Document:

Exhibit
10.2

 

EMPLOYMENT AGREEMENT

 

This Employment Agreement (this “Agreement”) is effective as of October
  , 2007 (the “Effective Date”), and is entered into by and between XXXXXX, an individual (“Executive”), and Fleetwood Enterprises,
Inc., a Delaware corporation (the “Company”).

 

R
E C I T A L S

 

WHEREAS, by entering into this Agreement, the terms of Executive’s
employment with the Company shall be governed by the terms and conditions of
this Agreement and any prior agreement between Executive and the Company or any
of the Company’s affiliated entities relating to Executive’s employment with
the Company or any of its affiliated entities shall be superseded by the terms
of this Agreement except to the extent set forth herein.

 

NOW, THEREFORE, in consideration of the foregoing, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged by the parties hereto, the parties hereto agree as follows:

 

A G R E E M E N T

 

1.                                      Employment.   As of the Effective Date, the Company hereby
employs Executive to serve in the capacity of [Title                     ].
The Company’s Board of Directors (the “Board”) and/or the Company’s Chief
Executive Officer (the “CEO”) may provide other designations of title to
Executive as the Board and/or CEO, in their discretion, may deem appropriate.

 

Executive agrees to perform the duties and functions as assigned by the
CEO and/or by the Board of Directors. Except for legal holidays, vacations and
absences due to temporary illness, Executive shall devote his time, attention
and energies to the business of the Company on a full-time basis. Executive
represents and warrants to the Company that he is under no restriction,
limitation or other prohibition to perform his duties as described herein.

 

2.                                      Employment Compensation And Benefits.

 

(a)                                  Base
Salary. Executive’s initial base salary shall be at the annual rate of XXXXXXXXX (Dollars) ($XXXXXXX) (the “Base
Salary”), which shall be payable at least as frequently as monthly and subject
to deductions and withholdings required by applicable law and as customary in
respect of the Company’s salaried employees. The Company, on the basis of
Executive’s performance and the Company’s financial success and progress, shall
review this salary level at least annually.

 

(b)                                 Incentive
Compensation. As additional compensation to provide incentives for
Executive to extend efforts which will assist in increasing the profits of the
Company, Executive shall be eligible to receive incentive compensation based on
achieving individual and organizational performance objectives in accordance
with the terms and conditions of the Company’s management compensation plan as
in effect from time to time.

 

 

(c)                                  Vacation.
Executive shall be entitled to annual vacations in accordance with the Company’s
vacation policies in effect from time to time during the term of this
Agreement.

 

(d)                                 Expense
Reimbursement. The Company shall reimburse Executive for all reasonable
amounts actually expended by Executive in the course of performing his duties
for the Company and in accordance with any Company-established guidelines as in
effect from time to time where Executive tenders receipts or other
documentation reasonably substantiating the amounts as required by the Company.

 

(e)                                  Other
Benefits. Except as otherwise provided in this Agreement, Executive shall
be entitled to receive all of the rights, benefits and privileges under any
retirement, pension, profit-sharing, group medical insurance, group dental
insurance, group-term life insurance, disability insurance and other employee
benefit plan or program of the Company which may be now in effect or hereafter
adopted, to the extent that Executive is eligible under and subject to the
provisions thereof as in effect from time to time.

 

3.                                      Termination.

 

(a)                                  At
Will. The Company shall employ Executive at will, and either Executive or
the Company may terminate Executive’s employment with the Company at any time
and for any reason, with or without cause, with or without notice.

 

(b)                                 Qualifying
Termination. Executive’s termination shall be considered a “Qualifying
Termination” unless:

 

(i)                                     Executive
voluntarily terminates his employment with the Company and its affiliated
companies. Executive, however, shall not be considered to have
voluntarily terminated his employment with the Company and its affiliated
companies if his overall targeted total cash compensation (base salary plus
targeted short term bonus), (TCC), is reduced or adversely modified in
any material respect (unless the reduction or modification applies
generally to similarly situated executives in the Company) or his position is
modified or changed so that he is no longer an officer of the Company and he
elects to terminate his employment within sixty (60) days following such
reduction, modification or change after having given the Company at least 30
days notice of the same and a reasonable opportunity to cure during such 30-day
notice period.

 

(ii)                                  The
termination is on account of Executive’s death or Disability. “Disability”
shall mean a physical or mental incapacity as a result of which Executive
becomes unable to continue the performance of his responsibilities for the
Company and its affiliated companies and which, at least three (3) months after
its commencement, is determined to be total and permanent by a physician agreed
to by the Company and Executive, or in the event of Executive’s inability to
designate a physician, his legal representative. In the absence of agreement
between the Company and Executive, each party shall nominate a qualified
physician and the two physicians so nominated shall select a third physician
who shall make the determination as to Disability.

 

2

 

(iii)                               Executive
is involuntarily terminated for “Cause.” 
For this purpose, “Cause” shall include but not be limited to:

 

(a)                                  Executive’s
refusal to comply with a lawful instruction of the Board or Executive’s
immediate supervisor, which refusal is not remedied by Executive within a
reasonable period of time after his receipt of written notice from the Company
identifying the refusal;

 

(b)                                 Executive’s
engaging in gross misconduct;

 

(c)                                  Executive’s
act or acts of personal dishonesty which result in Executive’s personal
enrichment at the expense of the Company or any of its affiliated companies; or

 

(d)                                 Executive’s
conviction of any misdemeanor involving an act of moral turpitude or any
felony; or

 

(e)                                  Executive’s
failure to perform his duties in a satisfactory manner. Executive must be
provided written notice of the unsatisfactory performance and provided at least
ninety (90) days to improve his performance.

 

(iv)                              Executive
ceases to be employed by the Company due to the sale or acquisition of all of
the equity interests in, or substantially all of the assets of, a subsidiary or
division of the Company with which Executive is affiliated, or in connection
with the merger of such a subsidiary or division, and this Agreement is assumed
in writing or by operation of law by such acquiring or surviving person or
entity or an affiliate thereof.

