Exhibit 10.25
October 17, 2002
Phyllis Knight
2610 Maple Ridge Lane
Orono, MN 55331
Dear Phyllis:
The purpose of this letter is to give the general guidelines of an
offer to join Champion Enterprises and the major terms of employment.
1. The position is Executive Vice President and Chief Financial Officer of
Champion Enterprises, Inc., based in Auburn Hills, MI. You will report
directly to me. Within 6 months, we will add the responsibility of
HomePride Finance.
2. The base salary is $320,000 annually, paid monthly. After 2 consecutive
profitable quarters, your base will be increased to $350,000 annually.
3. You will receive $100,000 cash your first day of employment, to be
refunded in whole if you resign (for reason other than death or
disability) within 18 months.
4. In lieu of a "2002 Bonus" that would be paid in March 2003, you will
receive a $100,000 cash one time payment on April 1, 2003.
5. The 2003 annual incentive program is yet to be determined, but will
have a range of up to 180% of base salary. This bonus will be paid in
March 2004.
6. The equity program will be formalized in a separate non-qualified stock
option agreement to cover a total of 600,000 shares of Champion
Enterprises stock vesting over the next four years. The general terms
of the equity program will be as follows:
a) 120,000 shares at 40% of market price on date of grant to be
purchased within 60 days of employment. These shares will vest
at a rate of 25% each six months. If you leave the company
during the two year period you will lose the prorated gain
Exhibit 10.25
amount remaining. You will have tax consequences of the
difference between purchase and market price. Once you
exercise this portion, you will be eligible for the following:
b) 480,000 shares at market price on date of grant to be vested
over four years at 120,000 shares vested on each anniversary
for the four years. The term of this grant is six years from
date of grant.
As a part of this option agreement, there will be a change of control
provision (similar to Cleberg, Collins and Surles) that immediately
vests the outstanding, unvested options, as well as requiring
confidentiality and non-compete provisions.
7. You will be eligible for the company's normal medical, dental, life
insurance and long term disability benefits at the first of the month
following your start date with the letters you provided, we have
covered all "preconditions" issues. In case of your death, Champion's
obligation under this agreement will terminate but any amount owed you
under this agreement or bonus plan plus all vested options at time of
your death will be paid to your estate. There is no defined benefits
retirement program, but we do have a 401(k) tax deferred savings
program. We have a deferred income program for base compensation and
annual bonuses. You will be entitled to four weeks vacation per year.
We do not pay cash in lieu of vacations.
8. In order to expedite and assist your family's move from Minnesota to
Michigan we will:
- Pay for all selling expenses for your Minnesota home.
- Pay for all closing costs for purchasing your home in
Michigan.
- Pay for physical moving of all household goods and incidentals
from Minnesota to Michigan.
- Pay for temporary housing and transportation expenses during
the commuting period. (To be finalized on or before August 1,
2003)
- Provide a one time gross up on the tax impact of moving
expenses.
Exhibit 10.25
9. You will be an "at will" employee which means your employment may be
terminated at any time, by you or Champion, for any reason, with or
without cause and without any further obligation.
10. If the company separates you for any reason (other than gross
malfeasance or legal reasons), the company will provide 18 months of
base salary, bonus and benefits. This severance clause may trigger at
your option, if your title, compensation and/or responsibilities are
reduced.
This offer is based on your commencing employment today.
If the terms are acceptable, please sign below and return one copy to
me. Phyllis, I look forward to you joining the Champion team.
Very truly yours,
/s/ WALTER R. YOUNG
--------------------------------------------
Walter R. Young
/s/ Phyllis Knight
- ------------------------------------------------
Phyllis Knight
10/17/02
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Dated
cc: Bob Anestis