SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant[X]
Filed by a Party other than the Registrant[ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14A-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
OAKWOOD HOMES CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(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 (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
TO BE HELD FEBRUARY 3, 1999
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of Oakwood
Homes Corporation, a North Carolina 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,
February 3, 1999 at 2:00 p.m., local time, for the purpose of considering and
acting upon the following:
1. Election of four members to the Board of Directors for a term of
three years and until their successors are elected and qualified.
2. Ratification of the selection of PricewaterhouseCoopers LLP as
independent public accountants for the fiscal year ending September
30, 1999.
3. Any and all other matters that may properly come before the meeting
or any adjournment thereof.
The Board of Directors has fixed the close of business on December 4, 1998
as the record date for determining the shareholders entitled to notice of and to
vote at the meeting or any adjournment thereof, and only holders of Common Stock
of the Company of record at such date will be entitled to notice of or to vote
at the meeting.
You are urged to attend the annual meeting in person but, if you are
unable to do so, the Board of Directors will appreciate the prompt return of the
enclosed proxy, dated and signed. The proxy may be revoked at any time before it
is exercised and will not be exercised if you attend the meeting and vote in
person.
By order of the Board of Directors.
NICHOLAS J. ST. GEORGE
Chairman and Chief Executive Officer
Greensboro, North Carolina
December 31, 1998
<PAGE>
OAKWOOD HOMES CORPORATION
P. O. BOX 27081
GREENSBORO, NORTH CAROLINA 27425-7081
----------------------
PROXY STATEMENT
----------------------
GENERAL
This Proxy Statement is being furnished in connection with the
solicitation by the Board of Directors of proxies to be used at the Annual
Meeting of Shareholders of Oakwood Homes Corporation, a North Carolina
corporation (the "Company"), to be held at the Auditorium of the Joseph S. Koury
Convention Center at the Four Seasons Holiday Inn, 3121 High Point Road,
Greensboro, North Carolina on Wednesday, February 3, 1999 at 2:00 p.m., local
time, and at any adjournment thereof. This Proxy Statement and the accompanying
proxy are first being sent to shareholders of the Company on or about December
31, 1998.
Solicitation other than by mail may be made personally and by telephone by
regularly employed officers and employees of the Company who will not be
additionally compensated therefor. The Company will request brokers, dealers,
banks or voting trustees, or their nominees, who hold stock in their names for
others or hold stock for others who have the right to give voting instructions,
to forward proxy materials to their principals and request authority for the
execution of the proxy and will reimburse such persons for their reasonable
expenses in so doing. The total cost of soliciting proxies will be borne by the
Company.
Any proxy delivered in the accompanying form may be revoked by the person
executing the proxy at any time before the authority thereby granted is
exercised by filing an instrument revoking it or a duly executed proxy bearing a
later date with the Secretary of the Company or if the person executing the
proxy attends the meeting and elects to vote in person. If a choice is specified
in the proxy, shares represented thereby will be voted in accordance with such
choice. If no choice is 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 of Common Stock held of record at the close of business on
December 4, 1998, which is the record date for determining the shareholders
entitled to notice of and to vote at such meeting or any adjournment thereof.
The number of shares of Common Stock of the Company outstanding on December 4,
1998 was 47,074,357 shares.
<PAGE>
PRINCIPAL HOLDERS OF COMMON STOCK AND HOLDINGS OF MANAGEMENT
At December 4, 1998, the only persons known to the Company to be the
beneficial owners of more than 5% of the Common Stock of the Company were as
follows:
Number of Shares
and Nature of Percentage of
Name and Address Beneficial Shares
of Beneficial Owner Ownership(1) Outstanding
- ------------------- ---------- -----------
Oak Value Capital Management, Inc. 5,371,038(2) 11.4%
3100 Tower Boulevard
Durham, NC 27707
FMR Corp. 4,701,954(3) 10.0%
82 Devonshire Street
Boston, MA 02109
Pioneering Management Corporation
60 State Street
Boston, MA 02109 3,350,700(4) 7.1%
- -------------------------
(1) Unless otherwise indicated, each shareholder has sole voting and
dispositive power with respect to all shares beneficially owned.
(2) The information concerning beneficial ownership is derived from a Schedule
13G dated August 12, 1998. Oak Value Capital Management, Inc. is a
registered investment adviser and has sole voting power over 4,985,238
shares and sole dispositive power over all the shares.