 

(c)                                  Return of Materials. In the event of any termination of
Executive’s employment for any reason whatsoever, Executive shall promptly
deliver to the Company all Company property, including, but not limited to,
documents, data, and other information pertaining to Confidential Information,
as defined below. Executive shall not take with him any documents or other
information, or any reproduction, summary or excerpt thereof, containing or
pertaining to any Confidential Information.

 

4.                                      Change in Control. Concurrently
with the execution of this Agreement, the Company and Executive have also
entered into a Change in Control Agreement of even date herewith (the “Change
in Control Agreement”). The Change in Control Agreement provides for certain
rights and benefits in the event of a “change in control” of the Company (as
defined therein) or termination of employment in connection with a change in
control.

 

5.                                      Severance Payment and Benefits.

 

If Executive’s employment is terminated as a result of a Qualifying
Termination as defined in Section 3(b), and if Executive delivers a
fully-executed release and waiver of all claims against the Company in a form
reasonably acceptable to the Company, then, upon expiration of any applicable
revocation period contained in the release and waiver, the Company shall pay or
provide Executive the following Severance Payment and benefits based on
Executive’s eligibility as described below:

 

3

 

(i)                                     As
eligible, Executive shall receive the Severance Payment, as defined below,
which shall be payable in equal monthly installments beginning on the first day
of the first full month and continuing on the first day of each month
thereafter during the Severance Period. The Severance Payment is in lieu of any
severance payment benefits which otherwise may at that time be available under
the Company’s applicable policies, other than the Change in Control Agreement. In
the event that Executive shall be entitled to receive severance compensation
under the Change in Control Agreement, such severance compensation shall be in
lieu of and not in addition to the benefits provided in this Section 5(a).

 

As used herein, “Monthly Severance Payment” shall mean the monthly
installment amount of the Base Salary of Executive at the time of Executive’s
termination plus the monthly average of the short-term incentive payments
(quarterly bonus) actually paid to Executive during the twelve (12) months
immediately preceding Executive’s termination.

 

Executive will be eligible for a number of Monthly Severance Payments
based on the schedule below:

 

	
  Length of Service

  	
   

  	
  Monthly Severance Payments

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  New hire up to six months

  	
   

  	
  0

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Six months up to 12 months

  	
   

  	
  3

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  12 months up to 18 months

  	
   

  	
  6

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  18 months up to 24 months

  	
   

  	
  9

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  24 months or more

  	
   

  	
  12

  	
   

  

 

Length of Service is the number of full months immediately before
the date of Executive’s Qualifying Termination during which Executive has been
continuously employed by the Company or any of its affiliated companies. Each
Monthly Severance Payment shall be subject to deductions and withholdings
required by applicable law. As used herein, “Severance Period” shall mean that
period beginning upon Executive’s Qualifying Termination and ending upon the
lapse thereafter of the number of months equal to the number of Monthly
Severance Payments.

 

(ii)                                  During
the Severance Period and to the extent reasonably practicable, Executive shall
be entitled to receive benefits comparable to those which had been made
available to him (including his family) under the Associate Healthcare
Management Plan before the Qualifying Termination. To the extent reasonably
practicable, these benefits shall be continued to Executive in a comparable
manner, at a comparable cost and at a comparable level as provided to Executive
(including his family) immediately prior to the Qualifying Termination. In some
cases, benefits may be converted to a reasonably similar private plan –
provided that the Company pays all additional costs associated with conversion.
The provision of these benefits shall be earlier terminated or reduced, as
applicable, if and to the extent Executive receives comparable benefits as a
result of concurrent coverage through another program. Participation in all
other benefits plans

 

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including group life insurance, personal
accident insurance, and disability insurance, etc., will cease as of the date
of termination.

 

(iii)                               Any
and all of Executive’s unvested stock options[, restricted stock or other
equity-based awards] shall immediately become fully vested and exercisable
according to the terms and conditions contained in the equity incentive plan(s)
and award agreement(s) pursuant to which such awards were granted.

 

6.                                      Compliance with Section 409A. Notwithstanding
any provision of this Agreement to the contrary, if, at the time of Executive’s
termination of employment with the Company, Executive is a “specified employee”
as defined in Section 409A of the Code, and one or more of the payments or
benefits received or to be received by Executive pursuant to this Agreement
would become subject to the additional tax under Section 409A(a)(1)(B) of the
Code or any other taxes or penalties imposed under Section 409A of the Code (the
“Section 409A Taxes”) if provided at the time otherwise required under this
Agreement, no such payment or benefit will be provided under this Agreement
until the earliest of (a) the date which is six (6) months after Executive’s “separation
from service” for any reason, other than death or “disability” (as such terms
are used in Section 409A(a)(2) of the Code) or (b) the date of Executive’s
death, or such shorter period that, as determined by the Company, is sufficient
to avoid the imposition of Section 409A Taxes. The provisions of this Section 6
shall only apply to the minimum extent required to avoid Executive’s incurrence
of any Section 409A Taxes. In addition, if any provision of this Agreement
would cause Executive to incur any penalty tax or interest under Section 409A
of the Code or any regulations or Treasury guidance promulgated thereunder, the
Company may reform such provision to maintain to the maximum extent practicable
the original intent of the applicable provision without violating the
provisions of Section 409A of the Code.

