PERFORMANCE SHARE AWARD AGREEMENT
UNDER THE CHAMPION ENTERPRISES, INC.
1995 STOCK OPTION AND INCENTIVE PLAN
THIS PERFORMANCE SHARE AWARD AGREEMENT made this 31st day of
August, 1995, by and between Champion Enterprises, Inc., a
Michigan corporation ("the Company"), and Xxxxxx X. Xxxxx, Xx.
(the "Grantee").
WITNESSETH:
WHEREAS, the Grantee is now employed by the Company as
President and Chief Executive Officer, and the Company desires
to provide additional incentive to the Grantee, to encourage
stock ownership by the Grantee, and to encourage the Grantee to
remain in the employ of the Company, and as an inducement
thereto, the Company has determined to award to the Grantee a
Performance Share Award pursuant to the Company's 1995 Stock
Option and Incentive Plan, a copy of which is attached hereto as
Exhibit A;
NOW, THEREFORE, it is agreed between the parties as follows:
1. Definitions in Agreement. For purposes of this
Agreement, certain words and phrases have the following
definitions:
(a) "Cause" means "cause" as defined in the Grantee's
employment agreement with the Company, dated April 27, 1990, as
may be amended from time to time; provided, however, that any
notice by the Company not to renew such employment agreement
shall not be deemed to constitute termination for "cause" unless
specifically stated in the notice;
(b) "Change in Control" means a "change in control of
the Company," as defined in Section 8.2 of the Plan.
(c) "Code" means the Internal Revenue Code of 1986, as
amended;
(d) "Committee" means the Compensation Committee of
the Company;
(e) "Common Stock" means the common stock of the
Company;
(f) "Company" means Champion Enterprises, Inc.;
(g) "Disability" means "disability" as defined under
Section 22(e) of the Code;
(h) "Employment" (whether or not capitalized) means
employment with the Company or any Parent or Subsidiary of the
Company;
(i) "Grantee" means Xxxxxx X. Xxxxx, Xx;
(j) "Parent" means any "parent corporation" as defined
in Section 424(e) of the Code;
(k) "Performance Share Award means the award granted
hereunder;
(l) "Plan" means the Company's 1995 Stock Option and
Incentive Plan; and
(m) "Subsidiary" means any "subsidiary corporation" as
defined in Section 424(f) of the Code.
(n) "Vest," "Vested" or "Vesting" (whether or not
capitalized) means the date on which all or a portion of the
restrictions under the Performance Share Award lapse.
2. Grant of Performance Share Award. Subject to the terms
and conditions hereof, the Company hereby awards to the Grantee
a Performance Share Award for 50,000 shares of the Company's
Common Stock. Provided, however, that notwithstanding any other
provision in this Agreement to the contrary (including Section
5(a)), this Performance Share Award is conditioned upon
shareholder approval of a Plan amendment at the next annual
meeting of the Company that establishes performance share goals
in accordance with the requirements of Code Section 162(m). If
such Plan amendment is not approved, this Performance Share
Award shall be null and void, the shares under the award shall
be forfeited, and the Grantee's rights to the performance shares
granted hereunder shall terminate in full.
3. Performance Goals - Restrictions on Transfer.
The following requirements must be satisfied before the
shares pursuant to this award shall be freely transferable:
(a) The Grantee has continuously complied with the Common
Stock deposit requirements of Section 4 until the performance
goals established herein have been satisfied or deemed
satisfied; and
(b) The Company's earnings per share for the 1996 through
1999 fiscal years have grown at a rate at least equal to the
median of the following peer group of eight publicly-held
manufactured home companies and one publicly-held bus company:
Xxxxxxx Homes, Inc., Fleetwood Enterprises, Inc., Oakwood Home
Corporation, Skyline Corporation, Cavalier Homes, Inc., Xxxxxx
Homes Corporation, Liberty Homes, Inc. and Supreme Industries,
Inc. (formerly "ESI Industries, Inc."), as applied in accordance
with the August 11, 1995 Committee minutes.
