EXHIBTI 10
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into as
of the 31st day of December 1996, by and between A. XXXXXX XXXXXXX, an
individual resident of the State of North Carolina ("Xxxxxxx"), and OAKWOOD
HOMES CORPORATION, a North Carolina corporation having its principal office and
place of business in Greensboro, North Carolina (the "Company").
STATEMENT OF PURPOSE
Xxxxxxx, who has been a senior executive and director of the Company
for several years, wishes to continue his employment with the Company, but in a
different capacity from that in which he is currently serving, and the Company
has agreed to such change of assignment. The Company and Xxxxxxx have therefore
agreed that Xxxxxxx will continue to render services to the Company on the terms
and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the Company and Xxxxxxx agree as follows:
1. Employment Period. For a period of twenty-four (24) months beginning
January 1, 1997, subject to extension as provided in the following sentence (the
"Employment Period"), Xxxxxxx shall serve as Executive Vice President and
Special Assistant to the President of the Company, or in such other office as
the Board of Directors of the Company (the "Board") shall determine, and in such
positions he shall have such duties as are assigned to him from time to time by
the Company's Chief Executive Officer. Unless either Xxxxxxx or the Company has
given written notice to the other of his or its desire to terminate this
Agreement by no later than November 30, 1998, the Employment Period shall
automatically be extended for an additional twenty-four (24) months beginning
January 1, 1999.
2. Duties. During his full-time employment hereunder Xxxxxxx shall
devote his full working time and energies to the business and affairs of the
Company, and shall use his best efforts, skill and abilities to promote the
Company's interests; provided, however, that Xxxxxxx xxx participate in civic,
charitable, educational or religious activities and affairs so long as such
activities do not interfere with the performance of his duties and obligations
to the Company.
3. Compensation.
(a) Salary and Incentive Compensation. The Company shall pay or cause
to be paid to Xxxxxxx during his full-time employment hereunder a base salary of
not less than Two Hundred and Fifty-Five Thousand Dollars ($255,000.00) per
annum, payable in monthly or more frequent installments in accordance with the
Company's regular payroll practices. In addition, although he would be
disqualified because of his change of assignment, Xxxxxxx shall be entitled to
receive the full amount that he would otherwise have earned under the Company's
annual incentive compensation program for the fiscal year ending September 30,
1997, subject to the provisions of the Company's Executive Incentive
Compensation Plan. The Long Term Incentive Compensation Award Agreement between
the Company and Xxxxxxx dated November 15, 1995, is terminated, and Xxxxxxx
shall receive no payments thereunder. For services after September 30, 1997,
Michael's incentive compensation or bonus, if any, shall be at the discretion of
the Compensation Committee of the Board.
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(b) Benefits. During Michael's full-time employment hereunder, except
as otherwise provided in Paragraph 3(a) above, he shall remain eligible to
participate, on the same basis as other executives of similar rank of the
Company, in any employee benefit plan hereafter existing to the extent that he
is then eligible under the general provisions thereof, and in any group
insurance, hospitalization, medical, health and accident, disability or similar
plans and programs of the Company to the extent that he is then eligible under
the general provisions thereof then pertaining.
4. Termination of Service.
(a) Discharge for Cause. The Board may discharge Xxxxxxx for
cause at any time and thereby terminate his full-time employment hereunder. Such
discharge shall be effected by written notice (the "Discharge Notice") to
Xxxxxxx which shall specify the reasons for his discharge and the effective date
thereof. As used herein, the term "for cause" shall mean (i) any breach by
Xxxxxxx of any material provisions of this Agreement, (ii) commission of a
wrongful act by Xxxxxxx that has or will have a material adverse effect on the
business, operations or financial condition of the Company, excluding matters of
business judgment that do not involve willful misconduct or gross negligence,
(3) any intentional falsification of reports, records or information submitted
by Xxxxxxx to the Company or any subsidiary of the Company, or any officer of
any thereof, (iv) fraud, criminal conduct, dishonesty or embezzlement by
Xxxxxxx, (v) misappropriation by Xxxxxxx of any assets or business opportunities
of the Company, or (vi) refusal or failure by Xxxxxxx to follow reasonable
specific instructions to him from the Chief Executive Officer or the Board;
provided, however, that to the extent that the cause for termination arises
under clause (i) or
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(vi) of this sentence and can be remedied, Xxxxxxx shall be given thirty (30)
days prior written notice of the Company's intention to terminate his employment
for cause, during which period he shall have the opportunity to remedy the act,
omission or condition giving rise to such cause, and if he successfully remedies
such act, omission or condition, Michael's employment shall not be terminated.
