“Code” means the Internal Revenue Code of 1986.“Common Stock” means the common stock of the Company, par value $.01 per share.“Compensation Committee” shall mean the Compensation Committee of the Board ofDirectors of the Company.“Disability” shall mean that the Executive, with or without any accommodation requiredby law, is, by reason of any medically determinable physical or mental impairment that can beexpected to result in death or can be expected to last for a continuous period of not less than 12months, receiving income replacement benefits for a period of not less than three months under anaccident and health plan covering employees of the Company. For purposes of this Agreement, theExecutive will be deemed to have a “Disability” on the last day of the third month for which theExecutive receives the income replacement benefits.“Plan” means the Cavco Industries, Inc. 2005 Stock Incentive Plan as it may be amendedfrom time to time, or such other plan that may be adopted by the Company.“Subsidiary” shall mean a corporation, partnership, joint venture, limited liabilitycompany, or any other entity in which the Company owns 50% or more of the stock, partnershipinterests, joint venture interests, membership interests, or other equity in such entity, orcontrols, through the right to vote for the management of the entity or otherwise, such entity, andshall include all entities which are controlling, controlled by, or under common control with suchcorporation, partnership, joint venture, limited liability company, or other entity.“Termination for Cause” shall mean the Company’s termination of the Executive’semployment pursuant to a determination by the Board, in its sole and absolute discretion, butacting in good faith, that the Executive is guilty of engaging in acts during the Term of thisAgreement that constitute theft, dishonesty, fraud, or embezzlement, or that constitute willful andrepeated insubordination.“Termination for Good Reason” shall mean the Executive’s termination of this Agreementand the Executive’s employment for “Good Reason.” For purposes of this Agreement, “Good Reason”means the occurrence of any of the following (unless Executive has expressly agreed to such eventin a signed writing): (i) a material diminution in the Executive’s authority, duties, orresponsibilities; (ii) a material diminution in the authority, duties or responsibilities of thesupervisor to whom the Executive is required to report, including a requirement that the Executivereport to an officer or employee of the Company instead ofreporting directly to the Company’s Board; or (iii) the Company’s material Breach of thisAgreement.
 
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The Executive must provide the Company with written notice of the occurrence of the action orBreach giving rise to Good Reason within 90 days of the initial existence of such action or Breach.Notwithstanding any provisions of this Agreement to the contrary, none of the events describedabove will constitute Good Reason if, within 30 days after the Executive provides the Company witha written notice specifying the occurrence or existence of the action or Breach that the Executivebelieves constitutes Good Reason, the Company has fully corrected (or reversed) such action orBreach. Executive’s employment will terminate on the day following the expiration of this 30 day“cure period,” unless the Executive and the Company agree to a later date (not later than two yearsfollowing the initial existence of such breach or action). The Executive shall be deemed to havewaived his right to terminate for Good Reason with respect to any such action or breach if he doesnot notify the Company in writing of such action or breach within 90 days of the event that givesrise to such action or Breach.“Termination Without Cause” shall mean the Company’s termination of the Executive’semployment for any reason other than a Termination for Cause.All other defined terms set forth in the text of this Agreement will have the meaning assignedto them in this Agreement.SECTION 2. *Employment*. From and after the Effective Date, the Company will employ theExecutive upon the terms and conditions set forth herein.SECTION 3. *Term*. Subject to the terms and conditions set forth herein, the Executive shall beemployed for a term commencing on the Effective Date and ending on March 31, 2015 (the “InitialTerm”), unless earlier terminated as provided in this Agreement. Thereafter, the term of thisAgreement shall automatically be extended for successive one (1) year periods (“Renewal Terms”)unless either the Board or the Executive gives written notice to the other at least ninety (90)days prior to the end of the Initial Term or any Renewal Term, as the case may be, of its or hisintention not to renew the term of this Agreement. The Initial Term and any Renewal Terms of thisAgreement shall be collectively referred to as the “Term.”SECTION 4. *Duties and Responsibilities*.(a) The Executive shall serve in the capacity of Chairman of the Board, President and ChiefExecutive Officer of the Company, subject to the direction of the Board of Directors of theCompany. The Executive’s duties under this Agreement shall consist of the performance of suchservices as are consistent with the responsibilities of said office and such other servicescommensurate with his position as a senior executive of the Company as may be assigned to him fromtime to time by the Board. Such duties shall be performed within the policies and guidelinesestablished from time to time by the Board, subject at all times to the ultimate control anddirection of the Board.(b) At all times during the Term, the Executive shall devote substantially all of hisbusiness time, attention and energies to the performance of his duties under this Agreement, andshall not undertake or be engaged in any other activities, whether or not pursued for gain, profitor other pecuniary advantage, which could impair his ability to fulfill his duties to the Companyunder this Agreement, without the prior written consent of the Board.
