As filed with the Securities and Exchange Commission on
October 24, 1996
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
CHAMPION ENTERPRISES, INC.
(Exact name of registrant as specified in its charter)
Michigan 38-2743168
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2701 University Drive, Suite 320, Auburn Hills, Michigan 48326
(Address of principal executive offices) (zip code)
REDMAN INDUSTRIES, INC. 1993 STOCK OPTION PLAN
REDMAN INDUSTRIES, INC. 1993 INCENTIVE HOLDERS'
STOCK OPTION PLAN
(Full title of the Plan)
LOUIS M. BALIUS, ESQ.
Vice President-Secretary and General Counsel
Champion Enterprises, Inc.
2701 University Drive, Suite 320
Auburn Hills, Michigan 48326
(Name and address of agent for service)
Telephone number, including area code, of agent for service:
(810)340-9090
Copies to:
D. RICHARD MCDONALD
Dykema Gossett PLLC
1577 North Woodward Avenue, Suite 300
Bloomfield Hills, Michigan 48304
CALCULATION OF REGISTRATION FEE
<TABLE>
<S> <C> <C> <C> <C>
Proposed Maximum Proposed Maximum Amount of
Title of Securities Amount to be Offering Aggregate Registration
to be Registered Registered Price per Share* Offering Price* Fee
Common Stock, 786,000 $9.54 $7,498,440 $2,273
$1.00 par value
</TABLE>
*The offering price for the shares of Common Stock registered
hereby is the average per share exercise price for the related
options under the Redman Industries, Inc. 1993 Stock Option Plan
and 1993 Incentive Holders' Stock Option Plan, which is equal to
the aggregate exercise price under such options divided by the
number of shares purchasable under such options.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION BY REFERENCE.
The following documents filed by Champion Enterprises (the
"Company") with the Securities and Exchange Commission (the
"Commission") are incorporated in this Registration Statement by
reference:
(a) The Company's Annual Report on Form 10-K for the fiscal
year ended December 30, 1995.
(b) The Company's Quarterly Reports on Form 10-Q for the
quarters ended March 30, 1996 and June 29, 1996.
(c) The Company's Current Reports on Form 8-K, dated
January 12, 1996, April 11, 1996, May 10, 1996 (as amended by
Form 8-K/A dated July 9, 1996), and August 21, 1996.
(d) Description of the Company's Common Stock contained in
the Company's Registration Statement on Form 8-A under the
Securities Exchange Act of 1934, Number 1-9751.
All documents filed by the Company with the Commission
pursuant to Sections 13, 14 and 15(d) of the Securities Exchange
Act of 1934, as amended, subsequent to the date of this
Registration Statement and prior to the termination of the
offering of the common stock covered by this Registration State-
ment shall be deemed to be incorporated by reference in this
Registration Statement and to be a part hereof from the date of
filing of each such document.
ITEM 4. DESCRIPTION OF SECURITIES.
Not required.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
No material interests.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Michigan Business Corporation Act
The Company is organized under the Michigan Business
Corporation Act (the "Michigan Act") which, in general, empowers
Michigan corporations to indemnify a person who was or is a party
or is threatened to be made a party to a threatened, pending or
completed action, suit or proceeding, whether civil, criminal,
administrative or investigative and whether formal or informal,
other than an action by or in the right of the corporation, by
reason of the fact that such person is or was a director,
officer, employee or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer,
partner, trustee, employee or agent of another enterprise,
against expenses, including attorney's fees, judgments,
penalties, fines and amounts paid in settlement actually and
reasonably incurred in connection therewith if the person acted
in good faith and in a manner reasonably believed to be in or not
opposed to the best interests of the corporation or its
shareholders and, with respect to a criminal action or
proceeding, if the person had no reasonable cause to believe his
or her conduct was unlawful.
The Michigan Act also empowers Michigan corporations to
provide similar indemnity to such a person for expenses,
including attorney's fees, and amounts paid in settlement
actually and reasonably incurred by the person in connection with
actions or suits by or in the right of the corporation if the
person acted in good faith and in a manner the person reasonably
believed to be in or not opposed to the interests of the
corporation or its shareholders, except in respect of any claim,
issue or matter in which the person has been found liable to the
corporation, unless the court determines that the person is
fairly and reasonably entitled to indemnification in view of all
relevant circumstances, in which case indemnification is limited
to reasonable expenses incurred.
The Michigan Act also permits a Michigan corporation to
purchase and maintain on behalf of such a person insurance
against liabilities incurred in such capacities. The Company has
obtained a policy of directors' and officers' liability
insurance.
Bylaws of the Registrant
The Company's Bylaws generally require the Registrant to
indemnify officers and directors to the fullest extent legally
possible under the Michigan Act and provide that similar
indemnification may be afforded employees and agents.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
The following exhibits are filed with this Registration
Statement:
5 Opinion of Dykema Gossett PLLC with respect to the
legality of the Common Stock to be registered
hereunder.
10.1 Redman Industries, Inc. 1993 Stock Option Plan.
10.2 Redman Industries, Inc. 1993 Incentive Holders' Stock
Option Plan.
23.1 Consent of Price Waterhouse LLP
23.2 Consent of Dykema Gossett PLLC (contained in Exhibit 5)
24 Power of Attorney (see "Signatures")
ITEM 9. UNDERTAKINGS.
(1) The undersigned registrant hereby undertakes to
file, during any period in which offers or sales are being
made, a post-effective amendment to this registration
statement: (i) to include any prospectus required by Section
10(a)(3) of the Securities Act of 1933; (ii) to reflect in the
prospectus any facts or events arising after the effective
date of this registration statement (or the most recent post-
effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information
set forth in this registration statement; (iii) to include any
material information with respect to the plan of distribution
not previously disclosed in this registration statement or any
material change to such information in this registration
statement; provided, however, that paragraphs (1)(i) and
(1)(ii) do not apply if this registration statement is on Form
S-3 or Form S-8 and the information required to be included in
a post-effective amendment by those paragraphs is contained in
periodic reports filed by the registrant pursuant to Section
13 or 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in this registration statement.
(2) The undersigned registrant hereby undertakes that,
for the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment shall be
deemed to be a new registration statement relating to the
securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) The undersigned registrant hereby undertakes to
remove from registration by means of a post effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
(4) The undersigned registrant hereby undertakes that,
for the purpose of determining any liability under the
Securities Act of 1933, each filing of the registrant's annual
report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section
15(d) or the Securities Exchange Act of 1934) that is
incorporated by reference in the registration statement shall
be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering thereof.
(5) Insofar as indemnification for liabilities arising
under the Securities Act of 1933 may be permitted to
directors, officers and controlling persons of the registrant
pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a
director, officer or controlling person of the registrant in
the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in
connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Act and will be governed by the final adjudication of such
issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of
1933, the registrant certifies that it has reasonable grounds
to believe that it meets all of the requirements for filing on
Form S-8 and has duly caused this registration statement to be
signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Auburn Hills, State of Michigan on
October 24, 1996.
CHAMPION ENTERPRISES, INC.
By: /s/ WALTER R. YOUNG, JR.
Walter R. Young, Jr.
Chairman of the Board of Directors,
President and Chief Executive Officer
POWER OF ATTORNEY
Each of the undersigned whose signature appears below
hereby constitutes and appoints Walter R. Young, Jr., A.
Jacqueline Dout and Louis M. Balius and each of them acting
alone, his or her true and lawful attorneys-in-fact and
agents, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any
and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and
to file the same, with all exhibits thereto, and other
documents in connection therewith, with the Securities and
Exchange Commission, under the Securities Act of 1933.
Pursuant to the requirements of the Securities Act of
1933, this registration statement has been signed by the
following persons in the capacities indicated on October 24,
1996.
TITLE
/s/ WALTER R. YOUNG, JR.
Walter R. Young, Jr. Chairman of the Board of Directors,
President and Chief Executive Officer
/s/ A. JACQUELINE DOUT
A. Jacqueline Dout Executive Vice President and
Chief Financial Officer
/s/ RICHARD HEVELHORST
Richard Hevelhorst Controller (Principal Accounting
Officer)
/s/ ROBERT W. ANESTIS
Robert W. Anestis Director
/s/ SELWYN ISAKOW
Selwyn Isakow Director
/s/ GEORGE R. MRKONIC
George R. Mrkonic Director
/s/ JOHNSON S. SAVARY
Johnson S. Savary Director
/s/ CARL L. VALDISERRI
Carl L. Valdiserri Director
<PAGE>
INDEX TO EXHIBITS
Exhibit
Number Exhibits
5 Opinion of Dykema Gossett PLLC with respect to the
legality of the Common Stock to be registered
hereunder
10.1 Redman Industries, Inc. 1993 Stock Option Plan.
10.2 Redman Industries, Inc. 1993 Incentive Holders'
Stock Option Plan.
23.1 Consent of Price Waterhouse LLP
23.2 Consent of Dykema Gossett PLLC (contained in Exhibit
5)
24 Power of Attorney (see "Signatures")
October 24, 1996
Champion Enterprises, Inc.
