CHAMPION PARTS, INC.
2525 22nd Street
Oak Brook, Illinois 60521
(708) 573-6600
NOTICE OF ANNUAL MEETING
OF SHAREHOLDERS TO BE HELD
NOVEMBER 16, 1995
To the Shareholders of Champion Parts, Inc.:
You are cordially invited to attend the Annual Meeting of
Shareholders of Champion Parts, Inc., which will be held at the
Wyndham Garden Hotel, 17 West 350 22nd Street, Oakbrook Terrace,
Illinois, on Thursday, November 16, 1995, at 10:00 A.M., Chicago
time, for the following purposes:
1. To elect Directors;
2. To approve and adopt the Champion Parts, Inc. 1995 Stock
Option Plan; and
3. To consider such other matters as may properly come before
the meeting or any adjournment thereof.
Only shareholders of record at the close of business on
September 22, 1995, are entitled to notice of and to vote at the
meeting and at any adjournment thereof.
We hope you attend the meeting in person, but, if you cannot,
please sign, date and return promptly the enclosed proxy in the
envelope provided so that your shares may be voted at the
meeting.
By Order of the Board of Directors,
MARK SMETANA
Secretary
Chicago, Illinois
September 29, 1995
<PAGE>
CHAMPION PARTS, INC.
2525 22nd Street
Oak Brook, Illinois 60521
(708) 573-6600
P R O X Y S T A T E M E N T
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD
NOVEMBER 16, 1995
This Proxy Statement is furnished in connection with the
solicitation of proxies for use at the annual meeting of
shareholders of CHAMPION PARTS, INC. (the "Company") to be held
on November 16, 1995, and at any adjournments thereof. This
Proxy Statement and accompanying proxy were first mailed to
shareholders on or about September 29, 1995. The accompanying
proxy is solicited on behalf of the Board of Directors of the
Company and is revocable by the shareholder giving it at any
time before it is voted by filing with the Secretary of the
Company a notice of revocation or a duly executed proxy bearing
a later date, or by attending the meeting and voting in person.
All shares represented by each properly executed unrevoked proxy
received in time for the meeting will be voted.
The close of business on September 22, 1995, has been fixed by
the Board of Directors as the record date for the determination
of shareholders entitled to vote at the meeting and at any
adjournments thereof.
Holders of Common Shares as of such date are entitled to one
vote per share, and voting with respect to the election of
directors is cumulative as a matter of right. Under cumulative
voting, each shareholder may vote the number of shares owned for
as many persons as there are directors to be elected at the
meeting, or may cumulate votes by giving one candidate for
election as many votes as the number of directors multiplied by
the number of his or her shares or distributing them on the same
principle among as many candidates as he or she shall see fit.
Discretionary authority for the proxy holders to cumulatively
vote shares represented by the proxies is being solicited. See
"Election of Directors" below. As of September 22, 1995, there
were outstanding 3,655,266 Common Shares, $.10 par value, of the
Company.
Shares owned by shareholders who are present in person, or which
are represented by proxy, at the annual meeting will be
tabulated by the election inspectors appointed for the meeting
and will determine whether or not a quorum is present. The
election inspectors will treat abstentions as shares that are
present and entitled to vote for purposes of determining the
presence of a quorum but as unvoted for purposes of determining
the approval of any matter submitted to the shareholders for a
vote. If a broker indicates on the proxy that it does not have
discretionary authority as to certain shares to vote on a
particular matter, those shares will be considered as present
but not entitled to vote with respect to that matter.
<PAGE>
Election of Directors
It is intended that the shares represented by the proxies will
be voted for the election of the nominees named below as
directors of the Company, and, subject to the agreements
described under "Concerning the Board of Directors" and
"Ownership of Voting Securities" below, the proxy holders may,
by cumulative voting, distribute votes in such manner and among
such nominees as they see fit to elect the maximum number of
nominees named below. Persons are elected directors of the
Company to hold office until the next annual meeting of
shareholders at which directors are elected.
The Company's bylaws provide that the Board of Directors shall
consist of nine directors. During 1995, Messrs. Calvin A.
Campbell and Donald G. Santucci resigned from the Board of
Directors. The vacancies created by the resignations of Messrs.
Campbell and Santucci will not be filled at the 1995 Annual
Meeting of Shareholders.
In the event that any nominee named below becomes unavailable
for election for any reason, which is not anticipated, the
shares represented by the proxies will be voted for any
substitute nominee designated by the Board of Directors of the
Company, unless the Board reduces the number of directors. As
indicated in the accompanying proxy, the authority to vote for
the election of directors or for any individual nominee or
nominees may be withheld by the shareholder giving the proxy.
Proxies will not be voted for a greater number of persons than
the number of nominees named below.
The nominees, and certain information concerning them as
furnished by such nominees, are as follows:
Principal Occupation and Served as a
Name (Age) Positions with the Company Director Since
- ------------------------ --------------------------------------- --------------
Thomas W. Blashill (36) President and Chief Executive Officer
of the Company 1993
John R. Gross (63) Owner, Chaney Auto Parts, Inc., Crest Hill,
Illinois 1966
Raymond F. Gross (56) Vice President, Erecta Shelters, Inc.,
Ft. Smith, Arkansas; consultant to the
Company 1968
Gary S. Hopmayer (55) Director, Original American Scones, Inc.,
Chicago, Illinois 1987
Barry L. Katz (43) President and General Counsel, RGP Holding,
Inc. 1993
Edward R. Kipling (64) Retired 1987
Raymond G. Perelman (77) Chairman of the Board of the Company;
Chairman of the Board and Chief Executive
Officer, RGP Holding, Inc. 1988
Mr. Blashill joined the Company in August 1992 as Director of
Financial Operations. He was elected President and Chief
Executive Officer of the Company in August 1995. Previously, Mr.
Blashill held the position of Executive Vice President since
March 1993 and was elected Vice President - Finance, Secretary
and Treasurer in December 1992. He was Vice President and
Treasurer of Washington Steel Corporation from 1991 to 1992.
Mr. John R. Gross is currently the owner of Chaney Auto Parts,
Inc., a retailer of auto parts. John R. Gross is the brother of
Raymond F. Gross.
Mr. Raymond F. Gross has been the Vice President of Erecta
Shelters Inc., a manufacturer and distributor of metal
buildings, since 1985. He has also been a consultant to the
Company since June 1984. Prior to June 1984 he was a Vice
President of the Company. Raymond F. Gross is the brother of
John R. Gross.
Mr. Hopmayer was President of Original American Scones, Inc., a
privately owned specialty baker, from 1987 to 1993. He is
currently a director of Original American Scones, Inc. Prior to
that time, he was President of Mega International, Inc., a
manufacturer and distributor of automotive electrical parts.
Mega International, Inc., founded by Mr. Hopmayer, was sold to
Echlin Inc. in October 1986.
