SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
[x] Filed by the registrant
Filed by a party other than the registrant [ ]
Check the appropriate box:
[x] Preliminary proxy statement
[ ] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
OAKWOOD HOMES CORPORATION
(Name of Registrant as Specified in Its Charter)
OAKWOOD HOMES CORPORATION
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
[x] $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transactions applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
(4) Proposed maximum aggregate value of transaction:
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, schedule or registration statement no.:
(3) Filing party:
(4) Date filed:
<PAGE>
PRELMINARY COPY
OAKWOOD HOMES CORPORATION
P. O. BOX 7386, GREENSBORO, NORTH CAROLINA
27417-0386
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
FEBRUARY 1, 1995
NOTICE is hereby given that the Annual Meeting of Sharehold-
ers of Oakwood Homes Corporation (the Company) will be held in
the Auditorium of the Four Seasons Holiday Inn Convention Center,
3121 High Point Road, Greensboro, North Carolina on Wednesday,
February 1, 1995 at 2:00 P.M., Local Time, for the purpose of
considering and acting upon the following:
1. Election of three members to the Board of Directors for
a term of three years and until their successors are
elected and qualified.
2. Approval of performance-based compensation for certain
key employees.
3. Approval of an amendment to the Bylaws of the Company
to increase the authorized number of directors of the
Company.
4. Ratification of the selection of Price Waterhouse LLP
as independent public accountants for the fiscal year
ending September 30, 1995.
5. Any and all other matters that may properly come before
the meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on
December 2, 1994 as the record date for determining the share-
holders entitled to notice of and to vote at the meeting or any
adjournment thereof and only holders of Common Stock of the
Company of record at such date will be entitled to notice thereof
and to vote thereat.
You are urged to attend the annual meeting in person but, if
you are unable to do so, the Board of Directors will appreciate
the prompt return of the enclosed proxy, dated and signed. The
proxy may be revoked at any time before it is exercised and will
not be exercised if you attend the meeting and vote in person.
By order of the Board of Directors.
NICHOLAS J. ST. GEORGE
President
Greensboro, North Carolina
December __, 1994
<PAGE>
OAKWOOD HOMES CORPORATION
P. O. BOX 7386, GREENSBORO, NORTH CAROLINA 27417-0386
______________________
PROXY STATEMENT
______________________
General
This Proxy Statement and the accompanying proxy card are
furnished to the shareholders of Oakwood Homes Corporation (the
Company) commencing on or about December __, 1994 in connection
with the solicitation by the Board of Directors of proxies to be
used at the Annual Meeting of Shareholders to be held at the
Auditorium of the Four Seasons Holiday Inn Convention Center,
3121 High Point Road, Greensboro, North Carolina on Wednesday,
February 1, 1995 at 2:00 P.M., Local Time, and at any adjournment
thereof.
Solicitation other than by mail may be made personally and
by telephone by regularly employed officers and employees of the
Company who will not be additionally compensated therefor. The
Company will request brokers, dealers, banks or voting trustees,
or their nominees, who hold stock in their names for others or
hold stock for others who have the right to give voting instruc-
tions, to forward proxy material to their principals and request
authority for the execution of the proxy and will reimburse such
persons for their reasonable expenses in so doing. The total
cost of soliciting proxies will be borne by the Company.
Any proxy delivered in the accompanying form may be revoked
by the person executing the proxy at any time before the authori-
ty thereby granted is exercised by filing an instrument revoking
it or a duly executed proxy bearing a later date with the Secre-
tary of the Company or if the person executing the proxy attends
the meeting and elects to vote in person. If a choice is speci-
fied in the proxy, shares represented thereby will be voted in
accordance with such choice. If no choice is made, the proxy
will be voted FOR the action proposed.
The only matters to be considered at the meeting, so far as
known to the Board of Directors, are the matters set forth in the
Notice of Annual Meeting of Shareholders and routine matters
incidental to the conduct of the meeting. However, if any other
matter should come before the meeting or any adjournment thereof,
it is the intention of the persons named in the accompanying
proxy or their substitutes to vote the proxy in accordance with
their best judgment on such matters.
Each shareholder present or represented and entitled to vote
on a matter at the meeting or any adjournment thereof will be
entitled to one vote on such matter for each share held by him of
record at the close of business on December 2, 1994, which is the
record date for determining the shareholders entitled to notice
of and to vote at such meeting or any adjournment
1
<PAGE>
thereof. The number of outstanding shares of the $.50 par value
Common Stock of the Company (the Common Stock) at the close of
business on December 2, 1994 was ____________ shares.
Principal Holders of the Common Stock and Holdings of Management
The following table sets forth certain information with
respect to the beneficial ownership of the Common Stock of the
only persons known by the Company to own beneficially more than
5% of the Common Stock:
Number of Shares
and Nature of Percentage of
Beneficial Shares
Name and Address Ownership Outstanding
FMR Corp. 2,511,250(1) _____%
Fidelity Management
& Research Company
82 Devonshire Street
Boston, MA 27417
Firstar Corporation 1,308,800(2) _____%
Firstar Investment
Research
& Management
Company
777 E. Wisconsin
Avenue
Milwaukee, WI 53202
__________________________
(1) The information concerning beneficial ownership is derived
from a Schedule 13G dated February 11, 1994. FMR Corp.,
through its control of Fidelity Management Trust Company,
has sole voting and dispositive power over 9,900 shares.
Fidelity Management & Research Company, a wholly-owned
subsidiary of FMR Corp. and a registered investment adviser,
is the beneficial owner of and has sole dispositive power
over 2,501,350 shares in its capacity as an investment
adviser. Voting power with respect to such shares resides
in the Fidelity Funds' Boards of Trustees. Edward C. John-
son 3d, who owns 34% of the outstanding common stock of FMR
Corp., together with various trusts for the benefit of
Johnson family members, form a controlling group with re-
spect to FMR Corp.
(2) The information concerning beneficial ownership is derived
from Schedule 13Gs dated February 10, 1994. Firstar Corpo-
ration, a parent holding company, or its subsidiary, Firstar
Investment Research & Management Company, an investment
adviser, has sole voting power over 1,188,800 shares, sole
dispositive power over 1,284,000 shares and shared voting
and dispositive power over 24,800 shares.
2
<PAGE>
The following table sets forth as of December 2, 1994
certain information with respect to the beneficial ownership of
the Common Stock by Mr. J. Michael Stidham, an executive officer
of the Company, and by all directors and officers as a group.
Information as to the beneficial ownership of each of the direc-
tors individually (including executive officers who are also
directors or nominees) is included in the information on each
director under the heading "Election of Directors."
Number of Shares Percentage of
Name of Beneficial Beneficially Owned Shares Outstanding(1)
Owner
J. Michael Stidham 32,494(2) 3
All directors and 1,416,025(4) ____%
officers
as a group (19
persons)
_________________________
(1) Based on the number of shares outstanding plus options which
are presently exercisable or exercisable within 60 days.