 
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(c) The Executive shall perform his duties under this Agreement with fidelity and loyalty,to the best of his ability, experience and talent and in a manner consistent with his fiduciaryresponsibilities.SECTION 5. *Compensation*.(a) Base Salary. During the Term, the Company shall pay a salary (the “Base Salary”) to theExecutive as set forth in following schedule, payable in accordance with the general payrollpractices of the Company in effect from time to time.     **PERIOD** **ANNUAL SALARY** April 1, 2011 to March 31, 2012 $400,000 April 1, 2012 to March 31, 2013 $450,000 April 1, 2013 to March 31, 2015 $500,000 Notwithstanding the foregoing, the Compensation Committee may review the Executive’s BaseSalary at any time and in its sole discretion adjust the Executive’s then current Base Salary;provided, however, that the Compensation Committee may not decrease the Executive’s then currentBase Salary without the prior written consent of the Executive. If the term of this Agreement isextended into a Renewal Term as provided in Section 3 above, then the annual salary of theExecutive shall be determined by the Compensation Committee in its reasonable business judgmentprovided that in no event may the Compensation Committee decrease the annual salary of theExecutive below that of any previous fiscal year during the Renewal Term.(b) Bonus.(i) Annual Bonus. In addition to the payment of Base Salary, for each fiscal year of theCompany during the Term, the Executive shall be awarded cash in an amount equal to (i) five percent(5%) of the first $4 million of pretax income of the Company, plus (ii) six percent (6%) of thenext $16 million of pretax income of the Company, plus (iii) three percent (3%) of pretax income ofthe Company above $20 million, provided that the cash award on pre-tax earnings of any materialassets or businesses acquired after June 30, 2011 shall be determined by the Compensation Committeein its sole judgment, in good faith, in consultation with the Executive (with “material” beingdetermined by the Compensation Committee in good faith). The amount of pretax income of theCompany, upon which the award is made, will be determined by the Board after the conclusion of therelevant fiscal year. The Annual Bonus shall be made pursuant to Section 7(e) of the Plan (orsimilar provision in any other plan that may be adopted by the Company) in accordance with Section162(m) of the Code. The Annual Bonus payable to the Executive for any fiscal year of the Companymay not exceed the limit set forth in Section 7(f)(iii) of the Plan. The cash bonus paymentdescribed in this Section 5(b)(i) shall bepaid to the Executive in a single lump sum payment within 65 days following the end of the fiscalyear for which Executive earns such cash bonus.
 
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(ii) Other Bonus Awards.(1) Special Performance Bonus. The Executive shall be awarded cash in the sum of $1 million(or a percentage thereof as indicated below), conditioned upon the attainment of the following4-year compounded annual growth rate (CAGR) performance targets, using the Company’s pre-taxearnings for the four fiscal quarters ended on December 31 2010 as a base year (i.e., calendar year2010) compared to the four fiscal quarters ending December 31, 2014 (i.e., calendar year 2014):     **FOUR YEAR CAGR** **PERCENT VESTING** Below 30%  0%30% to 39.9%  50%40% to 49.9%  80%50% and up  100%If the four-year CAGR in pre-tax earnings exceeds 30% but is less than 50%, the CompensationCommittee shall compute the percent vesting pro-rata using linear interpolation to the nearesttenth of percent of vesting (as an example only, if four-year CAGR is computed at 35%, then vestingwould be 65%). This cash award shall be paid promptly after December 31, 2014 as soon aspracticable after the Company files its financial statements for the quarter ending December 14,2014 with the Securities and Exchange Commission (but no later than February 28, 2015) uponconfirmation by the Compensation Committee of achievement of the performance target(s).(2) On December 31, 2014, the Executive shall be awarded cash in the sum of $3 million. Thecash bonus payment described in this Section 5(b)(ii)(2) is subject to the requirements of Section409A of the Code and shall be payable in accordance with Section 10 in $500,000 increments(together with simple interest at 5% per annum on the unpaid balance) on a date selected by theCompany between January 1 and January 30 in each of years 2015 through 2020.(iii) Subject to the provisions of Section 5(b)(iv) below, the payment of any bonus underSection 5(b)(ii) shall be conditioned upon the Executive’s employment by the Company on December31, 2014.