As filed with the Securities and Exchange Commission on September 15, 1998
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 300, Auburn Hills, Michigan 48326
Address of principal executive offices) (zip code)
Forty-Eight Individual Non-Qualified Stock Option Agreements
(Full title of the Plan)
John J. Collins, Jr., Esq.
Vice President-Secretary and General Counsel
Champion Enterprises, Inc.
2701 University Drive, Suite 300
Auburn Hills, Michigan 48326
(Name and address of agent for service)
Telephone number, including area code, of agent for service: (248)340-9090
Copies to:
D. Richard McDonald
Dykema Gossett PLLC
1577 North Woodward Avenue, Suite 300
Bloomfield Hills, Michigan 48304
CALCULATION OF REGISTRATION FEE
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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, 1,419,500 $ 23.25 $ 33,003,375 $9,736.00
$1.00 par value
- ------------------------------------------------------------------------------------------------------------
*Estimated solely for purposes of computing the Registration Fee, at 23.25 per share, the average price for
shares of the Common Stock on September 11, 1998, as reported on the New
York Stock Exchange, pursuant to Rule 457(h).
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PROSPECTUS
Champion Enterprises, Inc.
Suite 300
2701 University Drive
Auburn Hills, Michigan 48326
(248)340-9090
------------------
261,362 Shares of Common Stock
$1 par value
-------------------
The 261,362 shares of Common Stock of Champion Enterprises, Inc.
(the "Company" or "CEI") offered by this Prospectus are outstanding shares
of Common Stock or shares of Common Stock which may be issued upon the
exercise of outstanding stock options, which may be sold from time to time
in the market or in other transactions by certain selling shareholders of
the Company. See "Plan of Distribution" and "Selling Shareholders." The
Company will not receive any of the proceeds from these sales.
The Common Stock is traded on the New York Stock Exchange. On
September 11, 1998, the closing sale price for the Common Stock as traded on
the New York Stock Exchange was $23.875, as reported in The Wall Street
Journal.
-----------------
This offering is not underwritten.
-----------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
No dealer, salesman or other person has been authorized to give any
information or to make any representations not contained in this Prospectus
in connection with the offer made hereby, and, if given or made, such
information or representation must not be relied upon. The delivery of this
Prospectus at any time does not imply that the information herein is correct
as of any time subsequent to the date hereof.
The date of this Prospectus is September 15, 1998
CONTENTS
Additional Information
Incorporation by Reference
Forward Looking Statements
Plan of Distribution
Selling Shareholders
Legal Matters
Experts
Information Required in Registration Statement
Signatures
Power of Attorney
ADDITIONAL INFORMATION
This Prospectus constitutes a part of a Registration Statement filed
by the Company with the Securities and Exchange Commission, under the
Securities Act of 1933, as amended. This Prospectus omits certain of the
information contained in the Registration Statement, and reference is hereby
made to the Registration Statement and related exhibits for further
information with respect to the Company and the securities offered hereby.
Any statements contained herein concerning the provisions of any documents
are not necessarily complete, and in such instance reference is made to the
copy of such documents filed as an exhibit to the Registration Statement or
otherwise filed with the Securities and Exchange Commission. Each such
statement is qualified in its entirety by such reference. This Registration
Statement may be inspected by anyone at the office of the Commission without
charge, and copies of all or any part of it may be obtained upon payment of
the Commission's charge for copying.
Champion Enterprises, Inc. is subject to the information
requirements of the Securities Exchange Act of 1934, as amended, and in
accordance therewith files reports, proxy statements and other information
with the Securities and Exchange Commission. Such reports, proxy statements
and other information may be inspected and copied at the office of the
Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, or
at its Regional Offices located at Northwestern Atrium Center, 500 West
Madison Street, Suite 1400, Chicago, IL 60661-2511; and 7 World Trade
Center, 13th Floor, New York, New York 10007; and copies of such material
can be obtained from the Public Reference Section of the Commission, at 450
Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. The
Commission maintains a Web site that contains reports, proxy and information
statements and other information regarding registrants that file
electronically with the Commission. The address of that Web site is
http://www.sec.gov.
The Company's Common Stock is traded on the New York Stock Exchange.
Reports, proxy statements and other information concerning the Company may
be inspected at the offices of the Exchange at 20 Broad Street, New York,
New York 10005.
INCORPORATION BY REFERENCE
The following documents filed by the Company with the Securities and
Exchange Commission are incorporated by reference in this Prospectus:
(a) The Company's Annual Report on Form 10-K for the fiscal year
ended January 3, 1998.
(b) All other reports filed pursuant to Section 13(a) or 15(d)
of the Securities Exchange Act of 1934 since the end of the
fiscal year covered by the Annual Report on Form 10-K
referred to in Paragraph (a) above, as follows: the
Company's Quarterly Reports on Form 10-Q for its quarters
ended April 4, 1998, and July 4, 1998.
(c) The description of the Common Stock of the Company contained
in the Registration Statement on Form 8-A, No. 1-9751 filed
under the Securities Exchange Act of 1934.
All documents filed by the Company with the Commission pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934,
as amended, subsequent to the date of this Prospectus and prior to the
termination of the offering of the securities covered by this Prospectus
shall be deemed to be incorporated herein by reference and to be a part
hereof from the respective date of filing of each such document.
The Company will provide, without charge, to each person to whom
this Prospectus is delivered, on the written or oral request of any such
person, a copy of any or all of the documents incorporated herein by
reference (other than exhibits to such documents). Requests should be
directed to John J. Collins, Jr., Vice President-Secretary and General
Counsel, Champion Enterprises, Inc., 2701 University Drive, Suite 320,
Auburn Hills, Michigan 48326, (248)340-9090.
FORWARD LOOKING STATEMENTS
The Company may from time to time make written or oral forward
looking statements, including statements contained in the Company's filings
with the Commission and its reports to shareholders. This Prospectus
contains and incorporates by reference certain statements that could be
considered forward looking. Such statements are or will be based on the
Company's estimates, assumptions and projections, and are subject to risks
and uncertainties, including those specifically listed below and those
contained in the Company's reports previously filed with the SEC, that could
cause actual results to differ materially from those included in the forward
looking statements.