 

7.                                      Nondisclosure
of Confidential Information. Executive acknowledges that during the term of his employment with the Company, he
will have access to and become acquainted with information of a confidential,
proprietary or secret nature which is or may be either applicable to, or
related in any way to, the present or future business of the Company, the
research and development or investigation of the Company, or the business of
any customer of the Company (“Confidential Information”). For example,
Confidential Information includes, but is not limited to, devices, secret
inventions, processes and compilations of information, records, specifications,
designs, plans, proposals, software, codes, marketing and sales
programs, financial projections, cost summaries, pricing formula, and all
concepts or ideas, materials or information related to the business, products
or sales of the Company and its
customers and vendors. Executive
shall not disclose any Confidential Information, directly or indirectly, or use
such information in any way, either during the term of this Agreement or at any
time thereafter, except as required in the course of employment with the
Company. Executive also agrees
to comply with the Company’s policies and regulations, as established from time
to time for the protection of its Confidential Information, including, for
example, executing the Company’s standard confidentiality agreements. This
section shall survive termination of this Agreement.

 

8.                                      Non-Solicitation.
Executive agrees that so long as he is employed by the Company and for a
period of twenty-four (24) months after termination of his employment for any
reason, he shall not (a) directly or indirectly solicit, induce or attempt
to solicit or induce any employee of the Company or any of its affiliated
companies to discontinue his employment with the Company; (b) usurp any
opportunity of the Company or any of its affiliated companies of which
Executive

 

5

 

became aware during his tenure at the Company
or which is made available to him on the basis of the belief that Executive is
still employed by the Company; or (c) directly or indirectly solicit or induce
or attempt to influence any person or business that is an account, customer or
client of the Company or any of its affiliated companies to restrict or cancel
the business of any such account, customer or client with the Company or any of
its affiliated companies. This section
shall survive termination of this Agreement.

 

9.                                      Successors.

 

(a)                                  This
Agreement is personal to Executive, and without the prior written consent of
the Company shall not be assignable by Executive other than by will or the laws
of descent and distribution. This Agreement shall inure to the benefit of and
be enforceable by Executive’s legal representatives.

 

(b)                                 The
rights and obligations of the Company under this Agreement shall inure to the
benefit of and shall be binding upon the successors and assigns of the Company.

 

10.                               Governing
Law. This Agreement is made and entered into in the State of
California, and the internal laws of California shall govern its validity and
interpretation in the performance by the parties hereto of their respective
duties and obligations hereunder.

 

11.                               Modifications.
This Agreement may be amended or modified only by an instrument in writing
executed by all of the parties hereto.

 

12.                               Entire
Agreement. Except as otherwise set forth herein, this Agreement, along
with the Change in Control Agreement, supersedes any and all prior written or
oral agreements between Executive and the Company, including but not limited to
any and all employment agreements and change in control agreements. This
Agreement, along with the Change in Control Agreement, contains the entire
understanding of the parties hereto with respect to the terms and conditions of
Executive’s employment with the Company; provided, however, that
this Agreement is not intended to supersede any agreements that Executive may
previously have entered into regarding the protection of trade secrets and
confidential information.

 

13.                               Dispute
Resolution

 

(a)                                  Any
controversy or dispute between the parties involving the construction,
interpretation, application or performance of the terms, covenants, or
conditions of this Agreement, the employment of Executive or in any way arising
under this Agreement (a “Covered Dispute”) shall, on demand by either of the
parties be referenced pursuant to the procedures described in California Code
of Civil Procedure (“CCP”) Sections 638, et
seq., as they may be amended from time to time (or such procedures
as nearly the same as may be available under the laws of California, the “Reference
Procedures”), to a retired Judge from the superior court of California for the
County of Riverside (the “Venue County”) for a decision.

 

(b)                                 The
Reference Procedures shall be commenced by a joint stipulation filed in the
Venue County Court or by either party filing in the superior court of Venue
County a motion pursuant to CCP Section 638 (or such procedures as nearly the
same as may be available under the laws of California, a “Motion”). The referee
shall be a Judge from the list of retired

 

6

 

superior court Judges from the Venue County
who have made themselves available for trial or settlement of civil litigation
under said Reference Procedures. If the parties hereto are unable to agree on
the designation of a particular retired superior court Judge of the Venue
County, or the designated Judge is unavailable or unable to serve in such
capacity, request shall be made that the Presiding or Assistant Presiding Judge
of the superior court of the Venue County appoint as referee a retired superior
court Judge from the aforementioned list.

 

(c)                                  Except
as hereafter agreed by the parties, the referee shall apply the internal law of
the State of California in deciding the issues submitted hereunder. Each of the
parties reserves its respective rights to allege and assert in such pleadings
all claims, causes of action, contentions and defenses which it may have
arising out of or relating to the general subject matter of the Covered Dispute
that is being determined pursuant to the Reference Procedures. Reasonable
notice of any motions before the referee shall be given, and all matters shall
be set at the convenience of the referee. Discovery shall be conducted as the
parties agree or as allowed by the referee. Unless waived by each of the
parties, a reporter shall be present at all proceedings before the referee. By
agreeing to this procedure, the parties expressly waive their right to a jury
trial.

 

(d)                                 It
is the parties’ intention by this Section 13 that all issues of fact and law
and all matters of a legal and equitable nature related to any Covered Dispute
will be submitted for determination by a referee designated as provided herein.
Accordingly, the parties hereby stipulate that a referee designated as provided
herein shall have all powers of a Judge of the superior court including,
without limitation, the power to grant equitable and interlocutory and
permanent injunctive relief.

 

(e)                                  Each
of the parties specifically consents and agrees to (i) the exercise of
jurisdiction over his person by a referee designated as provided herein with
respect to any and all Covered Disputes; (ii) the personal jurisdiction of the
California courts with respect to any appeal or review of the decision of any
such referee, and (iii) venue for any dispute subject to this
Section 13 shall be in the County of Riverside.

 

(f)                                    Each
of the parties acknowledges that the decision by a referee designated as
provided herein shall be a basis for a judgment as provided in CCP Section 644
and shall be subject to exception and review as provided in CCP Section 645, or
such procedures as nearly the same as may be available under the laws of
California.

 

(g)                                 The
Company shall pay all fees and costs incurred by Executive in connection with
the Reference Procedures for a Covered Dispute other than attorneys’ fees
incurred by Executive.

