EX 4.6
BOLLE INC.
1998 STOCK INCENTIVE PLAN
PURPOSE
The purpose of the Plan is to provide a means through which the
Company and its Subsidiaries and Affiliates may attract able persons to enter
and remain in the employ of the Company and its Subsidiaries and Affiliates and
to provide a means whereby employees, directors and consultants of the Company
and its Subsidiaries and Affiliates can acquire and maintain Common Stock
ownership, or be paid incentive compensation measured by reference to the value
of Common Stock, thereby strengthening their commitment to the welfare of the
Company and its Subsidiaries and Affiliates and promoting an identity of
interest between stockholders and these employees.
So that the appropriate incentive can be provided, the Plan provides
for granting Incentive Stock Options, Nonqualified Stock Options, Stock
Appreciation Rights, Restricted Stock Awards, Phantom Stock Unit Awards,
Performance Share Unit Awards and Stock Bonus Awards, or any combination of the
foregoing. The Plan also provides for the automatic formula grant of Restricted
Stock to Non-Employee Directors.
DEFINITIONS
The following definitions shall be applicable throughout the Plan.
"Affiliate" means any affiliate of the Company within the meaning of 17
CFR ss. 230.405.
"Award" means, individually or collectively, any Incentive Stock Option,
Nonqualified Stock Option, Stock Appreciation Right, Restricted Stock
Award, Phantom Stock Unit Award, Performance Share Unit Award, Stock Bonus
Award or Director Stock Award.
"Award Period" means a period of time within which performance is measured
for the purpose of determining whether an Award of Performance Share Units
has been earned.
"BEC" means BEC Group, Inc., a Delaware corporation and former Parent of
the Company.
"Board" means the Board of Directors of the Company.
"Cause" means the Company, a Subsidiary or Affiliate having cause to
terminate a Participant's employment or service under any existing
employment, consulting or any other agreement between the Participant and
the Company or a Subsidiary or Affiliate or, in the absence of such an
employment, consulting or other agreement, upon (i) the determination by
the Committee that the Participant has ceased to perform his duties to the
Company, a Subsidiary or Affiliate (other than as a result of his
incapacity due to physical or mental illness or injury), which failure
amounts to an intentional and extended neglect of his duties to such
party, (ii) the Committee's determination that the Participant has engaged
or is about to engage in conduct materially injurious to the Company, a
Subsidiary or Affiliate or (iii) the Participant having been convicted of
a felony.
"Change in Control" shall, unless the Board otherwise directs by
resolution adopted prior thereto or, in the case of a particular award,
the applicable Award agreement states otherwise, be deemed to occur if (i)
any "person" (as that term is used in Sections 13 and 14(d)(2) of the
Exchange Act) is or becomes the beneficial owner (as that term is used in
Section 13(d) of the Exchange Act), directly or indirectly, of 50% or more
of either the outstanding shares of Common Stock or the combined voting
power of the Company's then outstanding voting securities entitled to vote
generally, (ii) during any period of two consecutive years beginning on
the date of the consummation of the Spinoff, individuals who constitute
the Board at the beginning of such period cease for any reason to
constitute at least a majority thereof, unless the election or the
nomination for election by the Company's shareholders of each new director
was approved by a vote of at least three-quarters of the directors then
still in office who were directors, or approved by directors, at the
beginning of the Spinoff period or (iii) the Company undergoes a
liquidation or dissolution or a sale of all or substantially all of the
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assets of the Company. Neither the Spinoff nor any merger, consolidation
or corporate reorganization in which the owners of the combined voting
power of the Company's then outstanding voting securities entitled to vote
generally prior to said combination, own 50% or more of the resulting
entity's outstanding voting securities shall, by itself, be considered a
Change in Control.
"Code" means the Internal Revenue Code of 1986, as amended. Reference in
the Plan to any section of the Code shall be deemed to include any
amendments or successor provisions to such section and any regulations
under such section.
"Committee" means the full Board, the Compensation Committee of the Board
or such other committee of at least two people as the Board may appoint to
administer the Plan.
"Common Stock" means the common stock par value $0.01 per share, of the
Company.
"Company" means Bolle Inc.
"Date of Grant" means the date on which the granting of an Award is
authorized or such other date as may be specified in such authorization.
"Director Stock Option" means the Award of a Nonqualified Stock Option to
Non-Employee Directors pursuant to Section 12.
"Director Stock Option Agreement" means the agreement entered into with
respect to a Director Stock Option pursuant to Section 12.
"Disability" means disability as defined in the long-term disability plan
of the Company, a Subsidiary or Affiliate, as may be applicable to the
Participant in question, or, in the absence of such a plan, the complete
and permanent inability by reason of illness or accident to perform the
duties of the occupation at which a Participant was employed or served
when such disability commenced or, if the Participant was retired when
such disability commenced, the inability to engage in any substantial
gainful activity, in either case as determined by the Committee based upon
medical evidence acceptable to it.