Long term growth in the manufactured housing industry may be
affected by: (1) the relative cost of manufactured housing versus other
forms of housing; (2) general economic trends, including inflation and
unemployment rates, consumer confidence, job growth and interest rates; (3)
changes in demographics, including new household formations and the number
of Americans on fixed income; (4) the availability and cost of financing for
manufactured homes; (5) changes in government regulations and policies,
including HUD regulations, local building codes and zoning regulations; and
(6) changes in regional markets and the U.S. economy as a whole. Short-term
sales could be affected by inclement weather and inventory levels of
manufactured housing retailers. Fluctuations in interest rates may affect
the demand for manufactured housing to the extent that those changes reduce
job growth, slow the U.S. economy, or cause a loss in consumer confidence.
The profitability of the registrant may also be affected by: (1) its ability
to efficiently expand operations and utilize production capacity; (2) its
ability to pass increased raw material costs, particularly lumber costs, on
to its customers; (3) market share position; (4) growth in the manufactured
housing industry as a whole; (5) the results of its acquisitions; and (6)
strength of retail distribution.
PLAN OF DISTRIBUTION
The 261,362 shares of Common Stock being offered by this
Prospectus are being offered by certain shareholders of the Company listed
under "Selling Shareholders" (the "Selling Shareholders"). These shares
have been or will be issued to the Selling Shareholders pursuant to certain
Nonqualified Stock Option Agreements that were executed as an inducement to
employment with the Company. The option agreements were entered into
separately and not as part of a related series of transactions.
The shares offered by the Selling Shareholders may be sold from time
to time on the New York Stock Exchange or in the over-the-counter market or
shares may be offered in independent transactions, in negotiated
transactions or otherwise. In addition, the shares may be sold in
transactions pursuant to Rule 144 under the Securities Act of 1933, in which
case any shares sold pursuant to Rule 144 may be deemed to be restricted
securities. The Selling Shareholders may also sell some or all of the
shares in transactions involving broker-dealers who may acquire shares as
principal. Sales will be in the quantities, at the time, and through
registered broker-dealers to be determined from time to time by each Selling
Shareholder. No arrangements for any broker-dealer to act on behalf of the
Selling Shareholders have yet been made. It is anticipated that any selling
broker-dealers engaged by the Selling Shareholders will receive only their
customary brokerage commissions. Participating broker-dealers may be deemed
underwriters of the shares within the meaning of the Securities Act of 1933,
in which event all such compensation to be received by them may be deemed
underwriting compensation.
Sales of the shares offered by the Selling Shareholders will be made
at prices per share approximating market prices prevailing at the time of
the sales. The Company will not receive any of the proceeds of the sales.
Any brokerage commissions due to any broker engaged by any Selling
Shareholder, and any expenses incurred by any Selling Shareholder in
connection with the offering made hereby, will be borne by the Selling
Shareholder. The Company is bearing the legal and accounting expense
incurred in the preparation and filing of the Registration Statement of
which this Prospectus is a part and the filing fee thereunder.
SELLING SHAREHOLDERS
Certain information is provided below with respect to each of the
Selling Shareholders. The information includes the name and address of each
Selling Shareholder, present positions, offices and material relationships
with the Company and its subsidiaries and any during the past three years,
the number of shares of common stock of the Company beneficially owned, the
number of shares offered by this Prospectus and the percentage of the Class
of Common Stock to be owned by the Selling Shareholders after the offering.
The following table does not include non-affiliates, each of whom may sell
up to 1,000 shares.
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Shares of CEI Common Stock
--------------------------
Present Positions, Offices Percent
or Relationships with CEI Owned as of Offered of Class
and its Affiliates and Date of this by this After
Name and Address** Any During the Past 3 Years Prospectus Prospectus Offering
------------------ --------------------------- ------------ ---------- --------
Calvin K. Aaron President of a retail subsidiary 2,000 2,000 *
Robert Bagwell Manager of a retail subsidiary 1,500 1,500 *
Karl H. Baumgartner President of a retail subsidiary 27,000 2,000 *
Richard Breidenbach President of a retail subsidiary 5,000 5,000 *
Art Chatoff Vice President of a retail 8,000 5,000 *
subsidiary
Gay Clary Manager of a retail subsidiary 1,500 1,500 *
M. Mark Cole President of a retail subsidiary 59,690 46,690 *
James Drake Manager of a retail subsidiary 1,500 1,500 *
Russell Fox President of a retail subsidiary 10,000 10,000 *
David Getler Manager of a retail subsidiary 3,335 3,335 *
Glenn Gilliam President of a retail subsidiary 5,000 5,000 *
Gary L. Good Vice President of a retail 16,675 16,675 *
subsidiary
James R. Gress Manager of a retail subsidiary 1,667 1,667 *
Howard Henderson Manager of a retail subsidiary 1,500 1,500 *
Leroy Jones President of a retail subsidiary 2,000 2,000
James Landreth President of a retail subsidiary 2,000 2,000 *
Hope McGinnis Manager of a retail subsidiary 1,500 1,500 *
James R. McKenzie President of a retail subsidiary 2,000 2,000 *
K.D. Pool President of a retail subsidiary 5,100 2,000 *
Don Powell Manager of a retail subsidiary 1,000 1,000 *
Mark B. Russell Treasurer of a retail subsidiary 3,335 3,335 *
Joseph Stegmayer President, Retail Operations and 120,000 120,000 *
Chief Financial Officer
Steven B. Thomas President of a retail subsidiary 2,000 2,000 *
John Whipple Treasurer of a retail subsidiary 3,000 3,000 *
Eugene Whitworth Chief Executive Officer of 26,327 6,327 *
a retail subsidiary
Charles E. Wright President of a retail subsidiary 2,000 2,000 *
- ----------------
* Less than 1%
** Address is Suite 300, 2701 University Drive, Auburn Hills, Michigan 48326.
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LEGAL MATTERS
The validity of the Common Stock offered hereby will be passed upon
for the Company by Dykema Gossett, PLLC of Bloomfield Hills, Michigan.
EXPERTS
The financial statements incorporated in this Prospectus by
reference to the Company's Annual Report on Form 10-K for the year ended
January 3, 1998, have been so incorporated in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given on the authority
of said firm as experts in auditing and accounting.
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 January 3, 1998.
(b) The Company's Quarterly Reports on Form 10-Q for its
quarters ended April 4, 1998, and July 4, 1998.
(c) 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 Statement 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.
The description of securities being offered is set forth in Item
3(c).
Item 5. Interests of Named Experts and Counsel.
Not Applicable
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.
