exv10w2



 







Exhibit
10.2




AGREEMENT




     This agreement (this “Agreement”) is entered into on this 11th day of August, 2005, by and
between Cavco Industries, Inc. (“Cavco”) and Sean K. Nolen (“Mr. Nolen”).



RECITALS:




     A. Mr. Nolen is an executive of Cavco. On or about June 30, 2003, Cavco and Mr. Nolen entered
into an Employment Agreement (the “Employment Agreement”).



     B. The parties mutually agree that it is in their respective best interests to terminate the
Employment Agreement and to agree to certain terms regarding Mr. Nolen’s employment and
compensation.



AGREEMENT:




          1. Termination of Employment Agreement. The Employment Agreement is terminated as of
the date hereof. In addition, Mr. Nolen desires to resign, and hereby resigns, as an officer of
Cavco, and as an officer, director, manager, trustee or administrator (or in any other
representative capacity) of or with respect to any subsidiary, affiliate or employee benefit plan
of Cavco, all effective as of the date hereof. Immediately following the termination of the
Employment Agreement, Mr. Nolen is and will be an employee of Cavco through and ending at the close
of business on December 31, 2005, and in such capacity he agrees to provide such services from time
to time upon the request of Cavco as Cavco deems necessary for the business or operations of Cavco
or its subsidiaries and which are related to the services he provided as an employee of Cavco prior
to the date of this Agreement. Mr. Nolen expressly waives and releases Cavco from any and all
payment obligations set forth in the Employment Agreement.




          2. Base Salary. While Mr. Nolen is an employee of Cavco, Cavco agrees that it will
pay Mr. Nolen a base salary of $13,125.00 per month payable in accordance with Cavco’s customary
payroll practices.




          3. Consulting Services. During the three-month period following the termination of
Mr. Nolen’s employment with Cavco, Cavco agrees to retain Mr. Nolen as a consultant, and Mr. Nolen
agrees to provide consulting services from time to time upon the request of Cavco as Cavco deems
necessary for the business or operations of Cavco or its subsidiaries, at a rate of $13,125.00 per
month payable in accordance with Cavco’s customary payroll practices. The parties will work
together to ensure that such consulting services do not unnecessarily interfere with Mr. Nolen’s
further employment and/or employment opportunities. However, the retention of Mr. Nolen as a
consultant is expressly conditional on Mr. Nolen’s execution (and non-revocation) of (a) promptly
after execution of this Agreement, an additional full release and waiver of Cavco with respect to
claims relating to the Age Discrimination in Employment Act or similar laws and (b) promptly after
termination of employment from Cavco, an additional general release and waiver of Cavco, in each
case in form and substance (including scope) satisfactory to Cavco and similar to the release set
forth in paragraph 4 hereof.




 









 








          4. Release of Claims. In consideration of the promises and payments set forth in this
Agreement, Mr. Nolen, on behalf of himself and his heirs or assigns, expressly releases Cavco and
its affiliates, and their respective directors, officers, employees, agents and representatives,
from any and all claims, complaints, causes of action, and demands of any kind, whether known or
unknown, which Mr. Nolen has, ever has had, or may have and which are based on acts or omissions
which Mr. Nolen knew or should have known about at the time of the signing of this Agreement,
including but not limited to any claims brought under his Employment Agreement.




          This release is a FULL WAIVER AND RELEASE and includes, without limitation, all rights
and claims arising under Title VII of the Civil Rights Act of 1964, as amended; the Americans with
Disabilities Act; the Family and Medical Leave Act; the Employee Retirement Income Security Act of
1974; the Fair Labor Standards Act; the Age Discrimination in Employment Act; the Rehabilitation
Act of 1973; the Arizona Civil Rights Act; the Consolidated Omnibus Budget Reconciliation Act; the
Fair Labor Standards Act; the Arizona Employment Protection Act; and/or any other federal, state,
or local law or regulation. This release also includes any contract or tort causes of action
arising from or in any way related to Mr. Nolen’s Employment Agreement or employment relationship
with Cavco or any of Cavco’s affiliates, including any claims for wrongful discharge, retaliatory
discharge, breach of contract, breach of covenant of good faith and fair dealing and/or prima facie
tort.




