<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant (X)
Filed by a Party other than the Registrant ( )
Check the appropriate box:
( ) Preliminary Proxy Statement ( ) Confidential, for Use of the
Commission Only (as permitted
by Rule 14a-6(e)(2))
(X) Definitive Proxy Statement
( ) Definitive Additional Materials
( ) Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
OAKWOOD HOMES CORPORATION
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
(X) No fee required
( ) Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
( ) Fee paid previously with preliminary materials.
( ) 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>
OAKWOOD HOMES CORPORATION
P. O. BOX 27081, GREENSBORO, NORTH CAROLINA
27425-7081
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
JANUARY 29, 1997
NOTICE is hereby given that the Annual Meeting of Shareholders of
Oakwood Homes Corporation (the Company) will be held in the Auditorium of the
Joseph S. Koury Convention Center at the Four Seasons Holiday Inn, 3121 High
Point Road, Greensboro, North Carolina on Wednesday, January 29, 1997 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 and election of one member to the Board of Directors
for a term of two years and until his successor is elected and
qualified.
2. Ratification of the selection of Price Waterhouse LLP as
independent public accountants for the fiscal year ending
September 30, 1997.
3. Any and all other matters that may properly come before the
meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on November 29,
1996 as the record date for determining the shareholders entitled to notice of
and to vote at the meeting or any adjournment thereof and only holders of Common
Stock of the Company of record at such date will be entitled to notice 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 23, 1996
<PAGE>
OAKWOOD HOMES CORPORATION
P. O. BOX 27081, GREENSBORO, NORTH CAROLINA 27425-7081
----------------------
PROXY STATEMENT
----------------------
GENERAL
This Proxy Statement and the accompanying proxy card are being
furnished to the shareholders of Oakwood Homes Corporation (the "Company")
commencing on or about December 23, 1996 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 Joseph S. Koury Convention
Center at the Four Seasons Holiday Inn, 3121 High Point Road, Greensboro, North
Carolina on Wednesday, January 29, 1997 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 instructions,
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 authority thereby granted is
exercised by filing an instrument revoking it or a duly executed proxy bearing a
later date with the Secretary of the Company or if the person executing the
proxy attends the meeting and elects to vote in person. If a choice is specified
in the proxy, shares represented thereby will be voted in accordance with such
choice. If no choice is 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
November 29, 1996, which is the record date for
1
<PAGE>
determining the shareholders entitled to notice of and to vote at such meeting
or any adjournment 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
November 29, 1996 was 45,848,319 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. 6,149,900(1) 13.4%
82 Devonshire Street
Boston, MA 02109
- -------------------------
(1) The information concerning beneficial ownership is derived from a
Schedule 13G dated June 7, 1996, filed by FMR Corp. jointly on behalf
of FMR Corp., Edward C. Johnson, Fidelity Management & Research Company
("Fidelity") and the Fidelity Magellan Fund ("Magellan"). Magellan
owned 3,719,200 of such shares. FMR Corp. has sole voting power over
21,200 shares and sole dispositive power over all of the shares. FMR
Corp. does not have shared voting or dispositive power over any of the
shares. Fidelity carries out the voting of the shares owned directly by
various Fidelity funds under written guidelines established by the
funds' Boards of Directors.
The following table sets forth as of November 29, 1996 certain
information with respect to the beneficial ownership of the Common Stock by Mr.
J. Michael Stidham, Executive Vice President-- Retail of Oakwood Mobile Homes,
Inc., a wholly-owned subsidiary of the Company and Larry T. Gilmore, Executive
Vice President--Consumer Finance of Oakwood Acceptance Corporation, a
wholly-owned subsidiary of the Company, and by all directors and officers as a
group. Information as to the beneficial ownership of each of the other directors
individually (including executive officers who are also directors) is included
in the information on each director or nominee under the heading "Election of
Directors."
<TABLE>
<CAPTION>
Number of Shares Percentage of
Name of Beneficial Owner Beneficially Owned Shares Outstanding1
<S> <C> <C>
J. Michael Stidham 110,176(2) (3)
Larry T. Gilmore 97,044(4) (3)
All directors and executive 3,464,917(5) 7.4%
officers as a group (16 persons)
</TABLE>
2
<PAGE>
- -------------------------
(1) Based on the number of shares outstanding plus options which are
presently exercisable or exercisable within 60 days.
(2) Includes 71,750 shares subject to options which are presently
exercisable or exercisable within 60 days and 1,752 shares of
restricted stock.
(3) Less than 1%.
(4) Includes 76,600 shares subject to options which are presently
exercisable or exercisable within 60 days, 2,570 shares of restricted
stock and 3,400 shares held by Mr.
