SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only
(as permitted by Rule 14A-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
OAKWOOD HOMES CORPORATION
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee
is calculated and state how it was determined):
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[ ] Fee paid previously with preliminary materials.
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Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(4) Date Filed:
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OAKWOOD HOMES CORPORATION
P. O. BOX 27081
GREENSBORO, NORTH CAROLINA 27425-7081
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JANUARY 30, 2002
Notice is hereby given that the Annual Meeting of Shareholders of
Oakwood Homes Corporation, a North Carolina corporation (the "Company"), will be
held at the Joseph S. Koury Convention Center, 3121 High Point Road, Greensboro,
North Carolina on Wednesday, January 30, 2002 at 2:00 p.m., local time, for the
purpose of considering and acting upon the following:
1. Election of one member to the Board of Directors.
2. Ratification of the selection of PricewaterhouseCoopers LLP as
independent accountants for the fiscal year ending September
30, 2002.
3. Any and all other matters that may properly come before the
meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on December 7,
2001 as the record date for determining the shareholders entitled to notice of
and to vote at the meeting or any adjournment thereof, and only holders of
Common Stock of the Company of record at such date will be entitled to notice of
or to vote at the meeting.
You are urged to attend the annual meeting in person but, if you are
unable to do so, the Board of Directors will appreciate the prompt return of the
enclosed proxy, dated and signed. The proxy may be revoked at any time before it
is exercised and will not be exercised if you attend the meeting and vote in
person.
By order of the Board of Directors.
/s/ Myles E. Standish
Myles E. Standish
President and Chief Executive Officer
Greensboro, North Carolina
December 31, 2001
OAKWOOD HOMES CORPORATION
P. O. BOX 27081
GREENSBORO, NORTH CAROLINA 27425-7081
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PROXY STATEMENT
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GENERAL
This Proxy Statement is being furnished in connection with the
solicitation by the Board of Directors of proxies to be used at the Annual
Meeting of Shareholders of Oakwood Homes Corporation, a North Carolina
corporation (the "Company"), to be held at the Joseph S. Koury Convention
Center, 3121 High Point Road, Greensboro, North Carolina on Wednesday, January
30, 2002 at 2:00 p.m., local time, and at any adjournment thereof. This Proxy
Statement and the accompanying proxy are first being sent to shareholders of the
Company on or about January 2, 2002.
Solicitation other than by mail may be made personally and by telephone
by regularly employed officers and employees of the Company who will not be
additionally compensated therefor. The Company will request brokers, dealers,
banks or voting trustees, or their nominees, who hold stock in their names for
others or hold stock for others who have the right to give voting instructions,
to forward proxy materials to their principals and request authority for the
execution of the proxy and will reimburse such persons for their reasonable
expenses in so doing. The total cost of soliciting proxies will be borne by the
Company.
Any proxy delivered in the accompanying form may be revoked by the
person executing the proxy at any time before the authority thereby granted is
exercised by filing an instrument revoking it or a duly executed proxy bearing a
later date with the Secretary of the Company or if the person executing the
proxy attends the meeting and elects to vote in person. If a choice is specified
in the proxy, shares represented thereby will be voted in accordance with such
choice. If no choice is specified, the proxy will be voted FOR the action
proposed.
The only matters to be considered at the meeting, so far as known to
the Board of Directors, are the matters set forth in the Notice of Annual
Meeting of Shareholders and routine matters incidental to the conduct of the
meeting. However, if any other matter should come before the meeting or any
adjournment thereof, it is the intention of the persons named in the
accompanying proxy or their substitutes to vote the proxy in accordance with
their best judgment on such matters.
Each shareholder present or represented and entitled to vote on a
matter at the meeting or any adjournment thereof will be entitled to one vote on
such matter for each share of Common Stock held of record at the close of
business on December 7, 2001, which is the record date for determining the
shareholders entitled to notice of and to vote at such meeting or any
adjournment thereof. A total of 9,528,343 shares of Common Stock of the Company
were outstanding on December 7, 2001. All share amounts contained in this proxy
statement are adjusted to give effect to the Company's one-for-five reverse
stock split effective June 18, 2001.
PRINCIPAL HOLDERS OF COMMON STOCK AND HOLDINGS OF MANAGEMENT
At December 7, 2001, the only persons known to the Company to be the
beneficial owner of more than 5% of the Common Stock of the Company were as
follows:
Number of Shares
and Nature of Percentage of
Name and Address Beneficial Shares
of Beneficial Owner Ownership Outstanding
------------------- ---------------- -----------
Dimensional Fund Advisors Inc. 855,580(1) 9.0%
1299 Ocean Avenue
11th Floor
Santa Monica, CA 90401
FMR Corp. 985,680(2) 10.3%
82 Devonshire Street
Boston, MA 02109
Credit Suisse First Boston 1,906,888(3) 16.7%(3)
Uetlibergstrasse 231
P.O. Box 900
CH-8070 Zurich, Switzerland
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(1) Such information is derived from a Schedule 13G dated February 2, 2001
filed by Dimensional Fund Advisors Inc. ("Dimensional"), which has sole
voting and dispositive power with respect to such shares. Such shares
are owned by certain investment companies, commingled group trusts and
accounts with respect to which Dimensional acts as an investment
advisor or manager. Dimensional disclaims beneficial ownership of all
such shares.