"Disinterested Person" means a person who is (i) a "nonemployee director"
within the meaning of Rule 16b-3 under the Exchange Act, or any successor
rule or regulation and (ii) an "outside director" within the meaning of
Section 162(m) of the Code; provided, however, that clause (ii) shall
apply only with respect to grants of Awards with respect to which the
Company's tax deduction could be limited by Section 162(m) of the Code if
such clause did not apply.
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"Eligible Person" means any (i) person regularly employed by the Company,
a Subsidiary or Affiliate who satisfies all of the requirements of Section
6; provided, however, that no such employee covered by a collective
bargaining agreement shall be an Eligible Person unless and to the extent
that such eligibility is set forth in such collective bargaining agreement
or in an agreement or instrument relating thereto; (ii) director of the
Company, a Subsidiary or Affiliate; or (iii) consultant to the Company, a
Subsidiary or Affiliate.
"Exchange Act" means the Securities Exchange Act of 1934.
"Fair Market Value" on a given date means (i) if the Stock is listed on a
national securities exchange, the mean between the highest and lowest sale
prices reported as having occurred on the primary exchange with which the
Stock is listed and traded on the date prior to such date, or, if there is
no such sale on that date, then on the last preceding date on which such a
sale was reported; (ii) if the Stock is not listed on any national
securities exchange but is quoted in the National Market System of the
National Association of Securities Dealers Automated Quotation System on a
last sale basis, the average between the high bid price and low ask price
reported on the date prior to such date, or, if there is no such sale on
that date, then on the last preceding date on which a sale was reported;
(iii) if the Stock is not listed on a national securities exchange nor
quoted in the National Market System of the National Association of
Securities Dealers Automated Quotation System on a last sale basis, the
amount determined by the Committee to be the fair market value based upon
a good faith attempt to value the Stock accurately and computed in
accordance with applicable regulations of the Internal Revenue Service; or
(iv) notwithstanding clauses (i) - (iii) above, with respect to Awards
granted as of the consummation of the Spinoff, the initial offering price
of the Stock to the public in connection with the Spinoff.
"Holder" means a Participant who has been granted an Award.
"Incentive Stock Option" means an Option granted by the Committee to a
Participant under the Plan which is designated by the Committee as an
Incentive Stock Option pursuant to Section 422 of the Code.
"Non-Employee Director" means a director of the Company who is not also an
employee of the Company.
"Nonqualified Stock Option" means an Option granted by the Committee to a
Participant under the Plan which is not designated by the Committee as an
Incentive Stock Option.
"Normal Termination" means termination of employment or service with the
Company and all Subsidiaries and Affiliates:
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Upon retirement pursuant to the retirement plan of the Company, a
Subsidiary or Affiliate, as may be applicable at the time to the
Participant in question;
On account of Disability;
With the written approval of the Committee; or
By the Company, a Subsidiary or Affiliate without Cause.
"Option" means an Award granted under Section 7 of the Plan.
"Option Period" means the period described in Section 7(c).
"Option Price" means the exercise price set for an Option described in
Section 7(a).
(ab) "Participant" means an Eligible Person who has been selected by
the Committee to participate in the Plan and to receive an Award pursuant to
Section 6 and a Non-Employee Director who has received an automatic grant of
Options pursuant to Section 12.
(ac) "Performance Goals" means the performance objectives of the
Company, a Subsidiary or Affiliate during an Award Period or Restricted Period
established for the purpose of determining whether, and to what extent, Awards
will be earned for an Award Period or Restricted Period.
(ad) "Performance Share Unit" means a hypothetical investment
equivalent equal to one share of Stock granted in connection with an Award made
under Section 9 of the Plan.
(ae) "Phantom Stock Unit" means a hypothetical investment equivalent
equal to one share of Stock granted in connection with an Award made under
Section 10 of the Plan.
(af) "Plan" means the Company's 1998 Stock Incentive Plan.
(ag) "Restricted Period" means, with respect to any share of
Restricted Stock or any Phantom Stock Unit, the period of time determined by
the Committee during which such Award is subject to the restrictions set forth
in Section 10.
(ah) "Restricted Stock" means shares of Stock issued or transferred to
a Participant subject to forfeiture and the other restrictions set forth in
Section 10.
(ai) "Restricted Stock Award" means an Award of Restricted Stock
granted under Section 10 of the Plan.
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(aj) "Securities Act" means the Securities Act of 1933, as amended.
(ak) "Spinoff" means the pro rata spinoff to the stockholders of BEC
of all of the common stock of the Company held by BEC in connection with a
Registration Statement on Form S-1.
(al) "Stock" means the Common Stock or such other authorized shares of
stock of the Company as the Committee may from time to time authorize for use
under the Plan.
