Nonqualified Stock Option Agreement/Chip Asch

EXHIBIT 10.3


STOCK OPTION AGREEMENT
CHAMPION ENTERPRISES, INC.
INDUCEMENT OPTIONS


THIS NONQUALIFIED STOCK OPTION GRANT (the "Grant") is made this April 30, 2002 (the "Grant Date"), by Champion Enterprises, Inc., a Michigan corporation ("the Company"), for the benefit of Chip Asch (the "Optionee").


WITNESSETH:


WHEREAS, Optionee is employed by the Company or one of its Subsidiaries; 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 and its subsidiaries.


NOW, THEREFORE, the Company hereby grants the Optionee certain options to purchase Common Stock according to the following terms and conditions:


1. OPTIONS. Subject to the terms and conditions of this Grant, the Company hereby grants Optionee the right and option to purchase from the Company 10,000 shares of the Company's Common Stock at a price equal to $8.30 per share, which is 100% of the closing price of the Company's Common Stock on the New York Stock Exchange, as reported in The Wall Street Journal, for the Grant Date. The options granted pursuant to this Grant shall not be immediately exercisable, but shall be exercisable according to the following schedule:


Number of Option Shares Date Exercisable - ----------------------- ----------------
2,500 April 30, 2003


2,500 April 30, 2004


2,500 April 30, 2005


2,500 April 30, 2006


No portion of this Grant shall be exercisable after the sixth anniversary of the Grant Date. This Grant may be exercised in installments. This Grant 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 1, the options granted pursuant to this Grant shall be immediately exercisable in full upon any Change in Control.


2. EXERCISE OF OPTION. Optionee may exercise any exercisable option granted pursuant to this Grant by completing the following steps.


(a) Written Notice. Delivery to the Company of a written notice signed by the Optionee in the form attached as EXHIBIT A. 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


1


purchase price of the shares then to be purchased. Any Common Stock tendered must have been owned by the Optionee for at least six months and 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 the terms and conditions of this Grant, the company shall issue the shares in the name of Optionee.


3. TERMINATION OF EMPLOYMENT.


a) Before Option Becomes Exercisable. If Optionee's employment with the Company shall terminate for any reason before all or any portion of this Grant becomes exercisable, Optionee's right to exercise that portion of the Grant shall terminate and all exercise rights relating thereto shall cease.


b) Termination Other Than Death or Disability. If, on or after the first anniversary of this Grant, Optionee's employment is terminated for any reason other than death or Disability, Optionee shall have the right, within the earlier of (1) the expiration of the option, or (2) three months after the termination of employment, to exercise any options pursuant to this Grant to the extent that they are exercisable and unexercised on ...