<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-K
(MARK ONE) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
/X/ OF THE SECURITIES EXCHANGE ACT OF 1934 (FEE
REQUIRED)
For the fiscal year ended April 28, 1996
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE
REQUIRED)
For the transition period from to
COMMISSION FILE NUMBER 1-7699
FLEETWOOD ENTERPRISES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 95-1948322
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
3125 MYERS STREET, RIVERSIDE, CALIFORNIA 92503-5527
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (909) 351-3500
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
NAME OF EACH EXCHANGE ON
TITLE OF EACH CLASS WHICH REGISTERED
-------------------------------- ---------------------------------
COMMON STOCK, $1 PAR VALUE NEW YORK STOCK EXCHANGE, INC.
PACIFIC STOCK EXCHANGE, INC.
PREFERRED SHARE PURCHASE RIGHTS NEW YORK STOCK EXCHANGE, INC.
PACIFIC STOCK EXCHANGE, INC.
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
NONE
(TITLE OF CLASS)
INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS
REQUIRED TO BE FILED BY SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 DURING THE PRECEDING 12 MONTHS (OR FOR SUCH SHORTER PERIOD THAT THE
REGISTRANT WAS REQUIRED TO FILE SUCH REPORTS), AND (2) HAS BEEN SUBJECT TO SUCH
FILING REQUIREMENTS FOR THE PAST 90 DAYS.
Yes __x__ No _____
AGGREGATE MARKET VALUE OF COMMON STOCK HELD BY NON-AFFILIATES ON JUNE 25,
1996: $1,147,759,000 (37,174,395 SHARES AT CLOSING PRICE ON NEW YORK STOCK
EXCHANGE OF $30.875). FOR THIS PURPOSE ALL SHARES HELD BY OFFICERS AND DIRECTORS
ARE CONSIDERED TO BE HELD BY AFFILIATES, BUT NEITHER THE REGISTRANT NOR SUCH
PERSONS CONCEDE THAT THEY ARE AFFILIATES OF THE REGISTRANT.
COMMON STOCK OUTSTANDING ON JUNE 25, 1996: 45,659,442 SHARES
DOCUMENTS INCORPORATED BY REFERENCE:
THE COMPANY'S PROXY STATEMENT WITH RESPECT TO ITS 1996 ANNUAL MEETING.
<PAGE>
FLEETWOOD ENTERPRISES, INC.
PART I
ITEM 1. BUSINESS
GENERAL
Fleetwood Enterprises, Inc. is the nation's largest producer of manufactured
housing and recreational vehicles (motor homes, travel trailers, folding
trailers and slide-in truck campers). The Company's principal manufacturing
activities are primarily conducted in 18 states within the U.S., and to a much
lesser extent in Canada. In addition, the Company operates three supply
companies which produce components for the primary manufacturing operations,
while also generating outside sales. Fleetwood Credit Corp. (FCC), the Company's
wholly owned RV finance subsidiary, was sold subsequent to year end. Finance
revenues from FCC have been excluded from fiscal 1996 and prior years' revenues,
and results of operations have been classified as discontinued operations.
Fleetwood's business began in 1950 through the formation of a California
corporation. The present company was incorporated in Delaware in September 1977,
and succeeded by merger to all the assets and liabilities of the predecessor
company. The Company's principal executive offices are located in Riverside,
California. As used herein, the terms "Fleetwood" or "Company" mean Fleetwood
Enterprises, Inc. and its subsidiaries, unless otherwise indicated by the
context.
FINANCIAL INFORMATION RELATING TO INDUSTRY SEGMENTS
The following table sets forth revenues by business segment and the relative
contribution of such revenues to total revenues for the past three fiscal years.
Information with respect to operating profit (loss) and identifiable assets by
industry segment is shown in the Notes to Consolidated Financial Statements in
Part II of this Form 10-K.
<TABLE>
<CAPTION>
YEARS ENDED APRIL
-------------------------------------------------
1996 % 1995 % 1994 %
---------- --- ---------- --- ---------- ---
<S> <C> <C> <C> <C> <C> <C>
(DOLLARS IN THOUSANDS)
Manufactured housing.......... $1,443,016 51% $1,370,293 49% $1,054,267 45%
---------- --- ---------- --- ---------- ---
Recreational vehicles:
North American sales--
Motor homes........... 720,186 26 759,792 27 706,105 30
Travel trailers....... 458,159 16 493,432 17 433,441 19
Folding trailers...... 87,208 3 82,207 3 72,671 3
European sales............ 51,941 2 52,488 2 29,199 1
---------- --- ---------- --- ---------- ---
1,317,494 47 1,387,919 49 1,241,416 53
---------- --- ---------- --- ---------- ---
Supply operations............. 48,767 2 49,650 2 36,501 2
---------- --- ---------- --- ---------- ---
$2,809,277 100% $2,807,862 100% $2,332,184 100%
---------- --- ---------- --- ---------- ---
---------- --- ---------- --- ---------- ---
</TABLE>
MANUFACTURED HOUSING
With many of the nation's households priced out of the site-built single
family home market, manufactured housing has for some time been the principal
source of housing in the economical new home market. Manufactured homes are
transported from the factory to the site in one or more sections, and are
installed utilizing their own chassis on either temporary or permanent
foundations. Although manufactured homes are transportable, they are rarely
moved after shipment from the factory to the homesite. About 60 percent of the
manufactured homes produced in the United States are placed on individually
owned lots. The balance are located on leased sites in manufactured housing
communities.
Homes manufactured by the Company are built to manufactured home
construction and safety standards established by the U.S. Department of Housing
and Urban Development. Fleetwood produces manufactured housing using efficient,
assembly-line techniques with basically the same materials that are used in
site-built homes. The Company purchases components primarily from outside
sources, installs
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plumbing, electrical and heating systems and fabricates sub-floors, walls,
cabinets and wardrobes. Interior walls are typically constructed with a drywall
material and exterior walls from wood products, anodized steel, simulated stucco
or a combination of these materials. Roofs are covered with asphalt or wood
shingles or constructed of galvanized steel.
Fleetwood's housing products are sold under various trade names with models
available in a variety of floorplans ranging in size from 650 to 2,560 square
feet. A typical manufactured home includes a living room, dining area, kitchen,
one or two bathrooms, and usually two or more bedrooms. Substantially all of the
Company's homes are equipped with carpeting, major appliances, drapes and forced
air furnaces, and may include furniture, all of which are included in the base
price. Optional features available include upgraded furniture packages, air
conditioning, automatic dishwashers and washers and dryers. Retail prices of the
Company's manufactured homes range from approximately $11,000 up to about
$120,000, although most are designed to sell for under $25,000.
In some states, manufactured homes are still classified legally and by
taxing authorities as personal property rather than real estate. Historically,
they have been financed as personal property with shorter loan maturities and
higher interest rates than conventional home mortgages. However, over the past
decade a growing number of states have begun treating manufactured homes as real
estate for tax and titling purposes. This is especially the case when they are
attached to permanent foundations on individually owned lots. Such real estate
treatment has in turn favorably affected financing. Retail financing has moved
closer to that of site-built housing, especially in those areas of the country
where multi-section homes have become a significant factor, or where land is
also being purchased and financed in the same transaction.
RECREATIONAL VEHICLES
MOTOR HOMES:
Fleetwood is the largest producer of motor homes in the United States,
manufacturing products under the brand names Bounder, Southwind, Pace Arrow,
Flair, Southwind Storm, Discovery, American Eagle, American Dream, American
Tradition, Tioga and Jamboree.
Motor homes are self-propelled vehicles which are primarily utilized for
vacations, camping trips and other leisure activities. A motor home is a
bus-like unit built directly on a purchased automotive chassis. The interior
typically includes the driver area, kitchen, bathroom, dining and sleeping
areas. The Company's Bounder, Southwind, Pace Arrow, Flair, Southwind Storm,
Discovery, American Eagle, American Dream and American Tradition lines are
conventional (Type A) motor homes which are fully self-contained, having
sleeping accommodations for four to eight people and such optional features as
air conditioning, auxiliary power generator and stereo radio. These units are
available in a variety of models ranging in length from 22' to 40'. Tioga and
Jamboree are more compact (Type C) motor homes built on cut-away van chassis
with basically the same features and options as full-size conventional models.
Type C units are available in various models ranging in length from 19' to 31'.
On May 23, 1996, the Company sold its interest in its European subsidiary,
Niesmann and Bischoff, a motor home manufacturer located in Koblenz, Germany.
The Company had acquired a majority interest in this subsidiary in September
1992. The European operation had significant operating losses over the last
3 1/2 years despite management's actions to broaden the product offering and
improve operating efficiencies. The divestiture resulted in a loss on
disposition of $28 million, before income tax benefits, and had an impact on net
earnings of $14 million or 30 cents per share, all of which was recognized in
the fourth quarter of fiscal 1996.
TRAVEL TRAILERS:
Fleetwood is the largest manufacturer of travel trailers in the United
States, marketing products under the brand names Prowler, Terry, Wilderness,
Mallard, Savanna, Avion, Westport and Euroway.
Fleetwood's travel trailers are designed to be towed by pickup trucks, vans
or other appropriate tow vehicles, and are similar to motor homes in use and
features. Although they are not generally designed to provide permanent living
quarters, travel trailers do provide comfortable living facilities for short
periods of time. All travel trailer models produced by the Company include
sleeping, eating and bathroom facilities. In
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addition, all of the Company's travel trailers are self-contained units with
their own lighting, heating, refrigeration, fresh water storage tanks and sewage
holding tanks so that they can be lived in for short periods without being
attached to utilities.
Most conventional travel trailers produced by Fleetwood are in 8' widths and
vary in length from 17' to 39' (including trailer hitch). The Avion, Westport
and Euroway products are slightly larger than the standard 8' width. The Company
also produces fifth-wheel trailers which are designed to be towed exclusively by
pickup trucks. Slide-in truck campers under the Caribou, Elkhorn and Angler
brand names are manufactured in one of the Company's travel trailer factories.
These units are similar in use and features to travel trailers, but are designed
to fit in the bed of a pickup truck.
FOLDING TRAILERS:
With the acquisition of The Coleman Company's folding trailer operation in
December 1989, Fleetwood became the nation's largest manufacturer of folding
trailers. Folding trailers provide a lower cost alternative to travel trailers
and are lighter and easier to tow. All models have eating and sleeping
facilities and range in length from 17' to 25'.
SUPPLY OPERATIONS AND OTHER BUSINESSES
Supply operations consist of two fiberglass manufacturing companies and a
lumber milling operation. These operations provide a reliable source of quality
components for the Company's principal manufacturing businesses, while also
generating significant outside sales.
The Company's wholly owned insurance subsidiary, Gibraltar Insurance
Company, Ltd., established in 1977, insures primarily products liability risks
of the parent company and its subsidiaries.
During fiscal 1990, the Company purchased a 75 acre land parcel located in
Southern California, and was planning to develop the parcel as a site-built
housing tract. Preliminary work has been done with respect to planning and
approvals, but the Company has decided not to continue with the project. In
fiscal year 1996, the value of the land was written down by $4.1 million to $2.8
million, which approximates the market value of the property.
DISCONTINUED OPERATIONS
On May 24, 1996, the Company completed the sale of its wholly owned RV
finance subsidiary, Fleetwood Credit Corp., to Associates First Capital
Corporation. The sale was a cash transaction for $156.6 million, resulting in a
net gain of approximately $55 million which will be recognized in the first
quarter of fiscal 1997. In connection with the sale, a long-term operating
agreement was signed to assure continuing cooperation between the Company and
Associates.
FCC commenced lending operations in fiscal 1987 and has become one of the
largest companies in the RV finance business. At the end of fiscal 1996, FCC had
total assets of approximately $435 million and was managing about $1.1 billion
in finance receivables. For fiscal 1996, FCC generated revenues of $52.2 million
and net income of $9.7 million.
The decision to sell this business segment was made in recognition of
changes which have occurred in the RV finance business in recent years from a
competitive standpoint. It was also the Company's belief that its capital can be
employed elsewhere to generate better shareholder returns. See Notes 1 and 4 of
the Notes to Consolidated Financial Statements in Part II of this Form 10-K for
further information.
SALES AND DISTRIBUTION
Fleetwood's policy is to produce manufactured housing only against orders
received from dealers, and the Company does not generally maintain an inventory
of finished homes. Recreational vehicles are sometimes built for inventory,
particularly during the winter months in anticipation of heavier spring demand.
The Company sells its recreational vehicles and manufactured housing to
independent dealers operating from approximately 2,700 locations in 49 states
and Canada. Historically, the Company has sold its products through many
independent dealers, none of which individually accounted for a material part of
the Company's total sales. Large chain dealerships have in recent years become
more important distributors of the Company's manufactured housing products.
However, no single dealer accounted for as much as 4
3
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percent of Fleetwood's total sales during the most recent fiscal year. In the
past, the Company has not had many exclusive dealership arrangements and most
dealers sell competitive lines; however, the Company is currently encouraging a
trend toward more exclusive dealership arrangements.
Fleetwood provides most purchasers of its recreational vehicles and
manufactured housing with a one-year warranty against defects in materials and
workmanship, excluding only certain specific components which are separately
warranted by the suppliers. With respect to manufactured homes, the Company
provides a five-year warranty on structural, plumbing and electrical system
failures for homes produced after March 15, 1993. In the case of motor homes,
the warranty period is one year or until a unit has been driven 15,000 miles,
whichever occurs first, except for structural items which are covered under a
limited warranty for three years. The extended structural warranty applies to
motor homes beginning with model year 1995. Annual expenses under such
warranties were approximately $102.4 million in 1996 and $83.6 million in 1995.
For the past few years, the Company has been actively involved in the
quality improvement process which has as one of its objectives the enhancement
of customer satisfaction. This process is facilitated by the use of independent
consumer surveys to determine whether retail customers are satisfied with the
quality of their Fleetwood product and the level of service provided by the
retailer. An independent consumer research firm conducts telephone surveys and
feeds back customer responses to the Company's manufacturing entities and
dealers to reinforce quality performance and eliminate customer problems. Each
year, specific customer satisfaction goals are established for the Company's
manufacturing operations and independent retailers. Dealers who meet these
performance standards are recognized with the Company's Circle of Excellence
award, and Fleetwood manufacturing centers are similarly honored for reaching
high levels of customer satisfaction. These efforts have resulted in increased
awareness by Company employees and retailers of the importance of product
quality and service, which in turn has significantly improved the Company's
customer satisfaction ratings.
Ultimately, the level of Company sales to dealers is determined by the rate
of dealer sales to retail customers. However, in the short run the Company's
shipments may vary markedly from retail sales because of dealers' adjustments to
inventories (upward or downward) based upon such factors as seasonality, current
or impending new model introductions, expectations of future demand and
inventory financing costs. Sales of manufactured housing are somewhat seasonal
and tend to be lower during the winter months in most areas. Recreational
vehicles are used primarily by vacationers and campers and, as a result, sales
historically have been higher during the Company's first and fourth fiscal
quarters.
Sales of recreational vehicles and manufactured housing are generally made
to dealers either on a C.O.D. basis or under commitments by financial
institutions which have agreed to finance dealer purchases. From time to time,
the Company provides financing support programs exclusively for Fleetwood
products. One such program with Fleetwood Credit Corp. (FCC) provides floor plan
financing to Fleetwood recreational vehicle dealers at interest rates slightly
below market, with the Company subsidizing the interest cost. The Company will
continue this subsidy to FCC on a more limited basis during the next two fiscal
years. A similar program exists with another outside lending institution. Under
these arrangements, the interest rate to the dealer varies depending on market
rates and the extent to which the Company subsidizes the programs. With
financing sources more readily available to wholesale and retail buyers, the
Company participation in subsidizing financing support programs has decreased in
recent years. The aggregate cost of wholesale finance subsidies was $7.0 million
in 1996 and $8.4 million in 1995.
In fiscal 1992, the Company formed an alliance with Associates, a unit of
Ford Motor Company, for the purpose of establishing wholesale and retail
financing programs exclusively for Fleetwood manufactured housing retailers. One
such program provides retail financing to buyers of Fleetwood homes at below-
market interest rates, with the Company compensating the lender for the
difference between actual and market interest rates. The cost of this program
was $1.0 million in 1996 and $1.1 million in 1995. Currently, about 700 retailer
locations participate in this program representing about 25 percent of the
Company's housing volume.
As is customary in the industry, most lenders financing dealer inventories
require the Company to execute repurchase agreements. These agreements provide
that in the event a dealer defaults on repayment of the financing, the Company
may be required to repurchase its product from the lenders in accordance
4
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with a declining repurchase price schedule. The risk of loss under these
agreements is spread over numerous dealers and lenders, and is further reduced
by the resale value of any products which may be repurchased. The number of
units repurchased and the losses incurred under these agreements have not been
significant in the past.
IDLE FACILITIES
Idle facilities include closed plants and certain other properties which are
not in current use by the Company. There were four idle plants at the end of
both 1996 and 1995. One plant was activated during fiscal 1996, another was
leased to a third party and two others became idle.
There are no immediate plans to reopen any of the closed plants. The idle
facilities consist solely of land and multi-purpose buildings with nominal
carrying costs. The book value of idle facilities was $5.5 million at April 28,
1996 and $6.7 million at April 30, 1995, net of accumulated depreciation of $3.7
million and $3.1 million, respectively. In the opinion of management, the
carrying values of idle facilities are not in excess of realizable value. The
Company has generally been successful in disposing of idle facilities at prices
that exceed carrying values. See Note 5 of the Notes to Consolidated Financial
Statements in Part II of this Form 10-K for further information.
ENGINEERING AND PRODUCT DEVELOPMENT
The Company is continually engaged in the development of new designs and
production techniques for Fleetwood products and in testing construction
materials. Amounts spent on these activities were $19.2 million in 1996 and
$17.5 million in 1995.
REGULATION (SEE ALSO "COMPETITION AND BUSINESS RISKS")
Standards established by the Federal government, several state and local
governments and the government of Canada regulate the installation of plumbing,
heating and electrical systems and construction methods utilized in the
Company's products. Accordingly, plans and specifications for Fleetwood products
are required to be approved and units may be inspected by the appropriate agency
prior to completion.
The Company is subject to provisions of the Housing and Community
Development Act of 1974, under which HUD establishes construction and safety
standards for manufactured homes, and also may require manufactured housing
producers to send notifications to customers of noncompliances with standards or
to repair manufactured homes which contain certain hazards or defects. The
Company is also subject to the National Traffic and Motor Vehicle Safety Act
under which the Department of Transportation may require manufacturers to recall
recreational vehicles which contain safety-related defects. Fleetwood has
periodically determined on its own initiative to recall and repair certain units
and, on occasion, has had disputes with such Departments over allegations that
its products fail to comply with Federal standards. The costs associated with
such notification or recall campaigns were not significant in the past.
In 1985, HUD adopted product standards regulating formaldehyde emissions
from particleboard and plywood used in manufactured homes and required an air
quality notice regarding formaldehyde to be placed prominently in all
manufactured homes. HUD's regulations are intended to preempt state and local
formaldehyde standards and notice requirements with respect to manufactured home
purchasers.
COMPETITION AND BUSINESS RISKS
Recreational vehicles produced by Fleetwood are intended for use on public
highways, and gasoline is required for the operation of motor homes and most
vehicles used to tow travel trailers and folding trailers. Shortages and
significant increases in the price of gasoline have had a substantial adverse
effect on the market for these products twice in the past and could again
adversely affect demand in the future. The substantial contraction of industry
and Fleetwood RV sales during fiscal 1980, 1981 and 1991, and the subsequent
improvements in sales as energy concerns abated, are indicative of the
sensitivity of the RV business to energy developments.
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The recreational vehicle and manufactured housing businesses are heavily
dependent on the availability and terms of financing for dealer and retail
purchases. Consequently, increases in interest rates and the tightening of
credit through governmental actions or other means have adversely affected the
Company's business in the past and are likely to do so in the future.
Some components of recreational vehicles and manufactured homes are produced
by only a small group of reputable suppliers which have the capacity to supply
large quantities on a national basis. This is especially true in the case of
motor home chassis where Ford Motor Company and General Motors Corporation are
the dominant suppliers. Shortages, production delays or work stoppages by the
employees of such suppliers could have a substantial adverse impact on the
Company's business. This is particularly significant in the current year in
which automotive labor negotiations will take place, and a strike is a distinct
possibility.
The businesses of producing and selling manufactured housing and
recreational vehicles are highly competitive as to price, design, quality and
service. There is competition from many other manufacturers, some of which,
though smaller than the Company, focus on specific product lines or geographic
areas and provide significant competition.
Any limitation on the growth of the number of spaces for manufactured homes
due to any cause, including local ordinances, which affects the operation of
manufactured housing communities, could adversely affect Fleetwood's housing
business. Manufactured housing communities and individual home placements are
subject to local zoning ordinances and other local regulations relating to
utility service and construction of roadways. In the past, there has been
resistance on the part of property owners to the adoption of zoning ordinances
permitting the location of manufactured homes in residential areas, which is
believed to have adversely affected the growth of the industry. However, in
recent years, important strides have been made in the elimination of
discriminatory zoning laws as more state and local authorities have recognized
the importance of manufactured housing in the overall housing market.
EMPLOYEE RELATIONS
As of April 28, 1996, the Company and its subsidiaries had approximately
18,000 employees. Most full-time employees are provided with paid annual
vacations, group life insurance, medical and hospitalization benefits, a
retirement plan and other fringe benefits. Approximately 600 of these employees
hold management or supervisory positions and work pursuant to written contracts.
Pursuant to these contracts, such employees may receive incentive compensation
depending on the financial performance of the employer entity, which can
represent a substantial part of their total compensation.
As of April 28, 1996, collective bargaining agreements were in effect at two
of Fleetwood's manufacturing locations covering a total of approximately 800
employees. Expiration dates for these agreements are in October 1996 and
September 1997. Except for employees at these plants, no other Company employees
are represented by a certified labor organization.
ITEM 2. PROPERTIES
The Company owns its executive offices which are located at 3125 Myers
Street in Riverside, California. The administrative offices, which occupy
173,500 square feet, are situated on Company-owned parcels of land totaling
approximately 18.1 acres. The following table describes additional property and
buildings owned or leased by the Company and its subsidiaries which are utilized
for manufacturing, research and development, and administrative purposes as of
April 28, 1996.
<TABLE>
<CAPTION>
APPROXIMATE APPROXIMATE
FACILITY AND LOCATION ACREAGE SQUARE FOOTAGE
- ------------------------------------------------ ----------- --------------
<S> <C> <C>
Plants Producing Manufactured Housing:
Hamilton, Alabama....................... 10.2 128,500
Glendale, Arizona....................... 41.5 120,400
Riverside, California................... 18.8 97,600
Woodland, California.................... 15.8 111,500
Auburndale, Florida..................... 13.7 97,200
Plant City, Florida..................... 11.5 85,800
Alma, Georgia........................... 43.6 221,700
</TABLE>
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<TABLE>
<CAPTION>
APPROXIMATE APPROXIMATE
FACILITY AND LOCATION ACREAGE SQUARE FOOTAGE
- ------------------------------------------------ ----------- --------------
<S> <C> <C>
Broxton, Georgia........................ 20.0 98,700
Douglas, Georgia........................ 25.7 273,600
Douglas, Georgia........................ 20.7 134,100
Fitzgerald, Georgia..................... 18.6 120,900
Pearson, Georgia........................ 13.3 133,200
Pearson, Georgia........................ 16.2 98,600
Nampa, Idaho............................ 19.8 153,500
Nampa, Idaho............................ 11.4 75,700
Garrett, Indiana........................ 22.1 120,800
Garrett, Indiana........................ 20.4 104,500
Lexington, Mississippi.................. 51.6 261,400
Lumberton, North Carolina............... 52.0 115,100
Mooresville, North Carolina............. 21.8 119,300
Pembroke, North Carolina................ 32.4 208,900
Roxboro, North Carolina................. 20.0 94,700
Woodburn, Oregon........................ 22.4 197,300
Woodburn, Oregon........................ 28.9 56,500
Elizabethtown, Pennsylvania............. 17.5 101,000
Elizabethtown, Pennsylvania............. 19.7 112,400
Gallatin, Tennessee..................... 18.2 183,800
Westmoreland, Tennessee................. 38.6 143,900
Westmoreland, Tennessee................. 20.6 114,800
Belton, Texas........................... 53.1 134,600
Waco, Texas............................. 18.1 117,000
Waco, Texas............................. 8.6 78,700
Waco, Texas............................. 19.4 97,200
Waco, Texas............................. 13.0 114,600
Wichita Falls, Texas.................... 31.5 113,000
Rocky Mount, Virginia................... 13.8 83,400
Woodland, Washington.................... 18.0 156,500
Plants Producing Recreational Vehicles:
Motor Homes:
Chico, California....................... 28.6 153,300
Riverside, California................... 36.8 326,700
Decatur, Indiana........................ 90.0 327,900
Decatur, Indiana........................ 29.3 179,300
Paxinos, Pennsylvania................... 71.6 222,400
Motor Home Service Facilities:
Riverside, California................... 9.5 60,600
Decatur, Indiana........................ 34.8 176,600
Paxinos, Pennsylvania(1)................ 7.1 39,600
Travel Trailers:
Rialto, California(2)................... 18.8 115,700
Riverside, California(3)................ 18.5 100,100
Crawfordsville, Indiana................. 15.0 131,500
Hancock, Maryland....................... 20.5 102,900
Omaha, Nebraska......................... 22.3 158,800
Edgerton, Ohio.......................... 16.6 92,700
LaGrande, Oregon........................ 32.0 98,000
Pendleton, Oregon....................... 20.8 198,700
Longview, Texas......................... 42.8 157,700
Winchester, Virginia.................... 20.6 122,700
</TABLE>
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<TABLE>
<CAPTION>
APPROXIMATE APPROXIMATE
FACILITY AND LOCATION ACREAGE SQUARE FOOTAGE
- ------------------------------------------------ ----------- --------------
<S> <C> <C>
Lindsay, Ontario, Canada................ 9.2 140,800
Folding Trailers:
Somerset, Pennsylvania.................. 42.6 392,500
Plants Producing Components:
Fontana, California..................... 11.9 83,000
Riverside, California................... 10.0 111,000
Hauser Lake, Idaho...................... 28.0 81,000
Decatur, Indiana........................ 32.1 216,500
Division Offices and Research and Development
Facilities:
Riverside, California................... 21.9 234,300
</TABLE>
The following Company-owned manufacturing facilities were not in operation
as of April 28, 1996.
<TABLE>
<CAPTION>
APPROXIMATE APPROXIMATE
FACILITY AND LOCATION ACREAGE SQUARE FOOTAGE
- ------------------------------------------------ ----------- --------------
<S> <C> <C>
Haines City, Florida............................ 13.6 89,800
Williamsport, Maryland.......................... 45.1 71,600
Benton Harbor, Michigan......................... 44.1 104,700
Lindsay, Ontario, Canada........................ 20.0 72,000
</TABLE>
- ---------
(1) Service facility deactivated subsequent to year end.
(2) Includes 4.0 acres and 27,100 square foot building leased from unaffiliated
outside party.
(3) Includes 1.0 acre and 31,700 square foot building leased from unaffiliated
third party.
ITEM 3. LEGAL PROCEEDINGS
The Company is involved in various legal proceedings, most of which are
routine litigation incident to its business, and some of which are covered in
whole or in part by insurance. In the opinion of management, none of the
uninsured cases involve realistic claims which are material in amount.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of the shareholders of the Company
during the fourth quarter of fiscal year 1996.
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EXECUTIVE OFFICERS OF THE COMPANY
<TABLE>
<CAPTION>
NAME TITLE AGE
- -------------------------------------------------------------------------- ---
<S> <C> <C>
John C. Crean Chairman of the Board and Chief Executive Officer 71
Glenn F. Kummer President and Chief Operating Officer 62
Jon A. Nord Senior Vice President-Housing Group 56
Elden L. Smith Senior Vice President-Recreational Vehicle Group 56
Paul M. Bingham Financial Vice President, Assistant Secretary and Chief
Financial Officer 54
William H. Lear Vice President-General Counsel and Secretary 56
Larry J. Hughes Vice President-Travel Trailers 52
Richard E. Parks Vice President-Motor Homes 49
Larry L. Mace Vice President-Supply Subsidiaries 53
Robert W. Graham Vice President-Administration and Human Resources 59
Jerry L. Hewitt Vice President-Quality 52
Nelson W. Potter Vice President-Planning and Corporate Development 53
Lyle N. Larkin Treasurer and Assistant Secretary 51
</TABLE>
None of the Company officers are related by blood, marriage, or adoption.
With the exception of Mr. Hewitt who joined the Company during fiscal year 1992,
all of the officers have been employed by the Company for at least the past five
years.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED SECURITY HOLDER MATTERS
The following table lists the high and low sales prices for Fleetwood's
Common stock during the past two fiscal years as reported on the New York Stock
Exchange Composite Tape, along with information on dividends paid per share
during the same periods. The Company's Common stock is listed on the New York
and the Pacific stock exchanges and traded on various regional exchanges (Ticker
Symbol: FLE). Call options are traded on the American Stock Exchange.
<TABLE>
<CAPTION>
DIVIDENDS
QUARTER HIGH LOW PAID
- --------------------------------------------- ------- ------- --------
<S> <C> <C> <C>
Fiscal 1996
First.................................... $22 3/4 $18 1/8 $.14
Second................................... 21 3/8 19 1/8 .15
Third.................................... 27 5/8 20 1/2 .15
Fourth................................... 29 23 1/8 .15
Fiscal 1995
First.................................... $23 7/8 $19 1/8 $.125
Second................................... 27 1/4 21 1/2 .14
Third.................................... 23 1/8 17 3/4 .14
Fourth................................... 24 1/8 18 .14
</TABLE>
On April 28, 1996, there were approximately 1,800 shareholders of record of
the Company's Common stock.
9
<PAGE>
The Company's policy is to consider dividend payments in the context of the
overall financial strength of the Company and earnings performance over an
extended period of time.During fiscal 1996, the Company declared quarterly
dividends of 15 cents per share. Subsequent to year end, the Company announced
an increase in the quarterly cash dividend from 15 cents to 16 cents per share.
The first dividend at the new rate was declared by the Board of Directors on
June 11, 1996, and is payable to shareholders on August 14, 1996.
ITEM 6. SELECTED FINANCIAL DATA
FIVE-YEAR SUMMARY OF SELECTED FINANCIAL DATA
YEARS ENDED APRIL
<TABLE>
<CAPTION>
1996 1995 1994 1993 1992
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
(DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA)
Manufacturing revenues................................................ $2,809,277 $2,807,862 $2,332,184 $1,907,899 $1,558,057
Income from continuing operations..................................... 69,901 75,998 58,553 50,373 35,408
Income from discontinued operations................................... 9,708 8,635 7,375 6,197 4,816
Net income............................................................ 79,609 84,633 65,928 56,570 40,224
Net income per Common and equivalent share:
Continuing operations............................................. 1.50 1.63 1.27 1.10 .78
Discontinued operations........................................... .21 .19 .16 .13 .10
Total............................................................. 1.71 1.82 1.43 1.23 .88
Total assets.......................................................... 1,108,932 940,374 845,219 745,221 666,929
Long-term debt........................................................ 80,000 -- -- -- --
Cash dividends declared per Common share.............................. .60 .56 .50 .47 .44
</TABLE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION
1996 COMPARED TO 1995:
Net income for fiscal year 1996 was $79,609,000 or $1.71 per share compared
to $84,633,000 or $1.82 per share in the prior year. Earnings were negatively
impacted by special non-recurring charges related to the divestiture of the
Company's German RV operation and the revaluation of an investment in Southern
California real estate. The German operation was sold in May 1996, but the loss
on disposition was recognized in the fourth quarter of fiscal 1996. The special
charges, which totaled $16.4 million or 35 cents per share after taxes,
prevented the Company from reaching record earnings in 1996. Revenues for the
year were $2.81 billion, virtually identical to the amount recorded last year.
