July 16, 2003

The unexpected development came this afternoon at a special meeting called by the company to vote on the sale. Only shareholders in attendance at Clayton's Blount County headquarters were permitted to vote on the delay.

At noon, the meeting was recessed for lunch and a Clayton board meeting.

"The shareholders, including those who (said they had) voted against (the sale to Berkshire), wanted it open to other bidders," CEO Kevin Clayton said.

Shareholders who cast votes already can change their votes during the next two weeks. A process for changing votes has not been finalized.

Cerberus told Kevin Clayton over the weekend that if stockholders reject Buffett's offer, the firm wanted to examine Clayton's operations with an eye toward making an offer.

When the deal with Berkshire Hathaway was announced, the purchase price represented a 12 percent premium on the price of the stock at that time.

Kevin Clayton has vigorously defended the deal throughout the controversy, arguing that Berkshire Hathaway's $140 billion in assets and a triple-A credit rating was the best route for Clayton Homes to provide mortgages for the people buying the homes the company makes, sells and insures.