Mr. Katz held the position of Senior Vice President of the
Company from December 16, 1992 to January 19, 1993. Since 1993,
Mr. Katz has been President and General Counsel of RGP Holding,
Inc., and its operating subsidiaries, and was its Senior Vice
President and General Counsel since May 1992. From March 1990 to
1994, he served as Senior Vice President and General Counsel for
General Refractories Company, and since that time has been its
President.
Mr. Kipling was Vice President and General Manager of the Rayloc
Division of Genuine Parts Company, a remanufacturer of
automotive parts, for more than five years prior to January
1987, and has since been retired.
Mr. Perelman has served as Chairman of the Board since December
16, 1992 and was President and Chief Executive Officer from
December 16, 1992 to January 19, 1993. He has been Chairman of
the Board of RGP Holding, Inc., a privately held holding company
with subsidiaries engaged in manufacturing businesses and
mining, since May 1992. Since 1985, he was the Chairman of the
Board and Chief Executive Officer of General Refractories
Company.
Concerning the Board of Directors
Except for directors who are officers of the Company, and except
as indicated below, each director received a fee of $10,000 for
service as a director during the Company's fiscal year ended
January 1, 1995. In addition, directors are reimbursed for
their reasonable travel expenses incurred in attending meetings
and in connection with Company business.
During the fiscal year ended January 1, 1995, the Board of
Directors held 6 meetings. There is no present director
nominated for election who attended fewer than 75% of the
aggregate of the total number of meetings of the Board of
Directors and the total number of meetings held by all
committees of the Board on which he served.
The Board of Directors maintains an Executive Committee, an
Audit Committee and a Compensation Committee. The Executive
Committee may exercise all the powers and authority of the Board
of Directors in the management of the business and affairs of
the Company, except as such authority may be limited by the
provisions of the Illinois Business Corporation Act. The
present members of the Executive Committee are Messrs. Raymond
F. Gross, Kipling, and Perelman. The Audit Committee discusses
matters of concern to the independent auditor resulting from the
audit; reviews changes in accounting principles in the financial
statements; and reviews non-auditing services performed for the
Company by the independent auditor. The present members of the
Audit Committee are Messrs. Raymond F. Gross, Hopmayer and Katz.
The Compensation Committee makes recommendations concerning
compensation of executive officers. The present members of the
Compensation Committee are Messrs. Kipling and Perelman. During
the fiscal year ended January 1, 1995, the Executive Committee
acted twice by written consent, the Audit Committee held 6
meetings and the Compensation Committee did not meet.
The Company does not have a Nominating Committee. This function
is performed by the Board of Directors. The Company's bylaws
establish procedures, including advance notice procedures, with
regard to the nomination, other than by or at the direction of
the Board of Directors, of persons for election as directors.
In general, notice must be delivered to the Company at its
principal executive offices not less than 60 days nor more than
90 days prior to the first anniversary of the preceding year's
annual meeting. Such notice must set forth all information with
respect to each such nominee required by the federal securities
laws (including such nominee's written consent to being named in
the proxy statement as a nominee and to serving as a director if
elected).
The Company has an indemnification agreement with each director
of the Company that provides that the Company shall indemnify
the director against certain claims that may be asserted against
him by reason of serving on the Board of Directors.
The Company and Raymond F. Gross, a director of the Company, are
parties to an agreement providing for his engagement as a
consultant to the Company for a period ending December 31, 1995.
The agreement provides for annual compensation of $10,000
through December 31, 1995 plus certain insurance and other
benefits. Mr. Gross received $5,000 in directors' fees in 1994.
Messrs. Hopmayer and Kipling serve as directors pursuant to a
Stock Purchase Agreement dated March 18, 1987 between the
Company and Echlin Inc. Under that Agreement, the Company agreed
to nominate not fewer than two persons designated by Echlin Inc.
for director, provided that if Echlin Inc. disposes of Common
Shares of the Company, the Company and Echlin Inc. shall modify
the number of persons designated by Echlin Inc. to be nominated
by the Company. See "Ownership of Voting Securities" below for
additional information concerning Echlin Inc. and transactions
between the Company and Echlin Inc.
Messrs. Calvin A. Campbell, Jr., John Gross, Raymond Gross, Gary
Hopmayer and Edward Kipling served on a Special Committee of the
Board which was formed in January 1995 to, among other things,
evaluate an offer by Mr. Perelman to infuse equity into the
Company. For their services, they received $500 compensation
for each meeting of the Special Committee. There were eight
meetings held through April 17, 1995. In addition, Mr. Campbell
received $5,000 to serve as Chairman of the Committee.
Mr. Katz serves as a director at the request of Mr. Perelman
and pursuant to an agreement between Mr. Perelman, RGP Holdings,
Inc. and the Company. See "Ownership of Voting Securities" below
for additional information concerning this agreement.
Executive Compensation
The following table sets forth information with respect to all
cash compensation paid to the Company's chief executive officer
at the end of the Company's 1994 fiscal year, and the two other
executive officers of the Company, whose annual compensation in
the Company's 1994 fiscal year exceeded $100,000 for services
rendered in all capacities to the Company, during the fiscal
years indicated.
<TABLE>
Long Term Compensation
------------------------------
Annual Compensation Awards Payouts
- ----------------------------------------------------------- ---------------------- ------- ----------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
<CAPTION>
Other
Annual Restricted Securities All Other
Compen- Stock Underlying LTIP Compen-
Name and Principal Year Salary Bonus sation Award(s) Options Payouts sation
Position ($) ($) ($)<F1> ($) (#) ($) ($)<F2>
- --------------------- ---- -------- ------- --------- ---------- ----------- ------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Donald G. Santucci 1994 $133,000 0 --- 0 0 0 $300
Resigned Officer (3) 1993 $115,000 $70,000 --- 0 0 0 0
<F3> 1992 NA NA NA NA NA NA NA
Thomas W. Blashill 1994 $128,173 0 --- 0 0 0 $3,000
President (4) 1993 $108,321 $50,000 --- 0 0 0 0
<F4> 1992 NA NA NA NA NA NA NA
Roger L. Wilson 1994 $105,000 $10,500 --- 0 0 0 0
Resigned Officer (5) 1993 $ 22,430 0 --- 0 0 0 0
<F5> 1992 NA NA NA NA NA NA NA
<FN>
<F1> (1) The amounts for Messrs. Santucci, Blashill and Wilson are
below threshold reporting requirements.
<F2> (2) The amounts reported are allocations under the Company's
Employee Stock Ownership Plan.
<F3> (3) Mr. Santucci resigned as President of the Company in July
1995.
<F4> (4) Mr. Blashill was elected President and Chief Executive
Officer of the Company in August 1995.
<F5> (5) Mr. Wilson resigned as Vice President Sales and Marketing
of the Company in July 1995.
</FN>
</TABLE>
Mr. Blashill has a severance compensation agreement with the
Company that provides for severance pay equal to six months
salary following the termination of his employment by the
Company.
The by-laws of the Company provide that officers shall be
elected annually by the Board of Directors at its first meeting
after each annual meeting of shareholders, to hold office until
their successors have been elected and have qualified.