 

14.                               Notices.
Any notice or communications required or permitted to be given to the
parties hereto shall be delivered personally or be sent by United States
registered or certified mail, postage prepaid and return receipt requested, and
addressed or delivered as follows, or at such other addresses the party
addressed may have substituted by notice pursuant to this Section:

 

7

 

	
  To the Company:

  	
  To Executive:

  
	
   

  	
   

  
	
  Fleetwood Enterprises, Inc.

  	
  (Name)

  
	
  3125 Myers Street

  	
  (Home Address)

  
	
  Riverside, California 92503-5527

  	
  (City, State, Zip)

  
	
  Attn: General Counsel

  	
   

  

 

15.                               Captions.
The captions of this Agreement are inserted for convenience and do not
constitute a part hereof.

 

16.                               Severability.
In case any one or more of the provisions contained in this Agreement shall
for any reason be held to be invalid, illegal or unenforceable in any respect,
such invalidity, illegality or unenforceability shall not affect any other
provision of this Agreement, but this Agreement shall be construed as if such
invalid, illegal or unenforceable provision had never been contained herein and
there shall be deemed substituted for such invalid, illegal or unenforceable
provision such other provision as will most nearly accomplish the intent of the
parties to the extent permitted by the applicable law. In case this Agreement,
or any one or more of the provisions hereof, shall be held to be invalid,
illegal or unenforceable within any governmental jurisdiction or subdivision
thereof, this Agreement or any such provision thereof shall not as a
consequence thereof be deemed to be invalid, illegal or unenforceable in any
other governmental jurisdiction or subdivision thereof.

 

17.                               Counterparts. This Agreement
may be executed in two or more counterparts, each of which shall be deemed an
original, but all of which shall together constitute one in the same Agreement.

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered effective as of the day and year first written
above.

 

 

	
  

  	
   

  	
   

  
	
   

  	
  (Name)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD ENTERPRISES, INC.,

  
	
   

  	
  a Delaware corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  
					

 

8Exhibit 10.3

 

CHANGE IN CONTROL AGREEMENT

 

This
AGREEMENT RE: CHANGE IN CONTROL (this “Agreement”) is dated as of October     ,
2007 and is entered into by and between                                                  
(“Executive”) and Fleetwood Enterprises, Inc., a Delaware corporation (the
“Company”).

 

BACKGROUND

 

The
Company believes that because of its position in the industry, financial
resources and historical operating results there is a possibility that the
Company may become the subject of a Change in Control (as defined below), either
now or at some time in the future.

 

The
Company believes that it is in the best interest of the Company and its
stockholders to foster Executive’s objectivity in making decisions with respect
to any pending or threatened Change in Control of the Company and to assure
that the Company will have the continued dedication and availability of Executive,
notwithstanding the possibility, threat or occurrence of a Change in Control.
The Company believes that these goals can best be accomplished by alleviating
certain of the risks and uncertainties with regard to Executive’s financial and
professional security that would be created by a pending or threatened Change
in Control and that inevitably would distract Executive and could impair his
ability to objectively perform his duties for and on behalf of the
Company. Accordingly, the Company believes that it is appropriate and in the best
interest of the Company and its stockholders to provide to Executive compensation
arrangements upon a Change in Control that lessen Executive’s financial risks
and uncertainties and that are reasonably competitive with those of other
corporations.

 

With
these and other considerations in mind, the Compensation Committee of the
Company has authorized the Company to enter into this Agreement with the Executive
to provide the protections set forth herein for Executive’s financial security
following a Change in Control.

 

NOW,
THEREFORE, in consideration of the foregoing, and for other good and valuable consideration
the receipt of which is hereby acknowledged, it is hereby agreed as follows:

 

AGREEMENT

 

1.                                       TERM OF AGREEMENT. This Agreement shall be
effective from the date first written above and, subject to the provisions of Section 4,
shall extend to (and thereupon automatically terminate) ninety (90) days after
Executive’s termination of employment with the Company for any reason. No
termination of this Agreement shall limit, alter or otherwise affect Executive’s
rights hereunder with respect to a Change in Control which has occurred prior
to such termination, including without limitation Executive’s right to receive
the various benefits hereunder.

 

 

2.                                       PURPOSE OF AGREEMENT. The purpose of this
Agreement is to provide that, in the event of a “Change in Control,” Executive may become
entitled to receive certain additional benefits, as described herein, in the event
of his termination under specified circumstances.

 

3.                                       CHANGE IN CONTROL. As used in this Agreement,
the phrase “Change in Control” shall mean:

 

(i)                                     Except as provided by subparagraph (iii) hereof,
the acquisition (other than from the Company) by any person, entity or “group”,
within the meaning of Section 13(d)(3) or 14(d)(2) of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”) (excluding,
for this purpose, the Company or its subsidiaries, or any executive benefit
plan of the Company or its subsidiaries which acquires beneficial ownership of
voting securities of the Company), of beneficial ownership (within the meaning
of Rule 13d-3 promulgated under the Exchange Act) of twenty-five percent
(25%) or more of either the then outstanding shares of common stock or the
combined voting power of the Company’s then outstanding voting securities
entitled to vote generally in the election of directors; or

 

(ii)                                  Individuals who, as of the date hereof,
constitute the Board of Directors of the Company (as of the date hereof the “Incumbent
Board”) cease for any reason to constitute at least a majority of the Board of Directors
of the Company, provided that any person becoming a director subsequent to the
date hereof whose election, or nomination for election by the Company’s
stockholders, is or was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board (other than an election or nomination
of an individual whose initial assumption of office is in connection with an
actual or threatened election contest relating to the election of the Directors
of the Company) shall be, for purposes of this Agreement, considered as though
such person were a member of the Incumbent Board; or

 

(iii)                               The consummation of a reorganization, merger
or consolidation with any other person, entity or corporation, other than

 

(1) 
a merger or consolidation which would result in the voting securities of the
Company outstanding immediately prior thereto continuing to represent (either
by remaining outstanding or by being converted into voting securities of
another entity) more than fifty percent (50%) of the combined voting power of
the voting securities of the Company or such other entity outstanding
immediately after such merger or consolidation, or

 

(2) 
a merger or consolidation effected to implement a recapitalization of the
Company (or similar transaction) in which no person acquires twenty-five
percent (25%) or more of the combined voting power of the Company’s then
outstanding voting securities; or

 

(iv)                              Approval by the stockholders of the Company
of a plan of complete liquidation of the Company; or

 

2

 

(v)                                 The sale or other disposition by the Company
of all or substantially all of the Company’s assets to an unrelated third party.

