February 12, 1997
John Collins
939 Yarmouth
Bloomfield Hills, Michigan 48301
Dear John:
This letter is to confirm my offer to join Champion
Enterprises, Inc. and the major terms of employment.
1) The position is Corporate Secretary and General Counsel
of Champion Enterprises, Inc., based in Auburn Hills,
Michigan. You will report to Ms. A. Jacqueline Dout,
Executive VP and CFO. For Corporate Governance and
Ethics purposes, you will report to the Chairman of the
Board of Directors.
2) The base pay is $190,000 annually, paid monthly.
3) The annual cash incentive plan is attached for 1997,
which if we perform at budgeted levels should provide a
cash incentive of $70,300 with potential up to 63% of
base (or $119,700). For 1997, your bonus will not be
prorated, and we guarantee a minimum bonus of $50,000
for 1997.
4) As an inducement to join us, you will receive a one-time
cash incentive of $50,000, payable 60 days after
your date of employment.
5) The equity program will be defined as separate
agreements effective on your date of employment to
cover a total of 100, shares of Champion Enterprises
stock over the next five years as follows:
A) 10,000 shares at 40% of market price on date of
acceptance to be purchased within 60 days of
employment. There is a two year restriction from
date of exercise on these shares and if you leave
the company during the two year period you lose
the prorated amount remaining. You will have tax
consequences of difference between purchase and
market price. Once you exercise this portion, you
will be eligible for the following:
B) 10,000 shares at 40% of market price on date of
acceptance. While the term of these options are
ten years, if you leave the company during the
first two years these options are forfeited on a
prorated 24 month period.
C) 80,000 shares at market value on date of
acceptance to be vested and exercisable in equal
prorate proportions (16,000) over five years on
the 1st, 2nd, 3rd, 4th and 5th anniversary date.
As a part of the option agreement, there will be a "change
of control" provision that immediately vests the
outstanding, unvested options.
6) You will be eligible for the company's normal
medical/dental, life insurance and long term disability
benefits. There is no defined benefits retirement
program, but we do have a 401(k) tax deferred savings
program. You will be responsible for paying
approximately 20% of the premium for medical/dental
coverage. You will be entitled to four weeks vacation
per year. We do not pay cash in lieu of vacations.
7) For three years from your acceptance, if the company
separates you for any reason (other than gross
malfeasance or legal reasons), the company will provide
up to 18 months base salary and benefits. This will be
reduced from 18 months, if less than 18 months remain
of the 36 month period.
8) You will be given a "change of control" agreement which
will provide a minimum 18 months of base salary and
incentives.
This offer is effective until today, February 12, 1997 with
employment to begin no later than Monday, March 3, 1997. If the
terms are acceptable, please sign below and return one copy to
me.
I look forward to you joining the team, for I am sure that
you will fine it personally and professionally rewarding.
Very truly yours,
/S/ WALTER R. YOUNG, JR.
Walter R. Young, Jr.
cc: Jackie Dout
/S/ JOHN J. COLLINS, JR.
John J. Collins, Jr.
Dated: February 12, 1997
Corporate Secretary and General Counsel
Champion Enterprises, Inc.
1977 Fiscal Year Incentive Plan
Eligibility
Must hold position at fiscal year end 1997 (January 3, 1998)
The Plan
This position will paid annually based upon the following:
Measure Attainment Level Incentive
EPS (% of Base Salary)
Minimum $1.50 25%
Level 1 $1.60 37%
Level 2 $1.76 50%
Maximum $1.92 63%
Within the program, the incentive payout will increase
between the attainment levels listed, but not as much as the next
attainment level incentive. The maximum incentive level is 63%
of base salary.
Definition and Rules
- - Payment will be made after audited year-end results are
finalized.
- - Payments on this plan are not eligible for benefit
calculations.
- - This Plan supersedes all other previous plans.
Definitions:
Base Pay: Annualized base pay as of January 3, 1998.
EPS: Annual, audited and publicly reported. EPS adjusted
only for excluding extraordinary gains or losses.
The attainment measure is based on current operations as of
December, 1996. Any acquisition or divestitures during the
year may require appropriate modifications to these
attainment measures.