(3) The information concerning beneficial ownership is derived from a Schedule
13G dated January 12, 1998 filed by FMR Corp. jointly on behalf of FMR
Corp., Edward C. Johnson, Abigail P. Johnson, Fidelity Management &
Research Company ("Fidelity") and the Fidelity Magellan Fund ("Magellan").
Fidelity is the beneficial owner of 4,525,754 of such shares as a result
of acting as investment adviser to various investment companies. Magellan,
one of such investment companies, beneficially owns 3,719,200 shares. Mr.
Johnson and FMR Corp. each have sole dispositive power with respect to
4,525,754 of such shares. Voting power with respect to such shares resides
with the board of trustees of the various Fidelity funds. Fidelity
Management Trust Company beneficially owns 169,100 shares. Mr. Johnson and
FMR Corp. each have sole voting and dispositive power with respect to such
shares.
(4) The information concerning beneficial ownership is derived from a Schedule
13G dated January 22, 1998. Pioneering Management Corporation is a
registered investment adviser and has sole voting and dispositive power
with respect to all such shares.
The following table sets forth as of December 4, 1998 certain information
with respect to the beneficial ownership of the Common Stock by J. Michael
Stidham, Executive Vice President - Retail and Chief Operating Officer of
Oakwood Mobile Homes, Inc., a wholly-owned subsidiary of the Company, Myles E.
Standish, Executive Vice President - Chief Administrative Officer and General
Counsel of the Company, C. Michael Kilbourne, formerly Executive Vice President
and Chief Financial Officer of the Company, and by all directors and executive
officers of the Company as a group. Messrs. Stidham,
2
<PAGE>
Standish and Kilbourne are the persons named in the Summary Compensation Table
who are not also directors or nominees as directors. Information as to the
beneficial ownership of each director individually (including the Named
Executive Officers who are also directors) is included in the information on
each director or nominee under the heading "Election of Directors."
Number of Shares
and Nature of Percentage of
Name and Address Beneficial Shares
of Beneficial Owner Ownership(1) Outstanding
- ------------------- ---------------- -----------
J. Michael Stidham 138,932(2) (3)
Myles E. Standish 67,921(4) (3)
C. Michael Kilbourne 209,727(5) (3)
Directors and executive 3,381,104(6) 7.0%
officers as a group (20
persons)
- -------------------------
(1) Based on the number of shares outstanding plus shares subject to options
held by such person that are presently exercisable or exercisable within
60 days. Unless otherwise indicated, each shareholder has sole voting and
dispositive power with respect to all shares beneficially owned.
(2) Includes 94,000 shares subject to options that are presently exercisable
or exercisable within 60 days and 33,180 shares of restricted stock.
(3) Less than 1%.
(4) Includes 40,000 shares subject to options that are presently exercisable
or exercisable within 60 days and 26,534 shares of restricted stock.
(5) Includes 174,042 shares subject to options that are presently exercisable
or exercisable within 60 days and 1,716 shares of restricted stock.
(6) Includes 1,320,892 shares subject to options that are presently
exercisable or exercisable within 60 days and 576,535 shares of restricted
stock.
ELECTION OF DIRECTORS
The Board of Directors has ten members and one vacancy. Four of the
directors' terms expire in 1999. The Board proposes to fill these positions at
the meeting with four nominees to serve, subject to the provisions of the
Bylaws, until the Annual Meeting of Shareholders in 2002 and until their
successors are duly elected and qualified. There will be one vacancy on the
Board of Directors. The Board of Directors intends to leave this vacancy 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 below for terms expiring in
2002, 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
3
<PAGE>
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.
The nominees for election as directors to serve until 2002 were elected to
their present terms, which expire in 1999, at the Annual Meeting of Shareholders
held January 31, 1996, with the exception of Mr. Schipke, who was elected to his
present term at the Annual Meeting of Shareholders held January 29, 1997, and
Mr. Edwards, who was elected to his present term at the Annual Meeting of the
Board of Directors held February 11, 1998.
<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 Chairman of the Company 1,050,845(3) 2.2%
1972 since 1996; Chief Executive
Officer since 1979;
President from 1979 to
1998. Director of American
Bankers Insurance Group,
Inc., Legg Mason,
Incorporated and Carey
International, Inc. He is
59 years old.
Sabin C. Streeter Private Investor and 34, 428(4) (5)
1993 Executive-in-Residence at
Columbia University
Graduate School of Business
since 1997; Managing
Director, Donaldson Lufkin
& Jenrette Securities
Corporation (investment
banking firm), 1976-1997.
Director of Middleby
Corporation and
Parker-Hunter
Incorporated. He is 57
years old.
Roger W. Schipke Private Investor since 16,428(6) (5)
1996 1996; Chairman of 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 61
years old.