 

4.                                       EFFECT OF A CHANGE IN CONTROL. (a) In the event of a Change in Control,
all of Executive ‘s unvested and outstanding stock options, restricted stock or
other equity-based awards shall immediately and automatically become fully
vested and (to the extent relevant) exercisable. Any stock options and stock
appreciation rights shall remain exercisable for their remaining terms (but in
no event later than the last day prior to the day that any extension would
cause such options or rights to no longer be exempt from the requirements of Section 409A
of the Code).

 

(b) 
In the event of a Change in Control, Sections 6 through 11 of this Agreement
shall become applicable to Executive. These Sections shall continue to remain
applicable until the second anniversary of the date upon which the Change in
Control occurs. On such second anniversary date, and provided that the
employment of  Executive has not been
terminated on account of a Qualifying Termination (as defined in Section 5
below), this Agreement shall terminate and be of no further force or effect.

 

5.                                       QUALIFYING TERMINATION. Executive’s
termination within the period commencing ninety (90) days prior to a Change in
Control and ending twenty-four (24) months following a Change in Control (the “Protection
Period”) shall be conclusively considered a “Qualifying Termination” unless:

 

(a)                                  Executive voluntarily terminates his
employment with the Company and its affiliated companies. Executive, however, shall
NOT be considered to have voluntarily terminated his employment with the
Company and its affiliated companies if during the Protection Period, Executive’s
overall compensation is reduced or adversely modified in any material respect or
his authority or duties are materially changed and he elects to terminate his
employment within sixty (60) days following such reduction, modification or
change after having given the
Company at least 30 days notice of the same and a reasonable opportunity to
cure during such 30-day notice period. For such purposes, Executive’s authority
or duties shall conclusively be considered to have been “materially changed”
if, without Executive’s express and voluntary written consent, there is any
substantial diminution or adverse modification in Executive’s title, status,
overall position, responsibilities, reporting relationship, general working
environment (including without limitation secretarial and staff support,
offices, and frequency and mode of travel), or if, without Executive’s express and
voluntary written consent, Executive’s job location is transferred to a site
more than fifty (50) miles away from his place of employment. In this regard as
well, Executive’s authority and duties shall conclusively be considered to have
been “materially changed” if, without Executive’s express and voluntary written
consent, Executive no longer holds the same title or no longer has the same
authority and responsibilities or no longer has the same reporting
responsibilities, in each case with respect and as to a publicly held parent
company which is not controlled by another entity or person.

 

3

 

(b)                                 The termination is on account of Executive’s
death or Disability. For such purposes, “Disability” shall mean a physical or mental
incapacity as a result of which Executive becomes unable to continue the
performance of his responsibilities for the Company and its affiliated
companies and which, at least three (3) months after its commencement, is
determined to be total and permanent by a physician agreed to by the Company
and Executive, or in the event of Executive’s inability to designate a
physician, Executive’s legal representative. In the absence of agreement
between the Company and Executive, each party shall nominate a qualified
physician and the two physicians so nominated shall select a third physician
who shall make the determination as to Disability.

 

(c)                                  Executive is involuntarily terminated for “Cause.”
For this purpose, “Cause” shall be limited to only three types of events:

 

(1)                                  the refusal of Executive to comply with a lawful,
written instruction of the Board of Directors or Executive’s immediate or departmental
supervisor, which refusal is not remedied by Executive within a reasonable
period of time after his receipt of written notice from the Company identifying
the refusal, so long as the instruction is consistent with the scope and responsibilities
of Executive’s position prior to the Change in Control;

 

(2)                                  an act or acts of personal dishonesty by Executive
which were intended to result in substantial personal enrichment of Executive
at the expense of the Company or any of its affiliated companies; or

 

(3)                                  Executives conviction of any misdemeanor involving
an act of moral turpitude or any felony.

 

6.                                       SEVERANCE PAYMENT.

 

(a)                                  If Executive’s employment is terminated as a
result of a Qualifying Termination, the Company shall pay Executive within thirty
(30) days after the Qualifying Termination a cash lump sum equal to two (2) times
Executive’s Compensation, as hereinafter defined (the “Severance Payment”).
Notwithstanding anything to the contrary herein, the sum of the aggregate
present value of (i) such Severance Payment, (ii) any and all additional
amounts or benefits which may be paid or conferred to or on behalf of Executive
in accordance with subsections (a) or (b) of Section 8 hereof,
and (iii) any and all other amounts or benefits paid or conferred to or on
behalf of Executive that constitute a “parachute payment” (“parachute payment,”
as defined in Section 280G(b)(2), or any successor thereto, of the
Internal Revenue Code of 1986, as amended (the “Code”)), shall not exceed an
amount equal to one dollar less than three (3) times Executive’s “base
amount” (“base amount,” as defined in Section 280G(b)(3), or any successor
thereto, of the Code). For the avoidance of doubt, the purpose and intent of
the foregoing sentence is to avoid giving rise to any obligation of the Company
to reimburse the Executive for (or otherwise pay on Executive’s behalf) any
Excise Tax (hereinafter defined) pursuant to Section 8 hereof, to the
extent of then-current applicable law. The Severance Payment payable by the
Company to the Executive shall be reduced to the extent necessary to

 

4

 

fulfill
the requirement of the two immediately preceding sentences that payment of
amounts includable in Executive’s base amount shall not exceed an amount equal
to one dollar less than three (3) times Executive’s base Amount. In the
event that it is determined that the amount of any payments will be reduced in
accordance with this Section 6, Executive shall have the right to
designate which of the payments shall be reduced and to what extent, provided
that Executive may not so elect to the extent that, in the determination
of counsel to the Company, such election would cause Executive to be subject to
the Excise Tax.