(iv) With respect to the bonuses set forth in Section 5(b)(ii), vesting shall accelerate inthe event of (a) a Change in Control, (b) Separation from Service due to a Termination WithoutCause or a Termination for Good Reason, (c) the Executive’s death, or (d) the Executive’sDisability. Subject to the requirements of Section 9(e) in the event of a Termination WithoutCause, and subject to the requirements of Section 10, payment then will be made within 65 daysfollowing the occurrence of the event (e.g., the closing of the transaction that results in theChange in Control, the Executive’s Separation from Service or the Executive’s death or Disability)that results in the payment. The Executive may not select the calendar yearof payment. In the case of the “Special Performance Bonus” provided pursuant to Section5(b)(ii)(1), in calculating the amount of the bonus, it will be assumed that the performance goalwas satisfied at the 100% level. Notwithstanding the foregoing, the payments and benefits providedin this Section 5 are subject to and conditioned upon the Executive executing a general release andwaiver (in the form reasonably acceptable to the Company), waiving all claims the Executive mayhave against the Company, its successors, assigns, affiliates, executives, officers and directors,and such payments are subject to and conditioned upon the Executive’s compliance with theNoncompetition covenants provided in Section 9 hereof.
 
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(v) In the event the Executive Separates from Service for any reason after December 31, 2014(e.g., Separation from Service due to retirement, voluntary resignation by Executive, Terminationfor Cause, Termination Without Cause, Termination for Good Reason, termination without Good Reason,or upon death, or Disability), before or after a Change in Control, any bonus payable under Section5(b)(ii) that has not been paid, including accrued but unpaid interest under Section 5(b)(ii)(2),shall, subject to Section 10 below, be paid to Executive (or his heirs or executors) within 65 daysfollowing the occurrence of the event that results in the payment. The Executive may not selectthe calendar year of payment.(c) Stock Options. The Executive shall be entitled to receive an annual grant of options ineach fiscal year during the term of this Agreement to acquire shares of the Common Stock of theCompany, the value of which shall equal 100% of the Executive’s then Base Salary using theBlack-Scholes option value model (i.e., the number of shares shall equal the grant date Base Salarydivided by the Black-Scholes option value. For example, assuming a Base Salary of $400,000 and aBlack-Scholes option value of $20 per share, a grant of 20,000 shares would be made). The numberof shares to be granted shall be rounded to the nearest 500 shares and shall not exceed the maximumgrant limit for an individual as set forth in the Plan. Vesting criteria (and achievement of such)and vesting timing shall be at the sole discretion of the Compensation Committee.Each such option grant shall be made from, and shall be subject to the standard terms setforth in, the Plan and shall be memorialized in a written agreement. The per share exercise priceof options will be equal to the fair market value of Cavco Common Stock on the date of the grant,as determined in accordance with the Plan.(d) Expense Reimbursement. During the Term, the Executive shall be entitled to receiveprompt reimbursement for all reasonable out-of-pocket expenses incurred in the reasonablediscretion of the Executive in connection with the due and proper performance of his dutieshereunder in accordance with the Company’s regular practices with respect to other similarlysituated executives of the Company.(e) Incentive, Savings and Retirement Plans. During the Term, the Executive shall beentitled to participate in all incentive, savings and retirement plans (whether or not qualifiedunder the Code) as amended, established or adopted and maintained by the Company from time to time,in accordance with the Company’s regular practices applicable to other similarly situatedexecutives of the Company. The provisions of this Section 5(e) shall not affect in any waytherights of the Company to amend or terminate any such incentive, savings or retirement plans inaccordance with the terms of such plans and the provisions of applicable law.(f) Group Benefit Plans. During the Term, the Executive shall be entitled to participate inall group benefit plans (including, but not limited to, disability, accident, medical, lifeinsurance and hospitalization plans) established or adopted and maintained by the Company from timeto time, in accordance with the Company’s regular practices applicable to other similarly situatedexecutives of the Company. The provisions of this Section 5(f) shall not affect in any waythe rights of the Company to amend or terminate any such group benefit plans in accordance with theterms of such plans and the provisions of applicable law.