Certain of the shares to be reoffered or resold pursuant to this
Registration Statement were issued without registration under the Securities
Act in reliance on Section 4(2) of the Securities Act for transactions not
involving a public offering. In determining that such exemption was
available, the Company relied on the fact that the shares were being issued
to a small number of investors, that such investors made certain investment
representations and that the investors agreed not to transfer the shares for
a period of two years.
Item 8. Exhibits.
The following exhibits are filed with this Registration Statement:
4.1 Form of Non-Qualified Stock Option Agreement.
4.2 Form of Non-Qualified Stock Option Agreement.
5 Opinion of Dykema Gossett PLLC with respect to the legality
of the Common Stock to be registered hereunder.
23.1 Consent of PricewaterhouseCoopers LLP
23.2 Consent of Ernst & Young LLP
23.3 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.
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
September 15, 1998.
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., Joseph H. Stegmayer and John
J. Collins, Jr. and each of them acting alone, his true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him and in his 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 September 15, 1998.
Title
-----
/s/ WALTER R. YOUNG, JR.
- --------------------------
Walter R. Young, Jr. Chairman of the Board of Directors,
President and Chief Executive Officer
(Principal Executive Officer)
/s/ JOSEPH H. STEGMAYER
- --------------------------
Joseph H. Stegmayer President, Retail Operations
and Chief Financial Officer
(Principal 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/ ROBERT W. STARK
- ---------------------------
Robert W. Stark Director
/s/ CARL L. VALDISERRI
- ---------------------------
Carl L. Valdiserri Director
INDEX TO EXHIBITS
Exhibit
Number Exhibits
4.1 Form of Non-Qualified Stock Option Agreement.
4.2 Form of Non-Qualified Stock Option Agreement.
5 Opinion of Dykema Gossett PLLC with respect to the legality
of the Common Stock to be registered hereunder.
23.1 Consent of PricewaterhouseCoopers LLP
23.2 Consent of Ernst & Young LLP
23.3 Consent of Dykema Gossett PLLC (contained in Exhibit 5)
24 Power of Attorney (see "Signatures")
The following document is a form of Nonqualified Stock Option Agreement
entered into between the Registrant and various officers and employees of
subsidiaries. The agreements are identical in all material respects except
as to the identity of the parties, the dates of execution and the number of
options granted.
NONQUALIFIED STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT (the "Agreement") is entered into this --- day
of ------, 1998 (the "Grant Date"), by and between Champion Enterprises,
Inc., a Michigan corporation ("the Company"), and ------------- (the
"Optionee").
WITNESSETH:
WHEREAS, Optionee is to be employed by a retail subsidiary of the Company;
and
WHEREAS, on ------------- (the "Stock Purchase Agreement Execution Date"),
the Company, through its wholly owned subsidiary Champion Home Centers,
Inc., a Michigan corporation ("Champion Home Centers"), executed that
certain stock purchase agreement (the "Stock Purchase Agreement") whereby
Champion Home Centers agreed to purchase substantially all of the assets of
- ------------- ; and
WHEREAS, the Optionee was previously employed by and was a shareholder of --
- -----------; and
WHEREAS, the Company wishes to provide additional incentive to Optionee, to
encourage stock ownership by Optionee, and to encourage Optionee to remain
in the employ of the Company or its subsidiaries; and
NOW, THEREFORE, the Company and Optionee hereby agree as follows:
1. Definitions. For the purposes of this Agreement, certain
words and phrases have the following definitions:
a) "Act" means the Securities Act of 1933;
b) "Code" means the Internal Revenue Code of 1986, as amended;
c) "Committee" means the Compensation Committee of the Company;
d) "Common Stock" means the common stock of the Company, par value
$1.00;
e) "Disability" means "disability" as defined under Section 22(e) of
the Code;
f) "Employment" (whether or not capitalized) means employment with the
Company or any Parent or Subsidiary of the Company;
g) "Parent" means any "parent corporation" as defined in Section 424(e)
of the Code;
h) "Subsidiary" means any "subsidiary corporation" as defined in
Section 424(f) of the Code.
2. First Part. The Company grants Optionee the right and option to
purchase from the Company ------------- shares of the Company's Common Stock
at a price equal to 40% of the closing price of the Company's Common Stock
on the New York Stock Exchange for the day prior to the Stock Purchase
Agreement Execution Date, as reported in The Wall Street Journal (the "First
Part"). The First Part must be exercised in its entirety by no later than
sixty (60) days after the Grant Date. This grant of the First Part is
conditioned upon the agreement by Optionee not to sell or otherwise transfer
the shares acquired under this First Part until at least two (2) years from
the date of exercise. In addition, if within 2 years from the Grant Date
Optionee terminates his employment with the Company or the Optionee's
employment is terminated for "Cause" (as defined below), Optionee shall
retain only the following shares:
Time From Grant Date Shares Retained
less than 6 months 0
less than 12 months -------------
less than 18 months -------------
less than 24 months -------------
24 months or more -------------
Shares not retained by Optionee above shall be forfeited and returned to the
Company in exchange for the exercise price paid by Optionee for the
forfeited shares. For purposes of this Agreement, "Cause" shall have the
meaning given to it in that certain employment agreement by and between the
Optionee and a subsidiary of the Company and executed on or about the date
hereof (the "Employment Agreement").
3. Second Part. If Optionee exercises the First Part within 60 days
from the Grant Date, the Company grants Optionee the right and option to
purchase from the Company ------------- shares of the Company's Common Stock
at a price equal to 100% of the closing price of the Company's Common Stock
on the New York Stock Exchange for the day prior to the Stock Purchase
Agreement Execution Date, as reported in The Wall Street Journal, (the
"Second Part"). The options granted under this Second Part shall not be
immediately exercisable, but shall be exercisable according to the following
schedule:
Number of Option Shares Date Exercisable
----- 1 year after the Grant Date
----- 2 years after the Grant Date
----- 3 years after the Grant Date
----- 4 years after the Grant Date
----- 5 years after the Grant Date
This grant of the Second Part is conditioned upon the agreement by Optionee
not to sell or otherwise transfer the shares acquired under this Second Part
until at least six (6) months from the date of exercise. No portion of this
Second Part shall be exercisable more than ten (10) years after the Grant
Date. The Second Part may be exercised in installments. This Second Part
is not intended to be an incentive stock option within the meaning of
Section 422 of the Code. Notwithstanding anything to the contrary contained
in this Section 3, if the Optionee exercises the First Part within 60 days
of the Grant Date, the Second Part shall be immediately exercisable if
Optionee is terminated by the Company without Cause.
