EMPLOYMENT AGREEMENT EXHIBIT 10.33
EMPLOYMENT AGREEMENT dated as of the 31st day of January, 1996 between
OAKWOOD HOMES CORPORATION, a North Carolina corporation with its principal
executive offices at Greensboro, North Carolina (the "Company"), and C. MICHAEL
KILBOURNE, an individual residing at Greensboro, North Carolina (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 shareholders.
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, 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.
(b) If no Change in Control of the Company has occurred on or before
the close of business on January 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 (i) any
corporation, other person or "group" becomes the "beneficial owner" 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.
"Group" shall mean persons who act in concert as described in Section 14(d)(2)
of the Securities Exchange Act of 1934, as amended (the "Act"), and "beneficial
owner" shall have the meaning which that term is given in Rule 13d-3 under the
Act.
(d) Upon a Change in Control of the Company, all of the
provisions of this Agreement shall become operative immediately.
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 which is 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 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.
(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;
(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 no later than the 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 the then current prime rate of
interest of First Union National Bank.
(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. All of the Executive's outstanding stock options
shall become exercisable in full on the date of a Change in Control of the
Company (as defined in Subsection 1(c)), 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 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 States registered or
certified mail, return receipt requested, postage prepaid, addressed as follows:
If to the Executive: C. Michael Kilbourne
Post Office Box 27081
Greensboro, North Carolina
27425-7081
If to the Company: Oakwood Homes Corporation
Post Office Box 27081
Greensboro, North Carolina
27425-7081
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.
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 with such arbitration or the collection of any amounts awarded the
Executive pursuant thereto.
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:
Nicholas J. St. George,
President and Chief Executive
Officer
C. Michael Kilbourne