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EXHIBIT 4.1
The following document is a form of Nonqualified Stock Option Agreement entered
into between the Registrant and various officers and employees of subsidiaries.
The agreements are identical in all material respects except as to the identity
of the parties, the dates of execution and the number of options granted.
NON-QUALIFIED STOCK OPTION AGREEMENT
(the "First Part")
THIS STOCK OPTION AGREEMENT (the "Agreement") is entered into this
day of , , (the "Grant Date"), by and between Champion
Enterprises, Inc., a Michigan corporation ("the Company"), and (the
"Optionee").
WITNESSETH:
WHEREAS, Optionee is to be employed as President, Retail Operations of
the Company; and
WHEREAS, the Company wishes to induce Optionee to accept that position,
to provide additional incentive to Optionee, to encourage stock ownership by
Optionee, and to encourage Optionee to remain in the employ of the Company or
its Subsidiaries; and
WHEREAS, the Company desires that Optionee keep certain information
that Optionee has acquired during Optionee's employment with the Company
confidential, and that Optionee not compete with the Company for at least two
years after Optionee's employment with the Company is terminated.
NOW, THEREFORE, the Company and Optionee hereby agree as follows:
1. DEFINITIONS. For the purposes of this Agreement, certain words and
phrases have the following definitions:
a) "Code" means the Internal Revenue Code of 1986, as amended;
b) "Committee" means the Compensation Committee of the Company;
c) "Common Stock" means the common stock of the Company, par
value $1.00;
d) "Employment" (whether or not capitalized) means employment
with the Company or any Parent or Subsidiary of the Company;
e) "Good Cause" means: (i) Optionee's dishonesty in his financial
dealings with the Company; (ii) the conviction of a crime by Optionee that
constitutes (x) a felony or (y) a misdemeanor involving moral turpitude which
may reasonably be expected to have an adverse effect on the Company, it
business, reputation or interest; (iii) a breach by Optionee of this Agreement
or any other contract or agreement between the Company and Optionee or a breach
by Optionee of a fiduciary duty or responsibility to the Company; or (iv) the
refusal of Optionee to follow the lawful policies and directives of the Board of
Directors of the Company;
f) "Parent" means any "parent corporation" as defined in Section
424(e) of the Code;
g) "Subsidiary" means any "subsidiary corporation" as defined in
Section 424(f) of the Code.
2. FIRST PART. The Company grants Optionee the right and option to
purchase from the Company shares of the Company's Common Stock at a
price equal to 40% of the closing price of the Company's Common Stock on the New
York Stock Exchange on , as reported in The Wall Street Journal
($ ) (the "First Part"). The First Part must be exercised in its entirety
within 60 days of the Grant Date. This grant of the First Part is conditioned
upon the agreement by Optionee not to sell or otherwise transfer the shares
acquired under this First Part until at least two (2) years from the date of
exercise. In addition, if prior to the second anniversary of the Grant Date,
Optionee terminates his employment with the Company or the Company terminates
the Optionee's employment for Good Cause, Optionee shall retain only the
following shares:
Date Employment Terminated Shares Retained
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Prior to 6 months from Grant Date 0
Prior to 12 months from Grant Date
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Prior to 18 months from Grant Date
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Prior to 24 months from Grant Date
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24 months or more after the Grant Date
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Shares not retained by Optionee above shall be forfeited and returned to the
Company in exchange for the exercise price paid by Optionee for the forfeited
shares.
3. TERMINATION OF EMPLOYMENT.
a) Before Exercise of the First Part. If Optionee's employment
with the Company shall terminate for any reason prior to Optionee's exercise in
full of the First Part, Optionee's right to exercise any option under this
Agreement shall terminate and all exercise rights hereunder shall immediately
cease.
b) Events Not Constituting a Termination. A change of job
title, a leave of absence with the written consent of the Company, or a transfer
of Optionee from one corporation to another among the Company, its Parent, or
any of its Subsidiaries shall not be deemed a termination of employment for
purposes of this Agreement.
4. EXERCISE OF OPTION. Optionee may exercise any exercisable option
granted pursuant to this Agreement by completing the following steps.
(a) Written Notice. Delivery to the Company of a written
notice signed by the Optionee in the form attached as EXHIBIT A. In addition, at
the request of the Company, Optionee may be required to provide a written
representation that Optionee is acquiring the shares for investment purposes
only, and not for resale.
(b) Purchase Price. Delivery to the Company of cash, a
personal check, bank draft, money order, or Common Stock (or any combination
thereof) equal to the purchase price of the shares then to be purchased. Any
Common Stock tendered shall be valued at the closing price of the Company's
Common Stock on the first business day prior to the exercise date, as reported
in The Wall Street Journal. After receipt of the above and subject to Section 7
below, the company shall issue the shares in the name of Optionee.