As explained in Notes 1 and 4 of the Notes to Consolidated Financial Statements,
the revenues and expenses of Fleetwood Credit Corp., the Company's finance
subsidiary sold subsequent to year end, have been classified as discontinued
operations for all years presented.
Excluding special charges, fourth quarter earnings in 1996 were vastly
improved over the prior year. Operating income from continuing operations jumped
89 percent primarily due to an upturn in motor home sales and continuing growth
in manufactured housing profits.
Fiscal 1996 revenues and earnings were mainly driven by favorable results
from the Company's housing group which posted record sales and profits.
Manufactured housing revenues totaled $1.44 billion for the year, 5 percent
ahead of last year's $1.37 billion. Shipments of 68,990 homes were only slightly
ahead of the prior year despite fairly robust growth for the industry as a
whole. Capacity constraints in some key market areas led to a decline in market
share for the Company. Housing group sales accounted for 51 percent of total
Company revenues compared to 49 percent last year.
Recreational vehicle revenues in fiscal 1996 did not keep pace with last
year's record $1.39 billion, falling 5 percent to $1.32 billion. However, a
strong recovery in motor home sales late in the year boosted RV revenues 14
percent in the fourth quarter. RV operating profits in fiscal 1996 were well
below the prior year mainly as a result of reduced revenues during the first
three quarters of the year. RV revenues included $720
10
<PAGE>
million for domestic motor home sales, off 5 percent from the prior year as
shipments fell 13 percent to 13,412 units. Travel trailer revenues, which also
include slide-in truck camper sales, were also behind the prior year, easing 7
percent to $458 million on an 8 percent decline in shipments to 34,315 units. By
contrast, the folding trailer division posted record sales of $87 million, 6
percent ahead of last year. Folding trailer shipments were up 4 percent to
20,407 units. The European operation recorded annual revenues of $52 million
which was off 1 percent. Recreational vehicle sales were 47 percent of total
Company revenues, down from 49 percent last year.
Manufacturing gross profit increased as a percentage of sales from 18.5
percent to 19.0 percent with improved housing margins more than offsetting lower
RV profits. Selling price increases and lower lumber costs led to the higher
housing margins. Competitive pricing on travel trailer and folding trailer
products pressured RV margins to levels below those achieved in the prior year.
See Note 15 of the Notes to Consolidated Financial Statements for further
information on operating profit by industry segment.
Operating expenses rose less than 1 percent to $401.2 million, and also
increased as a percentage of sales from 14.2 percent to 14.3 percent. Selling
expenses climbed 6 percent to $192.0 million as higher product warranty and
customer service costs more than offset otherwise lower selling expenses. As a
percentage of sales, selling expenses rose from 6.4 percent to 6.8 percent.
General and administrative expenses dropped 4 percent to $209.2 million and fell
as a percentage of sales from 7.7 percent to 7.4 percent. Individual expense
variations within this category were not significant.
Non-operating items amounted to a loss of $20.5 million in 1996 compared to
income of $5.2 million in the prior year. A $28.0 million loss on disposition of
the German RV operation and a $4.1 million writedown on Southern California real
estate more than offset the effect of higher investment income and lower
interest expense. The rise in investment income primarily reflects higher
invested balances.
The combined Federal and state income tax rate was 37.4 percent, down from
last year's 41.0 percent, reflecting cumulative tax benefits related to the
German investment loss. See Note 8 of the Notes to Consolidated Financial
Statements for a reconciliation of the provision for income taxes to the Federal
statutory rate.
1995 COMPARED TO 1994:
Net income climbed 28 percent in fiscal 1995 to a record $84,633,000 or
$1.82 per share, up from $65,928,000 or $1.43 per share in 1994. Higher profits
from manufacturing operations, particularly within the housing group, led to the
improved results. Last year's earnings included a $1,500,000 charge (3 cents per
share) for a change in accounting for income taxes. Revenues in fiscal 1995
reached an all-time high as all business segments experienced sales growth.
Consolidated revenues increased 20 percent to $2.81 billion compared to $2.33
billion in the prior year.
Although results for all of 1995 were well ahead of the prior year, fourth
quarter earnings did not keep pace with the similar period last year. The
positive sales and earnings momentum that characterized the first three quarters
stalled in the final quarter primarily because of softening demand for motor
homes, the most important segment of Fleetwood's recreational vehicle business.
Overall revenue growth was mainly driven by higher manufactured housing
sales which jumped 30 percent to a record $1.37 billion, up from $1.05 billion
last year. Fleetwood's housing shipments increased 21 percent to 68,847 units.
This was the result of industry growth along with higher market share for
Fleetwood. For calendar year 1994, industry unit volume grew nearly 20 percent,
but Fleetwood outpaced the industry with a 30 percent gain. This caused the
Company's market share to increase from 19.9 percent in calendar 1993 to 21.6
percent in 1994. Housing group sales in fiscal 1995 represented 49 percent of
total Company revenues, up from 45 percent in the prior year.
Despite a slowdown in the fourth quarter, recreational vehicle revenues
reached an all-time high of $1.39 billion, 12 percent ahead of last year's $1.24
billion. As a result of favorable RV market conditions throughout most of fiscal
1995, all of the Company's RV divisions posted sales gains. Domestic motor home
sales were a record $760 million, up 8 percent for the year, despite the decline
in the fourth quarter. Motor home unit volume rose 2 percent to 15,370 units.
Revenues for the travel trailer division, which include slide-
11
<PAGE>
in truck camper sales, rose 14 percent to a record $493 million. Shipments were
up 7 percent to 37,449 units. The Company's folding trailer division also posted
record revenues, generating a 13 percent sales increase to $82 million on a 6
percent rise in unit volume to 19,571. European RV sales recovered nicely in
fiscal 1995, rising 80 percent to $52 million. Overall, RV revenues in 1995
accounted for 49 percent of consolidated revenues compared to 53 percent last
year.
In 1994, the Department of Housing and Urban Development issued new
regulations relating to the construction of manufactured housing so that homes
are better able to withstand high winds and extreme temperatures. Houses
manufactured after July 13, 1994 had to comply with construction and
installation standards to withstand high winds in certain "hurricane zones"
along the Atlantic and Gulf coasts, including all of Florida. New thermal
standards, which principally relate to insulation ratings and the use of storm
windows, applied to homes manufactured beginning October 26, 1994. The wind and
thermal standards vary according to the geographic regions or zones where the
houses are sold. The Company increased the base prices of its homes to cover the
costs of complying with the new standards. With respect to the wind standard,
the increase in the average retail price of homes resulting from such cost
increases ranged from 7 to 15 percent, depending on the geographic region and
whether a home is single-section or multi-section. The increase in the average
retail price of homes resulting from the cost of compliance with the thermal
standard generally ranged from 7 to 8 percent. The cost increases resulting from
these new standards did not have a material effect on the Company's sales or
gross profit margins.
Primarily as a result of higher housing margins, manufacturing gross profit
improved to 18.5 percent of sales, up from 18.3 percent in the prior year. See
Note 15 of the Notes to Consolidated Financial Statements for further
information on operating profit by industry segment.
Operating expenses rose 19 percent to $397.8 million, but declined as a
percentage of sales from 14.4 percent to 14.2 percent. The dollar increase
mainly resulted from a sharp rise in selling costs which increased 38 percent to
$181.0 million. This was largely caused by higher costs for product warranties
and customer service, along with increases for RV marketing and sales promotion
expenses, product financing costs and sales commissions. Selling expenses rose
as a percentage of sales from 5.6 percent to 6.4 percent. General and
administrative expenses did not rise at the same rate as sales and, as a result,
declined from 8.7 percent of revenues to 7.7 percent. These costs rose a
moderate 7 percent to $216.8 million largely due to higher employee compensation
and benefit costs, much of which was related to plant expansion.
Non-operating income declined 32 percent in 1995 to $5.2 million. This
mainly resulted from higher interest expense for the European RV operation and
losses on the disposition of fixed assets. Losses of $700,000 were incurred this
year compared to gains totaling $326,000 last year.
The combined Federal and state income tax rate for 1995 was 41.0 percent
compared to 40.9 percent last year. The slight increase mainly resulted from
higher state income tax accruals. See Note 8 of the Notes to Consolidated
Financial Statements for a reconciliation of the provision for income taxes to
the Federal statutory rate.
LIQUIDITY AND CAPITAL RESOURCES:
The Company generally relies upon internally generated cash flows to satisfy
working capital needs and to fund capital expenditures. Positive cash flows were
generated from internal sources in 1996 and 1995 to support manufacturing
operations and to fund capital expenditures and shareholder dividends. Cash flow
from operations increased to $183.1 million in 1996, up from $103.4 million in
the prior year, largely as a result of a reduction in working capital used in
the recreational vehicle business. The Company maintained a strong cash position
in both years, with cash and investments totaling $287.9 million at the end of
1996 compared to $102.9 million in 1995. Cash equivalents received a boost near
the end of 1996 when the Company assumed $80 million in long-term debt from its
finance subsidiary and received a corresponding cash payment in return.
Cash outflows in 1996 included capital expenditures of $32.9 million and
dividends to shareholders of $27.6 million. In the prior year, major cash
outlays included $67.9 million in capital expenditures and $25.8 million in
shareholder dividends.
12
<PAGE>
Capital expenditures in 1996 and 1995 included the addition of new
manufactured housing plants and the normal replacement of machinery and
equipment. During 1996, a new manufactured housing plant was added and another
was substantially completed that will come onstream in fiscal 1997. Improvements
were also made at several existing plant locations. During 1995, 4 housing
factories and a new motor home service facility were added.
Capital expenditures in fiscal 1997 are currently estimated to be in the
range of $50 to $60 million. It is anticipated that plant additions will include
7 new manufactured housing facilities that will be satellite operations located
near existing Fleetwood manufacturing centers. In addition, plant modifications
are expected at several existing locations, along with the normal replacement of
machinery and equipment. It is anticipated that existing financial resources and
cash generated from operations will be adequate to fund these expenditures.
On May 30, 1996, the Company announced that it would conduct a Dutch Auction
tender offer to purchase up to 11.4 million shares, or approximately 25 percent
of its outstanding Common stock. The tender offer commenced on May 31 and is
scheduled to expire on June 27, 1996. The Company believes that the purchase of
shares represents an attractive investment that will enhance shareholder value.
The price range for the Dutch Auction as specified by the Company is from $27 to
$31 per share. If the Company is successful in acquiring all of the 11.4 million
shares, the cost of the tender offer could exceed $350 million. With the $156.6
million in proceeds from the sale of Fleetwood Credit Corp., the $80 million in
cash received from the finance subsidiary in return for assumption of long-term
debt and other available cash, the Company is in a position to fund the tender
offer without additional debt financing.
During the seasonally slow winter months (typically November through
February), the Company has historically built inventories of recreational
vehicles in order to meet the peak demand for these products in the spring. This
is usually accomplished without the use of debt financing; however, there have
been occasions when the Company has required the use of bank credit lines. This
situation occurred in the third quarter of fiscal 1995 which required the
Company to use uncommitted bank credit lines. During the month of January, the
Company borrowed $1.5 million for a one-week period to meet working capital
needs. All borrowings were paid off prior to the end of the quarter. The Company
has credit lines with its principal bank and another bank which are currently
being used only to support letters of credit. For fiscal year 1997 and beyond,
it is anticipated that adequate working capital to finance the Company's
manufacturing operations will be provided from internally generated funds,
notwithstanding the completion of the self-tender mentioned previously.
In March 1995, the Financial Accounting Standards Board (FASB) issued
statement No. 121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed of." This statement, which must be adopted by
the Company in fiscal 1997, requires that long-lived assets and certain
identifiable intangibles be reviewed for impairment whenever events or changes
in circumstances indicate that the carrying value of an asset may not be
recoverable. An impairment loss must be recognized if the expected future cash
flows from the use of an asset are less than the carrying value. In October
1995, the FASB issued statement No. 123, "Accounting for Stock-Based
Compensation," which establishes financial accounting and reporting standards
for stock-based compensation plans, such as stock option plans. This standard,
which the Company must also adopt in fiscal 1997, requires that the Company
measure the compensation cost of stock option awards at the time of grant and
either include the compensation cost as a component of income or disclose such
cost in the Notes to Financial Statements. Currently, the Company believes that
the adoption of these two new standards will not have a material impact on its
consolidated financial condition.
During the past three years, inflation has not had a significant impact on
the Company's operations. With the exception of lumber, prices paid for raw
materials and other manufacturing inputs have remained fairly stable throughout
this period. On a longer-term basis, the Company has demonstrated an ability to
adjust the selling prices of its products in reaction to changing costs.
13
<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Fleetwood Enterprises, Inc.:
We have audited the accompanying consolidated balance sheets of FLEETWOOD
ENTERPRISES, INC., (a Delaware Corporation) and subsidiaries as of April 28,
1996 and April 30, 1995, and the related consolidated statements of income,
changes in shareholders' equity, and cash flows for each of the three years in
the period ended April 28, 1996. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Fleetwood
Enterprises, Inc. and subsidiaries as of April 28, 1996 and April 30, 1995, and
the results of their operations and their cash flows for each of the three years
in the period ended April 28, 1996 in conformity with generally accepted
accounting principles.
As explained in Note 3 to the financial statements, effective April 25,
1994, the Company adopted Statement of Financial Accounting Standards No. 115.
In addition, as explained in Note 8 to the financial statements, effective April
26, 1993, the Company adopted Statement of Financial Accounting Standards No.
109.
ARTHUR ANDERSEN LLP
Orange County, California
June 25, 1996
14
<PAGE>
FLEETWOOD ENTERPRISES, INC.
CONSOLIDATED STATEMENTS OF INCOME
(AMOUNTS IN THOUSANDS EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
YEARS ENDED APRIL
----------------------------------
1996 1995 1994
---------- ---------- ----------
<S> <C> <C> <C>
Sales.................................................. $2,809,277 $2,807,862 $2,332,184
Cost of products sold.................................. 2,276,595 2,287,880 1,905,659
---------- ---------- ----------
Gross profit....................................... 532,682 519,982 426,525
Operating expenses..................................... 401,150 397,753 334,676
---------- ---------- ----------
Operating income................................... 131,532 122,229 91,849
OTHER INCOME (EXPENSE):
Loss on disposition of European subsidiary......... (28,000) -- --
Investment income.................................. 14,032 9,966 9,890
Interest expense................................... (1,429) (4,048) (2,549)
Other.............................................. (5,142) (700) 326
---------- ---------- ----------
(20,539) 5,218 7,667
---------- ---------- ----------
Income from continuing operations before provision for
income taxes, minority interest and cumulative effect
of accounting change................................. 110,993 127,447 99,516
Provision for income taxes............................. (41,543) (52,254) (40,717)
Minority interest in net loss of subsidiary............ 451 805 1,254
---------- ---------- ----------
Income from continuing operations before cumulative
effect of accounting change.......................... 69,901 75,998 60,053
Income from discontinued operations.................... 9,708 8,635 7,375
---------- ---------- ----------
Income before cumulative effect of accounting change... 79,609 84,633 67,428
Cumulative effect of change in accounting for income
taxes................................................ -- -- (1,500)
---------- ---------- ----------
Net income..................................... $ 79,609 $ 84,633 $ 65,928
---------- ---------- ----------
---------- ---------- ----------
Net income per Common and equivalent share:
Continuing operations.............................. $ 1.50 $ 1.63 $ 1.30
Discontinued operations............................ .21 .19 .16
Cumulative effect of accounting change............. -- -- (.03)
---------- ---------- ----------
Total.......................................... $ 1.71 $ 1.82 $ 1.43
---------- ---------- ----------
---------- ---------- ----------
Dividends declared per share of Common stock
outstanding.......................................... $ .60 $ .56 $ .50
---------- ---------- ----------
---------- ---------- ----------
Common and equivalent shares outstanding............... 46,469 46,531 46,207
---------- ---------- ----------
---------- ---------- ----------
</TABLE>
The accompanying notes are an integral part of these statements.
15
<PAGE>
FLEETWOOD ENTERPRISES, INC.
CONSOLIDATED BALANCE SHEETS
(AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
APRIL 28, APRIL 30,
1996 1995
---------- ----------
<S> <C> <C>
ASSETS
Cash..................................................... $ 15,792 $ 9,410
Investments.............................................. 272,138 93,456
Receivables.............................................. 173,380 152,210
Inventories:
Raw materials........................................ 94,302 133,379
Work in process and finished products................ 43,597 81,914
Net assets of discontinued operations.................... 97,444 87,736
Property, plant and equipment............................ 266,587 262,640
Deferred tax benefits.................................... 65,224 60,848
Cash value of Company-owned life insurance............... 30,953 3,700
Other assets............................................. 49,515 55,081
---------- ----------
$1,108,932 $ 940,374
---------- ----------
---------- ----------
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable......................................... $ 104,850 $ 96,428
Employee compensation and benefits....................... 109,552 101,570
Federal and state taxes on income........................ (16,850) (12,905)
Insurance reserves....................................... 47,408 44,343
Long-term debt........................................... 80,000 --
Other liabilities........................................ 134,835 102,795
---------- ----------
459,795 332,231
---------- ----------
Contingent liabilities
Shareholders' equity:
Preferred stock, $1 par value, authorized 10,000,000
shares, none outstanding........................... -- --
Common stock, $1 par value, authorized 75,000,000
shares, outstanding 45,640,000 at April 28, 1996
and 46,062,000 at April 30, 1995................... 45,640 46,062
Capital surplus...................................... 42,758 41,561
Retained earnings.................................... 561,500 519,941
Foreign currency translation adjustment.............. (946) 229
Investment securities valuation adjustment........... 185 350
---------- ----------
649,137 608,143
---------- ----------
$1,108,932 $ 940,374
---------- ----------
---------- ----------
</TABLE>
The accompanying notes are an integral part of these balance sheets.
16
<PAGE>
FLEETWOOD ENTERPRISES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
YEARS ENDED APRIL
---------------------------------------
1996 1995 1994
----------- ----------- -----------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income.......................... $ 79,609 $ 84,633 $ 65,928
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation expense............ 25,857 21,973 18,266
Amortization of intangibles and
goodwill...................... 1,227 1,824 1,817
Losses (gains) on sales of
property, plant and
equipment..................... 1,036 700 (326)
Loss on disposition of European
subsidiary.................... 28,000 -- --
Revaluation of real estate...... 4,106 -- --
Changes in assets and
liabilities:
(Increase) decrease in
receivables............... (21,170) 5,844 (21,929)
(Increase) decrease in
inventories............... 77,394 (31,639) (28,914)
Increase in deferred tax
benefits.................. (4,376) (3,886) (6,507)
Increase in cash value of
Company-owned life
insurance................. (27,253) (3,700) --
(Increase) decrease in other
assets.................... 271 (7,009) (5,367)
Increase in accounts
payable................... 8,422 15,860 26,076
Increase in other
liabilities............... 11,142 16,991 30,045
Foreign currency translation
adjustment.................... (1,175) 1,794 (1,473)
----------- ----------- -----------
Net cash provided by operating
activities........................ 183,090 103,385 77,616
----------- ----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of investment securities:
Held-to-maturity................ (4,148,530) (2,761,052) (3,710,964)
Available-for-sale.............. (537,364) (1,011,343) (270,492)
Proceeds from maturity of investment
securities:
Held-to-maturity................ 4,131,823 2,764,061 3,706,631
Available-for-sale.............. 201,425 875,191 120,304
Proceeds from sale of
available-for-sale investment
securities........................ 173,799 131,242 167,517
Purchases of property, plant and
equipment......................... (32,916) (67,864) (72,543)
Proceeds from sales of property,
plant and equipment............... 2,076 2,705 6,151
Investment in land held for sale.... (38) (68) (66)
Change in net assets of discontinued
operation......................... (9,708) (8,635) (7,375)
Pooling of interest................. -- -- 2,006
----------- ----------- -----------
Net cash used in investing
activities........................ (219,433) (75,763) (58,831)
----------- ----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Assumption of long-term debt........ 80,000 -- --
Dividends to shareholders........... (27,551) (25,778) (22,878)
Proceeds from exercise of stock
options........................... 1,781 678 294
Purchase of Common stock............ (11,505) -- --
----------- ----------- -----------
Net cash provided by (used in)
financing activities.............. 42,725 (25,100) (22,584)
----------- ----------- -----------
Increase (decrease) in cash............. 6,382 2,522 (3,799)
Cash at beginning of year............... 9,410 6,888 10,687
----------- ----------- -----------
Cash at end of year..................... $ 15,792 $ 9,410 $ 6,888
----------- ----------- -----------
----------- ----------- -----------
Supplementary disclosures:
Income taxes paid................... $ 51,670 $ 69,062 $ 53,595
Interest paid....................... 1,222 2,381 1,736
----------- ----------- -----------
----------- ----------- -----------
</TABLE>
The accompanying notes are an integral part of these statements.
17
<PAGE>
FLEETWOOD ENTERPRISES, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
(AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
COMMON STOCK FOREIGN INVESTMENT
---------------------- CURRENCY SECURITIES TOTAL
NUMBER CAPITAL RETAINED TRANSLATION VALUATION SHAREHOLDERS'
OF SHARES AMOUNT SURPLUS EARNINGS ADJUSTMENT ADJUSTMENT EQUITY
----------- --------- --------- ---------- ----------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE APRIL 25, 1993.......... 45,667 $ 45,667 $ 40,983 $ 416,031 $ (92) $ -- $ 502,589
ADD (DEDUCT)--
Pooling of interest......... 312 312 (311) 2,005 -- -- 2,006
Net income.................. -- -- -- 65,928 -- -- 65,928
Cash dividends declared on
Common stock.............. -- -- -- (22,878) -- -- (22,878)
Stock options exercised
(including related tax
benefits)................. 17 17 277 -- -- -- 294
Net adjustment from foreign
currency translation...... -- -- -- -- (1,473) -- (1,473)
----------- --------- --------- ---------- ----------- ----------- -------------
BALANCE APRIL 24, 1994.......... 45,996 45,996 40,949 461,086 (1,565) -- 546,466
ADD (DEDUCT)--
Net income.................. -- -- -- 84,633 -- -- 84,633
Cash dividends declared on
Common stock.............. -- -- -- (25,778) -- -- (25,778)
Stock options exercised
(including related tax
benefits)................. 66 66 612 -- -- -- 678
Net adjustment from foreign
currency translation...... -- -- -- -- 1,794 -- 1,794
Investment securities
valuation adjustment...... -- -- -- -- -- 350 350
----------- --------- --------- ---------- ----------- ----------- -------------
BALANCE APRIL 30, 1995.......... 46,062 46,062 41,561 519,941 229 350 608,143
ADD (DEDUCT)--
Net income.................. -- -- -- 79,609 -- -- 79,609
Cash dividends declared on
Common stock.............. -- -- -- (27,551) -- -- (27,551)
Stock options exercised
(including related tax
benefits)................. 105 105 1,676 -- -- -- 1,781
Stock repurchased........... (527) (527) (479) (10,499) -- -- (11,505)
Net adjustment from foreign
currency translation...... -- -- -- -- (1,175) -- (1,175)
Investment securities
valuation adjustment...... -- -- -- -- -- (165) (165)
----------- --------- --------- ---------- ----------- ----------- -------------
BALANCE APRIL 28, 1996.......... 45,640 $ 45,640 $ 42,758 $ 561,500 $ (946) $ 185 $ 649,137
----------- --------- --------- ---------- ----------- ----------- -------------
----------- --------- --------- ---------- ----------- ----------- -------------
</TABLE>
The accompanying notes are an integral part of these statements.
18
<PAGE>
FLEETWOOD ENTERPRISES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(A) PRINCIPLES OF CONSOLIDATION:
The consolidated financial statements include the accounts of Fleetwood
Enterprises, Inc. and its majority owned subsidiaries. The term "Company" used
herein means Fleetwood Enterprises, Inc. and its subsidiaries, unless otherwise
indicated by the context. All material intercompany accounts and transactions
have been eliminated.
The financial statements for prior years have been restated to show the
operations of Fleetwood Credit Corp., the Company's wholly owned finance
subsidiary, as a discontinued operation. The subsidiary was sold subsequent to
year end as explained in Note 4.
On March 10, 1994, North River Homes (North River) was merged with and into
the Company and 312,000 shares of the Company's Common stock were issued in
exchange for all of the outstanding stock of North River. The merger was
accounted for as an immaterial pooling of interest.
(B) REVENUE RECOGNITION:
Sales are recorded when products are shipped from factories to the Company's
dealers. The vast majority of sales are made for cash; however, most dealers
finance their purchases under flooring arrangements with banks or finance
companies. The Company allows ten business days from date of shipment for
lenders to process paperwork and make payment. Products are not sold on
consignment and dealers do not have the right to return products.
(C) FOREIGN CURRENCY TRANSLATION:
Exchange adjustments resulting from foreign currency transactions are
recognized currently in income, whereas adjustments resulting from the
translation of financial statements are reflected as a separate component of
shareholders' equity. The assets and liabilities of the Canadian and German
operations (which are not material) are translated to U.S. dollars at current
exchange rates. Revenues and expenses are translated at the average exchange
rates for the year. Gains or losses on foreign currency transactions in fiscal
years 1996, 1995 and 1994 were not material.
(D) INVENTORY VALUATION:
Inventories are valued at the lower of cost (first-in, first-out) or market.
Cost includes materials, labor and manufacturing overhead.
(E) DEPRECIATION:
Depreciation is provided using straight-line or accelerated methods based on
the following estimated useful lives:
- Buildings and improvements--10-40 years
- Machinery and equipment--3-15 years
(F) WARRANTY COSTS:
Estimated costs related to product warranties are accrued at the time
products are sold.
(G) NET INCOME PER COMMON AND EQUIVALENT SHARE:
Net income per Common and equivalent share amounts are based on the weighted
average number of shares outstanding during the years, including Common stock
equivalents resulting from dilutive stock options (See Note 13). Net income per
Common and equivalent share is the same as fully diluted earnings per share for
all periods presented.
(H) ACCOUNTING PERIOD:
The Company's fiscal year ends on the last Sunday in April. The year ending
dates for the past three fiscal years were April 28, 1996, April 30, 1995 and
April 24, 1994, respectively.
19
<PAGE>
FLEETWOOD ENTERPRISES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(I) CASH FLOW STATEMENTS:
For purposes of these statements, cash includes cash on hand and cash in
banks in demand deposit accounts.
(J) INSURANCE RESERVES:
Insurance reserves primarily represent estimated liabilities for products
liability and workers' compensation claims. Workers' compensation reserves
mainly consist of estimated case reserves on known claims. Products liability
reserves include both case reserves on known claims as well as estimated
liabilities for claims which have not been reported. Products reserves include
estimated amounts for unpaid claims and claim adjustment expenses which are
based on historical experience and independent actuarial calculations.
(K) USE OF ESTIMATES:
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
(2) SUPPLEMENTARY INFORMATION ON INSURANCE AND REAL ESTATE SUBSIDIARIES
The insurance subsidiary was formed primarily for the purpose of insuring
products liability risks of the parent company and its subsidiaries. The real
estate subsidiaries were formed for the purposes of participating in site-built
housing construction or in the development of planned communities using
manufactured housing. As of April 28, 1996, the investment in real estate
consisted of raw land, and there were no real estate development activities in
process. Condensed financial information for these subsidiaries, excluding
intercompany eliminations, is as follows:
<TABLE>
<CAPTION>
1996 1995 1994
------- ------- -------
(AMOUNTS IN THOUSANDS)
<S> <C> <C> <C>
Insurance subsidiary:
Investments................................... $73,488 $63,831 $54,803
Other assets.................................. 6,023 6,101 9,586
Reserves for losses........................... 46,839 44,367 45,343
Other liabilities............................. 8,821 9,389 9,772
Net premiums.................................. 10,813 12,462 12,320
Underwriting income........................... 5,844 5,738 5,185
Investment income............................. 6,336 4,135 6,818
Net income.................................... 7,688 6,212 7,414
Real estate subsidiaries:
Land.......................................... $ 2,800 $ 6,868 $ 6,800
Other assets.................................. 2,860 1,213 1,282
Notes payable-parent company.................. 795 795 795
Loss on revaluation of land................... (4,106) -- --
Net loss...................................... (2,421) -- --
</TABLE>
(3) INVESTMENTS
The Company has a cash management program which provides for the investment
of excess cash balances primarily in short-term money market instruments and
intermediate-term debt instruments. Investments consist of time deposits, U.S.
Treasury obligations, tax-exempt instruments and other non-equity type
investments stated at cost, which approximates market.
Effective with the beginning of fiscal year 1995, the Company adopted FAS
No. 115, "Accounting for Certain Investments in Debt and Equity Securities." The
statement requires that all applicable investments
20
<PAGE>
FLEETWOOD ENTERPRISES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
be classified as trading securities, available-for-sale securities or
held-to-maturity securities. The Company did not have any investments classified
as trading securities during the periods presented. The statement further
requires that held-to-maturity securities be reported at amortized cost and
available-for-sale securities be reported at fair value, with unrealized gains
and losses excluded from earnings but reported in a separate component of
shareholders' equity (net of the effect of income taxes) until they are sold. At
the time of sale, any gains or losses, calculated by the specific identification
method, will be recognized as a component of operating results.
The following is a summary of investment securities as of April 28, 1996:
<TABLE>
<CAPTION>
GROSS GROSS ESTIMATED
AMORTIZED UNREALIZED UNREALIZED FAIR
COST GAINS LOSSES VALUE
--------- ---------- ---------- ---------
(AMOUNTS IN THOUSANDS)
<S> <C> <C> <C> <C>
AVAILABLE-FOR-SALE SECURITIES:
U.S. Treasury securities and obligations of U.S. government
agencies.................................................. $ 111,484 $ 21 $517 $ 110,988
Obligations of states and political subdivisions............ 67,197 27 4 67,220
U.S. corporate securities................................... 6,015 -- 14 6,001
Foreign government obligations.............................. 3,335 88 -- 3,423
Other debt securities....................................... 58,446 584 -- 59,030
--------- ----- ----- ---------
$ 246,477 $720 $535 $ 246,662
--------- ----- ----- ---------
--------- ----- ----- ---------
HELD-TO-MATURITY SECURITIES:
Foreign government obligations.............................. $ 2,633 $ -- $ -- $ 2,633
Other debt securities....................................... 22,843 -- -- 22,843
--------- ----- ----- ---------
$ 25,476 $ -- $ -- $ 25,476
--------- ----- ----- ---------
--------- ----- ----- ---------
</TABLE>
The amortized cost and estimated fair value of the securities at April 28,
1996, by contractual maturity, are shown below. Expected maturities will differ
from contractual maturities because the issuers of the securities may have the
right to prepay obligations without prepayment penalties.