4. Termination of Employment.
a) Before Exercise of the First Part. If Optionee's employment with
the Company shall terminate for any reason prior to Optionee's exercise in
full of the First Part, Optionee's right to exercise any option under this
Agreement shall terminate and all exercise rights hereunder shall cease.
b) Death or Disability. If, on or after one (1) year from the Grant
Date (the first date that any portion of the Second Part becomes
exercisable), Optionee shall die or become Disabled, Optionee or the
executor or administrator of the estate of Optionee (as the case may be) or
the person or persons to whom the option shall have been transferred by will
or trust or by the laws of descent and distribution, or the legal guardian
of Optionee or the individual designated in Optionee's durable power of
attorney in the event of Disability, shall have the right, within one year
from the date of Optionee's death or Disability, to exercise the second part
of this option to the extent that it is exercisable and unexercised on the
date of Optionee's death or Disability. This one-year period may be
extended at the discretion of the Committee, but not beyond ten (10) years
from the Grant Date.
c) Other Termination. If, after Optionee's exercise in full of the
First Part, Optionee's employment shall be terminated for any reason other
than death or Disability, Optionee shall have the right, within three months
after such termination of employment, to exercise the second part of this
option to the extent that it is exercisable and unexercised on the date of
such termination of employment. This three-month period may be extended at
the discretion of the Committee, but not beyond ten (10) years from the
Grant Date.
d) Events Not Constituting a Termination. A leave of absence with the
written consent of the Company, or a transfer of Optionee from one
corporation to another among the Company, its Parent, or any of its
Subsidiaries shall not be deemed a termination of employment for purposes of
this Agreement.
5. Exercise of Option. Optionee may exercise any exercisable option
granted pursuant to this Agreement by completing the following steps.
(a) Written Notice. Delivery to the Company of a written notice signed
by the Optionee: (1) for the First Part, in the form attached as Exhibit A;
or
(2) for the Second Part, in the form attached as Exhibit B. In addition, at
the request of the Company, Optionee may be required to provide a written
representation that Optionee is acquiring the shares for investment purposes
only, and not for resale.
(b) Purchase Price. Delivery to the Company of cash, a personal check,
bank draft, money order, or Common Stock (or any combination thereof) equal
to the purchase price of the shares then to be purchased. Any Common Stock
tendered shall be valued at the closing price of the Company's Common Stock
on the first business day prior to the exercise date, as reported in The
Wall Street Journal.
After receipt of the above and subject to Section 8 below, the company shall
issue the shares in the name of Optionee.
6. No Right to Continued Employment. This Agreement does not give the
Optionee any right to be retained or to continued employment with the
Company of any Subsidiary of the Company.
7. Compliance with Securities Laws. Company's obligations under this
Agreement are subject to compliance with federal and state laws, rules and
regulations applying to the authorization, issuance or sale of securities,
and any applicable stock exchange requirements, and Company may require
Optionee to provide proof of compliance with those laws, rules, and
regulations before taking any action pursuant to this Agreement.
8. Investment Intent. The Optionee represents and warrants to the
Company that he is acquiring all shares of Common Stock under this option
for investment purposes only and not with a view to resale. The Optionee
acknowledges and agrees that such shares of Common Stock have not yet been
registered under the Act or the securities laws of any state and may not be
sold, transferred, assigned, offered, pledged or otherwise distributed
unless there is an effective registration statement under the Act and any
applicable securities laws covering such shares or the Company receives an
opinion of counsel from Optionee (and concurred to by counsel for the
Company) stating that such sale, transfer, assignment, offer, pledge or
other distribution is exempt from registration and prospectus delivery
requirements of the Act, any applicable state securities laws, or the
listing requirements of any stock exchange. Optionee further acknowledges
and agrees that any certificate for such shares shall contain an appropriate
legend to the foregoing effect and that a stop transfer order shall be
placed with the Company's transfer agent. The Company represents and
warrants that as soon as practical after the Optionee exercises any of the
options granted pursuant to this Agreement, the Company shall take any and
all steps that are necessary or required in order to register the Common
Stock pursuant to the Act.
9. Non-Assignability. The options granted by this Agreement shall not
be transferable by Optionee, other than by will or the laws of descent and
distribution, or as provided in Section 4(b) of this Agreement. Any
transferee of these options by will or the laws of descent and distribution
shall take them subject to the terms and conditions of this Agreement, and
no such transfer shall be effective to bind the Company unless the Company
is furnished with written notice of the transfer and a copy of the will or
any other evidence the Company deems necessary to establish the validity of
the transfer. The term "Optionee", as used in this Agreement, shall include
any person or entity to whom any option is transferred.
10. Withholding of Taxes. Optionee must pay to Company within fourteen
(14) days from the date of any exercise any amounts necessary to satisfy any
requirements for withholding of income or employment taxes in connection
with that exercise.
11. Rights as Shareholder. Optionee shall have no rights as a
shareholder of the Company with respect to any of the shares covered by this
option until the issuance of a stock certificate or certificates upon the
exercise of the option in full or in part, and then only with respect to
such shares represented by such certificate or certificates.
12. Disputes. As a condition to the granting the options contained in
this Agreement, Optionee and Optionee's successors and assigns agree that
any dispute or disagreement which shall arise under or as a result of this
Agreement shall be determined by the Committee in its sole discretion and
judgment. Any such determination or interpretation by the Committee of the
terms of this Agreement shall be final and shall be binding and conclusive
for all purposes.
13. Notices. Every notice relating to this Agreement shall be in
writing, any notice given by mail shall be by registered or certified mail
with return receipt requested. All notices to the Company shall be
delivered to the following address:
Champion Enterprises, Inc.
2701 University Drive, Suite 320
Auburn Hills, MI 48326-9090
Attn: Secretary of the Company
All notices by the Company to Optionee shall be delivered to Optionee
personally, or addressed to Optionee at Optionee's last residence address as
then contained in the records of the Company, or such other address as
Optionee may designate.
14. Adjustments. In the event of any stock dividend, stock split,
reclassification, merger, consolidation, or similar transaction affecting
the options covered by this Agreement, the number of shares and price per
share shall be adjusted pro rata for any increase or decrease in the number
of shares of outstanding common stock resulting from such stock dividend,
stock split, reclassification, merger, consolidation, or similar
transaction.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
COMPANY: CHAMPION ENTERPRISES, INC.
