Exhibit 10.17
THE SPORTSMAN'S GUIDE, INC.
1996 STOCK OPTION PLAN
1. PURPOSE. The purpose of this Plan is to advance the interests of
The Sportsman's Guide, Inc., a Minnesota corporation (the "Company") by
providing an opportunity to selected key employees of the Company to purchase
stock of the Company through the exercise of options granted under this Plan.
By encouraging such stock ownership, the Company seeks to attract, retain
and motivate key employees of training, experience and ability, and to
encourage the judgment, initiative and efforts of such employees for the
successful conduct of the Company's business. It is intended that these
purposes will be effected by the granting of stock options as provided herein
which will qualify as "incentive stock options" under the provisions of
Section 422 (or its successor provisions) of the Internal Revenue Code of
1986 (the "Code"), and options which do not qualify as incentive stock
options under the Code ("nonqualified options").
2. STOCK SUBJECT TO THE PLAN. The total number of shares that may be
subject to options granted under this Plan shall not exceed 4,000,000 shares
of the Common Stock of the Company, $.01 par value ("Common Stock"). Shares
subject to an option which for any reason expires or is terminated
unexercised as to such shares may again be the subject of an option under the
Plan. The shares delivered upon exercise of options granted under this Plan
may be either authorized but unissued shares or issued shares reacquired by
the Company.
3. ADMINISTRATION. The Plan shall be administered by the Compensation
Committee of the Board of Directors of the Company or such other committee
designated by the Board (the "Committee") consisting of two or more directors
who shall be appointed by and shall serve at the pleasure of the Board.
Subject to the provisions of this Plan, the Committee shall have full power
to construe and interpret the Plan and to establish, amend and rescind rules
and regulations for its administration. The Committee shall recommend to the
Board of Directors the individuals to whom and the times at which options
shall be granted, the designation of each option as an incentive stock option
or a nonqualified option, and the number of shares subject to each option.
Any such construction, rule determination or other action taken by the
Committee pursuant to the Plan shall be binding and conclusive upon the
approval by the Board of Directors.
Actions by a majority of the Committee at a meeting at which a quorum is
present, or actions approved in writing by all of the members of the
Committee, shall be the valid acts of the Committee. No member of the Board
of Directors or the Committee shall be liable for any action or determination
made in good faith with respect to the Plan or any option granted under it.
4. ELIGIBLE EMPLOYEES. Options may be granted by the Board of
Directors to such key employees of the Company, including members of the
Board of Directors who are also employees of the Company, as are selected by
the Committee. The maximum number of shares subject to options which may be
granted to any individual shall be the total number of shares available under
the Plan.
5. TERMS AND CONDITIONS OF OPTIONS. All options granted under this
Plan shall be evidenced by stock option agreements in such form and not
inconsistent with the Plan as the Committee shall approve from time to time,
which agreements shall include, but not be limited to, the following terms
and conditions:
(a) PRICE. The purchase price per share of stock payable upon the
exercise of each option granted hereunder shall not be less than the fair
market value of the stock on the date the option is granted. If at the time
of grant of an incentive stock option the optionee owns stock possessing more
than 10% of the combined voting power of all classes of stock of the Company,
such purchase price per share shall not be less than 110% of the fair market
value of the stock on the date the option is granted. Such fair market value
shall be determined in accordance with procedures established by the
Committee conforming to regulations issued by the Internal Revenue Service
with regard to incentive stock options.
(b) NUMBER OF SHARES. Each option agreement shall specify the
number of shares to which it pertains.
(c) EXERCISE OF OPTIONS. Each option shall be exercisable for the
full amount or for any part thereof and at such intervals or in such
installments as the Board of Directors may determine at the time it grants
such option. No option shall be exercisable with respect to any shares later
than ten years after the date of grant of the option. If at the time of
grant of an incentive stock option the optionee owns stock possessing more
than 10% of the combined voting power of all classes of stock of the Company,
such option shall be exercisable no later than five years after the date of
grant.
(d) NOTICE OF EXERCISE AND PAYMENT. An option shall be exercisable
by delivery of a written notice to the Secretary of the Company specifying
the number of shares for which it is exercised. If the shares are not at the
time registered under the Securities Act of 1933, the optionee shall include
with such notice a letter, in form and substance satisfactory to the Company,
confirming that the shares are being purchased for the optionee's own account
for investment and not with a view to distribution. The exercise price and
any withholding obligations under applicable tax laws shall be paid in full
at the time of delivery of the notice of exercise, either by (i) cashier's,
certified or personal check, (ii) if permitted by a vote of the Board of
Directors by delivery and assignment to the Company of shares of Common Stock
or (iii) by a combination of (i) and (ii). The value of the Company stock
for such purpose shall be its fair market value as of the date the option is
exercised.
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(e) NON-TRANSFERABILITY. No option shall be transferable by the
optionee otherwise than by will or the laws of descent and distribution, and
each option shall be exercisable during the lifetime of the optionee only by
him or her.