4
<PAGE>
<CAPTION>
Number of Percentage
Shares of
Name and Beneficially Shares
Director Since Information About Director Owned(1) Outstanding(2)
- -------------- -------------------------- ----------- ------------
<S> <C> <C>
William G. Edwards President and Chief Operating 563,740(7) 1.2%
1998 Officer of the Company since
1998; Executive Vice President
- Housing Operations, 1997-
1998; Executive Vice President
-Manufacturing, 1996-1997;
Senior Vice President -
Eastern Manufacturing,
1995-1996; President and
Chief Executive Officer of
Destiny Industries, Inc.
(manufacturer of manufactured
homes that was acquired by
the Company in 1995),
1978-1995. He is 54 year old.
</TABLE>
The following members of the Board of Directors were elected to their
present terms, which expire in 2001, at the Annual Meeting of Shareholders held
February 11, 1998:
Number of Percentage
Shares of
Name and Beneficially Shares
Director Since Information About Director Owned(1) Outstanding(2)
- ---------------- -------------------------- ------------ ------------
Clarence W. Walker Partner, Kennedy Covington 109,877(8) (5)
Lobdell & Hickman, L.L.P.,
Attorneys at Law,
Charlotte, NC since 1961.
He is 67 years old.
Dennis I. Meyer Partner, Baker & McKenzie, 169,796(9) (5)
1983 Attorneys at Law,
Washington, DC since 1965.
Director of United
Financial Banking
Companies, Inc. and Carey
International, Inc. He is
63 years old.
The following members of the Board of Directors were elected to their
present terms, which expire in 2000, at the Annual Meeting of Shareholders held
January 29, 1997, with the exception of Mr. Smith, who was elected to his
present term at the Annual Meeting of Shareholders held February 11, 1998:
Number of Percentage
Shares of
Name and Beneficially Shares
Director Since Information About Director Owned(1) Outstanding(2)
- --------------- -------------------------- ------------ -------------
Kermit G. Phillips Chairman of the Board, 240,416 (10) (5)
1979 Phillips Management Group,
Inc. (real estate
development and management
company) since 1974. He
is 64 years old.
5
<PAGE>
H. Michael Weaver Private Investor; Owner of 200,052 (11) (5)
Weaver Investment Company
(real estate investment
firm) since 1968. He is
61 years old.
Francis T. Vincent Private Investor; 29,428 (12) (5)
Jr. Commissioner of Major
1993 League Baseball,
1989-1992. Director of
Time-Warner Inc., General
Cigar Corporation and
Westfield Corporation. He
is 60 years old.
Lanty L. Smith Chairman of The Greenwood 86,000 (13) (5)
1997 Group, Inc. (provider of
technical and other
temporary personnel) since
1992; Chairman of
Precision Fabrics Group,
Inc. (manufacturer of high
performance textile
products) since 1988;
Chief Executive Officer of
Precision Fabrics Group,
Inc. from 1988 to 1997;
Chairman of Soles Brower
Smith and Co. (investment
banking firm) since 1998.
Director of First Union
Corporation and Wikoff
Color Corp. He is 56
years old.
- ---------------------
(1) Unless otherwise indicated, each shareholder has sole voting and
dispositive power with respect to all shares beneficially owned. Common
Stock ownership information is as of December 4, 1998.
(2) Based on the number of shares outstanding plus shares subject to options
that are presently exercisable or exercisable within 60 days.
(3) Includes 309,160 shares subject to options that are presently exercisable
or exercisable within 60 days and 420,869 shares of restricted stock.
(4) Includes 27,428 shares subject to options that are presently exercisable
or exercisable within 60 days and 1,000 shares held by Mr. Streeter's
wife.
(5) Less than 1%.
(6) Includes 12,428 shares subject to an option that is presently exercisable.
(7) Includes 46,680 shares subject to options that are presently exercisable
or exercisable within 60 days and 19,308 shares of restricted stock.
(8) Includes 56,488 shares subject to options that are presently exercisable
or exercisable within 60 days and 3,255 shares held by Mr. Walker's wife.
6
<PAGE>
(9) Includes 56,488 shares subject to options that are presently exercisable
or exercisable within 60 days and 85,188 shares held by Mr. Meyer's wife.
(10) Includes 72,988 shares subject to options that are presently exercisable
or exercisable within 60 days and 2,400 shares held by Mr. Phillips' wife.