By:
-------------------------------
John J. Collins, Jr.,
Vice President, Secretary
and General Counsel
OPTIONEE:
- -----------------------
EXHIBIT A
NOTICE OF EXERCISE OF FIRST PART OF
NONQUALIFIED STOCK OPTION
Secretary
Champion Enterprises, Inc.
2701 University Drive, Suite 320
Auburn Hills, Michigan 48326
Dear Sir:
A stock option was granted to me on -------------, which permits me to
purchase ------------- shares of Champion Enterprises, Inc. Common Stock at
a price of $______ per share. I elect to exercise this part of the option
to purchase ----- nonqualified stock option shares. A personal check (or
cash, bank draft, or money order) for the purchase price is enclosed with
this letter.
If I choose to make an 83(b) election under the Code, I shall pay the
Company within fourteen (14) days from the date of that election the
applicable amount to the Company to satisfy any requirements for withholding
of income and employment taxes arising from this exercise.
I acknowledge and agree that the shares of Common Stock that I am purchasing
may not currently be registered under the Securities Act of 1933 (the "Act")
or the securities laws of any state. I understand and agree that if these
shares are not currently registered, the Company is obligated to register
these shares under the Act as soon as practicable after this exercise.
Notwithstanding the foregoing, I acknowledge and agree that these shares may
not be sold, transferred, assigned, offered, pledged or otherwise
distributed until they are registered under the Act or unless the Company
receives an opinion of counsel from me (and concurred to by counsel for the
Company) stating that such sale, transfer, assignment, offer, pledge or
other distribution is exempt from registration and prospectus delivery
requirements of the Act, any applicable state securities laws, or the
listing requirements of any stock exchange.
I represent that I will not sell or otherwise transfer any shares that I
purchase pursuant to this letter for a period of two years. I also
understand that if my employment with the Company is terminated within two
years of the grant date of this option, a portion of the shares, pro-rated
semi-annually, shall be forfeited and returned to the Company in exchange
for the exercise price relating to those shares.
- ---------------
Address: --------------------
- -----------------------------
SSN: ------------------------
Dated: , 1998
EXHIBIT B
NOTICE OF EXERCISE OF SECOND PART OF
NONQUALIFIED STOCK OPTION
Secretary
Champion Enterprises, Inc.
2701 University Drive, Suite 320
Auburn Hills, Michigan 48326
Dear Sir:
A stock option was granted to me on -------------, which permits me, upon
the exercise of the first part of the option within 60 days, to purchase ---
- -- shares of Champion Enterprises, Inc. Common Stock at a price of $______
per share. I elect to exercise this part of the option to purchase ________
nonqualified stock option shares. A personal check (or cash, bank draft, or
money order) for the purchase price is enclosed with this letter.
I shall pay the Company the applicable amount to satisfy any requirements
for withholding of income and employment taxes arising from this exercise
within fourteen days from the determination of said amount by the Company.
I acknowledge and agree that the shares of Common Stock that I am purchasing
may not currently be registered under the Securities Act of 1933 (the "Act")
or the securities laws of any state. I understand and agree that if these
shares are not currently registered, the Company is obligated to register
these shares under the Act as soon as practicable after this exercise.
Notwithstanding the foregoing, I acknowledge and agree that these shares may
not be sold, transferred, assigned, offered, pledged or otherwise
distributed until they are registered under the Act or unless the Company
receives an opinion of counsel from me (and concurred to by counsel for the
Company) stating that such sale, transfer, assignment, offer, pledge or
other distribution is exempt from registration and prospectus delivery
requirements of the Act, any applicable state securities laws, or the
listing requirements of any stock exchange.
I represent that I will not sell or otherwise transfer any shares that I
purchase pursuant to this letter for a period of six months, and each
certificate for such shares shall contain a legend to the foregoing effect.
- -----------------------
Address: --------------------
- -----------------------------
SSN: ------------------------
Dated:
The following document is a form of Nonqualified Stock Option Agreement
entered into between the Registrant and various officers and employees of
subsidiaries. The agreements are identical in all material respects except
as to the identity of the parties, the dates of execution and the number of
options granted.
NONQUALIFIED STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT (the "Agreement") is entered into this ____ day
of -------, 1998 (the "Grant Date"), by and between CHAMPION ENTERPRISES,
INC., a Michigan corporation (the "Company") and ----------- (the
"Optionee").
WITNESSETH:
WHEREAS, Optionee is to be employed by a retail subsidiary of the Company;
WHEREAS, the Company wishes to provide additional incentive to Optionee, to
encourage stock ownership by Optionee, and to encourage Optionee to remain
in the employ of the Company or its subsidiaries; and
WHEREAS, the Company desires that Optionee not compete with the Company and
that Optionee keep certain information that Optionee has acquired during
Optionee's employment with the Company confidential.
NOW, THEREFORE, the Company and Optionee hereby agree as follows:
1. Definitions. For the purposes of this Agreement, certain
words and phrases have the following definitions:
a) "Act" means the Securities Act of 1933;
b) "Code" means the Internal Revenue Code of 1986, as amended;
c) "Committee" means the Compensation Committee of the Company;
d) "Common Stock" means the common stock of the Company, par value
$1.00;
e) "Disability" means "disability" as defined under Section 22(e) of
the Code;
f) "Employment" (whether or not capitalized) means employment with the
Company or any Parent or Subsidiary of the Company;
g) "Parent" means any "parent corporation" as defined in Section 424(e)
of the Code;
h) "Subsidiary" means any "subsidiary corporation" as defined in
Section 424(f) of the Code.
2. First Part. The Company grants Optionee the right and
option to purchase from the Company ----------- shares of the Company's
Common Stock at a price equal to 40% of the closing price of the Company's
Common Stock on the New York Stock Exchange for the day prior to the Stock
Purchase Agreement Execution Date, as reported in The Wall Street Journal
(the "First Part"). The First Part must be exercised in its entirety by no
later than sixty (60) days after the Grant Date. This grant of the First
Part is conditioned upon the agreement by Optionee not to sell or otherwise
transfer the shares acquired under this First Part until at least two (2)
years from the date of exercise. In addition, if within 2 years from the
Grant Date Optionee terminates his employment with the Company or the
Optionee's employment is terminated for "good cause" (as defined below),
Optionee shall retain only the following shares:
Time From Grant Date Shares Retained
less than 6 months 0
less than 12 months -----------
less than 18 months -----------
less than 24 months -----------
24 months or more -----------
Shares not retained by Optionee above shall be forfeited and returned to the
Company in exchange for the exercise price paid by Optionee for the
forfeited shares. "Good Cause" shall mean Optionee's gross misconduct,
material breach of his duties or an act of fraud or dishonesty by the
Optionee.