5. CONFIDENTIALITY AND NON-COMPETITION. As consideration for the
options granted by this Agreement, Optionee hereby agrees as follows:
a) Confidentiality Agreement. Except with the prior written
consent of the Company, Optionee shall not at any time during or after the term
of this Agreement: (a) disclose, publish, or in any other manner reveal to any
third party any Confidential Information (as defined below) relating to the
business or assets of the Company or its Subsidiaries; or (b) make use of any
Confidential Information (as hereinafter defined) for the Optionee's own
purposes, or for the benefit of any person or entity other than the Company and
its Subsidiaries.
b) Confidential Information Defined. "Confidential
Information" shall mean any and all nonpublic information and documentation
relating to the Company and its Subsidiaries, including but not limited to
information relating to the operations, services, trade secrets, dealer,
distributor and customer lists, promotion and pricing practices, operational
methods, market plans, studies, and forecasts, product development plans,
acquisition plans, design and design projects, inventions and research projects,
compensation information, procurement and sales activities and procedures, the
existence or substance of any agreements between Company (or any Subsidiary) and
any third party, and any and all other information and documentation relating to
the plans and operations of the Company or its Subsidiaries.
c) Non-Competition. Because of the highly competitive nature
of the Company's business, Optionee agrees that as long as Optionee is an
employee or officer of the Company, and for two years following Optionee's
termination of employment with the Company:
(1) Optionee will not, directly or indirectly (other
than on behalf of the Company), as owner, partner, joint venturer, employee,
broker, agent, principal, trustee, corporate officer, licensor, consultant, or
in any capacity whatsoever, engage in, become financially interested in, or have
any connection with, any business located in the United States or Canada engaged
in the production, sales, financing, insuring, or marketing of manufactured
homes;
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(2) Optionee will not to supply any competing products
or provide any competing services to any customer with whom the Company or its
Subsidiaries have done any business during his employment with the Company; and
(3) Optionee will not, directly or indirectly, induce
any employee of the Company or its affiliates to engage in any activity hereby
prohibited to the Optionee by this Agreement, or to terminate their employment
with the Company or its affiliates.
If any one of more of the terms contained in this Section or in this Agreement
shall for any reason be held to be excessively broad with regard to time,
duration, geographic scope, or activity, that term shall be construed in a
manner to enable it to be enforced to the maximum extent compatible with
applicable law.
d) Disclosure of Proprietary Information. Optionee shall
promptly disclose to the Company, in such form and manner as the Company may
reasonably require, all operations, systems, services, methods, developments,
inventions, improvements and other information or data pertaining to the
business or activities of the Company as are conceived, originated, discovered
or developed by Optionee (whether or not copyrighted or patented) during the
term of his employment with the Company, whether before or after the execution
of this Agreement. It is understood that such information is proprietary in
nature and shall be, as between the Company and Optionee, for the exclusive use
and benefit of the Company and shall be and remain the property of the Company.
If so requested by the Company, Optionee shall execute and deliver to the
Company any instrument as the Company may reasonably request to effectuate the
assignment of any such proprietary information to the Company.
e) Termination of Employment. Upon the termination of
Optionee's employment with the Company, Optionee shall deliver to the Company
all records, data and memoranda of every kind and character relating to the
Company and its affiliates, including all copies thereof, which are in
Optionee's possession or control.
f) Remedies for Breach. Optionee acknowledges and agrees that
the Company's remedies at law for any breach of the agreements contained in this
Section 5 would be inadequate. Optionee therefore agrees that in the event of
Optionee's breach of the agreements contained in this Section 5, the Company
shall be entitled to equitable relief in the form of specific performance, a
temporary restraining order, a temporary or permanent injunction, or any other
equitable remedy or relief which may then be available. Nothing in this Section
shall be construed as prohibiting the Company from pursuing any other remedies
available to it for any such breach, whether in law, equity, or otherwise.
6. NO RIGHT TO CONTINUED EMPLOYMENT. This Agreement does not give the
Optionee any right to be retained or to continued employment with the Company or
any Subsidiary of the Company.
7. COMPLIANCE WITH SECURITIES LAWS. Company's obligations under this
Agreement are subject to compliance with federal and state laws, rules and
regulations applying to the authorization, issuance or sale of securities, and
any applicable stock exchange requirements, and Company may require Optionee to
provide proof of compliance with those laws, rules, and regulations.
