submit a filing would not have a material adverse effect on the Company or on the ability of the Company and the Recipients to consummate this Agreement or the Securities Purchase Agreement;

 

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4.4 the Shares subject to issuance pursuant to the terms of the Securities Purchase Agreement, upon issuance on the terms and conditions specified herein and the Securities Purchase Agreement, will be duly authorized, validly issued, fully paid and non-assessable, free and clear of all liens and restrictions (other than restrictions on transfer imposed herein, in the Escrow Agreement (as and when the Shares are escrowed thereunder) and under the Act or any other applicable securities laws), and not subject to or issued in violation of any purchase option, call option, right of first refusal, preemptive right, subscription right or other similar right under any provision of the Indiana Business Corporation Law, the Organizational Documents or any agreement to which the Company is a party or is otherwise bound;

 

4.5 for the past three years, the Company has filed all registration statements, forms, reports, certifications and other documents (collectively, “SEC Reports”) required to be filed by the Company with the United States Securities and Exchange Commission (the “SEC”) and all such SEC Reports (i) have been filed on a timely basis, (ii) at the time filed, complied as to form in all material respects with the requirements of the Act and the Exchange Act applicable thereto, and (iii) did not, at the time they were filed, contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading, in any material respect;

 

4.6 the Common Stock is registered pursuant to Section 12(b) of the Exchange Act, and the Company has not (i) received any written notification that the SEC is contemplating terminating such registration or (ii) received written notice from The New York Stock Exchange (the “NYSE”) to the effect that the Company is not in compliance with the listing or maintenance requirements of such market or exchange; the Company shall use its commercially reasonable best efforts to cause the Shares to be approved for listing on the NYSE, on or before the issuance of the Shares, by filing and processing a supplemental listing application or applications and by obtaining all governmental and NYSE approvals required for such listing; and

 

4.7 neither the Company nor any person acting on behalf of the Company has offered or sold any of the Shares by any form of general solicitation or general advertising.

 

5. Securities Matters. With a view to making available to the Recipients the benefits of Rule 144 under the Act and any other rule or regulation of the SEC that may at any time permit a stockholder to sell Common Stock to the public without registration under the Act, Company will:

 

5.1 make and keep available adequate current public information, as those terms are understood and defined in Rule 144 under the Act, at all times after the Effective Date; and

 

5.2 use commercially reasonable efforts to file with the SEC in a timely manner all reports and other documents required of the Company under the Exchange Act.

 

6. Legends. Prior to a Recipient transferring Shares in compliance with the terms and conditions of this Agreement, the book entry representing such Shares shall bear the following legends (as well as any other notations or legends required by applicable corporation and securities laws) or contain a notation including such information:

 

“THE SHARES REPRESENTED HEREBY MAY BE TRANSFERRED ONLY IN ACCORDANCE WITH THE TERMS AND CONDITIONS OF A RESTRICTED STOCK AGREEMENT BETWEEN THE COMPANY AND THE STOCKHOLDER, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY.

 

THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY FEDERAL, STATE OR OTHER SECURITIES LAWS, AND MAY NOT BE OFFERED, SOLD, TRANSFERRED OR ASSIGNED EXCEPT (i) PURSUANT TO REGISTRATION THEREOF UNDER SUCH LAWS OR (ii) IF, IN THE OPINION OF COUNSEL SATISFACTORY TO THE COMPANY, THE PROPOSED TRANSFER MAY BE EFFECTED IN COMPLIANCE WITH APPLICABLE SECURITIES LAWS WITHOUT SUCH REGISTRATION.”

 

Upon transfer of the Shares pursuant to the terms and conditions of this Agreement, such legend may be replaced such that the book entry representing such Shares (a) shall contain a notation or bear a legend noting that such Shares have not been registered under any federal, state or other securities laws and noting the corresponding

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limitations on transfer as summarized above, but (b) shall no longer contain any legend that such Shares are subject to the terms of this Agreement.

 

7. Indemnification. The Recipients shall jointly and severally defend, indemnify and hold harmless the Company from and against any and all Losses incurred or suffered by any of them arising out of or resulting from any breach or misrepresentation of any representation or warranty or breach of any covenant or agreement set forth in this Agreement by a Recipient. Any such indemnification claim shall be made and governed by the indemnification procedures set forth in Section 10.4 of the Securities Purchase Agreement, mutatis mutandis. Notwithstanding anything to the contrary contained in this Agreement, Regional hereby authorizes and directs the Company to cancel all or any portion of Regional’s Shares not theretofore delivered to Regional pursuant to the Escrow Agreement in order to satisfy any indemnification obligation of the Sellers pursuant to and in accordance with Section 10.2 of the Securities Purchase Agreement and/or this Section 7.