3. Second Part. If Optionee exercises the First Part within 60
days from the Grant Date, the Company grants Optionee the right and option
to purchase from the Company ----------- shares of the Company's Common
Stock at a price equal to 100% of the closing price of the Company's Common
Stock on the New York Stock Exchange for the day prior to the Stock Purchase
Agreement Execution Date, as reported in The Wall Street Journal, (the
"Second Part"). The options granted under this Second Part shall not be
immediately exercisable, but shall be exercisable according to the following
schedule:
Number of Option Shares Date Exercisable
----------- 1 year after the Grant Date
----------- 2 years after the Grant Date
----------- 3 years after the Grant Date
----------- 4 years after the Grant Date
----------- 5 years after the Grant Date
This grant of the Second Part is conditioned upon the agreement by Optionee
not to sell or otherwise transfer the shares acquired under this Second Part
until at least six (6) months from the date of exercise. No portion of this
Second Part shall be exercisable more than ten (10) years after the Grant
Date. The Second Part may be exercised in installments. This Second Part
is not intended to be an incentive stock option within the meaning of
Section 422 of the Code.
4. Termination of Employment.
a) Before Exercise of the First Part. If Optionee's employment
with the Company shall terminate for any reason prior to Optionee's exercise
in full of the First Part, Optionee's right to exercise any option under
this Agreement shall terminate and all exercise rights hereunder shall
cease.
b) Death or Disability. If, on or after one (1) year from the
Grant Date (the first date that any portion of the Second Part becomes
exercisable), Optionee shall die or become Disabled, Optionee or the
executor or administrator of the estate of Optionee (as the case may be) or
the person or persons to whom the option shall have been transferred by will
or by the laws of descent and distribution, or the legal guardian of
Optionee or the individual designated in Optionee's durable power of
attorney in the event of Disability, shall have the right, within one year
from the date of Optionee's death or Disability, to exercise the second part
of this option to the extent that it is exercisable and unexercised on the
date of Optionee's death or Disability. This one-year period may be
extended at the discretion of the Committee, but not beyond ten (10) years
from the Grant Date.
c) Other Termination. If, on or after one (1) year from the
Grant Date (the first date that any portion of the Second Part becomes
exercisable), Optionee's employment shall be terminated for any reason other
than death or Disability, Optionee shall have the right, within three months
after such termination of employment, to exercise the second part of this
option to the extent that it is exercisable and unexercised on the date of
such termination of employment. This three-month period may be extended at
the discretion of the Committee, but not beyond ten (10) years from the
Grant Date.
d) Events Not Constituting a Termination. A leave of absence
with the written consent of the Company, or a transfer of Optionee from one
corporation to another among the Company, its Parent, or any of its
Subsidiaries shall not be deemed a termination of employment for purposes of
this Agreement.
5. Exercise of Option. Optionee may exercise any exercisable
option granted pursuant to this Agreement by completing the following steps.
(a) Written Notice. Delivery to the Company of a written notice
signed by the Optionee: (1) for the First Part, in the form attached as
Exhibit A; or (2) for the Second Part, in the form attached as Exhibit B.
In addition, at the request of the Company, Optionee may be required to
provide a written representation that Optionee is acquiring the shares for
investment purposes only, and not for resale.
(b) Purchase Price. Delivery to the Company of cash, a personal
check, bank draft, money order, or Common Stock (or any combination thereof)
equal to the purchase price of the shares then to be purchased. Any Common
Stock tendered shall be valued at the closing price of the Company's Common
Stock on the first business day prior to the exercise date, as reported in
The Wall Street Journal.
After receipt of the above and subject to Section 8 below, the company shall
issue the shares in the name of Optionee.
6. Confidentiality and Non-Competition. As consideration for
the options granted by this Agreement, Optionee hereby agrees as follows:
a) Confidentiality Agreement. Except with the prior written
consent of the Company, Optionee shall not during or after the term of this
Agreement: (a) disclose, publish, or in any other manner reveal to any
third party any Confidential Information (as defined below) relating to the
business or assets of the Company or its Subsidiaries; or (b) make use of
any Confidential Information (as hereinafter defined) for the Optionee's own
purposes, or for the benefit of any person or entity other than the Company
and its Subsidiaries.
b) Confidential Information Defined. "Confidential
Information" shall include any and all information and documentation
relating to the Company and its Subsidiaries, including but not limited to
information relating to the operations, services, trade secrets, dealer,
distributor and customer lists, promotion and pricing practices, operational
methods, market plans, studies, and forecasts, product development plans,
acquisition plans, design and design projects, inventions and research
projects, compensation information, procurement and sales activities and
procedures, the existence or substance of any agreements between Company (or
any Subsidiary) and any third party, and any and all other information and
documentation relating to the plans and operations of the Company or its
Subsidiaries.
c) Non-Competition.
(i) Definitions.
(1) "Non-Competition Period" shall start on the
date of this Agreement and end on the latter of (x) the
fifth anniversary of this Agreement (whether or not
termination occurs prior to such time) or (y) six months
after the effective date of any termination or resignation
during the employee's employment with a Subsidiary of the
Company.
(2) "Covered Area" shall mean all states where
A-1 Homes Group, Inc. ("A-1 Homes", a subsidiary of the
Company and the Optionee's direct employer) is from time to
time engaged in the Business (either directly or through any
dealer).
(3) The "Business" shall mean the retail sale
and service of manufactured housing, together with the
providing and/or arranging for financing and insurance
services in connection therewith.
(ii) Non-Competition Provision. Optionee acknowledges
that he/she is one of the very limited number of persons who has
developed the Business of ------- to its present condition, and that
his/her work for ----------- with respect to the Business has
brought and will continue to bring him into close contact with many
confidential affairs not readily available to the public. Optionee
further acknowledges that -------- and the Company will suffer
substantial and irreparable harm in the event Optionee should enter
into competition with any of them or disclose any of the affairs of
any of them to any third parties. In view of the foregoing and in
order to induce the Company to grant Optionee the options pursuant
to this Agreement, Optionee hereby agrees that during the
Non-Competition Period, he/she:
(1) Will not, directly or indirectly, whether
as an officer, director, consultant, agent,
employee, partner, shareholder, participant, owner
or otherwise, engage in any aspect or segment of
the Business or any business which competes with
the Business within the Covered Area.