2701 University Drive, Suite 320
Auburn Hills, MI 48326
Ladies and Gentlemen:
We have served as counsel to Champion Enterprises, Inc.
(the "Company") in connection with the preparation of the
Registration Statement (Form S-8) to be filed by the Company
on October 24, 1996 with the Securities and Exchange
Commission under the Securities Act of 1933, as amended,
representing the issuance in the manner described in the
Registration Statement of 786,000 shares of the Company's
Common Stock, par value $1.00 per share (the "Common Stock"),
pursuant to the Redman Industries, Inc. 1993 Stock Option Plan
and the Redman Industries, Inc. 1993 Incentive Holders' Stock
Option Plan.
We have examined and relied upon the originals, or copies
certified or otherwise identified to our satisfaction, of such
corporate records, documents, certificates and other instru-
ments as in our judgment are necessary or appropriate to
enable us to render the opinion expressed below.
Based upon such examination and our participation in the
preparation of the Registration Statement, it is our opinion
that (1) the Company is duly incorporated and validly existing
as a corporation in good standing under the laws of Michigan
and (2) the Common Stock, when issued in the manner described
in the Registration Statement, will be validly issued, fully
paid and nonassessable.
We consent to the filing of this opinion as Exhibit 5 to
the Registration Statement.
Very truly yours,
DYKEMA GOSSETT PLLC
/S/ D. RICHARD MCDONALD
D. Richard McDonald
(810)540-0859
1. Purpose.
Redman Industries, Inc., a Delaware corporation (the
"Company"), by means of this 1993 Stock Option Plan (the
"Plan"), desires to afford certain individuals and directors
and key employees of the Company and any parent corporation or
subsidiary corporation thereof now existing or hereafter
formed or acquired (such parent and subsidiary corporations
sometimes referred to herein as "Related Entities") who are
responsible for the continued growth of the Company an
opportunity to acquire a proprietary interest in the Company,
and thus to create in such persons an increased interest in
and a greater concern for the welfare of the Company and any
Related Entities. As used in the Plan, the terms "parent
corporation" and "subsidiary corporation" shall mean,
respectively, a corporation within the definition of such
terms contained in Sections 424(e) and 424(f), respectively,
of the Internal Revenue Code of 1986, as amended (the "Code").
The stock options described in Sections 6, 7 and 8 (the
"Options"), and the shares of Common Stock (as hereinafter
defined) acquired pursuant to the exercise of such Options are
a matter of separate inducement and are not in lieu of any
salary or other compensation for services.
2. Administration.
The Plan shall be administered by the Option Committee,
or any successor thereto, of the Board of Directors of the
Company (the "Board of Directors"), or by any other committee
appointed by the Board of Directors to administer this Plan
(the "Committee"). The number of individuals that shall
constitute the Committee shall be determined from time to time
by a majority of all the members of the Board of Directors,
and, unless that majority of the Board of Directors determines
otherwise, shall be no less than two individuals. A majority
of the Committee shall constitute a quorum (or if the
Committee consists of only two members, then both members
shall constitute a quorum), and subject to the provisions of
Section 5, the acts of a majority of the members present at
any meeting at which a quorum is present, or acts approved in
writing by a majority of the Committee, shall be the acts of
the Committee. The Committee shall be comprised exclusively
of "outside directors", as such term is used in connection
with Section 162(m) of the Code. Whenever the Company shall
have a class of equity securities registered pursuant to
Section 12 of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), each member of the Committee shall be
required to also be a "disinterested person" to administer the
Plan within the meaning of Rule 16b-3, as amended, or other
applicable rules under Section 16(b) of the Exchange Act, and
the Committee shall administer the Plan so as to comply at all
times with the Exchange Act.
The members of the Committee shall serve at the pleasure
of the Board of Directors, which shall have the power, at any
time and from time to time, to remove members from or add
members to the Committee. Removal from the Committee may be
with or without cause. Any individual serving as a member of
the Committee shall have the right to resign from membership
in the Committee by written notice to the Board of Directors.
The Board of Directors, and not the remaining members of the
Committee, shall have the power and authority to fill
vacancies on the Committee, however caused. The Board of
Directors shall promptly fill any vacancy that causes the
number of members of the Committee to be below two or any
other number that Rule 16b-3 may require from time to time.
3. Shares Available.
Subject to the adjustments provided in Section 10, the
maximum aggregate number of shares of Common Stock, par value
$0.01 per share, of the Company ("Common Stock") which may be
granted for all purposes under the Plan shall be three hundred
fifty thousand (350,000) shares. If, for any reason, any
shares as to which Options have been granted cease to be
subject to purchase thereunder, including, without limitation,
the expiration of such Option, the termination of such Option
prior to exercise or the forfeiture of such Option, such
shares shall thereafter be available for grants to such
individual or other individuals under the Plan. Options
granted under the Plan may be fulfilled in accordance with the
terms of the Plan with (i) authorized and unissued shares of
the Common Stock, (ii) issued shares of such Common Stock held
in the Company's treasury or (iii) issued shares of Common
Stock reacquired by the Company in each situation as the Board
of Directors or the committee may determine from time to time
at its sole option.
4. Eligibility and Bases of Participation.
Grants of Incentive Options (as hereinafter defined) and
Non-Qualified Options (as hereinafter defined) may be made
under the Plan, subject to and in accordance with Section 6,
to Key Employees. As used herein, the term "Key Employee"
shall mean any employee of the Company or any Related Entity,
including officers and directors of the Company or any Related
Entity who are also employees of the Company or any Related
Entity, who are regularly employed on a salaried basis and who
are so employed on the date of such grant, whom the Committee
identifies as having a direct and significant effect on the
performance of the Company or any Related Entity.
Grants of Non-Qualified Options may be made, subject to
and in accordance with Section 7, to any Eligible Non-Employee.
As used herein, the term "Eligible Non-Employee"
shall mean any person or entity of any nature whatsoever,
specifically including, without limitation, an individual,
firm, company, corporation, partnership, trust or other entity
(collectively, a "Person"), other than an Outside Director
Participant (as defined below), that the Committee designates
as eligible for a grant of Options pursuant to this Plan
because such Person performs bona fide consulting or advisory
services for the Company or any Related Entity (other than
services in connection with the offer or sale of securities in
a capital-raising transaction) and the Committee determines
that such Person has a direct and significant effect on the
financial development of the Company or any Related Entity.
Grants of Non-Qualified Options shall be made, subject to
and in accordance with Section 8, to individuals not regularly
employed by the Company who serve as directors of the Company
("Outside Director Participants").
The adoption of this Plan shall not be deemed to give any
Person a right to be granted any options.
5. Authority of Committee.
Subject to and not inconsistent with the express
provisions of the Plan, the Code and Rule 16b-3, the Committee
shall have plenary authority, in its sole discretion, to:
a. determine the Key Employees and Eligible Non-Employees to
whom Options shall be granted, the time
when such Options shall be granted, the number of
Options, the purchase price or exercise price of
each Option, the period(s) during which such Option
shall be exercisable (whether in whole or in part),
the restrictions to be applicable to Options and the
other terms and provisions thereof (which need not
be identical);
b. require, as a condition to the granting of any
Option, that the person receiving such Option agree
not to sell or otherwise dispose of such Option, any
Common Stock acquired pursuant to such Option or any
other "derivative security" (as defined by Rule 16a-l(c)
under the Exchange Act) for a period of six (6)
months following the later of (i) the date of the
grant of such Option or (ii) the date when the
exercise price of such Option is fixed if such
exercise price is not a fixed at the date of grant
of such Option;
c. provide an arrangement through registered broker-dealers
whereby temporary financing may be made
available to an optionee by the broker-dealer, under
the rules and regulations of the Board of Governors
of the Federal Reserve, for the purpose of assisting
the optionee in the exercise of an Option, such
authority to include the payment by the Company of
the commissions of the broker-dealer;
d. provide the establishment of procedures for an
optionee (1) to have withheld from the total number
of shares of Common Stock to be acquired upon the
exercise of an Option (other than an Incentive
Option) that number of shares having a Fair Market
Value (as defined in Section 12) which, together
with such cash as shall be paid in respect of
fractional shares, shall equal the Option exercise
price, and (2) to exercise a portion of an Option by
delivering that number of shares of Common Stock
already owned by such optionee having a Fair Market
Value which shall equal the partial Option exercise
price and to deliver the shares thus acquired by
such optionee in payment of shares to be received
pursuant to the exercise of additional portions of
such Option, the effect of which shall be that such
optionee can in sequence utilize such newly acquired
shares in payment of the exercise price of the
entire Option, together with such cash as shall be
paid in respect of fractional shares; provided,
however, that in the case of an Incentive Option, no
stock shall be used to pay the exercise price unless
such shares were not acquired through the exercise
of an Incentive Option or, if so acquired, have been
held for more than two years since the grant of such
Option and for more than one year since the exercise
of such Option;
e. provide the establishment of a procedure whereby a
number of shares of Common Stock or other securities
may be withheld from the total number of shares of
Common Stock or other securities to be issued upon
exercise of an Option (other than an Incentive
Option) to meet the obligation of withholding for
income, social security and other taxes incurred by
an optionee upon such exercise or required to be
withheld by the Company in connection with such
exercise;
f. prescribe, amend, modify and rescind rules and
regulations relating to the Plan;
g. make all determinations, perform all other acts,
exercise all other powers and establish any other
procedures determined by the Committee to be
necessary, appropriate or advisable in administering
the Plan or for the conduct of the Committee's
business.