(2) Includes 13,837 shares subject to options which are present-
ly exercisable or exercisable within 60 days.
(3) Less than 1%.
(4) Includes 525,467 shares subject to options which are pres-
ently exercisable or exercisable within 60 days.
Election of Directors
The Board of Directors has eleven members. Three of the
directors' terms expire in 1995. The Board proposes to fill
these positions at the meeting with three nominees to serve,
subject to the provisions of the Bylaws, until the Annual Meeting
of Shareholders in 1998 and until their successors are duly
elected and qualified. Directors are elected by a plurality of
the votes cast by the holders of shares entitled to vote in the
election of directors at a meeting at which a majority of the
votes entitled to be case is present. Provided a majority is
present, abstentions and shares not voted are not taken into
account in determining a plurality. It is the intention of the
persons named in the accompanying proxy to vote all proxies
solicited by the Board of Directors for the three nominees listed
hereafter for the terms expiring in 1998, unless authority to
vote for the nominees or an individual nominee is withheld by a
shareholder. If for any reason any nominee shall not become a
candidate for election as a director at the meeting, an event not
now anticipated, the proxies will be voted for the three nominees
including such substitutes as shall be designated by the Board of
Directors.
3
<PAGE>
The following nominees for election as directors to serve
until 1998 were elected to their present terms, which expire in
1995, at the Annual Meeting of Shareholders held January 29,
1992, except for Mr. Kilbourne, who is a nominee for election as
a director for the first time this year:
<TABLE>
<CAPTION>
Number of Percentage
Shares of
Name and Beneficially Shares
Director Since Information About Director Owned(1) Outstanding(2)
<S> <C> <C> <C>
Clarence W. Walker Partner, Kennedy Covington 57,213 3 4
1971 Lobdell & Hickman, L.L.P.,
Attorneys at Law, Charlotte, NC
since 1961. He is 63 years old.
Dennis I. Meyer Partner, Baker & McKenzie, 38,684 5 4
1983 Attorneys at Law, Washington,
DC since 1965. Director of
United Financial Banking
Companies, Inc. (bank holding
company). He is 59 years old.
C. Michael Kilbourne Executive Vice President of the 39,291 6 4
Company since 1994 and Chief
Financial Officer of the
Company since 1988; Vice
President of the Company,
1988-1994; Treasurer of the
Company, 1988-1992. He is 44
years old.
</TABLE>
The following members of the Board of Directors were elected
to their present terms, which expire in 1996, at the Annual
Meeting of Shareholders held February 3, 1993 except for Mr.
Streeter, who was elected to his present term at the Annual
Meeting of Shareholders held February 2, 1994:
<TABLE>
<CAPTION>
Number of Percentage
Shares of
Name and Beneficially Shares
Director Since Information About Director Owned(1) Outstanding(2)
<S> <C> <C> <C>
Nicholas J. St. George President and Chief 250,980(7) ____ %
1972 Executive Officer of
the Company since 1979.
Director of American
Bankers Insurance
Group, Inc. and of Legg
Mason, Incorporated.
He is 55 years old.
4
<PAGE>
Robert D. Harvey, Sr. Executive Vice President 88,963(8) 4
1984 of the Company since 1989.
He is 52 years old.
A. Steven Michael Executive Vice President 85,184(9) 4
1992 and Chief Operating
Officer of the Company
since 1989. He is 44 years old.
Sabin C. Streeter Managing Director, Donaldson 12,500(10) 4
1993 Lufkin & Jenrette Capital
Corporation (investment banking
firm) since 1976. Director
of Middleby Corporation
and FOTOBALL, Inc. He is 53
years old.
</TABLE>
The following members of the Board of Directors were elected
to their present terms, which expire in 1997, at the Annual
Meeting of Shareholders held February 2, 1994:
<TABLE>
<CAPTION>
Number of
Shares Percentage
Name and Beneficially of Shares
Director Since Information About Director Owned(1) Outstanding(2)
<S> <C> <C> <C>
Ralph L. Darling Chairman of the Board 513,993(11) ___%
1971 of the Company since 1971.
He is 83 years old.
Kermit G. Phillips, II Chairman of the Board, 116,894(12) 4
1979 Phillips Management
Group, Inc., Greensboro,
NC (real estate development
and management company) since
1974. He is 60 years old.
H. Michael Weaver Chairman of the Board of 48,562(5) 4
1991 W.H. Weaver Construction
Company (general construction,
real estate development and
management) since 1975.
He is 57 years old.
5
<PAGE>
Francis T. Vincent, Jr. Private Investor. 8,500(10) 4
1993 Commissioner of Major
League Baseball, 1989-1992;
Deputy Commissioner of Major
League Baseball, 1988.
Director of Time-Warner Inc.,
The Continental Corporation
and Culbro Corporation.
He is 56 years old.
</TABLE>
____________________
(1) Common Stock ownership information is as of December 2,
1994.
(2) Based on the number of shares outstanding plus shares sub-
ject to options held by the director which are presently
exercisable or exercisable within 60 days.
(3) Includes 36,090 shares subject to options which are present-
ly exercisable or exercisable within 60 days and 1,171
shares held by Mr. Walker's wife.
(4) Less than 1%.
(5) Includes 36,090 shares subject to options which are present-
ly exercisable or exercisable within 60 days and 2,594
shares held by Mr. Meyer's wife.
(6) Includes 21,521 shares subject to options which are present-
ly exercisable or exercisable within 60 days.
(7) Includes 158,257 shares subject to options which are pres-
ently exercisable or exercisable within 60 days.
(8) Includes 64,304 shares subject to options which are present-
ly exercisable or exercisable within 60 days.
(9) Includes 60,875 shares subject to options which are present-
ly exercisable or exercisable within 60 days.
(10) Includes 7,500 shares subject to an option which is present-
ly exercisable or exercisable within 60 days.
(11) Includes 48,190 shares held by Mr. Darling's wife. A Stock
Purchase and Option Agreement between Mr. Darling and the
Estate of Mr. James E. LaVasque grants to Mr. Darling the
right of first refusal to purchase any of the Common Stock
that the Estate proposes to sell. The trusts established
under the will of Mr. LaVasque owned 149,999
6
<PAGE>
shares of Common Stock at December 2, 1994. None of the LaVasque
trust shares are included above.
(12) Includes 36,090 shares subject to options which are presently
exercisable or exercisable within 60 days.
Committees of the Board of Directors
The Audit Committee is composed of Kermit G. Phillips, II,
S. Gray Steifel, Jr. and Clarence W. Walker. This Committee is
responsible for recommending independent public accountants for
the Company and reviewing the Company's financial statements,
audit reports, internal financial controls and internal audit
procedures. The Audit Committee met three times during the year
ended September 30, 1994.
