EXHIBIT 10.19
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into
as of the ____ day of _______________, ______ between OAKWOOD HOMES CORPORATION,
a North Carolina corporation (the "Company"), and
______________________________________(the "Executive").
STATEMENT OF PURPOSE
The Company considers sound and vital management to be essential to
protecting and enhancing the best interests of the Company and its stockholders.
Although the Company knows of no change in control of the Company which is being
contemplated, the Company recognizes that a future change in control is always
possible and this possibility creates uncertainty and insecurity among members
of management. The Company believes that appropriate measures should be taken to
reinforce the dedication of key members of management and to provide them with a
greater sense of security so that they will be encouraged to remain in the
employ of the Company. The Company also believes that it is in the best
interests of the Company and its stockholders that appropriate measures be taken
to assure the neutrality of management in analyzing a potential change in
control and the options available to the Company and to preserve continuity in
corporate management and operations in the event of a change in control.
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein, the Company and the Executive hereby agree as follows:
1. Operation of Agreement.
(a) This Agreement shall be effective upon its execution,
but anything in this Agreement to the contrary notwithstanding, neither this
Agreement nor any of its provisions, except its renewal provision, shall be
operative unless and until there has been a Change in Control of the Company, as
defined in Subsection 1(c) below and subject to the provisions of Subsection
1(d) below (regarding action by a majority of the Incumbent Board to modify or
terminate this Agreement up to 30 days following a Change in Control).
(b) If no Change in Control of the Company has occurred on
or before the close of business on December 31, 2001,
this Agreement shall thereupon expire; provided, however, the parties by their
written mutual assent may extend said date on which this Agreement shall expire.
(c) A "Change in Control" shall be deemed to have occurred
if any of the following events shall have occurred:
(i) any corporation, other person or "Group" (as defined below)
becomes the "Beneficial Owner" (as defined below) of more
than 25% of the Company's outstanding Common Stock; or
(ii) the Company's outstanding Common Stock (x) is held of
record by less than 300 persons or (y) is neither listed on
a national securities exchange nor authorized to be quoted
on an inter-dealer quotation system of a registered
national securities association.
1
For purposes of this definition of Change in Control, the following terms shall
have the following meanings:
"Beneficial Owner" shall have the meaning which that term is given in
Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the
"Act").
"Group" shall mean persons who act in concert as described in Section
14(d)(2) of the Act.
(d) Notwithstanding any provision of this Agreement to the
contrary, at any time up to thirty (30) days following the date of a Change in
Control, the Board of Directors may, in its sole and exclusive discretion with
approval of at least a majority of the "Incumbent Board" (as defined below),
terminate this Agreement or make any modifications to the terms and provisions
of this Agreement (including without limitation causing the Agreement to not
apply with respect to the given Change in Control or reducing the amount of
benefits described herein) without the consent of Executive. For purposes
hereof, "Incumbent Board" shall mean the group of individuals who, as of the
date of this Agreement, constitute the Board of Directors of the Company;
provided, however, that any individual who becomes a director subsequent to the
date of this Agreement and whose election, or whose nomination for election by
the Company's shareholders, to the Board of Directors was either (i) approved by
a vote of at least a majority of the directors then comprising the Incumbent
Board or (ii) recommended by a Nominating Committee comprised entirely of
directors who are then Incumbent Board members shall be considered as though
such individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of either an actual or threatened election contest (as such terms are
used in Rule 14a-11 of Regulation 14A promulgated under the Act), other actual
or threatened solicitation of proxies or consents or an actual or threatened
tender offer.
2. Employment; Period of Employment.
(a) The Company agrees to continue the Executive in its
employ, and the Executive hereby agrees to remain in the employ of the Company,
for the period set forth in Subsection 2(b) below (the "Period of Employment")
in the position and with the duties and responsibilities set forth in Section 3
below, subject to the other terms and conditions of this Agreement.
(b) The Period of Employment shall commence on the date of
any Change in Control and, subject only to the Executive's death or termination
of employment by the Company for "Cause" or "Disability" or by the Executive for
"Good Reason" (as defined in Section 4), shall continue until the close of
business on the later of (i) that date two years after the date on which the
Change in Control occurred or (ii) the expiration date under Subsection 1(b),
taking into account any extensions of said expiration date.
3. Position, Duties, and Responsibilities.
(a) During the Period of Employment, the Executive shall
continue to serve as an officer of the Company, either (i) with substantially
the same offices, titles, duties and responsibilities as the Executive had
immediately prior to the Change in Control or (ii) with a higher office with
titles, duties and responsibilities commensurate with such higher office.
(b) During the Period of Employment, the Executive shall
devote his full-time efforts during normal business hours to the business and
affairs of the Company, except reasonable
2
vacation periods and periods of illness or incapacity, but nothing in this
Agreement shall preclude the Executive from devoting reasonable time to serving
as a director or member of a committee of one or more organizations (business,
charitable, civic, religious or otherwise) involving no conflict with the
interests of the Company.