(am) "Stock Appreciation Right" or "SAR" means an Award granted under
Section 8 of the Plan.
(an) "Stock Bonus" means an Award granted under Section 11 of the
Plan.
(ao) "Stock Option Agreement" means the agreement between the Company
and a Participant who has been granted an Option pursuant to Section 7 which
defines the rights and obligations of the parties as required in Section 7(d).
(ap) "Subsidiary" means any subsidiary of the Company as defined in
Section 424(f) of the Code.
(aq) "Vested Unit" shall have the meaning ascribed thereto in Section
10(e).
EFFECTIVE DATE, DURATION
The Plan is effective as of January , 1998, the date of adoption of
the Plan by the Board.
The expiration date of the Plan, after which no Awards may be granted
hereunder, shall be January , 2008; provided, however, that the administration
of the Plan shall continue in effect until all matters relating to the payment
of Awards previously granted have been settled.
ADMINISTRATION
The Committee shall administer the Plan. Unless otherwise determined
by the Board, each member of the Committee shall, at the time he takes any
action with respect to an Award under the Plan, be a Disinterested Person. The
majority of the members of the Committee shall constitute a quorum. The acts of
a majority of the members present at any meeting at which a quorum is present
or acts approved in writing by a majority of the Committee shall be deemed the
acts of the Committee.
Subject to the provisions of the Plan, the Committee shall have
exclusive power to:
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Select the Eligible Persons to participate in the Plan;
Determine the nature and extent of the Awards, other than Director Stock
Options, to be made to each Participant;
Determine the time or times when Awards, other than Director Stock
Options, will be made;
Determine the duration of each Award Period and Restricted Period, except
with respect to a Director Stock Option;
Determine the conditions to which the payment of Awards, other than
Director Stock Options, may be subject;
Establish the Performance Goals for each Award Period;
Prescribe the form of Stock Option Agreement or other form or forms
evidencing Awards; and
Cause records to be established in which there shall be entered, from time
to time as Awards are made to Participants, the date of each Award, the
number of Incentive Stock Options, Nonqualified Stock Options, SARs,
Phantom Stock Units, Performance Share Units, shares of Restricted Stock
and Stock Bonuses awarded to each Participant, the expiration date, the
Award Period and the duration of any applicable Restricted Period.
The Committee shall have the authority, subject to the provisions of
the Plan, to establish, adopt, or revise such rules and regulations and to make
all such determinations relating to the Plan as it may deem necessary or
advisable for the administration of the Plan. The Committee's interpretation of
the Plan or any documents evidencing Awards granted pursuant thereto and all
decisions and determinations by the Committee with respect to the Plan shall be
final, binding, and conclusive on all parties unless otherwise determined by
the Board.
GRANT OF AWARDS; SHARES SUBJECT TO THE PLAN
The Committee may, from time to time, grant Awards of Options, Stock
Appreciation Rights, Restricted Stock, Phantom Stock Units, Performance Share
Units and/or Stock Bonuses to one or more Eligible Persons; provided, however,
that:
Subject to Section 14, the aggregate number of shares of Stock available
for issuance with respect to all Awards is 2,000,000 shares;
Such shares shall be deemed to have been used in payment of Awards whether
they are actually delivered or the Fair Market Value equivalent of such
shares is paid in cash. In the event any Option, SAR not attached to an
Option, Restricted Stock, Phantom Stock Unit or Performance Share Unit
shall be
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surrendered, terminate, expire, or be forfeited, the number of shares of
Stock no longer subject thereto shall thereupon be released and shall
thereafter be available for new Awards under the Plan;
Stock delivered by the Company in settlement of Awards under the Plan may
be authorized and unissued Stock or Stock held in the treasury of the
Company or may be purchased on the open market or by private purchase; and
No person may be granted Options or SARs under the Plan with respect to
more than 2,000,000 shares of Stock.
ELIGIBILITY
Participation shall be limited to Eligible Persons who have received
written notification from the Committee, or from a person designated by the
Committee, that they have been selected to participate in the Plan and
Non-Employee Directors who receive Director Stock Options.
DISCRETIONARY GRANT OF STOCK OPTIONS
The Committee is authorized to grant one or more Incentive Stock
Options or Nonqualified Stock Options to any Eligible Person; provided,
however, that no Incentive Stock Options shall be granted to any Eligible
Person who is not an employee of the Company or a Subsidiary. Each Option so
granted shall be subject to the following conditions, or to such other
conditions as may be reflected in the applicable Stock Option Agreement.