The Compensation Committee is composed of Dennis I. Meyer,
Sabin C. Streeter, Francis T. Vincent, Jr. and H. Michael Weaver.
This Committee reviews and makes recommendations and determina-
tions with respect to the compensation of officers. The Compen-
sation Committee met six times during the fiscal year ended
September 30, 1994.
The Board of Directors of the Company does not have a
Nominating Committee.
The Board of Directors met seven times during the fiscal
year ended September 30, 1994. Each director attended more than
75% of the aggregate of the number of meetings of the Board of
Directors and the number of meetings of all Committees on which
he served.
Compensation Committee Interlocks and Insider Participation
The Compensation Committee is currently composed of Dennis
I. Meyer, Sabin C. Streeter, H. Michael Weaver and Francis T.
Vincent, Jr. Until November 2, 1994, Clarence W. Walker was a
member of the Compensation Committee.
The law firm of Baker & McKenzie, of which Dennis I. Meyer
is a partner, has performed certain legal services for the
Company during the past fiscal year and such firm may provide
similar services to the Company during the current fiscal year.
Donaldson Lufkin & Jenrette Securities Corporation, of which
Sabin C. Streeter is Managing Director, has provided investment
banking services to the Company during the past fiscal year and
such firm may provide similar services to the Company during the
current fiscal year.
Weaver, Grubar & Black Company, a real estate broker, of
which H. Michael Weaver is Chairman of the Board and principal
shareholder, has received $___________ for its services to the
Company in connection with the sale of certain of the Company's
properties. In addition, W. H. Weaver Construction Company, of
which Mr. Weaver is Chairman of the Board and
7
<PAGE>
principal shareholder, is serving as construction manager in
connection with the construction of the Company's new headquarters
in Greensboro, North Carolina. W. H. Weaver Construction Company
will receive $440,000 for such services. The fees for services
provided by Weaver, Grubar & Black Company and W.H. Weaver
Construction Company were negotiated on an arms-length basis and
the Company believes such fees are comparable to fees charged by
others in the area for similar services.
The law firm of Kennedy Covington Lobdell & Hickman, L.L.P.,
of which Clarence W. Walker is a partner, has served as counsel
to the Company since 1971. It is expected that such firm will
continue to serve as counsel to the Company during the current
fiscal year.
Compensation Committee Report
Compensation Committee. The Compensation Committee (the
"Committee") is a standing committee of the Board of Directors
composed of outside directors who are not employees of the
Company. Mr. Streeter is the Chairman. Messrs. Meyer, Vincent
and Weaver are the other members.
The Committee is responsible for seeing that the executive
compensation programs of the Company are developed, implemented
and administered in a way that supports the Company's objective
of linking compensation to performance. The Committee reviews
and sets the base compensation and incentive compensation targets
of senior executives, including the President and Chief Executive
Officer, Nicholas J. St. George, and administers the Company's
1990 Long Term Performance Plan, including the granting of stock
options and stock appreciation rights ("SARs") and long-term cash
incentive compensation awards thereunder.
Corporate Compensation Philosophy. The Committee believes
that base compensation should be at a level sufficient to enable
the Company to attract and retain the highly qualified executives
it needs and that incentives should be provided to maximize the
Company's financial and operating results each year and over the
long term. Therefore, a major portion of each executive's annual
compensation is provided through bonuses dependant on the accom-
plishment of annual performance goals set by the Committee and
long-term incentives are provided through long-term cash incen-
tive compensation awards and grants of stock options and SARs
which link the interests of the Company's executives and share-
holders.
Executive Compensation. The Company's executive compensa-
tion program is composed of three basic elements: (A) base
salary; (B) annual incentive opportunities to earn significant
additional cash; and (C) long-term opportunities to accumulate
shares of Common Stock and SARs and to earn cash awards based
upon the Company's performance.
Base Salary. The Committee believes it has set execu-
tive officers' base salaries at a level below the average level
at comparable companies. Executive officers' base salaries for
the four most highly compensated executive officers other than
Mr. St. George for fiscal 1994 increased an average of 37% for
fiscal 1994 compared to fiscal 1993. These increases
8
<PAGE>
were made because of the Committee's determination that executive
base salaries were significantly lower than base salaries at
comparable companies. The Committee believes that the increase in the
level of base salary of the Company's executives was desirable to
enable the Company to attract and retain the highly qualified
individuals the Company needs.
Annual Incentive Compensation. The Committee estab-
lishes an annual incentive compensation pool to be distributed
among participating executive officers (according to predeter-
mined participation percentages) if a level of target net earn-
ings set by the Committee is met. This pool diminishes if net
earnings are less than the target and increases if the target is
exceeded. The executives eligible to participate and their
percentage participation is determined by the Committee based
upon the participant's level of responsibility and capacity to
contribute to the achievement of annual profit goals. The
Committee attempts to set an incentive compensation pool that
will allow executives' annual cash compensation (base salary plus
incentive compensation) to significantly exceed the median annual
cash compensation levels at comparable companies if the Company
achieves the target net income. The average annual incentive
compensation received in fiscal 1994 by the four most highly
compensated executive officers other than Mr. St. George was 13%
lower than in fiscal 1993. This is a result of certain one-time
bonuses paid in fiscal 1993 and an increase in the target net
earnings for fiscal 1994.
Long Term Incentive Awards. The Committee provides
long term incentives in the form of stock options, SARs and
performance-based cash awards granted under the Company's 1990
Long Term Performance Plan. The stock options and SARs seek to
advance the long term interests of the shareholders by providing
rewards to executives if the price of the Company's stock appre-
ciates. The number of stock options and SARs granted by the
Committee is based on the level of responsibility of the execu-
tive and the executive's performance. The executive's right to
exercise stock options or SARs vests over a period generally
ranging from one to five years. Certain options and SARs granted
by the Committee are contingent upon the Company meeting certain
target performance levels.
In November 1993 the Committee established a three-year
performance program, consisting of grants of stock options and
performance-based cash awards to executive officers and other key
employees of the Company. The stock options are exercisable in
November 1996. It is expected that no additional stock options
will be granted to the participating individuals during the three
year duration of the program. The performance-based cash awards
are subject to shareholder approval at the 1995 Annual Meeting of
Shareholders. The performance-based cash awards will increase or
decrease based upon the Company's net income over the three-year
period. A more complete description of the terms of the perfor-
mance-based cash awards is included under the heading "Approval
of Performance-Based Compensation for Certain Executive Offi-
cers." The performance-based cash awards are designed to provide
executive officers compensation significantly above levels at
comparable companies if the Company achieves significant increas-
es in net income over the three-year period. The stock and cash
elements of the program are designed to link the interests of the
executive officers and key
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<PAGE>
employees of the Company with the long-term performance of the
Company which the Committee believes will add to shareholder value.