 
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(h) Vacation. The Executive shall be entitled to such vacation, holidays and other paid orunpaid leaves of absence as are consistent with the Company’s normal policies or as are otherwiseapproved by the Company.(i) Withholding. All cash payments made to Executive shall be subject to customary federal,state and local income tax withholding.SECTION 6. *Termination and Resignation*. The Company shall have the right to terminate theExecutive’s employment hereunder at any time and for any reason, and upon any such termination theExecutive shall be entitled to receive from the Company prompt payment of the amount determinedpursuant to the applicable Subsection of Section 7 below. The Executive shall have the right toterminate his employment hereunder at any time by resignation, and thereupon the Executive will beentitled to receive from the Company prompt payment of the amount determined pursuant to theapplicable Subsection of Section 7 below.SECTION 7. *Payments Upon Termination and Resignation*.(a) Termination for Cause; Voluntary Resignation. In the event of a Termination for Cause, orif the Executive voluntarily resigns prior to the occurrence of a Change in Control of the Companyand such resignation does not constitute a Termination for Good Reason, then the Executive shall beentitled to receive only his then current Base Salary up to the date of the Executive’s terminationor resignation, as the case may be. The Executive shall not be entitled to the cash bonusdescribed in Section 5(b)(i) for the year of such termination or resignation.(b) Termination Prior to a Change in Control. If, prior to the occurrence of a Change inControl, Executive dies or becomes Disabled, or if the Executive’s employment is terminated as theresult of a Termination Without Cause or if the Executive terminates his employment for GoodReason, and in each case such termination constitutes a Separation from Service as defined inSection 10, the Executive (or his heirs or executors) shall be entitled to the following:(i) Continued payment of Executive’s then current Base Salary for the remaining Term of thisAgreement plus one (1) year following the expiration of the Term of the Agreement. Subject toSection 10, the Base Salary payments to which the Executive is entitled pursuant to this Section7(b)(i) shall be paid in accordance with the Company’s normal payroll procedures commencing on thefirst pay period immediately following the date on which theExecutive dies, becomes Disabled or incurs a Separation from Service due to a Termination withoutCause or a Termination for Good Reason, as the case may be.(ii) A single lump sum cash payment in an amount equal to two times the Average Bonus. Thelump sum payment to which the Executive is due pursuant to this Section 7(b)(ii) shall be paid toExecutive in a single lump sum payment within 65 days following the date on which the Executivedies, becomes Disabled or incurs a Separation from Service, due to a Termination without Cause or aTermination for Good Reason, as the case may be. The Executive may not select the calendar year ofpayment.
 
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(iii) Continued health insurance benefits, at substantially the level the Executive wasreceiving immediately prior to the date on which the Executive dies, becomes Disabled or incurs aSeparation from Service, as the case may be, for a period of 18 months following the date on whichthe Executive dies, becomes Disabled or incurs a Separation from Service, due to a Terminationwithout Cause or a Termination for Good Reason, as the case may be. The Company will satisfy theobligation to provide the health insurance benefits pursuant to this Section 7(b)(iii) by eitherpaying for or reimbursing the Executive for the actual cost of COBRA coverage (and Executive shallcooperate with Company in all respects in securing and maintaining such benefits, includingexercising all appropriate COBRA elections and complying with all terms and conditions of suchcoverage in a manner to minimize the cost). In order to ensure compliance with Section 409A of theCode, the amount of expenses eligible for reimbursement, or the amount of benefits provided to theExecutive, in one taxable year may not affect the expenses eligible for reimbursement or the amountof benefits provided in any other taxable year. All reimbursements must be made no later thanDecember 31 of the calendar year following the calendar year in which the expense was incurred.The Executive may not elect to receive cash or any other benefit in lieu of the benefits providedby this Section 7(b)(iii). The Company’s obligation under this Section 7(b)(iii) will cease whenand if the Executive becomes eligible to receive substantially similar coverage with a successoremployer.