 

8. General Provisions.

 

8.1 Notices. All notices or other communications that are required or permitted hereunder shall be in writing and sufficient if delivered personally, sent by nationally recognized overnight courier or by registered or certified mail (postage prepaid, return receipt requested) or by email (if applicable) as set forth on Section 12.3 of the Company Disclosure Schedule, mutatis mutandis, or to such other address as the party to whom notice is to be given may have furnished to the other parties in writing in accordance herewith. All such notices or communications shall be deemed to be received (i) in the case of personal delivery, nationally recognized overnight courier or registered or certified mail, on the date of receipt and (ii) in the case of email, upon receipt.

8.2 Further Assurances. From time to time after the date hereof, upon reasonable notice and without further consideration, each Recipient and the Company shall execute and deliver any other document or instrument and shall take any other action as may be necessary in the reasonable discretion of the Company or any stock transfer agent to give effect to or evidence the provisions of this Agreement.

 

8.3 Assignment. Except as otherwise expressly provided herein, neither party may assign rights or delegate duties arising hereunder without the prior written consent of the other party. Any assignment or delegation of any right, duty, or claim arising hereunder without such consent shall be void.

 

8.4 Entire Agreement. This Agreement, the Securities Purchase Agreement and the Escrow Agreement constitute the exclusive statement of the agreement among the Company and the Recipients concerning the matters set forth herein, including with respect to rights of and restrictions on the Shares, and supersede all other agreements, whether oral or written, among or between any of them concerning rights of and restrictions on the Shares.

 

8.5 Modification and Waiver. No amendment, modification, or waiver of this Agreement shall be effective unless made in a written instrument that specifically refers to this Agreement and is signed by the Company and each Recipient. Except as expressly provided herein, the failure of the Company or a Recipient to enforce at any time, or for any period of time, any provision of this Agreement shall not be construed as a waiver of any provision or of the right of any such party to enforce each and every provision of this Agreement.

 

8.6 Binding Effect. This Agreement shall be binding upon and inure to the benefit of each Recipient and its or his successors and assigns and shall be binding upon and inure to the benefit of the Company and its successors and assigns.

 

8.7 Not an Employment Agreement. Neither the execution of this Agreement nor the issuance of the Shares hereunder constitutes an agreement by the Company or any of its subsidiaries to employ or retain or to continue to employ or retain the Heath Jenkins during the entire, or any portion of, the term of this Agreement, including but not limited to any period during which any Shares are outstanding.

 

8.8 Governing Law and Dispute Resolution. Any dispute arising from this Agreement, including the governing law and jurisdiction thereof, shall be resolved in accordance with Sections 12.14 and 12.15 of the Securities Purchase Agreement, mutatis mutandis.

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8.9 Severability and Reformation. If any provision of this Agreement, or the application thereof to any person or circumstance, should, for any reason and to any extent, be invalid or unenforceable, then the remainder of this Agreement and the application of such provision to other persons and circumstances shall not be affected thereby, but rather shall be enforced to the greatest extent permitted by law.

 

8.10 Power of Attorney. Each of the Company, its successors and assigns is hereby appointed attorney-in-fact, with full power of substitution, of each Recipient for the purpose of carrying out the provisions of Section 7 of this Agreement and for taking any action and executing any instruments that such attorney-in-fact may deem necessary or advisable to accomplish the purposes thereof, which appointment as attorney-in-fact is coupled with an interest and is therefore irrevocable. The Company, as attorney-in-fact for a Recipient, may in the name and stead of such Recipient, make and execute all conveyances, assignments and transfers of such Recipient’s Shares solely for the purpose of carrying out the provisions of Section 7 of this Agreement, and each Recipient hereby ratifies and confirms all that the Company, as said attorney-in-fact, shall do by virtue hereof. Nevertheless, each Recipient shall, if so requested by the Company, execute and deliver to the Company all such instruments as may, in the judgment of the Company, be advisable for this purpose.

 

8.11 Headings. The headings contained in this Agreement are intended solely for convenience of reference sand shall not be considered in interpreting this Agreement.