Deductibility of Compensation. The Committee generally
attempts to see that cash compensation paid to executive officers
is deductible for federal income tax purposes. All cash compen-
sation paid in fiscal 1994 was deductible. However, cash compen-
sation payable under the annual incentive compensation pool could
cause a portion of the Company's cash compensation not to be
deductible in the future. The Compensation Committee expects to
examine this in fiscal 1995. Because the three-year cash awards
may result in certain executive officers receiving more than $1
million in cash compensation in the year in which such awards are
paid, the Committee is seeking shareholder approval of the three-
year cash awards to insure deductibility of such cash awards.
However, if such shareholder approval is not obtained, the
Committee will retain the right to pay compensation in excess of
$1 million, whether or not such compensation is deductible, and
will do so if the Committee determines that such payments are
necessary or desirable to attract and retain quality executives.
Stock options granted by the Committee are generally incentive
stock options. As a result, the Company receives no deduction on
the exercise of such options.
Chief Executive Officer Compensation. The Company's compen-
sation for the President and Chief Executive Officer, Mr. Nicho-
las J. St. George, consists of the same three basic elements as
that for the Company's other executive officers.
Base Salary. Mr. St. George's base salary was set for
fiscal 1994 at $325,000, which represents an increase of 62.5% in
Mr. St. George's base salary over fiscal 1993. This raise in Mr.
St. George's base salary resulted from the Committee's belief
that Mr. St. George's base salary was significantly lower than
base salaries of chief executive officers at comparable compa-
nies. Despite the increase in Mr. St. George's base salary, the
Committee is advised that Mr. St. George's base salary continued
to be lower than the median base compensation of chief executive
officers at comparable companies.
Annual Incentive Compensation. Mr. St. George's fiscal
1994 participation in the incentive compensation pool for senior
executives was significantly higher than any of the other execu-
tives who participated in the pool, reflecting Mr. St. George's
level of responsibility. Mr. St. George's cash incentive compen-
sation for fiscal 1994 was $564,000, a decrease of 26% below
fiscal 1993. This decrease is a result of a one-time bonus paid
in fiscal 1993 and the higher target net earnings established by
the Committee for purposes of the incentive compensation pool for
fiscal 1994.
Long Term Incentive Awards. Mr. St. George was one of
the executive officers selected by the Committee to receive stock
options and performance-based cash awards in November 1993. Mr.
St. George was granted options to purchase a total of 82,500
shares of Common Stock exercisable in November 1996 along with
certain rights to receive cash payments at the time of exercise
to help offset Mr. St. George's tax obligations resulting from
the exercise of nonqualified stock options to purchase 50,000
shares. In addition, Mr. St. George was
10
<PAGE>
awarded the opportunity to earn a target amount of $1,102,000 in a
performance-based cash award. This amount may be significantly
increased based upon the net income of the Company over a three-year
period. The performance-based cash award is subject to the
approval of the shareholders at the 1995 Annual Meeting of
Shareholders and is more fully described under the heading
"Approval of Performance-Based Compensation for Certain Executive
Officers."
Sabin C. Streeter, Chairman
Dennis I. Meyer
H. Michael Weaver
Francis T. Vincent, Jr.
Shareholder Return Performance Graph
Presented below is a line graph comparing the yearly per-
centage change in the Company's cumulative shareholder return on
the Company's Common Stock against the cumulative total return of
the Standard & Poors ("S&P") 500 Index and a peer group for the
period commencing October 1, 1989 and ending September 30, 1994,
covering the Company's last five fiscal years. The peer group
consists of the following publicly traded companies, all of which
are engaged in aspects of the manufactured housing industry:
Cavalier Homes, Inc., Champion Enterprises, Inc., Clayton Homes,
Inc., Fleetwood Enterprises, Inc., Liberty Homes, Inc., Schult
Homes Corporation and Skyline Corporation.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
AMONG THE COMPANY, S&P 500 INDEX AND PEER GROUP
OAKWOOD HOMES CORPORATION
Total Cumulative Shareholder Return for
Period Ending September 30, 1994
[Comparison graph appears here plot points are as followed]
<TABLE>
<CAPTION>
September 30... 1989 1990 1991 1992 1993 1994
<S> <C> <C> <C> <C> <C> <C>
Oakwood Homes 100.00 102.72 222.49 383.32 667.01 646.70
Peer Group 100.00 79.19 144.30 172.37 248.65 264.83
S&P 500 100.00 91.55 120.06 133.60 151.27 157.20
</TABLE>
11
<PAGE>
Executive Compensation
The table below shows certain compensation information for
the three fiscal years ended September 30, 1994 concerning the
Company's Chief Executive Officer and the Company's other four
most highly compensated executive officers (collectively, the
Named Executive Officers).
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Annual Compensation Long Term Compensation
Awards
Name and Other Annual Options/ All Other
Principal Fiscal Salary Bonus Compensation SARs Compen-
Position Year ($) ($) ($)(1) (#) sation($)(2)
<S> <C> <C> <C> <C> <C> <C>
Nicholas J. St. George 1994 325,000 673,000 -- 82,500(3)/0
President and Chief 1993 200,000 758,400 -- 0 6,302
Executive Officer 1992 200,000 384,300 -- 0 N/A
A. Steven Michael 1994 180,000 282,000 -- 17,000/0
Executive Vice President 1993 115,000 327,300 -- 0 8,708
of the Company 1992 115,000 170,000 -- 60,000/15,000 N/A
Robert D. Harvey, Sr. 1994 145,000 206,800 -- 10,500/0
Executive Vice President 1993 110,000 229,650 -- 0 13,060
of the Company 1992 110,000 124,000 -- 36,000/9,000 N/A
C. Michael Kilbourne 1994 140,000 206,800 -- 11,000/0
Executive Vice President 1993 100,000 252,800 -- 0 6,302
of the Company 1992 100,000 110,000 -- 42,000/10,500 N/A
J. Michael Stidham 1994 105,000 177,000 -- 5,000/0
Executive Vice President 1993 90,000 164,450 -- 0 5,034
of Oakwood Mobile 1992 80,000 81,887 -- 36,000/9,000 N/A
Homes, Inc.
</TABLE>
(1) No Named Executive Officer has received personal bene-
fits during the listed years in excess of 10% of annual
salary and bonus.
(2) The components of the amounts shown in this column con-
sist of Company contributions under the Company's vari-
ous retirement plans for Messrs. St. George, Michael,
Harvey, Kilbourne and Stidham, respectively, of $______-
__, $________, $________, $________ and $________, for
1994 and $6,302, $6,302, $6,302, $6,302 and $4,309 for
1993, and the interest accrued on deferred compensation
accounts that are considered by the Securities and Ex-
change Commission to be at above-market rates in the
amounts of $360, $2,236, $5,132, $120 and $792 for the
accounts of Messrs. St. George, Michael, Harvey, Kilbou-
rne and Stidham, respectively, for 1994 and $2,406,
$6,758 and $725 for the accounts of Messrs. Michael,
Harvey and Stidham, respectively, for 1993. Information
for the 1992 fiscal year is not presented pursuant to
transitional rules of the Securities and Exchange Com-
mission.