OPTION PRICE. The exercise price ("Option Price") per share of Stock for
each Option shall be set by the Committee at the time of grant but shall
not be less than (i) in the case of an Incentive Stock Option, and subject
to Section 7(e), the Fair Market Value of a share of Stock at the Date of
Grant, and (ii) in the case of a Non-Qualified Stock Option, the par value
of a share of Stock; provided, however, that all Options intended to
qualify as "performance-based compensation" under Section 162(m) of the
Code shall have an Option Price per share of Stock no less than the Fair
Market Value of a share of Stock on the Date of Grant.
MANNER OF EXERCISE AND FORM OF PAYMENT. Options which have become
exercisable may be exercised by delivery of written notice of exercise to
the Committee accompanied by payment of the Option Price. The Option Price
shall be payable in cash and/or shares of Stock valued at the Fair Market
Value at the time the Option is exercised (provided, however, that such
shares have either been held for six months or previously acquired on the
open market) or, in the discretion of the Committee, either (i) in other
property having a fair market value on the date of exercise equal to the
Option Price, or (ii) by delivering to the Committee a copy of irrevocable
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instructions to a stockbroker to deliver promptly to the Company an amount
of sale or loan proceeds sufficient to pay the Option Price.
OPTION PERIOD AND EXPIRATION. Options shall vest and become exercisable in
such manner and on such date or dates determined by the Committee and
shall expire after such period, not to exceed ten years, as may be
determined by the Committee (the "Option Period"); provided, however, that
notwithstanding any vesting dates set by the Committee, the Committee may
in its sole discretion accelerate the exercisability of any Option for any
reason, which acceleration shall not affect the terms and conditions of
any such Option other than with respect to exercisability. If an Option is
exercisable in installments, such installments or portions thereof which
become exercisable shall remain exercisable until the Option expires.
Unless otherwise stated in the applicable Option Agreement, the Option
shall expire earlier than the end of the Option Period in the following
circumstances:
If prior to the end of the Option Period, the Holder shall undergo a
Normal Termination, the Option shall expire on the earlier of the last
day of the Option Period or the date that is three months after the
date of such Normal Termination. In such event, the Option shall
remain exercisable by the Holder until its expiration, only to the
extent the Option was exercisable at the time of such Normal
Termination.
If the Holder dies prior to the end of the Option Period and while
still in the employ or service of the Company, a Subsidiary or
Affiliate, or within three months of Normal Termination, the Option
shall expire on the earlier of the last day of the Option Period or
the date that is twelve months after the date of death of the Holder.
In such event, the Option shall remain exercisable by the person or
persons to whom the Holder's rights under the Option pass by will or
the applicable laws of descent and distribution until its expiration,
only to the extent the Option was exercisable by the Holder at the
time of death.
If the Holder ceases employment or service with the Company and all
Subsidiaries and Affiliates for reasons other than Normal Termination
or death, the Option shall expire immediately upon such cessation of
employment or service.
STOCK OPTION AGREEMENT - OTHER TERMS AND CONDITIONS. Each Option granted
under the Plan shall be evidenced by a Stock Option Agreement, which shall
contain such provisions as may be determined by the Committee and, except
as may be specifically stated otherwise in such Stock Option Agreement,
which shall be subject to the following terms and conditions:
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Each Option or portion thereof that is exercisable shall be
exercisable for the full amount or for any part thereof.
Each share of Stock purchased through the exercise of an Option shall
be paid for in full at the time of the exercise. Each Option shall
cease to be exercisable, as to any share of Stock, when the Holder
purchases the share or exercises a related SAR or when the Option
expires.
Subject to Section 13(k), Options shall not be transferable by the
Holder except by will or the laws of descent and distribution and
shall be exercisable during the Holder's lifetime only by him.
Each Option shall vest and become exercisable by the Holder in
accordance with the vesting schedule established by the Committee and
set forth in the Stock Option Agreement.
Each Stock Option Agreement may contain a provision that, upon demand
by the Committee for such a representation, the Holder shall deliver
to the Committee at the time of any exercise of an Option a written
representation that the shares to be acquired upon such exercise are
to be acquired for investment and not for resale or with a view to the
distribution thereof. Upon such demand, delivery of such
representation prior to the delivery of any shares issued upon
exercise of an Option shall be a condition precedent to the right of
the Holder or such other person to purchase any shares. In the event
certificates for Stock are delivered under the Plan with respect to
which such investment representation has been obtained, the Committee
may cause a legend or legends to be placed on such certificates to
make appropriate reference to such representation and to restrict
transfer in the absence of compliance with applicable federal or state
securities laws.
Each Incentive Stock Option Agreement shall contain a provision
requiring the Holder to notify the Company in writing immediately
after the Holder makes a disqualifying disposition of any Stock
acquired pursuant to the exercise of such Incentive Stock Option. A
disqualifying disposition is any disposition (including any sale) of
such Stock before the later of (a) two years after the Date of Grant
of the Incentive Stock Option or (b) one year after the date the
Holder acquired the Stock by exercising the Incentive Stock Option.