(11) Includes 42,428 shares subject to options that are presently exercisable
or exercisable within 60 days, 52,500 shares held by the Edith H. Weaver
Marital Deduction Trust (of which Mr. Weaver is the trustee) and 5,000
shares held by Mr. Weaver's wife.
(12) Includes 27,428 shares subject to options that are presently exercisable
or exercisable within 60 days.
(13) Includes 6,000 shares subject to an option that is exercisable within 60
days.
THE BOARD OF DIRECTORS AND ITS COMMITTEES
The Board of Directors met seven times during the fiscal year ended
September 30, 1998. During fiscal 1998, each director attended more than 75% of
the aggregate of the number of meetings of the Board of Directors and all
committees on which he served. The Board of Directors of the Company has Audit,
Compensation and Executive Committees. The Board of Directors of the Company
does not have a Nominating Committee.
The Audit Committee is composed of Kermit G. Phillips, II, Sabin C.
Streeter, 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 five times
during the past fiscal year.
The Compensation Committee is composed of Francis T. Vincent, Jr., Dennis
I. Meyer, Roger W. Schipke and Lanty L. Smith. This Committee reviews and makes
recommendations and determinations with respect to the compensation of the
Company's officers. The Compensation Committee met eight times during the past
fiscal year.
The Executive Committee is composed of Messrs. St. George and Edwards.
This Committee is authorized to exercise all the powers and authority of the
Board of Directors that can be delegated to a committee under the North Carolina
Business Corporation Act. The Executive Committee did not meet during the past
fiscal year, although from time to time it meets informally and acts by
unanimous written consent.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During fiscal 1998, Messrs. Vincent, Meyer, Schipke and Smith served on
the Compensation Committee of the Board of Directors. None of such persons has
ever been an officer or employee of the Company. During fiscal 1998, no
executive officer of the Company served as a director or member of the
compensation committee (or other committee performing similar functions) of any
other entity of which an executive officer served on the Board of Directors or
Compensation Committee of the Company.
7
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
In the past, Weaver, Grubar & Black Company, a real estate brokerage firm
of which H. Michael Weaver is Chairman of the Board and a principal shareholder,
has performed brokerage services for the Company in connection with the
Company's purchase and sale of certain properties.
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.
The Company purchases furniture from Triangle Ventures, Inc., a furniture
company 50% owned by William G. Edwards. During fiscal 1998, the Company's
purchases from Triangle Ventures, Inc. were approximately $4.0 million. The
Company believes that the terms of this arrangement are no less favorable than
that which could be obtained from unrelated parties.
COMPENSATION COMMITTEE REPORT
COMPENSATION COMMITTEE. The Compensation Committee of the Board of
Directors (the "Committee") is a standing committee of the Board of Directors
composed of outside directors qualified under Section 162(m) of the Internal
Revenue Code. Mr. Vincent is the Chairman and Messrs. Meyer, Schipke and Smith
are the other members of the Committee.
The Committee attempts to insure that the Company's executive compensation
programs are developed, implemented and administered in a way that supports the
Company's objective of linking compensation to performance. 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 lower than at comparable companies but at a level
necessary to enable the Company to attract and retain the highly qualified
executives it needs and 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 Committee
believes that the major portion of each executive's annual compensation
potential should be 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.
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 the use of
incentive stock options can be 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 amounts of 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.
8
<PAGE>
Base Salary. Base salaries for fiscal 1998 increased an average of
4.4% over fiscal 1997 for the Named Executive Officers (as defined on page 12),
excluding Mr. St. George. The Committee believes base salaries for these
executive officers are significantly lower than those for similar 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 the Company's 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 the Company's 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. Because of the Company's financial performance in fiscal 1998, no annual
bonus was paid to any of the Named Executive Officers.
Long Term Incentive Awards and Payouts. The Committee provides its
executive officers with long term incentives in the form of stock options,
restricted stock awards and performance-based cash awards.
In November 1997, the Company adopted a long-term incentive plan to
provide certain executive officers with incentive compensation over the
three-year period ending September 30, 2000 based upon the Company's net income
during such period. This plan was subsequently cancelled due to the Company's
operating results during fiscal 1998.
During fiscal 1998, Messrs. Kilbourne, Edwards, Stidham and Standish were
granted options to purchase 100,000, 100,000, 60,000 and 35,000 shares of Common
Stock, respectively. These options were subsequently cancelled after the end of
fiscal 1998 and certain other options were granted as described on page 13
hereof.