The Committee may delegate to one or more of its members, or
to one or more agents, such administrative duties as it may
deem advisable, and the Committee or any person to whom it has
delegated duties as aforesaid may employ one or more persons
to render advice with respect to any responsibility the
Committee or such person may have under the Plan; provided,
however, that whenever the Company has a class of equity
securities registered under Section 12 of the Exchange Act,
the Committee may not delegate any duties to a member of the
Board of Directors who, if elected to serve on the Committee,
would not qualify as a "disinterested person" to administer
the Plan as contemplated by Rule 16b-3, as amended, or other
applicable rules under the Exchange Act.
The Committee may employ attorneys, consultants, accountants,
or other persons and the Committee, the Company, and its
officers and directors shall be entitled to rely upon the
advice, opinions or valuations of any such persons. All
actions taken and all interpretations and determinations made
by the Committee in good faith shall be final and binding upon
all persons who have received grants under the Plan, the
Company and all other interested persons. No member or agent
of the Committee shall be personally liable for any action,
determination or interpretation made in good faith with
respect to the Plan and all members and agents of the
Committee shall be fully protected by the Company in respect
of any such action, determination or interpretation.
6. Stock Options for Key Employees.
Subject to the express provisions of this Plan, the
Committee shall have the authority, in its sole discretion, to
grant incentive stock options pursuant to Section 422 of the
Code ("Incentive Options"), to grant non-qualified stock
options (options which do not qualify under Section 422 of the
Code) ("Non-Qualified Options") or to grant both types of
Options to Key Employees. No Incentive Option shall be
granted pursuant to this Plan more than ten (10) years after
the earlier of ten years from the date of adoption of the Plan
or ten (10) years from the date of approval of the Plan by the
shareholders of the Company. Notwithstanding anything in this
Plan to the contrary, Incentive Options may be granted only to
Key Employees. The terms and conditions of the Options
granted under this Section 6 shall be determined from time to
time by the Committee; provided, however, that the Options
granted under this Section 6 shall be subject to the
following:
a. Maximum Number of Shares. Subject to the adjustment
provisions contained in Section 10, the aggregate
number of shares of Common Stock with respect to
which Options granted pursuant to the Plan to any
Key Employee are exercisable shall not exceed
150,000.
b. Option Price. The Committee shall establish the
option price at the time any Incentive Option or
Non-Qualified Option is granted at such amount as
the Committee in its sole discretion shall
determine, subject to the following limitations.
The option price for each share purchasable under
any Option granted hereunder shall be such amount as
the Committee shall, in its best judgment, determine
to be not less than the greater of (i) the par value
per share of such stock and (ii) one hundred percent
(100%) of the Fair Market Value per share at the
date such Option is granted; provided, however, that
in the case of an Incentive Option granted to a
person who, at the time such Incentive option is
granted, owns shares of the Company or any Related
Entity which possess more than ten percent (10%) of
the total combined voting power of all classes of
shares of the Company or of any Related Entity, the
purchase price for each share shall be such amount
as the committee, in its best judgment, shall
determine to be not less than the greater of (i) the
par value per share of such stock and (ii) one
hundred ten percent (110%) of the Fair Market Value
per share at the date the Option is granted. The
Option price will be subject to adjustment in
accordance with the provisions of Section 10 of the
Plan.
c. Payment. The price per share of Common Stock with
respect to each Option shall be payable at the time
the Option is exercised. Such price shall be
payable (i) in cash or by an equivalent means
acceptable to the Committee, (ii) on the Committee's
prior consent, by delivery to the Company of shares
of Common Stock owned by the optionee or by the
delivery or withholding of shares pursuant to a
procedure created pursuant to Section 5.e. of the
Plan and subject to certain limitations with respect
to Incentive Options described in such Section 5.e.
or (iii) by any combination of clauses (i) and (ii).
Shares delivered to or withheld by the Company in
payment of the option price shall be valued at the
Fair Market Value of the Common Stock on the day
preceding the date of the exercise of the Option.
d. Continuation of Employment. Each Non-Qualified
Option granted to a Key Employee by its terms shall
require the optionee to remain in the continuous
employ of the Company, or any Related Entity, for a
period of six (6) months, or such other such period,
if any, as the Committee in its sole discretion may
determine, from the date of grant of the Option
before the right to exercise any part of the Option
will accrue. Each Incentive Option by its terms
shall require the optionee to remain in the
continuous employ of the Company or any Related
Entity, from the date of grant of the Incentive
Option until no more than three months prior to the
date of exercise of the Incentive Option.
e. Exercisability of Stock Option. Subject to Section
9, each Option shall be exercisable in one or more
installments as the Committee in its sole discretion
may determine at the time of the grant. The right
to purchase shares shall be cumulative so that when
the right to purchase any shares has accrued such
shares or any part thereof may be purchased at any
time thereafter until the expiration or termination
of the Option. No Option by its terms shall be
exercisable after the expiration of ten (10) years
from the date of grant of the Option, or such other
period (in the case of Non-Qualified Options) or
such shorter period (in the case of Incentive
Options) as the Committee in its sole discretion may
determine; provided, however, in the case of an
Incentive Option granted to a person who, at the
time such Option is granted, owns stock of the
Company, or any Related Entity, possessing more than
ten percent (10%) of the total combined voting power
of all classes of stock of the Company, or any
Related Entity, such Option shall not be exercisable
after the expiration of five (5) years from the date
such Option is granted.
f. Death. In the event of the death of any optionee,
the estate of such optionee, or a person who
acquired the right to exercise such Option by
bequest or inheritance or by reason of the death of
the optionee, shall have the right, at any time and
from time to time within six (6) months after the
date of death, or such other period, if any, as the
Committee in its sole discretion may determine (but
not after the expiration date of the Option), to
exercise such optionee's Option with respect to all
or any part of the shares of stock which such
optionee was entitled to purchase immediately prior
to the time of his death. In the case of an
Incentive Option, the estate of an optionee, or a
person who acquired the right to exercise such
Option by bequest or inheritance or by reason of the
death of the optionee, is not required to exercise
the Incentive Option within three months of the end
of the optionee's continuous employment by the
Company or a Related Entity, as is otherwise
required by Section 6.d.
g. Disability. If the employment of any optionee is
terminated because of Disability (as defined in
Section 12), such optionee shall have the right, at
any time and from time to time within six (6) months
after the date of termination, or such other period,
if any, as the Committee in its sole discretion may
determine (or within a maximum of one (1) year after
the date of such termination in the case of an
Incentive Option) (but not after the expiration date
of the Option), to exercise his Option with respect
to all or any part of the shares of stock which such
optionee was entitled to purchase immediately prior
to the time of such termination.
h. Retirement. If an optionee retires (as defined in
Section 12) from the Company or any Related Entity,
(i) all Options held by such optionee on the date of
his retirement shall become exercisable and (ii)
such optionee shall have the right, within one (1)
year (in the case of NonQualified Options) or three
(3) months (in the case of Incentive Options) after
the date of his retirement (but in no event after
the expiration date of the Option) to exercise his
Option with respect to all or any part of the shares
of stock underlying the options held by such
optionee immediately prior to the time of
retirement.
i. Other Termination or For Cause. If the employment
of an optionee is terminated for any reason other
than those specified in subsections 6(f), (g) and
(h) above, such optionee shall have the right,
within thirty (30) days after the date of such
termination, or such other period, if any, as the
Committee in its sole discretion may determine (or a
maximum of three (3) months in the case of an
Incentive Option) (but not after the expiration date
of the Option), to exercise his Option with respect
to all or any part of the shares of stock which such
optionee was entitled to purchase immediately prior
to the time of such termination, except that, unless
the Committee in its sole discretion provides
otherwise, if such optionee's employment was
terminated by the Company or any Related Entity for
good cause (as defined below), or if the optionee
voluntarily terminates employment without the
consent of the Company or any Related Entity (of
which fact the Committee shall be the sole judge),
such optionee shall immediately forfeit all rights
under his option except as to the shares of stock
already purchased. Termination for "good cause"
shall mean (unless another definition is agreed to
in writing by the Company and the optionee)
termination by action of the Board of Directors
because of: (A) the optionee's conviction of, or
plea of nolo contendere to, a felony or a crime
involving moral turpitude; (B) the optionee's
personal dishonesty, willful misconduct, willful
violation of any law, rule, or regulation (other
than minor traffic violations or similar offenses)
or breach of fiduciary duty which involves personal
profit; (C) the optionee's willful failure to
execute or comply with the policies of the Company
or his stated duties as established by the Board of
Directors or the President of the Company, or
intentional failure to perform his stated duties; or
(D) illegal use of a controlled substance by the
optionee. The determination that there exists "good
cause" for termination shall be made by the Option
Committee (unless otherwise agreed to in writing by
the Company and the optionee) and such determination
shall be conclusive.
j. Maximum Exercise. The aggregate Fair Market Value
of stock (determined at the time of the grant of the
Option) with respect to which Incentive Options are
exercisable for the first time by an optionee during
any calendar year under all plans of the Company and
any Related Entity shall not exceed $100,000.