The Company also has an indemnification agreement with each
officer of the Company that provides that the Company shall
indemnify the officer against certain claims which may be
asserted against him by reason of serving as an officer of the
Company.
Options Outstanding
As of January 1, 1995, the Company had options to purchase 4,500
Common Shares outstanding under its qualified and non-qualified
option plans.
During the fiscal year ended January 1, 1995, the Company did
not grant any stock options.
On August 22, 1995 (the "Grant Date"), the Company granted Mr.
Blashill an option to purchase 25,000 Common Shares at a price
of $1.00 per share. The option may be exercised immediately and
will expire in five years from the Grant Date, subject to
earlier termination of his employment.
Compensation Committee Interlocks and Insider Participation
On December 9, 1993, the Board elected Messrs. Perelman, Kipling
and Campbell as members of the Compensation Committee. During 1995,
Mr. Campbell resigned from the Bpard of Directors. None of
these members was an officer or employee of the Company, a
former officer of the Company, or a party to any relationship
requiring disclosure under item 404 of SEC Regulation S-K during
1994, except for Mr. Perelman, who served as President and CEO
of the Company from December 16, 1992 to January 19, 1993 and is
presently Chairman of the Board.
On March 23, 1995, the Company entered into a Preferred Stock
Purchase Agreement (the "Agreement") with RGP Holding, Inc.
("RGP"), an affiliate of Mr. Raymond G. Perelman, a director,
the Chairman of the Board of Directors and the beneficial owner
of 18.1% of the outstanding Common Shares of the Company.
Pursuant to the Agreement RGP agreed, subject to the terms and
conditions of the agreement, to purchase 1,666,667 shares of
the Company's newly authorized Series A Redeemable Cumulative
Convertible Voting 9% Preferred Shares (the "Preferred Shares"),
subject to the terms and conditions of the agreement, at a
purchase price of $3.00 per share, or an aggregate purchase
price of $5,000,001.On April 17, 1995 RGP notified the Company
that it had determined not to consummate the purchase. RGP
stated that the Company failed to satisfy certain conditions for
closing. The Company notified RGP that it was reserving its
rights.
Board of Directors Report on Compensation
The purpose of the Company's executive compensation is to enable
the Company to attract, retain and motivate qualified executives
to ensure the long-term success of the Company and its business
strategies. In 1994, the Company retained a compensation
consultant to review and make recommendations relating to the
compensation of the Company's executive officers. This review
led to revisions to executive compensation for 1994.
Executive compensation has generally consisted of two principal
components, base salary and bonus. In March 1993, the Board of
Directors appointed Mr. Santucci as President and Chief
Executive Officer of the Company and Mr. Blashill as Executive
Vice President. Mr. Santucci's base salary was fixed at
$130,000 per year and Mr. Blashill's base salary was fixed at
$125,000 per year. Company performance was not the principal
consideration when the base salaries of the Company's executive
officers were established. In June 1994, the Board of Directors
increased the base salaries of Messrs. Santucci and Blashill for
the Company's current fiscal year by five percent.
For the fiscal year ended January 1, 1995, Messrs. Santucci and
Blashill were eligible to receive an annual bonus based on the
Company's performance, with a maximum bonus of $70,000 and
$50,000, respectively, if the Company met or exceeded 100% of
its business plan, and no bonus if the Company achieved less
than 50% of its business plan. For achievement of between 50%
and 100% of the Company's business plan, the cash bonus was to
be the maximum cash bonus multiplied by the percentage achieved.
Messrs. Santucci and Blashill received no bonus for the 1994
fiscal year.
On August 22, 1995 (the "Grant Date"), the Company granted Mr.
Blashill an option to purchase 25,000 Common Shares at a price
of $1.00 per share. The option may be exercised immediately and
will expire in five years from the Grant Date, subject to
earlier termination of his employment.
In 1994, the Company's Board of Directors adopted a 1994 Stock
Option Plan subject to shareholder ratification. The 1994 Stock
Option Plan was canceled in August 1995 and no options were
granted.
In August 1995, the Company's Board of Directors adopted a 1995
Stock Option Plan. This plan is subject to shareholder
ratification. Participants in the plan shall be those employees
selected by a Committee of the Board of Directors. Options shall
be granted at a price determined by the Compensation Committee,
which shall not be less than 100% of the fair market value of
the Company's Common Stock at the date of grant. No option may
be exercised until six months after the grant date or after 10
years after the grant date. The options vest ratably over a
period not to exceed five years. See "Proposal to Approve and
Adopt the Champion Parts, Inc. 1995 Stock option Plan" for more
information.
The salary and bonus paid by the Company to the Chief Executive
Officer and the other two executive officers of the Company for
the fiscal year ended January 1, 1995 is set forth in the tables
preceding this Report. The Board of Directors believes that the
executive officers of the Company are dedicated to increasing
profitability and shareholder value and that the compensation
paid to the executive officers of the Company contributes to
this focus.
Thomas W. Blashill Gary S. Hopmayer Raymond G. Perelman
John R. Gross Barry L. Katz
Raymond F. Gross Edward R. Kipling
The foregoing Board of Directors Report on Compensation shall
not be deemed to be incorporated by reference into any filing of
the Company under the Securities Act of 1933 or the Securities
Exchange Act of 1934, except to the extent that the Company
specifically incorporates such information by reference.
<PAGE>
Proposal to Approve and Adopt the Champion Parts, Inc. 1995
Stock Option Plan
This proposal is to approve and adopt the Champion Parts, Inc.
1995 Stock Option Plan (the "Plan").
Background
On August 22, 1995, the Board of Directors approved the Plan and
recommended that the Plan be submitted to the Company's
shareholders for their approval and adoption. The following
summary of the Plan is qualified in all respects by reference to
the provisions of the Plan, a copy of which is attached hereto
as Exhibit A.
Purpose of the Plan
The purpose of the Plan is to provide an incentive for employees
of the Company and its subsidiaries to exert their best efforts
on behalf of the Company and its shareholders by providing such
persons opportunities to acquire Common Shares, and to attract
and retain the best available executive personnel and other
employees to be responsible for the management, growth and
success of the Company.
Description of the Plan
Eligibility. Participants in the Plan are those employees
selected to participate in the Plan whose participation in the
Plan is determined to be in the best interests of the Company or
a subsidiary.
Administration of the Plan. The Plan shall be administered by
the Compensation Committee of the Board or such other committee
of the Board as it may designate to administer the Plan, which
shall consist of two or more members of the Board and who shall
not be eligible to participate in the Plan (the "Committee").
The members of the Committee shall be appointed by and shall
serve at the pleasure of the Board, which may from time to time
change the Committee's membership.
The Committee shall have the sole and complete authority to
determine the individuals to whom options to purchase Common
Shares ("Options") are granted, the number of Common Shares
covered by an Option, and the date an Option is granted;
determine the terms, conditions and provisions of, and
restrictions relating to, each Option granted; interpret and
construe the Plan and all option agreements; and prescribe,
amend and rescind rules and regulations relating to the Plan.