(2) Such information is derived from a Schedule 13G dated September 10,
2001 filed by FMR Corp. jointly on behalf of FMR Corp., Edward C.
Johnson III and Abigail P. Johnson. Mr. Johnson and FMR Corp. each have
sole dispositive power with respect to such shares. Ms. Johnson is a
director of FMR Corp.
(3) Represents shares subject to a warrant held by Credit Suisse First
Boston International ("CSFBi") that is presently exercisable. According
to a Schedule 13G filed by Credit Suisse First Boston ("CSFB") on March
8, 2001, CSFB holds 56% of the ordinary voting shares of CSFBi. CSFB
disclaims beneficial ownership of all such Common Stock of the Company.
Such percentage is based on the number of shares outstanding plus
shares issuable upon exercise of the warrant.
The following table sets forth certain information with respect to the
beneficial ownership of the Common Stock as of December 7, 2001 by Douglas R.
Muir, Executive Vice President, Secretary and Treasurer of the Company, Suzanne
H. Wood, Executive Vice President and Chief Financial Officer of the Company,
Roger W. Schipke, Duane D. Daggett and by all directors and executive officers
of the Company as a group. Mr. Muir and Ms. Wood are the persons named in the
Summary Compensation Table on page 12 who are not also directors or nominees as
directors. Messrs. Schipke and Daggett are currently serving as directors of the
Company, although they are not seeking re-election to the Board following the
annual meeting. Information as to the beneficial ownership of each other
director individually (including those persons named in the Summary Compensation
Table who are also directors) is included in the information on such director
under the heading "Election of Directors."
2
Number of Shares
and Nature of Percentage of
Name of Beneficial Shares
Beneficial Owner Ownership(1) Outstanding(1)
---------------- ---------------- ---------------
Duane D. Daggett 48,200 (2)
Douglas R. Muir 29,382 (3) (2)
Roger W. Schipke 3,685 (4) (2)
Suzanne H. Wood 7,333 (5) (2)
Directors and executive officers as a 366,535 (6) 3.8%
group (12 persons)
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(1) Such numbers and percentages are based on the number of shares
outstanding plus shares subject to options that are presently
exercisable. Each such person has sole voting and dispositive power
with respect to all shares beneficially owned.
(2) Less than 1%.
(3) Includes 28,932 shares subject to options that are presently
exercisable and 354 shares held through the Company's 401(k) plan.
(4) Consists of 3,685 shares subject to options that are presently
exercisable.
(5) Consists of 7,333 shares subject to options that are presently
exercisable.
(6) Includes an aggregate of 176,723 shares subject to options that are
presently exercisable and 690 shares held through the Company's 401(k)
plan.
ELECTION OF DIRECTORS
The Board of Directors currently has ten members and one vacancy. Three
of the directors' terms expire in 2002. The Board proposes to fill one of these
positions at the meeting with a nominee to serve, subject to the provisions of
the Bylaws, until the Annual Meeting of Shareholders in 2005 and until his
successor is duly elected and qualified. This will leave a total of three
vacancies on the Board of Directors, all of which are in the class of directors
with a current term expiring in 2002. The Board of Directors intends to leave
these vacancies open until it has identified appropriate individuals who are
willing to serve as directors. Directors are elected by a plurality of the votes
cast by the holders of shares entitled to vote in the election of directors at a
meeting at which a majority of the votes entitled to be cast is present.
Provided a majority is present, abstentions and shares not voted are not taken
into account in determining a plurality. It is the intention of the persons
named in the accompanying proxy to vote all proxies solicited by the Board of
Directors for the nominee listed below for a term expiring as set forth herein,
unless authority to vote for the nominee is withheld by a shareholder. If for
any reason the nominee shall not become a candidate for election as a director
at the meeting, an event not now anticipated, the proxies will be voted for any
nominee or substitute designated by the Board of Directors. The proxies
solicited hereby will in no event be voted for more than one person.
Sabin C. Steeter is a nominee for election to serve until 2005. Mr.
Streeter was elected to his present term at the Annual Meeting of Shareholders
held on February 11, 1999. Roger W.
3
Schipke, who has served as a director of the Company since 1996, and Duane D.
Daggett, who has served as a director of the Company since 2000, will not be
seeking re-election as directors.