 

8.12 Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument.

 

8.13 Third Parties. Nothing expressed or implied in this Agreement is intended or shall be construed to confer on any person, other than the Company and the Recipients, any rights hereunder.

 

[Signature Page Follows]

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IN WITNESS WHEREOF, the parties have duly executed this Restricted Stock Agreement as of the day and year first set forth above.

 

COMPANY:

 

SKYLINE CHAMPION CORPORATION

 

 

By:

Name:

Title:

 

RECIPIENTS:

 

 

REGIONAL HOLDINGS CORPORATION

 

 

By:

Name: Heath Jenkins

Title: Chief Executive Officer

 

 

 

Dana Jenkins

 

[Signature Page to Restricted Stock Agreement]

 

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Exhibit 99.1

 

 

SKYLINE CHAMPION ANNOUNCES CLOSING OF THE ACQUISITION OF REGIONAL HOMES

Troy, Michigan, October 13, 2023 /Business Wire/ -- Champion Home Builders and Champion Retail Housing, subsidiaries of Skyline Champion Corporation (NYSE: SKY) (“Skyline Champion”) today announced the closing of its previously announced acquisition of Regional Enterprises LLC, and related companies (collectively, “Regional Homes”).

“We are excited to announce the closing and to welcome Regional Homes to the Skyline Champion family,” said Mark Yost, Skyline Champion’s President, and Chief Executive Officer. “We believe Regional Homes is an excellent strategic fit given their customer-centric selling approach which goes together with our on-going efforts to enhance our customers’ buying experience. Regional Homes’ strong presence in Alabama and Mississippi strengthens Skyline Champion’s market positioning as a leading provider of attainable housing solutions by expanding our captive retail and manufacturing distribution in this large region. We expect this transaction to generate solid returns over time with meaningful stakeholder value creation from day one, supported by Regional Homes’ attractive margin profile, its talented team, as well as available synergy capture.”

In coordination with the closing of the transaction, Skyline Champion is pleased to announce that Heath Jenkins will serve as the President of the Company’s captive retail operations. “We are fortunate to add Heath to the Skyline Champion team,” said Mark Yost. “Heath not only brings years of industry retail experience, and strong leadership capabilities exemplified by the strength and tenure of the Regional Homes’ team but also exhibits an unwavering commitment to put the customer first. These are traits that perfectly align with our core operating principles.”

The purchase price was approximately $313 million, net of cash acquired, plus assumed debt, primarily related to inventory floor plan liabilities, of $93 million. In addition to the purchase price, the transaction is subject to an earnout provision as well as customary net working capital adjustments. Skyline Champion funded the acquisition with cash on hand and $30 million of the Company’s common stock.

 

About Skyline Champion Corporation:

Skyline Champion Corporation (NYSE: SKY) is a leading producer of factory-built housing in North America and employs approximately 7,600 people. With more than 70 years of homebuilding experience and 44 manufacturing facilities throughout the United States and western Canada, Skyline Champion is well positioned with an innovative portfolio of manufactured and modular homes, ADUs, park-models and modular buildings for the single-family, multi-family, and hospitality sectors.

In addition to its core home building business, Skyline Champion provides construction services to install and set-up factory-built homes, operates a factory-direct retail business with 31 retail locations across the United States, and operates Star Fleet Trucking, providing transportation services to the manufactured housing and other industries from several dispatch locations across the United States.

Skyline Champion builds homes under some of the most well-known brand names in the factory-built housing industry including Skyline Homes, Champion Home Builders, Genesis Homes, Athens Park

 

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Models, Dutch Housing, Atlantic Homes, Excel Homes, Homes of Merit, New Era, Redman Homes, ScotBilt Homes, Shore Park, Silvercrest, Titan Homes in the U.S. and Moduline and SRI Homes in western Canada.

 

About Regional Homes:

Headquartered in Flowood, MS, Regional Homes is a manufactured and modular housing company. With over 1,200 employees, three manufacturing facilities, and 43 retail locations throughout the Southeast, Regional Homes is the fourth largest company in the industry, with the largest independent retail footprint. Since its founding in 2006, Regional Homes has sold over 30,000 manufactured homes and has built a reputation of exemplary service and customer satisfaction. In addition to manufacturing and retailing, other turnkey services provided with home purchases include site preparation, installation, furnishing, servicing, and maintenance. Regional Homes also maintains strong relationships with federal and state agencies by providing disaster relief housing programs in Texas, Mississippi, Florida, Alabama, and Louisiana.