(c) Termination Following a Change in Control. If within two years after the occurrence of aChange in Control of the Company: (i) the Executive’s employment is terminated as the result of aTermination Without Cause, or (ii) the executive voluntarily resigns his employment hereunder forany reason, and in each case such termination constitutes a Separation from Service as defined inSection 10, the Company will pay to the Executive a lump sum termination payment equal to two timesthe sum of the Executive’s then current Base Salary and Average Bonus. Subject to Section 10, thelump sum termination payment described in this Section 7(c) will be paid to the Executive within 65days following the Executive’s Separation from Service. If the Executive receives paymentspursuant to this Section 7(c), no payments will be due pursuant to Section 7(b). The Executive maynot select the calendar year of payment.(d) Notwithstanding the foregoing, the payments and benefits provided in this Section 7 aresubject to and conditioned upon the Executive executing a general release and waiver (in the formreasonably acceptable to the Company), waiving all claims the Executive may have against theCompany, its successors, assigns, affiliates, executives, officers and directors, and such paymentsare subject to and conditioned upon the Executive’s compliance with the Noncompetition covenantsprovided in Section 9 hereof.SECTION 8. *Confidentiality*. The Executive recognizes and acknowledges that the names of theCompany’s customers, the Company’s methods of operation, sales, engineering and other tradesecrets, as they may exist from time to time, are valuable, special and unique assets of theCompany. The Executive shall not, during or after the term of his employment under this Agreement,disclose any such names or other trade secrets, or any part thereof, that he becomes aware ofduring his employment, to any person, firm, corporation, association or other entity.
 
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SECTION 9. *Non-competition*.(a) During the Term of this Agreement and for a period of two years following the resignationof the Executive, a Termination for Cause, a Termination Without Cause (but subject to Section 9(d)below), or a Termination for Good Reason (and in no event for a period of less than four years fromthe Effective Date) the Executive shall not:(i) engage in any Competing Business, or become associated with any entity, whether as aprincipal, partner, employee, consultant, shareholder or otherwise (other than as a holder of notin excess of 5% of the outstanding voting shares of any publicly traded company) that is activelyengaged in any Competing Business, in the Business Territory. The term “Competing Business” means:the manufacturing, distribution, sale (wholesale and retail), financing (wholesale and retail), andinsuring of manufactured homes, modular homes, park model recreational trailers and cabins, andmodular commercial structures. The term “Business Territory” means: any geographic area in whichthe Company conducts business or sells products as of the Effective Date or at the time of thealleged competition; provided, however, if a court determines such a geographic scope isunenforceable, Business Territory shall mean the continent of North America; provided, however, ifa court determines such a geographic scope is unenforceable, Business Territory shall mean the 48continental states and the southern portion of Canada (for the purposes of this Agreement, the“Southern Portion” of Canada is that area within 200 miles of the Unites States Border); provided,however, if a court determines such a geographic scope is unenforceable, Business Territory shallmean the United States; provided, however, if a court determines such a geographic scope isunenforceable, Business Territory shall mean any state to which the Company has shipped amanufactured home, modular home, park model recreational trailer, cabin, or modular commercialstructure in the twenty-four (24) month period prior to the date of this Agreement; provided,however, if a court determines such a geographic scope is unenforceable then Business Territoryshall mean any location within a fifty (50) mile radius of any Company office or manufacturingfacility.(ii) except in connection with the due and proper performance of his duties hereunder,solicit or contact (with respect to any business conducted by the Company or any of itssubsidiaries) retailers, dealers, suppliers, financing parties, customers or potential customers onbehalf of any corporation or other entity or any other person engaged in any business conducted bythe Company or any of its subsidiaries or affiliates.(iii) solicit or otherwise induce any employee of the Company or any of its subsidiaries toterminate his or her service with the Company or any such subsidiary, or hire any person who was anemployee of the Company or any such subsidiary at any time during the 6-month period immediatelyprior to the date of termination or expiration of the Executive’s employment hereunder.(b) It is hereby agreed by and between the Executive and the Company that if a court ofcompetent jurisdiction determines that the four (4) year non-competition and non-solicitationperiods identified in this Section 9 are too broad to be enforced, the parties agree that thenon-solicitation period shall be three (3) years in duration. If a court of competent jurisdictiondetermines that this non-solicitation period as modified is still too broad to be enforced, theparties agree that the non-solicitation period shall be two (2) years in duration.