The following sets forth certain information regarding the nominee for
election:
Number of Percentage
Shares of
Name and Beneficially Shares
Director Since Information About Director Owned(1) Outstanding(1)
- -------------- -------------------------- ------------- --------------
Sabin C. Streeter Private Investor and 8,085(2) (3)
1993 Executive-in-Residence at Columbia
University Graduate School of Business
since 1997; Managing Director,
Donaldson Lufkin & Jenrette Securities
Corporation (investment banking firm)
from 1976 to 1997. Director of
Middleby Corporation. He is 60 years
old.
The following members of the Board of Directors were elected to their
present terms, which expire in 2004, at the Annual Meeting of Shareholders held
January 31, 2001:
Number of Percentage
Shares of
Name and Beneficially Shares
Director Since Information About Director Owned(1) Outstanding(1)
- -------------- -------------------------- ------------- --------------
Clarence W. Walker Partner, Kennedy Covington Lobdell & 16,522(4) (3)
1971 Hickman, L.L.P., Attorneys at Law,
Charlotte, NC since 1961. He is 70
years old.
Dennis I. Meyer Chairman of the Company since September 72,723(5) (3)
1983 2000. Partner, Baker & McKenzie,
Attorneys at Law, Washington, DC since
1965. Director of United Financial
Banking Companies, Inc. He is 66 years
old.
4
Robert A. Smith Executive Vice President - Financial 30,196(6) (3)
2000 Operations of the Company since
September 2000; Executive Vice President and
Chief Financial Officer of the Company from
October 1998 to September 2000; Executive Vice
President, Finance and Chief Operating Officer
of Oakwood Acceptance Corporation (the
Company's finance subsidiary) from September
1997 to October 1998; Senior Vice President of
the Company from February 1997 to September
1997. Partner, Price Waterhouse LLP from 1984
to 1997. He is 56 years old.
The following members of the Board of Directors were elected to their
present terms, which expire in 2003, at the Special Meeting of Shareholders held
February 9, 2000, with the exception of Mr. Standish, who was elected to his
present term at the Annual Meeting of Shareholders held January 31, 2001:
Number of Percentage
Shares of
Name and Beneficially Shares
Director Since Information About Director Owned(1) Outstanding(1)
- -------------- -------------------------- ------------ --------------
Kermit G. Phillips, II Retired; President of Phillips 10,685(7) (3)
1979 Management Group, Inc. (real estate
development and management company)
from 1974 to 2001. He is 67 years
old.
H. Michael Weaver Private Investor; Chairman of the 65,169(8) (3)
1991 Board of Weaver Investment Company
(real estate investment firm) since
1968. He is 64 years old.
Francis T. Vincent, Jr. Private Investor; Commissioner of 7,085(9) (3)
1999 Major League Baseball, 1989-1992.
Director of AOL - Time-Warner Inc.
and Westfield America Inc. He is 63
years old.
5
Myles E. Standish President and Chief Executive Officer 38,800(10) (3)
2000 of the Company since July 2001;
General Counsel of the Company since 1995;
Executive Vice President - Operations of the
Company from September 2000 to July 2001; Chief
Administrative Officer of the Company from
November 1998 until September 2000; Senior Vice
President of the Company from 1995 to November
1998. Partner, Kennedy Covington Lobdell &
Hickman, L.L.P. from 1987 to 1995. He is 47
years old.
- ---------------------
(1) Such numbers and percentages are based on the number of shares
outstanding plus shares subject to options that are presently
exercisable. Unless otherwise indicated, each director has sole voting
and dispositive power with respect to all shares beneficially owned.
Common Stock ownership information is as of December 7, 2001.
(2) Includes 200 shares held by Mr. Streeter's wife and 6,685 shares
subject to options that are presently exercisable.
(3) Less than 1%.
(4) Includes 442 shares held by Mr. Walker's wife and 9,685 shares subject
to options that are presently exercisable.
(5) Consists of 63,038 shares held by Mr. Meyer's wife and 9,685 shares
subject to options that are presently exercisable.
(6) Includes 201 shares held by Mr. Smith's individual retirement account,
119 shares held through the Company's 401(k) plan and 26,999 shares
subject to options that are presently exercisable.
(7) Consists of 1,000 shares held by the Kermit G. Phillips II Revocable
Trust, of which Mr. Phillips is the sole trustee and sole beneficiary,
and 9,685 shares subject to options that are presently exercisable.
(8) Includes 40,024 shares held by HMW Investments, L.P., a limited
partnership of which Mr. Weaver is the limited partner and Weaver
Investment Company, of which Mr. Weaver is the controlling shareholder,
is the general partner, 1,000 shares held by Mr. Weaver's wife, 10,500
shares held by the Edith H. Weaver Marital Deduction Trust, of which
Mr. Weaver is the trustee, and 9,685 shares subject to options that are
presently exercisable.
(9) Includes 6,685 shares subject to options that are presently
exercisable.
(10) Includes 217 shares held through the Company's 401(k) plan and 32,998
shares subject to options that are presently exercisable.