(f) TERMINATION OF OPTIONS. Each option shall terminate and may no
longer be exercised if the optionee ceases for any reason to be an employee
of the Company, except that:
(i) If the optionee's employment shall have terminated for any
reason other than cause, disability (as defined below) or death, the
optionee may at any time within a period of 30 days after such
termination of employment exercise the option to the extent the
option was exercisable by the optionee on the date of termination of
employment.
(ii) If the optionee's employment shall have been terminated
because of disability within the meaning of Section 22(e)(3) of the
Code, the optionee may at any time within a period of one year after
such termination of employment exercise the option to the extent the
option was exercisable by the optionee on the date of termination of
employment.
(iii) If the optionee dies at a time when the option was
exercisable by the optionee, the optionee's estate, personal
representative or beneficiary to whom it has been transferred
pursuant to Section 5(e) hereof may, within six months following the
death, exercise the option to the extent the option might have been
exercised at the time of the optionee's death.
(iv) No option may be exercised to any extent by anyone after
the expiration date of the option.
(g) RIGHTS AS SHAREHOLDER. The optionee shall have no rights as a
shareholder with respect to any shares covered by an option until the date of
issuance of a stock certificate to the optionee for such shares.
6. TREATMENT OF CERTAIN INCENTIVE STOCK OPTIONS. To the extent that
the aggregate fair market value (determined as of the date the option is
granted) of shares with respect to which one or more incentive stock options
first become exercisable by an optionee in any calendar year exceeds
$100,000, taking into account shares subject to incentive stock options under
this Plan and shares subject to incentive stock options under all other plans
of the Company or other entities referenced in Section 422(d)(1) of the Code,
the options shall be treated as nonqualified stock options.
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7. STOCK DIVIDENDS; STOCK SPLITS; COMBINATIONS; RECAPITALIZATIONS.
Appropriate adjustment shall be made in the maximum number of shares of
Common Stock subject to the Plan and in the number, kind and option price of
shares covered by outstanding options granted hereunder to give effect to any
stock dividends or other distribution, stock splits, stock combinations,
recapitalizations and other similar changes in the capital structure of the
Company after the effective date of the Plan.
8. MERGER; SALE OF ASSETS; DISSOLUTION. In the event of a change of
the Common Stock resulting from a merger or similar reorganization as to
which the Company is the surviving corporation, the number and kind of shares
which thereafter may be optioned and sold under the Plan and the number and
kind of shares then subject to options granted hereunder and the price per
share thereof shall be appropriately adjusted in such a manner as the
Committee may deem equitable to prevent substantial dilution or enlargement
of the rights available or granted hereunder. If the Company at any time
should dissolve, sell all or substantially all of its assets, undergo a
reorganization, or merge or consolidate with any corporation and the Company
is not the surviving corporation, then (unless in the case of a
reorganization, merger or consolidation the surviving corporation assumes the
optionees' rights under the Plan or issues substantially equivalent
substitute rights in place thereof) each optionee shall be notified by the
Company of his or her right to exercise all outstanding options prior to any
such dissolution, sale, reorganization, merger or consolidation. The failure
to exercise such outstanding options within 30 days of such notification
shall cause the options to be terminated.
Notwithstanding the foregoing, in the case of an incentive stock option,
no adjustment shall be made pursuant to Section 7 or 8 hereof which would
cause the Plan to violate Section 424(a) of the Code or any successor
provisions thereto, without the written consent of the optionee adversely
affected thereby.
9. AMENDMENT OR TERMINATION OF PLAN. The Board of Directors may at any
time amend or terminate the Plan or alter or amend any outstanding stock
option agreements under the Plan in any manner it deems advisable, provided
that no such action shall adversely affect or impair any then outstanding
option without the consent of the optionee holding such option.
10. EFFECT OF THE PLAN ON EMPLOYMENT RELATIONSHIP. The establishment of
the Plan shall in no way, now or hereafter, reduce, enlarge or modify the
employment relationship between the Company and the optionee. Nothing
contained in the Plan shall be construed as conferring upon any optionee any
right to continued employment with the Company or to give any employee any
right to participate in the Plan or to receive options. The granting of
options under the Plan shall be entirely discretionary with the Board of
Directors.
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11. EFFECTIVE DATE; DURATION OF PLAN. This Plan was adopted by the
Board of Directors on October 21, 1996 and shall be deemed effective as of
that date, subject to approval by the shareholders of the Company within 12
months after such adoption. Options granted before shareholder approval may
not be exercised until such approval is obtained, and such options will be
null and void (and the Plan shall terminate) if such approval is not
obtained. The Plan shall remain in effect until discontinued by the Board of
Directors, except that no incentive stock option may be granted under the
Plan after October 21, 2006.
12. DEFINITIONS.
(a) The term "key employees" means those executive, administrative,
operational or managerial employees of the Company who are determined by the
Committee to be eligible for options under this Plan.
(b) The term "optionee" means a key employee to whom an option is
granted under this Plan.
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