Fiscal 1998 represented the last year of a three year long-term incentive
plan (the "Long Term Plan") pursuant to which 10% of the Company's net income
above a 10% return on equity during the three-year period ending September 30,
1998 was allocated to a bonus pool for certain executive officers of the
Company, including the Named Executive Officers. The Long Term Plan provided for
bonuses to be paid 50% in cash and 50% in restricted stock at the discounts
described above in connection with the executive officers' annual incentive
compensation. Pursuant to the Long Term Plan, Messrs. Kilbourne, Edwards,
Stidham and Standish received cash bonuses of $789,720, $185,750, $392,050 and
$263,240 and restricted stock awards of 0, 17,981, 31,853 and 25,483 shares,
respectively. The Committee elected not to pay any restricted stock to Mr.
Kilbourne because of his resignation as an officer and director after the end of
fiscal 1998.
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 1998 at
$450,000 which represents no increase over fiscal 1997. 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.
9
<PAGE>
Annual Incentive Compensation. Like the Company's other Named Executive
Officers, Mr. St. George did not receive an annual bonus for fiscal 1998.
Long Term Incentive Awards and Payouts. Like the Company's other Named
Executive Officers, Mr. St. George also participated in the Long Term Plan
pursuant to which 10% of the Company's net income above a 10% return on equity
for the three-year period ending September 30, 1998 was allocated to a bonus
pool for certain executive officers. Under the Long Term Plan, Mr. St. George
received a cash bonus of $2,237,540 and a restricted stock award of 216,606
shares. Additionally, Mr. St. George was granted an option to purchase 200,000
shares of Common Stock during fiscal 1998. This option was subsequently
cancelled after the end of fiscal 1998 and a replacement option for 150,000
shares was granted as described on page 13 hereof.
Francis T. Vincent, Jr., Chairman
Dennis I. Meyer
Roger W. Schipke
Lanty L. Smith
10
<PAGE>
SHAREHOLDER RETURN PERFORMANCE GRAPH
Presented below is a line graph comparing the yearly percentage change in
the cumulative total shareholder return on the Company's Common Stock against
the cumulative total return of the Standard & Poors ("S&P") 500 Index and a peer
group for the period commencing September 30, 1993 and ending September 30,
1998, covering the Company's last five fiscal years. The peer group consists of
the following publicly traded companies, all of which are engaged in aspects of
the manufactured housing industry: Cavalier Homes, Inc., Champion Enterprises,
Inc., Clayton Homes, Inc., Fleetwood Enterprises, Inc., Liberty Homes, Inc. and
Skyline Corporation.
<TABLE>
<CAPTION>
1993 1994 1995 1996 1997 1998
9/30/93 9/30/94 9/30/95 9/30/96 9/30/97 9/30/98
<S> <C> <C> <C> <C> <C> <C>
OAKWOOD HOMES 100.00 96.96 136.46 210.40 220.48 102.15
S&P 500 100.00 103.69 134.50 161.84 227.26 247.85
PEER GROUP 100.00 105.78 123.09 174.50 178.44 177.83
</TABLE>
This graph assumes that $100 was invested in the Company's Common Stock,
in the S&P 500 Index and in the peer group on September 30, 1993, and that all
dividends were reinvested. The peer group set forth above is identical to that
in the Shareholder Return Performance Graph included in the proxy statement
distributed to shareholders in connection with the Company's 1998 Annual Meeting
of Shareholders, except that Schult Homes Corporation was included in the peer
group in the 1998 proxy statement but is not included in the peer group set
forth above. Schult Homes Corporation was acquired by the Company on April 1,
1998.
11
<PAGE>
EXECUTIVE COMPENSATION
The table below shows certain compensation information for the three
fiscal years ended September 30, 1998 concerning the Company's Chief Executive
Officer and the Company's four other most highly compensated executive officers
(collectively, the "Named Executive Officers").