<TABLE>
<CAPTION>
FAIR
COST VALUE
-------- --------
(AMOUNTS IN
THOUSANDS)
<S> <C> <C>
AVAILABLE-FOR-SALE:
Due in one year or less..................................... $145,483 $146,185
Due after one year through five years....................... 92,901 92,514
Due after five years through ten years...................... 8,093 7,963
-------- --------
$246,477 $246,662
-------- --------
-------- --------
HELD-TO-MATURITY:
All due in one year or less................................. $ 25,476 $ 25,476
-------- --------
-------- --------
</TABLE>
Investment income for the year ended April 28, 1996 consisted of the
following (amounts in thousands):
<TABLE>
<CAPTION>
AMOUNT
- ---------------------------------------------------------------------
<S> <C>
Interest income...................................................... $ 11,824
Gross realized gains................................................. 2,476
Gross realized losses................................................ (8)
Investment management fees........................................... (260)
--------
$ 14,032
--------
--------
</TABLE>
21
<PAGE>
FLEETWOOD ENTERPRISES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(4) DISCONTINUED OPERATIONS
On April 22, 1996, the Company announced that it had reached an agreement
with Associates First Capital Corporation for the sale of its wholly owned RV
finance company, Fleetwood Credit Corp., and the sale was completed on May 24,
1996. Under the terms of the agreement, Associates acquired all of the
outstanding stock of Fleetwood Credit Corp. for $156.6 million in cash. As part
of the transaction, Fleetwood and Associates entered into an operating agreement
to assure long-term cooperation between the parties and to facilitate wholesale
and retail financing for Fleetwood dealers and customers.
The finance company had revenues of $52.2 million for fiscal year 1996
compared to $47.8 million last year. At the end of 1996 and 1995, the finance
company had total assets of $435 million and $505 million, respectively.
(5) PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment is stated at cost and consists of the
following:
<TABLE>
<CAPTION>
1996 1995
---------- ----------
(AMOUNTS IN THOUSANDS)
<S> <C> <C>
Land.................................................. $ 17,096 $ 14,707
Buildings and improvements............................ 278,848 267,187
Machinery and equipment............................... 125,332 115,134
Idle facilities, net of accumulated depreciation...... 5,499 6,746
---------- ----------
426,775 403,774
Less accumulated depreciation......................... (160,188) (141,134)
---------- ----------
$ 266,587 $ 262,640
---------- ----------
---------- ----------
</TABLE>
Idle facilities include closed plants and certain other properties which are
not in current use by the Company. There were four idle plant facilities at the
end of both 1996 and 1995. One plant was activated during the year, another was
leased to a third party and two facilities became idle.
The carrying value of idle facilities was $5,499,000 at April 28, 1996 and
$6,746,000 at April 30, 1995, net of accumulated depreciation of $3,673,000 and
$3,136,000, respectively. In the opinion of management, the carrying values of
idle facilities are not in excess of net realizable value.
(6) LONG-TERM DEBT
On April 22, 1996, the Company assumed $80,000,000 in notes from the
discontinued finance subsidiary which are payable to The Prudential Insurance
Company of America. One note, which matures in August 1996, carries a fixed
interest rate of 8.65 percent. The other two notes have floating interest rates
and mature in November 2001 and June 2005.
<TABLE>
<CAPTION>
AMOUNTS AVERAGE
MATURITY (IN THOUSANDS) INTEREST RATE
- -------------------------------------------- -------------- -------------
<S> <C> <C>
Current portion............................. $25,000 8.65%
Due in 2001................................. 30,000 5.84
Due in 2005................................. 25,000 5.82
-------
$80,000
-------
-------
</TABLE>
22
<PAGE>
FLEETWOOD ENTERPRISES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(7) RETIREMENT AND DEFERRED COMPENSATION PLANS
The Company has qualified defined contribution retirement plans covering
substantially all employees. There are no prior service costs associated with
these plans. The Company follows the policy of funding qualified retirement plan
contributions as accrued. The Company also maintains non-qualified plans to
accrue retirement benefits subject to Internal Revenue Code limitations. The
costs associated with these retirement plans are summarized as follows:
<TABLE>
<CAPTION>
QUALIFIED NON-QUALIFIED
PLANS PLANS TOTAL
--------- ------------- -------
(AMOUNTS IN THOUSANDS)
<S> <C> <C> <C>
1996....................................... $ 18,756 $1,984 $20,740
1995....................................... 17,664 3,339 21,003
1994....................................... 16,372 2,787 19,159
</TABLE>
In addition to non-qualified retirement plans, the Company has a deferred
compensation plan that allows for the voluntary deferral of a portion of
managers' compensation. Participant balances in the various non-qualified plans
are credited with interest at a rate set at the discretion of the Company which,
for the three years ended April 1996, was the prime rate as published by a major
U.S. bank. To enhance security for the benefits payable under these plans, the
Company has established a "Rabbi Trust," funded with Company-owned life
insurance (COLI) policies on the lives of participants. The assets of the trust
are not generally available to the Company or its creditors except in the event
of the Company's insolvency. COLI premium payments to the trust were $27.6
million in 1996 and $3.9 million in fiscal 1995. The total liability for
benefits accrued under the non-qualified plans at the end of 1996 and 1995
totaled $42.1 million and $37.0 million, respectively. The cash values of the
related trust assets reflected in the accompanying balance sheets were $31.0
million and $3.7 million, respectively, at those same dates.
(8) INCOME TAXES
The provision for income taxes for each of the three years in the period
ended April 28, 1996 is summarized below:
<TABLE>
<CAPTION>
1996 1995 1994
-------- ------- -------
(AMOUNTS IN THOUSANDS)
<S> <C> <C> <C>
Current:
U.S. Federal.................................. $ 36,779 $46,201 $40,509
Foreign....................................... 1,034 683 76
State......................................... 8,106 9,256 6,639
-------- ------- -------
45,919 56,140 47,224
-------- ------- -------
Deferred, principally Federal:
Insurance reserves............................ (2,561) 977 (4,444)
Other......................................... (1,815) (4,863) (2,063)
-------- ------- -------
(4,376) (3,886) (6,507)
-------- ------- -------
$ 41,543 $52,254 $40,717
-------- ------- -------
-------- ------- -------
</TABLE>
23
<PAGE>
FLEETWOOD ENTERPRISES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
The provision for income taxes computed by applying the Federal statutory
rate to income before taxes is reconciled to the actual provisions for fiscal
years 1996, 1995 and 1994 as follows:
<TABLE>
<CAPTION>
1996 1995 1994
--------------- --------------- ---------------
AMOUNT % AMOUNT % AMOUNT %
-------- ----- -------- ----- -------- -----
(AMOUNTS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Income before provision for income taxes:
U.S. Federal............................................ $114,400 103.1% $131,749 103.4% $106,407 106.9%
Foreign................................................. (3,407) (3.1) (4,302) (3.4) (6,891) (6.9)
-------- ----- -------- ----- -------- -----
$110,993 100.0% $127,447 100.0% $ 99,516 100.0%
-------- ----- -------- ----- -------- -----
-------- ----- -------- ----- -------- -----
Computed statutory tax...................................... $ 38,848 35.0% $ 44,606 35.0% $ 34,831 35.0%
State income taxes, net..................................... 5,755 5.2 5,688 4.5 3,906 3.9
Tax-exempt income........................................... (333) (.3) (323) (.3) (256) (.3)
Other items, net............................................ (2,727) (2.5) 2,283 1.8 2,236 2.3
-------- ----- -------- ----- -------- -----
$ 41,543 37.4% $ 52,254 41.0% $ 40,717 40.9%
-------- ----- -------- ----- -------- -----
-------- ----- -------- ----- -------- -----
</TABLE>
In fiscal 1994, the Company adopted Statement of Financial Accounting
Standards No. 109 on Accounting for Income Taxes. The new standard required a
recalculation of deferred tax amounts to reflect current income tax rates in
effect when the taxes are payable. The effect of this change was a one-time
cumulative charge of $1.5 million which was applied to earnings in the year of
the change.
The components of the Company's deferred income tax benefits (liabilities)
as of April 28, 1996 and April 30, 1995 were as follows:
<TABLE>
<CAPTION>
1996 1995
------- -------
(AMOUNTS IN
THOUSANDS)
<S> <C> <C>
Insurance reserves.......................................... $26,298 $23,737
Deferred compensation....................................... 17,158 15,079
Warranty reserves........................................... 17,400 14,496
Dealer volume rebates....................................... 5,231 4,724
Depreciation................................................ (4,230) (3,184)
Other financial accruals.................................... 3,367 5,996
------- -------
$65,224 $60,848
------- -------
------- -------
</TABLE>
The net deferred tax asset summarized above is considered realizable;
however, the amount could be reduced if tax rates are reduced in the future.
(9) OTHER LIABILITIES
Other liabilities consist of the following:
<TABLE>
<CAPTION>
1996 1995
-------- --------
(AMOUNTS IN
THOUSANDS)
<S> <C> <C>
Dividends payable to shareholders........................... $ 6,865 $ 6,449
Dealer volume rebates....................................... 25,636 23,881
Product warranty reserves................................... 44,095 36,843
Other....................................................... 58,239 35,622
-------- --------
$134,835 $102,795
-------- --------
-------- --------
</TABLE>
24
<PAGE>
FLEETWOOD ENTERPRISES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(10) FAIR VALUE OF FINANCIAL INSTRUMENTS
The Company has estimated the fair value of its financial instruments in
compliance with Financial Accounting Standard No. 107, "Disclosure About Fair
Value of Financial Instruments." The estimates were made as of April 28, 1996
based on relevant market information. Financial instruments include cash,
investments and debt. See Note 3 regarding discussion on investments. The
estimated fair value of financial instruments and the valuation techniques used
to estimate the fair value were as follows (amounts in thousands):
<TABLE>
<CAPTION>
APRIL 28, 1996
---------------------
ESTIMATED
BOOK FAIR
VALUE VALUE
--------- ---------
<S> <C> <C>
Financial Assets:
Cash............................................... $15,792 $15,792
Financial Liabilities:
Long-term debt..................................... $80,000 $80,000
</TABLE>
CASH: The fair value approximates book value.
TERM DEBT: The fair value of term debt was estimated based on a present
value discounted cash flow analysis using rates the Company would have to pay
currently to acquire similar debt for similar remaining terms.
(11) CONTINGENT LIABILITIES
As is customary in the manufactured housing and recreational vehicle
industries, the Company is contingently liable at April 28, 1996 under the terms
of repurchase agreements with many financial institutions providing inventory
financing for dealers of the Company's products. The contingent liability under
these agreements approximates the amount financed, reduced by the resale value
of any products which may be repurchased, and the risk of loss is spread over
numerous dealers and financial institutions. Losses under these agreements have
not been significant in the past.
(12) RESULTS BY QUARTER (UNAUDITED)
The unaudited results by quarter for fiscal years 1996 and 1995 are shown
below:
<TABLE>
<CAPTION>
FIRST SECOND THIRD FOURTH
FISCAL YEAR ENDED APRIL 1996: QUARTER QUARTER QUARTER QUARTER
- ---------------------------------------- -------- -------- -------- --------
(AMOUNTS IN THOUSANDS EXCEPT PER SHARE
DATA)
<S> <C> <C> <C> <C>
Revenues................................ $704,717 $707,086 $625,444 $772,030
Operating income........................ 32,174 32,729 22,612 44,017
Income before taxes..................... 34,077 36,795 25,252 14,869
Income from continuing operations....... 20,406 21,839 14,944 12,712
Income from discontinued operations..... 2,392 2,172 2,358 2,786
Net income.............................. 22,798 24,011 17,302 15,498
Net income per Common and equivalent
share:
Continuing operations............... $ .44 $ .47 $ .32 $ .27
Discontinued operations............. .05 .05 .05 .06
-------- -------- -------- --------
Total............................... $ .49 $ .52 $ .37 $ .33
-------- -------- -------- --------
-------- -------- -------- --------
Common and equivalent shares
outstanding........................... 46,518 46,496 46,387 46,475
-------- -------- -------- --------
-------- -------- -------- --------
</TABLE>
25
<PAGE>
FLEETWOOD ENTERPRISES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
<TABLE>
<CAPTION>
FIRST SECOND THIRD FOURTH
FISCAL YEAR ENDED APRIL 1995: QUARTER QUARTER QUARTER QUARTER
- ---------------------------------------- -------- -------- -------- --------
<S> <C> <C> <C> <C>
Revenues................................ $753,578 $699,525 $648,248 $706,511
Operating income........................ 43,723 30,953 24,152 23,401
Income before taxes..................... 45,228 31,949 26,468 23,802
Income from continuing operations....... 27,189 19,049 16,050 13,710
Income from discontinued operations..... 2,063 2,160 2,230 2,182
Net income.............................. 29,252 21,209 18,280 15,892
Net income per Common and equivalent
share:
Continuing operations............... $ .59 $ .41 $ .34 $ .29
Discontinued operations............. .04 .04 .05 .05
-------- -------- -------- --------
Total............................... $ .63 $ .45 $ .39 $ .34
-------- -------- -------- --------
-------- -------- -------- --------
Common and equivalent shares
outstanding........................... 46,457 46,678 46,379 46,606
-------- -------- -------- --------
-------- -------- -------- --------
</TABLE>
(13) STOCK-BASED INCENTIVE COMPENSATION PLANS
Under the Company's 1992 Stock-Based Incentive Compensation Plan adopted
during fiscal 1993, incentive stock options or non-qualified options (among
other forms of incentive compensation devices) may be granted to officers and
other key employees of the Company for the purchase of up to 4,900,000 shares
(2,000,000 shares of which were authorized in April 1996, subject to shareholder
approval at the 1996 Annual Meeting) of the Company's Common stock. Expiration
dates for the options may not exceed ten years from the date of grant. The
options are exercisable at prices which equal or exceed the fair market value of
the Company's Common stock valued at the date of grant. At April 28, 1996, there
were 28 employees who held options under the plan. A similar plan adopted in
1982 expired in June 1992; however, exercisable options representing 383,800
shares still remain outstanding at April 28, 1996. Under a separate plan for
non-employee directors adopted during fiscal 1993, up to 100,000 shares have
been authorized for distribution of options. Automatic grants are made annually
under this plan. The following is a summary of stock option activity (including
those from the expired plan) for employees and non-employee directors for the
year ended April 28, 1996:
<TABLE>
<CAPTION>
SHARES OPTION PRICE
--------- -------------
<S> <C> <C>
Options outstanding at beginning of year.......... 2,293,366 --
Options granted................................... 343,658 $20.63-$25.88
Exercised......................................... (105,800) $ 8.06-$20.13
---------
Outstanding at end of year........................ 2,531,224 $ 8.06-$26.50
---------
---------
Exercisable at end of year........................ 2,148,224 $ 8.06-$26.50
---------
---------
Available for grant............................... 2,732,576
---------
---------
</TABLE>
(14) STOCKHOLDER RIGHTS PLAN
On November 10, 1988, the Company's Board of Directors adopted a stockholder
rights agreement, granting certain new rights to holders of the Company's Common
stock. Under the agreement, one right was granted for each share of Common stock
held as of November 23, 1988, and one right will be granted for each share
subsequently issued. Each right entitles the holder, in an unfriendly takeover
situation, and after paying the exercise price (currently $75), to purchase
Fleetwood Common stock having a market value equal to two times the exercise
price. Also, if the Company is merged into another corporation, or if 50 percent
or more of the Company's assets are sold, then rightholders are entitled, upon
payment of the exercise price, to buy common shares of the acquiring corporation
at a 50 percent discount from their then-current market value. In either
situation, these rights are not available to the acquiring party. However, these
exercise features will not be activated if the acquiring party makes an offer to
acquire all of the Company's
26
<PAGE>
FLEETWOOD ENTERPRISES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
outstanding shares at a price which is judged by the Board of Directors to be
fair to all Fleetwood stockholders. The rights may be redeemed by the Company
under certain circumstances at the rate of $.02 per right. The rights will
expire on November 9, 1998.
(15) INDUSTRY SEGMENT INFORMATION
The Company conducts manufacturing operations principally in two
industries--manufactured housing and recreational vehicles. On a smaller scale,
the Company operates supply companies which provide fiberglass parts, lumber and
other wood components to its primary businesses, while also generating outside
sales. Manufacturing operations are conducted in the United States and to a much
lesser extent in Canada and Europe. The operations of the Company's wholly owned
insurance and real estate subsidiaries have been included in the "Corporate and
Other" category because the impact on consolidated operating income is not
material. Operating profit is total revenue less cost of sales and operating
expenses. None of the following items have been included in the computation of
operating profit for the individual operating segments: corporate expenses,
non-operating income and expenses and income taxes. Identifiable assets are
those assets used in the operation of each industry segment. Corporate assets
primarily consist of cash, investments, deferred tax benefits, cash value of
Company-owned life insurance, other assets and idle facilities. Information with
respect to industry segments as of April 28, 1996, April 30, 1995 and April 24,
1994, and for each of the years then ended is set forth as follows:
<TABLE>
<CAPTION>
ADJUSTMENTS
MANUFACTURED RECREATIONAL SUPPLY CORPORATE AND
HOUSING VEHICLES OPERATIONS AND OTHER ELIMINATIONS TOTAL
------------- ------------ ----------- ---------- ------------ ------------
(AMOUNTS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
1996
Operating revenues............. $ 1,443,016 $ 1,317,494 $ 48,767 $ 10,811 $ (10,811) $ 2,809,277
Operating profit (loss)........ 106,433 34,086 2,971 (11,958) -- 131,532
Identifiable assets............ 249,734 269,804 42,862 546,754 (222) 1,108,932
Depreciation................... 11,370 10,132 1,905 2,450 -- 25,857
Capital expenditures........... 19,161 10,732 1,185 1,838 -- 32,916
1995
Operating revenues............. $ 1,370,292 $ 1,387,919 $ 49,651 $ 12,461 $ (12,461) $ 2,807,862
Operating profit (loss)........ 81,204 45,542 5,855 (10,372) -- 122,229
Identifiable assets............ 229,772 345,467 45,673 319,718 (256) 940,374
Depreciation................... 9,012 9,237 1,407 2,317 -- 21,973
Capital expenditures........... 39,864 18,739 4,204 5,057 -- 67,864
1994
Operating revenues............. $ 1,054,267 $ 1,241,416 $ 36,501 $ 12,320 $ (12,320) $ 2,332,184
Operating profit (loss)........ 56,860 43,883 4,969 (13,863) -- 91,849
Identifiable assets............ 188,493 332,311 40,331 285,067 (983) 845,219
Depreciation................... 6,881 7,922 1,221 2,242 -- 18,266
Capital expenditures........... 45,235 21,321 2,308 3,679 -- 72,543
</TABLE>
27
<PAGE>
ITEM 9. DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
MATTERS
None
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information regarding directors and executive officers as required by
Item 401 of Regulation S-K is set forth in Part I of this report under the
caption "Executive Officers of the Company" and on page two of the Company's
proxy statement which will be filed with the Securities and Exchange Commission
not later than 120 days after April 28, 1996, and by this reference is
incorporated herein.
ITEM 11. MANAGEMENT REMUNERATION AND TRANSACTIONS
The information required by Item 402 of Regulation S-K is set forth on pages
five through seven of the Company's proxy statement which will be filed with the
Securities and Exchange Commission not later than 120 days after April 28, 1996,
and by this reference is incorporated herein.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information required by Item 403 of Regulation S-K is set forth on pages
three and four of the Company's proxy statement which will be filed with the
Securities and Exchange Commission not later than 120 days after April 28, 1996,
and by this reference is incorporated herein.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information regarding certain relationships and related transactions as
required by Item 404 of Regulation S-K, if any, is set forth in the Company's
proxy statement which will be filed with the Securities and Exchange Commission
not later than 120 days after April 28, 1996, and by this reference is
incorporated herein.
28
<PAGE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
PAGE
REFERENCE
---------
(a) Financial Statements
(1) Financial Statements included in Part II of this report:
Report of Independent Public Accountants
Consolidated Statements of Income for each of the three
years in the period ended April 28, 1996
Consolidated Balance Sheets at April 28, 1996 and April
30, 1995
Consolidated Statements of Cash Flows for each of the
three years in the period ended April 28, 1996
Consolidated Statements of Changes in Shareholders' Equity
for each of the three years in the period ended April
28, 1996
Notes to Consolidated Financial Statements
(2) Financial Statement Schedules
Financial statement schedules not filed have been omitted
for the reason that the required information is shown in
the financial statements or notes thereto, the amounts
involved are not significant, or the required matter is
not present.
(3) Exhibits and Index to Exhibits:
3. (a) Restated Certificate of Incorporation.*
(b) Amendment to Restated Certificate of
Incorporation.**
(c) Restated Bylaws of the Company.**
4. (a) Rights Agreement dated November 10, 1988,
between the Company and the First National Bank
of Boston used in connection with a stockholder
rights plan.***
(b) Certificate of Designation, Preferences and
Rights of Series A Junior Participating
Preferred Stock filed November 23, 1988.***
9. Not applicable.
10. Material Contracts.****
(a) Form of employment agreement between the Company
and each of its officers.
(b) Amended and Restated Deferred Compensation Plan.
(c) Amended and Restated Supplemental Benefit Plan.
(d) Amended and Restated Long-Term Incentive
Compensation Plan.
(e) 1982 Stock Option Plan.
(f) Amended and Restated Benefit Restoration Plan.
(g) Dividend Equivalent Plan.
(h) Amended and Restated 1992 Stock-Based Incentive
Compensation Plan.
(i) The 1992 Non-Employee Director Stock Option
Plan.
(j) Senior Executive Incentive Compensation Plan.
(k) Operating Agreement between Fleetwood
Enterprises, Inc. and Fleetwood Credit Corp.
11. Not applicable.
12. Not applicable.
13. Not applicable.
18. Not applicable.
19. Not applicable.
21. Subsidiaries of the Registrant.
22. Not applicable.
29
<PAGE>
23. Consent of independent public accountants.
24. Not applicable.
27. Not applicable.
(b) Reports on Form 8-K
The Company filed a report on Form 8-K on April 23, 1996
regarding the sale of Fleetwood Credit Corp. and the
revaluation of its investment in its European RV operation.
- ---------
*The Restated Certificate of Incorporation of the Company was filed with the
Company's 10-K Annual Report for the year ended April 28, 1985, and by this
reference is incorporated herein.
**The Amendment to the Restated Certificate of Incorporation and the Restated
Bylaws of the Company, both of which were adopted during fiscal 1987, were
filed with the Company's 10-K Annual Report for the year ended April 26,
1987, and by this reference are incorporated herein.
***The rights agreement and exhibits used in connection with the Company's
stockholder rights plan were filed with the Company's report on Form 8-K on
November 10, 1988, and by this reference are incorporated herein.
****Items 10(b), 10(c), 10(d), 10(f), and 10(h) listed under "Material
Contracts" were amended during fiscal year 1996 and are included herewith.
The following documents from prior filings are hereby incorporated by
reference:
Item 10(a): Filed with the Company's 10-K Annual Report for the year ended
April 26, 1992.
Item 10(e): Filed with the Company's 10-K Annual Report for the year ended
April 26, 1987.
Item 10(g): Filed with the Company's 10-K Annual Report for the year ended
April 29, 1990.
Item 10(i): Filed with the Company's 10-K Annual Report for the year ended
April 26, 1992.
Item 10(j): Filed with the Company's 10-K Annual Report for the year ended
April 24, 1994.
Item 10(k): Filed with a Form 8-K report on June 7, 1996.
30
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934, THE REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED ON
ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED.
FLEETWOOD ENTERPRISES, INC.
REGISTRANT
BY PAUL M. BINGHAM
-------------------------------------
PAUL M. BINGHAM
FINANCIAL VICE PRESIDENT
Date: July 9, 1996
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THIS
REPORT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS ON BEHALF OF THE
REGISTRANT AND IN THE CAPACITIES AND ON THE DATES INDICATED.
SIGNATURE TITLE DATE
- ------------------------------ ------------------------------ ------------
JOHN C. CREAN Chairman of the Board and July 9, 1996
- ------------------------------ Chief Executive Officer
JOHN C. CREAN
GLENN F. KUMMER President, Chief Operating July 9, 1996
- ------------------------------ Officer and Director
GLENN F. KUMMER
PAUL M. BINGHAM Chief Financial Officer and July 9, 1996
- ------------------------------ Principal Accounting Officer
PAUL M. BINGHAM
DOUGLAS M. LAWSON Director July 9, 1996
- ------------------------------
DOUGLAS M. LAWSON
WALTER F. BERAN Director July 9, 1996
- ------------------------------
WALTER F. BERAN
THOMAS A. FUENTES Director July 9, 1996
- ------------------------------
THOMAS A. FUENTES
JAMES L. DOTI Director July 9, 1996
- ------------------------------
JAMES L. DOTI
31
<PAGE>
FLEETWOOD ENTERPRISES, INC.
DEFERRED COMPENSATION PLAN
(AMENDED AND RESTATED EFFECTIVE APRIL 1, 1995)
<PAGE>
TABLE OF CONTENTS
PAGE
1. Purpose.. . . . . . . . . . . . . . . . . . . 1
2. Definitions.. . . . . . . . . . . . . . . . . 1
2.1 Board. . . . . . . . . . . . . . . . . . 1
2.2 Committee. . . . . . . . . . . . . . . . 1
2.3 Company. . . . . . . . . . . . . . . . . 1
2.4 Deferral Period. . . . . . . . . . . . . 1
2.5 Monthly Compensation.. . . . . . . . . . 1
2.6 Other Compensation.. . . . . . . . . . . 1
2.7 Participant. . . . . . . . . . . . . . . 2
2.8 Plan.. . . . . . . . . . . . . . . . . . 2
2.9 Base Rate. . . . . . . . . . . . . . . . 2
2.10 Qualifying Amount. . . . . . . . . . . . 2
2.11 Qualifying Compensation. . . . . . . . . 2
2.12 Retirement.. . . . . . . . . . . . . . . 3
2.13 Subsidiary.. . . . . . . . . . . . . . . 3
2.14 Total Compensation.. . . . . . . . . . . 3
2.15 Change of Control. . . . . . . . . . . . 3
2.16 Fleetwood. . . . . . . . . . . . . . . . 4
3. Plan Administration.. . . . . . . . . . . . . 4
3.1 The Committee. . . . . . . . . . . . . . 4
3.2 Powers of the Committee. . . . . . . . . 4
3.4 Reliance on Reports. . . . . . . . . . . 4
3.5 Records and Reports. . . . . . . . . . . 5
3.6 Payment of Expenses. . . . . . . . . . . 5
3.7 Indemnification. . . . . . . . . . . . . 5
4. Eligibility and Participation.. . . . . . . . 5
4.1 Eligibility. . . . . . . . . . . . . . . 5
4.2 Selection of Participants. . . . . . . . 6
4.3 Duration of Participation. . . . . . . . 6
5. Right to Defer Compensation.. . . . . . . . . 6
6. Deduction of Deferred Compensation Amounts. . 7
7. Bookkeeping Account.. . . . . . . . . . . . . 7
8. Election as to the Payment of Deferred Amounts. 7
8.1 Election to Defer Payment to a Specified Future Date.7
8.2 Maximum Deferral.. . . . . . . . . . . . 8
8.3 Special Rules. . . . . . . . . . . . . . 8
8.4 Death Prior to Full Payment. . . . . . . 8
8.5 De Minimus Payments. . . . . . . . . . . 9
9. Beneficiary Designation.. . . . . . . . . . . 9
i
<PAGE>
9.1 Designation. . . . . . . . . . . . . . . 9
9.2 Changes. . . . . . . . . . . . . . . . . 9
10. Dissolution and Other Events. . . . . . . . . 9
10.1 Dissolution or Change of Control of
Fleetwood. . . . . . . . . . . . . . . . 9
10.2 Subsidiary Reorganization. . . . . . . . 10
11. Claims for Benefits.. . . . . . . . . . . . . 10
12. Non-Transferability.. . . . . . . . . . . . . 11
13. Court Orders. . . . . . . . . . . . . . . . . 11
14. Incompetency. . . . . . . . . . . . . . . . . 11
15. Notice. . . . . . . . . . . . . . . . . . . . 12
16. Effect on Employment Agreements.. . . . . . . 12
17. Required Approvals. . . . . . . . . . . . . . 12
18. Plan Amendment. . . . . . . . . . . . . . . . 13
18.1 Plan Restatement.. . . . . . . . . . . . 13
18.2 Future Plan Amendment. . . . . . . . . . 13
19. Unsecured Obligation. . . . . . . . . . . . . 13
20. Governing Law.. . . . . . . . . . . . . . . . 13
21. Pronouns. . . . . . . . . . . . . . . . . . . 14
ii
<PAGE>
FLEETWOOD ENTERPRISES, INC.
DEFERRED COMPENSATION PLAN
(AMENDED AND RESTATED AS OF APRIL 1, 1995)
1. PURPOSE.
The Purpose of this Deferred Compensation Plan is to permit
certain selected employees of Fleetwood Enterprises, Inc. and certain
Subsidiaries who are members of management or who are highly compensated to
defer receipt of a portion of their compensation. The Plan is intended to be
one described in Section 201(2) of the Employee Retirement Income Security Act
of 1974, as amended.
2. DEFINITIONS.
2.1 BOARD.
"Board" shall mean the board of directors of Fleetwood.
2.2 COMMITTEE.
"Committee" shall mean a committee appointed by the President of
Fleetwood. The Committee shall consist of not less than two members. A member
of the Committee may also be a Participant under the Plan, but any Committee
member who is such a member shall not participate in any rulings by the
Committee which relate to his own distributions or elections or which are
otherwise particularly applicable to his own participation.
2.3 COMPANY.
"Company" shall mean Fleetwood and its Subsidiaries.
2.4 DEFERRAL PERIOD.
"Deferral Period" shall mean a calendar quarter.
2.5 MONTHLY COMPENSATION.
"Monthly Compensation" shall mean the amount of monthly salary
paid by the Company to a Participant pursuant to a written or oral employment
contract prior to any deduction for federal, state, local or foreign taxes or
other charges required by law to be withheld.
2.6 OTHER COMPENSATION.
"Other Compensation" shall mean the total direct compensation,
including bonuses and incentive compensation, paid
<PAGE>
by the Company to a Participant as shown in the Company's books and records
prior to any reduction for federal, state, local or foreign taxes or other
charges required by law to be withheld but excluding (i) amounts attributable to
the Participant's Monthly Compensation and (ii) any amounts of deferred
compensation as a result of payments under this or any other deferred
compensation plan or arrangement and (iii) any amounts of pension or profit
sharing benefits included in such deferred compensation.
2.7 PARTICIPANT.
"Participant" means a full time employee of the Company who is
eligible to become a Participant, who is selected as a Participant and who
continues to be a Participant under the provisions of Section 4 of this Plan.
An employee shall be deemed a "full time" employee of the Company if he or she
is so classified under the Company's usual and customary employment practices
prevailing from time to time during the period that such person has been
designated as a Participant.
2.8 PLAN.
"Plan" shall mean this deferred compensation plan.
2.9 BASE RATE.
"Base Rate" shall mean the base rate of interest charged by the
Bank of America NT&SA (or base or prime rate of such other major bank as may be
selected by the Committee), or, after March 31, 1995, any other rate selected by
the Committee in its sole and absolute discretion. Notwithstanding the
foregoing, upon and after a Change of Control, the "Base Rate" shall be the
greater of the base or prime rate charged from time to time by Bank of America,
NT&SA or the rate in use immediately before the Change of Control. The "Base
Rate" shall be adjusted quarterly as of the last day of each calendar quarter
based on the Base Rate in effect on the last business day of the calendar
quarter and the adjusted Base Rate will be utilized prospectively with respect
to subsequent quarters.
2.10 QUALIFYING AMOUNT.
The "Qualifying Amount" for a particular Participant for each
Deferral Period shall be $15,000 or quarterly salary, whichever is greater.