Gilmore's wife.
(5) Includes 1,001,909 shares subject to options which are presently
exercisable or exercisable within 60 days and 237,117 shares of
restricted stock.
ELECTION OF DIRECTORS
The Board of Directors has 10 members and one vacancy. Four of the
directors' terms expire in 1997. 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 2000 and until their
successors are duly elected and qualified and one nominee to serve, subject to
the provisions of the Bylaws, until the Annual Meeting of Shareholders in 1999
and until his successor is duly elected and qualified. There will be one vacancy
on the Board of Directors. The Board of Directors intends to leave this position
open until the Board of Directors has identified an appropriate individual who
is willing to serve as a director. Directors are elected by a plurality of the
votes cast by the holders of shares entitled to vote in the election of
directors at a meeting at which a majority of the votes entitled to be cast is
present. Provided a majority is present, abstentions and shares not voted are
not taken into account in determining a plurality. It is the intention of the
persons named in the accompanying proxy to vote all proxies solicited by the
Board of Directors for the four nominees listed hereafter for terms expiring in
1999 and 2000, as the case may be, 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 four nominees
including such substitutes as shall be designated by the Board of Directors.
3
<PAGE>
The nominees for election as directors to serve until 2000 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 Owned1 Outstanding2
<S> <C> <C> <C>
Kermit G. Phillips, II Chairman of the Board, Phillips 143,352(3) (4)
1979 Management Group, Inc., Greensboro, NC
(real estate development and management
company) since 1974. He is 62 years old.
H. Michael Weaver Chairman of the Board of W.H. 127,552(5) (4)
1991 Weaver Construction Company (general
construction, real estate development and
management) since 1975. He is 59 years
old.
Francis T. Vincent, Private Investor. Commission- 23,428(6) (4)
Jr. er of Major League Baseball, 1989-1992.
1993 Director of Time-Warner Inc., Horizon
Group, Inc. and Culbro Corporation. He is
58 years old.
</TABLE>
4
<PAGE>
The nominee for election as a director to serve until 1999 was elected
to his present term, which expires in 1997, by the Board of Directors at a
special meeting of the Board on January 31, 1996 to fill a vacancy on the Board:
<TABLE>
<CAPTION>
Number of
Shares Percentage
Name and Beneficially of Shares
Director Since Information About Director Owned1 Outstanding2
<S> <C> <C> <C>
Roger W. Schipke Private Investor. Chairman of 8,428(7) (4)
1996 the Board and Chief Executive Officer,
Sunbeam Corporation (manufacturer of
consumer products), 1993-1996; Chairman
of the Board and Chief Executive Officer,
The Ryland Group, Inc. (mortgage-banking
and home building), 1990-1993. Director
of Brunswick Corporation, Rouse
Corporation and Legg Mason, Incorporated.
He is 60 years old.
</TABLE>
The following members of the Board of Directors were elected to their
present terms, which expire in 1998, at the Annual Meeting of Shareholders held
February 1, 1995:
<TABLE>
<CAPTION>
Number of Percentage
Shares of
Name and Beneficially Shares
Director Since Information About Director Owned1 Outstanding2
<S> <C> <C> <C>
Clarence W. Walker Partner, Kennedy Covington 110,096(8) (4)
1971 Lobdell & Hickman, L.L.P., Attorneys at
Law, Charlotte, NC since 1961. He is 65
years old.
Dennis I. Meyer Partner, Baker & McKenzie, 83,796(9) (4)
1983 Attorneys at Law, Washington, DC since
1965. Director of United Financial
Banking Companies, Inc. (bank holding
company). He is 61 years old.
5
<PAGE>
C. Michael Kilbourne Executive Vice President of the 147,081(10) (4)
1995 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 46 years old.
</TABLE>
The following members of the Board of Directors were elected to their
present terms, which expire in 1999, at the Annual Meeting of Shareholders held
January 31, 1996:
<TABLE>
<CAPTION>
Number of Percentage
Shares of
Name and Beneficially Shares
Director Since Information About Director Owned1 Outstanding2
<S> <C> <C> <C>
Nicholas J. St. George President and Chief Executive 1,529,632(11) 3.3%
1972 Officer of the Company since 1979.
Director of American Bankers Insurance
Group, Inc. and of Legg Mason,
Incorporated. He is 57 years old.
A. Steven Michael Executive Vice President and Chief 278,932(12) (4)
1992 Operating Officer of the Company since
1989. He is 46 years old.
Sabin C. Streeter Managing Director, Donaldson 31,428(13) (4)
1993 Lufkin & Jenrette Securities Corporation
(investment banking firm) since 1976.