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
- -----------------------------------------------------------------------------------------------------------------------------------
ANNUAL COMPENSATION LONG TERM COMPENSATION
-----------------------------------------------------------------------------------------------
AWARDS PAYOUTS
SECURITIES ALL OTHER
OTHER ANNUAL RESTRICTED UNDERLYING COMPEN-
NAME AND FISCAL SALARY BONUS COMPENSATION STOCK AWARDS OPTIONS LTIP PAYOUTS SATION
PRINCIPAL POSITION YEAR ($) ($) ($) ($) (#) ($) ($)(1)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Nicholas J. St. George 1998 450,000 0 144,880(2) 2,237,540(3) 200,000 2,237,540 6,940
Chairman and 1997 450,000 867,290(4) 115,391(2) 96,366(3) 0 0 7,442
Chief Executive Officer 1996 450,000 1,133,787(4) 70,942(2) 553,150(3)(5) 160,000 7,565,230 2,155
C. Michael Kilbourne (6) 1998 235,962 0 46,728(7) 0 100,000 789,720 4,380
Executive Vice President 1997 218,269 349,169(4) - (8) 38,797(3) 0 0 4,583
1996 200,000 586,877(4) - (8) 74,225(3) 56,000 2,553,780 2,387
William G. Edwards 1998 181,293 0 114,103(9) 185,750(3) 100,000 185,750 5,521
President and Chief 1997 185,539 270,108(4) - (8) 30,012(3) 0 0 5,905
Operating Officer 1996 165,442 347,612 - (8) 0 53,000 0 2,590
J. Michael Stidham 1998 197,308 0 - (8) 329,050(3) 60,000 329,050 7,250
Executive Vice 1997 176,539 270,108(4) - (8) 30,012(3) 15,000 0 6,707
President - Retail 1996 140,000 346,356(4) - (8) 43,800(3) 40,000 1,167,050 5,884
Myles E. Standish 1998 125,000 0 15,483(10) 263,240(3) 35,000 263,240 3,750
Executive Vice President - 1997 125,000 213,836(4) - (8) 23,760(3) 0 0 4,702
Chief Administrative 1996 125,000 274,199(4) - (8) 30,467(3) 30,000 446,225 998
Officer
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The components of the amounts shown in this column consist of (a) Company
contributions under the Company's various retirement plans for Messrs. St.
George, Kilbourne, Edwards, Stidham and Standish, respectively, of $4,558,
$3,707, $5,521, $4,962 and $3,750 for 1998, $5,192, $3,606, $5,430, $4,619
and $4,702 for 1997, and $1,817, $2,346, $2,590, $4,883 and $998 for 1996,
and (b) interest accrued on deferred compensation accounts for Messrs. St.
George, Kilbourne, Edwards, Stidham and Standish, respectively, that are
considered by the Securities and Exchange Commission to be at above-market
rates in the amounts of $2,382, $673, $0, $2,288, and $0 for 1998, $1,775,
$502, $0, $1,613 and $0 for 1997, and $338, $41, $0, $1,001 and $0 for
1996.
(2) Includes $95,968, $89,445 and $48,981 attributable to personal use of the
Company's plane for fiscal 1998, 1997 and 1996, respectively.
(3) Amounts with respect to fiscal 1998 represent the value of shares of
restricted stock issued pursuant to the Long Term Plan. Amounts with
respect to fiscal 1997 and fiscal 1996 represent the value of shares of
restricted stock issued as partial payment of bonuses with respect to such
fiscal years. Such values are based upon the price of the Common Stock at
the relevant fiscal year end. Shares issued with respect to fiscal 1998
will vest on September 30, 2000 and shares issued with respect to fiscal
1997 will vest on September 30, 1999. Shares issued with respect to fiscal
1996 vested on September 30, 1998 and are no longer restricted. At
September 30, 1998, Mr. St. George held 420,869 shares of restricted stock
with a value of $5,523,906, Mr. Kilbourne held 1,716 shares with a value of
$22,523, Mr. Edwards held 19,308 shares with a value of $253,418, Mr.
Stidham held 33,180 shares with a value of $435,488, and Mr. Standish held
26,534 shares with a value of $348,259. The foregoing values (a) are
calculated based upon the $13.125 closing price of the
12
<PAGE>
Common Stock on the New York Stock Exchange on September 30, 1998 and (b)
include shares earned pursuant to the Long Term Plan even though such
shares were not issued until after September 30, 1998. Dividends are paid
on all such shares of restricted stock.
(4) Does not include the value of the portion of the bonus paid in shares of
restricted stock. See note 3 above.
(5) Does not include the dollar value of 200,000 shares of restricted stock
issued to Mr. St. George in November 1995 that will vest in 2000. Dividends
are paid on these shares of restricted stock.
(6) Mr. Kilbourne resigned as a director and executive officer of the Company
effective October 30, 1998.
(7) Includes $22,618 attributable to personal use of the Company's plane and
$19,725 with respect to a Company car.
(8) Such Named Executive Officer did not receive personal benefits during the
listed years in excess of the lesser of $50,000 or 10% of his annual salary
and bonus.
(9) Includes $56,908 attributable to personal use of the Company's plane and
$49,738 with respect to insurance premiums paid by the Company.
(10) Includes $12,813 with respect to a Company car.