6
THE BOARD OF DIRECTORS AND ITS COMMITTEES
The Board of Directors met nine times during the fiscal year ended
September 30, 2001 ("fiscal 2001"). During fiscal 2001, each director attended
more than 75% of the aggregate of the number of meetings of the Board of
Directors and all committees on which he served. The Board of Directors has
Audit, Compensation, Executive and Management Committees. The Board of Directors
does not have a Nominating Committee.
The Audit Committee is composed of Messrs. Phillips, Streeter, Walker
and Weaver. This Committee is responsible for recommending independent public
accountants for the Company, as well as acting on behalf of the Board of
Directors in the oversight of all material aspects of the Company's reporting,
internal control and audit functions. The Audit Committee met six times during
the past fiscal year.
The Compensation Committee is currently composed of Messrs. Meyer,
Schipke and Vincent. This Committee reviews and makes recommendations and
determinations with respect to the compensation of the Company's officers. The
Compensation Committee met two times during the past fiscal year.
The Executive Committee is currently composed of Messrs. Daggett,
Meyer, Phillips, Smith, Standish and Weaver. This Committee is authorized to
exercise all the powers and authority of the Board of Directors that can be
delegated to a committee under the North Carolina Business Corporation Act. The
Executive Committee met ten times during the past fiscal year.
The Management Committee is currently composed of Messrs. Smith and
Standish. Mr. Daggett was a member of the Management Committee until his
resignation on July 24, 2001. This Committee is authorized to enter into
financing arrangements and to approve other routine matters that would otherwise
require the approval of the Board of Directors. The Management Committee did not
formally meet during the past fiscal year, although it met informally on various
occasions throughout the year.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During fiscal 2001, Messrs. Meyer, Schipke and Vincent served on the
Compensation Committee of the Board of Directors. None of such persons has ever
been an officer or employee of the Company or any of its subsidiaries. During
fiscal 2001, no executive officer of the Company served as a director or member
of the compensation committee (or other committee performing similar functions)
of any other entity of which an executive officer served on the Board of
Directors or Compensation Committee of the Company.
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
The law firm of Kennedy Covington Lobdell & Hickman, L.L.P., of which
Clarence W. Walker is a partner, has served as counsel to the Company since
1971. It is expected that such firm will continue to serve as counsel to the
Company during the current fiscal year.
7
COMPENSATION COMMITTEE REPORT
Compensation Committee. The Compensation Committee of the Board of
Directors (the "Committee") is a standing committee of the Board of Directors
composed of outside directors qualified under Section 162(m) of the Internal
Revenue Code. Mr. Schipke is currently the Chairman and Messrs. Meyer and
Vincent are the other current members of the Committee.
The Committee attempts to ensure that the Company's executive
compensation programs are developed, implemented and administered in a way that
supports the Company's objective of linking compensation to performance. During
fiscal 2001, the Committee reviewed and set the base salaries for five of the
Company's senior executives and provided for their annual incentive
compensation. The Committee is also responsible for equity-based compensation
for officers and key employees of the Company.
Corporate Compensation Philosophy. The Committee believes that the
Company's base compensation levels should be in line with those of comparable
companies in order to enable the Company to attract and retain the highly
qualified executives it needs and that incentives should be provided so that its
executives can achieve total compensation in excess of that at comparable
companies only if warranted by results. Long-term incentives are provided
primarily through grants of stock options and restricted stock that link the
interests of the Company's executive officers and shareholders.
Deductibility of Compensation. The Committee attempts to see that cash
compensation paid to executive officers is deductible for federal income tax
purposes. Many of the stock options granted by the Committee are incentive stock
options, and the Company receives no income tax deduction upon the exercise of
these options. The Committee believes that the use of incentive stock options
can be important because upon exercise the executive will not be in a position
where he or she might need to sell the underlying stock to pay personal income
taxes.
Executive Compensation. The Company's executive compensation program is
composed of three basic elements: (a) base salary; (b) annual incentive
compensation; and (c) long-term incentive opportunities primarily in the form of
stock options.
Base Salary. Base salaries for fiscal 2001 increased an
average of 18% over fiscal 2000 for the Named Executive Officers (as defined on
page 12, but excluding Messrs. Standish and Daggett, each of whom served as
Chief Executive Officer for a portion of fiscal 2001). Changes in base salaries
for these executive officers was primarily the result of additional
responsibilities undertaken by these individuals as the Company reduced the
number of persons at its executive management level during the year.
Annual Incentive Compensation. During fiscal 2001, the
Committee established a target bonus for each of the Named Executive Officers.
The amounts were determined by the Committee based upon each executive's level
of responsibility and capacity to contribute to the achievement of the Company's
goals. Payment of the target bonuses, if any, during fiscal 2001 was based on
the performance objectives set by the Committee. Bonuses paid to the Named
Executive Officers (other than Messrs. Standish and Daggett) increased 105% over
fiscal 2000, primarily as a result of changes in the roles of the Named
Executive Officers, as well as improvements in the Company's liquidity-one of
the primary performance objectives set by the Committee.