7. Stock Option Grants to Eligible Non-Employees. Subject
to the express provisions of this Plan, the Committee shall
have the authority, in its sole discretion, to grant Non-Qualified
Options to Eligible Non-Employees; provided,
however, that whenever the Company has any class of equity
securities registered pursuant to Section 12 of the Exchange
Act, no Eligible Non-Employee then serving on the Committee
(or such other committee then administering the Plan) shall be
granted Options hereunder if the grant of such options would
cause such Eligible Non-Employee to no longer be a
"disinterested person" as set forth in Section 2 hereof. The
terms and conditions of the Options granted under this Section
7 shall be determined from time to time by the Committee;
provided, however, that the Options granted under this Section
7 shall be subject to the following:
a. Maximum Number of Shares. Subject to the adjustment
provisions contained in Section 10, the aggregate
number of shares of Common Stock with respect to
which Options granted pursuant to the Plan to any
Eligible Non-Employee are exercisable shall not
exceed 150,000.
b. Option Price. The Committee shall establish the
option price at the time any Non-Qualified Option is
granted at such amount as the Committee in its sole
discretion shall determine, subject to the following
limitations. The option price for each share
purchasable under any Non-Qualified Option granted
hereunder shall be such amount as the Committee
shall, in its best judgment, determine to be not
less than the greater of (i) the par value per share
of such stock and (ii) one hundred percent (100%) of
the Fair Market Value per share at the date such
Option is granted.
c. Payment. The price per share of Common Stock with
respect to each Option shall be payable at the time
the Option is exercised. Such price shall be
payable (i) in cash or by an equivalent means
acceptable to the Committee, (ii) on the Committee's
prior consent, by delivery to the Company of shares
of Common Stock owned by the optionee or by the
delivery or withholding of shares pursuant to a
procedure created pursuant to Section 5.e. of the
Plan or (iii) by any combination of clauses (i) and
(ii). Shares delivered to or withheld by the
Company in payment of the option price shall be
valued at the Fair Market Value of the Common Stock
on the day preceding the date of the exercise of the
Option.
d. Exercisability of Stock Option. Subject to Section
9, each Option shall be exercisable in one or more
installments as the Committee in its sole discretion
may determine at the time of the grant. The right
to purchase shares shall be cumulative so that when
the right to purchase any shares has accrued such
shares or any part thereof may be purchased at any
time thereafter until the expiration or termination
of the Option. No Option by its terms shall be
exercisable after the expiration of ten (10) years
from the date of grant of the Option, or such other
period as the Committee in its sole discretion may
determine.
e. Death. In the event of the death of any optionee,
the estate of such optionee shall have the right, at
any time and from time to time within six (6) months
after the date of death, or such other period, if
any, as the Committee in its sole discretion may
determine (but not after the expiration of the
option), to exercise such optionee's Option with
respect to all or any part of the shares of stock
which such optionee was entitled to purchase
immediately prior to the time of his death.
f. Disability. If the retention by the Company or any
Related Entity of the services of any Eligible Non-Employee
is terminated because of Disability, such
optionee shall have the right, at any time and from
time to time within six (6) months after the date of
the optionee's termination, or such other period, if
any, as the Committee in its sole discretion may
determine (but in no case after the expiration of
the Option), to exercise his Option with respect to
all or any part of the shares of stock which such
optionee was entitled to purchase immediately prior
to the time of such termination.
g. Other Termination or For Cause. If the retention by
the Company or any Related Entity of the services of
any Eligible Non-Employee is terminated for any
reason other than those specified in subsections
7(f) and (g) above, such optionee shall have the
right, within thirty (30) days after the date of
such termination, or such other period, if any, as
the Committee in its sole discretion may determine
(but not after the expiration date of the Option),
to exercise his Option with respect to all or any
part of the shares of stock which such optionee was
entitled to purchase immediately prior to such
termination, except that if such optionee
voluntarily terminates his service without the
consent of the Company or any Related Entity (of
which fact the Committee shall be the sole judge),
then such optionee shall immediately forfeit his
rights under his Option except as to the shares of
stock already purchased.
h. Ineligibility for Other Grants. Any Eligible
Non-Employee who receives an Option pursuant to this
Section 7 shall be ineligible to receive any Options
under any other Section of the Plan.
i. The Committee. The provisions of this Section 7
shall be administrated by the Committee solely in
accordance with the terms hereof; provided, however,
that the Committee shall maintain the authority to
interpret this Section of the Plan and to make all
determinations permitted by this Section 7 or deemed
necessary for its administration.
j. Amendment. Whenever the Company has a class of
equity securities registered pursuant to Section 12
of the Exchange Act, the provisions of this Section
7 shall not be amended more than one time in any six
month period, other than to comport with amendments
to the Code, the Employee Retirement Income Security
Act of 1974, as amended ("ERISA") or the rules and
regulations thereunder.
8. Stock Option Grants to Outside Director Participants.
Subject to the express provisions of this Plan, commencing
with the Annual Meeting of the Company's stockholders to be
held in 1994, each person who is serving as an Outside
Director Participant on the third trading day following the
later of (i) the date on which the Annual Meeting of the
Company's stockholders or any adjournment thereof is held in
any year and (ii) the date on which the Company publicly
announces the results of operations of the Company for the
fiscal quarter immediately preceding such Annual Meeting,
shall automatically be granted an Option to purchase 1,000
shares of Common Stock. In addition, but without duplication
with respect to the foregoing grant to existing Outside
Directors, an initial grant of an Option to purchase 5,000
shares of Common Stock shall automatically be granted to each
individual who is first elected an Outside Director on the
third trading date following the effective date of such
election. The terms and conditions of the Options granted to
outside Director Participants hereunder shall be determined
from time to time by the Committee; provided, however, that
the Options granted hereunder shall be Non-Qualified Options
and shall be subject to the following:
a. Maximum Number of Shares. Subject to the adjustment
provisions contained in Section 10, the aggregate
number of shares of Common Stock with respect to
which Options granted pursuant to the Plan to any
Outside Director Participant are exercisable shall
not exceed 30,000.
b. Option Price. The Committee shall establish the
option price at the time any Non-Qualified Option is
granted at such amount as the Committee in its sole
discretion shall determine, subject to the following
limitations. The option price for each share
purchasable under any Non-Qualified Option granted
hereunder shall be such amount as the Committee
shall, in its best judgment, determine to be not
less than the greater of (i) the par value per share
of such stock and (ii) one hundred percent (100%) of
the Fair Market Value per share at the date such
Option is granted. The Option price will be subject
to adjustment in accordance with the provisions of
Section 10 of the Plan.
c. Payment. The price per share of Common Stock with
respect to each Option shall be payable at the time
the Option is exercised. Such price shall be
payable (i) in cash or by an equivalent means
acceptable to the Committee, (ii) on the Committee's
prior consent, by delivery to the Company of shares
of Common Stock owned by the optionee or by the
delivery or withholding of shares pursuant to a
procedure created pursuant to Section 5.e. of the
Plan or (iii) by any combination of clauses (i) and
(ii). Shares delivered to or withheld by the
Company in payment of the option price shall be
valued at the Fair Market Value of the Common Stock
on the day preceding the date of the exercise of the
Option.
d. Exercisability of Stock Option. Subject to
subsections (e), (f) and (g) below, (i) fifty
percent (50%) of each Option shall be exercisable
within one (1) year after the date of the grant,
(ii) an additional twenty-five percent shall be
exercisable within two (2) years after the date of
the grant and (iii) the remainder shall be
exercisable three (3) years after the date of the
grant. The right to purchase shares shall be
cumulative so that when the right to purchase any
shares has accrued such shares or any part thereof
may be purchased at any time thereafter until the
expiration or termination of the Option. No Option
by its terms shall be exercisable after the
expiration of five (5) years from the date of grant
of the Option.
e. Death. In the event of the death of an Outside
Director Participant, (i) all Options held by such
optionee on the date of death shall become
exercisable and (ii) the estate of such optionee
shall have the right within one (1) year after the
date of death (but in no event after the expiration
of the Option) to exercise his Option with respect
to all or any part of the shares of stock underlying
the Options held by such optionee immediately prior
to the time of his death.
f. Disability. If an Outside Director Participant's
service as a director of the Company is terminated
because of Disability, (i) all options held by such
optionee as of the date of such termination shall
become exercisable and (ii) such optionee shall have
the right within one (1) year after the date of such
termination (but in no event after the expiration of
the Option) to exercise his Option with respect to
all or any part of the shares of stock underlying
the Options held by such optionee immediately prior
to the time of such termination.