Director of Middleby Corporation, Park-
Hunter Incorporated and FOTOBALL, Inc.
He is 55 years old.
</TABLE>
- --------------------
(1) Common Stock ownership information is as of November 29, 1996.
(2) Based on the number of shares outstanding plus shares subject to
options held by the director or nominee which are presently exercisable
or exercisable within 60 days.
(3) Includes 64,548 shares subject to options which are presently
exercisable or exercisable within 60 days.
6
<PAGE>
(4) Less than 1%.
(5) Includes 36,428 shares subject to options which are presently
exercisable or exercisable within 60 days and 4,000 shares held by Mr.
Weaver's wife.
(6) Includes 21,428 shares subject to options which are presently
exercisable or exercisable within 60 days.
(7) Includes 6,428 shares subject to an option which is exercisable within
60 days.
(8) Includes 64,548 shares subject to options which are presently
exercisable or exercisable within 60 days and 2,292 shares held by Mr.
Walker's wife.
(9) Includes 64,548 shares subject to options which are presently
exercisable or exercisable within 60 days and 5,188 shares held by Mr.
Meyer's wife.
(10) Includes 111,134 shares subject to options which are presently
exercisable or exercisable within 60 days and 2,969 shares of
restricted stock.
(11) Includes 150,000 shares subject to options which are presently
exercisable or exercisable within 60 days, 222,126 shares of restricted
stock and 768,760 shares held by the Estate of Ralph L. Darling, for
which Mr. St. George serves as executor.
(12) Includes 201,843 shares subject to options which are presently
exercisable or exercisable within 60 days and 3,831 shares of
restricted stock.
COMMITTEES OF THE BOARD OF DIRECTORS
The Audit Committee is composed of Kermit G. Phillips, II, Clarence W.
Walker and H. Michael Weaver. 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, 1996.
The Compensation Committee is composed of Dennis I. Meyer and Francis
T. Vincent, Jr. This Committee reviews and makes recommendations and
determinations with respect to the compensation of officers. The Compensation
Committee met five times during the fiscal year ended September 30, 1996.
The Board of Directors of the Company does not have a Nominating
Committee.
The Board of Directors met five times during the fiscal year ended
September 30, 1996. 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.
7
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee is currently composed of Dennis I. Meyer and
Francis T. Vincent, Jr.
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.
In the past, Weaver, Grubar & Black Company, a real estate broker of
which H. Michael Weaver is Chairman of the Board and principal shareholder, has
performed brokerage services for the Company in connection with the Company's
purchase and sale of certain properties. In addition, W. H. Weaver Construction
Company, of which Mr. Weaver is Chairman of the Board and principal shareholder,
served as construction manager in connection with the construction of the
Company's new headquarters in Greensboro, North Carolina. W. H. Weaver
Construction Company received approximately $550,000 for such 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
qualified under Section 162(m) of the Internal Revenue Code. Mr. Vincent is the
Chairman. Mr. Meyer is the other member.
The Committee attempts to insure 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 salaries for senior executives and
provides for annual and long-term incentive compensation of senior executives
under compensation plans that have received shareholder approval.
Corporate Compensation Philosophy. The Committee believes that base
compensation should be at the minimal level necessary to enable the Company to
attract and retain the highly qualified executives it needs but that incentives
should be provided so that the executives can achieve total compensation
significantly in excess of those at comparable companies only if warranted by
operating results. The major portion of each executive's annual compensation is
provided through bonuses dependent on the accomplishment of annual performance
goals. Long- term incentives are provided through long-term cash incentive
awards and grants of stock options and restricted stock, which link the
interests of the Company's executives and shareholders.
8
<PAGE>
Deductibility of Compensation. The Committee attempts to see that cash
compensation paid to executive officers is deductible for federal income tax
purposes. To that end the Committee and the Board of Directors presented for
shareholder approval in fiscal 1996 the Executive Incentive Compensation Plan
and the Key Employee Stock Plan. Many of the stock options granted by the
Committee are incentive stock options, and the Company receives no tax deduction
on the exercise of such options. The Committee believes that use of incentive
stock options is important because upon exercise the executive will not need to
sell the underlying stock to pay taxes.
Executive Compensation. The Company's executive compensation program is
composed of three basic elements: (A) base salary; (B) annual incentive
opportunities to earn significant additional cash and restricted stock; and (C)
long-term opportunities in the form of stock options and incentive awards in the
form of cash and restricted stock based upon the Company's performance over
time.