8
Long Term Incentive Opportunities. The Committee provides its
executive officers with long term incentives primarily in the form of stock
options. During fiscal 2001, Messrs. Standish, Daggett, Smith and Muir and Ms.
Wood were granted options to purchase 15,000, 24,000, 15,000, 8,000 and 8,000
shares of Common Stock, respectively. These options become exercisable in equal
installments on each of June 20, 2001, December 20, 2001 and June 20, 2002.
Chief Executive Officer Compensation. The compensation for Mr. Daggett,
the Company's President and Chief Executive Officer through July 24, 2001,
consisted of the same three basic elements as for the Company's other executive
officers.
Base Salary. Mr. Daggett's base salary for fiscal 2001 was
$400,000, which represented a decrease of 12.5% compared to the base salary of
the Company's chief executive officer during fiscal 2000. The Committee believes
Mr. Daggett's base salary was below the median base salary of chief executive
officers of companies of comparable size.
Annual Incentive Compensation. In connection with Mr.
Daggett's resignation, the Company and Mr. Daggett entered into the separation
agreement discussed on page 14. In this agreement, the Company agreed that Mr.
Daggett would receive $500,000 on January 2, 2002 as a special separation
benefit and as a payment in lieu of his bonus for 2001.
Long Term Incentive Opportunities. In fiscal 2001, Mr. Daggett
received a stock option grant of 24,000 shares, subject to the same
exercisability restrictions discussed above for the other executive officers.
Mr. Standish's base salary and bonus were not changed upon his election
as Chief Executive Officer on July 24, 2001. During fiscal 2001, Mr. Standish
received a stock option grant of 15,000 shares, subject to the same
exercisability restrictions discussed above for the other executive officers.
Roger W. Schipke, Chairman
Dennis I. Meyer
Francis T. Vincent, Jr.
9
AUDIT COMMITTEE REPORT
The Audit Committee's role is to act on behalf of the Board of
Directors in the oversight of all material aspects of the Company's reporting,
internal control and audit functions. The Audit Committee's role includes a
particular focus on the qualitative aspects of financial reporting to
shareholders and on the Company's processes and procedures for the management of
business and financial risks. A full description of the Audit Committee's
primary responsibilities, operating principles, and relationship with internal
and external auditors is contained in the Audit Committee Charter, a copy of
which was attached to the Company's proxy statement for its 2001 Annual Meeting
of Shareholders.
For fiscal 2001, the Audit Committee was composed of Messrs. Phillips,
Streeter, Walker and Weaver, each of whom is "independent" under the New York
Stock Exchange's listing standards. During fiscal 2001, the Audit Committee met
six times.
During fiscal 2001, the Audit Committee:
- Reviewed and discussed the Company's audited fiscal 2001
financial statements with management and representatives of
PricewaterhouseCoopers LLP, the Company's independent
accountants;
- Discussed with PricewaterhouseCoopers LLP the matters required
to be discussed by Statement on Auditing Standards Nos. 61 and
90; and
- Received the written disclosures and the letter from
PricewaterhouseCoopers LLP required by Independence Standards
Board Standard No. 1, and has discussed with
PricewaterhouseCoopers LLP its independence.
In reliance on the review, discussions and disclosures referred to
above, the Audit Committee recommended to the Board of Directors that the
Company's audited financial statements for fiscal 2001 be included in the
Company's Annual Report on Form 10-K for the year ended September 30, 2001.
Clarence W. Walker, Chairman
Kermit G. Phillips, II
Sabin C. Streeter
H. Michael Weaver
10
SHAREHOLDER RETURN PERFORMANCE GRAPH
Presented below is a graph comparing the yearly percentage change in
the cumulative total shareholder return on the Company's Common Stock against
the cumulative total return of the Standard & Poors ("S&P") 500 Index and a peer
group for the period commencing September 30, 1996 and ending September 30,
2001, covering the Company's last five fiscal years. The peer group consists of
the following publicly traded companies, all of which are engaged in aspects of
the manufactured housing industry: Cavalier Homes, Inc., Champion Enterprises,
Inc., Clayton Homes, Inc., Fleetwood Enterprises, Inc., Liberty Homes, Inc. and
Skyline Corporation.
The graph assumes that $100 was invested in the Company's Common Stock,
in the S&P 500 Index and in the peer group on September 30, 1996, and that all
dividends were reinvested.
[GRAPH]
1996 1997 1998 1999 2000 2001
---- ---- ---- ---- ---- ----
Oakwood Homes 100.00 104.79 48.54 16.69 5.62 3.11
S&P 500 100.00 140.61 153.68 196.43 223.55 163.76
Peer Group 100.00 101.00 100.00 59.00 52.00 62.00
11
EXECUTIVE COMPENSATION
The table below sets forth certain compensation information for the
three fiscal years ended September 30, 2001 concerning (i) both individuals
serving as the Company's Chief Executive Officer during fiscal 2001 and (ii) the
Company's three other executive officers (collectively, the "Named Executive
Officers").