g. Retirement. If an outside Director Participant
retires (as defined in Section 12) from the Company,
(i) all Options held by such optionee on the date of
his retirement shall become exercisable and (ii)
such optionee shall have the right, within one (1)
year after the date of his retirement (but in no
event after the expiration date of the Option) to
exercise his Option with respect to all or any part
of the shares of stock underlying the Options held
by such optionee immediately prior to the time of
retirement.
h. Other Termination or For Cause. In the event an
Outside Director Participant is terminated for any
reason other than those specified in subsections
8(e), (f) or (g) above, such optionee shall have the
right, within thirty (30) days after the date, of
such termination (but in no event after the
expiration date of the Option), to exercise his
Option with respect to all or any part of the shares
of stock which such optionee was entitled to
purchase immediately prior to such termination;
provided, however, that if the optionee is removed
from office for cause by action of the stockholders
of the company in accordance with its by-laws and
the General Corporation Law of the State of
Delaware, or if such optionee voluntarily terminates
his service without the consent of the Company (of
which fact the Committee shall be the sole judge),
then such optionee shall immediately forfeit his
rights under his Option, except as to the shares of
common stock of the Company already purchased
thereunder.
i. Ineligibility for Other Grants. Any Outside
Director Participant who receives an Option pursuant
to this Section 8 shall be ineligible to receive any
other Option under any other Section of this Plan.
j. The Committee. The provisions of this Section 8
shall be administered by the Committee solely in
accordance with the terms hereof; provided, however,
that the Committee shall maintain the authority to
interpret this Section of the Plan and to make all
determinations permitted by this Section 8 or deemed
necessary for its administration.
k. Amendment. Whenever the Company has a class of
equity securities registered pursuant to Section 12
of the Exchange Act, the provisions of this Section
8 shall not be amended more than one (1) time in any
six (6) month period, other than to comply with
amendments to the Code, ERISA or the rules and
regulations thereunder.
9. Change of Control.
Any option agreement pursuant to which an Option is
granted under the Plan (an "Option Agreement") may provide
that upon the occurrence of an event constituting a Change of
Control (as defined in Section 12), the optionee shall become
immediately fully vested in all unexercised Options granted
pursuant to the Plan; provided, however, that with respect to
any Incentive Stock Option, such Option shall become
exercisable under this Section 9 only to the extent that such
accelerated exercisability does not result in such Option's
failing to comply with Section 6.j., unless the optionee
consents to such result.
10. Adjustment of Shares.
In the event there is any change in the Common Stock by
reason of any consolidation, combination, liquidation,
reorganization, recapitalization, stock dividend, stock split,
split-up, split-off, spin-off, combination of shares, exchange
of shares or other like change in capital structure of the
Company, the number or kind of shares or interests subject to
an Option and the per share price or value thereof shall be
appropriately adjusted by the Committee at the time of such
event, provided that each optionee's position with respect to
the Option and the per share price' or value thereof shall
not, as a result of such adjustment, be worse than it had been
immediately prior to such event. Any fractional shares or
interests resulting from such adjustment shall be eliminated.
Notwithstanding the foregoing, (i) each such adjustment with
respect to an Incentive Option shall comply with the rules of
Section 424(a) of the Code, and (ii) in no event shall any
adjustment be made which would render any Incentive option
granted hereunder other than an "incentive stock option" for
purposes of Section 422 of the Code.
In the event of a Change of Control or a merger between
the Company and another corporation in which the Company is
not the surviving entity and where any optionee holds Options
issued pursuant to this Plan which have not been exercised,
the Company shall cause such Options to be cancelled and
replacement Options to be issued by the surviving entity or a
Related Entity.
11. Miscellaneous Provisions.
a. Assignment or Transfer. No grant of any "derivative
security" (as defined by Rule 16a-l(c) under the
Exchange Act) made under the Plan or any rights or
interests therein shall be assignable or
transferable by an optionee except by will or the
laws of descent and distribution. During the
lifetime of an optionee, Options granted hereunder
shall be exercisable only by the optionee.
b. Investment Representation. If a registration
statement under the Securities Act of 1933, as
amended (the "Securities Act"), with respect to the
Common Stock issuable upon exercise of an Option, is
not in effect at the time such Option is exercised,
the Company may require, for the sole purpose of
complying with the Securities Act, that prior to
delivering such Common Stock to the exercising
optionee, such optionee must deliver to the
Secretary of the Company a written statement (i)
representing and warranting that such Common Stock
is being acquired for investment only and not with a
view to the resale or distribution thereof, (ii)
acknowledging and confirming that such Common Stock
may not be sold unless registered for sale under the
Securities Act or pursuant to an exemption from such
registration and (iii) agreeing that the
certificates representing such Common Stock shall
bear a legend to the effect of the foregoing.
Notwithstanding anything in this Plan to the
contrary, the Company shall not be required to
deliver Common Stock pursuant to any exercise of an
Option if such action would, in the opinion of
counsel to the Company, result in a violation of any
state or federal securities law, and the Company may
require that the exercising optionee deliver any
such written representations, written covenants and
other documents as the Company or its counsel deems
reasonably necessary,, if any, including, without
limitation, an opinion of counsel reasonably
satisfactory to the Company to the effect that such
delivery of stock would not result in a violation of
any state or federal securities laws. If,
subsequent to the delivery by an optionee of the
written statement described in the preceding
paragraph, the Common Stock issuable upon exercise
of an Option is registered under the Securities Act,
the Company may release such optionee from such
written statement.
c. Securities Act Legend. Certificates for shares of
Common Stock, when issued, may have substantially
the following legend, or statements of other
applicable restrictions, endorsed thereon, and may
not be immediately transferable:
THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE
HAVE NOT BEEN REGISTERED UNDER & THE SECURITIES ACT
OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS.
THE SHARES MAY NOT BE OFFERED FOR SALE, SOLD,
PLEDGED, TRANSFERRED, OR OTHERWISE DISPOSED OF UNTIL
THE HOLDER HEREOF PROVIDES EVIDENCE SATISFACTORY TO
THE ISSUER (WHICH, IN THE DISCRETION OF THE ISSUER,
MAY INCLUDE AN OPINION OF COUNSEL SATISFACTORY TO
THE ISSUER) THAT SUCH OFFER, SALE, PLEDGE, TRANSFER,
OR OTHER DISPOSITION WILL NOT VIOLATE APPLICABLE
FEDERAL OR STATE LAWS.
This legend shall not be required for shares of
Common Stock issued pursuant to an effective
registration statement under the Securities Act.
d. Legend for Restrictions on Transfer. Each
certificate representing shares issued to an
optionee pursuant to an Option granted under the
Plan shall, if such shares are subject to any
transfer restriction, including a right of first
refusal, provided for under this Plan or an Option
Agreement, bear a legend that complies with
applicable law with respect to the restrictions on
transferability contained in this Section ll.d.,
such as:
THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE
ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY
IMPOSED BY THAT CERTAIN INSTRUMENT ENTITLED 111993
REDMAN INDUSTRIES, INC. STOCK OPTION PLAN" AS
ADOPTED BY REDMAN INDUSTRIES, INC. (THE
"CORPORATION") ON SEPTEMBER _, 1993, AND AN
AGREEMENT THEREUNDER BETWEEN THE CORPORATION AND
[HOLDER] DATED _________, 199_, AND MAY NOT BE
TRANSFERRED, SOLD, OR OTHERWISE DISPOSED OF EXCEPT
AS THEREIN PROVIDED. THE CORPORATION WILL FURNISH A
COPY OF SUCH INSTRUMENT AND AGREEMENT TO THE RECORD
HOLDER OF THIS CERTIFICATE WITHOUT CHARGE ON REQUEST
TO THE CORPORATION AT ITS PRINCIPAL PLACE OF
BUSINESS OR REGISTERED OFFICE.
e. Withholding Taxes. In the case of distributions of
Common Stock or other securities hereunder, the
Company, as a condition of such distribution, may
require the payment (through withholding from the
optionee's salary, payment of cash by the optionee,
reduction of the number of shares of Common Stock or
other securities to be issued (except in the case of
an Incentive Option), or otherwise) of any federal,
state, local or foreign taxes required by law to be
withheld with respect to such distribution.
f. Costs and Expenses. The costs and expenses of
administering the Plan shall be borne by the Company
and shall not be charged against any Option nor to
any employee receiving an Option.
g. Funding of Plan. The Plan shall be unfunded. The
Company shall not be required to make any
segregation of assets to assure the payment of any
Option under the Plan.
h. Other Incentive Plans. The adoption of the Plan
does not preclude the adoption by appropriate means
of any other incentive plan for employees.
i. Vesting. Except as otherwise provided herein, an
Option granted pursuant to the Plan shall vest and,
hence, become exercisable as determined by the Board
of Directors or the Committee.
j. Effect on Employment. Nothing contained in the Plan
or any agreement related hereto or referred to
herein shall affect, or be construed as affecting,
the terms of employment of any Key Employee except
to the extent specifically provided herein or
therein. Nothing contained in the Plan or any
agreement related hereto or referred to herein shall
impose, or be construed as imposing, an obligation
on (i) the Company or any Related Entity to continue
the employment of any Key Employee, and (ii) any Key
Employee to remain in the employ of the Company or
any Related Entity.
k. Noncompetition. Any Option Agreement may contain,
among other things, provisions prohibiting optionees
from competing with the Company or any Related
Entity in a form or forms acceptable to the Option
Committee, in its sole discretion.
