[CHAMPION ENTERPRISES, INC. LETTERHEAD]
August 31, 1995
Xx. Xxxxxx X. Xxxxx, Xx.
0000 Xxxxxxxxx Xxxxx
Xxxxxxxxxx Xxxxx, XX 00000
Re: Employment Agreement Amendment
Dear Xxxxxx:
Effective today, this letter amends the employment agreement
between Champion Enterprises, Inc. ("Corporation") and you,
dated April 27, 1990 and as previously amended by letters from
Xxxxxxx X. Xxx and Xxxxx Xxxxxxxx, dated April 27, 1990 and May
7, 1990 respectively (in the aggregate, the "Agreement").
1. Base Salary Increase. Effective January 1, 1997 and on
the first day of every other calendar year thereafter, your
annual base compensation in Section 3(a) of the Agreement shall
be increased by $50,000.
2. Stock Option Rights Upon Employment Termination.
Section 9 of the Agreement, which accelerates the exercise terms
of outstanding stock options and provides cash out rights if
your employment terminates under certain circumstances, shall
not apply to any stock options granted to you on August 31,
1995. Such option grants shall be governed by the employment
termination provisions set forth in the stock option agreements
evidencing the grants.
3. Non-Competition Provision. A new Section 14 shall be
added to the Agreement to read as follows:
14. Noncompetition Provision.
In recognition of the highly competitive nature of the
Corporation's business, you agree that (i) as long as you
are an employee or officer of the Corporation and (ii) for
two years after your termination of employment with the
Corporation (unless your employment is terminated by the
Corporation without cause, in which case this Section 14
shall not apply to competitive action occurring after the
termination of your employment);
(a) You will not, directly or indirectly (other than
on behalf of the Corporation), 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 engaged in the production and marketing of
manufactured homes and buses (other than on behalf of the
Corporation). You agree not to supply competing products or
provide competing services to any customer with whom the
Corporation has done any business during your employment
with the Corporation, whether as an officer, director,
proprietor, employee, partner, or investor (other than as a
holder of less than 1% of the outstanding capital stock of a
publicly traded corporation), consultant, advisor, agent or
sales representative.
(b) You agree not to directly or indirectly induce
employees of the Corporation to engage in any activity
hereby prohibited to you or to terminate their employment
with the Corporation.
(c) If any one or more of the terms contained in this
Section 14 shall for any reason be held invalid, illegal or
unenforceable, such invalidity, illegality and
unenforceability shall not affect any other term therein,
but such term shall be deemed deleted, and such deletion
shall not affect the validity of the other terms of this
Section 14 or any other Section of this Agreement, or your
obligations under any other agreements with the Corporation.
Alternatively, if any one or more of the terms contained in
this Section 14 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 extent compatible with
applicable law.
(d) You acknowledge that the Corporation's and its
subsidiaries' trade secrets, private or secret processes as
they exist form time to time and information concerning
products, research and development data, market studies and
forecasts, editorial redesign information, editorial source
identification and compensation information, technical
information, procurement and sales activities and
procedures, promotion and pricing techniques, marketing
arrangements and plans, business plans, the substance of
agreements with customers or others, service and training
programs and arrangements, customer lists and credit and
financial data concerning customers (the "Proprietary
Information") are valuable, special and unique assets of the
Corporation and its subsidiaries, access to and knowledge of
which will have been gained by virtue of your position and
involvement with the Corporation. In light of the highly
competitive nature of the industry in which the Corporation
has conducted its business, you further agree that all
Proprietary Information obtained by you as a result of such
position or involvement shall be considered confidential.
In recognition of this fact, you agree that you will not
disclose any of such Proprietary Information to any person
or other entity for any reason or purpose whatsoever, and
you will not make use of any Proprietary Information for
your own purposes or for the benefit of any person or other
entity (except the Corporation) under any circumstances.
(e) Upon your termination of employment with the
Corporation, you will deliver to the Corporation all
records, data and memoranda of every kind and character of
the Corporation and all copies thereof which are in your
possession or control, and which relate to your employment
or to the activities of the Corporation or its subsidiaries
or to any Proprietary Information, including but not limited
to customer lists, editorial sources, drawings, prints,
manuals, notebooks, reports and correspondence, other than
employment related records and documents which you are
entitled to keep.
(f) Notwithstanding the provisions in the third
paragraph of Section 2 of this Agreement to the contrary,
you acknowledge and agree that the Corporation's remedy at
law or through arbitration for a breach of any of the
provisions of Section 14 would be inadequate and, in
recognition of this fact, in the event of a breach or
threatened breach by you of any provision of Section 14 of
this Agreement, it is agreed that, in addition to any other
remedies it may have, the Corporation shall be entitled to
equitable relief in the form of specific performance,
temporary restraining order, temporary or permanent
injunction or any other equitable remedy which may then be
available. Further, you acknowledge that the granting of a
temporary injunction, or temporary restraining order would
not be an adequate remedy upon breach or threatened breach
of Section 14 hereof and consequently agree upon any such
breach or threatened breach that the Corporation shall be
entitled to the granting of injunctive relief prohibiting
the sale of products and providing of services of the kind
sold or provided by the Corporation. Nothing herein
contained shall be construed as prohibiting the Corporation
from pursuing any other remedies available to it for such
breach. This provision shall override the third paragraph
of Section 2 of the Agreement for purposes of enforcing the
Covenant not to Compete and Proprietary Information
requirements set forth in this Section 14.
4. Except as amended herein, your Agreement remains in
full force and effect and has not been modified or rescinded.
If this letter conforms to your understanding and approval,
please sign below, and this letter will constitute a contractual
amendment to the Agreement between you and the Corporation.
ACCEPTED AND AGREED: CHAMPION ENTERPRISES, INC.
Xxxxxx X. Xxxxx, Xx. Xxxxxx X. Xxxxxxx
Chairman of the Compensation
Committee
MAH/5877