Description of Options. Options granted pursuant to the Plan
are incentive stock options within the meaning of Section 422 of
the Internal Revenue Code of 1986 (the "Code"). Subject to
certain adjustments to prevent dilution, the number of Common
Shares for which Options may be granted under the Plan may not
exceed 100,000 Common Shares, which may be newly issued or
treasury shares.
Options may be granted to participants at such time or times as
shall be determined by the Committee except that no Option may
be granted more than 10 years after the adoption of the Plan by
the Board. Each Option shall be evidenced by an agreement that
shall specify the exercise price, the duration of the Option,
the number of Common Shares to which the Option applies, and
such other terms and conditions not inconsistent with the Plan
as the Committee shall determine.
The Committee shall determine the per share option price, which
shall be not less than 100% of the fair market value on the date
the Option is granted (the "Grant Date") (110% in the case of a
grant of an Option to a participant who, on the Grant Date, owns
stock possessing more than 10% of the total combined voting
power of all classes of stock of the Company or any subsidiary
or parent of the Company). The fair market value of a Common
Share shall be determined in such manner as the committee may
deem equitable or as required by applicable laws or regulations.
On September 20, 1995, the last sale price of the Common Shares
as reported by the NASDAQ Stock Market was $1.00 per share.
Options awarded under the Plan shall be exercisable at such
times and shall be subject to such restrictions and conditions,
including the performance of a minimum period of service after
the grant, as the Committee may impose, which need not be
uniform for all participants; provided, however, that no Option
shall be exercisable for more than 10 years after the Grant Date
(5 years in the case of an Option to a participant who, on the
Grant Date, owns stock possessing more than 10% of the total
combined voting power of all classes of stock of the Company or
any subsidiary or parent of the Company); no Option shall be
exercisable until six months after the Grant Date; and each
Option will vest ratably over a period determined by the
Committee which shall not exceed five years.
A participant may exercise an Option by delivering a notice of
exercise to the Company or its representative as designated by
the Committee that indicates the number of Common Shares covered
by the exercise. A participant granted an Option may exercise
the Option from time to time, in whole or in part, up to the
total number of Common Shares with respect to which the Option
is then exercisable, except that no fraction of a Common Share
may be purchased upon the exercise of any Option.
The Committee shall determine the procedures governing the
exercise of Options, and shall require that the per share option
price be paid in full at the time of exercise. The Committee
may, in its discretion, permit a participant to make payment in
cash, or in Common Shares already owned by the participant,
valued at the fair market value thereof, as partial or full
payment of the exercise price. The Committee may, in its
discretion, permit payment of the option price by delivery of a
properly executed exercise notice together with a copy of
irrevocable instructions to a broker to deliver promptly to the
Company the amount of sale or loan proceeds to pay the price.
The aggregate fair market value of the stock covered by Options
granted under the Plan or any other incentive stock options
under any other stock option plan of the Company or any
subsidiary or parent of the Company that become exercisable for
the first time by any employee in any calendar year shall not
exceed $100,000.
Any Option granted to a participant shall not be transferable
other than by will or the laws of descent and distribution and
shall be exercisable during the participant's lifetime only by
him.
Amendment, Modification and Termination of the Plan. The Board
at any time may terminate or suspend the Plan, and from time to
time may amend or modify the Plan. No amendment, modification,
or termination of the Plan shall in any manner adversely affect
an Option theretofore granted under the Plan without the consent
of the participant. Such amendments or modifications may
increase the cost of the Plan to the Company or alter the
allocation of benefits under the Plan with respect to the
participants therein.
Termination of Employment. Except as otherwise determined by
the Committee at the time of grant, in the event a participant's
employment with the Company and all subsidiaries terminates by
reason of death, disability or retirement after age 65, any
Option granted to such participant which is then outstanding may
be exercised at any time prior to the expiration of the term of
the Option or within three years following the participant's
termination of employment with the Company and all subsidiaries,
whichever period is shorter.
Except as otherwise determined by the Committee at the time of
grant, in the event the employment of the participant with the
Company is terminated by the Company or a subsidiary for cause
or in the event the participant resigns without good reason (as
defined in the Plan), any Option granted to such participant
which is then outstanding shall cease to be exercisable on the
date of the participant's termination of employment.
Except as otherwise determined by the Committee at the time of
grant, in the event the employment of the participant with the
Company and all subsidiaries shall terminate for any reason
other than one described above, any Option granted to such
participant which is then outstanding may be exercised by the
participant at any time prior to the expiration date of the term
of the Option or within three months following the participant's
termination of employment with the Company and all subsidiaries,
whichever period is shorter.
In the event the employment of the participant with the Company
and all subsidiaries shall terminate for any reason, the
participant shall have the right to exercise an Option only to
the extent the participant's right to exercise such Option had
accrued at the date of termination of employment pursuant to the
terms of the applicable option agreement and had not previously
been exercised.
Plan Awards
There are not currently any specific plans for awards under the
Plan. However, it is anticipated that Options will be granted
pursuant to the Plan during 1995. The actual number and
identity of persons to be granted Options has not yet been
determined.
Federal Tax Treatment
The Plan is not a qualified pension, profit-sharing or stock
bonus plan under Section 401(a) of the Code. The Plan is not
subject to any provisions of the Employee Retirement Income
Security Act of 1974.
A participant will generally have no taxable income upon either
the grant or exercise of an Option. If the participant does not
dispose of Common Shares acquired pursuant to the exercise of an
Option within two years of the grant or one year of the
exercise, any gain or loss realized in his subsequent
disposition will be capital gain or loss. If such holding
period requirements are not satisfied, the participant will
generally realize ordinary income at the time of disposition in
an amount equal to the excess of the fair market value of the
Common Shares on the date of exercise (or if less, the amount
realized upon disposition) over the option price. Any remaining
gain is taxed as long-term or short-term capital gain.
Vote Required
If approved by the shareholders, the Plan would become effective
immediately.
Adoption of the Plan requires the affirmative vote of the
holders of a majority of the Common Shares represented in person
or by proxy at the Annual Meeting.
The Company's Board recommends a vote FOR the approval and
adoption of the Plan as described above. Proxies solicited by
the Company's Board will be voted in favor of the approval and
adoption of the Plan unless stockholders specify to the contrary
in their proxies.
Ownership of Voting Securities
The following tabulation shows, as of September 22, 1995, (a)
the name, address and Common Share ownership for each person
known by the Company to be the beneficial owner of more than
five percent of the Company's outstanding Common Shares (the
only class of voting securities outstanding), (b) the Common
Share ownership of each director and nominee for director, (c)
the Common Share ownership of each executive officer named in
the Compensation Table, and (d) the Common Share ownership of
all directors and executive officers as a group.
Number of Common Shares Percent of Common
Beneficial Owner Beneficially Owned (1) Shares Outstanding
- ------------------------------- --------------------------- ------------------
RGP Holding, Inc.