Base Salary. Base salaries for fiscal 1996 were unchanged from
fiscal 1995. The Committee believes base salaries are significantly lower than
those for like positions in comparable companies.
Annual Incentive Compensation. The Committee establishes an
annual target bonus for each executive officer if a level of net earnings is
met. The target bonus diminishes if net earnings are less, and increases if net
earnings are greater. The executives eligible to participate and their
respective target bonuses are 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 a target bonus
that will allow executives' annual cash compensation levels (base salary plus
incentive compensation) to significantly exceed the median annual cash
compensation levels at companies of comparable size if the Company achieves
significant increases in net earnings. At least 10% and up to 50% of the bonus,
at the election of the executive, is paid in restricted stock with a two or four
year vesting period issued at a discount of 20% or 30% of the fair market value
of the stock, with the discount increasing with the length of the vesting
period. In determining fiscal 1996 bonuses, the Committee excluded from the
calculation income arising from securitization gains in fiscal 1996. The average
bonuses received in fiscal 1996 by the four most highly compensated executive
officers other than Mr. St. George were significantly higher than in fiscal 1995
due to the Company's operating results.
Long Term Incentive Awards. The Committee provides long term
incentives in the form of stock options, restricted stock awards and
performance-based cash awards. Prior to fiscal 1996, awards were granted under
the Company's 1990 Long Term Performance Plan. Beginning in fiscal 1996 these
awards are made under the Key Employee Stock Plan and Executive Incentive
Compensation Plan.
Fiscal 1996 was the last year of a three-year cash incentive plan
adopted by the Committee in fiscal 1994 and approved by the shareholders at the
1995 annual meeting. This
9
<PAGE>
plan provided that participating executives would receive a target cash award if
the Company achieved compound growth in net income, as determined by the plan,
of 15%. The plan provided that the target cash payment would increase 25% for
each additional percentage point of compound growth in net income. In
determining the compound growth in net income, the Committee excluded net income
resulting from securitization gains and certain mergers. This resulted in
compound net income growth, determined in accordance with the plan, of 38.46%
and a multiplier of 6.865. Because of these excellent financial results,
participating executives earned long term cash payments that were substantially
higher than the targeted awards.
During fiscal 1996, the Committee adopted a new three-year performance
plan ending September 30, 1998. Under this plan, twelve executives of the
Company will participate in a cash and restricted stock pool. The value of the
pool will equal 10% of the Company's earnings over the three-year period in
excess of a 10% return on equity. Fifty percent of the pool will be paid in cash
and fifty percent in restricted stock which will be issued in 1998. The
restricted stock will have a two or four year vesting period, at the election of
the executive, and be issued at a discount of 20% or 30% of the fair market
value of the stock, with the discount increasing with the length of the vesting
period. In connection with the plan, the Committee also granted stock options
which will fully vest in 1998 if the Company achieves a 15% return on equity
during the three-year period. If return on equity is below 15%, a portion or all
of the option, depending on the actual return on equity, will not vest until
2005. The four most highly paid executives other than Mr. St. George are
participants in the plan. The Committee believes that this plan will create
incentives for participating executives to continue to maximize the Company's
performance during the period.
Chief Executive Officer Compensation. The compensation for Mr. St.
George consists of the same three basic elements as for the Company's other
executive officers.
Base Salary. Mr. St. George's base salary was set for fiscal 1996 at
$450,000, which represents no change over fiscal 1995. The Committee believes
Mr. St. George's base salary is substantially below the median base salary of
chief executive officers of companies of comparable size.
Annual Incentive Compensation. Mr. St. George's fiscal 1996 target
bonus was significantly higher than any of the other executive officers,
reflecting Mr. St. George's level of responsibility. Mr. St. George's target
bonus was $385,000. The Company's net income in fiscal 1996 was $68 million,
compared to $45 million in fiscal 1995, a 51% increase. Even with the exclusion
of securitization gains, net income rose 27%. These excellent results caused the
target to be multiplied by 4.207, resulting in a bonus of $1,619,695, an
increase of 127% over fiscal 1995. Mr. St. George elected to take 30% of this
bonus in restricted stock with a two- year vesting period. Although the
Committee believes that this brings Mr. St. George's annual compensation to a
level significantly higher than the average annual compensation of chief
executive officers at comparable companies, the Committee believes that the
performance of the Company warrants this level of compensation.
10
<PAGE>
Long Term Incentive Awards. Mr. St. George was one of the executive
officers selected by the Committee to receive an award under the three year plan
ending in 1996. Mr. St. George's target award was $1,102,000. Because of the
Company's exceptional performance during the period, the amount of the award was
$7,565,320.