 
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(c) The Executive and the Company agree that the covenants set forth herein are appropriateand reasonable when considered in light of the nature and extent of the businesses conducted by theCompany and its subsidiaries. The Executive acknowledges that (i) the Company has a legitimateinterest in protecting its business, (ii) the covenants set forth herein are not oppressive to theExecutive and contain such reasonable limitations as to time, scope, geographical area andactivity, (iii) the covenants do not harm in any manner whatsoever the public interest, and (iv)the Executive has received and will receive substantial consideration for agreeing to suchcovenants.(d) It is further agreed that in the event of a Termination Without Cause prior to December31, 2014, Executive may elect, immediately after such discharge, by written notice which, to beeffective, must be received by the Company on or before the tenth (10th) day after suchdischarge, to forego the bonuses payable under Section 5(ii) in which case the Non-Competeprovisions of Section 9(a)(i) herein shall be null and void.SECTION 10. *Section 409A*.(a) The Company intends, but cannot warrant or guarantee, that this Agreement complies withthe requirements of Section 409A of the Code or any amendments or exceptions thereto. ThisAgreement shall be operated in compliance with Section 409A of the Code or an exception thereto andeach provision of this Agreement shall be interpreted, to the extent possible, to comply withSection 409A of the Code or an exception thereto.(b) If the Executive is a “Specified Employee” (as defined in Treasury Regulation§1.409A-1(i)) on the date on which the Executive incurs a Separation from Service, the paymentsdescribed in Sections 5(b)(v), 7(b)(i), and 7(c), to the extent such payments are subject to therequirements of Section 409A (and do not qualify for an exception thereto) shall not be made toExecutive prior to the first (1st) business day following the date which is six (6)months following the date on which the Executive’s Separation from Service occurs. Any amountsthat would have been paid during the six (6) months following the Executive’s Separation fromService will be paid on the first business day following the expiration of the six-month periodwithout interest thereon.(c) For purposes of this Agreement, the term “Separation from Service” means, either (i)termination of the Executive’s employment with the Company and all Affiliates, or (ii) a permanentreduction in the level of bona fide services the Executive provides to Company and all Affiliatesto an amount that is 20% or less of the average level of bona fide services the Executive providedto the Company in the immediately preceding 36 months, with the level of bona fide servicecalculated in accordance with Treasury Regulation §1.409A-1(h)(1)(ii).For purposes of determining whether a Separation from Service has occurred under this Section10, the term “Affiliate” shall have the meaning assigned in Treasury Regulation§1.409A-1(h)(3) (which generally requires fifty percent (50%) common ownership).
 
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The Executive’s employment relationship is treated as continuing while the Executive is onmilitary leave, sick leave, or other bona fide leave of absence (if the period of such leave doesnot exceed six (6) months, or if longer, so long as the Executive’s right to reemployment withCompany or an Affiliate is provided either by statute or contract). If the Executive’s period ofleave exceeds six (6) months and the Executive’s right to reemployment is not provided either bystatute or by contract, the employment relationship is deemed to terminate on the first dayimmediately following the expiration of such six-month period. Whether a Separation from Servicehas occurred will be determined based on all of the facts and circumstances and in accordance withregulations issued by the United States Treasury Department pursuant to Section 409A of the Code.(d) If the Company fails to make any payment, either intentionally or unintentionally, withinthe time period specified in this Agreement, but the payment is made within the same calendar year,such payment will be treated as made within the time period specified in this Agreement pursuant toTreasury Regulation §1.409A-3(d). In addition, if a payment is not made due to a dispute withrespect to such payment, the payment may be delayed in accordance with Treasury Regulation§1.409A-3(g).(e) Under no circumstances may the time or schedule of any payment made or benefit providedpursuant to this Agreement be accelerated or subject to a further deferral except as otherwisepermitted or required pursuant to regulations and other guidance issued pursuant to Section 409A ofthe Code. The Executive does not have any right to make any election regarding the time or form ofany payment due under this Agreement.SECTION 11. *Miscellaneous*.(a) Entire Agreement; Amendment; Termination of Previous Agreement. This Agreement cancelsand supersedes all previous agreements relating to the subject matter of this Agreement, written ororal, between the parties hereto (including for periods of time on and after April 1, 2011, theEmployment Agreement dated June 30, 2003 between Employee and Company, as amended by the FirstAmendment to Employment Agreement, dated March 26, 2007 and the Amendment to Employment Agreementdated December 29, 2010, provided that such Employment Agreement, as amended, shall continue infull force and effect for periods of time prior to April 1, 2011) and contains the entireunderstanding of the parties hereto with respect to the subject matter hereof and shall not beamended, modified or supplemented in any manner whatsoever except as otherwise provided herein orin writing signed by each of the parties hereto.(b) Reimbursement of Legal Expenses. If at any time the Executive (or his beneficiary orbeneficiaries, or his estate, as the case may be) shall commence any legal action to enforce any ofthe terms or provisions of this Agreement, including, without limitation, any term or provisionrequiring the payment of compensation to the Executive hereunder, whether in installments or in alump sum, or the payment of the severance benefit hereunder, and such legalaction results in a decision favorable to the person so commencing such action, the Company agreesto reimburse such person for all costs and expenses of such action, including reasonable attorney’sfees, incurred by such person in connection therewith. The reimbursement payment to which anyperson becomes entitled pursuant to this Section 11(b) shall be paid to such person on or beforeMarch 15 of the calendar year following the calendar year in which the favorable decision isrendered.