Upon termination pursuant to this Paragraph 4(a), Michael's compensation and
benefits hereunder shall forthwith cease and, except as otherwise provided in
Paragraphs 6 and 7 below, this Agreement shall terminate.
(b) Discharge Without Cause. The Company retains the right to discharge
Xxxxxxx without cause at any time by written notice of termination of employment
given to him, in which case his employment shall terminate on the effective date
specified in such notice. If the Company discharges Xxxxxxx without cause, he
shall be relieved of his obligations under Section 2 hereof but shall continue
to receive his base salary as provided in the first sentence of Paragraph 3(a)
above until the end of the Employment Period; and, in addition, Xxxxxxx shall be
relieved of his obligations and restraints under Paragraph 7 below to the extent
such obligations would otherwise extend beyond the period during which he is
receiving compensation in accordance with the forepart of this sentence.
(c) Termination by Xxxxxxx. Xxxxxxx xxx voluntarily terminate his
employment hereunder by thirty (30) days advance written notice to the Company
given at any time within thirty (30) days after Xxxxxxxx X. St. Xxxxxx ceases to
be the Company's Chief Executive Officer. Termination by Xxxxxxx pursuant to
this Paragraph 4(c) shall be deemed for all purposes to be his voluntary
resignation with the consent of the Board. Upon termination pursuant to this
Paragraph 4(c), Xxxxxxx shall continue for twelve calendar
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months to receive the base salary then being paid to him, but all other
compensation and benefits being paid to him shall forthwith cease and, except as
otherwise provided in this sentence and in Paragraphs 6 and 7 below, this
Agreement shall terminate.
5. Expenses. Upon submission of proper vouchers, the Company will pay
or reimburse Xxxxxxx for all transportation, hotel and living expenses incurred
by him on the Company's business during the Employment Period, all in accordance
with the Company's policies in effect from time to time
6. Confidentiality. Xxxxxxx acknowledges that, as a result of his past
positions with the Company and in his continuing employment, he has had and will
have access to proprietary confidential information that directly and indirectly
relates to the business of the Company and its subsidiaries (the "Business").
Xxxxxxx agrees that, for a period from the date hereof through and including the
later of five years after Xxxxxxx ceases to be employed by the Company and
December 31, 2006 (the "Confidentiality Period"), he will not, without the prior
written consent of the Company, (i) disclose to any person any confidential
information obtained with respect to the Business, except for information which
at the time is known to the public other than as a result of a disclosure by
Xxxxxxx not permitted hereunder, or lawfully acquired from a third party who is
not obligated to the Company to maintain such information in confidence, or (ii)
retain any papers or documents or papers relating to any such confidential
information. This Paragraph 6 shall survive the termination of this Agreement.
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7. Competition.
(a) Covenant. In consideration of the Company's agreeing to his request
for a change of assignment, agreeing to employ him during the Employment Period,
and agreeing to continue his participation in the 1997 Annual Incentive
Compensation Program, Xxxxxxx covenants and agrees that during the time he is
entitled to receive his base salary hereunder and (except for termination by
Xxxxxxx under Paragraph 4(c) above) for one year thereafter he will not,
directly or indirectly, in any geographic market in which the Company at the
time is conducting business
(i) enter into the employment of, or render services to,
any Competitive Business (as defined below);
(ii) engage in any Competitive Business for his own
account; or
(iii) become interested in any Competitive Business as an
individual, partner, shareholder, creditor, director, officer,
principal, agent, employee, trustee, consultant, advisor or
any in any other relationship or capacity; provided, however,
that the provisions of this Paragraph 7(c) shall not be deemed
to prohibit Xxxxxxx from acquiring or holding, solely as an
investment, publicly traded securities of such corporation so
long as such securities do not, in the aggregate, constitute
more than 5% of any class or series of outstanding securities
of such corporation;
(iv) employ or solicit for employment, or
advise or recommend to any other person that they employ or
solicit for employment, any employee of the Company or any of
its subsidiaries engaged in the Business; or
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(v) discuss with any employee of the Company or any of its
subsidiaries engaged in the Business, the formation or operation of any
Competitive Business or the possible future employment of such employee
by any Competitive Business if Xxxxxxx has or expects to acquire a
proprietary interest in such business or is or expects to be made a
director or executive officer thereof.
(b) Definitions. For purposes of this Paragraph 7, (i) a "Competitive
Business" shall mean any business that is engaged, in whole or in part, in the
manufacture, sale (at wholesale or retail, except occasional retail sales
incident to the operation of a mobile home park) or financing, of manufactured
or other non-site-built housing of any kind, (ii) the "geographic markets" in
which the Company at a particular time conducts business are and will be those
described in the Company's then most recent Annual Report to Shareholders and
Form 10-K Report, and (iii) a "proprietary interest" in a business shall mean
ownership, through direct or indirect stockholdings or otherwise, of more than
5% of such business, and Xxxxxxx shall be deemed to expect to acquire a
proprietary interest in a business or to be made a director or executive officer
of such business if such possibility has been discussed by any officer,
director, employee, agent or promotor of such business.