 

(b)                                 For purposes of this Agreement, Executive’s “Compensation”
shall equal the sum of (i) Executive’s highest annual salary rate with the
Company, or any of its affiliated companies, within the three (3) year
period ending on the date of Executive’s Qualifying Termination, or such shorter
period if Executive has been employed by the Company or any of its affiliated
companies for a shorter period, plus (ii) a “Bonus Increment.” The Bonus
Increment shall equal the highest annualized targeted bonuses and incentive compensation
payments, assuming 100% of the targets stated thereunder had been met, payable to
Executive within the three (3) year period immediately before the date of
Executive’s Qualifying Termination under all of the Company’s bonus and
incentive compensation plans or arrangements, or during such shorter period if
Executive has been employed by the Company or any of its affiliated companies
for a shorter period.

 

(c)                                  The Severance Payment hereunder is in lieu of
any severance payment that Executive might otherwise be entitled to from the
Company in the event of a Change in Control and termination of employment under
the Company’s applicable severance pay policies, if any, or under any  other oral or written agreement, including the
Employment Agreement between the Company and Executive of even date herewith (the “Employment
Agreement”); PROVIDED, HOWEVER, that Executive shall continue to be entitled to
receive the severance pay benefits under the Company’s applicable policies, if
any, or under another written agreement (including the Employment Agreement) if
and to the extent Executive’s termination is not a Qualifying Termination  during the Protection Period.

 

7.                                       ADDITIONAL BENEFITS. In the event of a
Qualifying Termination, Executive shall be entitled to continue to participate
in the following executive benefit programs which had been made available to
Executive (including his family) before the Qualifying Termination: group
medical insurance, group dental insurance, group-term life insurance and
disability insurance. These programs shall be continued at no cost to
Executive, except to the extent that tax rules require the inclusion of
the value of such benefits in Executive’s income. The programs shall be
continued in the same way and at the same level as immediately prior to the Qualifying
Termination. The programs shall continue for Executive’s benefit for two (2) years
after the date of the Qualifying Termination; PROVIDED, HOWEVER, that Executive’s
participation in each of such programs shall be earlier terminated or reduced,
as applicable, if and to the extent Executive receives benefits as a result of
concurrent coverage through another program.

 

5

 

8.                                       INDEMNIFICATION FOR EXCISE TAX. In the event
that Executive becomes entitled to receive a Severance Payment in accordance
with the provisions of Section 6 above, and notwithstanding the provision
for a reduction in Severance Payment in Section 6, such Severance Payment
and any other benefits or payments (including transfers of property) that
Executive receives, or is to receive, pursuant to this Agreement or any other
agreement, plan or arrangement with the Company in connection with a Change in
Control of the Company (“Other Benefits”) shall be subject to the tax imposed
pursuant to Section 4999 of the Code (or any successor thereto) or any
comparable provision of state law (an “Excise Tax”), the following rules shall
apply:

 

(a)                                  The Company shall pay to Executive, within
thirty (30) days after the Executive’s Qualifying Termination, an additional amount
(the “Gross-Up Payment”) such that the net amount retained by Executive, after
deduction of any Excise Tax with respect to the Severance Payment or the Other
Benefits and any federal, state and local income tax, FICA tax and Excise Tax
upon such Gross-Up Payment, is equal to the amount that would have been
retained by Executive if such Excise Tax were not applicable. It is intended
that Executive shall not suffer any loss or expense resulting from the
assessment of any Excise Tax or the Company’s reimbursement of Executive for
payment of any such Excise Tax.

 

(b)                                 For purposes of determining whether any of
the Severance Payments or Other Benefits will be subject to an Excise Tax and
the amount of such Excise Tax, (i) any other payments or benefits received
or to be received by Executive in connection with a Change in Control of the
Company or Executive’s termination of employment (whether pursuant to the terms
of this Agreement or any other plan, arrangement or agreement with the Company,
any person whose actions result in a Change in Control or any person affiliated
with the Company or such person) shall be treated as “parachute payments”
within the meaning of Section 280G(b)(2) of the Code (or any
successor thereto), and all “excess parachute payments” within the meaning of Section 280G(b)(l)
of the Code (or any successor thereto) shall be treated as subject to the
Excise Tax, unless in the opinion of tax counsel selected by the Company’s
independent auditors and acceptable to Executive such other payments or
benefits (in whole or in part) do not constitute parachute payments, or such
excess parachute payments (in whole or in part) represent reasonable
compensation for services actually rendered within the meaning of Section 280G(b)(4) of
the Code  (or any successor thereto), (ii) the
amount of the Severance Payments and Other Benefits which shall be treated as
subject to the Excise Tax shall be equal to the lesser of (A) the total
amount of the Severance Payments or Other Benefits or (B) the amount of
excess parachute payments within the meaning of Sections 280G(b)(l) and (4) of
the Code (or any successor or successors thereto), after applying clause (i), above,
and (iii) the value of any non-cash benefits or any deferred payment or
benefit shall be determined by the Company’s independent auditors in accordance
with the principles of Sections 280G(d)(3) and (4) of the Code (or
any successor or successors thereto).

