DISCRETIONARY OPTION AGREEMENT
DISCRETIONARY OPTION AGREEMENT dated as of this 3rd
day of February, 1997, providing for the granting of certain
options by Blue Bird Corporation, a Delaware corporation (the
"Corporation"), to Xxxxx X. Xxxxxxx, an employee of the
Corporation or of a subsidiary of the Corporation (the
"Employee").
As of April 15, 1992, the Corporation has duly
adopted the Blue Bird Corporation Management Stock Option Plan
(the "Plan"), which is incorporated herein by reference. Un-
less otherwise expressly stated, all defined terms herein
shall have the same meanings ascribed to them in the Plan. In
accordance with Section 7 of the Plan, the Employee is to be
granted options under the Plan to buy shares of common stock,
par value $.01 per share (the "Shares") of the Corporation.
1. NUMBER OF SHARES, DISCRETIONARY OPTION PRICE.
The Corporation hereby irrevocably grants to the Employee
40,000 options (the "Discretionary Options"), which are not
intended to be Incentive Stock Options as defined in Section
422 of the Code, to purchase 40,000 Shares (the "Discretionary
Option Shares") at an exercise price of $9 per Share (the
"Option Price") on the terms and subject to the
conditions set forth herein. Except as explicitly provided
for in an agreement among the Corporation, the Management
Investors and others, dated as of April 15, 1992 (the
"Stockholders' Agreement"), the holder of the Discretionary
Options shall not have any of the rights of a stockholder with
respect to any Discretionary Option Shares unless and until
the Employee has paid the Option Price with respect thereto in
full.
2. PERIOD OF DISCRETIONARY OPTIONS AND CONDITIONS
OF EXERCISE. (a) The term of the Discretionary Options and
of this Agreement shall commence on the date hereof (the "Date
of Grant") and terminate upon the earlier of (i) April 16,
2002 (the "Expiration Date") and (ii) the time at which any
Discretionary Options are completely terminated pursuant to
Section 3 hereof. Upon the termination of a Discretionary
Option in accordance with the provisions herein, all rights of
the Employee with respect to the Discretionary Options
hereunder and in connection with the Discretionary Options
under the Plan shall cease.
(b) The Discretionary Options shall be fully vested
and exercisable from the Date of Grant.
(c) The Corporation need not issue fractional
Shares upon the exercise of the Discretionary Options but in
lieu thereof shall pay to the holder exercising the
Discretionary Options the Fair Value Price of such fractional
Shares (determined in accordance with the Stockholders'
Agreement). The right of the holder of the Discretionary
Options to purchase Discretionary Option Shares may be
exercised in whole or in part at any time and from time to
time prior to the earlier of the Expiration Date and, as to
any portion of the Discretionary Options, the time at which
such portion is terminated pursuant to Section 3.
3. TERMINATION UPON TERMINATION OF EMPLOYMENT.
Except in circumstances specified in the following sentence,
the Plan and the Stockholders' Agreement, the Discretionary
Options shall terminate immediately upon the Employee's
ceasing to be a full-time employee of the Corporation or any
of its subsidiaries. The time at which any Discretionary
Option shall terminate shall be the earliest to occur of (x)
the Expiration Date, (y) the close of business on the date on
which the Employee exercises a Put Right with respect to any
Shares owned by him or her pursuant to the Stockholders'
Agreement and (z) the following dates:
(i) the thirtieth day after the date
upon which the Employee ceases to be a full-
time employee of the Corporation or any of its
subsidiaries unless he or she ceases to be an
employee in a manner described in subsection (ii)
or (iii) below;
(ii) the one hundred and eightieth day
after the date of the death of the Employee if
the Employee dies before the time at which any
Discretionary Option terminates; or
(iii) immediately upon the Employee's vol-
untary termination of employment (without
Cause and not upon the occasion of his or her
Retirement or Disability (as such terms are
defined in the Stockholders' Agreement)) or
termination of employment by the Corporation
or any of its subsidiaries for Cause.