INCENTIVE STOCK OPTION GRANTS TO 10% STOCKHOLDERS. Notwithstanding
anything to the contrary in this Section 7, if an Incentive Stock Option
is granted to a Holder who owns stock representing more than ten percent
of the voting power of all classes of stock of the Company or of a
Subsidiary, the Option Period shall not exceed five years from the Date of
Grant of such Option and the Option Price shall be at least
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110 percent of the Fair Market Value (on the Date of Grant) of the Stock
subject to the Option.
$100,000 PER YEAR LIMITATION FOR INCENTIVE STOCK OPTIONS. To the extent
the aggregate Fair Market Value (determined as of the Date of Grant) of
Stock for which Incentive Stock Options are exercisable for the first time
by any Participant during any calendar year (under all plans of the
Company and its Subsidiaries) exceeds $100,000, such excess Incentive
Stock Options shall be treated as Nonqualified Stock Options.
VOLUNTARY SURRENDER. The Committee may permit the voluntary surrender of
all or any portion of any Nonqualified Stock Option and its corresponding
SAR, if any, granted under the Plan to be conditioned upon the granting to
the Holder of a new Option for the same or a different number of shares as
the Option surrendered or require such voluntary surrender as a condition
precedent to a grant of a new Option to such Participant. Such new Option
shall be exercisable at an Option Price, during an Option Period, and in
accordance with any other terms or conditions specified by the Committee
at the time the new Option is granted, all determined in accordance with
the provisions of the Plan without regard to the Option Price, Option
Period, or any other terms and conditions of the Nonqualified Stock Option
surrendered.
STOCK APPRECIATION RIGHTS
Any Option granted under the Plan may include SARs, either at the Date
of Grant or, except in the case of an Incentive Stock Option, by subsequent
amendment. The Committee also may award SARs to Eligible Persons independent of
any Option. An SAR shall be subject to such terms and conditions not
inconsistent with the Plan as the Committee shall impose, including, but not
limited to, the following:
VESTING. SARs granted in connection with an Option shall become
exercisable, be transferable and shall expire according to the same
vesting schedule, transferability rules and expiration provisions as the
corresponding Option. An SAR granted independent of an Option shall become
exercisable, be transferable and shall expire in accordance with a vesting
schedule, transferability rules and expiration provisions as established
by the Committee and reflected in an Award agreement.
AUTOMATIC EXERCISE. If on the last day of the Option Period (or in the
case of an SAR independent of an Option, the period established by the
Committee after which the SAR shall expire), the Fair Market Value of the
Stock exceeds the Option Price (or in the case of an SAR granted
independent of an Option, the Fair Market Value of the Stock on the Date
of Grant), the Holder has not exercised the SAR or the corresponding
Option, and neither the SAR nor the
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corresponding Option has expired, such SAR shall be deemed to have been
exercised by the Holder on such last day and the Company shall make the
appropriate payment therefor.
PAYMENT. Upon the exercise of an SAR, the Company shall pay to the Holder
an amount equal to the number of shares subject to the SAR multiplied by
the excess, if any, of the Fair Market Value of one share of Stock on the
exercise date over the Option Price, in the case of an SAR granted in
connection with an Option, or the Fair Market Value of one share of Stock
on the Date of Grant, in the case of an SAR granted independent of an
Option. With respect to SARs exercised before the Company has been subject
to the reporting requirements of Section 13(a) of the Exchange Act for one
year, the Company shall issue or transfer to the Participant shares of
Stock with a Fair Market Value at such time equal to 100 percent of any
such excess. With respect to SARs exercised after the Company has been
subject to such reporting requirements for at least one year, the Company
shall pay such excess in cash, in shares of Stock valued at Fair Market
Value, or any combination thereof, as determined by the Committee.
Fractional shares shall be settled in cash.
METHOD OF EXERCISE. A Participant may exercise an SAR at such time or
times as may be determined by the Committee at the time of grant by filing
an irrevocable written notice with the Committee or its designee,
specifying the number of SARs to be exercised, and the date on which such
SARs were awarded.
EXPIRATION. Except as otherwise provided in the case of SARs granted in
connection with Options, an SAR shall expire on a date designated by the
Committee which is not later than ten years after the Date of Grant of the
SAR.
PERFORMANCE SHARES
AWARD GRANTS. The Committee is authorized to establish Performance Share
programs to be effective over designated Award Periods determined by the
Committee. At the beginning of each Award Period, the Committee will
establish in writing Performance Goals based upon financial objectives for
the Company for such Award Period and a schedule relating the
accomplishment of the Performance Goals to the Awards to be earned by
Participants. Performance Goals may include absolute or relative growth in
earnings per share or rate of return on stockholders' equity or other
measurement of corporate performance and may be determined on an
individual basis or by categories of Participants. The Committee shall
determine the number of Performance Share Units to be awarded, if any, to
each Participant who is selected to receive such an Award. The Committee
may add new Participants to a Performance Share program after its
commencement by making pro rata grants.