12
<PAGE>
(3) A non-qualified stock option for 50,000 shares, included
in the 82,500, contains a tax-reimbursement element
which will flow through to Mr. St. George certain tax
benefits the Company will receive relating to Mr. St.
George's exercise.
The table below sets forth all option and SAR grants during
the fiscal year ended September 30, 1994 to each Named Executive
Officer and the potential realizable value of each grant of
options assuming annualized appreciation in the Common Stock at
the rate of 5% and 10% over the term of the option.
<TABLE>
<CAPTION>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
Potential Realizable
Value at Assumed Annual
Rates of Stock Price
Appreciation for
Individual Grants Option Term
% of Total
Number of Options/SARs Exercise
Shares Underlying Granted to or Base
Name Options/SARs Employees in Price Expiration
Granted (# Sh) Fiscal Year $/Sh) Date 5% ($) 10% ($)
<S> <C> <C> <C> <C> <C> <C>
Nicholas J. St. George 32,500 15.5% $26.50 11/16/2003 541,640 1,372,574
50,000(1) 23.8% $26.50 11/16/2003 833,292 2,111,652
A. Steven Michael 17,000 8.1% $26.50 11/16/2003 283,319 717,962
Robert D. Harvey, Sr. 10,500 5.0% $26.50 11/16/2003 174,991 443,477
C. Michael Kilbourne 11,000 5.2% $26.50 11/16/2003 183,324 464,564
J. Michael Stidham 5,000 2.4% $26.50 11/16/2003 83,329 211,165
</TABLE>
__________________
(1) Grant also included a tax-reimbursement element which
will flow through to Mr. St. George certain tax benefits
the Company will receive relating to Mr. St. George's
exercise.
13
<PAGE>
The table below sets forth, on an aggregated basis, each
exercise of stock options or SARs during the fiscal year ended
September 30, 1994 by each of the Named Executive Officers and
the 1994 fiscal year-end value of unexercised options and SARs.
<TABLE>
<CAPTION>
AGGREGATED OPTION/SAR EXERCISES IN THE 1994
FISCAL YEAR AND FY-END OPTION/SAR VALUES
Value of
Number of Unexercised
Unexercised In-the-Money
Options/SARs Options/SARs
at FY-End (#) at FY-End ($)
Shares Value
Acquired on Realized Exercisable/ Exercisable/ Une-
Name Exercise ($) Unexercisable xercisable
<S> <C> <C> <C> <C>
Nicholas J. St. George 40,000 $883,700 158,257/187,618 $3,116,441/
$1,744,959
A. Steven Michael 0 0 60,875/77,000(1) $1,253,892/
$918,600
Robert D. Harvey, Sr. 6,152 $106,876 64,304/46,500(1) $1,306,312/
$551,160
C. Michael Kilbourne 0 0 21,521/53,000(1) $433,644/
$643,000
J. Michael Stidham 0 0 13,837/41,000(1) $280,052/
$551,160
</TABLE>
_____________________
(1) Includes options to purchase certain shares and certain
stock appreciation rights which are contingent upon
Company performance and certain other factors through
the 1995 fiscal year. Assumes all shares and stock
appreciation rights will be earned.
14
<PAGE>
The table below sets forth information concerning certain
long-term incentive awards (the "Awards") made during the fiscal
year ended September 30, 1994. The Awards are payable in cash
and contain no minimum or maximum payment. The amount paid
depends on the increase in the Company's net income during the
three-year period ended September 30, 1996 and are more fully
described under the caption "Approval of Performance-Based
Compensation for Certain Executive Officers."
<TABLE>
<CAPTION>
LONG-TERM INCENTIVE PLANS -
AWARDS IN LAST FISCAL YEAR
Performance Period Until
Name Number of Units Maturation or Payout Target Future Payout
<S> <C> <C> <C>
Nicholas J. St. George 1,102,000 November 16, 1996 $1,102,000
A. Steven Michael 580,000 November 16, 1996 $580,000
Robert D. Harvey, Sr. 356,000 November 16, 1996 $356,000
C. Michael Kilbourne 372,000 November 16, 1996 $372,000
J. Michael Stidham 170,000 November 16, 1996 $170,000
</TABLE>
Compensation of Directors
The directors of the Company who are not employees are paid
an annual fee of $22,000 plus $1,000 for each Board meeting
attended, $1,000 for each Committee meeting attended and not held
on the same day as a Board meeting and $500 for each Board
meeting participated in by conference telephone. Non-employee
directors are also eligible to receive stock options under the
Company's 1990 Director Stock Option Plan under which each non-
employee director was granted an option to purchase 7,500 shares
of the Common Stock on each of July 30, 1992 and 1994 and will be
granted an option to purchase 7,500 shares of Common Stock on
July 30, 1996 at an option price equal to the fair market value
of the Common Stock on such dates. The number of shares granted
on July 30, 1996 may be adjusted downward if there is not a
sufficient number of shares reserved under the plan.
Employment Contracts, Termination of Employment and
Change of Control Arrangements
The Company has entered into employment agreements with
Messrs. St. George, Harvey and Michael. The agreements provide
that in the event of a change of control of the Company, as
defined in the agreements, before or on January 30, 1996, these
executives will remain in the employ of the Company for two years
after such change of control. If the employment of an executive
is terminated within two years after such change of control for
reason other than death, disability or cause, as defined in the
agreements, or if an executive resigns during such time for good
reason, as defined in the agreements, the executive is entitled
to a lump sum payment equal to two times his annual compensation.
The agreements are intended to provide key executives
15
<PAGE>
a greater sense of security, assure their objectivity in analyzing
any potential change in control and preserve continuity of
management in the event of a change in control.
The Company has entered into Executive Disability Benefit
Agreements with Messrs. St. George and Harvey. Under the dis-
ability agreements, the Company will pay to these executives
their then current base salary for the first 180 days they are
totally disabled. After such time, they will be paid specified
sums so long as they are totally disabled and under the age of
65. The agreements provide for Messrs. St. George and Harvey to
receive $23,942 and $4,953 per month, respectively, in the event
of their total disability. In the event of a partial disability,
the executives will receive lesser payments. In no event,
however, will the Company be obligated under the disability
agreements to pay more than twice the amount of the payments the
Company will receive pursuant to disability income policies
purchased by the Company to insure each executive.