The Committee believes that the Committee's compensation policy for its
executive officers, including Mr. St. George, which emphasizes short-term and
long-term incentives based on operating results, has been a key contributing
factor in the Company's excellent financial performance. During the last three
years, earnings per share and net income (not taking into account the effect of
pooling of interests accounting) have increased at compound growth rates of 34%
and 40%, respectively. Over the same three year period the Company's market
capitalization increased from $529 million to $1.237 billion, or 133%. The
Company's cumulative total return to shareholders, including dividends, over the
three year period was 110%, compared to 62% for the Standard & Poors 500. For
additional information on shareholder performance, see "Performance Graph" on
page 12.
In order to continue to provide incentives for superior results, Mr.
St. George was included in the three-year incentive plan ending September 30,
1998. Mr. St. George's participation percentage in the plan is 34%. In
conjunction with the plan, Mr. St. George received a stock option for 160,000
shares, subject to the same terms and conditions as other options granted in
conjunction with the plan.
During fiscal 1996, the Committee also granted Mr. St. George an award
of 200,000 shares of restricted stock. The award was subject to the performance
criteria that the Company's net income or revenue increase by 10% or more in
fiscal 1996, a condition that was met. The award does not vest unless Mr. St.
George continues to serve in his present capacity, or any other capacity he may
be asked to perform in by the Board of Directors, for five years. The Committee
believes that this award will ensure that Mr. St. George will continue to work
for the Company for a sufficient period of time to allow the Board to plan for
Mr. St. George's succession.
Francis T. Vincent, Jr., Chairman
Dennis I. Meyer
11
<PAGE>
SHAREHOLDER RETURN PERFORMANCE GRAPH
Presented below is a line graph comparing the yearly percentage 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, 1991 and ending September
30, 1996, 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
(A graph appears below and the plot points are as follows:)
OAKWOOD HOMES CORPORATION
Total Cumulative Shareholder Return for
Five-Year Period Ending September 30, 1996
September 30... 1991 1992 1993 1994 1995 1996
Oakwood Homes 100.00 172.29 299.80 290.67 409.12 630.78
Peer Group 100.00 119.45 172.31 183.53 211.19 299.38
S&P 500 100.00 111.00 125.36 130.02 168.56 202.72
This graph assumes that $100 was invested in the Company's Common Stock on
October 1, 1991 in the S&P 500 Index and in the peer group, and assumes
reinvestment of all dividends.
12
<PAGE>
EXECUTIVE COMPENSATION
The table below shows certain compensation information for the three
fiscal years ended September 30, 1996 concerning the Company's Chief Executive
Officer and the Company's other four most highly compensated executive officers
(collectively, the "Named Executive Officers").
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
- ------------------------------------------------------------------------------------------------------------------------------------
Annual Compensation Long Term Compensation
----------------------------------------------------------------------------------------------
Awards Payouts
Securities
Underlying ALL OTHER
Other Annual RESTRICTED Options/ LTIP PAYOUTS COMPEN-
Name and Fiscal Salary Bonus Compensation STOCK AWARD(S) SARs ($) SATION
Principal Position Year ($) ($) ($)(1) ($) (#) ($)(2)
----------------------------------------
- ---------------------------------------------------------------------------- --------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Nicholas J. St. George 1996 450,000 1,133,787(3) 70,924(4) 553,150(5)(6) 160,000/0 $7,565,230 7,071
President and Chief 1995 450,000 712,250 -- 0 0 0 5,716
Executive Officer 1994 325,000 673,000 -- 0 82,500/0 0 14,015
A. Steven Michael 1996 255,000 757,260 -- 95,775(6) 90,000/0 $3,981,700 4,600
Executive Vice President 1995 255,000 370,000 -- 0 0 0 11,686
of the Company 1994 180,000 282,000 -- 0 17,000/0 0 10,385
C. Michael Kilbourne 1996 200,000 586,877 -- 74,225(6) 56,000/0 $2,553,780 3,129
Executive Vice President 1995 200,000 286,750 -- 0 0 0 4,730
of the Company 1994 140,000 206,800 -- 0 11,000/0 0 4,837
J. Michael Stidham 1996 140,000 346,356 -- 43,800(6) 40,000/0 $1,167,050 5,192
Executive Vice President 1995 140,000 265,400 -- 0 0 0 8,085
of Oakwood Mobile 1994 105,000 177,000 -- 0 5,000/0 0 5,169
Homes, Inc.