12. Definitions.
a. "Fair Market Value" shall, as it relates to the
Common Stock, mean the average of the high and low
prices of such Common Stock as reported on the
principal national securities exchange on which the
shares of Common Stock are then listed on the date
specified herein, or if there were no sales on such
date, on the next preceding day on which there were
sales, or if such Common Stock is not listed on a
national securities exchange, the last reported bid
price in the over-the-counter market, or if such
shares are not traded in the over-the-counter
market, the value of such Common Stock on such date
as determined by the Committee in good faith.
b. "Disability" shall be construed under the
appropriate provisions of the long-term disability
plan maintained for the benefit of employees of the
Company or any Related Entity who are regularly
employed on a salaried basis unless another meaning
shall be agreed to in writing by the Committee and
the optionee; provided, however, that in the case of
an Incentive Option "disability" shall have the
meaning specified in Section 22(e)(3) of the Code.
c. A "Change of Control" shall be deemed to have
occurred if, subsequent to the Effective Date of
this Plan, (A) any "person" (as such term is defined
in Section 13(d) of the Exchange Act) is or becomes
the beneficial owner, directly or indirectly, of
either (x) a majority of the Company's outstanding
Common Stock or (y) securities of the Company
representing a majority of the combined voting power
of the Company's then outstanding voting securities,
or (B) during any period of two consecutive years,
individuals who at the beginning of such period
constitute the Board of Directors cease, at any time
after the beginning of such period, for any reason
to constitute a majority of the Board of Directors
unless the election of each new director was
nominated or ratified by at least two-thirds of the
directors still in office who were directors at the
beginning of such two-year period; provided,
however, that in the case of an Outside. Director
Participant, the failure of such an Outside Director
Participant nominated for re-election by management
to be re-elected in a contested proxy contest also
shall constitute a Change of Control as to such
Outside Director Participant.
d. "Retirement" shall mean (i) with respect to any Key
Employee, the termination of employment of such
person from the Company or any Related Entity, who
at the time of such termination is at least fifty-five
(55) years of age and who has completed at
least ten (10) years of service (at least 1,000 in
any fiscal year) with the Company, any Related
Entity or any combination thereof or (ii) with
respect to any Outside Director Participant, either
failure of the Company to retain or nominate for
re-election such Outside Director Participant or such
director is ineligible to run for re-election
pursuant to the Company's by-laws.
13. Amendment of Plan.
Subject to Sections 7.k. and 8.k., the Board of
Directors, with the consent of the Option Committee, shall
have the right to amend, modify, suspend or terminate the Plan
at any time, provided that (i) no amendment shall be made
which shall increase the total number of shares of the Common
Stock which may be issued and sold pursuant to Options granted
under the Plan or decrease the minimum option price in the
case of an Incentive Option or modify the provisions of the
Plan relating to eligibility with respect to Incentive
Options, unless such amendment is made by or with the approval
of the stockholders, and (ii) no amendment shall be made which
shall adversely affect the Plan's qualification under Section
162(m)(4)(C) of the Code. The Board of Directors shall be
authorized to amend the Plan and the Options granted
thereunder (i) to qualify as "incentive stock options" within
the meaning of Section 422 of the Code, (ii) to comply with
Rule 16b-3 (or any successor rule) under the Exchange Act or
(iii) to maintain qualification under Section 162(m)(4)(C) of
the Code. No amendment, modification, suspension or
termination of the Plan shall alter or impair any options
previously granted under the Plan, without the consent of the
holder thereof.
14. Effective Date.
The Plan shall become effective at the latest of the
following dates: (i) the date on which more than fifty percent
(50%) of the shareholders of the Company entitled to vote
thereon approve the Plan and (ii) the date on which the Option
Committee, comprised exclusively of two or more "outside
directors" (within the meaning of Section 162(m) of the Code),
adopts and ratifies the Plan (the "Effective Date"); provided,
however, that if the Plan is not approved by a vote of the
stockholders of the Company at an annual meeting or by written
consent within twelve (12) months before or after the
Effective Date, the Plan and any Options granted thereunder
shall terminate. No Options shall be granted hereunder prior
to the Effective Date.
REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.
IT WITNESS WHEREOF, Redman Industries, Inc., acting by
and through its officer hereunto duly authorized, has executed
this instrument, as of the 15th day of September, 1993.
REDMAN INDUSTRIES, INC.
By: /S/ FERGUS J. WALKER, JR.
Name: Fergus J. Walker, Jr.
Title: Executive Vice
President
1. Purpose.
Redman Industries, Inc., a Delaware corporation (the
"Company"), by means of this 1993 Incentive Holders' Stock
Option Plan (the "Plan"), desires to afford certain key
employees of the Company and any parent corporation or
subsidiary corporation thereof now existing or hereafter
formed or acquired (such parent and subsidiary corporations
sometimes referred to herein as "Related Entities") who are
responsible for the continued growth of the Company an
opportunity to acquire a proprietary interest in the Company,
and thus to create in such persons an increased interest in
and a greater concern for the welfare of the Company and any
Related Entities. As used in the Plan, the terms "parent
corporation" and "subsidiary corporation" shall mean,
respectively, a corporation within the definition of such
terms contained in Sections 424(e) and 424(f), respectively,
of the Internal Revenue Code of 1986, as amended (the "Code").
The stock options described in Section 6 (the "Options"),
and the shares of Common Stock (as hereinafter defined)
acquired pursuant to the exercise of such Options are a matter
of separate inducement and are not in lieu of any salary or
other compensation for services.
2. Administration.
The Plan shall be administered by the Option Committee,
or any successor thereto, of the Board of Directors of the
Company (the "Board of Directors"), or by any other committee
appointed by the Board of Directors to administer this Plan
(the "Committee"). The number of individuals that shall
constitute the Committee shall be determined from time to time
by a majority of all the members of the Board of Directors,
and, unless that majority of the Board of Directors determines
otherwise, shall be no less than two individuals. A majority
of the Committee shall constitute a quorum (or if the
Committee consists of only two members, then both members
shall constitute a quorum), and subject to the provisions of
Section 5, the acts of a majority of the members present at
any meeting at which a quorum is present, or acts approved in
writing by a majority of the Committee, shall be the acts of
the Committee. Whenever the Company shall have a class of
equity securities registered pursuant to Section 12 of the
Securities Exchange Act of 1934, as amended (the "Exchange
Act"), each member of the Committee shall be required to be a
"disinterested person" to administer the Plan within the
meaning of Rule 16b-3, as amended, or other applicable rules
under Section 16(b) of the Exchange Act, and the Committee
shall administer the Plan so as to comply at all times with
the Exchange Act.
The members of the Committee shall serve at the pleasure
of the Board of Directors, which shall have the power, at any
time and from time to time, to remove members from or add
members to the Committee. Removal from the Committee may be
with or without cause. Any individual serving as a member of
the Committee shall have the right to resign from membership
in the Committee by written notice to the Board of Directors.
The Board of Directors, and not the remaining members of the
Committee, shall have the power and authority to fill
vacancies on the Committee, however caused. The Board of
Directors shall promptly fill any vacancy that causes the
number of members of the Committee to be below two or any
other number that Rule 16b-3 may require from time to time.
3. Shares Available.
Subject to the adjustments provided in Section 10, the
maximum aggregate number of shares of Common Stock, par value
$0.01 per share, of the Company ("Common Stock") which may be
granted for all purposes under the Plan shall be four hundred
thousand (400,000) shares. If, for any reason, any shares as
to which Options have been granted cease to be subject to
purchase thereunder, including, without limitation, the
expiration of such Option, the termination of such Option
prior to exercise or the forfeiture of such Option, such
shares shall thereafter be available for grants to such
individual or other individuals under the Plan. Options
granted under the Plan may be fulfilled in accordance with the
terms of the Plan with (i) authorized and unissued shares of
the Common Stock, (ii) issued shares of such Common Stock held
in the Company's treasury or (iii) issued shares of Common
Stock reacquired by the Company in each situation as the Board
of Directors or the Committee may determine from time to time
at its sole option.
4. Eligibility and Bases of Participation.
Grants of Non-Qualified Options (as hereinafter defined)
may be made under the Plan, subject to and in accordance with
Section 6, to Key Employees. As used herein, the term "Key
Employee" shall mean any employee of the Company or any
Related Entity, including officers and directors of the
Company or any Related Entity who are also employees of the
Company or any Related Entity, who are regularly employed on a
salaried basis and who are so employed on the date of such
grant, whom the Committee identifies as having a direct and
significant effect on the performance of the Company or any
Related Entity.
The adoption of this Plan shall not be deemed to give any
Person a right to be granted any Options.