2.11 QUALIFYING COMPENSATION.
"Qualifying Compensation" shall mean that amount of Other
Compensation payable to any Participant with respect to any Deferral Period in
excess of the amount, if any, which would have to be added to the aggregate of
all Monthly Compensation payable to such Participant for such Deferral Period in
order to derive a total equal to the appropriate Qualifying Amount.
2
<PAGE>
2.12 RETIREMENT.
"Retirement" shall mean the voluntary or involuntary termination
of the Participant's employment for reasons other than death or disability,
occurring at or after the time when the Participant has attained the age of 60.
"Retirement Age" shall mean age 60.
2.13 SUBSIDIARY.
"Subsidiary" shall mean such corporations, fifty percent (50%) or
more of the outstanding voting stock of which is owned, directly or indirectly,
by Fleetwood or by Subsidiaries that have been designated in writing by the
Committee to be Subsidiaries for this purpose.
2.14 TOTAL COMPENSATION.
"Total Compensation" shall mean the sum of Monthly Compensation
and Other Compensation.
2.15 CHANGE OF CONTROL.
"Change in Control" shall mean the first to occur of any of the
following events:
(a) Any "person" (as that term is used in Section 13 and
14(d)(2) of the Securities Exchange Act of 1934 ("Exchange Act")but not
including for this purpose any person that, as of January 1, 1995, owned 15
percent or more of the outstanding common stock of Fleetwood or a person who
acquires shares of such common stock from such person by will or by the laws of
descent or distribution) becomes the beneficial owner (as that term is used in
Section 13(d) of the Exchange Act), directly or indirectly, of 25 percent or
more of Fleetwood's capital stock entitled to vote in the election of directors;
(b) During any period of not more than two consecutive years,
not including any period prior to April 1, 1995, individuals who at the
beginning of such period constitute the Board, and any new director (other than
a director designated by a person who has entered into an agreement with
Fleetwood to effect a transaction described in clause (a), (c) or (d) of this
Section 2.15) whose election by the Board or nomination for election by
Fleetwood's stockholders was approved by a vote of at least three-fourths
(3/4ths) of the directors then still in office who either were directors at the
beginning of the period or whose election or nomination for election was
previously so approved, cease for any reason to constitute at least a majority
thereof;
(c) The shareholders of Fleetwood approve any consolidation or
merger of Fleetwood other than a consolidation or merger of Fleetwood in which
the holders of the common stock
3
<PAGE>
of Fleetwood immediately prior to the consolidation or merger hold more than 50%
of the common stock of the surviving corporation immediately after the
consolidation or merger; or
(d) Substantially all of the assets of the Company are sold or
otherwise transferred to parties that are not within a "controlled group of
corporations" (as defined in Section 1563 of the Internal Revenue Code of 1986,
as amended) in which the Company is a member.
2.16 FLEETWOOD.
"Fleetwood" shall mean Fleetwood Enterprises, Inc., a Delaware
corporation.
3. PLAN ADMINISTRATION.
3.1 THE COMMITTEE.
The Committee shall administer the Plan in accordance with its
terms.
3.2 POWERS OF THE COMMITTEE.
The Committee shall have full power and authority to determine
the eligibility of persons to become Participants, to select Participants and to
adopt and revise such rules and procedures as it shall deem necessary for the
administration of the Plan. The decision of the Committee with respect to any
question arising as to the individuals determined to be eligible or selected to
participate in this Plan, the amount, terms, form and time of payment of
deferred compensation and the interpretation of this Plan shall be final,
conclusive and binding on all persons.
3.3 ORGANIZATION AND OPERATION OF COMMITTEE.
The Committee shall act by a majority of its members at the time
in office, and such action may be taken either by vote at a meeting or in
writing without a meeting. The Committee may authorize any one or more of its
members or any specifically designated officer of the Company to execute any
document or documents on behalf of the Committee. The Committee may appoint
such accountants, counsel, specialists, and other persons as it deems necessary
or desirable in connection with the administration of this Plan.
3.4 RELIANCE ON REPORTS.
Each member of the Committee shall be fully justified in relying
or acting in good faith upon any opinion or report made by the independent
public accountants of the Company and upon any other opinions, reports or
information furnished in connection with the Plan by any accountant, counsel, or
other
4
<PAGE>
specialist (including financial officers of the Company, whether or not such
persons may be members of the Committee or Participants under the Plan). In no
event shall any person who is or shall have been a member of the Committee be
liable for any determination made or other action taken or any omission to act
in reliance upon any such opinion, report or information or for any action,
including the furnishing of information, taken or failure to act, if in good
faith.
3.5 RECORDS AND REPORTS.
The Committee shall keep a record of all its proceedings and
acts, and shall keep all such books of account, records, and other data as may
be necessary for proper administration of the Plan.
3.6 PAYMENT OF EXPENSES.
Unless otherwise determined by the Board, the members of the
Committee shall serve without compensation for services as such, but all
expenses of the Committee shall be paid by the Company. Such expenses shall
include any expenses incident to the functioning of the Committee, including,
but not limited to, fees of accountants, counsel, and other specialists, and
other costs of administering the Plan.
3.7 INDEMNIFICATION.
Each person who is or shall have been a member of the Committee
shall be indemnified and held harmless by Fleetwood against and from any loss,
cost, liability, or expense that may be imposed upon or reasonably incurred by
him or her in connection with or resulting from any claim, action, suit, or
proceeding to which he or she may be a party or in which he or she may be
involved by reason of any action taken or failure to act under the Plan and
against and from any and all amounts paid by him or her in settlement thereof,
with the approval of Fleetwood, or paid by him or her in satisfaction of
judgment in any such action, suit, or proceeding against him or her, provided he
or she shall give Fleetwood an opportunity, at its own expense, to handle and
defend the same before he or she undertakes to handle and defend it on his or
her own behalf. The foregoing rights of indemnification shall not be exclusive
of any other rights of indemnification to which such persons may be entitled
under the certificate of incorporation or bylaws of Fleetwood, as a matter of
law or otherwise, or any power that Fleetwood may have to indemnify them or hold
them harmless.
4. ELIGIBILITY AND PARTICIPATION.
4.1 ELIGIBILITY.
A person shall be eligible to become a Participant under the Plan
only if:
5
<PAGE>
(i) he or she is a full time employee of the Company, and
(ii) his or her Total Compensation during the Deferral Period
with respect to which such person will be a Participant is
expected to exceed $15,000.
4.2 SELECTION OF PARTICIPANTS.
Participants shall be selected by the Committee from among those
persons who become eligible under Section 4.1, but the Committee need not select
all eligible persons as Participants. No person shall become a Participant with
respect to a Deferral Period unless and until such person (i) has been selected
as a Participant by the Committee prior to commencement of such Deferral Period
and (ii) prior to the commencement of such Deferral Period such person receives
from the Committee, or a duly authorized representative of the Committee,
written notice of such person's selection as a Participant. Subject to the
provisions of Section 16, once a person has been selected as a Participant under
this Plan with respect to a Deferral Period, such person shall remain a
Participant for such Deferral Period until such person's participation is
terminated pursuant to Section 4.3.
4.3 DURATION OF PARTICIPATION.
A person shall become a Participant upon selection as a
Participant pursuant to the preceding provisions of this Section 4. A person
shall cease to be a Participant upon the earliest of such person's (i) death,
(ii) disability, (iii) retirement, (iv) termination of employment or (v) receipt
of the full amount of deferred compensation, if any, payable to such person
under this Plan. Transfer or retirement by any Participant during any Deferral
Period of his employment between Fleetwood and any Subsidiary, or between
Subsidiaries, shall not affect any deferral election of such Participant made
prior to the date of such transfer.
5. RIGHT TO DEFER COMPENSATION.
Subject to the provisions of Section 16, on or before 5:00 P.M.
Pacific Time of the last business day of the fiscal quarter of Fleetwood
preceding each Deferral Period, such Participant may make an election to defer
all or any portion of the Participant's Qualifying Compensation, if any, which
in the absence of such an election would be payable for such Deferral Period.
An election to defer may specify that all or any lesser percentage of a
Participant's Other Compensation in excess of a minimum specified amount (which
minimum, when added to Monthly Compensation, must be equal to or in excess of
the appropriate Qualifying Amount) is to be deferred. Elections may be amended
or revoked only if written notice of amendment or revocation is received by the
Treasurer of Fleetwood at or before 5:00 P.M.,
6
<PAGE>
Pacific Time, on the last business day of the fiscal quarter of Fleetwood on or
before which the election is to be made. If a Participant fails to make any
election prior to a required date no amount of such Participant's compensation
shall be deferred.
6. DEDUCTION OF DEFERRED COMPENSATION AMOUNTS.
If a Participant elects to defer a portion of his or her
compensation pursuant to the provisions of Section 5 of this Plan, the payments
which would otherwise be paid to the Participant under the provisions of the
Participant's oral or written employment agreement or arrangement with the
Company shall be reduced as follows: If the aggregate Monthly Compensation to
be received by a Participant during a Deferral Period is not expected to exceed
the greater of the corresponding Qualifying Amount or any higher minimum amount
of compensation which the Participant, pursuant to the provisions of Section 5
of this Plan, has specified is to be received before deferral of income is to
occur, then the Participant shall be paid amounts, if any, of Other Compensation
which are earned during the Deferral Period until the Qualifying Amount or any
other such higher minimum amount has been received by the Participant and
thereafter any additional amounts of Other Compensation earned during the
Deferral Period shall be reduced in the proportion specified by the Participant
pursuant to the provisions of Section 5 of this Plan.
7. BOOKKEEPING ACCOUNT.
A separate and distinct unfunded, unsecured account shall be
established and maintained by the Company on its books for the Participant.
Amounts being deferred by a Participant pursuant to this Plan shall be credited
to such Participant's account as deferrals occur. Amounts deferred under this
Plan shall bear interest at a rate per annum equal to the lesser, as of the last
business day of the prior calendar quarter, of (i) the Base Rate computed
pursuant to Section 2.9 or (ii) the maximum rate permitted under California law.
Interest shall be credited and compounded quarterly as of the end of each
calendar quarter.
8. ELECTION AS TO THE PAYMENT OF DEFERRED AMOUNTS.
8.1 ELECTION TO DEFER PAYMENT TO A SPECIFIED FUTURE DATE.
A Participant shall elect concurrently with his or her election
made under Section 5 of this Plan as follows:
(a) to defer receipt of amounts which are deferred under
Section 5 plus credited earnings for payment either in one lump sum in January
of a specified future year or in not more than five (5) equal annual cash
installments starting in a
7
<PAGE>
specified future year, each installment payable during January of the applicable
year; and
(b) in the event the Participant's employment with the Company
terminates prior to the payment times selected under Section 8.1(a) above, to
defer receipt of amounts which are deferred under Section 5 plus credited
earnings for payment either in an immediate lump sum or in a lump sum during the
month of January following employment termination, or in accordance with the
election made under Section 8.1(a) above.
8.2 MAXIMUM DEFERRAL.
Notwithstanding the provisions of Section 8.1 of this Plan,
without the prior written consent of the Committee, the receipt of amounts
deferred under Section 5 of this Plan may not be deferred to a date which is
later than twenty (20) years following the end of the calendar year which
includes the Participant's Retirement Age or Retirement, whichever is later.
8.3 SPECIAL RULES.
The elections described in Section 8.1 above shall be subject to
the following:
(a) A Participant may modify any election under Section 8.1(b)
at any time that is not less than two years before the prior election under such
provision would otherwise take effect. Any untimely modification hereunder
shall not be given effect.
(b) Notwithstanding paragraph (a) above, an election under
Section 8.1 may be modified at any time if (i) the Participant and the Committee
both agree to such modification and such modification is on account of the
Participant's involuntary termination of employment with the Company or the
Participant is suffering a severe financial hardship attributable to an
unforeseeable emergency that cannot be relieved by any other source reasonably
available to the Participant, or (ii) the Participant elects at any time to have
his or her full remaining balance distributed but reduced by 10 percent and the
Participant is suspended from future participation in the Plan until the end of
the eighth full fiscal quarter following the distribution.
8.4 DEATH PRIOR TO FULL PAYMENT.
In the event that the Participant has amounts payable as deferred
compensation under this Plan and dies prior to the payment of all or a portion
of such amounts, the balance of the amount payable at the time of the
Participant's death shall be paid to the Participant's beneficiary, or, if no
beneficiary has been designated by the Participant, to the Participant's estate.
Such payments shall be in the form selected by the Participant
8
<PAGE>
unless the beneficiary and the Committee agree to payment in an immediate lump
sum.
8.5 DE MINIMUS PAYMENTS.
If the amounts credited to a Participant's or his or her
successor's account with respect to a Deferral Period is less than $1,000.00,
then the Committee, at its sole option, may elect to pay such deferred amount to
the Participant or successor immediately, notwithstanding any election by the
Participant to defer payment until a later date.
9. BENEFICIARY DESIGNATION.
9.1 DESIGNATION.
A Participant may designate a beneficiary or beneficiaries who
(to the extent provided in Section 8.4) upon the Participant's death are to
receive the distributions that otherwise would have been paid to the
Participant. All designations shall be in writing in form accepted or approved
by the Committee and shall be effective only if and when delivered to the
Committee during the lifetime of the Participant. If a Participant designates a
beneficiary without providing in the designation that the beneficiary must be
living at the time of distribution, the designation shall vest in the
beneficiary all of the distributions whether payable before or after the
beneficiary's death, and any distributions remaining upon the beneficiary's
death shall be made to the beneficiary's estate.
9.2 CHANGES.
A Participant may, from time to time during the Participant's
lifetime, change his or her beneficiary or beneficiaries by a written instrument
in form accepted or approved by the Committee and delivered to the Committee.
In the event a Participant shall not designate a beneficiary or beneficiaries as
aforesaid, or if for any reason such designation shall be ineffective, in whole
or in part, the distribution that otherwise would have been paid to the
Participant shall be paid to the Participant's estate.
10. DISSOLUTION AND OTHER EVENTS.
10.1 DISSOLUTION OR CHANGE OF CONTROL OF FLEETWOOD.
(a) In the event that Fleetwood is liquidated or dissolved, then
with respect to any amounts which may then or thereafter become payable to a
Participant or a Participant's beneficiary or successors under Section 9 of this
Plan, the Company shall pay such amount promptly in cash, without regard to any
elections with respect to deferrals or installments which the Participant may
have in effect. Payment shall be made upon the
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earlier to occur of (i) a liquidation or dissolution with respect to the Company
or (ii) a determination made by the Board in the exercise of its discretion that
such liquidation or dissolution is imminent.
(b) The occurrence of a Change of Control shall not affect the
payment of amounts deferred hereunder and all amounts deferred hereunder shall
remain so deferred and shall be paid in accordance with Participant elections as
specified in Section 8 hereof. A Participant shall, however, be indemnified and
held harmless for any costs incurred, including without limitation attorneys'
fees, in the course of and in order to receive payments of amounts to which he
or she becomes entitled after a Change in Control.
10.2 SUBSIDIARY REORGANIZATION.
In the event the assets of one Subsidiary are transferred to
another Subsidiary by merger, consolidation, transfer of assets, transfer of
capital stock or otherwise, the transferee Subsidiary shall assume amounts which
may then or thereafter become payable by the transferor Subsidiary to a
Participant or a Participant's beneficiaries or Successors under Section 8 of
this Plan. For purposes of this Section 10.2, a Subsidiary may include
Fleetwood.
11. CLAIMS FOR BENEFITS.
No employee or other person shall have any claim or right to
become a Participant under this Plan except as provided herein. Neither this
Plan nor any action taken hereunder shall be construed as giving any employee
any right to be retained in the employ of the Company. Benefits shall be paid
in accordance with the provisions of this instrument. If and to the extent
benefits are not automatically paid hereunder, the Participant, or a Beneficiary
or any other person claiming through the Participant, shall make a written
request for benefits under this Plan. This written claim shall be mailed or
delivered to the Committee. Such claim shall be reviewed by the Committee or
its delegate.
(a) If the claim is denied, in whole or in part, the Committee or its
delegate shall provide a written notice within ninety (90) days setting forth
the specific reasons for denial, and any additional material or information
necessary to perfect the claim, and an explanation of why such material or
information is necessary, and appropriate information and explanation of the
steps to be taken if a review of the denial is desired.
(b) If the claim is denied and a review by the full Committee is
desired, the Participant (or Beneficiary) shall notify the Committee or its
delegate in writing within sixty (60) days of the denial (a claim shall be
deemed denied if the Committee does not take any action within the aforesaid
ninety
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(90) day period). In requesting a review, the Participant or his Beneficiary
may request a review of the Plan document or other pertinent documents with
regard to the Plan, may submit any written issues and comments, may request an
extension of time for such written submission of issues and comments, and may
request that a hearing be held, but the decision to hold a hearing shall be
within the sole discretion of the Committee.
(c) The decision on the review of the denied claim shall be rendered
by the Committee within sixty (60) days after the receipt of the request for
review (if no hearing is held) or within sixty (60) days after the hearing if
one is held. The decision shall be written and shall state the specific reasons
for the decision, including reference to specific provisions of the Plan on
which the decision is based.
12. NON-TRANSFERABILITY.
A Participant's rights and interests under this Plan, including
the amounts payable, may not be assigned, pledged, transferred or otherwise
hypothecated except, in the event of the Participant's death, to his or her
designated beneficiaries as provided in this Plan, or in the absence of such
designation, to his or her estate. Any attempt by a Participant or his or her
beneficiaries to assign, transfer or dispose of any right under this Plan, other
than as permitted herein, shall be disregarded.
13. COURT ORDERS.
Notwithstanding any other provision hereof, the Committee may
respond as it deems appropriate in its sole and absolute discretion to any court
ordered payment (including without limitation those pertaining to child support
or alimony). Appropriate responses may include without limitation affording the
non-Participant spouse the same rights enjoyed by the Participant spouse to
modify a previously elected or determined payment format, subject to the
provisions hereof.
14. INCOMPETENCY.
Every person receiving or claiming a benefit under this Plan
shall be conclusively presumed to be mentally competent until the date on which
the Committee receives a written notice, in form and manner acceptable to the
Committee, that such person is incompetent and that a guardian, conservator or
other person legally vested with the care of his or her estate has been
appointed; provided, however, that if the Committee shall determine in its sole
discretion that any person to whom a benefit is payable under this Plan is
unable to care for his or her affairs because of incompetency, any payments due
(unless a prior claim therefor shall have been made by a duly appointed legal
representative) may be paid to the spouse, a child, a parent, a brother or
sister of such person, or to any person or institution deemed by the Committee
to have incurred expenses for
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such person otherwise entitled to payment. In the event a guardian or
conservator of the estate of any person receiving or claiming benefits under
this Plan shall be appointed by a court of competent jurisdiction, payment shall
be made to such guardian or conservator provided that proper proof of
appointment and continuing qualification is furnished in a form and manner
acceptable to the Committee. Any payment made in accordance with this section
shall be a complete discharge of any liability therefor under this Plan.
15. NOTICE.
All elections by a Participant under Sections 5 and 8.1 and the
designation of any beneficiary under Section 9 shall be made on forms supplied
or approved by the Committee. Any other notice or other communication required
or permitted by this Plan to be given or accepted by a Participant, a
Participant's successors or beneficiaries, the Committee or the Company, must be
in writing and may be given or may be served by depositing the same in the
United States mail, addressed to the party to be notified, postage prepaid and
registered or certified with return receipt requested or by delivering the same
in person to such party. All notices to a Participant or to his or her
successors or beneficiaries shall be delivered to the last known address or
addresses on file with the Company. Notices to the Committee or to the Company
and elections and beneficiary designations shall be delivered to the following
person and address:
Fleetwood Enterprises, Inc.
3125 Myers Street
Riverside, California 92523
Attention: Treasurer
or to such other address and person as the Committee, through two duly elected
officers, shall specify.
16. EFFECT ON EMPLOYMENT AGREEMENTS.
By consenting to the terms of this Plan or by making any election
to defer compensation pursuant to the terms of this Plan, each Participant
agrees that his employment agreement with the Company, as in effect from time to
time and whether executed prior to or after becoming a Participant under the
Plan, shall be supplemented and amended to the extent necessary to be consistent
with the Plan. In the event of any conflict between the terms of a
Participant's employment agreement with the Company and the terms of this Plan,
the terms of this Plan shall prevail.
17. REQUIRED APPROVALS.
The right of each Participant to elect to defer any portion of
his or her compensation and all other rights and obligations of Participants and
the Company under this Plan are specifically contingent upon the obtaining of
all necessary
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regulatory and other approvals and compliance with all applicable federal, state
and local laws, ordinances, rules and regulations. Specifically, without
limiting the foregoing, each Participant by submitting any election under this
Plan and the Company by accepting such election agree that the sale of any
securities which are the subject of this Plan has not been qualified with the
Commissioner of Corporations of the State of California and the issuance of such
securities and the payment or receipt of the consideration therefor prior to
such qualification is unlawful. The rights of all parties to this Plan
(including all Participants and the Company or its Subsidiaries) are expressly
conditioned upon such qualification being obtained.
18. PLAN AMENDMENT.
18.1 PLAN RESTATEMENT.
This Plan has been restated effective as of April 1, 1995,
pursuant to action taken by the Board for the purpose of amending and restating
the Plan. This Plan as so restated shall apply to all amounts deferred
hereunder including those deferred prior to April 1, 1995.
18.2 FUTURE PLAN AMENDMENT.
This Plan may be further amended by the Board at any time and
from time to time, provided that no such amendment shall operate to adversely
affect a Participant's rights under the Plan with respect to amounts deferred
prior to the date of such amendment.
19. UNSECURED OBLIGATION.
Participants under this Plan shall not have any interest in any
fund or specific assets of the Company by reason of this Plan. No trust fund
shall be created in connection with the Plan, and there shall be no funding of
amounts which may become or are payable to any Participant; provided, that
benefits under this Plan may be funded in whole or in part through the Fleetwood
Enterprises Master Deferred Compensation Trust, a grantor trust described in
Section 671 of the Internal Revenue Code; provided further, that upon a Change
of Control, the Company must immediately contribute an amount, if any, to such
trust so that all benefits earned and credited hereunder through such Change
shall be fully funded through such Trust. A Participant's rights under such
Trust shall be governed solely by the instrument or instruments governing such
trust.
20. GOVERNING LAW.
This Plan shall be governed by and construed in accordance with
laws of the State of California.
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21. PRONOUNS.
The masculine pronoun shall include the feminine and the singular
pronoun shall include the plural and VICE VERSA, unless the context clearly
indicates otherwise.
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AMENDMENT NO. 2
FLEETWOOD ENTERPRISES, INC.
DEFERRED COMPENSATION PLAN
(AMENDED AND RESTATED EFFECTIVE APRIL 1, 1995)
The Fleetwood Enterprises, Inc. Deferred Compensation Plan (Amended and
Restated effective April 1, 1995) is hereby further amended, effective
January 1, 1996, as follows:
A. Section 5 shall be amended by the addition of the following at the
end thereof:
Notwithstanding the foregoing, Participants employed by Fleetwood
Credit Corp. or employed by the Company to be responsible for the
affairs of Fleetwood Credit Corp. may, on or before the Closing Date
of the sale by the Company to an unrelated third party of all of the
stock of Fleetwood Credit Corp., make a special election to defer
all or a portion of the retention bonus to be paid to such
Participant in connection with said transaction for services
rendered by the Participant during the period following the Closing
Date with a duration as set forth in the particular retention bonus
program applicable to the particular Participant. Such special
election with respect to the retention bonus may be amended or
revoked at any time on or before 5:00 p.m. Pacific Time on the
Closing Date.
B. The first sentence of Section 8.3(a) shall be amend4ed in its
entirety to read as follows:
A Participant may modify any election under Section 8.1(b) at any
time that is not less than two years before the prior election
under such provision would otherwise take effect; provided, that
any modified election itself may not take effect until a date that
is at least two years after it is made.
<PAGE>
FLEETWOOD ENTERPRISES, INC.
SUPPLEMENTAL BENEFIT PLAN
(Amended And Restated Effective April 1, 1995)
<PAGE>
TABLE OF CONTENTS
1. Purpose.. . . . . . . . . . . . . . . . . . . . . . . . 1
2. Definitions.. . . . . . . . . . . . . . . . . . . . . . 1
2.1 Board. . . . . . . . . . . . . . . . . . . . . . . 1
2.2 Committee. . . . . . . . . . . . . . . . . . . . . 1
2.3 Company. . . . . . . . . . . . . . . . . . . . . . 2
2.4 Deferred Compensation. . . . . . . . . . . . . . . 2
2.5 Participant. . . . . . . . . . . . . . . . . . . . 2
2.6 Plan Period. . . . . . . . . . . . . . . . . . . . 2
2.7 Base Rate. . . . . . . . . . . . . . . . . . . . . 2
2.8 Restricted Contributions.. . . . . . . . . . . . . 2
2.9 Retirement Plans.. . . . . . . . . . . . . . . . . 2
2.10 Subsidiary.. . . . . . . . . . . . . . . . . . . . 3
2.11 Supplemental Benefits. . . . . . . . . . . . . . . 3
2.12 Change of Control. . . . . . . . . . . . . . . . . 3
2.13 Fleetwood. . . . . . . . . . . . . . . . . . . . . 4
3. Plan Administration.. . . . . . . . . . . . . . . . . . 4
3.1 The Committee. . . . . . . . . . . . . . . . . . . 4
3.2 Powers of the Committee. . . . . . . . . . . . . . 4
3.3 Organization and Operation of Committee. . . . . . 4
3.4 Reliance on Reports. . . . . . . . . . . . . . . . 4
3.5 Records and Reports. . . . . . . . . . . . . . . . 5
3.6 Payment of Expense.. . . . . . . . . . . . . . . . 5
3.7 Indemnification. . . . . . . . . . . . . . . . . . 5
4. Eligibility and Participation.. . . . . . . . . . . . . 6
5. Determination of Supplemental Benefits. . . . . . . . . 6
5.1 Separate Determination for Each Plan Period. . . . 6
5.2 Determination of Amount of Supplemental
Benefits.. . . . . . . . . . . . . . . . . . . . . 6
5.3 Computation of Interest. . . . . . . . . . . . . . 6
5.4 Vesting. . . . . . . . . . . . . . . . . . . . . . 7
6. Unsecured Obligation. . . . . . . . . . . . . . . . . . 7
7. Payment.. . . . . . . . . . . . . . . . . . . . . . . . 7
8. Beneficiary Designation.. . . . . . . . . . . . . . . . 9
9. Dissolution and Other Events. . . . . . . . . . . . . . 9
9.1 Dissolution or Change of Control of Fleetwood. . . 9
9.2 Subsidiary Reorganization. . . . . . . . . . . . . 10
10. Claim to Supplemental Benefits and Employee Rights. . . 10
11. Nontransferability. . . . . . . . . . . . . . . . . . . 11
12. Court Orders. . . . . . . . . . . . . . . . . . . . . . 11
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13. Relationship to Other Benefits. . . . . . . . . . . . . 11
14. Amendment and Termination.. . . . . . . . . . . . . . . 11
14.1 Plan Restatement.. . . . . . . . . . . . . . . . . 11
14.2 Future Amendment and Termination.. . . . . . . . . 12
15. Amendment of Retirement Plans.. . . . . . . . . . . . . 12
16. De Minimus Payments.. . . . . . . . . . . . . . . . . . 12
17. Incompetency. . . . . . . . . . . . . . . . . . . . . . 12
18. Notice. . . . . . . . . . . . . . . . . . . . . . . . . 13
19. Governing Law.. . . . . . . . . . . . . . . . . . . . . 13
20. Pronouns. . . . . . . . . . . . . . . . . . . . . . . . 13
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<PAGE>
FLEETWOOD ENTERPRISES, INC.
SUPPLEMENTAL BENEFIT PLAN
(AMENDED AND RESTATED EFFECTIVE APRIL 1, 1995)
1. PURPOSE.
The purpose of the Supplemental Benefit Plan (the "Plan") is to
provide benefits to certain highly-compensated or management employees of
Fleetwood Enterprises, Inc. and certain of its Subsidiaries in addition to the
benefits provided under the Fleetwood Enterprises, Inc. Retirement Plan
(including for purposes of the Plan, the Benefit Restoration Plan) or the
Fleetwood Retirement Plan, whichever of such Retirement Plans are applicable to
the particular employee. To this end, the Plan provides for (1) supplemental
unfunded benefits in excess of those provided by the Retirement Plans because of
the contribution limitations of Sections 415 and 401(a)(17) of the Internal
Revenue Code of 1986 as amended (the "Code"), and (2) unfunded benefits in lieu
of amounts which would have been contributed to the Retirement Plans if deferred
compensation were included in the Retirement Plan's definition of "Earnings" for
purposes of contributions. This Plan is intended to constitute an unfunded plan
providing benefits to a select group of management or highly compensated
employees within the meaning of Section 201(2) of the Employee Retirement Income
Security Act of 1974, as amended.
2. DEFINITIONS.
The following terms shall have the respective meanings set forth
below:
2.1 BOARD.
"Board" shall mean the Board of Directors of Fleetwood.
2.2 COMMITTEE.
"Committee" shall mean a committee appointed by the President of
Fleetwood. The Committee shall consist of not less than two members. A member
of the Committee may also be a participant under the Plan, but any Committee
member who is such a member shall not participate in any rulings by the
Committee which relate to his own distributions or elections or which are
otherwise particularly applicable to his own participation.
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2.3 COMPANY.
"Company" shall mean Fleetwood and its Subsidiaries.
2.4 DEFERRED COMPENSATION.
"Deferred Compensation" shall mean amounts for which a
Participant has an election to defer in effect under the Fleetwood Enterprises,
Inc. Deferred Compensation Plan.
2.5 PARTICIPANT.
"Participant" shall mean a person described in Section 4.
2.6 PLAN PERIOD.
"Plan Period" shall mean the applicable quarters of the calendar
year, ending respectively on March 31, June 30, September 30, and December 31.
2.7 BASE RATE.
"Base Rate" shall mean the base rate of interest charged by the
Bank of America, NT&SA (or base or prime rate of such other major bank as may be
selected by the Committee), or, after March 31, 1995, any other rate selected by
the Committee in its sole and absolute discretion. Notwithstanding the
foregoing, upon and after a Change of Control, the "Base Rate" shall be the
greater of the base or prime rate charged from time to time by the Bank of
America, NT&SA or the rate in use immediately before the Change of Control. The
"Base Rate" shall be adjusted quarterly as of the last day of each Plan Period
based on the base rate in effect on the last business day of such period.
2.8 RESTRICTED CONTRIBUTIONS.
"Restricted Contributions" shall mean the Company contributions
which would have been allocated to the account of the Participant in the
Retirement Plans for the Plan Year but for the limitations imposed by
Sections 415 and 417 of the Internal Revenue Code.
2.9 RETIREMENT PLANS.
"Retirement Plans" shall mean the Fleetwood Enterprises, Inc.
Retirement Plan and the
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Fleetwood Retirement Plan, in each case as now in effect or hereafter amended.
2.10 SUBSIDIARY.
"Subsidiary" shall mean such corporations, fifty percent (50%) or
more of the outstanding voting stock of which is owned, directly or indirectly,
by the Company or by Subsidiaries that have been designated in writing by the
Committee to be Subsidiaries for this purpose.
2.11 SUPPLEMENTAL BENEFITS.
"Supplemental Benefits" shall mean the amounts credited to a
Participant's account pursuant to Section 5.2 of this Plan.