SUMMARY COMPENSATION TABLE
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LONG-TERM
ANNUAL COMPENSATION COMPENSATION
-----------------------------------------------------------------------
AWARDS
----------
OTHER SECURITIES ALL OTHER
ANNUAL UNDERLYING COMPEN-
NAME AND FISCAL SALARY BONUS COMPENSATION OPTIONS SATION
PRINCIPAL POSITION YEAR ($) ($) ($) (#) ($)(1)
- -----------------------------------------------------------------------------------------------------------------
Myles E. Standish 2001 323,269 225,000 (3) 15,000 7,200
President and Chief Executive 2000 278,769 90,000 (3) 12,000 7,446
Officer(2) 1999 200,000 0 (3) 15,000 6,558
Duane D. Daggett 2001 393,846 0 (3) 24,000(4) 3,077
Former President and Chief 2000 55,385 30,000 (3) 12,000(4) 0
Executive Officer(2) 1999 -- -- -- -- --
Robert A. Smith 2001 323,269 225,000 (3) 15,000 7,368
Executive Vice President - 2000 278,769 90,000 (3) 12,000 5,661
Financial Operations 1999 200,000 85,700 (3) 15,000 7,108
Douglas R. Muir, 2001 273,654 125,000 (3) 8,000 8,569
Executive Vice President, 2000 238,615 80,000 (3) 4,000 7,942
Secretary and Treasurer 1999 148,077 150,000 (3) 7,000 6,630
Suzanne H. Wood 2001 202,615 90,000 (3) 8,000 0
Executive Vice President and 2000 162,539 45,000 (3) 3,000 0
Chief Financial Officer 1999 110,577 100,000 (3) 2,000 0
(1) The components of the amounts shown in this column consist of (a)
Company contributions under the Company's various retirement plans for
Messrs. Standish, Daggett, Smith and Muir and Ms. Wood of $7,200,
$3,077, $7,368, $8,569 and $0 for fiscal 2001, $7,446, $0, $5,661,
$7,429 and $0 for fiscal 2000, and $6,558, $0, $7,108, $2,943 and $0
for fiscal 1999, respectively, and (b) interest accrued on a deferred
compensation account for Mr. Muir of $513 and $3,687 for fiscal 2000
and fiscal 1999, respectively. Additionally, effective November 30,
2001, the Company and Mr. Daggett entered into the separation agreement
that is described on page 14 relating to, among other things, Mr.
Daggett's separation from the Company, as well as amounts payable to
Mr. Daggett as a special separation benefit and in lieu of his bonus
for fiscal 2001.
(2) Mr. Daggett served as President and Chief Executive Officer until his
resignation from such positions on July 24, 2001. Mr. Standish was
appointed to such offices on such date.
(3) Such Named Executive Officer did not receive perquisites or other
personal benefits during the listed years in excess of the lesser of
(a) $50,000 or (b) 10% of his or her annual salary and bonus.
(4) Such stock options were terminated in connection with Mr. Daggett's
separation from the Company.
12
The table below sets forth information relating to stock option grants
during fiscal 2001 to each Named Executive Officer and the potential realizable
value of each grant of options assuming annualized appreciation in the Common
Stock at the rate of 5% and 10% over the term of the option.
OPTION GRANTS IN FISCAL 2001
Number of % of Total Potential Realizable Value
Shares Options At Assumed Annual Rates
Underlying Granted to Exercise or of Stock Price
Options Employees in Base Price Expiration Appreciation
Name Granted Fiscal Year ($/Share) Date for Option Term ($)
---- -------- ----------- -------- ---- -------------------
(#)(1) 5% 10%
------ -- ---
Myles E. Standish 15,000 14.9 $3.15 12/20/10 29,715 75,304
Duane D. Daggett 24,000(2) 23.8 $3.15 12/20/10 47,544 120,487
Robert A. Smith 15,000 14.9 $3.15 12/20/10 29,715 75,304
Douglas R. Muir 8,000 7.9 $3.15 12/20/10 15,848 40,162
Suzanne H. Wood 8,000 7.9 $3.15 12/20/10 15,848 40,162
- -------------------------
(1) The stock options vest in three equal installments on each of June 20,
2001, December 20, 2001 and June 20, 2002.
(2) Such stock options were terminated in connection with Mr. Daggett's
separation from the Company.