5. Authority of Committee.
Subject to and not inconsistent with the express
provisions of the Plan, the Code and Rule 16b-3, the Committee
shall have plenary authority, in its sole discretion, to:
a. determine the Key Employees to whom Options shall be
granted, the time when such Options shall be
granted, the number of Options, the purchase price
or exercise price of each Option, the period(s)
during which such Option shall be exercisable
(whether in whole or in part), the restrictions to
be applicable to Options and the other terms and
provisions thereof (which need not be identical);
b. require, as a condition to the granting of any
Option, that the person receiving such Option agree
not to sell or otherwise dispose of such Option, any
Common Stock acquired pursuant to such Option or any
other "derivative security" (as defined by Rule 16a-l(c)
under the Exchange Act) for a period of six (6)
months following the later of (i) the date of the
grant of such Option or (ii) the date when the
exercise price of such Option is fixed if such
exercise price is not fixed at the date of grant of
such Option;
c. provide an arrangement through registered broker-dealers
whereby temporary financing may be made
available to an optionee by the broker-dealer, under
the rules and regulations of the Board of Governors
of the Federal Reserve, for the purpose of assisting
the optionee in the exercise of an Option, such
authority to include the payment by the Company of
the commissions of the broker-dealer;
d. provide the establishment of procedures for an
optionee (1) to have withheld from the total number
of shares of Common Stock to be acquired upon the
exercise of an Option that number of shares having a
Fair Market Value (as defined in Section 12) which,
together with such cash as shall be paid in respect
of fractional shares, shall equal the Option
exercise price, and (2) to exercise a portion of an
Option by delivering that number of shares of Common
Stock already owned by such optionee having a Fair
Market Value which shall equal the partial Option
exercise price and to deliver the shares thus
acquired by such optionee in payment of shares to be
received pursuant to the exercise of additional
portions of such Option, the effect of which shall
be that such optionee can in sequence utilize such
newly acquired shares in payment of the exercise
price of the entire Option, together with such cash
as shall be paid in respect of fractional shares;
e. provide the establishment of a procedure whereby a
number of shares of Common Stock or other securities
may be withheld from the total number of shares of
Common Stock or other securities to be issued upon
exercise of an Option to meet the obligation of
withholding for income, social security and other
taxes incurred by an optionee upon such exercise or
required to be withheld by the Company in connection
with such exercise;
f. prescribe, amend, modify and rescind rules and
regulations relating to the Plan; and
g. make all determinations, perform all other acts,
exercise all other powers and establish any other
procedures determined by the Committee to be
necessary, appropriate or advisable in administering
the Plan or for the conduct of the Committee's
business.
The Committee may delegate to one or more of its members, or
to one or more agents, such administrative duties as it may
deem advisable, and the Committee or any person to whom it has
delegated duties as aforesaid may employ one or more persons
to render advice with respect to any responsibility the
Committee or such person may have under the Plan; provided,
however, that whenever the Company has a class of equity
securities registered under Section 12 of the Exchange Act,
the Committee may not delegate any duties to a member of the
Board of Directors who, if elected to serve on the Committee,
would not qualify as a "disinterested person" to administer
the Plan as contemplated by Rule 16b-3, as amended, or other
applicable rules under the Exchange Act. The Committee may
employ attorneys, consultants, accountants, or other persons
and the Committee, the Company, and its officers and directors
shall be entitled to rely upon the advice, opinions or
valuations of any such persons. All actions taken and all
interpretations and determinations made by the Committee in
good faith shall be final and binding upon all persons who
have received grants under the Plan, the Company and all other
interested persons. No member or agent of the Committee shall
be personally liable for any action, determination or
interpretation made in good faith with respect to the Plan and
all members and agents of the Committee shall be fully
protected by the Company in respect of any such action,
determination or interpretation.
6. Stock Options for Key Employees.
Subject to the express provisions of this Plan, the
Committee shall have the authority, in its sole discretion, to
grant non-qualified stock options (options which do not
qualify under Section 422 of the Code) ("Non-Qualified
Options") to Key Employees. The terms and conditions of the
Options granted under this Section 6 shall be determined from
time to time by the Committee; provided, however, that the
Options granted under this Section 6 shall be subject to the
following:
a. Incentive Unit Agreement Provisions. In its sole
discretion, the Committee may include, among other
things, provisions in the Option Agreements (as
defined hereinafter) similar to those set forth in
the Incentive Units Agreements, entered into by the
Company and certain employees thereof prior to the
Effective Date hereof, in substantially the form set
forth on Exhibit A hereto. Such provisions may
include, without limitation, provisions relating to
non-competition.
b. Option Price. The Committee shall establish the
option price at the time any Non-Qualified Option is
granted at such amount as the Committee in its sole
discretion shall determine but in no event less than
the par value per share of the Common Stock issuable
upon exercise of such Option. The Option price will
be subject to adjustment in accordance with the
provisions of Section 10 of the Plan.
c. Payment. The price per share of Common Stock with
respect to each Option shall be payable at the time
the Option is exercised. Such price shall be
payable (i) in cash or by an equivalent means
acceptable to the Committee, (ii) on the Committee's
prior consent, by delivery to the Company of shares
of Common Stock owned by the optionee or by the
delivery or withholding of shares pursuant to a
procedure created pursuant to Section 5.e. of the
Plan or (iii) by any combination of clauses (i) and
(ii). Shares delivered to or withheld by the
Company in payment of the option price shall be
valued at the Fair Market Value of the Common Stock
on the day preceding the date of the exercise of the
Option.
d. [Intentionally deleted.]
e. Exercisability of Stock Option. Unless otherwise
provided in the Option Agreements, each Option shall
be immediately vested in full on the date of grant
thereof. Subject to Section 9, each Option shall be
exercisable in one or more installments as the
Committee in its sole discretion may determine at
the time of the grant. The right to purchase shares
shall be cumulative so that when the right to
purchase any shares has accrued such shares or any
part thereof may be purchased at any time thereafter
until the expiration or termination of the Option.
No Option by its terms shall be exercisable after
the expiration of ten (10) years from the date of
grant of the Option, or such other period as the
Committee in its sole discretion may determine.
f. Death. The Option Agreements may provide that, in
the event of the death of any optionee, the estate
of such optionee, or a person who acquired the right
to exercise such Option by bequest or inheritance or
by reason of the death of the optionee, may have the
right, at any time and from time to time within such
period, if any, as the Committee in its sole
discretion may determine, after the date of death
(but not after the expiration date of the Option),
to exercise such optionee's Option with respect to
all or any part of the shares of stock which such
optionee was entitled to purchase immediately prior
to the time of his death.
g. Disability. The Option Agreements may provide that,
if the employment of any optionee is terminated
because of Disability (as defined in Section 12),
such optionee may have the right, at any time and
from time to time within such period, if any, as the
Committee in its sole discretion may determine,
after the date of such termination (but not after
the expiration date of the Option), to exercise his
Option with respect to all or any part of the shares
of stock which such optionee was entitled to
purchase immediately prior to the time of such
termination.
h. Retirement. The Option Agreements may provide that,
if an optionee retires (as defined in Section 12)
from the Company or any Related Entity, (i) all
Options held by such optionee on the date of his
retirement shall become exercisable and (ii) such
optionee shall have the right, within such period,
if any, as the Committee in its sole discretion may
determine, after the date of his retirement (but in
no event after the expiration date of the Option),
to exercise his Option with respect to all or any
part of the shares of stock underlying the Options
held by such optionee immediately prior to the time
of retirement.
7 [Intentionally deleted.]
8. [Intentionally deleted.]
9. Change of Control.
Any option agreement pursuant to which an Option is
granted under the Plan (an "Option Agreement") may provide
that upon the occurrence of an event constituting a Change of
Control (as defined in Section 12), the optionee shall become
immediately fully vested in all unexercised Options granted
pursuant to the Plan.
10. Adjustment of Shares.
In the event there is any change in the Common Stock by
reason of any consolidation, combination, liquidation,
reorganization, recapitalization, stock dividend, stock split,
split-up, split-off, spin-off, combination of shares, exchange
of shares or other like change in capital structure of the
Company, the number or kind of shares or interests subject to
an Option and the per share price or value thereof shall be
appropriately adjusted by the Committee at the time of such
event, provided that each optionee's position with respect to
the Option and the per share price or value thereof shall not,
as a result of such adjustment, be worse than it had been
immediately prior to such event. Any fractional shares or
interests resulting from such adjustment shall be eliminated.
In the event of a Change of Control or a merger between
the Company and another corporation in which the Company is
not the surviving entity and where any optionee holds Options
issued pursuant to this Plan which have not been exercised,
the Company shall cause such Options to be canceled and
replacement Options to be issued by the surviving entity or a
Related Entity.