2.12 CHANGE OF CONTROL.
"Change in Control" shall mean the first to occur of any of the
following events:
(a) Any "person" (as that term is used in Section 13 and
14(d)(2) of the Securities Exchange Act of 1934 ("Exchange Act") but not
including for this purpose any person that, as of January 1, 1995, owned 15
percent or more of the outstanding common stock of Fleetwood or a person who
acquires shares of such common stock from such person by will or by the laws of
descent or distribution) becomes the beneficial owner (as that term is used in
Section 13(d) of the Exchange Act), directly or indirectly, of 25 percent or
more of Fleetwood's capital stock entitled to vote in the election of directors;
(b) During any period of not more than two consecutive years,
not including any period prior to April 1, 1995, individuals who at the
beginning of such period constitute the Board, and any new director (other than
a director designated by a person who has entered into an agreement with the
Company to effect a transaction described in clause (a),(c), or (d) of this
Section 2.12) whose election by the board of directors or nomination for
election by Fleetwood's stockholders was approved by a vote of at least three-
fourths (3/4ths) of the directors then still in office who either were directors
at the beginning of the period or whose election or nomination for election was
previously so approved, cease for any reason to constitute at least a majority
thereof;
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(c) The shareholders of Fleetwood approve any consolidation or
merger of Fleetwood other than a consolidation or merger of Fleetwood in which
the holders of the common stock of Fleetwood immediately prior to the
consolidation or merger hold more than 50% of the common stock of the surviving
corporation immediately after the consolidation or merger; or
(d) Substantially all of the assets of the Company are sold or
otherwise transferred to parties that are not within a "controlled group of
corporations" (as defined in Code Section 1563) in which the Company is a
member.
2.13 FLEETWOOD
"Fleetwood" shall mean Fleetwood Enterprises, Inc., a Delaware
corporation.
3. PLAN ADMINISTRATION.
3.1 THE COMMITTEE.
The Committee shall administer the Plan in accordance with its
terms.
3.2 POWERS OF THE COMMITTEE.
The Committee shall have full power and authority to adopt and
revise such rules and procedures as it shall deem necessary for the
administration of the Plan . The decision of the Committee with respect to any
question arising under this Plan shall be final, conclusive and binding on all
persons.
3.3 ORGANIZATION AND OPERATION OF COMMITTEE.
The Committee shall act by a majority of its members at the time
in office, and such action may be taken either by a vote at a meeting or in
writing without a meeting. The Committee may authorize any one or more of its
members to execute any document or documents on behalf of the Committee. The
Committee may appoint such accountants, counsel, specialists, and other persons
as it deems necessary or desirable in connection with the administration of this
Plan.
3.4 RELIANCE ON REPORTS.
Each member of the Committee and each member of the Board shall
be fully justified in relying
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or acting in good faith upon any opinion or report made by the independent
public accountants of the Company and upon any other opinions, reports or
information furnished in connection with the Plan by any accountant, counsel, or
other specialist (including financial officers of the Company, whether or not
such persons may be Participants under the Plan). In no event shall any person
who is or shall have been a member of the Committee or of the Board be liable
for any determination made or other action taken or any omission to act in
reliance upon any such opinion, report or information or for any action,
including the furnishing of information, taken or failure to act, if in good
faith.
3.5 RECORDS AND REPORTS.
The Committee shall keep a record of all its proceedings and
acts, and shall keep all such books of accounts, records, and other data as may
be necessary for proper administration of the Plan.
3.6 PAYMENT OF EXPENSE.
Unless otherwise determined by the Board, the members of the
Committee shall serve without compensation for services as such, but all
expenses of the Committee shall be paid by the Company. Such expenses shall
include any expenses incident to the functioning of the Committee, including,
but not limited to, fees of accountants, counsel, and other specialists, and
other costs of administering the Plan.
3.7 INDEMNIFICATION.
Each person who is or shall have been a member of the Committee
or of the Board shall be indemnified and held harmless by Fleetwood against and
from any loss, cost, liability, or expense that may be imposed upon or
reasonably incurred by him in connection with or resulting from any claim,
action, suit, or proceeding to which he may be a party or in which he may be
involved by reason of any action taken or failure to act under the Plan and
against and from any and all amounts paid by him in settlement thereof, with the
approval of Fleetwood, or paid by him in satisfaction of judgment in any such
action, suit, or proceeding against him, provided he shall give Fleetwood an
opportunity, at its own expense, to handle and defend it on his own behalf. The
foregoing rights of indemnification shall not be exclusive of any other rights
of indemnification to which such persons may be entitled under the certificate
of incorporation or bylaws of Fleetwood, as a
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<PAGE>
matter of law, or otherwise, or any power that Fleetwood may have to indemnify
them or hold them harmless.
4. ELIGIBILITY AND PARTICIPATION.
Those persons who are participants in either of the Retirement Plans
and have Deferred Compensation or Restricted Contributions for a Plan Period
shall become Participants for the Plan Period.
5. DETERMINATION OF SUPPLEMENTAL BENEFITS.
5.1 SEPARATE DETERMINATION FOR EACH PLAN PERIOD.
A separate determination shall be made with respect to each
Plan Period as to the amount of Supplemental Benefits to be credited to the
account of each Participant for the Plan Period.
5.2 DETERMINATION OF AMOUNT OF SUPPLEMENTAL BENEFITS.
For each Plan Period, the account of each Participant shall
be credited with amounts equal to:
(i) the amount of Company contributions which would have
been allocated to the Participant's account in either of the Retirement Plans
for the Plan Period if "Earnings" under such Retirement Plan included Deferred
Compensation, such amount to be credited no later than as of the date or dates
the Company contributions would have been made to such Retirement Plan if
"Earnings" under such Retirement Plan included Deferred Compensation; plus
(ii) the amount of Restricted Contributions allocable to
the Participant for the Plan Period, such amount to be credited as of the dates
the Restricted Contributions would have been made to the applicable Retirement
Plan but for the limitations of Sections 415 and 401(a)(17) of the Internal
Revenue Code; plus
(iii) the interest, if any, computed under Section 5.3.
5.3 COMPUTATION OF INTEREST.
Amounts credited under this Plan shall bear interest at a
rate per annum equal to the lesser of
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(i) the Base Rate computed pursuant to Section 2.7, or (ii) the maximum rate
permitted under California law. Interest shall be credited and compounded
quarterly as of the end of each Plan Period. Participants' accounts shall be
accurately and timely credited with interest earned hereunder.
5.4 VESTING.
A Participant's vested percentage of the amounts credited to
his account under this Plan shall be the same as his vested percentage of
amounts credited to his account under the applicable Retirement Plan.
6. UNSECURED OBLIGATION.
Participants under this Plan shall not have any interest in any
fund or specific assets of the Company by reason of this Plan. No trust fund
shall be created in connection with the Plan, and there shall be no funding of
amounts which may become or are payable to any Participant; provided, that
benefits under this Plan may be funded in whole or in part through the Fleetwood
Enterprises Master Deferred Compensation Trust, a grantor trust described in
Internal Revenue Code Section 671; provided further, that upon a Change of
Control, the Company must immediately contribute an amount, if any, to such
trust sufficient so that all benefits earned and credited hereunder through such
Change shall be fully funded through such trust. A Participant's rights under
such trust shall be governed solely by the instrument or instruments governing
such trust.
7. PAYMENT.
(a) The vested portion of the amount of Supplemental Benefits
credited to a Participant's account under this Plan, shall, subject to the
provisions of Sections 7(b), 5.4 and 16, be paid in accordance with the written
election of a Participant upon his or her termination of employment with the
Company, on a form authorized for such purpose by the Committee, which election
shall be made immediately prior to the inception of the Participant's
participation in this Plan. In such election, the Participant shall designate
either one or a combination of the following payment options:
(i) A lump sum upon employment termination with the
Company, or in the first week of January of a designated year (1st, 2nd, 3rd,
etc.) following termination.
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<PAGE>
(ii) Consecutive annual installments of not less than
$10,000 each, such installments to commence in the first week of January of a
designated year (1st, 2nd, 3rd, etc.) following employment termination with the
Company and payable over a period not to exceed 20 years from the date of
employment termination.
(iii) A lump sum amount of less than the participant's
entire benefit, in accordance with (i) above, followed by installment payments
of the balance in accordance with (ii), above.
(b) The elections described in paragraph (a) above shall be
subject to the following:
(i) A Participant may modify any election at any time that
is not less than two years before the prior election would otherwise take
effect.
(ii) Notwithstanding clause (i) above, an election may be
modified at any time if (A) the Participant and the Committee both agree to such
modification and such modification is on account of the Participant's
involuntary termination of employment with the Company or the Participant is
suffering a severe financial hardship attributable to an unforeseeable emergency
that cannot be relieved by any other source reasonably available to the
Participant, or (B) the Participant elects at any time to have his or her full
remaining balance distributed but reduced by 10 percent and the Participant is
suspended from future participation in the Plan until the end of the eighth
calendar quarter following the distribution.
(iii) While distributions will ordinarily commence upon or
after employment termination with the Company, a Participant in his or her
election or election modification may specify that payments may commence while
the person is still employed with the Company on or after the date the sum of
such person's age and total service with the Company equals 85. Notwithstanding
the foregoing, the Committee may order payment to any Participant still employed
with the Company if the sum of such individual's age and total service with the
Company equals 70 and the Committee determines that there are mitigating
circumstances surrounding such individual that warrant prompt payment.
(c) To the extent that a percentage of the Participant's account
or accounts in the applicable Retirement Plan attributable to the Company
contributions
8
<PAGE>
is forfeited because of termination of employment, an equal percentage of the
Participant's account under this Plan shall be forfeited, subject to provisions
of restoration which may be provided by the applicable Retirement Plan.
(d) If no separate election is made hereunder, payment to the
Participant shall be made in a lump sum in January of the year following
termination of employment with the Company.
(e) Upon the death of a Participant, all funds will be paid to
the Participant's designated beneficiary or beneficiaries in the form selected
by the Participant unless the beneficiary and the Committee agree to payment in
an immediate lump sum.
8. BENEFICIARY DESIGNATION.
A Participant may designate a beneficiary or beneficiaries by
means of a written election on a form authorized for such purpose by the
Committee. A Participant may change such election at any time on a form
authorized for such purpose by the Committee. If a Participant does not make an
election in accordance with this Section 8 and has previously designated a
beneficiary or beneficiaries under the Participant's applicable Retirement Plan,
then that designation shall be effective for purposes of this Plan.
9. DISSOLUTION AND OTHER EVENTS.
9.1 DISSOLUTION OR CHANGE OF CONTROL OF FLEETWOOD
(a) In the event that Fleetwood is liquidated or dissolved,
then with respect to any amounts which may then or thereafter become payable to
a Participant or a Participant's beneficiary or successors under Section 7 of
this Plan, the Company shall pay such amount promptly in cash, without regard to
any elections with respect to deferrals or installments which the Participant
may have in effect. Payment shall be made upon the earlier to occur of (i) a
liquidation or dissolution with respect to the Company or (ii) a determination
made by the Board in the exercise of its discretion that such liquidation or
dissolution is imminent.
(b) The occurrence of a Change of Control shall not affect the
payment of amounts hereunder, and all benefits hereunder shall remain deferred
and shall be
9
<PAGE>
paid in accordance with Participant elections as specified in Section 7 hereof.
A Participant shall, however, be indemnified and held harmless for any costs
incurred, including without limitation attorneys' fees, in the course of and in
order to receive payments of amounts to which he or she becomes entitled after a
Change in Control.
9.2 SUBSIDIARY REORGANIZATION.
In the event the assets of one Subsidiary are transferred to
another Subsidiary by merger, consolidation, transfer of assets, transfer of
capital stock or otherwise, the transferee Subsidiary shall assume amounts which
may then or thereafter become payable by the transferor Subsidiary to a
Participant or a Participant's beneficiaries or successors under the provisions
of this Plan. For purposes of this Section 9.2, a Subsidiary may include
Fleetwood.
10. CLAIM TO SUPPLEMENTAL BENEFITS AND EMPLOYEE RIGHTS.
No employee or other person shall have any claim or right to become a
Participant under this Plan except as provided herein. Neither this Plan nor
any action taken hereunder shall be construed as giving any employee any right
to be retained in the employ of the Company. Benefits shall be paid in
accordance with the provisions of this instrument. If and to the extent
benefits are not automatically paid hereunder, the Participant, or a Beneficiary
or any other person claiming through the Participant, shall make a written
request for benefits under this Plan. This written claim shall be mailed or
delivered to the Committee. Such claim shall be reviewed by the Committee or
its delegate.
(a) If the claim is denied, in whole or in part, the Committee or its
delegate shall provide a written notice within ninety (90) days setting forth
the specific reasons for denial, and any additional material or information
necessary to perfect the claim, and an explanation of why such material or
information is necessary, and appropriate information and explanation of the
steps to be taken if a review of the denial is desired.
(b) If the claim is denied and a review by the full Committee is
desired, the Participant (or Beneficiary) shall notify the Committee or its
delegate in writing within sixty (60) days of the denial (a claim shall be
deemed denied if the Committee does not take any
10
<PAGE>
action within the aforesaid ninety (90) day period). In requesting a review,
the Participant or his Beneficiary may request a review of the Plan document or
other pertinent documents with regard to the Plan, may submit any written issues
and comments, may request an extension of time for such written submission of
issues and comments, and may request that a hearing be held, but the decision to
hold a hearing shall be within the sole discretion of the Committee.
(c) The decision on the review of the denied claim shall be rendered
by the Committee within sixty (60) days after the receipt of the request for
review (if no hearing is held) or within sixty (60) days after the hearing if
one is held. The decision shall be written and shall state the specific reasons
for the decision, including reference to specific provisions of the Plan on
which the decision is based.
11. NONTRANSFERABILITY.
Except as may be permitted by the applicable Retirement Plan or in
order to pay death benefits as provided hereunder, a person's rights and
interest under this Plan, including amounts payable, may not be assigned,
pledged, transferred or otherwise hypothecated.
12. COURT ORDERS.
Notwithstanding any other provisions hereof, the Committee may respond
as it deems appropriate in its sole and absolute discretion to any court ordered
payment (including without limitation those pertaining to child support or
alimony). Appropriate responses may include without limitation affording the
non-Participant spouse the same rights enjoyed by the Participant spouse to
modify a previously elected or determined payment format, subject to the
provisions hereof.
13. RELATIONSHIP TO OTHER BENEFITS.
No payment under the Plan shall be taken into account for determining
any benefits under any pension, retirement, profit sharing, group insurance or
other benefit plan of the Company.
14. AMENDMENT AND TERMINATION.
14.1 PLAN RESTATEMENT.
This Plan has been restated as of April 1, 1995, pursuant to action
taken by the Board for the
11
<PAGE>
purpose of amending and restating the Plan. This Plan as so restated shall
apply to all amounts earned hereunder including those earned prior to April 1,
1995.
14.2 FUTURE AMENDMENT AND TERMINATION.
The Board may terminate this Plan or modify or amend this Plan in
such respects as it shall deem advisable. No termination or amendment of the
Plan, however, shall reduce the amount of the benefit which a person who is a
Participant at the time such termination or amendment occurs has already become
entitled to.
15. AMENDMENT OF RETIREMENT PLANS.
In the event that any of the provisions of either of the Retirement
Plans are amended, said amendment to the extent not in direct conflict with
express provisions of this Plan shall be equally applicable to the payment of
Supplemental Benefits under this Plan.
16. DE MINIMUS PAYMENTS.
Notwithstanding any other provision of this Plan or either of the
Retirement Plans to the contrary, in the event that amounts become payable to a
Participant or to his or her successor under the terms of this Plan and the
present value of such amounts is less than $10,000.00, the Committee may, at its
sole discretion, direct the present value of such amounts to be paid in a lump
sum cash payment.
17. INCOMPETENCY.
Every person receiving or claiming a benefit under this Plan shall be
conclusively presumed to be mentally competent until the date on which the
Committee receives a written notice, in form and manner acceptable to the
Committee, that such person is incompetent and that a guardian, conservator or
other person legally vested with the care of his or her estate has been
appointed; provided, however, that if the Committee shall determine in its sole
discretion that any person to whom a benefit is payable under this Plan is
unable to care for his or her affairs because of incompetency, any payments due
(unless a prior claim therefore shall have been made by a duly appointed legal
representative may be paid to the spouse, a child, a parent, a brother or sister
of such person, or to any person or institution deemed by the Committee to have
incurred expenses for
12
<PAGE>
such person otherwise entitled to payment. In the event a guardian or
conservator of the estate of any person receiving or claiming benefits under
this Plan shall be appointed by a court of competent jurisdiction, payment shall
be made to such guardian or conservator provided that proper proof of
appointment and continuing qualification is furnished in a form and manner
acceptable to the Committee. Any payment made in accordance with this section
shall be a complete discharge of any liability therefor under this Plan.
18. NOTICE.
All elections by a Participant and the designation of any beneficiary
or beneficiaries shall be made on forms supplied or approved by the Committee.
Any other notice or other communication required or permitted by this Plan to be
given or accepted by a Participant, a Participant's successors or beneficiaries,
the Committee or the Company, must be in writing and may be given or may be
served by depositing the same in the United States mail, addressed to the party
to be notified, postage prepaid and registered or certified with return receipt
requested or by delivering the same in person to such party. All notices to a
Participant or to his or her successors or beneficiaries shall be delivered to
the last known address or addresses on file with the Company. Notices to the
Committee or to the Company and beneficiary designations shall be delivered to
the following person and address:
Fleetwood Enterprises, Inc.
3125 Myers Street
Riverside, California 92523
Attention: Treasurer
or to such other address and person as the Committee, through two duly elected
officers, shall specify.
19. GOVERNING LAW.
This Plan shall be governed by and construed in accordance with
the laws of the State of California.
20. PRONOUNS.
The masculine pronoun shall include the feminine and the singular
pronoun shall include the plural and VICE VERSA, unless the context clearly
indicates otherwise.
13
<PAGE>
AMENDMENT NO. 2
FLEETWOOD ENTERPRISES, INC.
SUPPLEMENTAL BENEFIT PLAN
(AMENDED AND RESTATED EFFECTIVE APRIL 1, 1995)
The Fleetwood Enterprises, Inc. Supplemental Benefit Plan (Amended and
Restated effective April 1, 1995) is hereby amended, effective January 1, 1996,
as follows:
A. Section 7(b)(i) shall be amended in its entirety to read as follows:
A Participant may modify any election at any time that is not less
than two years before the prior election would otherwise take effect,
provided, that any modified election itself may not take effect until
a date that is at least two years after it is made.
<PAGE>
FLEETWOOD ENTERPRISES, INC.
LONG-TERM INCENTIVE PLAN
(AMENDED AND RESTATED AS OF APRIL 17, 1996)
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
PAGE
<S> <C>
1. Purpose................................................................... 1
2. Definitions............................................................... 1
2.1 Award Period.................................................... 1
2.2 Board........................................................... 1
2.3 Cash-Flow Return................................................ 1
2.4 Cash-Flow Return on Gross Cash Investments...................... 2
2.5 Change of Control............................................... 2
2.6 Committee....................................................... 3
2.7 Company......................................................... 3
2.8 Company's Actual Performance Level.............................. 3
2.9 Direct Compensation............................................. 3
2.10 Disability...................................................... 3
2.11 Fiscal Year..................................................... 4
2.12 Gross Cash Investment........................................... 4
2.13 Incentive Compensation.......................................... 4
2.14 Interest Expense................................................ 4
2.15 Maximum Incentive Compensation Award............................ 4
2.16 Maximum Performance Level....................................... 4
2.17 Minimum Achievement Award....................................... 5
2.18 Minimum Performance Level....................................... 5
2.19 Participant..................................................... 5
2.19(a) Benchmark Participant........................................... 5
2.19(b) Other Participants.............................................. 5
2.20 Participation Units............................................. 5
2.21 Performance Objective........................................... 6
2.22 Retirement...................................................... 6
2.23 Subsidiary...................................................... 6
2.24 Target Performance Award........................................ 6
3. Plan Administration....................................................... 6
3.1 The Committee................................................... 6
3.2 Powers of the Committee......................................... 6
3.3 Organization and Operation of Committee......................... 6
3.4 Reliance on Reports............................................. 7
3.5 Records and Reports............................................. 7
3.6 Payment of Expenses............................................. 7
3.7 Indemnification................................................. 7
4. Eligibility and Participation............................................. 8
4.1 Eligibility..................................................... 8
4.2 Selection of Participants....................................... 8
4.3 Duration of Participation....................................... 8
4.4 Designation of the Benchmark Participant and Other Participants. 9
5. Determination of Incentive Compensation................................... 9
5.1 Separate Determination for Each Award Period.................... 9
5.2 Determination of Company Performance Goals...................... 9
5.3 Selection and Designation of Participants....................... 9
5.4 Determination of the Benchmark Participant's Incentive
Compensation Award Levels................................. 9
5.5 Award of Participation Units to the Benchmark Participant and
Other Participants......................................... 10
5.6 Communication of Objectives and Related Incentive Compensation
Benefits................................................... 10
6. Amount of Incentive Compensation.......................................... 10
6.1 Calculation of the Benchmark Participant's Incentive Compensation
Award...................................................... 10
<PAGE>
6.2 Calculation of Incentive Compensation for Other Participants.... 11
6.3 Amounts Payable to Deceased Disabled and Retired Participants... 11
6.4 No Incentive Compensation for Terminated Employees.............. 12
6.5 Limitation of Aggregate Amount of Incentive Compensation
Payable in Any One Fiscal Year............................. 12
7. Payment................................................................... 13
7.1 Form............................................................ 13
7.2 Forfeiture of Certain Benefits.................................. 13
7.3 Death Prior to Full Payment..................................... 13
8. Waiver of Participation................................................... 13
8.1 Participation Voluntary......................................... 13
8.2 Effect of Waiver................................................ 13
9. Beneficiary Designation................................................... 14
9.l Designation..................................................... 14
9.2 Changes......................................................... 14
10. Dissolution or Merger..................................................... 14
10.1 Dissolution or Change of Control of Fleetwood Enterprises, Inc.. 14
10.2 Recapitalization................................................ 15
11. Claim to Incentive Compensation and Employee Rights....................... 15
12. Unsecured Obligation...................................................... 15
13. Nontransferability........................................................ 15
14. Tax Withholding........................................................... 15
15. Relationship to Other Benefits............................................ 15
16. Amendment and Termination................................................. 16
17. Incompetency.............................................................. 16
18. Effective Date of Amended and Restated Plan............................... 16
19. Notices................................................................... 16
</TABLE>
ii
<PAGE>
FLEETWOOD ENTERPRISES, INC.
LONG-TERM INCENTIVE PLAN
1. PURPOSE.
The purpose of the Long-Term Incentive Plan (the "Plan") is to provide a
means of paying incentive compensation to certain key management employees who
contribute materially to the long-term success of Fleetwood Enterprises, Inc.
By relating the incentive rewards of certain key executives to the achievement
of high cash-flow returns over successive two-year periods, the Company will be
in a position to provide additional motivation and to reward extraordinary
performance by making those employees most responsible for such performance
participants in the Company's success. Consistent increases in the Company's
cash flow add economic value to the Company, which benefits the Company's
shareholders. In addition, by providing long-term incentive compensation
opportunities as well as the Company's long-time short-term incentive program,
the Company expects not only to attract but also to maintain, on a long-term
basis, a highly competent management team.
2. DEFINITIONS.
The following terms shall have the respective meanings set forth below:
2.1 AWARD PERIOD.
"Award Period" shall mean a period of two consecutive Fiscal Years selected
by the Committee. No more than one Award Period shall begin during any single
Fiscal Year.
2.2 BOARD.
"Board" shall mean the Board of Directors of the Company (meaning in this
case the parent company and not its subsidiaries).
2.3 CASH-FLOW RETURN.
"Cash-Flow Return" shall mean net income for a Fiscal Year after provisions
for taxes on income, as shown on Fleetwood Enterprises, Inc.'s audited
consolidated financial statements as at the end of a Fiscal Year, plus
provisions for depreciation and amortization and Interest Expense (after tax),
adjusted to (i) exclude items of either a positive or negative nature resulting
from the disposal of a segment of a business, classified as being an
"extraordinary" item, or classified as an "unusual or infrequent" item
(including any item associated with a change in the capital structure of the
Company or unusual or infrequent items resulting from any transaction or
restructuring approved by the Board), all as determined using principles similar
to generally accepted accounting principles, (ii) exclude items of either a
positive or negative nature resulting from the acquisition, operation, or
disposition of a business operation that, based upon the type of business
conducted or its geographic location, does not constitute a core business of the
Company's business operations, (iii) include any amounts which previously
reduced such Cash-Flow Return for such Fiscal Year as a result of the payment or
accrual of benefits to Participants under this
<PAGE>
Plan and (iv) exclude the effect of any acquisitions during the Award Period
accounted for as a "pooling of interests" by restating the financial statements
to indicate the effect which would have resulted if such acquisitions had been
accounted for as "purchases". Each of the adjustments referred to in (i), (ii),
(iii) and (iv) of the preceding sentence shall be made net of "tax effect", if
any.
2.4 CASH-FLOW RETURN ON GROSS CASH INVESTMENTS
"Cash-Flow Return on Gross Cash Investment" for an Award Period shall mean
the average annual amount of Cash-Flow Return for the two (2) fiscal years
included in the Award Period divided by the Gross Cash Investment at the end of
the Fiscal Year immediately prior to the Award Period. By multiplying the
amount determined under the preceding sentence by 100, Cash-Flow Return on Gross
Cash Investment may be expressed as a percentage. If this Plan calls for the
computation of Cash-Flow Return on Gross Cash Investment for a period which is
less than a full Award Period, the Cash-Flow Return shall be the aggregate
amount, averaged on an annualized basis, earned between the commencement of the
Award Period and the date of the unaudited interim financial statements as of
the end of the fiscal month immediately preceding the end of the period and the
Gross Cash Investment shall be the Gross Cash Investment at the end of the
Fiscal Year immediately prior to the Award Period.
2.5 CHANGE OF CONTROL.
"Change of Control" shall mean circumstances under which (i) a third person
including a "Group" as defined in Section 13(d)(3) of the Securities Exchange
Act of 1934, who is not an "Exempt Person" as defined in the last sentence of
this subsection, acquires capital stock of the Company having twenty-five
percent (25%) or more of the total number of votes that may be voted for the
election of directors of the Company, or (ii) as a result of any cash tender or
exchange offer, merger or other business combination, or any combination of any
of the foregoing transactions (a "Transaction"), the persons who were directors
of the Company before the Transaction shall cease to constitute a majority of
the board of directors of the Company, or any successor to the Company. For
purposes of this Section 2.5, an "Exempt Person" means (i) a person who as of
January 1, 1989, owned ten percent (10%) or more of the outstanding common stock
of the Company or a person who acquires shares of such common stock from such
person by will or by the laws of descent or distribution; or (ii) a person who
would not otherwise be a beneficial owner of twenty-five percent (25%) or more
of the combined voting power of the Company's then outstanding voting securities
but for a reduction in the number of outstanding voting securities resulting
from a stock repurchase program or other similar plan of the Company or from a
self tender offer of the Company, which plan or tender offer commenced on or
after the date hereof, provided, however, that the term "person" shall include
such person from and after the first date upon which (A) such person, since the
date of the commencement of such plan or tender offer, shall have acquired
beneficial ownership of, in the aggregate, a number of voting securities of the
Company equal to 1% or more of the voting securities of the Company then
outstanding and (B) such person, together with all affiliates and associates of
such person, shall beneficially own 25% or more the voting securities of the
Company then outstanding.
2
<PAGE>
2.6 COMMITTEE.
"Committee" shall mean a committee appointed by the Board from among its
own members. The Committee shall consist of not less than two members. No
member of the Committee may, while serving on the Committee, also be a
Participant in this Plan. In addition, if the Incentive Compensation is to be
awarded to a Participant subject to Section 162(m) of the Internal Revenue Code,
then each of the Committee members shall also be "outside directors," as such
term is defined in the regulations under Section 162(m) of the Internal Revenue
Code.
2.7 COMPANY.
"Company" shall mean Fleetwood Enterprises, Inc. and its subsidiaries.
2.8 COMPANY'S ACTUAL PERFORMANCE LEVEL.
"Company's Actual Performance Level" means the Cash-Flow Return on Gross
Cash Investment for an Award Period actually achieved during an Award Period
computed as of the end of the Award Period.
2.9 DIRECT COMPENSATION.
"Direct Compensation" shall mean gross salary and bonus payments to an
employee prior to reduction as a result of state and federal income tax
withholding, disability, social security and other charges, excluding, however,
(i) any payments under this Plan (ii) any and all pension and profit sharing
contributions or benefits and (iii) any other indirect compensation. "Average
Annual Direct Compensation" shall mean the average amount of annual Direct
Compensation paid to the Benchmark Participant during an Award Period or, if
applicable, a shortened Award Period. For the purpose of this Section 2.9,
salary and bonus payments shall be deemed paid and exclusions shall be deemed
charged as of the date of accrual of such payments and exclusions by the
Company, notwithstanding that actual payment may be deferred to a later date
with or without the employee's consent. Specifically, without limiting the
provisions of the preceding sentence, computations as of the end of a fiscal
quarter or other period of time shall be accrued as of the last day of the
quarter or applicable period of time, notwithstanding that the computation of
the amount may not be completed until some time thereafter or that actual
payment may be deferred by the election of the employee or otherwise to some
future date.
2.10 DISABILITY.
"Disability" shall mean the permanent inability of a Participant because of
injury or disease to engage in an occupation or employment which is
substantially similar to the occupation or employment in which the Participant
was engaged prior to the time when the injury or disease first began to affect
the Participant's occupation or employment with the Company. The existence of a
Disability and the time when a Disability commences shall be determined by the
Committee based upon such medical or other evidence as the Committee in its sole
discretion may find advisable. The decisions of the Committee with respect to
the existence of a Disability or the time when a Disability commenced shall be
final and binding on all persons including without limitation the Disabled
Participant and his other successors or representatives.
3
<PAGE>
2.11 FISCAL YEAR.
"Fiscal Year" shall mean the fiscal year of Fleetwood Enterprises, Inc.
adopted for accounting and reporting purposes.
2.12 GROSS CASH INVESTMENT.
"Gross Cash Investment" shall mean total book assets plus accumulated
depreciation minus non-debt liabilities as shown and as classified on Fleetwood
Enterprises, Inc.'s audited consolidated financial statements; provided,
however, such financial statements shall be restated to exclude the effect of
any acquisitions during the Award Period accounted for on a "pooling of
interests" basis and to include the effect of such acquisitions as if they had
been accounted for as "purchases" and shall be equitably and appropriately
adjusted to take into account any material change in the capital structure of
the Company resulting from any transaction or restructuring event approved by
the Board.
2.13 INCENTIVE COMPENSATION.
"Incentive Compensation" shall mean the dollar amount awarded to a
Participant with respect to an Award Period under the terms of Section 6 of this
Plan. Notwithstanding any other provision of this Plan to the contrary
(including Sections 6.3 and 6.5), no Participant shall be awarded more than
$1,000,000 of Incentive Compensation (as determined under Section 6 of this
Plan) for any Award Period.
2.14 INTEREST EXPENSE.
"Interest Expense" means the interest cost on Company debt obligations and
does not include interest on non-debt liabilities (i.e., accounts payable,
employee compensation and benefits accruals, income tax payables and other
liabilities).
2.15 MAXIMUM INCENTIVE COMPENSATION AWARD.
"Maximum Incentive Compensation Award" shall mean the percentage of Average
Annual Direct Compensation during an Award Period which will be paid as
Incentive Compensation to the Benchmark Participant, assuming the Company's
Actual Performance Level equals or exceeds the Maximum Performance Level.