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DETERMINATION OF AWARD. At the completion of a Performance Share Award
Period, or at other times as specified by the Committee, the Committee
shall calculate the number of shares of Stock earned with respect to each
Participant's Performance Share Unit Award by multiplying the number of
Performance Share Units granted to the Participant by a performance factor
representing the degree of attainment of the Performance Goals.
PARTIAL AWARDS. A Participant for less than a full Award Period, whether
by reason of commencement or termination of employment or otherwise, shall
receive such portion of an Award, if any, for that Award Period as the
Committee shall determine.
PAYMENT OF PERFORMANCE SHARE UNIT AWARDS. Performance Share Unit Awards
shall be payable in that number of shares of Stock determined in
accordance with Section 9(b); provided, however, that, at its discretion,
the Committee may make payment to any Participant in the form of cash upon
the specific request of such Participant. The amount of any payment made
in cash shall be based upon the Fair Market Value of the Stock on the day
prior to payment. Payments of Performance Share Unit Awards shall be made
as soon as practicable after the completion of an Award Period.
ADJUSTMENT OF PERFORMANCE GOALS. The Committee may, during the Award
Period, make such adjustments to Performance Goals as it may deem
appropriate, to compensate for, or reflect, (i) extraordinary or
non-recurring events experienced during an Award Period by the Company or
by any other corporation whose performance is relevant to the
determination of whether Performance Goals have been attained; (ii) any
significant changes that may have occurred during such Award Period in
applicable accounting rules or principles or changes in the Company's
method of accounting or in that of any other corporation whose performance
is relevant to the determination of whether an Award has been earned or
(iii) any significant changes that may have occurred during such Award
Period in tax laws or other laws or regulations that alter or affect the
computation of the measures of Performance Goals used for the calculation
of Awards; provided, however, that with respect to such Awards intended to
qualify as "performance-based compensation" under Section 162(m) of the
Code, such adjustment shall be made only to the extent that the Committee
determines that such adjustments may be made without a loss of
deductibility for such Award under Section 162(m) of the Code.
DISCRETIONARY RESTRICTED STOCK AWARDS AND PHANTOM STOCK UNITS
AWARD OF RESTRICTED STOCK AND PHANTOM STOCK UNITS.
The Committee shall have the authority (1) to grant Restricted Stock
and Phantom Stock Unit Awards to Eligible
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Persons, (2) to issue or transfer Restricted Stock to Participants,
and (3) to establish terms, conditions and restrictions applicable to
such Restricted Stock and Phantom Stock Units, including the
Restricted Period, which may differ with respect to each grantee, the
time or times at which Restricted Stock or Phantom Stock Units shall
be granted or become vested and the number of shares or units to be
covered by each grant.
The Holder of a Restricted Stock Award shall execute and deliver to
the Company an Award agreement with respect to the Restricted Stock
setting forth the restrictions applicable to such Restricted Stock. If
the Committee determines that the Restricted Stock shall be held in
escrow rather than delivered to the Holder pending the release of the
applicable restrictions, the Holder additionally shall execute and
deliver to the Company (i) an escrow agreement satisfactory to the
Committee, and (ii) the appropriate blank stock powers with respect to
the Restricted Stock covered by such agreements. If a Participant
shall fail to execute a Restricted Stock agreement and, if applicable,
an escrow agreement and stock powers, the Award shall be null and
void. Subject to the restrictions set forth in Section 10(b), the
Holder shall generally have the rights and privileges of a stockholder
as to such Restricted Stock, including the right to vote such
Restricted Stock. At the discretion of the Committee, cash dividends
and stock dividends with respect to the Restricted Stock may be either
currently paid to the Holder or withheld by the Company for the
Holder's account, and interest may be paid on the amount of cash
dividends withheld at a rate and subject to such terms as determined
by the Committee. Cash dividends or stock dividends so withheld by the
Committee shall not be subject to forfeiture.
Upon the Award of Restricted Stock, the Committee shall cause a stock
certificate registered in the name of the Holder to be issued and, if
it so determines, deposited together with the stock powers with an
escrow agent designated by the Committee. If an escrow arrangement is
used, the Committee shall cause the escrow agent to issue to the
Holder a receipt evidencing any stock certificate held by it
registered in the name of the Holder.