11. Miscellaneous Provisions.
a. Assignment or Transfer. No grant of any "derivative
security" (as defined by Rule 16a-l(c) under the
Exchange Act) made under the Plan or any rights or
interests therein shall be assignable or
transferable by an optionee except by will or the
laws of descent and distribution. During the
lifetime of an optionee, Options granted hereunder
shall be exercisable only by the optionee.
b. Investment Representation. If a registration
statement under the Securities Act of 1933, as
amended (the "Securities Act"), with respect to the
Common Stock issuable upon exercise of an Option, is
not in effect at the time such Option is exercised,
the Company may require, for the sole purpose of
complying with the Securities Act, that prior to
delivering such Common Stock to the exercising
optionee, such optionee must deliver to the
Secretary of the Company a written statement (i)
representing and warranting that such Common Stock
is being acquired for investment only and not with a
view to the resale or distribution thereof, (ii)
acknowledging and confirming that such Common Stock
may not be sold unless registered for sale under the
Securities Act or pursuant to an exemption from such
registration and (iii) agreeing that the
certificates representing such Common Stock shall
bear a legend to the effect of the foregoing.
Notwithstanding anything in this Plan to the
contrary, the Company shall not be required to
deliver Common Stock pursuant to any exercise of an
Option if such action would, in the opinion of
counsel to the Company, result in a violation of any
state or federal securities law, and the Company may
require that the exercising optionee deliver any
such written representations, written covenants and
other documents as the Company or its counsel deems
reasonably necessary, if any, including, without
limitation, an opinion of counsel reasonably
satisfactory to the Company to the effect that such
delivery of stock would not result in a violation of
any state or federal securities laws. If,
subsequent to the delivery by an optionee of the
written statement described in the preceding
paragraph, the Common Stock issuable upon exercise
of an option is registered under the Securities Act,
the Company may release such optionee from such
written statement.
c. Securities Act Legend. Certificates for shares of
Common Stock, when issued, may have substantially
the following legend, or statements of other
applicable restrictions, endorsed thereon, and may
not be immediately transferable:
THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. THE
SHARES MAY NOT BE OFFERED FOR SALE, SOLD, PLEDGED,
TRANSFERRED, OR OTHERWISE DISPOSED OF UNTIL THE
HOLDER HEREOF PROVIDES EVIDENCE SATISFACTORY TO THE
ISSUER (WHICH, IN THE DISCRETION OF THE ISSUER, MAY
INCLUDE AN OPINION OF COUNSEL SATISFACTORY TO THE
ISSUER) THAT SUCH OFFER, SALE, PLEDGE, TRANSFER, OR
OTHER DISPOSITION WILL NOT VIOLATE APPLICABLE
FEDERAL OR STATE LAWS.
This legend shall not be required for shares of
Common Stock issued pursuant to an effective
registration statement under the Securities Act.
d. Legend for Restrictions on Transfer. Each
certificate representing shares issued to an
optionee pursuant to an Option granted under the
Plan shall, if such shares are subject to any
transfer restriction, including a right of first
refusal, provided for under this Plan or an Option
Agreement, bear a legend that complies with
applicable law with respect to the restrictions on
transferability contained in this Section ll.d.,
such as:
THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE
ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY
IMPOSED BY THAT CERTAIN INSTRUMENT ENTITLED "REDMAN
INDUSTRIES, INC. 1993 INCENTIVE HOLDERS' STOCK
OPTION PLAN" AS ADOPTED BY REDMAN INDUSTRIES, INC.
(THE "CORPORATION") ON SEPTEMBER __, 1993, AND AN
AGREEMENT THEREUNDER BETWEEN THE CORPORATION AND
(HOLDER] DATED ________, 199_, AND MAY NOT BE
TRANSFERRED, SOLD, OR OTHERWISE DISPOSED OF EXCEPT
AS THEREIN PROVIDED. THE CORPORATION WILL FURNISH A
COPY OF SUCH INSTRUMENT AND AGREEMENT TO THE RECORD
HOLDER OF THIS CERTIFICATE WITHOUT CHARGE ON REQUEST
TO THE CORPORATION AT ITS PRINCIPAL PLACE OF
BUSINESS OR REGISTERED OFFICE.
e. Withholding Taxes. In the case of distributions of
Common Stock or other securities hereunder, the
Company, as a condition of such distribution, may
require the payment (through withholding from the
optionee's salary, payment of cash by the optionee,
reduction of the number of shares of Common Stock or
other securities to be issued) of any federal,
state, local or foreign taxes required by law to be
withheld with respect to such distribution.
f. Costs and Expenses. The costs and expenses of
administering the Plan shall be borne by the Company
and shall not be charged against any Option nor to
any employee receiving an Option.
g. Funding of Plan. The Plan shall be unfunded. The
Company shall not be required to make any
segregation of assets to assure the payment of any
Option under the Plan.
h. Other Incentive Plans. The adoption of the Plan
does not preclude the adoption by appropriate means
of any other incentive plan for employees.
i. Vesting. Except as otherwise provided herein, an
Option granted pursuant to the Plan shall vest and,
hence, become exercisable as determined by the Board
of Directors or the Committee.
j. Effect on Employment. Nothing contained in the Plan
or any agreement related hereto or referred to
herein shall affect, or be construed as affecting,
the terms of employment of any Key Employee except
to the extent specifically provided herein or
therein. Nothing contained in the Plan or any
agreement related hereto or referred to herein shall
impose, or be construed as imposing, an obligation
on (i) the Company or any Related Entity to continue
the employment of any Key Employee, and (ii) any Key
Employee to remain in the employ of the Company or
any Related Entity.
12. Definitions.
a. "Fair Market Value" shall, as it relates to the
Common Stock, mean the average of the high and low
prices of such Common Stock as reported on the
principal national securities exchange on which the
shares of Common Stock are then listed on the date
specified herein, or if there were no sales on such
date, on the next preceding day on which there were
sales, or if such Common Stock is not listed on a
national securities exchange, the last reported bid
price in the over-the-counter market, or if such
shares are not traded in the over-the-counter
market, the value of such Common Stock on such date
as determined by the Committee in good faith.
b. "Disability" shall be construed under the
appropriate provisions of the long-term disability
plan maintained for the benefit of employees of the
Company or any Related Entity who are regularly
employed on a salaried basis unless another meaning
shall be agreed to in writing by the Committee and
the optionee.
c. A "Change of Control,, shall be deemed to have
occurred if, subsequent to the Effective Date of
this Plan, (A) any "person" (as such term is defined
in Section 13(d) of the Exchange Act) is or becomes
the beneficial owner, directly or indirectly, of
either (x) a majority of the Company's outstanding
Common Stock or (y) securities of the Company
representing a majority of the combined voting power
of the Company's then outstanding voting securities,
or (B) during any period of two consecutive years,
individuals who at the beginning of such period
constitute the Board of Directors cease, at any time
after the beginning of such period, for any reason
to constitute a majority of the Board of Directors
unless the election of each new director was
nominated or ratified by at least two-thirds of the
directors still in office who were directors at the
beginning of such two-year period; provided,
however, that in the case of an Outside Director
Participant, the failure of such an Outside Director
Participant nominated for re-election by management
to be re-elected in a contested proxy contest also
shall constitute a Change of Control as to such
Outside Director Participant.
d. "Retirement" shall mean (i) with respect to any Key
Employee, the termination of employment of such
person from the Company or any Related Entity, who
at the time of such termination is at least fifty-five
(55) years of age and who has completed at
least ten (10) years of service (at least 1,000 in
any fiscal year) with the Company, any Related
Entity or any combination thereof or (ii) with
respect to any outside Director Participant, either
failure of the Company to retain or nominate for
re-election such Outside Director Participant or such
director is ineligible to run for re-election
pursuant to the Company's by-laws.
13. Amendment of Plan.
The Board of Directors shall have the right to amend,
modify, suspend or terminate the Plan at any time, provided
that no amendment shall be made which shall increase the total
number of shares of the Common Stock which may be issued and
sold pursuant to Options granted under the Plan, unless such
amendment is made by or with the approval of the stockholders.
The Board of Directors shall be authorized to amend the Plan
and the Options granted thereunder to comply with Rule 16b-3
(or any successor rule) under the Exchange Act. No amendment,
modification, suspension or termination of the Plan shall
alter or impair any Options previously granted under the Plan,
without the consent of the holder thereof.
14. Effective Date.
The Plan shall become effective as of September 15, 1993,
(the "Effective Date"); provided, however, that if the Plan is
not approved by a vote of the stockholders of the Company at
an annual meeting or by written consent within twelve (12)
months before or after the Effective Date, the Plan and any
Options granted thereunder shall terminate.
REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.
IT WITNESS WHEREOF, Redman Industries, Inc., acting by
and through its officer hereunto duly authorized, has executed
this instrument, as of the 15th day of September, 1993.
REDMAN INDUSTRIES, INC.
By: /S/ FERGUS J. WALKER, JR.
Name: Fergus J. Walker, Jr.
Title: Executive Vice President
<PAGE>
We hereby consent to the incorporation by reference in
the Registration Statement on Form S-8 of our report dated
February 9, 1996, which appears on page F-2 of Champion
Enterprises, Inc. Annual Report on Form 10-K for the year
ended December 30, 1995.
/S/ PRICE WATERHOUSE LLP
Price Waterhouse LLP
Detroit, Michigan
October 24, 1996