The Company has entered into Executive Retirement Benefit
Employment Agreements with Messrs. St. George, Harvey, Michael,
Kilbourne and Stidham. Pursuant to the retirement agreements,
these executives will receive monthly retirement benefit payments
for a period of fifteen years. The amount of such retirement
payments will vary according to the reason for the termination of
the executive's employment and the age of the executive at the
time of termination. Mr. St. George is entitled to payments if
he retires after reaching age 55 and Messrs. Harvey, Michael,
Kilbourne and Stidham after reaching age 60. The annual retire-
ment benefit payable upon retirement at age 65 to each of the
Named Executive Officers is as follows: $403,212 for Mr. St. Ge-
orge, $165,012 for Mr. Harvey, $315,680 for Mr. Michael, $150,399
for Mr. Kilbourne and $158,351 for Mr. Stidham. The benefit
amount decreases for each year the executive retires before age
65. Retirement benefits will be paid to an executive if he
leaves the Company before the minimum retirement age as a result
of a termination without cause or a voluntary termination with
the approval of the Board of Directors or if an executive is
terminated without his consent and without cause after a change
of control of the Company.
Compliance with Section 16(a) of Securities Exchange Act of 1934
Section 16(a) of the Securities and Exchange Act of 1934 (the
Exchange Act) requires the Company's directors and executive
officers and persons who own more than 10% of the Company's
Common Stock to file with the SEC initial reports of ownership
and reports of changes in ownership of the Common Stock and other
equity securities. Officers, directors and greater than 10%
shareholders are required to furnish the Company with copies of
all such reports they file. To the Company's knowledge, based
solely on a review of the copies of such reports furnished to the
Company and written representations that no other reports were
required, during the fiscal year ended September 30, 1994, all
Section 16(a) filing requirements applicable to its executive
officers, directors and greater than 10% beneficial shareholders
were complied with, except that Larry T. Gilmore, an executive
officer of the Company, failed to report one transaction. Such
transaction has since been reported.
16
<PAGE>
Approval of Performance-Based Compensation for Certain Executive
Officers
In November 1993, the Compensation Committee of the Board of
Directors awarded certain executive officers and key employees
performance-based cash awards (the "Three-Year Incentive Awards")
under the Company's 1990 Long Term Performance Plan, subject to
shareholder approval at the 1995 Annual Meeting of Shareholders.
The Company's 1990 Long Term Performance Plan, which was approved
by the shareholders at the Company's 1991 Annual Meeting of
Shareholders, authorizes the Compensation Committee to make cash
incentive awards to key employees. The Three-Year Incentive
Awards are designed to provide long-term performance compensation
to executive officers of the Company in the event specific net
income goals are achieved.
Background. The Revenue Reconciliation Act of 1993 added
Section 162(m) to the Internal Revenue Code (the "Code") effec-
tive January 1, 1994. Section 162(m) provides, among other
things, that compensation in excess of $1,000,000 paid to a
corporation's chief executive officer and the four other highest
paid executive officers who are employed by the corporation at
the end of a fiscal year will not be deductible for Federal
income tax purposes unless the compensation is "qualified perfor-
mance-based compensation." The Compensation Committee believes
that the Three-Year Incentive Awards currently comply with all of
the requirements for "qualified performance-based compensation"
except possibly the shareholder approval requirement. Even
though the shareholders of the Company have previously approved
the 1990 Long Term Performance Plan under which the Three-Year
Incentive Awards have been granted, the Compensation Committee is
seeking shareholder approval so that there can be no question
about the deductibility of the Three-Year Incentive Awards
because such Awards could cause compensation paid to certain
executive officers to exceed $1 million in the year in which the
Awards are paid. The following is a summary of the material
terms of the Three-Year Incentive Awards.
Administration. The Program will be administered by the
Compensation Committee of the Board of Directors.
Eligibility. Ten key employees of the Company have been
selected by the Compensation Committee to receive Three-Year
Incentive Awards, including the Named Executive Officers, four
other executive officers and another key employee. Such employ-
ees were selected to receive awards based on their level of
responsibility and overall contribution to the performance of the
Company.
Operation of the Program. The Three-Year Incentive Awards
provide each of the participating key employees with the opportu-
nity to earn a target cash payment (the "Target Cash Payment") if
the aggregate net income of the Company for the three fiscal
years ending September 30, 1996 ("Three-Year Net Income") equals
$97,846,000 ("Target Three-Year Net Income"), such amount being
the equivalent of a compound increase of 15% each year of the
three year period over the Company's net income for its fiscal
year ended September 30, 1993 ("Base Net Income"). For purposes
of determining the compound annual growth rate, it is
17
<PAGE>
assumed that Three-Year Net Income grew at a constant compounded
rate regardless of the actual level of net income in any given year.
In the event Three-Year Net Income exceeds Target Three-Year Net
Income, then the amounts payable to such individuals will in-
crease as follows: for each 1% by which the compound annual
growth rate of Three-Year Net Income over Base Net Income exceeds
15%, the cash payment to each participant will be increased by
25% of the Target Cash Payment. If Three-Year Net Income falls
short of Target Three-Year Net Income, then the amounts payable
shall decrease as follows: for each 1% by which the compound
annual growth rate of Three-Year Net Income over Base Net Income
is less than 15%, the cash payment to each participant will be
decreased by 33 1/3% of the Target Cash Payment. For increases
or decreases that amount to less than 1% in compound growth
rates, the increase or decrease in the Target Cash Payment shall
be prorated accordingly. No cash payments will be made if Three-
Year Net Income represents a 12% or lower compound annual growth
rate over Base Net Income.
For purposes of the Three-Year Incentive Awards, Three-Year
Net Income and Target Three-Year Net Income are determined based
on the consolidated income of the Company and its subsidiaries
before accruals for the cash incentive compensation payable under
the Three-Year Incentive Awards but after provision for income
taxes, and will be determined by the Compensation Committee by
reference to the certified consolidated financial statements of
the Company prepared in accordance with generally accepted
accounting principles by the Company's regularly employed certi-
fied public accountants. The Compensation Committee may, in its
discretion, order downward adjustments to the amount of the
Three-Year Incentive Awards to take account of significant
transactions that externally affect Three-Year Net Income, such
as mergers, acquisitions and stock offerings.
The Target Cash Payment amounts for the Chief Executive
Officer, each of the Named Executive Officers, all executive
officers as a group and all employees other than executive
officers as a group are shown below. The Target Cash Payments
presented in the table below are based on Three-Year Net Income
equaling Target Three-Year Net Income, or a 15% compound increase
in Three-Year Net Income over Base Net Income. The amounts
actually paid may increase significantly from Target Cash Pay-
ments. In fiscal 1994, before accruals for the Three-Year
Incentive Awards, the Company had net income of approximately
$36.1 million, approximately a 46% increase over Base Net Income.
In fiscal 1994, the Company accrued approximately $3.46 million
for payment of the Three-Year Incentive Awards.