The table below sets forth information related to the exercises of
stock options during fiscal 2001 by each Named Executive Officer and the fiscal
year-end number and value of unexercised stock options:
AGGREGATED OPTION EXERCISES IN
FISCAL 2001 AND FY-END OPTION VALUES
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options Options
At FY-End At FY-End
Shares -------------- -------------
Acquired on Value Exercisable/ Exercisable/
Name Exercise(#) Realized($) Unexercisable(#) Unexercisable($)
---- ----------- ----------- ---------------- ----------------
Myles E. Standish 0 0 22,998/27,000 5,000/10,000
Duane D. Daggett 0 0 12,000/24,000 8,000/16,000(1)
Robert A. Smith 0 0 16,999/28,999 5,000/10,000
Douglas R. Muir 0 0 23,933/11,666 2,667/5,333
Suzanne H. Wood 0 0 4,000/9,000 2,667/5,333
- ------------------------
(1) All such stock options were terminated in connection with Mr. Daggett's
separation from the Company.
13
DIRECTOR COMPENSATION
The directors of the Company who are not employees are paid an annual fee
of $36,000 plus $1,000 for each Board meeting attended, $1,500 for each
Committee meeting attended that is not held on the same day as a Board meeting
and $500 for each Board meeting participated in by telephone conference call.
Committee chairmen who are not also employees receive an additional $1,000 each
quarter. Under the Company's 1998 Director Deferral Plan, non-employee directors
may elect to defer payment of all or any portion of their annual retainer and
meeting fees until they no longer serve on the Board of Directors of the
Company. Directors participating in this plan are credited with phantom stock
units as they defer fees. Upon resignation or retirement, a participating
director will be entitled to receive a cash payment equal to the value of his
phantom stock units on the date he ceases to be a director. Under the Company's
1997 Director Plan, each non-employee director was granted an option to purchase
1,200 shares of Common Stock on July 30, 2000 at the fair market value at such
time, and each non-employee director will be granted an option to purchase 1,200
shares of Common Stock on July 30, 2002 at the fair market value at such time.
EMPLOYMENT ARRANGEMENTS
The Company has entered into employment agreements with Messrs. Standish
and Smith that provide for their continued employment with the Company for two
years following a change in control occurring on or before December 31, 2003. If
either such executive's employment is terminated within two years after such
change of control for reason other than death, disability or cause or if either
such executive resigns during such time for good reason, and the Compensation
Committee does not revise the agreements in connection with a change of control
approved by the independent directors, he will be entitled to a lump sum payment
equal to two times his annual compensation. These agreements are intended to
provide Messrs. Standish and Smith with a greater sense of security, assure
their objectivity in analyzing any potential change in control and preserve
continuity of management in the event of a change in control.
In connection with Mr. Daggett's resignation as President and Chief
Executive Officer of the Company on July 24, 2001, the Company and Mr. Daggett
entered into a separation agreement. The separation agreement provided that Mr.
Daggett would resign as an employee of, and from all other positions held with,
the Company effective November 30, 2001, other than as a member of the Board of
Directors and its Executive Committee. In the separation agreement, the Company
and Mr. Daggett acknowledged that Mr. Daggett had been paid his then current
salary through November 30, 2001 and agreed that Mr. Daggett would be paid a
lump sum payment of $500,000 on January 2, 2002 as a special separation benefit
and as a payment in lieu of his bonus for fiscal 2001. Additionally, the Company
agreed to provide Mr. Daggett with health care coverage and continue to pay
premiums on a $300,000 term life insurance policy until December 31, 2004. The
Company and Mr. Daggett agreed that (a) his stock options to purchase 24,000
shares at an exercise price of $3.15 per share and 12,000 shares at an exercise
price of $7.05 per share were cancelled and that the Company will make a cash
payment to Mr. Daggett equal to the value, if any, that such stock options would
have had on December 31, 2004 and (b) his stock appreciation right for 5,000
shares at $15.94 per share was cancelled and that the Company will make a cash
payment to Mr. Daggett equal to the value, if any, that such stock appreciation
right would have had on July 31, 2002. Any payments based on the value of such
stock options or stock appreciation right will be accelerated in connection with
certain change of control events with the value of the stock options and the
stock appreciation right being determined on the basis of the value attributable
to the common stock in any such transaction.
14
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and executive officers and certain persons who own more than
10% of the Company's Common Stock to file with the Securities and Exchange
Commission initial reports of ownership and reports of changes in ownership of
the Common Stock and other equity securities of the Company. Directors,
executive officers and such greater than 10% shareholders are required to
furnish the Company with copies of all such reports they file. To the Company's
knowledge, based solely on a review of the copies of such reports furnished to
the Company and written representations that no other reports were required,
during fiscal 2001, all Section 16(a) filing requirements applicable to its
executive officers, directors and greater than 10% beneficial shareholders were
complied with on a timely basis, except as described below. During fiscal year
2001, Kermit G. Phillips reported 20 transactions in the Company's Common Stock
on a Form 4 that was not filed on a timely basis.
RATIFICATION OF SELECTION OF INDEPENDENT ACCOUNTANTS
The Board of Directors has selected PricewaterhouseCoopers LLP as
independent accountants to examine the financial statements of the Company and
its subsidiaries for the fiscal year ending September 30, 2002. This selection
is being presented to the shareholders for their ratification at the annual
meeting. The firm of PricewaterhouseCoopers LLP (and its predecessors) has
examined the financial statements of the Company since 1977. Representatives of
PricewaterhouseCoopers LLP are expected to be present at the annual meeting with
an opportunity to make a statement if they desire to do so and are expected to
be available to respond to appropriate questions.