8. INVESTMENT INTENT AND REGISTRATION. The Optionee represents and
warrants to the Company that he or she is acquiring all shares of Common Stock
under this option for investment purposes only and not with a view to resale.
The Optionee acknowledges and agrees that such shares of Common Stock have not
yet been registered under the Act or the securities laws of any state and may
not be sold, transferred, assigned, offered, pledged or otherwise distributed
unless there is an effective registration statement under the Act and any
applicable securities laws covering such shares or the Company receives an
opinion of counsel from Optionee (and concurred to by counsel for the Company)
stating that such sale, transfer, assignment, offer, pledge or other
distribution is exempt from registration and prospectus delivery requirements of
the Act, any applicable state securities laws, or the listing requirements of
any stock exchange. Optionee further acknowledges and agrees that any
certificate for such shares shall contain an appropriate legend to the foregoing
effect and that a stop transfer order shall be placed with the Company's
transfer agent. The Company represents and warrants that as soon as practical
after the Optionee exercises any of the options granted pursuant to this
Agreement, the Company shall take any and all steps that are necessary or
required in order to register the Common Stock pursuant to the Act.
9. NON-ASSIGNABILITY. The options granted by this Agreement shall not
be transferable by Optionee, other
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than by will or the laws of descent and distribution. Any transferee of these
options by will or the laws of descent and distribution shall take them subject
to the terms and conditions of this Agreement, and no such transfer shall be
effective to bind the Company unless the Company is furnished with written
notice of the transfer and a copy of the will or any other evidence the Company
deems necessary to establish the validity of the transfer. The term "Optionee",
as used in this Agreement, shall include any person or entity to whom any option
is transferred.
10. WITHHOLDING OF TAXES. Optionee must pay to Company within fourteen
(14) days from the date of any exercise any amounts necessary to satisfy any
requirements for withholding of income or employment taxes in connection with
that exercise.
11. DISPUTES. As a condition to the granting the options contained in
this Agreement, Optionee and Optionee's successors and assigns agree that any
dispute or disagreement which shall arise under or as a result of this Agreement
shall be determined by the Committee in its sole discretion and judgment. Any
such determination or interpretation by the Committee of the terms of this
Agreement shall be final and shall be binding and conclusive for all purposes.
12. NOTICES. Every notice relating to this Agreement shall be in
writing, any notice given by mail shall be by registered or certified mail with
return receipt requested. All notices to the Company shall be delivered to the
following address:
Champion Enterprises, Inc.
0000 Xxxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxx Xxxxx, XX 00000-0000
Attn: Secretary of the Company
All notices by the Company to Optionee shall be delivered to Optionee
personally, or addressed to Optionee at Optionee's last residence address as
then contained in the records of the Company, or such other address as Optionee
may designate.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
COMPANY: CHAMPION ENTERPRISES, INC.
By:
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Xxxxxx X. Xxxxx, Xx.
President and Chief
Executive Officer
OPTIONEE:
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EXHIBIT A
NOTICE OF EXERCISE OF FIRST PART
(NON-QUALIFIED STOCK OPTION SHARES)
Secretary
Champion Enterprises, Inc.
0000 Xxxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxx Xxxxx, Xxxxxxxx 00000
Dear Sir:
A stock option was granted to me which permits me to purchase
shares of Champion Enterprises, Inc. Common Stock at a price of $ per
share. I elect to exercise this part of the option to purchase
non-qualified stock option shares. A personal check [or cash, bank draft, money
order, or common stock] for the purchase price is enclosed with this letter.
I acknowledge and agree that the shares of Common Stock that I am
purchasing may not currently be registered under the Securities Act of 1933 (the
"Act") or the securities laws of any state. I understand and agree that if these
shares are not currently registered, the Company will register these shares
under the Act as soon as practicable after this exercise. Notwithstanding the
foregoing, I acknowledge and agree that these shares may not be sold,
transferred, assigned, offered, pledged or otherwise distributed until they are
registered under the Act or unless the Company receives an opinion of counsel
from me (and concurred to by counsel for the Company) stating that such sale,
transfer, assignment, offer, pledge or other distribution is exempt from
registration and prospectus delivery requirements of the Act, any applicable
state securities laws, or the listing requirements of any stock exchange.
In addition, I represent that I will not sell or otherwise transfer any
shares that I purchase pursuant to this letter for a period of two years. I also
understand that if I terminate my employment with the Company or if the Company
terminates my employment for "Good Cause" within two years of the grant date of
this option, a portion of the shares, pro-rated semi-annually, shall be
forfeited and returned to the Company in exchange for the exercise price
relating to those shares.
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Address:
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SSN: - -
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Dated: ,
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