Name and Position Target Cash Payment
Nicholas J. St. George $1,102,000
President and Chief Executive Officer
A. Steven Michael 580,000
Executive Vice President
Robert D. Harvey 356,000
Executive Vice President
18
<PAGE>
C. Michael Kilbourne 372,000
Executive Vice President
J. Michael Stidham 170,000
Executive Vice President of Oakwood
Mobile Homes, Inc.
All executive officers
as a group (9 persons) 3,180,000
All employees other than executives 114,000
officers as a group (1 person)
No employee not named has a Target Cash Payment greater than
$170,000.
A participant will forfeit all rights to receive any cash
payments under the Three-Year Incentive Awards unless he remains
in the continuous employment of the Company from November 16,
1993 through November 16, 1996, except that if a participant's
employment is terminated by reason of his death or disability
occurring after November 16, 1994 then (i) with respect to such
participant, the compound growth rate in net income will be
determined on the basis of the number of full fiscal years of the
Company that have elapsed between September 30, 1993 and the date
of termination and (ii) the cash awards, if any, earned by such
participant will be prorated by multiplying the Target Cash Award
by a fraction the numerator of which is the number of full fiscal
years that have elapsed between September 30, 1993 and the date
of termination and the denominator of which is three.
Amendment of the Program. The terms of the Three-Year
Incentive Awards may be amended at any time by the Compensation
Committee in its sole discretion in order to adjust downward the
Three-Year Incentive Awards to reflect significant transactions
that may externally affect Three-Year Net Income such as mergers,
acquisitions and stock offerings and may be amended to qualify
the Three-Year Incentive Awards as "qualified performance-based
compensation" under Code Section 162(m). The Compensation
Committee is not permitted to amend the terms of the Three-Year
Incentive Awards to increase the benefits payable to any partici-
pant. As required by Code Section 162(m), no material term of
the Three-Year Incentive Awards will be amended without share-
holder approval.
Recommendation. The Three-Year Incentive Awards are subject
to the condition that the awards be approved by the shareholders
of the Company. The Compensation Committee believes that the
Three-Year Incentive Awards provide an important link between the
compensation of the Company's key employees and the Company's
long-term performance. If the shareholders do not approve the
Three-Year Incentive Awards, the Compensation Committee will
retain the right to provide additional compensation that it
believes desirable to ensure that the Company will retain the
services of key employees who had received Three-Year Incentive
Awards. Such compensation may not be deductible for Federal
income tax purposes.
The Board of Directors recommends a vote FOR approval of the
Three-Year Incentive Awards. The affirmative vote of a majority
of votes cast with respect to the Three-Year
19
<PAGE>
Incentive Awards is required for approval of the Three-Year
Incentive Awards. Abstentions and broker non-votes will have no
effect.
Approval of an Amendment to the Company's Bylaws
On November 16, 1993, the Board of Directors approved,
subject to the approval of the shareholders at the 1995 Annual
Meeting of Shareholders, an amendment to Section 3.2 of Article
III of the Bylaws of the Company which would increase the minimum
and maximum number of members of the Board of Directors. The
Bylaws as currently in effect provide that the number of direc-
tors of the Company shall not be less than three nor more than
eleven. The current Bylaws, as well as the proposed amendment to
the Bylaws, provide for directors to serve three year staggered
terms. As amended, the Bylaws would provide that the number of
directors of the Company shall not be less than seven nor more
than fifteen. Amended Section 3.2 would read as follows:
Section 3.2 Number, Term and Qualification. The
Number of Directors of the Corporation shall be a maximum
of fifteen (15) and a minimum of seven (7) and the exact
number of directors within these limits shall be fixed
from time to time by resolution of the Board of Direc-
tors. Any directorships not filled by the shareholders
shall be treated as vacancies to be filled by and in the
discretion of the Board of Directors. The directors
shall be divided into three classes, each class to be as
nearly equal in number as possible. Each class of direc-
tors shall be elected to serve for terms of three (3)
years and until their successors shall be elected and
qualified. In the event of any increase in the autho-
rized number of directors, the additional directors shall
be classified so that all classes of directors shall be
increased equally, as nearly as possible, and, in the
event of any decrease in the authorized number of direc-
tors, all classes of directors shall be decreased equal-
ly, as nearly as possible. In the event of the death,
resignation, retirement, removal or disqualification of a
director during his elected term of office, his successor
shall be elected to serve only until the expiration of
the term of his predecessor. Directors need not be
residents of the State of North Carolina or shareholders
of the Corporation.
The current bylaw was adopted when the Company was signifi-
cantly smaller than it currently is. There are now eleven
members of the Board of Directors, the maximum permitted under
the Company's present Bylaws. The Board of Directors believes
that the amendment is desirable so that the Board of Directors
will have the flexibility, if it deems it advisable, to add
additional members to the Board of Directors who can contribute
to the continuing growth of the Company.
The amendment requires the affirmative vote of the holders of
at least 75% of the shares of the Common Stock entitled to vote.
Abstentions and broker non-votes will have the effect of negative
votes. Proxies solicited by the Board of Directors will be voted
for the approval of the amendment, unless shareholders specify a
different choice. The Board of Directors recommends a vote FOR
the approval of the amendment to the Bylaws.
20
<PAGE>
Ratification of Selection of Independent Public Accountants
The Board of Directors has selected Price Waterhouse LLP as
independent public accountants to examine the financial state-
ments of the Company and its subsidiaries for the fiscal year
ending September 30, 1995. This selection is being presented to
the shareholders for their ratification at the Annual Meeting.
The firm of Price Waterhouse LLP has examined the financial
statements of the Company since 1977. Representatives of Price
Waterhouse LLP are expected to be present at the Annual Meeting
of Shareholders with an opportunity to make a statement if they
desire to do so and are expected to be available to respond to
appropriate questions.
The Board of Directors recommends a vote FOR ratification of
the selection of Price Waterhouse as independent public accoun-
tants to examine the financial statements of the Company and its
subsidiaries for the fiscal year ending September 30, 1995, and
proxies solicited by the Board of Directors will be so voted
unless shareholders specify otherwise.
Shareholder Proposals
Any proposal that a shareholder intends to present for action
at the 1996 Annual Meeting of Shareholders, currently scheduled
for January 31, 1996, must be received by the Company no later
than August __, 1995 in order for the proposal to be included in
the proxy statement and form of proxy for the 1996 Annual Meeting
of Shareholders. The proposal should be sent to Secretary,
Oakwood Homes Corporation, Box 7386, Greensboro, North Carolina
27417-0386.
21
<PAGE>
PRELIMINARY COPY
OAKWOOD HOMES CORPORATION
PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR ANNUAL MEETING OF SHAREHOLDERS TO BE HELD FEBRUARY 1, 1995
The undersigned hereby appoints RALPH L. DARLING and
NICHOLAS J. ST. GEORGE, and each or either of them proxies, with
full power of substitution, with the powers the undersigned would
possess if personally present, to vote, as designated below, all
shares of the $.50 par value Common Stock of the undersigned in
Oakwood Homes Corporation at the Annual Meeting of Shareholders
to be held February 1, 1995, and at any adjournment thereof.