Audit Fees. PricewaterhouseCoopers LLP billed the Company $891,000 for
professional services rendered related to the audit of the Company's annual
financial statements for fiscal 2001 and reviews of the financial statements
included in the Company's quarterly reports on Form 10-Q filed during fiscal
2001.
Financial Information Systems Design and Implementation Fees.
PricewaterhouseCoopers LLP rendered no professional services to the Company for
the design and implementation of financial information systems during fiscal
2001.
All Other Fees. PricewaterhouseCoopers LLP billed the Company
$1,126,000 for all professional services rendered during fiscal 2001 other than
audits, reviews and financial information systems design and implementation,
which generally included services related to income taxes, transaction services
and procedures performed for underwriters in connection with securitization
transactions.
The Audit Committee has considered whether the provision of services by
PricewaterhouseCoopers LLP other than those rendered in connection with the
audit of the Company's financial statements for fiscal 2001 and the review of
the Company's quarterly financial statements for fiscal 2001 is compatible with
maintaining PricewaterhouseCoopers LLP's independence.
The Board of Directors recommends a vote FOR ratification of the
selection of PricewaterhouseCoopers LLP as independent accountants to examine
the financial statements of the Company and its subsidiaries for the fiscal year
ending September 30, 2002, and proxies solicited by the Board of Directors will
be so voted unless shareholders specify otherwise. If the
15
shareholders do not ratify the selection of PricewaterhouseCoopers LLP, the
selection of independent accountants will be reconsidered by the Board of
Directors.
SHAREHOLDER PROPOSALS
Any proposal that a shareholder intends to present for action at the 2003
Annual Meeting of Shareholders, currently scheduled for January 29, 2003, must
be received by the Company no later than September 11, 2002 in order for the
proposal to be included in the proxy statement and form of proxy for the 2003
Annual Meeting of Shareholders. In addition, if the Company receives notice of a
shareholder proposal after November 25, 2002, such proposal will be considered
untimely and the persons named in the proxy statement and form of proxy for the
2003 Annual Meeting of Shareholders will have discretionary authority to vote on
such proposal without discussion of the matter in the proxy statement and
without such proposal appearing as a separate item on the proxy card. Any
shareholder proposal should be sent to Secretary, Oakwood Homes Corporation, P.
O. Box 27081, Greensboro, North Carolina 27425-7081.
16
OAKWOOD HOMES CORPORATION
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD
PROMPTLY USING THE ENCLOSED ENVELOPE TO:
OAKWOOD HOMES CORPORATION
C/O FIRST UNION NATIONAL BANK
PROXY TABULATION
P.O. BOX 217950
CHARLOTTE, NC 18254-3555
FOLD AND DETACH HERE
OAKWOOD HOMES CORPORATION
PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JANUARY 30, 2002
The undersigned hereby appoints MYLES E. STANDISH and ROBERT A. SMITH,
and each or either of them proxies, with full power of substitution, with the
powers the undersigned would possess if personally present, to vote, as
designated below, all shares of the Common Stock of the undersigned in Oakwood
Homes Corporation at the Annual Meeting of Shareholders to be held January 30,
2002, and at any adjournment thereof.
This proxy will be voted FOR the election of the nominee as director and
FOR item 2 unless otherwise specified. The Board of Directors recommends voting
FOR each item. All proposals are submitted by Oakwood Homes Corporation.
1. ELECTION OF DIRECTOR: Nominee is Sabin C. Streeter.
[ ] FOR the nominee [ ] WITHHOLD AUTHORITY
to vote for the nominee
2. RATIFICATION OF SELECTION OF PRICEWATERHOUSECOOPERS LLP AS INDEPENDENT
PUBLIC ACCOUNTANTS
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(Continued and to be signed on the reverse)
OAKWOOD HOMES CORPORATION
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD
PROMPTLY USING THE ENCLOSED ENVELOPE TO:
OAKWOOD HOMES CORPORATION
C/O FIRST UNION NATIONAL BANK
PROXY TABULATION
P.O. BOX 217950
CHARLOTTE, NC 18254-3555
FOLD AND DETACH HERE
In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting.
Receipt of the Notice of Annual Meeting and accompanying Proxy Statement
is hereby acknowledged. This proxy will be voted as specified herein, and,
unless otherwise directed, will be voted FOR the election of the nominee and FOR
item 2.
Please date, sign exactly as printed below and return promptly in the
enclosed postage-paid envelope.
Dated: , 2002.
----------------------------
-----------------------------------------
-----------------------------------------
(When signing as attorney, executor,
administrator, trustee, guardian, etc.,
give title as such. If a joint account,
each joint owner should sign personally.)