Larry T. Gilmore 1996 140,000 299,855 -- 64,250(6) 40,000/0 $1,167,050 3,817
Executive Vice 1995 140,000 211,200 -- 0 0 0 7,609
President -- Consumer 1994 115,000 142,500 -- 0 5,000/0 0 6,428
Finance of
Oakwood Acceptance
Corporation
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) NO NAMED EXECUTIVE OFFICER HAS RECEIVED PERSONAL BENEFITS DURING THE
LISTED YEARS IN EXCESS OF THE LESSER OF $50,000 OR 10% OF ANNUAL SALARY
AND BONUS OTHER THAN MR. ST. GEORGE.
(2) THE COMPONENTS OF THE AMOUNTS SHOWN IN THIS COLUMN CONSIST OF COMPANY
CONTRIBUTIONS UNDER THE COMPANY'S VARIOUS RETIREMENT PLANS FOR MESSRS.
ST. GEORGE, MICHAEL, KILBOURNE, STIDHAM AND GILMORE, RESPECTIVELY, OF
APPROXIMATELY $6,733, $1,676, $3,088, $4,191 AND $3,171 FOR 1996, AND
$4,050, $8,356, $4,440, $6,757 AND $6,590 FOR 1995 AND $13,655, $8,149,
$4,717, $4,377 AND $5,905 FOR 1994, AND THE INTEREST ACCRUED ON DEFERRED
COMPENSATION ACCOUNTS THAT ARE CONSIDERED BY THE SECURITIES AND EXCHANGE
COMMISSION TO BE AT ABOVE-MARKET RATES IN THE AMOUNTS OF $338, $2,924,
$41, $1,001 AND $646 FOR THE
14
<PAGE>
ACCOUNTS OF MESSRS. ST. GEORGE, MICHAEL, KILBOURNE, STIDHAM AND GILMORE,
RESPECTIVELY, FOR 1996, $1,666, $3,330, $290, $1,328 AND $1,019 FOR THE
ACCOUNTS OF MESSRS. ST. GEORGE, MICHAEL, KILBOURNE, STIDHAM AND GILMORE,
RESPECTIVELY, FOR 1995, AND $360, $2,236, $120, $792 AND $523 FOR THE
ACCOUNTS OF MESSRS. ST. GEORGE, MICHAEL, KILBOURNE, STIDHAM AND GILMORE,
RESPECTIVELY, FOR 1994.
(3) DOES NOT INCLUDE THE VALUE OF THE PORTION OF THE BONUS PAID IN SHARES OF
RESTRICTED STOCK. SEE NOTE 5 BELOW.
(4) INCLUDES $48,981 ATTRIBUTABLE TO THE COST OF COMPANY AIRCRAFT FOR MR. ST.
GEORGE'S PERSONAL USE.
(5) DOES NOT INCLUDE THE DOLLAR VALUE OF 200,000 SHARES OF RESTRICTED STOCK
ISSUED TO MR. ST. GEORGE IN NOVEMBER 1995 WHICH WILL VEST IN THE YEAR
2000, SUBJECT TO THE SATISFACTION OF CERTAIN PERFORMANCE AND OTHER
CRITERIA. DIVIDENDS WILL BE PAID ON THE SHARES OF RESTRICTED STOCK. SEE
"COMPENSATION COMMITTEE REPORT" AND "LONG-TERM INCENTIVE PLANS - AWARDS
IN LAST FISCAL YEAR" FOR ADDITIONAL INFORMATION ON THE TERMS OF THE
RESTRICTED STOCK.
(6) AMOUNT REPRESENTS THE DOLLAR VALUE OF SHARES OF RESTRICTED STOCK ISSUED
TO THE NAMED EXECUTIVE OFFICERS AS PARTIAL PAYMENT OF THEIR BONUSES FOR
THE FISCAL YEAR ENDED SEPTEMBER 30, 1996. AT SEPTEMBER 30, 1996, MR. ST.
GEORGE HELD 200,000 SHARES OF RESTRICTED STOCK WITH A VALUE EQUAL TO
$5,425,000, BASED ON A CLOSING PRICE OF THE COMMON STOCK ON THE NEW YORK
STOCK EXCHANGE OF $27.125; NO OTHER NAMED EXECUTIVE OFFICER HELD SHARES
OF RESTRICTED STOCK AT SEPTEMBER 30, 1996. THE 33,248 SHARES OF
RESTRICTED STOCK ISSUED TO THE NAMED EXECUTIVE OFFICERS AS PARTIAL
PAYMENT OF THEIR BONUSES WERE NOT ISSUED UNTIL NOVEMBER 4, 1996.