(c) Injunctive Relief. Xxxxxxx acknowledges that in view of the nature
of the Business and his own unique knowledge and skills, the restrictions
contained in this Paragraph 7 and in Paragraph 6 above are reasonable and
necessary to protect the Company's legitimate business interests, that any
violation of such restrictions will cause irreparable injury to the Company for
which money damages will not adequately compensate and that if
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he violates any of such restrictions the Company should and will be entitled to
preliminary and permanent injunctive relief in addition to appropriate monetary
accounting and damages.
(d) Survival. This Paragraph 7 shall survive the termination of this
Agreement.
8. Notices. Any notices, requests, demands or other communications
under this Agreement to a party hereto shall be in writing and shall be deemed
to have been duly given when delivered in person or deposited in the United
States mail, postage prepaid, by registered or certified mail, return receipt
requested, to the parties hereto at the following addresses:
As to Xxxxxxx: Mr.A. Xxxxxx Xxxxxxx
0000 Xxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000
As to Company: Oakwood Homes Corporation
0000 XxXxxxx Xxxx
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: Chief Executive Officer
Either party hereto may change his or its address to which notices or other
communications hereunder are to be directed by giving notice thereto to the
other party hereto as hereinabove provided.
9. Severability. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision hereof, all of which provisions are intended to be severable and to
remain in full force and effect.
10. No Waivers. The failure of either party at any time or times to
enforce or require performance of any provisions hereof shall not affect the
right of such party at a later time to enforce or require performance thereof.
No waiver by either party of the breach of any provision hereof, whether by
conduct or otherwise, shall be construed as a further or
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continuing waiver of any such breach, or as a waiver of the breach of any othe
provision hereof.
11. Applicable Law. This Agreement shall be enforced, interpreted and
construed under the laws of the State of North Carolina.
12. Binding Effect. This Agreement shall be binding upon and inure to
the benefit of the parties hereto, and their respective heirs, executors,
administrators, legal representa- tives, successors and assigns, if any.
13. Entire Agreement; Modifications. This Agreement contains the entire
agreement between the Company and Xxxxxxx with respect to the subject matter
hereof; provided, however, that the following agreements between Xxxxxxx and the
Company shall remain in effect according to their respective terms:
(a) All stock option award agreements and all deferred compensation
agreements between the Company and Xxxxxxx;
(b) Employment Agreement dated November 16, 1990, as amended ("Golden
Parachute Agreement"); and
(c) Executive Retirement Benefit Employment Agreement dated June 3,
1993, as amended ("Executive Retirement Agreement");
provided, however, that the Executive Retirement Agreement is hereby amended by
adding the following to the end of Section 4(d) thereof:
"Voluntary termination by Executive in accordance with Paragraph 4(c)
of the Employment Agreement between Executive and the Company dated as
of December 31, 1996, shall be deemed to be Approved Voluntary
Termination and shall entitle Executive to receive payments in the
amount and in accordance with the schedule set out in Schedule E
attached hereto (i) without further approval of the Board of Directors,
(ii) without the 180 days notice referred to above, and (iii) without
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requiring that Executive be at least 50 years of age (any earlier age
to be treated as 50 years of age for purposes of Schedule E)."
This Agreement may not be modified or amended except by a writing signed by the
party against whom enforcement is sought.
14. No Duplication of Payment. Notwithstanding anything to the contrary
herein, Xxxxxxx shall receive no compensation payments hereunder after his full
time employment with the Company terminates if Xxxxxxx at the time has received,
is receiving or is entitled to receive, payments under the Golden Parachute
Agreement, it being intended that Xxxxxxx shall not receive post-employment
payments hereunder and under the Golden Parachute Agreement.
15. Duplicate Originals. This Agreement is executed in duplicate
originals, each of which shall be deemed an original hereof.
IN WITNESS WHEREOF, Xxxxxxx has hereunto set his hand and seal, and the
Company has caused this Agreement to be executed by its duly authorized
representatives, all as of the day and year first above.
Witness: /s/ A. Xxxxxx Xxxxxxx [SEAL]
A. Xxxxxx Xxxxxxx
/s/ Xxxxxx Xxxx
"Xxxxxxx"
[CORPORATE SEAL] OAKWOOD HOMES CORPORATION
ATTEST:
By: /s/ Xxxxxxxx X. St. Xxxxxx
By: /s/ Xxxxxxx X. Xxxx Title: President
Title:Senior Vice President
"Company"
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