225 City Line Avenue
Bala Cynwyd, Pennsylvania 19004 661,600 (2) 18.1% (2)
Echlin Inc.
100 Double Beach Road
Branford, Connecticut 06405 600,000 (3) 16.4% (3)
Dimensional Fund Advisors, Inc.
1299 Ocean Avenue, 11th Floor
Santa Monica, California 90401 197,700 (4) 5.4% (4)
Champion Parts, Inc.
Employee Stock Ownership Plan
c/o Champion Parts, Inc.
2525 22nd Street
Oak Brook, Illinois 60521 154,540 (5) 4.2% (5)
John R. Gross Director (8) 118,212 3.2%
Raymond F. Gross, Director (8) 31,164 *
Gary S. Hopmayer, Director (3) --- ---
Barry L. Katz, Director (2) 7,500 *
Edward R. Kipling, Director (3) 2,000 *
Raymond G. Perelman,
Director, Chairman of the Board 661,600 (2) 18.1% (2)
Thomas W. Blashill,
Director, President and Chief
Executive Officer 5,143 (6) *
Richard Hebert Treasurer 3,011 (6) *
Mark Smetana
Vice President - Finance and
Secretary 2,312 (6) *
All directors and executive
officers as a group (9 persons) (7) 830,942 22.7%
_____________
* Not greater than 1%.
(1) Information with respect to beneficial ownership is based on
information furnished to the Company or contained in filings
made with the Securities and Exchange Commission.
(2) RGP Holding, Inc. is indirectly controlled by Mr. Perelman.
Pursuant to an agreement between the Company, Mr. Raymond G.
Perelman and RGP Holding, Inc. dated September 20, 1993, as
amended, Mr. Perelman and RGP granted to the proxy holders
appointed by the Board of Directors of the Company the proxy to
vote all shares beneficially owned by them, including shares
held by any affiliates (the "Perelman Shares"), for the election
of the nominees named herein. Mr. Perelman and RGP have also
agreed, among other things, not to solicit proxies in opposition
to such nominees. The Company and the Board have agreed that if
shareholders of the Company vote shares in person or by proxy
for nominees other than such nominees, the proxy holders
appointed by the Company will cumulate their votes in such
manner as to attempt to elect Mr. Katz prior to the election of
Mr. Blashill. However, under the Company's bylaws, as described
above, no additional persons may be nominated. The agreement
will be amended to provide that Mr. Perelman and RGP Holdings
may elect to terminate the agreement if the 1995 Annual Meeting
of Shareholders is held after November 21, 1995 and the by-laws
of the Company are not amended to reduce the size of the Board
of Directors to seven members.
(3) All shares owned by Echlin Inc. ("Echlin") are subject to a
Stock Purchase Agreement dated March 18, 1987 between the
Company and Echlin. Under the Stock Purchase Agreement, Echlin
may vote its shares in its discretion. At the time the Company
entered into the Stock Purchase Agreement, the Company entered
into a Supply Agreement with Echlin whereby the Company agreed
to purchase certain automotive parts manufactured by Echlin as
required by the Company, provided that Echlin is able to meet
the Company's delivery requirements and competitive prices.
During the fiscal year ended January 1, 1995, the Company
purchased approximately $2.6 million of components used in the
remanufacture of automotive parts from Echlin. On March 9,
1992, Echlin notified the Company that it was exercising its
limited market protection rights under the Stock Purchase
Agreement. Accordingly, the Company issued a $2,400,000
promissory note to Echlin which was paid to Echlin in quarterly
installments of $200,000. The note carries an interest rate of
1% above prime. In April 1995, the Company defaulted on the
final installment of the note. It subsequently paid $100,000 and
$100,000 remains outstanding.
Messrs. Hopmayer and Kipling serve as directors pursuant to the
Stock Purchase Agreement.
(4) Dimensional Fund Advisors Inc. ("Dimensional"), a registered
advisor, is deemed to have beneficial ownership of 197,700
shares of Champion Parts, Inc. stock as of September 22, 1995,
all of which shares are held in portfolios of DFA Investment
Dimensions Group Inc., a registered open-end investment company,
or in series of the DFA Investment Trust Company, a Delaware
business trust, or the DFA Group Trust and DFA Participation
Group Trust, investment vehicles for qualified employee benefit
plans, all of which Dimensional Fund Advisors Inc. serves as
investment manager. Dimensional disclaims beneficial ownership
of all such shares.
(5) Shares held by this plan are voted by Messrs. Blashill and
Smetana, as trustees. Employees participating in the Stock
Ownership Plan are entitled to direct the trustees as to the
voting of shares allocated to their accounts. Unallocated Stock
Ownership Plan shares will be voted in the same manner,
proportionately, as the allocated Stock Ownership Plan shares
for which voting instructions are received from employees. For
more information concerning the ownership and voting of shares
held by the Stock Ownership Plan and the trustees, see note (7)
below.
(6) Includes 2,143, 3,011 and 812 shares allocated to Messrs.
Blashill's, Hebert's and Smetana's accounts, respectively, under
the Employee Stock Ownership Plan.
(7) Includes a total of 5,966 shares allocated to the accounts
of executive officers under the Employee Stock Ownership Plan
(the "Stock Ownership Plan"). Does not include 148,574 shares
allocated to the accounts of employees other than executive
officers. Each of the participants in the Stock Ownership Plan
(approximately 120 employees) is entitled to direct the trustees
as to the voting of shares allocated to his or her account.
(8) As of May 31, 1995 Elizabeth Gross, her children and members
of their immediate families beneficially owned 209,794 Common
Shares, or approximately 5.7% of the Common Shares outstanding.
John R. Gross and Raymond F. Gross, children of Elizabeth Gross,
are directors of the Company.
Company Performance
The following graph shows a five year comparison of cumulative
total returns for the Company, the Dow Jones Industrial Average
and the Dow Jones Automobile Parts and Equipment index. The
comparison shows the value of the indices as of the end of each
year from December 31, 1989 through January 1, 1995. The total
cumulative return on investment (change in the year end stock
price plus reinvested dividends) for each of the periods for the
Company, the Dow Jones Industrial Average and the Dow Jones
Automobile Parts and Equipment index is based on the stock price
or composite index at the end of fiscal 1989.Assumes the value
of investment in Champion Parts, Inc. stock and each index was
$100 on December 31, 1989, and that all dividends were
reinvested.
1989 1990 1991 1992 1993 1994
---- ---- ---- ---- ---- ----
Champion Parts, Inc. $100 $61 $83 $81 $92 $69
Dow Jones Auto Index $100 $87 $108 $138 $181 $159
Dow Jones Ind. Avg. $100 $99 $125 $133 $155 $163
The foregoing table shall not be deemed to be incorporated by
reference into any filing of the Company under the Securities
Act of 1933 or the Securities Exchange Act of 1934, except to
the extent that the Company specifically incorporates such
information by reference.