This proxy will be voted FOR the election of all nominees as
directors and FOR items 2, 3 and 4 unless otherwise specified.
The Board of Directors recommends voting for on each item.
1. ELECTION OF DIRECTORS: Nominees are Clarence W. Walker,
Dennis I. Meyer and C. Michael Kilbourne
[ ] FOR all listed nominees [ ] WITHHOLD AUTHORITY to
(except do not vote for vote for the listed
the nominee(s) whose nominees
name(s) I have written
below)
2. APPROVAL OF PERFORMANCE-BASED COMPENSATION FOR KEY EMPLOYEES
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. APPROVAL OF AMENDMENT TO BYLAWS
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(Continued and to be signed on the reverse)
<PAGE>
4. RATIFICATION OF SELECTION OF PRICE WATERHOUSE LLP AS INDEPENDENT
PUBLIC ACCOUNTANTS:
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(Continued from other side)
In their discretion, the proxies are authorized to vote upon
such other business as may properly come before the meeting.
Receipt of Notice of Annual Meeting and accompanying Proxy
Statement is hereby acknowledged. This proxy will be voted as
specified herein, and, unless otherwise directed, will be voted
FOR the election of all nominees and FOR items 2, 3 and 4.
Please date, sign exactly as printed below and return
promptly in the enclosed postage-paid envelope.
Dated: ________________________, 199__.
________________________________________
________________________________________
(When signing as attorney, executor,
administrator, trustee, guardian, etc.,
give title as such. If a joint account,
each joint owner should sign personal-
ly.)
<PAGE>
THREE-YEAR PERFORMANCE PROGRAM
Cash Incentive Awards
WHEREAS, this Compensation Committee deems it advisable and
in the best interests of the Corporation that cash incentive
awards in the form of Performance Units, each with a value of one
dollar ($1), be granted to the key employees named below, in the
amounts set opposite their respective names below, subject to the
terms and conditions set forth below and in the Plan.
NOW, THEREFORE, BE IT RESOLVED, that the following key
employees of this Corporation ("Participants") be, and each of
them hereby is, awarded the opportunity to earn the Performance
Units set forth opposite his name below, each such Unit to have
the value of One Dollar ($1), subject to the terms and conditions
set forth below and in the Plan:
Name Number of Performance Units
Nicholas J. St. George 1,102,000
A. Steven Michael 580,000
C. Michael Kilbourne 372,000
Robert D. Harvey 356,000
Larry M. Walker 170,000
Larry D. Gilmore 170,000
Michael Stidham 170,000
Jeffrey D. Mick 130,000
Douglas R. Muir 130,000
James D. Casterline 114,000
TOTAL UNITS 3,294,000;
provided, that the aggregate net income of the Corporation for
the three fiscal years ending September 30, 1996 ("Program Net
Income") is $97,846,000, such amount being the equivalent of a
compound increase of 15% per year over the Corporation's net
income for its fiscal year ending September 30, 1993 ("Base Net
Income"), and provided, further, that
(a) Excess. If Program Net Income exceeds
$97,846,000, then the amounts payable shall increase as
follows: for each 100 basis points by which the compound
annual growth rate of Program Net Income over Base Net
Income exceeds 15%, the number of Units earned by each
Participant shall be increased by 25% of the amount set
opposite his name above; and
(b) Shortfall. If Program Net Income falls short of
$97,846,000, then the amounts payable shall decrease as
follows: for each 100 basis points by which the compound
annual growth rate of Program Net Income over Base Net
Income is less than 15%, the number of Performance Units
<PAGE>
earned by each Participant shall be decreased by 33 1/3% of
the amount set forth opposite his name above; and
(c) Proration. For increases or shortfalls that
amount to fewer than 100 basis points in compound growth
rates, the increment or decrement in the Units earned shall
be prorated appropriately; and
(d) Illustration. An illustration of the application
of the foregoing Performance Unit awards is contained in
Exhibit B to the minutes of this meeting; and
(e) Forfeiture. A Participant shall forfeit all right
to receive any Performance Units under this Program unless
he remains in the continuous employment of the Corporation
from the date hereof through November 16, 1996, except that
if a Participant's employment is terminated by reason of his
death or disability occurring after November 16, 1994, then
(i) with respect to such Participant, Program Net Income
shall be determined on the basis of the number of full
fiscal years of the Corporation that have elapsed between
September 30, 1993, and the date of termination, (ii) the
number of Performance Units, if any, earned by such
Participant shall be prorated by multiplying the number of
Units set forth opposite his name above by a fraction the
numerator of which is the number of full fiscal years that
have elapsed between September 30, 1993, and the date of
termination, and the denominator of which is three, and
(iii) all other provisions of the Program shall apply; and
FURTHER RESOLVED, that for purposes of this Program, "Base
Net Income" and "Program Net Income" shall mean the consolidated
income of the Corporation and its subsidiaries before provision
for the cash incentive compensation payable under this Program
but after provision for income taxes, and shall be determined by
reference to the certified consolidated financial statements of
the Corporation prepared in accordance with generally accepted
accounting principles by the Corporation's regularly employed
certified public accountants, which financial statements shall be
conclusive and binding on all parties, provided, however, that
this Committee may, in its discretion, order adjustments in the
determination of Program Net Income to take account of
significant transactions that externally affect income, such as
mergers, acquisitions and stock offerings; and
FURTHER RESOLVED, that the cash value of Units earned under
this Program, as determined and certified by this Committee,
shall be paid as soon as practicable after November 16, 1996, or
as soon as practicable after the availability of audited
financial statements for the fiscal year ending September 30,
1996, whichever occurs last, except that in the case of a
Participant who dies or becomes disabled between November 16,
2
<PAGE>
1994, and November 16, 1996, it shall be paid as soon as
practicable after his death or disability; and
FURTHER RESOLVED, that any questions or disputes with
respect to the interpretation or application of this Program
shall be decided by this Committee, whose decision shall be final
and binding; and
FURTHER RESOLVED, that this Program may be amended at any
time by this Committee, and the earning and payment of
Performance Units as provided in the foregoing resolutions are
subject to the condition that this Program be presented to and
approved by the shareholders of this Corporation, if this
Committee determines, on advice of counsel, that amendment of
this Program or the securing of shareholder approval hereof is
necessary or advisable in order to assure that payments of
Performance Units hereunder are exempt from the limits of Section
162(m) of the Internal Revenue Code; and
FURTHER RESOLVED, that the proper officers of this
Corporation be, and they hereby are, authorized and empowered to
take such actions as shall in their discretion be necessary or
desirable in order to carry out the full intent and purposes of
the foregoing resolutions.
3
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