2.16 MAXIMUM PERFORMANCE LEVEL.
"Maximum Performance Level" means the Cash-Flow Return on Gross Cash
Investment which if equaled or exceeded as of the end of an Award Period will
cause the Benchmark Participant at the end of the Award Period to be entitled to
Incentive Compensation in an amount equal to his Maximum Incentive Compensation
Award multiplied by his Average Annual Direct Compensation during the Award
Period.
4
<PAGE>
2.17 MINIMUM ACHIEVEMENT AWARD.
"Minimum Achievement Award" shall mean the percentage of Average Annual
Direct Compensation during an Award Period which will be paid as Incentive
Compensation to the Benchmark Participant assuming the Company's Actual
Performance Level equals the Minimum Performance Level.
2.18 MINIMUM PERFORMANCE LEVEL.
"Minimum Performance Level" means the minimum Cash-Flow Return on Gross
Cash Investment to be achieved during an Award Period before any Incentive
Compensation shall be payable to Participants. This return must be at least
equal to the Company's cost of capital as computed at the beginning of each
Award Period.
2.19 PARTICIPANT.
"Participant" means a full-time employee of the company who is eligible to
become a Participant, who is selected as a Participant and who continues to be a
Participant under the provisions of Section 4 of this Plan. An employee shall
be deemed a "full -time" employee of the Company if he or she is so classified
under the Company's usual and customary employment practices prevailing from
time to time during the period that such person has been designated as a
Participant. Participants shall be designated by the Committee as the Benchmark
Participant and the Other Participants, respectively.
2.19(a) BENCHMARK PARTICIPANT
"Benchmark Participant" means the Participant so designated by the
Committee whose Incentive Compensation shall be determined at the end of the
applicable Award Period by calculation in accordance with the provisions of
Section 6.1 of this Plan and whose Incentive Compensation Award shall be
utilized as the base, or benchmark, in calculating the Incentive Compensation
Awards of the Other Participants.
2.19(b) OTHER PARTICIPANTS.
"Other Participants" means Participants other than the Benchmark
Participant whose Incentive Compensation Award Period shall be calculated in
accordance with the provisions of Section 6.2 of the Plan.
2.20 PARTICIPATION UNITS.
"Participation Units" are units of measurement utilized in determining the
Incentive Compensation Awards of Other Participants as compared to the Award of
the Benchmark Participant. Participation Units shall be awarded to the
Benchmark Participant and the Other Participants in accordance with Section 5.5
of the Plan.
5
<PAGE>
2.21 PERFORMANCE OBJECTIVE.
"Performance Objective" means the Cash-Flow Return on Gross Cash Investment
which, if achieved as of the end of an Award Period, will cause a Participant to
be entitled to Incentive Compensation at the end of the Award Period.
2.22 RETIREMENT.
"Retirement" means the voluntary termination of a Participant's employment
for reasons other than death or Disability, occurring at or after the time when
such Participant has attained the age of fifty-five.
2.23 SUBSIDIARY.
"Subsidiary" shall mean a corporation fifty percent (50%) or more of the
outstanding voting stock of which is owned, directly or indirectly, by the
Company or by a Subsidiary of the Company.
2.24 TARGET PERFORMANCE AWARD.
"Target Performance Award" shall mean the percentage of Average Annual
Direct Compensation during an Award Period which will be paid as Incentive
Compensation to the Benchmark Participant, assuming that the Company's Actual
Performance Level equals the Performance Objective.
3. PLAN ADMINISTRATION.
3.1 THE COMMITTEE.
The Committee shall administer the Plan in accordance with its terms.
3.2 POWERS OF THE COMMITTEE.
The Committee shall have full power and authority to establish performance
criteria under the Plan, determine the eligibility of persons to become
Participants, to select Participants, to designate Participants as the Benchmark
Participant and Other Participants, to make awards to Participants, to terminate
the designation of a Participant or to reduce the number of Participation Units
awarded to Participants and to adopt and revise such rules and procedures as it
shall deem necessary for the administration of the Plan. The decision of the
Committee with respect to any question arising as to the individuals determined
to be eligible or selected to participate in the Plan, the amount, terms, form
and time of payment of Incentive Compensation and the interpretation of the Plan
shall be final, conclusive and binding on all persons.
3.3 ORGANIZATION AND OPERATION OF COMMITTEE.
The Committee shall act by a majority of its members at the time in office,
and such action may be taken by a vote at a meeting, including a meeting at
which conference telephone or similar
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equipment is utilized by means of which all persons participating in the meeting
can hear each other, or by unanimous written consent without a meeting. The
Committee may authorize any one or more of its members or any specifically
designated officer of the company to execute any document or documents on behalf
of the Committee. The Committee may appoint such accountants, counsel,
specialists, and other persons as it deems necessary or desirable in connection
with the administration of this Plan.
3.4 RELIANCE ON REPORTS.
Each member of the Committee and each member of the Board shall be fully
justified in relying or acting in good faith upon any opinion or report made by
the independent public accountants of the Company and upon any other opinions,
reports or information furnished in connection with the Plan by any accountant,
counsel, or other specialist (including financial officers of the company,
whether or not such persons may be Participants under the Plan). In no event
shall any person who is or shall have been a member of the Committee or of the
Board be liable for any determination made or other action taken or any omission
to act in reliance upon any such opinion, report or information or for any
action, including the furnishing of information, taken or failure to act, if in
good faith.
3.5 RECORDS AND REPORTS.
The Committee shall keep a record of all its proceeding and acts, and shall
keep all such books of account, records and other data as may be necessary for
proper administration of the Plan.
3.6 PAYMENT OF EXPENSES.
Unless otherwise determined by the Board, the members of the committee
shall serve without compensation for services as such, but all expenses of the
Committee shall be paid by the Company. Such expenses shall include any
expenses incident to the functioning of the Committee, including, but not
limited to, fees of accountants, counsel, and other specialists, and other costs
of administering the Plan.
3.7 INDEMNIFICATION.
Each person who is or shall have been a member of the Committee or of the
Board shall be indemnified and held harmless by the Company against and from any
loss, cost, liability, or expense that may be imposed upon or reasonably
incurred by him in connection with or resulting from any claim, action, suit, or
proceeding to which he may be a party or in which he may be involved by reason
of any action taken or failure to act under the Plan and against and from any
and all amounts paid by him in settlement thereof, with the Company's approval,
or paid by him in satisfaction of judgment in any such action, suit, or
proceeding against him, provided he shall give the Company an opportunity, at
its own expense, to handle and defend the same before he undertakes to handle
and defend it on his own behalf. The foregoing rights of indemnification shall
not be exclusive of any other rights of indemnification or exculpation to which
such persons
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may be entitled under the Company's Certificate of Incorporation or bylaws, as a
matter of law, or otherwise, or any power that the Company may have to indemnify
them or hold them harmless.
4. ELIGIBILITY AND PARTICIPATION.
4.1 ELIGIBILITY.
Only the following persons who make, influence or implement long-term
policy decisions of the Company shall be eligible to become Participants under
this Plan: (i) full-time key executive employees of the Company who are not also
directors of the Company and (ii) directors of the Company who are also full-
time officers of the Company, provided, however, no more than a minority of the
directors of the Company in office at the time that Participants are selected
for an Award Period may become Participants with respect to such Award Period.
4.2 SELECTION OF PARTICIPANTS.
Participants shall be selected by the Committee from among those persons
who become eligible under Section 4.1, but the Committee need not select all
eligible persons as Participants. Participants shall be separately selected for
each Award Period, and the selection of a person as a Participant for one Award
Period shall not mean that such person will be selected for participation with
respect to any subsequent Award Period. No person shall become a participant
with respect to any Award Period under the Plan unless an until such person (i)
has been selected as a Participant by the committee and (ii) has received
written notice of selection as a Participant from the committee or a duly
authorized representative of the Committee.
4.3 DURATION OF PARTICIPATION.
A person shall become a Participant upon selection as a Participant
pursuant to the preceding provisions of this Section 4. A person shall cease to
be a Participant with respect to any Award Period upon the earlier of such
person's (i) death (ii) Disability (iii) Retirement (iv) termination of
employment or (v) receipt of the full amount of Incentive Compensation, if any,
payable to such person with respect to the Award Period. In addition, the
Committee may terminate the participation of a Participant, or reduce the number
of Participation Units awarded to a Participant, with respect to any Award
Period in the event that the management responsibilities of such person are
reduced to the extent that such person would not have been considered eligible
under Section 4.1, or would have been awarded a lesser number of Participation
Units by the Committee under Section 5.5, if such person had such management
responsibilities prior to the commencement of such Award Period. In such event,
a Participant whose participation is terminated by the Committee will be
entitled to receive Incentive Compensation for each such Award Period after the
conclusion of such Award Period, on a pro rata basis calculated in the same
manner as under Section 6.3, and a Participant whose number of Participation
Units is reduced shall be entitled to receive Incentive Compensation for each
such Award Period after the conclusion of such Award Period on a pro rata basis
calculated by averaging the Participation Units held by the Participant during
the Award Period based on the percentage of the Award Period the Participant
held each respective number of Participation
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<PAGE>
Units; provided, however that the provisions of Section 6.3(iii) shall not
apply to payment made under this Section.
4.4 DESIGNATION OF THE BENCHMARK PARTICIPANT AND OTHER
PARTICIPANTS.
Prior to each Award Period, the Committee shall designate the Benchmark
Participant from among the Participants and shall further designate the Other
Participants.
5. DETERMINATION OF INCENTIVE COMPENSATION.
5.1 SEPARATE DETERMINATION FOR EACH AWARD PERIOD.
A separate determination shall be made with respect to each Award Period as
to (i) the Minimum Performance Level for the Award Period (ii) the Performance
Objective for the Award Period (iii) the Maximum Performance Level for the Award
Period (iv) the persons who will be Participants during the Award Period and (v)
the Participants designated as the Benchmark Participant and the Other
Participants, respectively.
5.2 DETERMINATION OF COMPANY PERFORMANCE GOALS.
Prior to the commencement of each Award Period, the Committee shall
establish the Minimum Performance Level, the Performance Objective and the
Maximum Performance Level for such Award Period.
5.3 SELECTION AND DESIGNATION OF PARTICIPANTS.
Prior to the commencement of each Award Period, the Committee shall select
the persons who will be Participants during the Award Period and shall designate
the Benchmark Participant and Other Participants. Such selection and
designation shall be made in accordance with the provisions of Section 4 of the
Plan.
5.4 DETERMINATION OF THE BENCHMARK PARTICIPANT'S INCENTIVE
COMPENSATION AWARD LEVELS.
Prior to the commencement of each Award Period the Committee shall
establish for the Benchmark Participant:
(i) the Benchmark Participant's Minimum Achievement Award, expressed as a
percentage of his Average Annual Direct Compensation during the Award Period:
(ii) the Benchmark Participant's Target Performance Award, expressed as a
percentage of his Average Annual Direct Compensation during the Award Period;
and
(iii) the Benchmark Participant's Maximum Incentive Compensation Award
expressed as a percentage of his Average Annual Direct Compensation during the
Award Period.
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The Benchmark Participant's Target Performance Award shall not exceed 35%
of his Average Annual Direct Compensation during the Award Period nor shall his
Maximum Incentive Compensation Award exceed 50% of his Average Annual Direct
Compensation during the Award Period.
5.5 AWARD OF PARTICIPATION UNITS TO THE BENCHMARK PARTICIPANT
AND OTHER PARTICIPANTS.
Prior to the commencement of each Award Period, the Committee shall award
to the Benchmark Participant and each Other Participant a specific number of
Participation Units determined by the Committee.
5.6 COMMUNICATION OF OBJECTIVES AND RELATED INCENTIVE
COMPENSATION BENEFITS.
Performance goals and the method of determining Incentive Compensation in
relationship to the Performance goals shall be communicated to the Participants
prior to the beginning of each Award Period.
6. AMOUNT OF INCENTIVE COMPENSATION.
6.1 CALCULATION OF THE BENCHMARK PARTICIPANT'S INCENTIVE
COMPENSATION AWARD.
Subject to the provisions of Section 6.5 of this Plan, the amount of
Incentive Compensation payable for each Award Period to the Benchmark
Participant shall be as follows:
(i) FAILURE TO ACHIEVE MINIMUM PERFORMANCE LEVEL.
If at the end of the Award Period the Company's actual performance level
has not equaled or exceeded the Minimum Performance Level, no Incentive
Compensation shall be payable.
(ii) PERFORMANCE EQUAL OR EXCEEDING MINIMUM LEVEL.
If at the end of the Award Period the Company's actual performance level
equals or exceeds the Minimum Performance Level but does not equal or exceed the
Performance Objective, the Benchmark Participant shall receive as Incentive
Compensation a percentage of his Average Annual Direct Compensation during the
Award Period which is equal to the sum of (a) the Minimum Achievement Award plus
(b) an additional percentage determined by multiplying the difference between
his Target Performance Award and his Minimum Achievement Award by a fraction,
the numerator of which is the difference between the Company's actual
performance level and the Minimum Performance Level and the denominator of which
is the difference between the Performance Objective and the Minimum Performance
Level.
(iii) PERFORMANCE EQUALS PERFORMANCE OBJECTIVE.
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If at the end of the Award Period the Company's actual performance level
equals the Performance Objective, the Benchmark Participant shall receive as
Incentive compensation a percent of his Average Annual Direct Compensation
during the Award Period which is equal to his Target Performance Award.
(iv) PERFORMANCE EXCEEDS PERFORMANCE OBJECTIVE.
If at the end of the Award Period the Company's actual performance level
exceeds the Performance Objective but does not equal or exceed the Maximum Award
Level, the Benchmark Participant shall receive as Incentive Compensation a
percentage of his Average Annual Direct Compensation during the Award Period
which is equal to the sum of (a) his Target Performance Award plus (b) an
additional percentage determined by multiplying the difference between his
Maximum Incentive Compensation Award and his Target Performance Award by a
fraction, the numerator of which is the difference between the Company's actual
performance level and the Performance Objective and the denominator of which is
the difference between the Maximum Performance Level and the Performance
Objective.
(v) MAXIMUM AMOUNT.
If at the end of the Award Period the company's actual performance level
equals or exceeds the Maximum Performance Level, the Benchmark Participant shall
receive as Incentive Compensation a percentage of his Average Annual Direct
Compensation during the Award Period which is equal to this Maximum Incentive
Compensation Award.
6.2 CALCULATION OF INCENTIVE COMPENSATION FOR OTHER
PARTICIPANTS.
Subject to the provisions of Section 6.5 of the Plan, the amount of
Incentive Compensation payable to the Other Participants for each Award Period
shall be calculated by multiplying the amount of Incentive compensation paid to
the Benchmark Participant for such Award Period by a fraction, the numerator of
which is the number of Participation Units awarded to each such Other
Participant for such Award Period and the denominator of which is the number of
Participation Units awarded to the Benchmark Participant for such Award Period.
In the event of the death, Disability, Retirement or termination of employment
of the Benchmark Participant during an Award Period, the Incentive Compensation
awarded to the Other Participants will be determined by applying the fraction
described in the preceding paragraph to the Incentive Compensation the Benchmark
Participant would have received for such Award Period had his Direct
Compensation continued throughout such Award Period at the gross salary and
bonus payment levels in effect immediately prior to his death, Disability,
Retirement or termination of employment.
6.3 AMOUNTS PAYABLE TO DECEASED DISABLED AND RETIRED
PARTICIPANTS.
If a Participant's employment by the Company is terminated during an Award
Period by reason of death, Disability or Retirement, the Participant's Incentive
Compensation, if any, for the Award Period shall be determined pursuant to the
provisions of Sections 6.1 and 6.2 of this Plan,
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<PAGE>
whichever is applicable, as if such Participant had remained a Participant at
the end of the Award Period; provided, however, the following shall apply:
(i) for the purpose of determining the Company's Actual Performance Level,
the Award Period shall commence as of the date originally established but shall
end as of the end of the Fiscal Year during which the Participant's death,
Disability or Retirement occurred. The achievement of the various Incentive
Compensation goals shall therefore be determined on the basis of the Company's
performance over a shorter period of time if the Participant's death, Disability
or Retirement occurs prior to the commencement of the second Fiscal Year of an
Award Period.
(ii) the amount of Incentive Compensation, if any, computed under Section
6.1 or Section 6.2 of this Plan, whichever is applicable, shall be reduced by
multiplying such amount by a fraction, the numerator of which is the number of
full fiscal months during which the Participant was an employee of the Company
during the Award Period and the denominator of which is the number of full
fiscal months contained in the full two years of the Award Period during which
the Participant's death, Disability or Retirement occurs.
(iii) the limitation set forth in Section 6.5 shall not apply to
amounts payable under this section 6.3 and, with respect to the amounts payable
to Other Participants during such Award Period, amounts payable under this
Section 6.3 shall not be included in computing the limitation under Section 6.5.
6.4 NO INCENTIVE COMPENSATION FOR TERMINATED EMPLOYEES.
No Incentive Compensation shall be payable for an Award Period if the
Participant's employment by the Company is terminated during the Award Period
for reasons other than death, Disability or Retirement, provided that a
Participant who is granted a Company-approved leave of absence shall not be
deemed to have terminated employment by virtue of such leave of absence.
6.5 LIMITATION OF AGGREGATE AMOUNT OF INCENTIVE COMPENSATION
PAYABLE IN ANY ONE FISCAL YEAR.
Except as is provided in Paragraph (iii) of Section 6.3 of this Plan,
notwithstanding any other provision of this Plan to the contrary, if the total
Incentive compensation payable to all Participants for an Award Period (assuming
the payment of all amounts under Section 7.1 of this Plan) exceeds three percent
(3%) of the Company's aggregate Cash-Flow Return (as defined in Section 2.3) for
that Award Period, the Incentive Compensation payable to each Participant for
that Award Period shall be reduced in the proportion that each such Participant
shares in the total Incentive compensation for the Award Period to such an
extent that the total Incentive Compensation payable for the Award Period does
not exceed three percent (3% ) of the Company's aggregate Cash-Flow Return for
the Award Period.
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7. PAYMENT.
7.1 FORM.
At the end of each Award Period, the Committee shall determine in
accordance with Section 6 of this Plan the Incentive Compensation, if any, for
the Participant on the basis of the extent to which the performance goals were
achieved by the Company. Incentive Compensation awarded under the terms of this
Plan shall be paid in cash as a lump sum as soon as practicable after audited
financial statements are available for the Award Period to which the Incentive
Compensation pertains, unless deferred by the Participant in accordance with any
applicable program for deferring incentive compensation under which such
Participant has made a valid election to defer all or part of such award. In
such latter case, the amount deferred by such Participant shall be handled in
accordance with the applicable provisions of such deferred compensation program.
7.2 FORFEITURE OF CERTAIN BENEFITS.
In the event that a Participant who has amounts payable as Incentive
compensation under the terms of this Plan which have not been paid: (i) has
engaged in felonious or fraudulent activity resulting in harm to the Company, or
(ii) has divulged any of the Company's confidential information or trade
information or trade secrets to a competitor, the Committee may terminate all or
such portion of the amount payable as incentive compensation to the Participant
as it deems appropriate.
7.3 DEATH PRIOR TO FULL PAYMENT.
In the event that a Participant has amounts payable as Incentive
Compensation under this Plan and dies prior to the payment of such amounts, the
amounts payable at the time of the Participant's death shall be paid to the
Participant's beneficiary or, if no beneficiary was designated by the
Participant, to the Participant's estate.
8. WAIVER OF PARTICIPATION.
8.1 PARTICIPATION VOLUNTARY.
Participation in this Plan is voluntary, and an employee otherwise eligible
to become a Participant or maintain his status as a Participant may waive
participation by filing a declaration to this effect with the Committee.
8.2 EFFECT OF WAIVER.
In the event that a Participant waives participation in this Plan during an
Award Period, no Incentive Compensation may be paid to such Participant for the
Award Period during which the waiver of participation is effective.
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9. BENEFICIARY DESIGNATION.
9.l DESIGNATION.
A Participant may designate a beneficiary or beneficiaries who, upon his
death, are to receive the distributions that otherwise would have been paid to
him. All designations shall be in writing in form accepted or approved by the
Committee and shall be effective only if and when delivered to the Committee
during the lifetime of the Participant. If a Participant designates a
beneficiary without providing in the designation that the beneficiary must be
living at the time of such distribution, the designation shall vest in the
beneficiary all of the distributions whether payable before or after the
beneficiary's death, and any distributions remaining upon the beneficiary's
death shall be made to the beneficiary's estate.
9.2 CHANGES.
A Participant may from time to time during his lifetime change his
beneficiary or beneficiaries by a written instrument in form accepted or
approved by the Committee and delivered to the Company. In the event a
Participant does not designate a beneficiary or beneficiaries as aforesaid, or
if for any reason such designation does not become effective, amounts that
otherwise would have been paid to such Participant shall be paid to his estate.
10. DISSOLUTION OR MERGER.
10.1 DISSOLUTION OR CHANGE OF CONTROL OF FLEETWOOD ENTERPRISES,
INC.
In the event that the Company is liquidated or dissolved, or in the event
of the occurrence of a Change of Control, this Plan and every outstanding Award
Period shall be terminated as of the date of such event. Incentive
Compensation, if any, for the outstanding Award Period so terminated shall be
computed by assuming that all Participants retired as of the date of such event
and were entitled to the benefit, if any, computed under Section 6.3 of this
Plan; provided, however, for the purposes of subparagraph (i) of Section 6.3,
the Fiscal Year during which the assumed retirement occurs shall end on the date
of such event. In respect of amounts deferred hereunder and any amounts which
may then or thereafter become payable to a Participant or to a Participant's
beneficiary or successors under Section 7 hereof plus any Award made for any
outstanding Award Periods terminated under this Section 10.1, the Company shall
pay such amounts promptly in cash, without regard to any elections with respect
to deferrals or installments which the Participant may have in effect. Payment
shall be made upon the earlier to occur of (i) a liquidation, dissolution or
Change of Control with respect to the Company or (ii) a determination made by
the Board of Directors of the Company in the exercise of its discretion that
such liquidation, dissolution or Change of Control is imminent. A Participant
shall be indemnified and held harmless for any costs incurred, including without
limitation attorney's fees, in the course of and in order to receive payments of
amounts to which he is entitled under this Section 10.1 by reason of Change of
Control.
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10.2 RECAPITALIZATION.
Notwithstanding the provisions of Section 10.1, if the Company is
recapitalized or is merged in a transaction which does not result in a
substantial change in the Company's operations, business, or in the ownership of
the outstanding equity securities of Fleetwood Enterprises, Inc.; the Board at
its sole option may determine that the provisions of Section 10.1 shall not
apply.
11. CLAIM TO INCENTIVE COMPENSATION AND EMPLOYEE RIGHTS.
No employee or other person shall have any claim or right to become a
Participant under this Plan. Neither this Plan nor any action taken hereunder
shall be construed as giving any employee any right to be retained in the employ
of the Company, the employment contract between the Company or a Subsidiary, in
the event the employer is a Subsidiary, being the determination document with
respect to the employment relationship.
12. UNSECURED OBLIGATION.
Participants under this Plan shall not have any interest in any fund or
specific assets of the Company by reason of this Plan. No trust fund shall be
created in connection with the Plan, and there shall be no funding of amounts
which may become or are payable to any Participant.
13. NONTRANSFERABILITY.
A person's rights and interests under this Plan, including amounts payable,
may not be assigned, pledged, transferred or otherwise hypothecated except, in
the event of an employee's death, to his designated beneficiary as provided in
this Plan, or in the absence of such designation, to his heirs, devisees or
legatees by will or the laws of descent and distribution. If a Participant or
his successor shall attempt to assign, transfer or dispose of any right under
this Plan, or should such right be subjected to attachment, execution,
garnishment, sequestration or other legal, equitable or other process, it shall
ipso facto pass to such one or more as may be appointed by the Committee from
among the beneficiaries, if any, theretofore designated by such Participant and
the spouse and blood relatives of the Participant. However, the Committee in
its sole discretion may reappoint the Participant to receive any payment
thereafter becoming due either in whole or in part. Any appointment made by the
Committee hereunder may be revoked by the Committee at any time, and a further
appointment made by it.
14. TAX WITHHOLDING.
The Company shall have the right to deduct any Federal, state, local or
foreign taxes or other charges required by law to be withheld from payments made
to participants under the Plan.
15. RELATIONSHIP TO OTHER BENEFITS.
Payments under the Plan shall be considered as compensation for the
purposes of determining benefits under the Company's retirement or supplemental
benefit plans, but shall not be taken into account in determining benefits under
other benefit plans of the Company.
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16. AMENDMENT AND TERMINATION.
Unless this Plan shall theretofore have been terminated as herein provided,
no Award Periods may begin after May 1, 2004. The Board may terminate this Plan
or may modify or amend this Plan in such respects as it shall deem advisable.
No termination or amendment of the Plan under this Section 16 shall reduce the
amount of the benefit which a person who is a Participant at the time such
termination or amendment occurs has either already become entitled to under
Section 6 or may become entitled to as a result of Award Periods which have
commenced but have not theretofore been concluded, unless such Participant
consents to such reduction; provided, however, nothing herein shall prevent the
Company, at its sole option, upon amendment or termination of the Plan, from
prepaying all or any portion of Incentive Compensation amounts which are not yet
payable or which have been deferred under Section 7 of this Plan.
17. INCOMPETENCY.
Every person receiving or claiming benefits under this Plan shall be
conclusively presumed to be mentally competent until the date on which the
Committee receives a written notice, in a form and manner acceptable to the
Committee, that such person is incompetent and that a guardian, conservator or
other person legally vested with the care of his estate has been appointed;
provided, however, that if the Committee shall determine in its sole discretion
that any person to whom a benefit is payable under the Plan is unable to care
for his affairs because of incompetency, any payment due (unless a prior claim
therefor shall have been made by a duly appointed legal representative), may be
paid to the spouse, a child, a parent, a brother or sister, of said person, or
to any person or institution deemed by the Committee to have incurred expenses
for such person otherwise entitled to payment. In the event a guardian or
conservator of the estate of any person receiving or claiming benefits under the
Plan shall be appointed by a court of competent jurisdiction, payments shall be
made to such guardian or conservator provided that proper proof of appointment
and continuing qualification is furnished in a form and manner acceptable to the
Committee. Any payment made in accordance with this Section shall be a complete
discharge of any liability therefor under the Plan.
18. EFFECTIVE DATE OF AMENDED AND RESTATED PLAN.
The Amended and Restated Plan is effective as of April 24, 1994, subject to
shareholder approval; for Award Periods beginning prior to such date, the Plan
as existing prior to the effect of the amendments contained herein shall
continue in effect.
19. NOTICES.
Any elections by a Participant and the designation of any beneficiary under
Section 9 shall be made on forms supplied or approved by the Committee. Any
other notice or other communication required or permitted by this Plan to be
given or accepted by a Participant, a Participant's successors or beneficiaries,
the Committee, the Company or the Board, must be in writing and may be given or
may be served by depositing the same in the United States mail, addressed to the
party to be notified, postage prepaid and registered or certified with return
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receipt requested or by delivering the same in person to such party. All
notices to a participant or to his or her successors or beneficiaries shall be
delivered to the last known address or addresses on file with the Company.
Notices to the Committee or to the Company and elections and beneficiary
designations shall be delivered to the following person and address:
Fleetwood Enterprises, Inc.
3125 Myers Street
Riverside, California 92503-5527
Attention: Treasurer
or to such other address and person as the Committee shall specify.
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FLEETWOOD ENTERPRISES, INC.
BENEFIT RESTORATION PLAN
(AMENDED AND RESTATED EFFECTIVE APRIL 1, 1995)
TABLE OF CONTENTS
<PAGE>
Page
----
1. Purpose. . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . 1
2.1 Board . . . . . . . . . . . . . . . . . . . . . . . 1
2.2 Committee . . . . . . . . . . . . . . . . . . . . . 1
2.3 Company. . . . . . . . . . . . . . . . . . . . . . . 1
2.4 Participant. . . . . . . . . . . . . . . . . . . . . 1
2.5 Plan Period . . . . . . . . . . . . . . . . . . . . 2
2.6 Base Rate . . . . . . . . . . . . . . . . . . . . . 2
2.7 Restored Benefits. . . . . . . . . . . . . . . . . . 2
2.8 Restricted Contributions . . . . . . . . . . . . . . 2
2.9 Retirement Plan . . . . . . . . . . . . . . . . . . 2
2.10 Supplemental Plan . . . . . . . . . . . . . . . . . 2
2.11 Change of Control . . . . . . . . . . . . . . . . . 2
3. Plan Administration . . . . . . . . . . . . . . . . . . . . . 3
3.1 The Committee . . . . . . . . . . . . . . . . . . . 3
3.2 Powers of the Committee. . . . . . . . . . . . . . . 3
3.3 Organization and Operation of Committee . . . . . . 4
3.4 Reliance on Reports. . . . . . . . . . . . . . . . . 4
3.5 Records and Reports . . . . . . . . . . . . . . . . 4
3.6 Payment of Expense . . . . . . . . . . . . . . . . . 4
3.7 Indemnification. . . . . . . . . . . . . . . . . . . 5
4. Eligibility and Participation. . . . . . . . . . . . . . . . . 5
5. Determination of Restored Benefits . . . . . . . . . . . . . . 5
5.1 Provisional Determination for Each Plan Period . . . 5
5.2 Determination of Amount of Restored Benefits . . . . 5
5.3 Computation of Interest. . . . . . . . . . . . . . . 6
5.4 Vesting. . . . . . . . . . . . . . . . . . . . . . . 6
6. Unsecured Obligation . . . . . . . . . . . . . . . . . . . . . 6
7. Payment . . . . . . . . . . . . . . . . . . . . . . . . . . 7
8. Beneficiary Designation. . . . . . . . . . . . . . . . . . . . 8
9. Dissolution and Other Events . . . . . . . . . . . . . . . . . 8
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10. Claim to Benefits and Employee Rights. . . . . . . . . . . . . 9
11. Nontransferability . . . . . . . . . . . . . . . . . . . . . . 10
12. Court Orders . . . . . . . . . . . . . . . . . . . . . . . . . 10
13. Relationship to Other Benefits . . . . . . . . . . . . . . . . 10
14. Amendment and Termination. . . . . . . . . . . . . . . . . . . 10
14.1 Plan Restatement . . . . . . . . . . . . . . . . . . 10
14.2 Future Amendment . . . . . . . . . . . . . . . . . . 10
15. Amendment of Retirement Plan . . . . . . . . . . . . . . . . . 11
16. De Minimus Payments. . . . . . . . . . . . . . . . . . . . . . 11
17. Incompetency . . . . . . . . . . . . . . . . . . . . . . . . . 11
18. Notice. . . . . . . . . . . . . . . . . . . . . . . . . . . 11
19. Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . 12
20. Pronouns. . . . . . . . . . . . . . . . . . . . . . . . . . . 12
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FLEETWOOD ENTERPRISES, INC.
BENEFIT RESTORATION PLAN
(Amended and Restated Effective April 1, 1995)
1. PURPOSE.
The purpose of the Benefit Restoration Plan (the "Plan") is to provide
benefits to certain highly compensated or management employees of Fleetwood
Enterprises, Inc. in addition to the benefits provided under the Fleetwood
Enterprises, Inc. Retirement Plan (the "Retirement Plan") and, if applicable,
the Fleetwood Enterprises, Inc. Supplemental Benefit Plan (the "Supplemental
Plan"). To this end, the Plan provides on an unfunded basis benefits that would
otherwise be provided under the Retirement Plan but for the limitations of
Sections 401(a)(4) and 410(b) of the Internal Revenue Code of 1986, as amended
(the "Code"). This Plan is intended to constitute an unfunded plan providing
benefits to a select group of management or highly compensated employees within
the meaning of Section 201(2) of the Employee Retirement Income Security Act of
1974, as amended.