 
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(c) Succession. This Agreement shall inure to the benefit of and be binding upon theCompany, its successors and assigns, including without limitation, any person, partnership orcorporation which may acquire all or substantially all or a majority of the Company’s assets andbusiness, or with or into which the Company may be consolidated or merged, and this provision shallapply in the event of any subsequent mergers, consolidations, and transfers, and shall be bindingupon the Executive, his heirs and personal representatives.(d) No Waiver. The failure of either party to insist, in any one or more instances, uponperformance of any of the terms or conditions of this Agreement shall not be construed as a waiveror a relinquishment of any right granted hereunder or of the future performance of any such term orcondition, but the obligation of the other party with respect thereto shall continue in full forceand effect.(e) Notice. Any notice to be given to the Company hereunder shall be deemed sufficient ifaddressed to the Company in writing and personally delivered or mailed by certified mail to itsoffice at 1001 N. Central Avenue, 8th Floor, Phoenix, Arizona 85004, Attn: Secretary. Any notice tobe given to the Executive hereunder shall be deemed sufficient if addressed to the Executive inwriting and personally delivered or mailed by certified mail to 1001 N. Central Avenue, 8th Floor,Phoenix, Arizona 85004, Attn: Joseph H. Stegmayer, Chief Executive Officer. Either party may, bynotice as aforesaid, designate a different address or addresses.(f) Severability. Subject to the provisions of Section 9 (but only with respect to any courtdeterminations described in Section 9(a)(i) and Section 9(b)), in the event any provision of thisAgreement shall be held to be illegal, invalid or unenforceable for any reason, the illegality,invalidity, or unenforceability shall not affect the remaining provisions hereof, but such illegal,invalid or unenforceable provision shall be fully severable and this Agreement shall be construedand enforced as if the illegal, invalid or unenforceable provision had never been included herein.(g) Headings; Drafting. The titles and headings of Sections are included for convenience ofreference only and are not to be considered in construction of the provisions hereof. Neither thisAgreement nor any provision contained in this Agreement will be interpreted in favor of or againstany party hereto because such party or its legal counsel drafted this Agreement or such provision.(h) Word Usage. Words used in the masculine shall apply in the feminine where applicable, andwherever the context of this Agreement dictates, the plural shall be read as the singular and thesingular as the plural.(i) Governing Law. This Agreement shall be governed in all respects by, and construed andinterpreted with, the substantive laws of the State of Arizona (without giving effect to anyconflict of laws rule, principle, statute or regulation that would result in the application of thelaws of another jurisdiction).
 
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(j) Counterparts. This Agreement may be executed in one or more counterparts (including byfacsimile or portable document format (pdf)) for the convenience of the parties hereto, each ofwhich will be deemed an original, but all of which together will constitute one and the sameinstrument, notwithstanding that both parties are not signatories to the same counterpart.(k) Action by the Company. Any action or decision to be made by the Company under thisAgreement shall be made by the Compensation Committee unless this Agreement expressly provides thatsuch action or decision is to be made by the Board (but, in such an event, without theparticipation by the Executive in the vote with respect to such decision or action).IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year firstabove written.**CAVCO INDUSTRIES, INC.**,