The terms and conditions of a grant of Phantom Stock Units shall be
reflected in a written Award agreement. No shares of Stock shall be
issued at the time a Phantom Stock Unit Award is made, and the Company
will not be required to set aside a fund for the payment of any such
Award. Holders of Phantom Stock Units shall receive an amount equal to
the cash dividends paid by the Company upon one share of Stock for
each Phantom Stock Unit then credited to such Holder's account
("Dividend Equivalents"). The Committee shall, in its sole discretion,
determine whether to credit to the
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account of, or to currently pay to, each Holder of an Award of Phantom
Stock Units such Dividend Equivalents. Dividend Equivalents credited
to a Holder's account shall be subject to forfeiture on the same basis
as the related Phantom Stock Units, and may bear interest at a rate
and subject to such terms as are determined by the Committee.
RESTRICTIONS.
Restricted Stock awarded to a Participant shall be subject to the
following restrictions until the expiration of the Restricted Period,
and to such other terms and conditions as may be set forth in the
applicable Award agreement: (1) if an escrow arrangement is used, the
Holder shall not be entitled to delivery of the stock certificate; (2)
the shares shall be subject to the restrictions on transferability set
forth in the Award agreement; (3) the shares shall be subject to
forfeiture to the extent provided in subparagraph (d) and the Award
Agreement and, to the extent such shares are forfeited, the stock
certificates shall be returned to the Company, and all rights of the
Holder to such shares and as a shareholder shall terminate without
further obligation on the part of the Company.
Phantom Stock Units awarded to any Participant shall be subject to (1)
forfeiture until the expiration of the Restricted Period, to the
extent provided in subparagraph (d) and the Award agreement, and to
the extent such Awards are forfeited, all rights of the Holder to such
Awards shall terminate without further obligation on the part of the
Company and (2) such other terms and conditions as may be set forth in
the applicable Award agreement.
The Committee shall have the authority to remove any or all of the
restrictions on the Restricted Stock and Phantom Stock Units whenever
it may determine that, by reason of changes in applicable laws or
other changes in circumstances arising after the date of the
Restricted Stock Award or Phantom Stock Award, such action is
appropriate.
RESTRICTED PERIOD. The Restricted Period of Restricted Stock and Phantom
Stock Units shall commence on the Date of Grant and shall expire from time
to time as to that part of the Restricted Stock and Phantom Stock Units
indicated in a schedule established by the Committee.
FORFEITURE PROVISIONS. Except to the extent determined by the Committee
and reflected in the underlying Award agreement, in the event a Holder
terminates employment with the Company and all Subsidiaries and Affiliates
during a Restricted Period, that portion of the Award with respect to
which restrictions have not expired ("Non-Vested Portion") shall be
treated as follows.
-15-
Upon the voluntary resignation of a Participant or discharge by the
Company, a Subsidiary or Affiliate for Cause, the Non-Vested Portion
of the Award shall be completely forfeited.
Upon Normal Termination, the Non-Vested Portion of the Award shall be
prorated for service during the Restricted Period and shall be
received as soon as practicable following termination.
Upon death, the Non-Vested Portion of the Award shall be prorated for
service during the Restricted Period and paid to the Participant's
beneficiary as soon as practicable following death.
DELIVERY OF RESTRICTED STOCK AND SETTLEMENT OF PHANTOM STOCK UNITS. Upon
the expiration of the Restricted Period with respect to any shares of
Stock covered by a Restricted Stock Award, the restrictions set forth in
Section 10(b) and the Award agreement shall be of no further force or
effect with respect to shares of Restricted Stock which have not then been
forfeited. If an escrow arrangement is used, upon such expiration, the
Company shall deliver to the Holder, or his beneficiary, without charge,
the stock certificate evidencing the shares of Restricted Stock which have
not then been forfeited and with respect to which the Restricted Period
has expired (to the nearest full share) and any cash dividends or stock
dividends credited to the Holder's account with respect to such Restricted
Stock and the interest thereon, if any.
Upon the expiration of the Restricted Period with respect to any
Phantom Stock Units covered by a Phantom Stock Unit Award, the Company shall
deliver to the Holder, or his beneficiary, without charge, one share of Stock
for each Phantom Stock Unit which has not then been forfeited and with respect
to which the Restricted Period has expired ("Vested Unit") and cash equal to
any Dividend Equivalents credited with respect to each such Vested Unit and the
interest thereon, if any; provided, however, that, if so noted in the
applicable Award agreement, the Committee may, in its sole discretion, elect to
pay cash or part cash and part Stock in lieu of delivering only Stock for
Vested Units. If cash payment is made in lieu of delivering Stock, the amount
of such payment shall be equal to the Fair Market Value of the Stock as of the
date on which the Restricted Period lapsed with respect to such Vested Unit.
STOCK RESTRICTIONS. Each certificate representing Restricted Stock awarded
under the Plan shall bear the following legend until the lapse of all
restrictions with respect to such Stock:
"Transfer of this certificate and the shares represented
hereby is restricted pursuant to the terms of a Restricted Stock
Agreement, dated as of , between
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Bolle Inc. and . A copy of such Agreement is on file at the
offices of the Company at ."