2. DEFINITIONS.
The following terms shall have the respective meanings set forth
below:
2.1 BOARD.
"Board" shall mean the Board of Directors of the Company.
2.2 COMMITTEE.
"Committee" shall mean a committee appointed by the President of the
Company. The Committee shall consist of not less than two members. A member of
the Committee may also be a participant under the Plan, but any Committee member
who is such a member shall not participate in any rulings by the Committee which
relate to his own distributions or elections or which are otherwise particularly
applicable to his own participation.
2.3 COMPANY.
"Company" shall mean Fleetwood Enterprises, Inc., a Delaware
corporation.
2.4 PARTICIPANT.
"Participant" shall mean a person described in Section 4.
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2.5 PLAN PERIOD.
"Plan Period" shall mean the applicable quarters of the calendar year,
ending respectively on March 31, June 30, September 30, and December 31.
2.6 BASE RATE.
"Base Rate" shall mean the base rate of interest charged by the Bank
of America, NT&SA (or base or prime rate of such other major bank as may be
selected by the Committee), or, after March 31, 1995, any other rate selected by
the Committee in its sole and absolute discretion. Notwithstanding the
foregoing, upon and after a Change of Control, the "Base Rate" shall be the
greater of the base or prime rate charged from time to time by Bank of America,
NT&SA or the rate in use immediately before the Change of Control. The "Base
Rate" shall be adjusted quarterly as of the last day of each Plan Period based
on the Base Rate in effect on the last business day of such period.
2.7 RESTORED BENEFITS.
"Restored Benefits" shall mean the amounts credited to a Participant's
account pursuant to Section 5.2 of this Plan.
2.8 RESTRICTED CONTRIBUTIONS.
"Restricted Contributions" shall mean the Company contributions which
would otherwise have been allocated to the account of the Participant in the
Retirement Plan for the Plan Year but for the limitations imposed by Code
Sections 401(a)(4) and 410(b) but does not include contributions considered
"Restricted Contributions" for purposes of the Supplemental Plan.
2.9 RETIREMENT PLAN.
"Retirement Plan" shall mean the Fleetwood Enterprises, Inc.
Retirement Plan as now in effect or hereafter amended.
2.10 SUPPLEMENTAL PLAN.
"Supplemental Plan" shall mean the Fleetwood Enterprises, Inc.
Supplemental Benefit Plan as now in effect or hereafter amended.
2.11 CHANGE OF CONTROL.
"Change in Control" shall mean the first to occur of any of the
following events:
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(a) Any "person" (as that term is used in Section 13 and
14(d)(2) of the Securities Exchange Act of 1934 ("Exchange Act")but not
including for this purpose any person that, as of January 1, 1995, owned 15
percent or more of the outstanding common stock of the Company or a person who
acquires shares of such common stock from such person by will or by the laws of
descent or distribution) becomes the beneficial owner (as that term is used in
Section 13(d) of the Exchange Act), directly or indirectly, of 25 percent or
more of the Company's capital stock entitled to vote in the election of
directors;
(b) During any period of not more than two consecutive years,
not including any period prior to April 1, 1995, individuals who at the
beginning of such period constitute the Board, and any new director (other than
a director designated by a person who has entered into an agreement with the
Company to effect a transaction described in clause (a), (c) or (d) of this
Section 2.11) whose election by the Board or nomination for election by the
Company's stockholders was approved by a vote of at least three-fourths (3/4ths)
of the directors then still in office who either were directors at the beginning
of the period or whose election or nomination for election was previously so
approved, cease for any reason to constitute at least a majority thereof;
(c) The shareholders of the Company approve any consolidation or
merger of the Company other than a consolidation or merger of the Company in
which the holders of the common stock of the Company immediately prior to the
consolidation or merger hold more than 50% of the common stock of the surviving
corporation immediately after the consolidation or merger; or
(d) Substantially all of the assets of the Company are sold or
otherwise transferred to parties that are not within a "controlled group of
corporations" (as defined in Code Section 1563) in which the Company is a
member.
3. PLAN ADMINISTRATION.
3.1 THE COMMITTEE.
The Committee shall administer the Plan in accordance with its terms.
3.2 POWERS OF THE COMMITTEE.
The Committee shall have full power, authority and discretion to adopt
and revise such rules and procedures as it shall deem necessary for the
administration of the Plan, including, but not limited to, determinations of
eligibility
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and entitlement to benefits hereunder. The decision of the Committee with
respect to any question arising under this Plan shall be final, conclusive and
binding on all persons.
3.3 ORGANIZATION AND OPERATION OF COMMITTEE.
The Committee shall act by a majority of its members at the time in
office, and such action may be taken either by a vote at a meeting or in writing
without a meeting. The Committee may authorize any one or more of its members
to execute any document or documents on behalf of the Committee. The Committee
may appoint such accountants, counsel, specialists, and other persons as it
deems necessary or desirable in connection with the administration of this Plan.
3.4 RELIANCE ON REPORTS.
Each member of the Committee and each member of the Board shall be
fully justified in relying or acting in good faith upon any opinion or report
made by the independent public accountants of the Company and upon any other
opinions, reports or information furnished in connection with the Plan by any
accountant, counsel, or other specialist (including financial officers of the
Company, whether or not such persons may be Participants under the Plan). In no
event shall any person who is or shall have been a member of the Committee or of
the Board be liable for any determination made or other action taken or any
omission to act in reliance upon any such opinion, report or information or for
any action, including the furnishing of information, taken or failure to act, if
in good faith.
3.5 RECORDS AND REPORTS.
The Committee shall keep a record of all its proceedings and acts, and
shall keep all such books of accounts, records, and other data as may be
necessary for proper administration of the Plan.
3.6 PAYMENT OF EXPENSE.
Unless otherwise determined by the Board, the members of the Committee
shall serve without compensation for their services as such, but all expenses of
the Committee shall be paid by the Company. Such expenses shall include any
expenses incident to the functioning of the Committee, including, but not
limited to, fees of accountants, counsel, and other specialists, and other costs
of administering the Plan.
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3.7 INDEMNIFICATION.
Each person who is or shall have been a member of the Committee or of
the Board shall be indemnified and held harmless by the Company against and from
any loss, cost, liability, or expense that may be imposed upon or reasonably
incurred by him in connection with or resulting from any claim, action, suit, or
proceeding to which he may be a party or in which he may be involved by reason
of any action taken or failure to act under the Plan and against and from any
and all amounts paid by him in settlement thereof, with the approval of the
Company, or paid by him in satisfaction of judgment in any such action, suit, or
proceeding against him, provided he shall give the Company an opportunity, at
its own expense, to handle and defend it on his own behalf. The foregoing
rights of indemnification shall not be exclusive of any other rights of
indemnification to which such persons may be entitled under the certificate of
incorporation or bylaws of the Company, as a matter of law, or otherwise, or any
power that the Company may have to indemnify them or hold them harmless.
4. ELIGIBILITY AND PARTICIPATION.
Those persons who are Participants in the Retirement Plan and have
Restricted Contributions for a Plan Period shall become Participants for the
Plan Period.
5. DETERMINATION OF RESTORED BENEFITS.
5.1 PROVISIONAL DETERMINATION FOR EACH PLAN PERIOD.
A separate determination shall be made with respect to each Plan
Period as to the amount of Restored Benefits to be initially and provisionally
credited to the account of each Participant for the Plan Period.
Notwithstanding the foregoing, any such determinations (and allocations as
provided under Section 5.2 below) made for Plan Periods prior to the end of the
calendar year which includes such Periods shall be contingent and subject to
reduction or elimination depending on a final determination of the Participant's
Restricted Contributions for such fiscal year to be made not later than the end
of such year.
5.2 DETERMINATION OF AMOUNT OF RESTORED BENEFITS.
For each Plan Period, the account of each Participant shall be
initially and provisionally credited with amounts equal to:
(i) the amount of Company contributions which would have been
allocated to the Participant's account
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in the Retirement Plan for the Plan Period (taking into account applicable
limits under Code Sections 401(a)(17) and 415 and amounts that can be taken into
account as "Earnings" under the Retirement Plan) if the Participant received an
allocation equal, when expressed as a percentage of compensation, to the
allocation made under such plan to all participants thereunder who are not
participants in this Plan less the allocation actually made to the Retirement
Plan; plus
(ii) the interest, if any, computed under Section 5.3.
Notwithstanding the foregoing, amounts so credited (other than interest) for
Plan Periods prior to the end of the fiscal year which includes such Periods
shall be contingent and subject to reduction or elimination depending on a final
determination of the Participant's Restricted Contributions for such fiscal year
to be made not later than the end of such fiscal year. Accordingly, the final
credit for a fiscal year shall be the amounts provisionally credited under this
Section 5.2 less the amount by which Restricted Contributions are reduced
pursuant to the year end determination previously described and actually made to
the Retirement Plan. Amounts credited as interest shall always remain credited
under the Plan and shall not be subject to reduction or elimination.
5.3 COMPUTATION OF INTEREST.
Amounts credited under this Plan shall bear interest at a rate per
annum equal to the lesser of (i) the Base Rate computed pursuant to Section 2.6,
or (ii) the maximum rate permitted under California law. Interest shall be
credited and compounded quarterly as of the end of each calendar quarter.
Participants' accounts shall be accurately and timely credited with interest
earned hereunder.
5.4 VESTING.
A Participant shall be fully vested in amounts finally (as opposed to
provisionally) credited to his account under this Plan.
6. UNSECURED OBLIGATION.
Participants under this Plan shall not have any interest in any fund
or specific assets of the Company by reason of this Plan. No trust fund shall
be created in connection with the Plan, and there shall be no funding of amounts
which may become or are payable to any Participant; provided, that benefits
under the Plan may be funded in whole or in part through the Fleetwood
Enterprises Master
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Deferred Compensation Trust, a grantor trust described in Internal Revenue Code
Section 671; provided further, that upon a Change of Control, the Company must
immediately contribute an amount, if any, to such trust sufficient so that all
benefits earned and credited hereunder through such Change shall be fully funded
through such trust. A Participant's rights under such trust shall be governed
solely by the instrument or instruments governing such trust.
7. PAYMENT.
(a) The Restored Benefits credited to a Participant's account under
this Plan shall, subject to the provisions of Sections 7(b), 5.4 and 16, be paid
in accordance with the written election of the terminating or retiring
Participant, upon his or her termination of employment with the Company, on a
form authorized for such purpose by the Committee, which election shall be made
immediately prior to the inception of the Participant's participation in this
Plan. In such election, the Participant shall designate either one or a
combination of the following payment options:
(i) A lump sum upon employment termination with the Company, or
in the first week of January of a designated year (1st, 2nd, 3rd, etc.)
following termination.
(ii) Consecutive annual installments of not less than $10,000
each, such installments to commence in the first week of January of a designated
year (lst, 2nd, 3rd, etc.) following employment termination with the Company and
payable over a period not to exceed 20 years from the date of employment
termination.
(iii) A lump sum amount of less than the Participant's entire
benefit, in accordance with (i), above, followed by installment payments of the
balance in accordance with (ii), above.
(b) The elections and distribution provisions described in
paragraph (a) above shall be subject to the following:
(i) A Participant may modify any election at any time that is
not less than two years before the prior election would otherwise take effect.
(ii) Notwithstanding clause (i), above, an election may be
modified at any time if (A) the Participant and the Committee both agree to such
modification and such modification is on account of the Participant's
involuntary termination of employment with the Company or the Participant is
suffering a severe financial hardship
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<PAGE>
attributable to an unforseeable emergency that cannot be relieved by any other
source reasonably available to the Participant, or (B) the Participant elects at
any time to have his or her full balance distributed but reduced by 10 percent
and the Participant is suspended from future participation in the Plan until the
end of the eighth full calendar quarter following the distribution.
(iii) While distributions must ordinarily commence upon or after
employment termination with the Company, a Participant on his or her election or
election modification may specify that payments may commence while the person is
still employed with the Company commencing on or after the date the sum of such
person's age and total service with the Company equals 85. Notwithstanding the
foregoing, the Committee may offer payment to any Participant still employed
with the Company if the sum of such individual's age and total Company service
equals 70 and the Committee determines that there are mitigating circumstances
surrounding such individual that warrant prompt payment.
(c) If no separate election is made hereunder, payment to the
Participant shall be made in a lump sum in January of the year following
termination of employment with the Company.
(d) Upon the death of a Participant, all remaining funds will be paid
to the Participant's designated beneficiary or beneficiaries in the form
selected by the Participant unless the beneficiary and the Committee agree to
payment in an immediate lump sum.
8. BENEFICIARY DESIGNATION.
A Participant may designate a beneficiary or beneficiaries by means of
a written election on a form authorized for such purpose by the Committee. A
Participant may change such election at any time on a form authorized for such
purpose by the Committee. If a Participant does not make an election in
accordance with this Section 8 and has previously designated a beneficiary or
beneficiaries under the Participant's Retirement Plan, then that designation
shall be effective for purposes of this Plan.
9. DISSOLUTION AND OTHER EVENTS.
(a) In the event the Company is liquidated or dissolved, then with
respect to any amounts which may then or thereafter become payable to a
Participant or a Participant's beneficiary or successors under Section 7 of this
Plan, the Company shall pay such amount promptly in cash, without regard to any
elections with respect to deferrals or installments which the Participant may
have in
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<PAGE>
effect. Payment shall be made upon the earlier to occur of (i) a liquidation or
dissolution with respect to the Company or (ii) a determination made by the
Board of Directors of the Company in the exercise of its discretion that such
liquidation or dissolution is imminent.
(b) The occurrence of a Change of Control shall not affect the
payment of amounts hereunder and all benefits hereunder shall remain deferred
and shall be paid in accordance with Participant elections as specified in
Section 7 hereof. A Participant shall, however, be indemnified and held
harmless for any costs incurred, including without limitation attorneys' fees,
in the course of and in order to receive or retain payment of amounts to which
he or she becomes entitled after a Change in Control.
10. CLAIM TO BENEFITS AND EMPLOYEE RIGHTS.
No employee or other person shall have any claim or right to become a
Participant under this Plan except as provided herein. Neither this Plan nor
any action taken hereunder shall be construed as giving any employee any right
to be retained in the employ of the Company. Benefits shall be paid in
accordance with the provisions of this instrument. If and to the extent
benefits are not automatically paid hereunder, the Participant, or a Beneficiary
or any other person claiming through the Participant, shall make a written
request for benefits under this Plan. This written claim shall be mailed or
delivered to the Committee. Such claim shall be reviewed by the Committee or
its delegate.
(a) If the claim is denied, in whole or in part, the Committee or its
delegate shall provide a written notice within ninety (90) days setting forth
the specific reasons for denial, and any additional material or information
necessary to perfect the claim, and an explanation of why such material or
information is necessary, and appropriate information and explanation of the
steps to be taken if a review of the denial is desired.
(b) If the claim is denied and a review by the full Committee is
desired, the Participant (or Beneficiary) shall notify the Committee or its
delegate in writing within sixty (60) days of the denial (a claim shall be
deemed denied if the Committee does not take any action within the aforesaid
ninety (90) day period). In requesting a review, the Participant or his
Beneficiary may request a review of the Plan document or other pertinent
documents with regard to the Plan, may submit any written issues and comments,
may request an extension of time for such written submission of issues and
comments, and may request that a hearing be held, but the decision to hold a
hearing shall be within the sole discretion of the Committee.
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(c) The decision on the review of the denied claim shall be rendered
by the Committee within sixty (60) days after the receipt of the request for
review (if no hearing is held) or within sixty (60) days after the hearing if
one is held. The decision shall be written and shall state the specific reasons
for the decision, including reference to specific provisions of the Plan on
which the decision is based.
11. NONTRANSFERABILITY.
Except as may be permitted by the Retirement Plan or in order to pay
death benefits as provided hereunder, a person's rights and interest under this
Plan, including amounts payable, may not be assigned, pledged, transferred or
otherwise hypothecated.
12. COURT ORDERS.
Notwithstanding any other provision hereof, the Committee may respond
as it deems appropriate in its sole and absolute discretion to any court ordered
payment (including without limitation those pertaining to child support or
alimony). Appropriate responses may include without limitation affording the
non-Participant spouse the same rights enjoyed by the Participant spouse to
modify a previously elected or determined payment format, subject to the
provisions hereof.
13. RELATIONSHIP TO OTHER BENEFITS.
No payment under the Plan shall be taken into account for determining
any benefits under any pension, retirement, profit sharing, group insurance or
other benefit plan of the Company.
14. AMENDMENT AND TERMINATION.
14.1 PLAN RESTATEMENT.
This Plan has been restated as of April 1, 1995, pursuant to action
taken by the Board for the purpose of amending and restating the Plan. This
Plan as so restated shall apply to all amounts earned hereunder including those
earned prior to April 1, 1995.
14.2 FUTURE AMENDMENT.
The Board may terminate this Plan or may modify or amend this Plan in
such respects as it shall deem advisable. No termination or amendment of the
Plan, however, shall reduce the amount of the benefit to which a person who is a
Participant at the time such termination or amendment occurs has already become
entitled.
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15. AMENDMENT OF RETIREMENT PLAN.
In the event that any of the provisions of the Retirement Plan are
amended, said amendment to the extent not in direct conflict with express
provisions of this Plan shall be equally applicable to the payment of Restored
Benefits under this Plan.
16. DE MINIMUS PAYMENTS.
Notwithstanding any other provision of this Plan or the Retirement
Plan to the contrary, in the event that amounts become payable to a Participant
or to his or her successor under the terms of this Plan and the present value of
such amounts is less than $10,000.00, the Committee may, at its sole discretion,
direct the present value of such amounts to be paid in a lump sum cash payment.
17. INCOMPETENCY.
Every person receiving or claiming a benefit under this Plan shall be
conclusively presumed to be mentally competent until the date on which the
Committee receives a written notice, in form and manner acceptable to the
Committee that such person is incompetent and that a guardian, conservator or
other person legally vested with the care of his or her estate has been
appointed; provided, however, that if the Committee shall determine in its sole
discretion that any person to whom a benefit is payable under this Plan is
unable to care for his or her affairs because of incompetency, any payments due
(unless a prior claim therefor shall have been made by a duly appointed legal
representative) may be paid to the spouse, a child, a parent, a brother or
sister of such person, or to any person or institution deemed by the Committee
to have incurred expenses for such person otherwise entitled to payment. In the
event a guardian or conservator of the estate of any person receiving or
claiming benefits under this Plan shall be appointed by a court of competent
jurisdiction, payment shall be made to such guardian or conservator, provided
that proper proof of appointment and continuing qualification is furnished in a
form and manner acceptable to the Committee. Any payment made in accordance
with this section shall be a complete discharge of any liability therefor under
this Plan.
18. NOTICE.
All elections by a Participant and the designation of any beneficiary
or beneficiaries shall be made on forms supplied or approved by the Committee.
Any other notice or other communication required or permitted by this Plan to be
given or accepted by a Participant, a Participant's successors or beneficiaries,
the Committee or the Company
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must be in writing and may be given or may be served by depositing the same in
the United States mail, addressed to the party to be notified, postage prepaid
and registered or certified with return receipt requested or by delivering the
same in person to such party. All notices to a Participant or to his or her
successors or beneficiaries shall be delivered to the last known address or
addresses on file with the Company. Notices to the Committee or to the Company
and beneficiary designations shall be delivered to the following person and
address:
Fleetwood Enterprises, Inc.
3125 Myers Street
Riverside, California 92523
Attention: Treasurer
or to such other address and person as the Committee, through two duly elected
officers, shall specify.
19. GOVERNING LAW.
This Plan shall be governed by and construed in accordance with the
laws of the State of California.
20. PRONOUNS.
The masculine pronoun shall include the feminine and the singular
pronoun shall include the plural and VICE VERSA, unless the context clearly
indicates otherwise.
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AMENDMENT NO. 2
FLEETWOOD ENTERPRISES, INC.
BENEFIT RESTORATION PLAN
(AMENDED AND RESTATED EFFECTIVE APRIL 1, 1995)
The Fleetwood Enterprises, Inc. Benefit Restoration Plan (Amended and Restated
effective April 1, 1995) is hereby amended, effective January 1, 1996, as
follow:
Section 7(b)(i) modify any election at any time that is not less than two
years before the prior election would otherwise take effect; provided, that
any modified election itself may not take effect until a date that is at
least two years after it is made; provided, further, that, notwithstanding
any other provision hereof to the contrary, a Participant may modify any
election on or before March 31, 1996, if made to extend a previously
elected payment form (which theretofore was for a period of less than ten
years) to an installment form of at least ten but not more than twenty
years in response to HR 394 (pertaining to pension source taxation) and
such modification may be made without regard to whether it is made two
years before the prior election would otherwise take effect or itself takes
effect earlier than 2 years after it is made.
<PAGE>
FLEETWOOD ENTERPRISES, INC.
AMENDED AND RESTATED
1992 STOCK-BASED INCENTIVE COMPENSATION PLAN
(Including All Amendments Adopted Through April 17, 1996)
I. GENERAL PROVISIONS
1.1 PURPOSES OF THE PLAN
Fleetwood Enterprises, Inc. ("Fleetwood") has adopted this 1992 Stock-Based
Incentive Compensation Plan (the "Plan") to advance the interests of Fleetwood
and its stockholders by affording to key management and other Employees of
Fleetwood and its subsidiaries an opportunity to acquire or increase a
proprietary interest in Fleetwood or to otherwise benefit from the success of
the Company through the grant to such Employees of Incentive Awards under the
terms and conditions set forth herein. By thus encouraging such Employees to
become owners of Fleetwood's shares and by granting such Employees other
incentive compensation that is measured by the increased market value of
Fleetwood's shares or another appropriate measure of the success and
profitability of the Company, the Company seeks to attract, retain and motivate
those highly competent individuals upon whose judgment, initiative, leadership
and continued efforts the success of the Company in large measure depends.
1.2 DEFINITIONS.
As used herein the following terms shall have the meanings set forth below:
(a) "Board" means the Board of Directors of Fleetwood.
(b) "Cause" means, with respect to the discharge by the Company of any
Participant, any conduct on the part of the Participant that constitutes (i) the
willful and continued failure to substantially perform Participant's employment
duties (other than due to physical or mental illness), (ii) the willful engaging
by Participant in misconduct which is or reasonably could be expected to become
materially injurious to the Company, monetarily or otherwise, (iii) an act or
acts of dishonesty on the part of the Participant constituting a felony under
applicable law, or (iv) a willful and material breach of any employment
agreement, if any, between Participant and the Company.
(c) "Change in Control" means the following and shall be deemed to occur
if any of the following events occur:
(i) Any "person," as such term is used in Sections 13(d) and 14(d)
of the Exchange Act, is or becomes the "beneficial owner" (as defined in
Rule 13d-3 under the Exchange Act), directly or indirectly, of securities
of Fleetwood representing 25% or more of the combined voting power of
Fleetwood's then outstanding voting securities;
<PAGE>
(ii) Individuals who, as of the date hereof, constitute the Board
(the "Incumbent Board"), cease for any reason to constitute at least a
majority of the Board, provided that any person becoming a director
subsequent to the date hereof whose election, or nomination for election by
Fleetwood's stockholders, is approved by a vote of at least a majority of
the directors then comprising the Incumbent Board (other than an election
or nomination of an individual whose initial assumption of office is in
connection with an actual or threatened election contest relating to the
election of the directors of Fleetwood, as such terms are used in Rule 14a-
11 of Regulation 14A promulgated under the Exchange Act) shall, for the
purposes of this Plan, be considered as though such person were a member of
the Incumbent Board;
(iii) The stockholders of Fleetwood approve a merger or consolidated
with any other corporation, other than
(A) a merger or consolidation which would result in the voting
securities of Fleetwood outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being
converted into voting securities of another entity) more than 50% of
the combined voting power of the voting securities of Fleetwood or
such other entity outstanding immediately after such merger or
consolidation, and
(B) a merger or consolidation effected to implement a
recapitalization of the Company (or similar transaction) in which no
person acquires 50% or more of the combined voting power of
Fleetwood's then outstanding voting securities; or
(iv) The stockholders of Fleetwood approve a plan of complete
liquidation of the Company or an agreement for the sale or other
disposition by the Company of all or substantially all of the Company's
assets.
Notwithstanding the preceding provisions of this Section 1.2(d), a Change in
Control shall not be deemed to have occurred (1) if the "person" described in
the preceding provisions of this Paragraph is an underwriter or underwriting
syndicate that has acquired the ownership of 50% or more of the combined voting
power of Fleetwood's then outstanding voting securities solely in connection
with a public offering of Fleetwood's securities; (2) if the "person" described
in the preceding provisions of this Paragraph is an employee stock ownership
plan or other employee benefit plan maintained by the Company that is qualified
under the provisions of the Employee Retirement Income Security Act of 1974, as
amended; or (3) if the person described in clause (i) of the preceding
provisions of this Paragraph would not otherwise be a beneficial owner of 25% or
more of the combined voting power of Fleetwood's then outstanding voting
securities but for a reduction in the number of outstanding voting securities
resulting from a stock repurchase program or other similar plan of the Company
or from a self tender offer of the Company, which plan or tender offer commenced
on or after the date hereof, provided, however, that the term "person" shall
include such person from and after the first date upon which (A) such person,
since the date of the commencement of such plan or tender offer, shall have
acquired beneficial ownership of, in the aggregate, a number of voting
securities of the Company equal to 1% or
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more of the voting securities of the Company then outstanding and (B) such
person, together with all affiliates and associates of such person, shall
beneficially own 25% or more the voting securities of the Company then
outstanding.
(d) "Code" means the Internal Revenue Code of 1986, as amended. Where the
context so requires, a reference to a particular Code section shall also refer
to any successor provision of the Code to such section.
(e) "Committee" means the committee appointed by the Board to administer
the Plan.
(f) "Common Stock" means the common stock of Fleetwood, par value $1.00
per share.
(g) "Company" means Fleetwood and any present or future parent or
subsidiary corporations (as defined in Section 424 of the Code of 1986, as
amended) with respect to Fleetwood, any other entity designated by the Board, or
any successors to such corporations or entities.
(h) "Employee" means any regular employee of the Company.
(i) "Exchange Act" means the Securities Exchange Act of 1934, as amended.
Where the context so requires, a reference to a particular section of the
Exchange Act shall also refer to any successor provision to such section.
(j) "Fair Market Value" means the fair market value of a share of Common
Stock as determined by the Committee on the basis of such factors as it may deem
appropriate.
(k) "Fleetwood" means Fleetwood Enterprises, Inc., a Delaware corporation,
or any successor thereto.
(l) "Incentive Award" means any Stock Option, Stock Appreciation Right,
Stock Payment, Performance Award or other award granted or sold under the Plan.
(m) "Incentive Stock Option" means an incentive stock option, as defined
under Section 422 of the Code and the regulations thereunder.
(n) "Nonqualified Stock Option" means a stock option other than an
Incentive Stock Option. An Option that otherwise meets the requirements under
Code Section 422 for qualification as an incentive stock option shall
nevertheless be treated as a Nonqualified Stock Option if the Committee so
specifies in the Incentive Award pursuant to which such Option is granted.
(o) "Option or "Stock Option" means a right to purchase Common Stock and
refers to both Incentive Stock Options and Nonqualified Stock Options, subject
to an Incentive Award under this Plan and the provisions of Article III hereof.
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(p) "Participant" means any Employee selected by the Committee to receive
an Incentive Award pursuant to this Plan.
(q) "Payment Event" means the event or events giving rise to the right to
payment of a Performance Award.
(r) "Performance Award" means an award, payable in cash, Common Stock or a
combination thereof, which is the subject of an Incentive Award under this Plan
and the provisions of Article IV hereof.
(s) "Performance-Based Compensation" means performance-based compensation
as described in Section 162(m) of the Code and the regulations thereunder. If
the amount of compensation an Employee will receive under any Incentive Award is
not based solely on an increase in the value of Common Stock after the date of
grant or award, the Committee, in order to qualify an Incentive Award as
performance-based compensation under Section 162(m) of the Code and the
regulations thereunder, can condition the grant, award, vesting, or
exercisability of such an award on the attainment of a preestablished, objective
performance goal. For this purpose, a preestablished, objective performance
goal may include one or more of the following performance criteria: (i) cash
flow, (ii) earnings per share (including earnings before interest, taxes, and
amortization), (iii) return on equity, (iv) total stockholder return, (v) return
on capital, (vi) return on assets or net assets, (vii) income or net income,
(viii) operating margin, (ix) return on operating revenue, and (x) any other
similar performance criteria contemplated by the regulations under Section
162(m).
(t) "Plan" means the Fleetwood Enterprises, Inc. 1992 Stock-Based
Incentive Compensation Plan as set forth herein, as amended from time to time.
(u) "Purchase Price" means the purchase price (if any) to be paid by a
Participant for Restricted Stock as determined by the Committee.
(v) "Restricted Stock" means Common Stock which is the subject of an
Incentive Award under this Plan and the provisions of Article V hereof.
(w) "Securities Act" means the Securities Act of 1933, as amended.
(x) "Stock Appreciation Right" or "Right" means a right granted pursuant
to Article V of the Plan to receive a number of shares of Common Stock or, in
the discretion of the Committee, an amount of cash or a combination of shares
and cash, based on the increase in the Fair Market Value of the shares subject
to the right during such period as is specified by the Committee.
(y) "Stock Payment" means a payment in shares of the Company's Common
Stock to replace all or any portion of the compensation (other than base salary)
that would otherwise become payable to any Employee of the Company, as provided
in Article VI.
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1.3 SHARES OF COMMON STOCK SUBJECT TO THE PLAN
(a) Subject to the provisions of Section 1.3(c) and Section 8.1 of the
Plan, the aggregate number of shares of Common Stock that may be issued (or
allocated in the case of Stock Appreciation Rights which have been exercised)
pursuant to Incentive Awards under this Plan shall not exceed 4,900,000 shares,
which amount gives effect to a two-for-one split of the Common Stock effected in
the fourth quarter of the Company's fiscal 1993 and the addition of 2,000,000
post-split Shares effective April 17, 1996.
(b) The Common Stock to be issued under this Plan will be made available,
at the discretion of the Board or the Committee, either from authorized but
unissued shares of Common Stock or from previously issued shares of Common Stock
reacquired by the Company, including shares purchased on the open market.
(c) Shares of Common Stock subject to unexercised portions of any Option
or Right granted under this Plan that expires, terminates or is canceled (other
than an Option or Right which expires because it was in tandem with an Option or
Right which was exercised), will again become available for the grant of further
Incentive Awards under this Plan.
(d) Notwithstanding any other provision of this Plan, no Employee shall be
granted Incentive Awards with respect to more than 100,000 shares of Common
Stock in any one calendar year; provided, however, that this limitation shall
not apply if it is not required in order for the compensation attributable to
Incentive Awards hereunder to qualify as Performance-Based Compensation. The
limitation set forth in this Section 1.3(d) shall be subject to adjustment as
provided in Section 7.1, but only to the extent such adjustment would not affect
the status of compensation attributable to Incentive Awards hereunder as
Performance-Based Compensation.