DIVIDENDS WILL BE PAID ON THE SHARES OF RESTRICTED STOCK. SEE
"COMPENSATION COMMITTEE REPORT" FOR ADDITIONAL INFORMATION ON THE TERMS
OF THE RESTRICTED STOCK.
14
<PAGE>
THE TABLE BELOW SETS FORTH THE GRANT OF STOCK OPTIONS AND SARS DURING THE
FISCAL YEAR ENDED SEPTEMBER 30, 1996 TO EACH OF THE NAMED EXECUTIVE OFFICERS.
SEE "COMPENSATION COMMITTEE REPORT" FOR ADDITIONAL INFORMATION REGARDING THESE
GRANTS.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE
AT ASSUMED ANNUAL RATES OF
STOCK PRICE APPRECIATION
INDIVIDUAL GRANTS FOR OPTION TERM
NUMBER OF % OF TOTAL
SECURITIES OPTIONS/SARS
UNDERLYING GRANTED TO EXERCISE OR
OPTIONS/SARS EMPLOYEES IN BASE PRICE EXPIRATION DATE
NAME GRANTED (#) FISCAL YEAR $/SHARE 5%($) 10%($)
---- ----------- ----------- ------- ----- ------
<S> <C> <C> <C> <C> <C> <C> <C>
Nicolas J. St. George 160,000(1) 12.3% $18.33 11/15/2005 $1,844,432 $4,673,600
A. Steven Michael 90,000(1) 6.9% $18.33 11/15/2005 $1,037,700 $2,628,900
C. Michael Kilbourne 56,000(1) 4.3% $18.33 11/15/2005 $645,680 $1,635,760
J. Michael Stidham 40,000(1) 3.1% $18.33 11/15/2005 $461,200 $1,268,400
Larry T. Gilmore 40,000(1) 3.1% $18.33 11/15/2005 $461,200 $1,168,400
</TABLE>
- -------------------
(1) This option will fully vest in 1998 if the Company achieves a 15% return
on equity in the three-year period ending September 30, 1998. If return
on equity is below 15%, all or a portion of such option, depending on the
actual return on equity, will not vest until 2005.
The table below sets forth, on an aggregated basis, each exercise of
stock options or SARs during the fiscal year ended September 30, 1996 by each of
the Named Executive Officers and the 1996 fiscal year-end value of unexercised
options and SARs:
AGGREGATED OPTION/SAR EXERCISES IN THE 1996
FISCAL YEAR AND FY-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
VALUE OF
NUMBER OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS/SARS OPTIONS/SARS
AT FY-END AT FY-END
SHARES
ACQUIRED ON VALUE EXERCISABLE/ EXERCISABLE/
NAME EXERCISE REALIZED UNEXERCISABLE (#) UNEXERCISABLE ($)
- ---- -------- -------- ----------------- -----------------
<S> <C> <C> <C> <C> <C> <C>
Nicholas J. St. George 253,578 $4,676,159 237,572/298,600 4,229,385/4,561,454
A. Steven Michael 47,000 $731,180 194,297/116,453 4,603,567/1,195,268
C. Michael Kilbourne 21,000 $334,354 2,371,397/751,702
103,588/74,454
J. Michael Stidham 37,924 $683,535 69,296/42,454 1,530,103/399,222
Larry T. Gilmore 26,000 $408,080 74,146/42,454 1,539,291/399,222
</TABLE>
15
<PAGE>
The table below sets forth certain information regarding awards to the
Named Executed Officers under the Company's Executive Incentive Compensation
Plan (the "Awards") during the fiscal year ended September 30, 1996. The Awards
will be paid 50% in cash and 50% in restricted shares of Common Stock. Each
Named Executive Officer was assigned a percentage participation, set forth in
the table below, in an incentive compensation pool (the "Pool"). The amount of
the Pool, to be determined following the fiscal year ending September 30, 1998,
will be equal to 10% of the amount by which the Company's net income exceeds a
10% return on equity (determined by averaging the return on equity for each of
the three fiscal years ending September 30, 1998). There is no target minimum or
maximum amount to be paid. See "Compensation Committee report" for additional
information regarding the Awards.