 

(c)                                  For purposes of determining the amount of the
Gross-Up Payment, Executive shall be deemed to pay federal income taxes at the
highest marginal rate of federal

 

6

 

income
taxation in the calendar year in which the Gross-Up Payment is to be made and
state and local income taxes at the highest marginal rates of taxation in the
state and locality of Executive’s residence on the date of the Executive’s Qualifying
Termination, net of the maximum reduction in federal income taxes which could
be obtained from deduction of such state and local taxes.

 

(d)                                 In the event that the Excise Tax is
subsequently determined to be less than the amount taken into account hereunder
at the time of the Executive’s Qualifying Termination, the Executive shall repay
to the Company, at the time that the amount of such reduction in Excise Tax is
finally determined, the portion of the Gross-Up Payment attributable to such
reduction plus interest on the amount of such repayment at the rate provided in
Section 1274(b)(2)(B) of the Code (or any successor thereto) (the “Applicable
Rate”). In the event that the Excise Tax is determined to exceed the amount
taken into account hereunder at the time of such Qualifying Termination
(including by reason of any payment the existence or amount of which cannot be determined
at the time of the Gross-Up Payment), the Company shall make an additional
Gross-Up Payment in respect of such excess (plus interest, determined at the
Applicable Rate, payable with respect to such excess) at the time that the
amount of such excess is finally determined.

 

9.                                       RIGHTS AND OBLIGATIONS PRIOR TO A CHANGE IN
CONTROL. Prior to the date which is ninety (90) days before a Change in
Control, the rights and obligations of Executive with respect to his employment
by the Company shall be determined in accordance with the policies and
procedures adopted from time to time by the Company and the provisions of the
Employment Agreement or any other written employment contract in effect between
the Company and Executive from time to time. This Agreement deals only with
certain rights and obligations of Executive during the Protection Period or
otherwise upon or subsequent to a Change in Control, and the existence of this Agreement
shall not be treated as raising any inference with respect to what rights and
obligations exist prior to the date which is ninety (90) days before a Change
in Control. Unless otherwise expressly set forth in a separate written employment
agreement between Executive and the Company, the employment of Executive is
expressly at-will, and Executive or the Company may terminate Executive’s
employment with the Company at any time and for any reason, with or without
cause, with or without notice, provided that if such termination occurs within the
Protection Period and constitutes a Qualifying Termination (as defined in Section 5
above) the provisions of this Agreement (and not any other agreement, including
the Employment Agreement) shall govern the payment of the Severance Payment and
certain other benefits as provided herein.

 

10.                                 NON-EXCLUSIVITY OF RIGHTS. Subject to Section 6(c) hereof,
nothing in this Agreement shall prevent or limit Executive’s continuing or future
participation in any benefit, bonus, incentive or other plan or program provided
by the Company or any of its affiliated companies and for which Executive may qualify,
nor shall anything herein limit or otherwise affect such rights as Executive may have
under any stock option or other agreements with the Company or any of its
affiliated companies. Except as otherwise provided in Section 6(c) hereof,
amounts which are vested benefits or which Executive is

 

7

 

otherwise
entitled to receive under any plan or program of the Company or any of its
affiliated companies at or subsequent to the date of any Qualified Termination
shall be payable in accordance with such plan or program.

 

11.                                 FULL SETTLEMENT. The Company’s obligation to
make the payments provided for in this Agreement and otherwise to perform its
obligations hereunder shall not be affected by any set-off, counter-claim,
recoupment, defense or other claim, right or action which the Company may have
against Executive or others. In no event shall Executive be obligated to seek
other employment or to take any other action by way of mitigation of the
amounts payable to Executive under any of the provisions of this Agreement. The
Company agrees to pay, to the full extent permitted by law, all legal fees and
expenses which Executive may reasonably incur as a result of Executive’s
successful collection efforts to receive amounts payable hereunder, or as a
result of any contest (regardless of the outcome thereof) by the Company or
others of the validity or enforceability of, or liability under, any provision
of this Agreement or any guarantee of performance thereof (including as a
result of any contest by Executive about the amount of any payment pursuant to
this Section).

 

12.                                 SUCCESSORS.

 

(a)                                  This Agreement is personal to Executive, and
without the prior written consent of the Company shall not be assignable by Executive
other than by will or the laws of descent and distribution. This Agreement
shall inure to the benefit of and be enforceable by Executive’s legal
representatives.

 

(b)                                 The rights and obligations of the Company
under this Agreement shall inure to the benefit of and shall be binding upon
the successors and assigns of the Company.

 

13.                                 GOVERNING LAW. This Agreement is made and
entered into in the State of California, and the internal laws of California
shall govern its validity and interpretation in the performance by the parties
hereto of their respective duties and obligations hereunder.

 

14.                                 MODIFICATIONS. This Agreement may be
amended or modified only by an instrument in writing executed by all of the
parties hereto.

 

15.                                 DISPUTE RESOLUTION.

 

(a)                                  Any controversy or dispute between the
parties involving the construction, interpretation, application or performance of
the terms, covenants, or conditions of this Agreement or in any way arising
under this Agreement (a “Covered Dispute”) shall, on demand by either of the
parties by written notice served on the other party in the manner prescribed in
Section 16 hereof, be referenced pursuant to the procedures described in
California Code of Civil Procedure (“CCP”) Sections 638, ET seq., as they may be
amended from time to time (or such procedures as nearly the same as may be
available under the laws of California, the “Reference Procedures”), to a
retired Judge from the

 

8

 

superior
court of California for the County of Riverside (the “Venue County”) for a
decision.

 

(b)                                 The Reference Procedures shall be commenced
by either party by the filing in the superior court of Venue County a petition pursuant
to CCP Section 638(1) (or such procedures as nearly the same as may be
available under the laws of California, a “Petition”). Said Petition shall
designate as a referee a Judge from the list of retired superior court Judges
from the Venue County who have made themselves available for trial or settlement
of civil litigation under said Reference Procedures. If the parties hereto are
unable to agree on the designation of a particular retired superior court Judge
of the Venue County, or the designated Judge is unavailable or unable to serve
in such capacity, request shall be made in said Petition that the Presiding or
Assistant Presiding Judge of the superior court of the Venue County appoint as
referee a retired superior court Judge from the aforementioned list.