4. Termination Following Change in Control. If, after a Change in
Control of the Company has occurred, the Company shall terminate the Executive's
employment other than because of his death or for Disability or Cause or if the
Executive shall terminate his employment for Good Reason, the Executive shall be
entitled to all of the benefits and payments provided in Section 5 below,
subject to the provisions of Subsection 1(d) above.
(a) Disability. Termination based on "Disability" shall
mean termination because of the Executive's absence due to physical or mental
illness from his duties with the Company on a full-time basis for 150
consecutive business days unless within 30 days after Notice of Termination (as
defined in Subsection 4(d) below) is given following such absence, the Executive
shall return to the full-time performance of his duties.
(b) Cause. Termination shall be deemed to have been for
Cause only if termination shall have been the result of
an act or acts of dishonesty on the part of the Executive constituting a felony
and resulting or intended to result in substantial gain or personal enrichment
at the expense of the Company, or if there has been a willful and substantial
breach by the Executive of the provisions of Subsection 3(b) above, and such
breach has caused substantial injury to the Company. In no event shall the
Executive's termination by the Company be considered to have been for Cause if
such termination took place as a result of (i) the Executive's bad judgment or
negligence or (ii) any act or omission without intent of gaining a profit to
which the Executive was not legally entitled or (iii) any act or omission
believed by the Executive in good faith to have been in, or not opposed to, the
interests of the Company.
(c) Good Reason. "Good Reason" shall mean
(i) the assignment to the Executive of any duties
inconsistent with his duties described in Subsection 3(a)
above or any removal of the Executive from or any failure
to re-elect the Executive to his positions described in
Subsection 3(a) above, except in connection with promotions
to higher office;
(ii) a reduction by the Company in the
Executive's base salary as in effect immediately prior to
the Change in Control;
(iii) the failure by the Company to maintain and
to continue the Executive's participation in the Company's
benefit or compensation plans as in effect immediately
prior to the Change in Control (including but not limited
to bonus and incentive compensation plans, stock option,
bonus, award and purchase plans, life insurance, medical,
health and accident, and disability plans); or the taking
of any action by the Company which would adversely affect
the Executive's participation in or reduce the Executive's
benefits under any of such plans or deprive the Executive
of any fringe benefit he enjoyed immediately prior to the
Change in Control; or the failure to provide the Executive
with the number of paid vacation days to which he was
entitled under the Company's normal vacation policy in
effect immediately prior to the Change in Control;
3
(iv) the relocation of the Executive's office to
anywhere other than a location within 100 miles of
Greensboro, North Carolina or the Company's requiring the
Executive to be based anywhere other than within 100 miles
of Greensboro, North Carolina (or such other location as
shall be the location of the Executive's office immediately
prior to the Change in Control) except for required travel
on the Company's business to an extent consistent with the
Executive's business travel obligations immediately prior
to the Change in Control; or
(v) the failure by the Company to obtain the
assumption of this Agreement by any successor as
contemplated in Section 7 below.
(d) Any termination of the Executive's employment, unless
because of death, shall be communicated by written Notice of Termination to the
other party. In the event of termination of employment by the Company for Cause
or Disability or by the Executive for Good Reason, the Notice of Termination
shall state the specific ground for termination (Cause, Disability or Good
Reason) and set forth in reasonable detail the facts and circumstances claimed
to provide a basis for the specified ground of termination.
(e) "Termination Date" shall mean (i) if the Executive's
employment is terminated due to death, the Executive's date of death, (ii) if
the Executive's employment is terminated for Disability, thirty days after
Notice of Termination is given (provided that the Executive shall not have
returned to the performance of his duties on a full-time basis during such
thirty day period), (iii) if the Executive's employment is terminated for Cause,
the date specified in the Notice of Termination, and (iv) if the Executive's
employment is terminated for any other reason, the date on which a Notice of
Termination is given.
5. Benefits.
(a) If the Company shall terminate the Executive's
employment other than because of his death or for Disability or Cause, or if the
Executive shall terminate his employment for Good Reason, then the Company shall
pay to the Executive and provide him, his dependents, beneficiaries and estate,
with the following;
(i) The Company shall pay the Executive his full
base salary through the Termination Date at the higher of
the rate in effect when Notice of Termination is given or
the rate in effect one year prior to such date, plus credit
for any vacation earned but not taken. The Executive's full
base salary shall be paid at the times normally scheduled
for payment of the salaries of key members of management;
provided, however, that all of such salary shall be paid
not later than Termination Date.
(ii) The Company shall pay the Executive a lump
sum payment equal to two times the highest annual
compensation (including base salary, incentive compensation
and monetary bonus or similar award) paid or payable to the
Executive by the Company for any of the three fiscal years
ended immediately prior to the Termination Date. This lump
sum payment shall be due and payable on the 10th business
day after the Termination Date and bear interest from the
Termination Date until paid at then current prime rate of
interest of First Union National Bank.