(c) If any of the foregoing conditions is not satisfied,
the Grantee shall forfeit the shares under the award, and his
rights under the award shall be null and void. The certificate
evidencing the shares under the award shall carry a restrictive
legend that prohibits any transfer including the assignment,
hypothecation or pledge of the shares under the award prior to
the attainment of the performance goals and lapse of the
foregoing restrictions.
(d) Any Common Stock issued pursuant to this award shall
not be transferable until the Committee certifies in writing
that the performance goals and restrictions have been satisfied.
4. Grantee's Deposit of Shares.
(a) As partial consideration for this Performance
Share Award and the total stock incentive program of 800,000
shares of Company Common Stock awarded to Grantee on the award
date, Grantee shall deposit with the Company 15,625 of his
personally-owned, unencumbered shares of the Company's Common
Stock within 60 days after the date of this award. Grantee
shall be entitled to vote and receive dividends on such shares
while they are on deposit with the Company. The Performance
Share Award granted hereunder shall terminate in full if the
Grantee does not deposit the aforementioned 15,625 unencumbered
shares on or before 60 days after the award date, or, subject to
paragraph (b) below, if the Grantee otherwise retakes possession
of said shares prior to the expiration, termination or full
attainment of the vesting and performance goals under this award
(unless the Committee, at its sole discretion, has unilaterally
decided to return the deposited shares to the Grantee prior to
such date). If shareholder approval is not obtained for the
Plan amendment described in Section 2, above, the 15,625 shares
of the Grantee's Common Stock on deposit with the Company for
this award shall be immediately returned to the Grantee.
(b) Upon the attainment of the performance goals under
this Performance Share Award, the 15,625 shares on deposit shall
be returned to Grantee. If shareholder approval is obtained for
the Plan amendment described in Section 2, above, and the
restrictions and/or performance goals set forth in Section 3,
above, are not satisfied, the Grantee's shares on deposit
immediately shall be returned to the Grantee.
5. Termination of Employment and Change in Control.
(a) If, prior to the satisfaction of all performance
goals and restrictions under this award, the Grantee's
employment with the Company shall be terminated for any reason
except (i) a Change in Control, (ii) death, (iii) Disability, or
(iv) the Grantee's involuntary termination by the Company
without Cause, the Grantee shall forfeit all shares under the
award and his rights to the performance shares under this award
shall terminate in full.
(b) In the event of a Change in Control, all
performance goals and restrictions under the Performance Share
Award shall be deemed to have been satisfied, and all
restrictions shall lapse, making the shares under the award
freely transferable, subject to any applicable federal or state
securities laws.
(c) Upon the Grantee's termination due to (i) death,
(ii) Disability or (iii) involuntary termination by the Company
without Cause prior to the satisfaction of all performance goals
and restrictions under this award, such performance goals and
restrictions shall be deemed to have been satisfied on a
prorated basis, so that the number of shares that become freely
transferable shall be based on the Grantee's number of full
months of employment during the performance period, and the
Grantee shall forfeit the remaining shares and his rights to
such forfeited shares shall terminate in full.
(d) A leave of absence with the written consent of the
Company, shall not be a termination of services for purposes of
this award. However, the transfer of the Grantee from one
corporation to another among the Company, its Parent and any of
its Subsidiaries shall be deemed to constitute the Grantee's
involuntary termination of employment by the Company without
Cause if the Grantee, without his consent, does not retain his
position as Chief Executive Officer of the Company.
6. Compliance With Securities Laws. Anything to the
contrary herein notwithstanding, the Company's obligation to
deliver stock under this award is subject to such compliance
with federal and state laws, rules and regulations applying to
the authorization, issuance or sale of securities, and
applicable stock exchange requirements, as the Company deems
necessary or advisable. The Company shall not be required to
deliver stock pursuant hereto unless and until it receives
satisfactory proof that the issuance or transfer of such shares
shall not violate any of the provisions of the Securities Act of
1933 or the Securities Exchange Act of 1934 or the rules and
regulations of the Securities Exchange Commission promulgated
thereunder, or the rules and regulations of any stock exchange
on which the Company's securities are traded, or state law
governing the sale of securities, or that there has been
compliance with the provisions of such acts, rules, regulations
and state laws.