(2) Will not, directly or indirectly, interfere
with, disrupt, or attempt to disrupt, any
relationship, contractual or otherwise, between ---
----, the Company, or any Subsidiary of the Company
and any dealer, distributor, customer, supplier or
employee of -------, the Company, or any Subsidiary
of the Company in the Covered Area;
(3) Will not, directly or indirectly, employ or
solicit the employment or engagement by others of
any employee of -------, the Company, or any
Subsidiary of the Company who was such an employee
at the time of termination of Optionee's employment
hereunder or within six (6) months prior to such
termination.
(iii) Optionee acknowledges that the
Non-Competition Period and the Covered Area under this
Section 8(a) hereof are reasonable, in view of the nature of
the Business in which ------- and the Company are engaged
and Optionee's knowledge of the Business and the
confidential information that will be made available to
Optionee. Optionee represents to the Company that the
enforcement of the restrictions contained in this Section
6(c) would not be unduly burdensome to Optionee, and in
order to induce the Company to grant the options under this
Agreement, the Optionee further represents and acknowledges
that he/she is willing and able to compete in other
geographical areas not prohibited by this Section 6(c).
Notwithstanding the foregoing, if any provision, or any part
thereof, of this Section 6(c) is held to be unenforceable
because of the duration thereof or the area covered thereby,
the parties agree that the court or arbitrators making the
determination shall have the power to reduce the duration or
the area of such provision, or to delete specific words or
phrases, and in its reduced or amended form such provision
shall then be enforceable and be enforced. The provisions
of this Section 6(c) shall continue to be binding upon
Optionee in accordance with its terms, notwithstanding the
termination of this Agreement.
d) Disclosure of Proprietary Information. Optionee
shall promptly disclose to the Company, in such form and manner as
the Company may reasonably require, all operations, systems,
services, methods, developments, inventions, improvements and other
information or data pertaining to the business or activities of the
Company as are conceived, originated, discovered or developed by
Optionee (whether or not copyrighted or patented) during the term of
his employment with the Company or its Subsidiaries, whether before
or after the execution of this Agreement. It is understood that
such information is proprietary in nature and shall be, as between
the Company and Optionee, for the exclusive use and benefit of the
Company and shall be and remain the property of the Company. If so
requested by the Company, Optionee shall execute and deliver to the
Company any instrument as the Company may reasonably request to
effectuate the assignment of any such proprietary information to the
Company.
e) Termination of Employment. Upon the termination of
Optionee's employment with the Company or its Subsidiaries, Optionee
shall deliver to the Company all records, data and memoranda of
every kind and character relating to the Company and its
Subsidiaries, including all copies thereof, which are in Optionee's
possession or control.
f) Remedies for Breach. Optionee acknowledges and
agrees that the Company's remedies at law for any breach of the
agreements contained in this Section 6 would be inadequate.
Optionee therefore agrees that in the event of Optionee's breach of
the agreements contained in this Section 6, the Company shall be
entitled to equitable relief in the form of specific performance, a
temporary restraining order, a temporary or permanent injunction, or
any other equitable remedy or relief which may then be available.
Nothing in this Section shall be construed as prohibiting the
Company from pursuing any other remedies available to it for any
such breach, whether in law, equity, or otherwise.
7. No Right to Continued Employment. This Agreement does not
give the Optionee any right to be retained or to continued employment with
the Company or any Subsidiary of the Company.
8. Compliance with Securities Laws. Company's obligations
under this Agreement are subject to compliance with federal and state laws,
rules and regulations applying to the authorization, issuance or sale of
securities, and any applicable stock exchange requirements, and Company may
require Optionee to provide proof of compliance with those laws, rules, and
regulations before taking any action pursuant to this Agreement.
9. Investment Intent. The Optionee represents and warrants to
the Company that he or she is acquiring all shares of Common Stock under
this option for investment purposes only and not with a view to resale. The
Optionee acknowledges and agrees that such shares of Common Stock have not
yet been registered under the Act or the securities laws of any state and
may not be sold, transferred, assigned, offered, pledged or otherwise
distributed unless there is an effective registration statement under the
Act and any applicable securities laws covering such shares or the Company
receives an opinion of counsel from Optionee (and concurred to by counsel
for the Company) stating that such sale, transfer, assignment, offer, pledge
or other distribution is exempt from registration and prospectus delivery
requirements of the Act, any applicable state securities laws, or the
listing requirements of any stock exchange. Optionee further acknowledges
and agrees that any certificate for such shares shall contain an appropriate
legend to the foregoing effect and that a stop transfer order shall be
placed with the Company's transfer agent. The Company represents and
warrants that as soon as practical after the Optionee exercises any of the
options granted pursuant to this Agreement, the Company shall take any and
all steps that are necessary or required in order to register the Common
Stock pursuant to the Act.
10. Non-Assignability. The options granted by this Agreement
shall not be transferable by Optionee, other than by will or the laws of
descent and distribution. Any transferee of these options by will or the
laws of descent and distribution shall take them subject to the terms and
conditions of this Agreement, and no such transfer shall be effective to
bind the Company unless the Company is furnished with written notice of the
transfer and a copy of the will or any other evidence the Company deems
necessary to establish the validity of the transfer. The term "Optionee",
as used in this Agreement, shall include any person or entity to whom any
option is transferred.
11. Withholding of Taxes. Optionee must pay to Company within
fourteen (14) days from the date of any exercise any amounts necessary to
satisfy any requirements for withholding of income or employment taxes in
connection with that exercise.
12. Rights as Shareholder. Optionee shall have no rights as a
shareholder of the Company with respect to any of the shares covered by this
option until the issuance of a stock certificate or certificates upon the
exercise of the option in full or in part, and then only with respect to
such shares represented by such certificate or certificates.