4
(iii) The Company shall pay all legal fees and
expenses which the Executive may incur as a result of the
Company's contesting the validity or enforceability of this
Agreement, or as a result of the Company's failure to make
timely payment of any sum due to the Executive hereunder.
(b) The Executive shall not be required to mitigate the
benefits or amounts of any payment provided for in this
Section 5 by seeking other employment or otherwise, nor shall the amount of any
payment provided for in this Section 5 be reduced by any compensation earned by
the Executive as a result of employment by another employer after the Date of
Termination, or otherwise.
6. Options. Subject to the provisions of Subsection 1(d) above, all
of the Executive's outstanding stock options shall become exercisable in full on
the date of a Change in Control of the Company, whether or not the stock options
were exercisable on such date.
7. Successors; Binding Agreement.
(a) The Company shall require any successor (whether direct
or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business or assets of the Company, by agreement in form
and substance satisfactory to the Executive, expressly to assume and agree to
perform this Agreement in the same manner and to the same extent that the
company would be required to perform if no such succession had taken place. As
used in this Agreement, "Company" shall mean the company as defined in the
preamble to this Agreement and any successor to its business or assets which
executes and delivers the agreement provided for in this Paragraph 7 or which
otherwise becomes bound by all the terms and provisions of this Agreement by
operation of law.
(b) This Agreement shall inure to the benefit of and be
enforceable by the Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees.
8. Notices. For the purposes of this Agreement, notices and all other
communications provided for herein shall be in writing and shall be deemed to
have been duly given when delivered or mailed by United Stated registered or
certified mail, return receipt requested, postage prepaid, addressed as follows:
If to the Executive:
--------------------------
Xxxx Xxxxxx Xxx 0000
Xxxxxxxxxx, Xxxxx Xxxxxxxx
00000-0000
If to the Company:
--------------------------
Oakwood Homes Corporation
Xxxx Xxxxxx Xxx 0000
Xxxxxxxxxx, Xxxxx Xxxxxxxx
00000-0000
Attention: Secretary
or to such other address as any party may have furnished to the other in writing
in accordance herewith, except that notices of change of address shall be
effective only upon receipt.
5
9. Governing Law. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of
North Carolina.
10. Miscellaneous. No provisions of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing signed by the Executive and the Company. No waiver by either party of
any breach of this Agreement shall be deemed a waiver of any prior or subsequent
breach. No agreements or representations, oral or otherwise, with respect to the
subject matter hereof have been made by either party which are not set forth
expressly in this Agreement.
11. Separability. The invalidity or unenforceability of any
provisions of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in full force and
effect.
12. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same Agreement.
13. Withholding of Taxes. The Company may withhold from any benefits
payable under this Agreement all federal, state, city or other taxes as shall be
required pursuant to any law or governmental regulation or ruling.
14. Non-assignability. This Agreement is personal in nature and
neither of the parties hereto shall, without the consent of the other, assign or
transfer this Agreement or any rights or obligations hereunder, except as
provided in Section 7 above. Without limiting the foregoing, the Executive's
right to receive payments hereunder shall not be assignable or transferable,
whether by pledge, creation of a security interest or otherwise, other than a
transfer by his will or by the laws of descent or distribution, and in the event
of any attempted assignment or transfer contrary to this paragraph, the Company
shall have no liability to pay any amount so attempted to be assigned or
transferred.
15. Arbitration; Fees.
(a) Any disputes between the Company and the Executive
concerning this Agreement will be settled by arbitration in accordance with the
Commercial Arbitration Rules of the American Arbitration Association, by a panel
of three arbitrators, one selected by the Executive, one selected by the Company
and the other selected by the two so chosen. Judgment upon the arbitration award
rendered by the arbitrators shall be binding and conclusive and may be entered
in any court having jurisdiction thereof. The costs of the arbitration shall be
borne by the Company.
(b) In the event that the Executive receives an arbitration
award pursuant to subsection (a) above, the Company
shall, within thirty (30) days after the presentation of proper receipts or
invoices therefor, reimburse the Executive the reasonable fees and disbursements
of counsel incurred in connection of any amounts awarded the Executive pursuant
thereto.
16. Termination of Pre-Existing Employment Agreement. The Company and
the Executive hereby acknowledge and agree that this Agreement replaces any
employment agreement previously entered into between the Company and the
Executive, and that any rights granted under any such pre-existing employment
agreement are hereby terminated and of no further force and effect.
[SIGNATURES ON NEXT PAGE]
6
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered as of the day and year first above set forth.
OAKWOOD HOMES CORPORATION
ATTEST: By:
-----------------------------
Xxxxxxxx X. St. Xxxxxx,
Chairman and Chief Executive
---------------------------- Officer
EXECUTIVE:
[SEAL]
--------------------------------
[Name]
7