The table below sets forth information relating to stock option grants
during the fiscal year ended September 30, 1998 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 GRANTS IN LAST FISCAL YEAR
Individual Grants(1)
% of
Total Potential
Number of Options Realizable Value
Shares Granted At Assumed Annual
Underlying to Exercise Rates of Stock
Options Employees or Base Price Appreciation
Granted in Fiscal Price Expiration for Option Term
Name (#) Year $/Share Date 5%($) 10%($)
---- --- ---- ------- ---- ----- ------
<S> <C> <C> <C> <C> <C> <C> <C>
Nicholas J. St. George 200,000 16.2 28.85 5/19/07 3,404,000 8,516,000
C. Michael Kilbourne 100,000 8.1 28.85 5/19/07 1,702,000 4,258,000
William G. Edwards 100,000 8.1 28.85 5/19/07 1,702,000 4,258,000
J. Michael Stidham 60,000 4.9 28.85 5/19/07 1,021,200 2,554,800
Myles E. Standish 35,000 2.8 28.85 5/19/07 595,700 1,490,300
- -------------------
</TABLE>
(1) In November 1998, all such options were cancelled and, in connection
therewith, Messrs. St. George, Kilbourne, Edwards, Stidham and Standish
were granted options to purchase 150,000, 0, 125,000, 100,000 and 75,000
shares of Common Stock, respectively, at the then current fair market
value.
13
<PAGE>
The table below sets forth, on an aggregated basis, information related to
the exercises of stock options and stock appreciation rights ("SARs") during the
fiscal year ended September 30, 1998 by each Named Executive Officer and the
fiscal year-end value of unexercised stock options and SARs:
<TABLE>
<CAPTION>
AGGREGATED OPTION/SAR EXERCISES IN
FISCAL 1998 AND FY-END OPTION/SAR VALUES
Value of
Number of Unexercised
Unexercised In-the-Money
Options/SARs Options/SARs
Shares At FY-End At FY-End
Acquired on Value Exercisable/ Exercisable/
Name Exercise(#) Realized($) Unexercisable(#) Unexercisable($)
<S> <C> <C> <C> <C> <C> <C>
Nicholas J. St. George 0 0 124,440/449,160 448,668/673,002
C. Michael Kilbourne 0 0 118,042/156,000 889,478/0
William G. Edwards 0 0 11,120/138,880 0/0
J. Michael Stidham 17,750 437,624 54,000/115,000 455,490/0
Myles E. Standish 10,000 166,175 10,000/65,000 550/0
</TABLE>
LONG-TERM INCENTIVE PLAN AWARDS
In November 1997, the Company adopted a long-term incentive plan to
provide its executive officers (including the Named Executive Officers) with
incentive compensation over the three-year period ending September 30, 2000
based upon the Company's net income. Such plan was subsequently cancelled.
DIRECTOR COMPENSATION
The directors of the Company who are not employees are paid an annual fee
of $34,000 plus $1,000 for each Board meeting attended, $1,500 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. Committee
chairmen receive an additional $1,000 each quarter. Under the Company's 1998
Director Deferral Plan, non-employee directors may elect to defer payment of all
or any portion of their annual retainer and meeting fees until they no longer
serve on the Board of Directors of the Company. Directors participating in this
plan are credited with phantom stock units as they defer fees. Upon resignation
or retirement, a participating director will be entitled to receive a cash
payment equal to the value of his phantom stock units on the date he ceases to
be a director. Additionally, under the Company's 1997 Director Plan, each
non-employee director was granted an option to purchase 6,000 shares of Common
Stock on July 30, 1998 at an exercise price per share equal to the fair market
value of the Common Stock on such date. Under the 1997 Director Plan, each
non-employee director will also be granted an option to purchase 6,000 shares of
Common Stock on July 30, 2000 and 2002 at the fair market value at such time.
EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT AND CHANGE OF CONTROL
ARRANGEMENTS
The Company has entered into employment agreements with Messrs. St. George,
Edwards, Stidham and Standish that provide for such executives' continued
employment with the Company for two years
14
<PAGE>
following a change in control occurring on or before January 30, 2001 with
respect to Mr. St. George and on or before December 31, 2003 with respect to
Messrs. Edwards, Stidham and Standish. If the employment of any such executive
is terminated within two years after such change of control for reason other
than death, disability or cause or if any such executive resigns during such
time for good reason, and the Compensation Committee does not revise the
agreements (other than with respect to Mr. St. George), he will be entitled to a
lump sum payment equal to two times his annual compensation. These agreements
are intended to provide these executives with a greater sense of security,
assure their objectivity in analyzing any potential change in control and
preserve continuity of management in the event of a change in control.