4. NON-TRANSFERABILITY OF DISCRETIONARY OPTIONS;
DEATH OF EMPLOYEE. No Discretionary Option nor this Agreement
may be transferred by the Employee except that the contract
rights under the Stockholders' Agreement with respect to any
Discretionary Option may be transferred to the estate of a
deceased Employee, and, further, during the lifetime of the
Employee, the Discretionary Options may be exercised only by
him or her. More particularly, but without limiting the
generality of the foregoing, the Discretionary Options may not
be assigned, transferred (except as provided above), pledged
or hypothecated in any way, shall not be assignable by
operation of law and shall not be subject to execution, at-
tachment or similar process. Any attempted assignment,
transfer, pledge, hypothecation or other disposition of the
Discretionary Options contrary to the provisions hereof shall
be null and void and without effect.
5. EXERCISE OF DISCRETIONARY OPTIONS. The
Discretionary Options shall be exercised as specified in the
Plan.
6. SPECIFIC RESTRICTIONS UPON DISCRETIONARY OPTION
SHARES. The Employee hereby agrees with the Corporation as
follows:
(a) The Employee shall acquire the Discretionary
Option Shares for investment purposes only and not with a view
to resale or other distribution thereof to the public in vio-
lation of the Securities Act of 1933, as amended (the "Securi-
ties Act"), and shall not dispose of any Discretionary Option
Shares in any transaction which, in the opinion of counsel to
the Corporation, would violate the Securities Act, or the
rules and regulations thereunder, or any applicable state
securities, or "blue sky", laws;
(b) If any Discretionary Option Shares shall be
registered under the Securities Act, no public offering
(otherwise than on a national securities exchange, as defined
in the Exchange Act) of any Discretionary Option Shares shall
be made by the Employee (or any other person) under such
circumstances that he or she (or such other person) may be
deemed an underwriter, as defined in the Securities Act; and
(c) The Corporation shall have the authority to
endorse upon the certificate or certificates representing the
Discretionary Option Shares such legends referring to the
foregoing restrictions or any restrictions resulting from the
fact that the Employee is a party to the Stockholders' Agree-
ment.
7. TERMINATION OF EMPLOYMENT. The employment of
the Employee shall not be deemed to have terminated if the
Employee is an employee of the Corporation or one of its sub-
sidiaries who is absent upon a bona fide leave of absence or
who is transferred to and becomes an employee of a subsidiary
corporation or if he or she is an employee of a subsidiary
corporation who is transferred to and becomes an employee of
the Corporation or another subsidiary of the Corporation.
However, if a subsidiary corporation ceases to be a subsidi-
ary, all employees of such subsidiary not theretofore trans-
ferred to and becoming employees of the Corporation or of
another subsidiary of the Corporation shall be deemed to have
ceased to be Employees within the meaning of the Plan on the
date such subsidiary ceases to be a subsidiary of the Corpora-
tion. The provisions of this paragraph shall, however, be
subject to the provisions of Section 16 of the Plan pertaining
to the consequences of a merger or consolidation of the
Corporation and/or a subsidiary with any other corporation.
8. PAYMENT. Nothing herein contained or done
pursuant hereto shall obligate the recipient of a
Discretionary Option to purchase and/or pay for any
Discretionary Option Shares except those Discretionary Option
Shares in respect of which the holder of the Discretionary
Option shall have exercised such option to purchase hereunder
in the manner hereinabove provided.
9. TIME. Time shall be of the essence for this
Agreement.
10. BINDING EFFECT. This Agreement shall enure to
the benefit of and be binding upon the parties hereto, their
heirs, successors and permitted assigns.
11. THE EMPLOYEE HEREBY REPRESENTS, WARRANTS AND
ACKNOWLEDGES TO THE CORPORATION THAT THE EMPLOYEE IS AN
EMPLOYEE OF THE CORPORATION OR AN AFFILIATE OF THE CORPORATION
AND THAT THE EMPLOYEE WAS NOT AND IS NOT INDUCED TO ENTER INTO
THIS AGREEMENT BY AN EXPECTATION OF EMPLOYMENT OR CONTINUED
EMPLOYMENT.