Independent Public Accountants
Arthur Andersen LLP served as the Company's independent public
accountant for the fiscal year ending January 1, 1995. The
Board of Directors is considering its options for the current
fiscal year, including engaging another independent public
accountant. The Company expects that a representative of Arthur
Andersen LLP will be present at the annual meeting, with the
opportunity to make a statement if he should desire to do so,
and will be available to respond to questions.
Arthur Andersen LLP issued an unqualified opinion with an
explanatory paragraph related to a going concern on the
Company's financial statements for the fiscal year ended January
1, 1995. The Company has had no disagreements with Arthur
Andersen LLP on any matters of accounting principles or
practices, financial statement disclosures, or auditing scope or
procedures.
On October 28, 1993 the Company's Executive Committee, on the
recommendation of the Audit Committee, dismissed Deloitte &
Touche as the Company's independent public accounting firm.
Deloitte & Touche issued unqualified reports on the Company's
financial statements for the fiscal years ended December 29,
1991 and January 3, 1993. The Company did not have any
disagreements with Deloitte & Touche on any matters of
accounting principles or practices, financial statement
disclosures, or audit scope or procedures.
On October 28, 1993 the Company's Executive Committee, on the
recommendation of the Audit Committee, appointed Arthur Andersen
LLP as the Company's independent public accountants for 1993.
Prior to such appointment, the Company had not engaged Arthur
Andersen LLP to provide consulting on the application of
accounting principles to a specified transaction(s), for an
audit opinion, or for written or oral advice that could be
considered an important factor in the Company reaching a
decision as to an accounting, auditing or financial reporting
issue.
Shareholder Proposals
Shareholders who desire to submit proposals for inclusion in the
proxy statement of the Board of Directors to be utilized in
connection with the 1996 Annual Meeting of Shareholders must
submit such proposals to the Secretary of the Company no later
than June 1, 1996.
General
The cost of soliciting proxies will be borne by the Company. In
addition to the use of the mails, proxies may be solicited by
personal interview, telephone, telecopy, telex and telegraph,
and by directors, officers and regular employees of the Company
without special compensation therefor. The Company will arrange
for the forwarding of proxy material to the beneficial owners of
Common Shares held of record on the record date by banks,
brokers, dealers and other nominees whose reasonable expenses in
handling proxy material with beneficial owners will be
reimbursed by the Company. The Company has engaged Georgeson &
Co. Inc. for a fee expected to be $6,000 plus out-of-pocket
expenses to assist in the solicitation.
Management knows of no other business other than that set forth
above to be transacted at the meeting, but if other matters
requiring a vote of the shareholders arise, the persons
designated as proxies will vote the shares represented by the
proxies in accordance with their judgment on such matters.
By Order of the Board of Directors,
MARK SMETANA
Secretary
DATED: Chicago, Illinois
September 29, 1995
EXHIBIT A
CHAMPION PARTS, INC.
1995 STOCK OPTION PLAN
SECTION 1 OBJECTIVE
The objective of this Champion Parts, Inc. 1995 Stock Option
Plan (the "Plan") is to provide an incentive for employees of
the Company and its Subsidiaries to exert their best efforts on
behalf of the Company and its shareholders by providing such
persons opportunities to acquire common shares of the Company,
and to attract and retain the best available executive personnel
and other employees to be responsible for the management, growth
and success of the Company.
SECTION 2 DEFINITIONS
2.1 General Definitions. The following words and phrases, when
used herein, shall have the following meanings:
(a) "Act" - The Securities Exchange Act of 1934, as amended.
(b) "Agreement" - The agreement issued pursuant to Section
hereof which evidences the grant of an Option under the Plan and
which sets forth the terms, conditions, and limitations relating
to such Option.
(c) "Board" - The Board of Directors of the Company.
(d) "Code" - The Internal Revenue Code of 1986, as amended,
and including the regulations promulgated pursuant thereto.
(e) "Committee" - The Compensation Committee of the Board or
such other committee of the Board as the Board may designate to
administer this Plan. All members of the Committee shall be
disinterested persons within the meaning of Rule 16b-3 under the
Act, as the same may be amended or supplemented from time to
time, as promulgated under the Act. No member of the Committee
shall be eligible to receive Options under the Plan unless
permitted by such Rule 16b-3.
(f) "Common Stock" - The present Common Shares, $.10 par
value, of the Company, and any shares into which such shares are
converted, changed or reclassified.
(g) "Company" - Champion Parts, Inc., an Illinois corporation.
(h) "Employee" - Any person employed as an employee by the
Company or any Subsidiary.
(i) "Fair Market Value" - The fair market value of Common
Stock as determined in such manner as the Committee may deem
equitable or required by applicable laws or regulations.
(j) "Option" - The right to purchase Common Stock at a stated
price for a specified period of time. Any Option granted
hereunder shall be an incentive stock option under Code section
422.
(k) "Participant" - Any Employee designated by the Committee
to participate in the Plan. The Committee's designation of a
Participant in any year shall not require the Committee to
designate such person to receive an Option in any other year.
The Committee shall consider such factors as it deems pertinent
in selecting Participants, including without limitation (i) the
financial condition of the Company; (ii) anticipated profits for
the current or future years; (iii) contributions of Participants
to the profitability and development of the Company; and (iv)
other compensation provided to Participants.
(l) "Plan" - This Champion Parts, Inc. 1994 Stock Option Plan,
as amended from time to time.
(m) "Shares" - Shares of Common Stock.
(n) "Subsidiary" - Any corporation (other than the Company) in
an unbroken chain of corporations beginning with the Company if,
at the time of the granting of such Option, each of the
corporations other than the last corporation in the chain owns
stock having 50% or more of the combined voting power of all
classes of stock in one of the other corporations in such chain.
2.2 Other Definitions. In addition to the above definitions,
certain words and phrases used in the Plan and any Agreement may
be defined elsewhere in the Plan or in such Agreement.
SECTION 3 COMMON STOCK
3.1 Number of Shares. Subject to the provisions of Section 3.3
hereof, the number of Shares for which Options may be granted
under the Plan may not exceed 150,000 Shares, which may be newly
issued or treasury shares.
3.2 Re-usage. If an Option expires or is terminated,
surrendered, or canceled without having been fully exercised,
the Shares covered by such Option shall again be immediately
available for Options under the Plan.
3.3 Adjustments. In the event of any change in the outstanding
Common Stock by reason of a stock split, stock dividend,
combination, reclassification or exchange of Shares,
recapitalization, merger, consolidation or other similar event,
the number of Shares available for Options, the minimum exercise
price under subsection 6.3(b) hereof, the number of Shares
subject to outstanding Options and the price thereof, and the
Fair Market Value, as applicable, shall be appropriately
adjusted by the Committee in its sole discretion and any such
adjustment shall be binding and conclusive on all parties. Any
fractional Shares resulting from any such adjustment shall be
disregarded.
SECTION 4 ELIGIBILITY AND PARTICIPATION
Participants in the Plan shall be those employees selected by
the Committee to participate in the Plan whose participation in
the Plan the Committee determines to be in the best interests of
the Company or a Subsidiary.