The Company has also entered into an Executive Disability Benefit Agreement
with Mr. St. George. Under this agreement, the Company will pay Mr. St. George
his then current base salary for the first 180 days after he is totally
disabled. After such time, he will be paid $23,942 per month in the event he is
determined to be totally disabled, subject to increase to reflect cost of living
adjustments, so long as he is totally disabled and under the age of 60. In no
event, however, would the Company be obligated under this agreement to pay more
than twice the amount of the payments the Company would 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 and Stidham. Pursuant to these 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. Messrs. St. George and
Stidham are entitled to payments under these agreements if they retire after
reaching ages 55 and 60, respectively. The annual retirement benefit payable
upon retirement at age 65 is $403,212 for Mr. St. George and $315,605 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 termination without
cause or 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.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities and Exchange Act of 1934 requires the
Company's directors and executive officers and certain persons who own more than
10% of the Company's Common Stock to file with the Securities and Exchange
Commission initial reports of ownership and reports of changes in ownership of
the Common Stock and other equity securities of the Company. Directors, officers
and such greater than 10% shareholders are required to furnish the Company with
copies of all such reports they file. To the Company's knowledge, based solely
on a review of the copies of such reports furnished to the Company and written
representations that no other reports were required, during the fiscal year
ended September 30, 1998, all Section 16(a) filing requirements applicable to
its executive officers, directors and greater than 10% beneficial shareholders
were complied with on a timely basis, except that Mr. Edwards filed two late
Forms 4 reporting an aggregate of four transactions, Mr. Weaver filed one late
Form 4 reporting two transactions and Mr. Phillips reported on Form 5 one
transaction that was required to have been earlier reported on Form 4.
RATIFICATION OF SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has selected PricewaterhouseCoopers LLP as
independent public accountants to examine the financial statements of the
Company and its subsidiaries for the fiscal year ending September 30, 1999. This
selection is being presented to the shareholders for their ratification at the
Annual Meeting.
15
<PAGE>
The firm of PricewaterhouseCoopers LLP (and its predecessors) has examined
the financial statements of the Company since 1977. Representatives of
PricewaterhouseCoopers LLP are expected to be present at the Annual Meeting 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 PricewaterhouseCoopers LLP as independent public accountants to examine the
financial statements of the Company and its subsidiaries for the fiscal year
ending September 30, 1999, and proxies solicited by the Board of Directors will
be so voted unless shareholders specify otherwise. If the shareholders do not
ratify the selection of PricewaterhouseCoopers LLP, the selection of independent
public accountants will be reconsidered by the Board of Directors.
SHAREHOLDER PROPOSALS
Any proposal that a shareholder intends to present for action at the 2000
Annual Meeting of Shareholders, currently scheduled for February 2, 2000, must
be received by the Company no later than September 2, 1999 in order for the
proposal to be included in the proxy statement and form of proxy for the 2000
Annual Meeting of Shareholders. In addition, if the Company receives notice of a
shareholder proposal after November 15, 1999, such proposal will be considered
untimely and the persons named in the proxy statement and form of proxy for the
2000 Annual Meeting of Shareholders will have discretionary authority to vote on
such proposal without discussion of the matter in the proxy statement and
without such proposal appearing as a separate item on the proxy card. Any
shareholder proposal should be sent to Secretary, Oakwood Homes Corporation,
P.O. Box 27081, Greensboro, North Carolina 27425-7081.
16
<PAGE>
<TABLE>
<CAPTION>
OAKWOOD HOMES CORPORATION
PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR ANNUAL MEETING OF SHAREHOLDERS TO BE HELD FEBRUARY 3, 1999
The undersigned hereby appoints NICHOLAS J. ST. GEORGE and WILLIAM G.
EDWARDS, 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 3, 1999, 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 Nicholas J. St. George, Sabin C.
Streeter, Roger W. Schipke and William G. Edwards.
<S> <C>
[ ] FOR all listed nominees (except do not vote for the
nominee(s) whose name(s) I have written below)
[ ] WITHHOLD AUTHORITY to vote for the listed
nominees
- -----------------------------------------------------------------------------------------
2. RATIFICATION OF SELECTION OF PRICEWATERHOUSECOOPERS LLP AS INDEPENDENT
PUBLIC ACCOUNTANTS
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(Continued and to be signed on the reverse)
<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:_____________________________ , 1999.
___________________________________________
___________________________________________
(When signing as attorney, executor,
administrator, trustee, guardian, etc.,
give title as such. If a joint account,
each joint owner should sign personally.)
</TABLE>
17