13. Disputes. As a condition to the granting the options
contained in this Agreement, Optionee and Optionee's successors and assigns
agree that any dispute or disagreement which shall arise under or as a
result of this Agreement shall be determined by the Committee in its sole
discretion and judgment. Any such determination or interpretation by the
Committee of the terms of this Agreement shall be final and shall be binding
and conclusive for all purposes. If the Company seeks enforcement of
Optionee's covenants under Section 6 of this Agreement in a court of law or
otherwise, this Agreement shall be governed by and construed in accordance
with the laws of the State of Michigan (other than conflicts of law
principles), and Optionee intends to, and does hereby, confer jurisdiction
to enforce the covenants contained in Section 6 of the Agreement upon the
courts of any jurisdiction within the State of Michigan and any
jurisdictions in which Optionee is alleged to have violated the covenants
contained in Section 6.
14. Notices. Every notice relating to this Agreement shall be
in writing, any notice given by mail shall be by registered or certified
mail with return receipt requested. All notices to the Company shall be
delivered to the following address:
Champion Enterprises, Inc.
2701 University Drive, Suite 320
Auburn Hills, MI 48326-9090
Attn: Secretary of the Company
All notices by the Company to Optionee shall be delivered to Optionee
personally, or addressed to Optionee at Optionee's last residence address as
then contained in the records of the Company, or such other address as
Optionee may designate.
[the remainder of this page is intentionally left blank]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
COMPANY: CHAMPION ENTERPRISES, INC.
By:
---------------------------------
Its:
---------------------------------
OPTIONEE:
- -------------------------
EXHIBIT A
NOTICE OF EXERCISE OF FIRST PART OF
NONQUALIFIED STOCK OPTION
Secretary
Champion Enterprises, Inc.
2701 University Drive, Suite 320
Auburn Hills, Michigan 48326
Dear Sir:
A stock option was granted to me on ----------, 1998, which permits me to
purchase ------ shares of Champion Enterprises, Inc. Common Stock at a price
of ------ per share. I elect to exercise this part of the option to
purchase ------ nonqualified stock option shares. A personal check (or
cash, bank draft, or money order) for the purchase price is enclosed with
this letter.
If I choose to make an 83(b) election under the Code, I shall pay the
Company within fourteen (14) days from the date of that election the
applicable amount to the Company to satisfy any requirements for withholding
of income and employment taxes arising from this exercise.
I acknowledge and agree that the shares of Common Stock that I am purchasing
may not currently be registered under the Securities Act of 1933 (the "Act")
or the securities laws of any state. I understand and agree that if these
shares are not currently registered, the Company is obligated to register
these shares under the Act as soon as practicable after this exercise.
Notwithstanding the foregoing, I acknowledge and agree that these shares may
not be sold, transferred, assigned, offered, pledged or otherwise
distributed until they are registered under the Act or unless the Company
receives an opinion of counsel from me (and concurred to by counsel for the
Company) stating that such sale, transfer, assignment, offer, pledge or
other distribution is exempt from registration and prospectus delivery
requirements of the Act, any applicable state securities laws, or the
listing requirements of any stock exchange.
I represent that I will not sell or otherwise transfer any shares that I
purchase pursuant to this letter for a period of two years. I also
understand that if my employment with the Company is terminated within two
years of the grant date of this option, a portion of the shares, pro-rated
semi-annually, shall be forfeited and returned to the Company in exchange
for the exercise price relating to those shares.
- -----------------------
Address:--------------------
- ----------------------------
SSN:------------------------
Dated: , 1998
EXHIBIT B
NOTICE OF EXERCISE OF SECOND PART OF
NONQUALIFIED STOCK OPTION
Secretary
Champion Enterprises, Inc.
2701 University Drive, Suite 320
Auburn Hills, Michigan 48326
Dear Sir:
A stock option was granted to me on -----------, 1998, which permits me,
upon the exercise of the first part of the option within 60 days, to
purchase ------ shares of Champion Enterprises, Inc. Common Stock at a price
of ------ per share. I elect to exercise this part of the option to
purchase ------------- nonqualified stock option shares. A personal check
(or cash, bank draft, or money order) for the purchase price is enclosed
with this letter.
I shall pay the Company the applicable amount to satisfy any requirements
for withholding of income and employment taxes arising from this exercise
within fourteen days from the determination of said amount by the Company.
I acknowledge and agree that the shares of Common Stock that I am purchasing
may not currently be registered under the Securities Act of 1933 (the "Act")
or the securities laws of any state. I understand and agree that if these
shares are not currently registered, the Company is obligated to register
these shares under the Act as soon as practicable after this exercise.
Notwithstanding the foregoing, I acknowledge and agree that these shares may
not be sold, transferred, assigned, offered, pledged or otherwise
distributed until they are registered under the Act or unless the Company
receives an opinion of counsel from me (and concurred to by counsel for the
Company) stating that such sale, transfer, assignment, offer, pledge or
other distribution is exempt from registration and prospectus delivery
requirements of the Act, any applicable state securities laws, or the
listing requirements of any stock exchange.
I represent that I will not sell or otherwise transfer any shares that I
purchase pursuant to this letter for a period of six months, and each
certificate for such shares shall contain a legend to the foregoing effect.
- -----------------------
Address: -------------------
- ----------------------------
SSN: -----------------------
Dated: ---------------------
September 15, 1998
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 September 15, 1998, 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 1,419,500 shares of the Company's Common Stock,
par value $1.00 per share (the "Common Stock"), pursuant to various
Nonqualified Stock Option Agreements.
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 instruments 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
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the
Prospectus constituting a part of this Registration Statement on Form S-8 of
our report dated February 6, 1998, appearing on page F-2 of Champion
Enterprises, Inc. Annual Report on Form 10-K for the year ended January 3,
1998. We also consent to the references to us under the heading "Experts"
in such Prospectus.
PRICEWATERHOUSECOOPERS LLP
/s/ PRICEWATERHOUSECOOPERS LLP
Bloomfield Hills, Michigan
September 10, 1998
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement
(Form S-8) pertaining to the Forty-Eight Individual Non-Qualified Stock
Option Agreements of Champion Enterprises, Inc. for the registration of
1,419,500 shares of its common stock, of our report dated May 17, 1996, with
respect to the consolidated financial statements of Redman Industries, Inc.
for the year ended March 29, 1996, included in Champion Enterprises, Inc.'s
Annual Report (Form 10K) for the year ended January 3, 1998 filed with the
Securities and Exchange Commission.
ERNST & YOUNG LLP
/s/ ERNST & YOUNG LLP
Dallas, Texas
September 10, 1998