SECTION 5 ADMINISTRATION
5.1 Committee. The Plan shall be administered by the
Committee, which shall consist of two or more members of the
Board and who shall not be eligible to participate in the Plan.
The members of the Committee shall be appointed by and shall
serve at the pleasure of the Board, which may from time to time
change the Committee's membership.
5.2 Authority. The Committee shall have the sole and complete
authority to:
(a) determine the individuals to whom Options are granted, the
number of Shares covered by an Option, and the date an Option is
granted;
(b) determine the terms, conditions and provisions of, and
restrictions relating to, each Option granted;
(c) interpret and construe the Plan and all Agreements,
including, but not limited to, the effect of approved leaves of
absence which, shall be consistent with requirements relating to
incentive options under Code section 422;
(d) correct any defect or supply any omission or reconcile any
inconsistency in this Plan or any Agreement;
(e) prescribe, amend and rescind rules and regulations
relating to the Plan;
(f) determine the content and form of all Agreements;
(g) determine all questions relating to Options under the Plan;
(h) maintain accounts, records and ledgers relating to Options;
(i) maintain records concerning its decisions and proceedings;
(j) employ agents, attorneys, accountants or other persons for
such purposes as the Committee considers necessary or desirable;
and
(k) do and perform all acts which it may deem necessary or
appropriate for the administration of the Plan and to carry out
the objectives of the Plan.
5.3 Determinations. All determinations, interpretations, and
other actions made or taken by the Committee pursuant to the
provisions of the Plan shall be final, binding, and conclusive
on all persons.
5.4 Delegation. Except as required by Rule 16b-3 promulgated
under the Act (and any successor to such rule) with respect to
the grant of Options to Participants who are subject to Section
16 of the Act, the Committee may delegate to appropriate senior
officers of the Company its duties under the Plan pursuant to
such conditions and limitations as the Committee may establish.
SECTION 6 OPTIONS
6.1 Grant of Option. Options may be granted to Participants at
such time or times as shall be determined by the Committee
except that no Option may be granted more than 10 years after
the adoption of this Plan by the Board.
6.2 Option Agreement.
(a) Each Option shall be evidenced by an Agreement that shall
specify the exercise price, the duration of the Option, the
number of Shares to which the Option applies, and such other
terms and conditions not inconsistent with the Plan as the
Committee shall determine.
(b) As a condition to issuance of Shares upon exercise of an
Option, an Agreement may require the Participant (or his
representative) to give satisfactory assurance, upon exercise of
the Option, that:
1. the Shares to be delivered are being acquired for
Participant's own account for investment and not with a view to,
or for sale in connection with, any distribution of the Shares
so purchased; or
2. in the case of acquisition by an estate, that the shares
are not being acquired for resale in a transaction which, in the
opinion of counsel for the Company, would violate any Federal or
State law.
(c) Appropriate officers of the Company are hereby authorized
to execute (by facsimile or manually affixed signature) and
deliver Agreements, and amendments thereto, in the name of the
Company as directed from time to time by the Committee.
6.3 Option Price. The Committee shall determine the per share
option price, which shall be not less than 100% of the Fair
Market Value on the date the Option is granted (the "Grant
Date") (110% in the case of a grant of a Option to a Participant
who, on the Grant Date, owns stock possessing more than 10% of
the total combined voting power of all classes of stock of the
Company or any Subsidiary or parent of the Company). In the
Committee's discretion, the Grant Date of an Option may be
established as the date on which Committee action approving the
Option is taken or any later date specified by the Committee.
6.4 Exercise of Options.
(a) Options awarded under the Plan shall be exercisable at such
times and shall be subject to such restrictions and conditions,
including the performance of a minimum period of service after
the grant, as the Committee may impose, which need not be
uniform for all participants; provided, however, that:
1. no Option shall be exercisable for more than 10 years after
the Grant Date (5 years in the case of a Option to a Participant
who, on the Grant Date, owns stock possessing more than 10% of
the total combined voting power of all classes of stock of the
Company or any Subsidiary or parent of the Company);
2. no Option shall be exercisable until six months after the
Grant Date; and
3. each Option will vest ratably over a period determined by
the Committee which shall not exceed five years.
(b) A Participant may exercise an Option by delivering a notice
of exercise to the Company or its representative as designated
by the Committee that indicates the number of Shares covered by
the exercise. The notice of exercise, once delivered, shall be
irrevocable. A Participant granted an Option may exercise the
Option from time to time, in whole or in part, up to the total
number of Shares with respect to which the Option is then
exercisable, except that no fraction of a Share may be purchased
upon the exercise of any Option.
(c) The Committee shall determine the procedures governing the
exercise of Options, and shall require that the per share option
price be paid in full at the time of exercise. The Committee
may, in its discretion, permit a Participant to make payment in
cash, or in Shares already owned by the Participant, valued at
the Fair Market Value thereof, as partial or full payment of the
exercise price. The Committee may, in its discretion, permit
payment of the option price by delivery of a properly executed
exercise notice together with a copy of irrevocable instructions
to a broker to deliver promptly to the Company the amount of
sale or loan proceeds to pay the price. To facilitate the
foregoing, the Company may enter into agreements for coordinated
procedures with one or more brokerage firms. As soon as
practical after full payment of the exercise price, the Company
shall deliver to the Participant a certificate or certificates
representing the acquired Shares.
6.5 Limits on Options. The aggregate Fair Market Value of the
stock covered by Options granted under this Plan or any other
incentive stock options under any other stock option plan of the
Company or any Subsidiary or parent of the Company that become
exercisable for the first time by any employee in any calendar
year shall not exceed $100,000. The aggregate fair market value
will be determined at the Grant Date.
6.6 Rights as a Shareholder. Until the exercise of an Option
and the issuance of the Shares in respect thereof, a Participant
shall have no rights as a Shareholder with respect to the Shares
covered by such Option.
SECTION 7 AMENDMENT, MODIFICATION, AND TERMINATION OF PLAN
The Board at any time may terminate or suspend the Plan, and
from time to time may amend or modify the Plan. No amendment,
modification, or termination of the Plan shall in any manner
adversely affect an Option theretofore granted under the Plan
without the consent of the Participant.
SECTION 8 TERMINATION OF EMPLOYMENT
8.1 Termination of Employment Due to Retirement. Except as
otherwise determined by the Committee at the time of grant, in
the event a Participant's employment with the Company and all
Subsidiaries terminates by reason of retirement after age 65,
any Option granted to such Participant which is then outstanding
may be exercised at any time prior to the expiration of the term
of the Option or within three years following the Participant's
termination of employment with the Company and all Subsidiaries,
whichever period is shorter.
8.2 Termination of Employment Due to Death or Disability.
Except as otherwise determined by the Committee at the time of
grant, in the event a Participant's employment with the Company
and all Subsidiaries is terminated by reason of death or
disability, any Option granted to such Participant which is then
outstanding may be exercised by the Participant (or the
Participant's legal representative or beneficiary, if
applicable) at any time prior to the expiration date of the term
of the Option or within three years following the Participant's
termination of employment with the Company and all Subsidiaries,
whichever period is shorter.