1.4 ADMINISTRATION OF THE PLAN
(a) The Plan will be administered by the Committee, which will consist of
two or more members of the Board appointed by the Board who, during the one-year
period prior to service on the Committee and while serving on the Committee, are
not granted or awarded equity securities of Fleetwood pursuant to the Plan or
any other plan of the Company or any of its affiliates, except as permitted by
Rule 16b-3(c)(2) promulgated under the Exchange Act (or any other comparable
provisions at the time or times in question). In addition, if Incentive Awards
are to be made to persons subject to Section 162(m) of the Code and such awards
are intended to constitute Performance-Based Compensation, then each of the
Committee's members shall also be an "outside director," as such term is defined
in the regulations under Section 162(m) of the Code. Notwithstanding anything
contained herein, no person shall be disqualified from being a member of the
Committee merely because such person is entitled to receive grants or awards
pursuant to the Fleetwood Enterprises, Inc. 1992 Nonemployee Director Stock
Plan.
(b) The Committee has and may exercise such powers and authority of the
Board as may be necessary or appropriate for the Committee to carry out its
functions as described in the Plan. The Committee has authority in its
discretion to select the eligible Employees to whom, and the time or times at
which, Incentive Awards shall be granted or sold, the nature of each Incentive
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Award, the number of shares of Common Stock or the number of rights that make up
each Incentive Award, the period for the exercise of each Incentive Award, the
performance criteria (which need not be identical) utilized to measure the value
of Performance Awards and such other terms and conditions applicable to each
individual Incentive Award as the Committee shall determine. The Committee may
grant at any time new Incentive Awards to a Participant who has previously
received Incentive Awards or other grants (including other stock options)
whether such prior Incentive Awards or such other grants are still outstanding,
have previously been exercised in whole or in part, or are canceled in
connection with the issuance of new Incentive Awards; provided, however, that
the Committee shall not have the authority to amend outstanding Incentive Awards
or to cancel outstanding Incentive Awards and grant new Incentive Awards in
substitution thereof if the purpose of such action is to reprice outstanding
Incentive Awards. The Committee may grant Incentive Awards singly or in
combination or in tandem with other Incentive Awards as it determines in its
discretion. The purchase price or initial value and any and all other terms and
conditions of the Incentive Awards may be established by the Committee without
regard to existing Incentive Awards or other grants. Further, the Committee
may, with the consent of a Participant, amend in a manner consistent with the
Plan the terms of any existing Incentive Award previously granted to such
Participant or acquire from a Participant for a payment of cash, Common Stock or
other consideration any existing Incentive Award.
(c) Subject to the express provisions of the Plan, the Committee has the
authority to interpret the Plan, to determine the terms and conditions of
Incentive Awards and to make all other determinations necessary or advisable for
the administration of the Plan. The Committee has authority to prescribe, amend
and rescind rules and regulations relating to the Plan. All interpretations,
determinations and actions by the Committee shall be final, conclusive and
binding upon all parties. Any action of the Committee with respect to the
administration of the Plan shall be taken pursuant to a majority vote or by the
unanimous written consent of its members.
(d) No member of the Board or the Committee will be liable for any action
or determination made in good faith by the Board or the Committee with respect
to the Plan or any transaction arising under the Plan.
1.5 PARTICIPATION
(a) All Employees, as determined by the Committee, are eligible to receive
Incentive Awards under the Plan. In no event may any member of the Board who is
not an Employee be granted an Incentive Award under the Plan.
(b) At the time of the grant of each Incentive Award pursuant to this
Plan, the Committee shall deliver, or cause to be delivered, to the Participant
to whom the Incentive Award is granted a written statement evidencing the
Incentive Award and setting forth such terms and conditions applicable to the
Incentive Award as the Committee may in its discretion determine consistent with
the Plan.
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II. DIVIDEND EQUIVALENTS
(a) In the Committee's discretion, a Participant may, as set forth in
subparagraph (b) below, be entitled to receive, at no additional cost, an amount
for each share of Common Stock upon which an Incentive Award is based, a
"Dividend Equivalent" equal to the cash or other consideration paid as a
dividend or distribution (other than a dividend or distribution payable in
Common Stock) by the Company with respect to its outstanding shares of Common
Stock, provided that with respect to Options and Rights granted in tandem, the
Dividend Equivalent will be payable with respect to either the Right or the
Option, but not both. If awarded by the Committee, Dividend Equivalents shall
be paid, with respect to record dates during the period on or after the date an
Incentive Award is granted to and including the date such Incentive Award is
exercised or terminated, or such other period as is determined by the Committee
and specified in the instrument that evidences the grant of the Incentive Award.
Such Dividend Equivalents shall be converted to additional shares of Common
Stock or cash by such formula as may be determined by the Committee.
(b) The Committee, in its discretion, shall determine from time to time
whether any Participant shall be entitled to Dividend Equivalents with respect
to any other Incentive Award. The Committee shall not be obligated to award
Dividend Equivalents, and may elect to grant Dividend Equivalents to some
Participants and not to other Participants.
(c) Dividend Equivalents shall be computed as of each record date for
Common Stock dividends or distributions in such manner as may be determined by
the Committee and shall be payable to Participants who have been granted
Dividend Equivalents at such time or times as the Committee in its discretion
may determine. Dividend Equivalents payable to holders of Incentive Awards may
be deferred and paid at a later date as and to the extent provided in the
Fleetwood Enterprises, Inc. Deferred Compensation Plan, as amended or restated
from time to time.
III. OPTIONS
3.1 GRANT OF OPTIONS; OPTION PRICE
(a) The Committee may grant Options under the Plan from time to time to
Employees.
(b) The purchase price of Common Stock under each Option (the "Option
Exercise Price") will be determined by the Committee at the date such Option is
granted. The Option Exercise Price may be equal to, greater than or less than
Fair Market Value on the date of grant of the Common Stock subject to the
Option; provided, however, that (i) in no event shall the Option Exercise Price
be less than eighty-five percent (85%) of Fair Market Value of the Company Stock
subject to the Option on the date of grant nor less than the par value of the
shares of Common Stock subject to the Option; and (ii) that in the case of an
Incentive Stock Option the Option Exercise Price shall be not less than the Fair
Market Value on the date of grant of the Common Stock subject to such Option or
such other amount as is necessary to enable such Option to be treated as an
"incentive stock option" within the meaning of Code Section 422.
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3.2 OPTION PERIOD
Options may be exercised as determined by the Committee, but, in the case
of an Incentive Stock Option, in no event after ten years from the date of grant
of such Option or such other period as is necessary to enable such Option to be
treated as an "incentive stock option" within the meaning of Code Section 422.
Options granted to persons who are subject to the provisions of Section 16 of
the Exchange Act shall not be exercisable prior to the expiration of six (6)
months from the date of the grant of such Option.
3.3 EXERCISE OF OPTIONS
At the time of the exercise of an Option, the purchase price shall be paid
in full in cash or other equivalent consideration acceptable to the Committee
and consistent with the Plan's purpose and applicable law, including without
limitation, Common Stock or Restricted Stock or other contingent awards
denominated in either stock or cash. Any shares of Company Stock assigned and
delivered to the Company in payment or partial payment of the purchase price
will be valued at their Fair Market Value on the exercise date. No fractional
shares will be issued pursuant to the exercise of an Option nor will any cash
payment be made in lieu of fractional shares. In the case of an Incentive Stock
Option, only the Participant to whom such Option is granted may exercise such
Option during the lifetime of such Participant, provided, however, in the event,
that such Participant becomes incompetent to exercise such Option, then such
Participant's legal representative may exercise such Option on his behalf.
3.4 LIMITATION ON EXERCISE OF INCENTIVE STOCK OPTIONS
The aggregate Fair Market Value (determined at the time the Option is
granted) with respect to which Incentive Stock Options are exercisable for the
first time by any Employee during any calendar year (under all stock option
plans of the Company) shall not exceed $100,000 or such other limit as is
prescribed by the Code. Any Options granted as Incentive Stock Options pursuant
to the Plan in excess of such limitation shall be treated as Nonqualified Stock
Options.
3.5 TERMINATION OF EMPLOYMENT
(a) Except as otherwise provided in a written agreement between the
Company and the Participant, in the event of the termination of a Participant's
employment with the Company for Cause, all of the Participant's unexercised
Options and/or Rights shall expire as of the date of such termination.
(b) Except as otherwise provided in a written agreement between the
Company and the Participant, in the event of a Participant's termination of
employment for:
(i) Any reason other than for Cause, death, disability, or normal
retirement (as defined in the Company's retirement plan which covers the
Participant), the Participant's Options and/or Rights shall expire and
become unexercisable as of the earlier of (A) the date such Options and/or
Rights expire in accordance with their terms or (B) three calendar months
after the date of termination.
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(ii) Death or disability, subject to the provisions of Section 3.5(c)
below, the Participant (or such Participant's legal representative) shall
have twelve (12) months after the date of termination within which to
exercise Options and/or Rights that have become exercisable on or before
such date and that have not expired on or before such date, regardless of
the date upon which such Options or Rights would otherwise expire in
accordance with their terms.
(iii) Normal retirement, subject to the provisions of Section 3.5(c)
below, the Participant's Options and/or Rights shall expire and become
unexercisable as of the earlier of (A) the date such Options and/or Rights
expire in accordance with their terms or (B) three (3) years after the date
of termination.
(c) Notwithstanding anything to the contrary in Sections 3.5(a) or 3.5(b),
above, the Committee may in its discretion designate such shorter or longer
periods to exercise Options and/or Rights following a Participant's termination
of employment; provided, however, that any shorter periods determined by the
Committee shall be effective only if provided for in the instrument that
evidences the grant to the Participant of such Options and/or Rights or if such
shorter period is agreed to in writing by the Participant. In the case of an
Incentive Stock Option, notwithstanding anything to the contrary herein, in no
event shall such Option be exercisable after the expiration of ten years from
the date such Option is granted (or such other period as is provided in Code
Section 422), nor shall such Option be the subject of any term or provision
which would disqualify such Option from being an incentive stock option under
Code Section 422. Notwithstanding anything to the contrary herein, Options
and/or Rights shall be exercisable by a Participant (or his successor in
interest) following such Participant's termination of employment only to the
extent that installments thereof had become exercisable on or prior to the date
of such termination; provided, however, that the Committee, in its discretion,
may elect to accelerate the vesting of all or any portion of any Options and/or
Rights that had not become exercisable on or prior to the date of such
termination.
IV. PERFORMANCE AWARDS
4.1 GRANT OF PERFORMANCE AWARDS
The Committee may authorize the payment of Performance Awards under the
Plan. The Committee shall determine the performance criteria (which need not be
identical) to be utilized to calculate the value of the Performance Awards, the
term of such Performance Awards, the Payment Event, and the form and time of
payment of Performance Awards. The specific terms and conditions of each
Performance Award shall be set forth in a written statement evidencing the grant
of such Performance Award.
4.2 PAYMENT OF AWARD; LIMITATION
Upon the occurrence of a Payment Event, payment of a Performance Award will
be made to the Participant in cash or in shares of Common Stock valued at Fair
Market Value on the date of the Payment Event or a combination of Common Stock
and cash, as the Committee in its discretion may determine. The Committee may
impose a limitation on the amount payable upon
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the occurrence of a Payment Event, which limitation shall be set forth in the
written statement evidencing the grant of the Performance Award.
Notwithstanding any other provision of this Plan, as to any Performance Awards
not subject to the annual share limitation of Section 1.3(d), no Employee shall
be granted Performance Awards of more than $500,000 in any one calendar year;
provided, however, that this limitation shall not apply if it is not required in
order for the compensation attributable to Performance Award hereunder to
qualify as Performance-Based Compensation.
4.3 EXPIRATION OF PERFORMANCE AWARD
If any Participant's employment with the Company is terminated for any
reason, all of the Participant's rights under the Performance Award shall expire
and terminate unless otherwise determined by the Committee.
V. STOCK APPRECIATION RIGHTS
5.1 GRANTING OF STOCK APPRECIATION RIGHTS
The Committee may grant to Employees Stock Appreciation Rights, related or
unrelated to Options, at any time.
(a) A Stock Appreciation Right granted in connection with an Option
granted under this Plan will entitle the holder of the related Option, upon
exercise of the Stock Appreciation Right, to surrender such Option, or any
portion thereof to the extent unexercised, with respect to the number of shares
as to which such Stock Appreciation Right is exercised, and to receive payment
of an amount computed pursuant to Section 5.1(c). Such Option will, to the
extent surrendered, then cease to be exercisable.
(b) Subject to Section 5.1(g), a Stock Appreciation Right granted in
connection with an Option hereunder will be exercisable at such time or times,
and only to the extent that, the related Option is exercisable, and will not be
transferable except to the extent that such related Option may be transferable.
A Stock Appreciation Right shall be canceled to the extent a related Option is
exercised.
(c) Upon the exercise of a Stock Appreciation Right related to an Option,
the Holder will be entitled to receive payment of an amount determined by
multiplying: (i) the difference obtained by subtracting the Option Exercise
Price of a share of Common Stock specified in the related Option from the Fair
Market Value of a share of Common Stock on the date of exercise of such Stock
Appreciation Right (or as of such other date or as of the occurrence of such
event as may have been specified in the instrument evidencing the grant of the
Stock Appreciation Right), by (ii) the number of shares as to which such Stock
Appreciation Right is exercised.
(d) The Committee may grant Stock Appreciation Rights unrelated to Options
to Employees. Section 5.1(c) shall be used to determine the amount payable at
exercise under such Stock Appreciation Right, except that in lieu of the Option
Exercise Price specified in the related Option the initial base amount specified
in the Incentive Award shall be used; provided, however,
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that in no event shall the initial base amount be less than eighty-five percent
(85%) of the Fair Market Value of the Common Stock on the date of grant.
(e) Notwithstanding the foregoing, the Committee, in its discretion, may
place a dollar limitation on the maximum amount that will be payable upon the
exercise of a Stock Appreciation Right under the Plan.
(f) Payment of the amount determined under the foregoing provisions of
this Section 5.1 may be made solely in whole shares of Common Stock valued at
their Fair Market Value on the date of exercise of the Stock Appreciation Right
or, alternatively, at the sole discretion of the Committee, in cash or in a
combination of cash and shares of Common Stock as the Committee deems advisable.
The Committee is hereby vested with full discretion to determine the form in
which payment of a Stock Appreciation Right will be made and to consent to or
disapprove the election of a Participant to receive cash in full or partial
settlement of a Stock Appreciation Right. If the Committee decides to make full
payment in shares of Common Stock, and the amount payable results in a
fractional share, payment for the fractional share will be made in cash.
(g) The Committee may, at the time a Stock Appreciation Right is granted,
impose such conditions on the exercise of the Stock Appreciation Right as may be
required to satisfy the requirements of Rule 16b-3 under the Exchange Act (or
any other comparable provisions in effect at the time or times in question).
5.2 TERMINATION OF EMPLOYMENT
Section 3.5 will govern the treatment of Stock Appreciation Rights upon the
termination of a Participant's employment with the Company.
VI. STOCK PAYMENTS
The Committee may approve Stock Payments of the Company's Common Stock to
any Employee of the Company for all or any portion of the Employee's
compensation (other than base salary). For purposes of making Stock Payments,
the Common Stock shall be valued by the Committee; provided, however, that such
value shall not be less than eighty-five percent (85%) of the Fair Market Value
of the Common Stock on the date of payment.
VII. OTHER PROVISIONS
7.1 ADJUSTMENT PROVISIONS
(a) Subject to Section 7.1(b) below, (i) if the outstanding shares of
Common Stock of Fleetwood are increased, decreased or exchanged for a different
number or kind of shares or other securities of Fleetwood, or if additional
shares or new or different shares or other securities of Fleetwood are
distributed in respect of such shares of Common Stock (or any stock or
securities received with respect to such Common Stock), through reorganization,
recapitalization, reclassification, stock dividend, stock split, reverse stock
split, spin-off or other distribution with respect to such shares of Common
Stock (or any stock or securities received with respect to such
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Common Stock), or (ii) if the value of the outstanding shares of Common Stock of
Fleetwood is reduced by reason of an extraordinary cash dividend, an appropriate
and proportionate adjustment may be made in (x) the maximum number and kind of
shares provided in Section 1.3, (y) the number and kind of shares or other
securities subject to then outstanding Incentive Awards, and (z) the price for
each share or other unit of any other securities subject to then outstanding
Incentive Awards.
(b) In addition to the adjustments permitted by Section 7.1(a) above,
except as otherwise expressly provided in the statement evidencing the grant of
an Incentive Award, upon the occurrence of a Change in Control of Fleetwood any
outstanding Incentive Awards not theretofore exercisable, payable or free from
restrictions, as the case may be, shall immediately become exercisable, payable
or free from restrictions (other than restrictions required by applicable law or
any national securities exchange upon which any securities of Fleetwood are then
listed), as the case may be, in their entirety and any shares of Common Stock
acquired pursuant to an Incentive Award which are not fully vested shall
immediately become fully vested, notwithstanding any of the other provisions of
the Plan.
(c) Upon the dissolution or liquidation of Fleetwood or upon a
reorganization, merger or consolidation of Fleetwood with one or more
corporations, as a result of which Fleetwood goes out of existence or becomes a
subsidiary of another corporation, or upon a sale of substantially all of the
property of Fleetwood to another corporation (in each of such cases a
"Termination Event"), this Plan shall terminate. Any Option theretofore granted
under the Plan and not exercised on or prior to the Termination Event shall
expire and terminate, unless provision be made in writing in connection with
such Termination Event for the assumption of the Option or the substitution for
such Option of a new option covering the stock of a successor employer
corporation, or a parent or subsidiary thereof or of the Company, with
appropriate adjustments as to number and kind of shares and prices, in which
event such Option shall continue in the manner and under the terms so provided.
(d) Adjustments under this Section 7.1 will be made by the Committee,
whose determination as to what adjustments will be made and the extent thereof
will be final, binding and conclusive. No fractional interests will be issued
under the Plan resulting from any such adjustments.
7.2 TRANSFERABILITY OF INCENTIVE AWARDS
Incentive Awards, any interest therein, and the right to receive the
proceeds thereof shall not be transferable by a Participant, other than by will
or the laws of descent and distribution. The transfer by a Participant to a
trust created by the Participant for the benefit of the Participant or the
Participant's family which is revocable at any and all times during the
Participant's lifetime by the Participant and as to which the Participant is the
sole acting Trustee during his or her lifetime, will not be deemed to be a
transfer for purposes of the Plan. Under such rules and regulations as the
Committee may establish pursuant to the terms of the Plan, a beneficiary may be
designated with respect to an Incentive Award in the event of the death of a
Participant. If the estate of the Participant is the beneficiary with respect
to an Incentive Award, any rights with respect to such Incentive Award may be
transferred to the person or persons or entity (including a trust) entitled
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thereto under the will of such Participant or pursuant to the laws of descent
and distribution. The Committee shall by such rules and regulations as are
established from time to time prescribe the manner in which and the terms and
conditions of the transfer of Incentive Awards pursuant to qualified domestic
relations orders.
7.3 CONTINUATION OF EMPLOYMENT
(a) Nothing in the Plan or in any statement evidencing the grant of an
Incentive Award pursuant to the Plan shall be construed to create or imply any
contract of employment between any Participant and the Company, to confer upon
any Participant any right to continue in the employ of the Company, or to confer
upon the Company any right to require any Participant's continued employment.
Except as expressly provided in the Plan or in any statement evidencing the
grant of an Incentive Award pursuant to the Plan, the Company shall have the
right to deal with each Participant in the same manner as if the Plan and any
such statement evidencing the grant of an Incentive Award pursuant to the Plan
did not exist, including, without limitation, with respect to all matters
related to the hiring, discharge, compensation and conditions of the employment
of the Participant. Unless otherwise expressly set forth in a separate
employment agreement between the Company and such Participant, the Company or
the Participant may terminate the employment of any Participant with the Company
at any time for any reason, with or without cause.
(b) Any question(s) as to whether and when there has been a termination of
a Participant's employment, the reason (if any) for such termination, and/or the
consequences thereof under the terms of the Plan or any statement evidencing the
grant of an Incentive Award pursuant to the Plan shall be determined by the
Committee, and the Committee's determination thereof shall be final and binding.
7.4 COMPLIANCE WITH GOVERNMENT REGULATIONS
No shares of Common Stock will be issued pursuant to an Incentive Award
unless and until all applicable requirements imposed by federal and state
securities and other laws, rules and regulations and by any regulatory agencies
having jurisdiction and by any stock exchanges upon which the Common Stock may
be listed have been fully met. As a condition precedent to the issuance of
shares of Common Stock pursuant to an Incentive Award, the Company may require
the Participant to take any reasonable action to comply with such requirements.
7.5 ADDITIONAL CONDITIONS
The award of any benefit under this Plan also may be subject to such other
provisions (whether or not applicable to the benefit award to any other
Participant) as the Committee determines appropriate including, without
limitation, provisions to assist the Participant in financing the purchase of
Common Stock through the exercise of Stock Options, provisions for the
forfeiture of or restrictions on resale or other disposition of shares of Common
Stock acquired under any form of benefit, provisions giving the Company the
right to repurchase shares of Common Stock acquired under any form of benefit in
the event the Participant elects to dispose of such shares, and provisions to
comply with federal and state securities laws. The Company may
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make such provisions as it deems appropriate for the withholding by the Company
pursuant to federal or state income tax laws of such amounts as the Company
determines it is required to withhold in connection with any Incentive Award.
The Company may require a Participant to satisfy any relevant tax requirements
before authorizing any issuance of Common Stock to such Participant or payment
of any other benefit hereunder to such Participant. Any such settlement shall
be made in the form of cash, a certified or bank cashier's check or such other
form of consideration as is satisfactory to the Board.
7.6 PRIVILEGES OF STOCK OWNERSHIP
No Participant and no beneficiary or other person claiming under or through
such Participant will have any right, title or interest in or to any shares of
Common Stock allocated or reserved under the Plan or subject to any Incentive
Award, except as to such shares of Common Stock, if any, that have been issued
to such Participant in accordance with the terms and conditions of the
applicable Incentive Award.
7.7 AMENDMENT AND TERMINATION OF PLAN: AMENDMENT OF INCENTIVE AWARDS
(a) The Board may alter, amend, suspend or terminate the Plan at any time.
No such action of the Board, unless taken with the approval of the stockholders
of the Company, may increase the maximum number of shares that may be sold or
issued under the Plan or alter the class of Employees eligible to participate in
the Plan. With respect to any other amendments of the Plan, the Board may in
its discretion determine that such amendments shall only become effective upon
approval by the stockholders of the Company, if the Board determines that such
stockholder approval may be advisable, such as for the purpose of obtaining or
retaining any statutory or regulatory benefits under federal or state securities
law, federal or state tax law or any other laws or for the purposes of
satisfying applicable stock exchange listing requirements.
(b) The Committee may, with the consent of a Participant, make such
modifications in the terms and conditions of an Incentive Award as it deems
advisable. Without limiting the generality of the foregoing, the Committee may,
with the consent of the Participant, from time to time adjust or reduce the
purchase price of Options held by such Participant by cancellation of such
Options and granting of Options to purchase the same or a lesser number of
shares at lower purchase prices or by modification, extension or renewal of such
Options.
(c) Except as otherwise provided in this Plan or in the statement
evidencing the grant of the Incentive Award, no amendment, suspension or
termination of the Plan will, without the consent of the Participant, alter,
terminate, impair or adversely affect any right or obligation under any
Incentive Award previously granted under the Plan.
7.8 UNFUNDED STATUS OF PLAN
The Plan is intended to constitute an "unfunded" plan for incentive and
deferred compensation. With respect to any payments not yet made to a
Participant by the Company, nothing contained herein shall give any such
Participant any rights that are greater than those of a general creditor of the
Company. In its sole discretion, the Committee may authorize the creation
14
<PAGE>
of trusts or other arrangements to meet the obligations created under the Plan
to deliver Common Stock or payments in lieu of or with respect to Incentive
Awards hereunder, provided, however, that unless the Committee otherwise
determines with the consent of the affected Participant, the existence of such
trusts or other arrangements is consistent with the "unfunded" status of the
Plan.
7.9 OTHER COMPENSATION PLANS
The adoptive of the Plan shall not affect any other stock option, incentive
or other compensation plans in effect for the Company, nor shall the Plan
preclude the Company from establishing any other forms of incentive or other
compensation for Employees of the Company.
7.10 PLAN BINDING ON SUCCESSORS
The Plan and any agreement with respect to an Incentive Award shall be
binding upon the successors and assigns of the Company and upon each Participant
and such Participant's heirs, executors, administrators, personal
representatives, permitted assignees, and successors in interest.
7.11 SINGULAR, PLURAL; GENDER
Whenever used herein, nouns in the singular shall include the plural, and
the masculine pronoun shall include the feminine gender, as the context may
require.
7.12 APPLICABLE LAW
This Plan shall be governed by, interpreted under, and construed and
enforced in accordance with the internal laws of the State of California.
VIII. EFFECTIVE DATE AND DURATION OF PLAN
The Plan shall become effective on the later of (a) the date of its
adoption by the Board, (b) the date of its approval by the holders of a majority
of the outstanding shares of Common Stock. The Plan shall terminate at such
time as the Board, in its discretion, shall determine. No Incentive Award may
be granted under the Plan after the date of such termination, but such
termination shall not affect any Incentive Award theretofore granted.
15
<PAGE>
EXHIBIT 21
SUBSIDIARIES OF THE REGISTRANT
At April 28, 1996, the Registrant had the following subsidiary companies,
all of which are wholly owned unless otherwise indicated in the footnotes:
<TABLE>
<CAPTION>
JURISDICTION OF
COMPANY INCORPORATION
- ------------------------------------------------------------------------------------------- ---------------------
<S> <C>
Subsidiaries producing manufactured housing:
Fleetwood Homes of Alabama, Inc........................................................ Alabama
Fleetwood Homes of Arizona, Inc........................................................ Arizona
Fleetwood Homes of California, Inc..................................................... California
Fleetwood Homes of Florida, Inc........................................................ Florida
Fleetwood Homes of Georgia, Inc........................................................ Georgia
Fleetwood Homes of Idaho, Inc.......................................................... Idaho
Fleetwood Homes of Indiana, Inc........................................................ Indiana
Fleetwood Homes of Kentucky, Inc.(1)................................................... Kentucky
Fleetwood Homes of Mississippi, Inc.................................................... Mississippi
Fleetwood Homes of North Carolina, Inc................................................. North Carolina
Fleetwood Homes of Oklahoma, Inc.(1)................................................... Oklahoma
Fleetwood Homes of Oregon, Inc......................................................... Oregon
Fleetwood Homes of Pennsylvania, Inc................................................... Pennsylvania
Fleetwood Homes of Tennessee, Inc...................................................... Tennessee
Fleetwood Homes of Texas, Inc.......................................................... Texas
Fleetwood Homes of Virginia, Inc....................................................... Virginia
Fleetwood Homes of Washington, Inc..................................................... Washington
North River Homes, Inc. (2)............................................................ Alabama
Subsidiaries producing motor homes:
Fleetwood Motor Homes of California, Inc............................................... California
Fleetwood Motor Homes of Indiana, Inc.................................................. Indiana
Fleetwood Motor Homes of Pennsylvania, Inc............................................. Pennsylvania
Niesmann & Bischoff GmbH(3)(8)......................................................... Germany
Subsidiaries producing travel trailers:
Fleetwood Travel Trailers of California, Inc........................................... California
Fleetwood Travel Trailers of Indiana, Inc.............................................. Indiana
Fleetwood Travel Trailers of Maryland, Inc............................................. Maryland
Fleetwood Travel Trailers of Nebraska, Inc............................................. Nebraska
Fleetwood Travel Trailers of Ohio, Inc................................................. Ohio
Fleetwood Travel Trailers of Oregon, Inc............................................... Oregon
Fleetwood Travel Trailers of Texas, Inc................................................ Texas
Fleetwood Travel Trailers of Virginia, Inc............................................. Virginia
Fleetwood Canada Ltd.(4)............................................................... Ontario, Canada
Subsidiary producing folding trailers:
Fleetwood Folding Trailers, Inc........................................................ Delaware
Supply subsidiaries:
Gold Shield, Inc....................................................................... California
Gold Shield of Indiana, Inc............................................................ Indiana
Hauser Lake Lumber Operation, Inc...................................................... Idaho
Other subsidiaries:
Buckingham Development Co.............................................................. California
C.V. Aluminum, Inc.(1)................................................................. California
Continental Lumber Products, Inc....................................................... California
FLE Corp............................................................................... California
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
JURISDICTION OF
COMPANY INCORPORATION
- ------------------------------------------------------------------------------------------- ---------------------
<S> <C>
Fleetwood Credit Corp.(8).............................................................. California
Fleetwood Credit Receivables Corp.(5)(8)............................................... California
Fleetwood Deutschland GmbH(4)(8)....................................................... Germany
Fleetwood Foreign Sales Corp........................................................... U.S. Virgin Islands
Fleetwood Holidays, Inc................................................................ Florida
Fleetwood Insurance Services, Inc...................................................... California
Fleetwood International, Inc........................................................... California
Fleetwood Recreational Vehicles of Michigan, Inc.(1)................................... Michigan
Gibraltar Insurance Company, Ltd....................................................... Bermuda
GSF Installation Co.(1)................................................................ California
Niesmann & Bischoff Clou Mobile Verwaltungsgesellschaft mbH(6)(8)...................... Germany
Niesmann & Bischoff Clou Mobile GmbH & Co. KG(7)(8).................................... Germany
</TABLE>
- ---------
(1) Wholly owned subsidiary inactive at April 28, 1996.
(2) Wholly owned subsidiary of Fleetwood Homes of Alabama, Inc.
(3) Wholly owned subsidiary of Niesmann & Bischoff Clou Mobile GmbH & Co. KG.
(4) Wholly owned subsidiary of Fleetwood International, Inc.
(5) Wholly owned subsidiary of Fleetwood Credit Corp.
(6) Majority owned subsidiary of Fleetwood Deutschland GmbH.
(7) Partnership of which Fleetwood Deutschland GmbH owns majority interest.
(8) Majority owned subsidiary sold subsequent to year end.
<PAGE>
EXHIBIT 23
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
by reference of our report dated June 25, 1996, included in Fleetwood
Enterprises, Inc.'s Form 10-K for the year ended April 28, 1996, into the
Company's previously filed Registration Statement No. 2-79232.
ARTHUR ANDERSEN LLP
Orange County, California
June 25, 1996
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> APR-28-1996
<PERIOD-END> APR-28-1996
<CASH> 15792
<SECURITIES> 272138
<RECEIVABLES> 173380
<ALLOWANCES> 0
<INVENTORY> 137899
<CURRENT-ASSETS> 0
<PP&E> 426775
<DEPRECIATION> 160188
<TOTAL-ASSETS> 1108932
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 45640
<OTHER-SE> 603497
<TOTAL-LIABILITY-AND-EQUITY> 1108932
<SALES> 2809277
<TOTAL-REVENUES> 2809277
<CGS> 2276595
<TOTAL-COSTS> 2677745
<OTHER-EXPENSES> 5142
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1429
<INCOME-PRETAX> 110993
<INCOME-TAX> 41543
<INCOME-CONTINUING> 69901
<DISCONTINUED> 9708
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 79609
<EPS-PRIMARY> 1.71
<EPS-DILUTED> 1.71
<FN>
AMOUNTS FOR CURRENT ASSETS AND CURRENT LIABILITIES ARE
NOT SHOWN SINCE BALANCE SHEET IS PRESENTED IN NONCLASSIFIED
FORMAT.
</FN>
</TABLE>