 

(c)                                  Except as hereafter agreed by the parties,
the referee shall apply the internal law of the State of California in deciding
the issues submitted hereunder. Unless formal pleadings are waived by agreement
among the parties and the referee, the moving party shall file and serve its
complaint within fifteen (15) days from the date a referee is designated as
provided herein, and the other party shall have fifteen (15) days thereafter in
which to plead to said complaint. Each of the parties reserves its respective
rights to allege and assert in such pleadings all claims, causes of action,
contentions and defenses which it may have arising out of or relating to
the general subject matter of the Covered Dispute that is being determined pursuant
to the Reference Procedures. Reasonable notice of any motions before the
referee shall be given, and all matters shall be set at the convenience of the
referee. Discovery shall be conducted as the parties agree or as allowed by the
referee. Unless waived by each of the parties, a reporter shall be present at all
proceedings before the referee.

 

(d)                                 It is the parties’ intention by this Section 15
that all issues of fact and law and all matters of a legal and equitable nature
related to any Covered Dispute will be submitted for determination by a referee
designated as provided herein. Accordingly, the parties hereby stipulate that a
referee designated as provided herein shall have all powers of a Judge of the
superior court including, without limitation, the power to grant equitable and interlocutory
and permanent injunctive relief.

 

(e)                                  Each of the parties specifically (i) consents
to the exercise of jurisdiction over his person by a referee designated as provided
herein with respect to any and all Covered Disputes; and (ii) consents to
the personal jurisdiction of the California courts with respect to any appeal
or review of the decision of any such referee.

 

(f)                                    Each of the parties acknowledges that the
decision by a referee designated as provided herein shall be a basis for a
judgment as provided in CCP Section 644 and shall be subject to exception
and review as provided in CCP Section 645, or such procedures as nearly
the same as may be available under the laws of California.

 

9

 

(g)                                 The Company shall pay all fees and costs
incurred by Executive in connection with the Reference Procedures for a Covered
Dispute other than attorneys’ fees incurred by Executive.

 

16.                                 NOTICES. Any notice or communications
required or permitted to be given to the parties hereto shall be delivered
personally or be sent by United States registered or certified mail, postage
prepaid and return receipt requested, and addressed or delivered as follows, or
at such other addresses the party addressed may have substituted by notice
pursuant to this Section:

 

	
  To
  the Company:

  	
   

  	
  To
  Executive:

  
	
   

  	
   

  	
   

  
	
  Fleetwood
  Enterprises, Inc.

  	
   

  	
   

  	
   

  
	
  3125
  Myers Street

  	
   

  	
  Home
  Address

  
	
  Riverside,
  California 92503-5527

  	
   

  	
  City,
  State, Zip

  
	
  Attn:
  General Counsel

  	
   

  	
   

  

 

17.                                 CAPTIONS. The captions of this Agreement are
inserted for convenience and do not constitute a part hereof.

 

18.                                 SEVERABILITY. In case any one or more of the
provisions contained in this Agreement shall for any reason be held to be
invalid, illegal or unenforceable in any respect, such invalidity, illegality
or unenforceability shall not affect any other provision of this Agreement, but
this Agreement shall be construed as if such invalid, illegal or unenforceable
provision had never been contained herein and there shall be deemed substituted
for such invalid, illegal or unenforceable provision such other provision as
will most nearly accomplish the intent of the parties to the extent permitted
by the applicable law. In case this Agreement, or any one or more of the
provisions hereof, shall be held to be invalid, illegal or unenforceable within
any governmental jurisdiction or subdivision thereof, this Agreement or any
such provision thereof shall not as a consequence thereof be deemed to be
invalid, illegal or unenforceable in any other governmental jurisdiction or subdivision
thereof.

 

19.                                 COUNTERPARTS. This Agreement may be
executed in two or more counterparts, each of which shall be deemed an
original, but all of which shall together constitute one in the same Agreement.

 

20.                                 COMPLIANCE WITH SECTION 409A. Notwithstanding
any provision of this Agreement to the contrary, if, at the time of Executive’s
termination of employment with the Company, Executive is a “specified employee”
as defined in Section 409A of the Code, and one or more of the payments or
benefits received or to be received by Executive pursuant to this Agreement
would become subject to the additional tax under Section 409A(a)(1)(B) of
the Code or any other taxes or penalties imposed under Section 409A of the
Code (the “Section 409A Taxes”) if provided at the time otherwise required
under this Agreement, no such payment or benefit will be provided under this
Agreement until the earliest of (a) the date which is six (6) months
after Executive’s “separation from

 

10

 

service” for any reason, other than death or “disability”
(as such terms are used in Section 409A(a)(2) of the Code) or (b) the
date of Executive’s death, or such shorter period that, as determined by the
Company, is sufficient to avoid the imposition of Section 409A Taxes. The
provisions of this Section 20 shall only apply to the minimum extent
required to avoid Executive’s incurrence of any Section 409A Taxes. In
addition, if any provision of this Agreement would cause Executive to incur any
penalty tax or interest under Section 409A of the Code or any regulations
or Treasury guidance promulgated thereunder, the Company may reform such
provision to maintain to the maximum extent practicable the original intent of
the applicable provision without violating the provisions of Section 409A
of the Code.

 

IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered effective as of the day and year first written above.

 

 

	
   

  	
   

  
	
  [Name
  of Executive]

  
	
   

  	
   

  
	
   

  	
   

  
	
  FLEETWOOD
  ENTERPRISES, INC.,

  	
   

  
	
  a
  Delaware corporation

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  
	
  Title:

  	
   

  
			

 

11

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