LONG-TERM INCENTIVE PLANS - AWARDS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
PERFORMANCE OR OTHER PERIOD
NAME UNTIL MATURATION OR PAYOUT % PARTICIPATION
<S> <C> <C>
Nicholas J. St. George September 30, 1998 34%
A. Steven Michael September 30, 1998 18%
C. Michael Kilbourne September 30, 1998 12%
J. Michael Stidham September 30, 1998 5%
Larry T. Gilmore September 30, 1998 5%
</TABLE>
In addition, during the fiscal year Mr. St. George received an award of
restricted stock as follows:
<TABLE>
<CAPTION>
PERFORMANCE OR OTHER PERIOD
NAME NUMBER OF SHARES UNTIL MATURATION OR PAYOUT
<S> <C> <C>
Nicholas J. St. George 200,000 2000(1)
</TABLE>
- --------------------
(1) This award was subject to the performance criteria that the Company's net
income or revenue increase by 10% or more in fiscal 1996, a condition
that was met. The award does not vest unless Mr. St. George continues to
serve in his present capacity, or any other capacity he may be asked to
perform in by the Board of Directors, for five years. See "Compensation
Committee Report" for additional information regarding the award.
COMPENSATION OF DIRECTORS
The directors of the Company who are not employees are paid an annual fee
of $28,000 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 also have received stock options under the Company's 1990
Director Stock Option Plan under which each non-employee director was granted an
option to purchase 15,000 shares of the Common Stock on each of July 30, 1992
and 1994 and an option to purchase 6,428 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.
16
<PAGE>
EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT AND CHANGE OF CONTROL
ARRANGEMENTS
The Company has entered into employment agreements with Messrs. St.
George, Michael and Kilbourne. 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, 2001, 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 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 an Executive Disability Benefit Agreement
with Mr. St. George. Under the disability agreement, the Company will pay to Mr.
St. George his then current base salary for the first 180 days he is totally
disabled. After such time, he will be paid specified sums so long as he is
totally disabled and under the age of 65. The agreement provides for Mr. St.
George to receive $23,942 per month in the event of his total disability. In the
event of a partial disability, Mr. St. George will receive lesser payments. In
no event, however, will the Company be obligated under the disability agreement
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 Mr.
St. George.
The Company has entered into Executive Retirement Benefit Employment
Agreements with Messrs. St. George, Michael, Kilbourne, Stidham and Gilmore.
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. Michael, Kilbourne, Stidham and Gilmore after reaching age 60. The
annual retirement benefit payable upon retirement at age 65 to each of the Named
Executive Officers is as follows: $403,212 for Mr. St. George, $315,680 for Mr.
Michael, $150,399 for Mr. Kilbourne, $158,351 for Mr. Stidham and $90,298 for
Mr. Gilmore. 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.
17
<PAGE>
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
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, 1996, all Section 16(a)
filing requirements applicable to its executive officers, directors and greater
than 10% beneficial shareholders were complied with.
RATIFICATION OF SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has selected Price Waterhouse LLP as independent
public accountants to examine the financial statements of the Company and its
subsidiaries for the fiscal year ending September 30, 1997. 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 LLP as independent public accountants to examine
the financial statements of the Company and its subsidiaries for the fiscal year
ending September 30, 1997, 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 1998
Annual Meeting of Shareholders, currently scheduled for February 4, 1998, must
be received by the Company no later than August 25, 1997 in order for the
proposal to be included in the proxy statement and form of proxy for the 1998
Annual Meeting of Shareholders. The proposal should be sent to Secretary,
Oakwood Homes Corporation, Box 27081, Greensboro, North Carolina 27425- 7081.
18
<PAGE>
***********************************************************
APPENDIX
OAKWOOD HOMES CORPORATION
PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR ANNUAL MEETING OF SHAREHOLDERS TO BE HELD JANUARY 29, 1997
The undersigned hereby appoints NICHOLAS J. ST. GEORGE and C. MICHAEL
KILBOURNE, 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 January 29, 1997, and at any adjournment thereof.
This proxy will be voted FOR the election of all nominees as directors
and FOR item 2 unless otherwise specified. The Board of Directors recommends
voting for on each item.
1. ELECTION OF DIRECTORS: Nominees are Kermit G. Phillips, II, H. Michael
Weaver, Francis T. Vincent, Jr. and Roger W. Schipke.
<TABLE>
<S> <C>
[ ] FOR all listed nominees (except do not vote for the [ ] WITHHOLD AUTHORITY to vote for the listed
nominee(s) whose name(s) I have written below) nominees
</TABLE>
2. RATIFICATION OF SELECTION OF PRICE WATERHOUSE LLP AS INDEPENDENT PUBLIC
ACCOUNTANTS
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(Continued and to be signed on the reverse)
19
<PAGE>
In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting.
Receipt of the Notice of Annual Meeting and accompanying Proxy Statement
is hereby acknowledged. This proxy will be voted as specified herein, and,
unless otherwise directed, will be voted FOR the election of all nominees and
FOR item 2.
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 personally.)
20
<PAGE>