          5. Non-Compete. During the term of Mr. Nolen’s employment with Cavco hereunder and
during the 15-month period following the termination of Mr. Nolen’s employment with Cavco, Mr.
Nolen will not directly or indirectly engage in (whether as an employee, consultant, proprietor,
shareholder, partner, director, or otherwise), or have any ownership interest in, or participate in
the financing, operation, management or control of any person, firm, corporation or business that
engages in designing, manufacturing or selling manufactured housing, park model homes and/or cabins
in the States of Arizona, California, Nevada, New Mexico, Texas, Colorado or Utah or any other
states where Cavco or its affiliates do business or that otherwise directly or indirectly competes
with Cavco or its affiliates, absent Cavco’s prior written approval upon instructions of its Board
of Directors.




          6. Non-Solicitation. During the term of Mr. Nolen’s employment with Cavco hereunder
and during the 15-month period following the termination of Mr. Nolen’s employment with Cavco, Mr.
Nolen will not (a) solicit or otherwise induce any employee of Cavco or any of its subsidiaries to
terminate his or her service with Cavco or any such subsidiary or hire any person who was an
employee of Cavco or any of its subsidiaries, or (b) solicit or contact any manufactured housing
industry retailers, dealers, suppliers, customers or potential customers on behalf of any
corporation or other entity or any other person engaging in the business of designing,
manufacturing or selling manufactured housing, park model homes and/or cabins.




          7. Amendment of Stock Option Agreement. Cavco and Mr. Nolen are parties to a stock
option agreement dated December 12, 2003 (the “Stock Option Agreement”). Cavco and Mr. Nolen agree
that the Stock Option Agreement is hereby modified as follows: (a) the vesting schedule for the
50,000 shares that are unvested as of the date hereof shall be amended, as of the date hereof, so
that 15,000 of such shares shall vest on December 12, 2005,




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and the remaining 35,000 shares shall not vest and shall no longer become exercisable, it
being expressly agreed by Mr. Nolen that he hereby waives any right to exercise the option for such
35,000 shares, (b) upon termination of Mr. Nolen’s employment with Cavco, all vesting of any
unvested shares under the Stock Option Agreement shall cease immediately, (c) upon termination of
Mr. Nolen’s employment with Cavco for any reason other than cause (as specified in paragraph 10
hereof), Mr. Nolen will continue to have the right to exercise the option for all shares that are
vested as of the date of the termination of his employment for a period of (but not beyond) six
months following such termination (it being understood that upon a termination for cause, the
option will become null and void) and (d) in the event of Mr. Nolen’s death or disability prior to
December 12, 2005, the 15,000 shares will vest on December 12, 2005, and these shares will be
exercisable by Mr. Nolen’s heirs or permitted assigns under the same terms included
herein.* In all other respects, the terms of the Stock Option Agreement remain in full
force and effect.




          8. Confidential Information. The parties agree to keep the terms of this Agreement
confidential except that they may reveal its terms to immediate family, tax advisors, legal counsel
and as otherwise required by law or regulation or as Cavco reasonably determines to be necessary in
the conduct of its business. Mr. Nolen also agrees that he will not, at any time, disclose or
reveal any trade secrets or other confidential or proprietary information regarding Cavco or its
subsidiaries or affiliates or their respective businesses, operations or properties to any person,
firm, corporation or other entity.




          9. Governing Law. This Agreement is to be construed and interpreted in accordance
with the laws of the state of Arizona, except as federal law may preempt those laws.




          10. Breach/Attorneys’ Fees and Costs. Mr. Nolen understands that his employment and
engagement as a consultant hereunder will not cease upon his death or disability, and that Cavco
will be entitled to terminate his employment and his engagement as a consultant hereunder only for
cause, which, for purposes of this Agreement, shall be limited to theft, fraud or embezzlement or a
violation of this Agreement as provided in the next sentence. Mr. Nolen understands that if he
violates any of the terms of paragraph 5 or 6, or the second sentence of paragraph 8, of this
Agreement, payments under this Agreement will cease and Cavco will be entitled to terminate Mr.
Nolen’s employment and/or engagement as a consultant hereunder and, in the case of a violation of
paragraph 5 or 6, to a refund from Mr. Nolen of all amounts paid to him under this Agreement. In
the event of any dispute regarding this Agreement, the prevailing party shall be entitled to
reasonable attorney’s fees and costs.