With a distinguished company culture, Regional Homes strikes a balance of teamwork, competitiveness, and discipline that creates a cohesive and supportive environment. It is dedicated to the continued development of a collaborative and thriving environment for our staff, as well as to producing an exceptional home-buying experience for our customers.

 

Forward-Looking Statements

Statements in this press release, including certain statements regarding Skyline Champion’s strategic initiatives, and future market demand are intended to be covered by the safe harbor for "forward-looking statements" provided by the Private Securities Litigation Reform Act of 1995. These forward-looking statements generally can be identified by use of words such as "believe," "expect," "future," "anticipate," "intend," "plan," "foresee," "may," "could," "should," "will," "potential," "continue," or other similar words or phrases. Similarly, statements that describe objectives, plans, or goals also are forward-looking statements. Such forward-looking statements involve inherent risks and uncertainties, many of which are difficult to predict and are generally beyond the control of Skyline Champion. We caution readers that a number of important factors could cause actual results to differ materially from those expressed in, implied, or projected by such forward-looking statements. Risks and uncertainties include regional, national and international economic, financial, public health and labor conditions, and the following: supply-related issues, including prices and availability of materials; labor-related issues; inflationary pressures in the North American economy; the cyclicality and seasonality of the housing industry and its sensitivity to changes in general economic or other business conditions; demand fluctuations in the housing industry, including as a result of actual or anticipated increases in homeowner borrowing rates; the possible unavailability of additional capital when needed; competition and competitive pressures; changes in consumer preferences for our products or our failure to gauge those preferences; quality problems, including the quality of parts sourced from suppliers and related liability and reputational issues; data security breaches, cybersecurity attacks, and other information technology disruptions; the potential disruption of operations caused by the conversion to new information systems; the extensive regulation affecting the production and sale of factory-built housing and the effects of possible changes in laws with which we must comply; the potential impact of natural disasters on sales and raw material costs; the risks associated with mergers and acquisitions, including integration of operations and information systems; periodic inventory adjustments by, and changes to relationships with, independent retailers; changes in interest and foreign exchange rates; insurance coverage and cost issues; the possibility that all or part of

 

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our intangible assets, including goodwill, might become impaired; the possibility that our risk management practices may leave us exposed to unidentified or unanticipated risks; the potential disruption to our business caused by public health issues, such as an epidemic or pandemic, and resulting government actions; and other risks set forth in the “Risk Factors” section, the “Legal Proceedings” section, the “Management's Discussion and Analysis of Financial Condition and Results of Operations” section, and other sections, as applicable, in our Annual Reports on Form 10-K, including our Annual Report on Form 10-K for the fiscal year ended April 1, 2023 previously filed with the Securities and Exchange Commission (“SEC”), as well as in our Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K, filed with or furnished to the SEC.

If any of these risks or uncertainties materializes or if any of the assumptions underlying such forward-looking statements proves to be incorrect, then the developments and future events concerning Skyline Champion set forth in this press release may differ materially from those expressed or implied by these forward-looking statements. You are cautioned not to place undue reliance on these statements, which speak only as of the date of this release. We anticipate that subsequent events and developments will cause our expectations and beliefs to change. Skyline Champion assumes no obligation to update such forward-looking statements to reflect events or circumstances after the date of this document or to reflect the occurrence of unanticipated events, unless obligated to do so under the federal securities laws.

 

Investor contact information:

Name: Kevin Doherty

Email: investorrelations@championhomes.com

Phone: (248) 614-8211

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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v3.23.3

Document And Entity Information	Oct. 13, 2023
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Oct. 13, 2023
Entity Registrant Name	SKYLINE CHAMPION CORPORATION
Entity Central Index Key	0000090896
Entity Emerging Growth Company	false
Securities Act File Number	001-04714
Entity Incorporation, State or Country Code	IN
Entity Tax Identification Number	35-1038277
Entity Address, Address Line One	755 West Big Beaver Road, Suite 1000
Entity Address, City or Town	Troy
Entity Address, State or Province	MI
Entity Address, Postal Zip Code	48084
City Area Code	(248)
Local Phone Number	614-8211
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock
Trading Symbol	SKY
Security Exchange Name	NYSE

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