12. NOTICES. Any notice required or permitted un-
der this Agreement shall be deemed given when delivered per-
sonally, or when deposited in a United States Post Office as
registered mail, postage prepaid, addressed, as appropriate,
to the Employee at his or her address set forth below or such
other address as he or she may designate in writing to the
Corporation, or to the Corporation, 0000 Xxxxxxxxx Xxxx,
Xxxxx, Xxxxxxx, 00000, Attention: Corporate Secretary or such
other address(es) as the Corporation may designate in writing
to the Employee.
13. FAILURE TO ENFORCE NOT A WAIVER. The failure
of the Corporation to enforce at any time any provision of
this Agreement shall in no way be construed to be a waiver of
such provision or of any other provision hereof.
14. GOVERNING LAW. This Agreement shall be gov-
erned by and construed according to the laws of the State of
Delaware, without regard to principles of conflict of laws.
15. PROVISIONS OF PLAN. The Discretionary Options
provided for herein are granted pursuant to the Plan, and said
Discretionary Options and this Agreement are in all respects
governed by the Plan and subject to all of the terms and pro-
visions thereof, whether such terms and provisions are incor-
porated in this Agreement solely by reference or are expressly
cited herein. For greater certainty, without limiting the
generality of the foregoing, the Employee agrees to be bound
by any amendments to the Plan or this Agreement made by the
Compensation Committee of the Board of Directors of the
Corporation in accordance with the provisions of the Plan to
conform the Plan or this Agreement and to the rules and
regulations of any national securities exchange on which the
Corporation proposes to list any of its shares. From and
after the date, if any, on which any shares are listed on any
national securities exchange, the terms and conditions of this
Agreement and the implementation thereof shall be subject to
the rules and regulations of such exchange, and, in the event
of any inconsistency between the terms and conditions of this
Agreement and the rules and regulations of any such exchange,
the rules and regulations of such exchange shall prevail.
IN WITNESS WHEREOF, the Corporation has executed
this Agreement in duplicate on the day and year first above
written.
BLUE BIRD CORPORATION
By: /S/ Xxxx X. Xxxxxx
----------------------------
Name: Xxxx X. Xxxxxx
Title: Chairman of the Board
and President
The undersigned hereby accepts, and agrees to, all terms and
provision of the foregoing Agreement.
/S/ Xxxxx X. Xxxxxxx
----------------------------
Xxxxx X. Xxxxxxx
0000 Xxxxxxxxx
----------------------------
ADDRESS
Xxxxxxxx, Xxxxx 00000
----------------------------
BLUE BIRD CORPORATION
CONSENT OF THE MEMBERS OF THE COMPENSATION COMMITTEE
OF THE BOARD OF DIRECTORS
IN LIEU OF A MEETING
The undersigned, being all the members of the
Compensation Committee of the Board of Directors of Blue Bird
Corporation, do hereby consent without a meeting of the
Compensation Committee, to the adoption of the resolutions at-
tached hereto.
DATED as of the 27th day of January, 1997.
/S/ Xxxxxx X. Xxxxxxxxx
-----------------------
Xxxxxx X. Xxxxxxxxx
/S/ Xxxx X. Xxxxxx
-----------------------
Xxxx X. Xxxxxx
/S/ Xxxxxx X. Xxxxxx
-----------------------
Xxxxxx X. Xxxxxx
WHEREAS, the Compensation Committee of the Board of
Directors (the "Committee") of Blue Bird Corporation (the
"Corporation") has determined that it is in the best
interests of the Corporation to grant certain stock options
to Xx. Xxxxx X. Xxxxxxx, an officer of the Corporation,
pursuant to the Corporation's Management Stock Option Plan
(the "Plan").
NOW, THEREFORE, BE IT:
RESOLVED, that, pursuant to the Plan, Xx. Xxxxx X.
Xxxxxxx be, and he hereby is, granted 40,000 options to
purchase 40,000 Shares (as defined in the Plan), upon
execution by Xx. Xxxxxxx of an appropriate option agreement;
FURTHER RESOLVED, that such options shall be
Discretionary Options (as defined in the Plan);
FURTHER RESOLVED, that such Discretionary Options
shall be granted as of February 3, 1997, and shall be fully
vested and exercisable on and as of such date; and
FURTHER RESOLVED, that the Option Price (as defined
in the Plan) of such Discretionary Options shall be $9.00,
subject to adjustment as provided in the Plan.