          11. Severability. In any event any provision of this Agreement shall be held to be
illegal, invalid or unenforceable for any reason, the illegality, invalidity, or unenforceability
shall not affect the remaining provisions, but such illegal, invalid or unenforceable provision
shall be fully severable and this Agreement shall be construed and enforced as if the illegal,
invalid or unenforceable provision had never been included. Mr. Nolen further agrees that:






 




			
	*	 	 The numbers of shares set forth above reflect
the effect of the two-for-one stock split of Cavco stock that occurred on
January 31, 2005.




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(a) If the non-competition covenants contained in this Agreement should be held by
any court or other constituted legal authority to be void or unenforceable in any
particular area or jurisdiction, then he shall consider this Agreement to be amended
and modified with respect to that particular area or jurisdiction so as to comply
with the order or other constituted legal authority, and as to all other areas and
jurisdictions, the non-competition covenants contained herein shall remain in full
force and effect as originally written.




(b) If the non-competition covenants contained in this Agreement should be held by
any court or other constituted legal authority to be effective in any particular
area or jurisdiction only if said covenants are modified to limit their duration or
scope, then the non-competition covenants shall be amended and modified with respect
to that particular area or jurisdiction so as to comply with the order of any court
or other constituted legal authority, and as to all other areas and jurisdictions,
the non-competition covenants contained herein shall remain in full force and effect
as originally written.




(c) The covenants set forth herein are appropriate and reasonable when considered in
light of the nature and extent of the business of designing, manufacturing or
selling manufactured housing, park model homes and cabins as conducted by Cavco and
its subsidiaries. Mr. Nolen acknowledges that (i) Cavco has a legitimate interest
in protecting its business, (ii) the covenants set forth herein are not oppressive
to him and contain such reasonable limitations as to time, scope, geographical area
and activity, (iii) the covenants do not harm in any manner whatsoever the public
interest, and (iv) he has received and will receive substantial consideration for
agreeing to such covenants.



          12. Understanding Regarding Agreement. Mr. Nolen, by his execution of this Agreement,
vows that the following statements are true:





(a) That he has been given the opportunity to and has, in fact, read this entire
Agreement, that it is in plain language, and he has had all questions regarding its
contents answered to his satisfaction;




(b) That he has been given the FULL OPPORTUNITY TO SEEK INDEPENDENT ADVICE
AND/OR COUNSEL FROM AN ATTORNEY of his own choosing prior to execution of this
Agreement;




(c) That he fully understands the content of this Agreement and understands that it
is a FULL WAIVER OF ALL CLAIMS AGAINST CAVCO as set forth and defined by
paragraph 4 hereof;




(d) That this full waiver of all claims against Cavco as set forth and defined by
paragraph 4 hereof is given in return for valuable consideration as provided under
the terms of this Agreement;



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(e) That he fully understands that he is WAIVING ANY RIGHTS AND BENEFITS UNDER
HIS EMPLOYMENT AGREEMENT previously executed in exchange for the promises and
payments set forth in this Agreement.; and




(f) That he enters into this Agreement knowingly and voluntarily in exchange for the
promises referenced in this Agreement and that no other representations have been
made to him to induce or influence his execution of this Agreement, whether written
or oral, except as set forth above.



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     In witness whereof, Mr. Nolen has executed this Agreement on this 11th day of August, 2005.



	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	By:
	 	/s/ Sean K. Nolen
	 

	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Sean K. Nolen
	 
	 	 	 	 	 	 	 	 	 	 







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     In witness whereof, Cavco has caused this Agreement to be executed by its duly authorized
officer, on this 11th day of August, 2005.



	 	 	 	 	 	 	 	 	 	 	 	 
	  
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	CAVCO INDUSTRIES, INC.
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	By:
	 	/s/ Joseph H. Stegmayer
	 

	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Joseph H. Stegmayer, President
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 






     



	 	 	 	 	 
	 

	 	 	 	 
	 

	 	 	 	 
	 

	 	 	 	  
	 
	 	 	 	 
	  
	 	 	 	 
	 
	 
	 	 	 	 	 
	 
	 	 	 	 






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