8.3 Termination by Company for Cause or Resignation by
Participant Without Good Reason. Except as otherwise determined
by the Committee at the time of grant, in the event the
employment of the Participant with the Company is terminated by
the Company or a Subsidiary for cause or in the event the
Participant resigns without good reason, any Option granted to
such Participant which is then outstanding shall cease to be
exercisable on the date of the Participant's termination of
employment.
(a) As used herein, "cause" means:
1. the perpetration by the Participant of a dishonest act,
subversion, misappropriation or fraud against the Company or any
Subsidiary, or any willful misrepresentation by such Participant
to any holder of securities of the Company or any member of the
Board;
2. any wilful and material breach by the Participant of his
employment agreement, if any, or of any fiduciary duty in
connection with his employment the Company or any Subsidiary;
3. any conviction of the Participant by a federal or state
court for the commission of or a guilty plea to a felony; or
4. one or more demonstrable acts of dishonesty, disloyalty,
or insubordination.
(b) As used herein, "good reason" means:
1. a relocation of the Participant's principal place of
employment outside an area specified in the applicable
Agreement, other than for reasonably required travel on the
Company's (or Subsidiary's, if applicable) business;
2. a material reduction in the Participant's base or
aggregate compensation, other than a general reduction
applicable to all or substantially all of the executive
employees of the Company or its Subsidiaries;
3. a change in the Participant's status, title, position or
responsibilities (including reporting responsibilities) which
represents an adverse change from the Participant's prior
status, title, position or responsibilities;
4. the purported termination of the Participant for cause
which does not comply with the terms of subsection hereof; or
5. such other event as the Committee may determine on a case
by case basis.
8.4 Termination of Employment for Any Other Reason. Except as
otherwise determined by the Committee at the time of grant, in
the event the employment of the Participant with the Company and
all Subsidiaries shall terminate for any reason other than one
described in Section 8.1, 8.2 or 8.3 hereof, any Option granted
to such Participant which is then outstanding may be exercised
by the Participant at any time prior to the expiration date of
the term of the Option or within three months following the
Participant's termination of employment with the Company and all
Subsidiaries, whichever period is shorter.
8.5 Accrual of Right at Date of Termination. The Participant
shall have the right to exercise an Option as indicated in
Sections 8.1, 8.2, 8.3 and 8.4 only to the extent the
Participant's right to exercise such Option had accrued at the
date of termination of employment pursuant to the terms of the
applicable Agreement and had not previously been exercised.
SECTION 9 MISCELLANEOUS PROVISIONS
9.1 Non-transferability of Options. Notwithstanding any other
provision herein, any Option granted hereunder to a Participant
shall not be transferable other than by will or the laws of
descent and distribution and shall be exercisable during the
Participant's lifetime only by him.
9.2 Substitute Grants. Notwithstanding anything herein to the
contrary, the Committee may grant one or more Options to an
employee of another corporation who becomes an Employee by
reason of a corporate merger, consolidation, acquisition of
stock or property, reorganization or liquidation involving the
Company in substitution for a stock option granted by such other
corporation ("Substituted Option"). The terms and conditions of
the substitute Option may vary from the terms and conditions
required by the forgoing provisions of this Plan and from those
of the Substituted Option. The Committee shall prescribe the
exact provisions of the substitute Option, preserving where it
deems appropriate the provisions of the Substituted Option.
9.3 No Guarantee of Employment or Participation. Nothing in
the Plan shall interfere with or limit in any way the right of
the Company to terminate any Participant's employment at any
time, nor confer upon any Participant any right to continue in
the employment of the Company or a Subsidiary. No employee
shall have a right to be selected as a Participant, or, having
been so selected, to receive any future awards.
9.4 Tax Withholding. The Company shall have the authority to
withhold, or require a Participant to remit to the Company, an
amount sufficient to satisfy federal, state, and local
withholding tax requirements upon exercise of an Option under
the Plan, and the Company may defer issuance of Shares until
such requirements are satisfied. The Committee may, in its
discretion, permit a Participant to elect, subject to such
conditions as the Committee shall require, to have Shares
otherwise issuable under the Plan as a result of the exercise of
an Option withheld by the Company and having a Fair Market Value
sufficient to satisfy all or part of the Participant's estimated
total federal, state, and local tax obligation associated with
the transaction.
9.5 Governing Law. The Plan and all determinations made and
actions taken pursuant hereto, to the extent not otherwise
governed by the Code or Act, shall be governed by the law of the
State of Illinois and construed in accordance therewith.
9.6 Effective Date. The Plan shall be effective immediately
upon adoption by the Board, subject to approval by the
shareholders of the Company within twelve months after such
adoption.
CHAMPION PARTS, INC.
Proxy solicited on Behalf of the Board of Directors of the Company for the
Annual Meeting To Be Held on November 16, 1995
The undersigned hereby constitutes and appoints THOMAS W.
BLASHILL and MARK SMETANA, and each of them, his or her true and
lawful agents and proxies with full power of substitution in
each, to vote all Common Shares of CHAMPION PARTS, INC. which
the undersigned is entitled to vote at the Annual Meeting of
Shareholders to be held at the Wyndham Garden Hotel, 17 West 350
22nd Street, Oakbrook Terrace, IL, on Thursday, November 16,
1995, and at any adjournments thereof, on all matters coming
before the meeting, hereby revoking any proxy heretofore given:
(Continued, and TO BE SIGNED, on other side)
<PAGE>
CHAMPION PARTS, INC.
FOR ALL
1. Election of Directors FOR WITHHELD EXCEPT
Nominees: T. Blashill, J. Gross, R. Gross,
G. Hopmayer, B. Katz E. Kipling, ___ ___ ___
and R. Perelman
(INSTRUCTION: To withhold authority to vote for any individual
nominee write that nominee's name on the space provided below)
_______________________________________
FOR AGAINST ABSTAIN
2. To approve and adopt the Champion Parts, Inc.
1995 Stock Option Plan. ___ ___ ___
FOR AGAINST ABSTAIN
3. In their discretion, upon any other matters
as may properly come before the meeting or
any adjournments thereof. ___ ___ ___
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE
MANNER DIRECTED HEREIN. IF NO DIRECTION IS MADE, THIS PROXY
WILL BE VOTED FOR ITEMS 1 AND 2 AND, IN THE DISCRETION OF THE
PROXY HOLDERS, MAY BE VOTED CUMULATIVELY FOR THE ELECTION OF
DIRECTORS.
PLEASE DATE, SIGN, AND RETURN THIS PROXY PROMPTLY.
_________________________________
Date
_________________________________
Signature
_________________________________
Signature if held jointly
Please date and sign as name appears hereon. When shares are
held by joint tenants, both should sign. When signing as
attorney, executor, administrator, trustee or guardian, please
give full title as such. If a corporation, please sign in full
corporate name by President or other authorized officer. If a
partnership, please sign in partnership name by authorized
person.