7. Non-Assignability. The Performance Share Award hereby
granted and shares of Common Stock pursuant to such award shall
not be transferable by the Grantee other than by will or the
laws of descent and distribution. Any transferee of the award
shall take the same subject to the terms and conditions of this
Agreement. No such transfer of the award shall be effective to
bind the Company unless the Company shall have been furnished
with written notice thereof and a copy of the will and/or such
other evidence as the Company may deem necessary to establish
the validity of the transfer and the acceptance by the
transferee or transferees of the terms and conditions of this
Agreement. No assignment or transfer of this award, or of the
rights represented thereby, whether voluntary or involuntary, by
operation of law or otherwise, except a transfer by the Grantee
by will or by the laws of descent and distribution, shall vest
in the purported assignee or transferee any interest or right
herein whatsoever.
8. Withholding. The Grantee hereby authorizes the Company
to withhold from his compensation or agrees to tender the
applicable amount to the Company to satisfy any requirements for
withholding of income and employment taxes in connection with
the satisfaction of the restrictions and the performance goals
under the award granted hereby.
9. Disputes. As a condition to the granting of this
award, the Grantee and the Grantee'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 and that any such
determination and any interpretation by the Committee of the
terms of this Agreement shall be final and shall be binding and
conclusive for all purposes.
10. Adjustments. In the event of any stock dividend, stock
split, reclassification, merger, consolidation, or similar
transaction affecting the shares covered by this award, the
rights of the Grantee shall be as provided in Section 8.1 of the
Plan and any adjustment therein provided shall be made in
accordance with Section 8.1 of the Plan.
11. Rights as Shareholder. The Grantee shall have no
rights as a shareholder of the Company with respect to any of
the shares covered by this award until the issuance of a stock
certificate or certificates representing the shares under the
award. Provided, further, that during the period when the
shares are nontransferable and subject to the restrictions and
performance goals set forth in Section 3, the Grantee may vote
the shares under the award, and any dividends issued on such
shares during the restricted period shall be reinvested on
behalf of the Grantee in additional shares under the Plan, and
such additional shares shall become a part of this award and
subject to the terms, conditions and restrictions herein. The
shares awarded herein shall not be transferable until all terms,
conditions and restrictions set forth herein have lapsed.
12. Notices. Every notice relating to this Agreement shall
be in writing and if given by mail shall be given by registered
or certified mail with return receipt requested. All notices to
the Company shall be delivered to the Secretary of the Company
at the Company's headquarters in Auburn Hills, Michigan, or
addressed to the Secretary of the Company at 0000 Xxxxxxxxxx
Xxxxx, Xxxxxx Xxxxx, XX 00000-0000. All notices by the Company
to the Grantee shall be delivered to the Grantee personally or
addressed to the Grantee at the Grantee's last residence address
as then contained in the records of the Company or such other
address as the Optionee may designate. Either party by notice
to the other may designate a different address to which notices
shall addressed. Any notice given by the Company to the Grantee
at the Grantee's last designated address shall be effective to
bind any other person who shall acquire rights hereunder.
13. "Grantee" to Include Certain Transferees. Whenever the
word "Grantee" is used in any provision of this Agreement under
circumstances where the provision should logically apply to any
other person or persons to whom the award, in accordance with
the provisions of Section 7 hereof, may be transferred, the word
"Grantee" shall be deemed to include such person or persons.
14. Governing Law. This Agreement has been made in and
shall be construed in accordance with the laws of the State of
Michigan.
15. Provisions of Plan Controlling. The provisions hereof
are subject to the terms and provisions of the Plan attached
hereto as Exhibit A. In the event of any conflict between the
provisions of this option and the provisions of the Plan, the
provisions of the Plan shall control.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first above written.
CHAMPION ENTERPRISES, INC.
By:
Xxxxxx X. Xxxxxxx
Chairman of the
Compensation Committee
Xxxxxx X. Xxxxx, Xx., Grantee
MAH/5875