Stop transfer orders shall be entered with the Company's transfer agent and
registrar against the transfer of legended securities.
STOCK BONUS AWARDS
The Committee may issue unrestricted Stock under the Plan to Eligible
Persons, alone or in tandem with other Awards, in such amounts and subject to
such terms and conditions as the Committee shall from time to time in its sole
discretion determine. Stock Bonus Awards under the Plan shall be granted as, or
in payment of, a bonus, or to provide incentives or recognize special
achievements or contributions.
AUTOMATIC GRANTS OF STOCK OPTIONS TO NON-EMPLOYEE DIRECTORS
Upon the consummation of the Spinoff each Non-Employee Director shall
be automatically granted a Nonqualified Stock Option to purchase 3,333 shares
of Stock. Thereafter, on the date any person first becomes a Non-Employee
Director, such person shall be automatically granted without further action by
the Board or the Committee a Nonqualified Stock Option to purchase 3,333 shares
of Stock. Thereafter, beginning in 1999, for the remainder of the term of the
Plan and provided he remains a Non-Employee Director of the Company, on the
date of each of the Company's Annual Meeting of Stockholders, each Non-Employee
Director shall be automatically granted without further action by the Board or
the Committee a Nonqualified Stock Option to purchase 1,000 shares of Stock.
All such Options granted to Non-Employee Directors shall hereinafter be
referred to as Director Stock Options.
(a) OPTION PRICE; TERM. All Director Stock Options shall have an
Option Price per share equal to the Fair Market Value of a share of Stock on
the Date of Grant. All Director Stock Options shall vest and become exercisable
over a period of four years at the rate of 25% of each grant annually on each
of the four consecutive anniversaries of the Date of Grant directly following
the Date of Grant provided the Non-Employee Director's services as a director
continues through each such anniversary. The term of each Non-Employee Director
Option ("Term"), after which each such Option shall expire, shall be ten years
from the date of Grant.
(b) EXPIRATION. If prior to the expiration of the Term of a Director
Stock Option the Non-Employee Director shall cease to be a member of the Board
for any reason other than his death, the
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Director Stock Option shall expire on the earlier of the expiration of the Term
or the date that is three months after the date of such cessation. If prior to
the expiration of the Term of a Director Stock Option a Non-Employee Director
shall cease to be a member of the Board by reason of his death, the Director
Stock Option shall expire on the earlier of the expiration of the Term or the
date that is one year after the date of such cessation. In the event a
Non-Employee Director ceases to be a member of the Board for any reason, any
unexpired Director Stock Option shall thereafter be exercisable until its
expiration only to the extent that such Option was exercisable at the time of
such cessation.
(c) DIRECTOR STOCK OPTION AGREEMENT. Each Director Stock Option shall
be evidenced by a Director Stock Option Agreement, which shall contain such
provisions as may be determined by the Committee.
(d) NONTRANSFERABILITY. Subject to Section 13(k), Director Stock
Options shall not be transferable except by will or the laws of descent and
distribution and shall be exercisable during the Non-Employee Director's
lifetime only by him.
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GENERAL
ADDITIONAL PROVISIONS OF AN AWARD. Awards under the Plan also may be
subject to such other provisions (whether or not applicable to the benefit
awarded to any other Participant) as the Committee determines appropriate
including, without limitation, provisions to assist the Participant in
financing the purchase of Stock upon the exercise of Options, provisions
for the forfeiture of or restrictions on resale or other disposition of
shares of Stock acquired under any Award, provisions giving the Company
the right to repurchase shares of Stock acquired under any Award in the
event the Participant elects to dispose of such shares, and provisions to
comply with Federal and state securities laws and Federal and state tax
withholding requirements. Any such provisions shall be reflected in the
applicable Award agreement.
PRIVILEGES OF STOCK OWNERSHIP. Except as otherwise specifically provided
in the Plan, no person shall be entitled to the privileges of stock
ownership in respect of shares of Stock which are subject to Awards
hereunder until such shares have been issued to that person.
GOVERNMENT AND OTHER REGULATIONS. The obligation of the Company to make
payment of Awards in Stock or otherwise shall be subject to all applicable
laws, rules, and regulations, and to such approvals by governmental
agencies as may be required. Notwithstanding any terms or conditions of
any Award to the contrary, the Company shall be under no obligation to
offer to sell or to sell and shall be prohibited from offering to sell or
selling any shares of Stock pursuant to an Award unless such shares have
been properly registered for sale pursuant to the Securities Act with the
Securities and Exchange Commission or unless the Company has received an
opinion of counsel, satisfactory to the Company, that such shares may be
offered or sold without such registration pursuant to an available
exemption therefrom and the terms and conditions of such exemption have
been fully complied with. The Company shall be under no obligation to
register for sale under the Securities Act any of the shares of Stock to
be offered or sold under the Plan. If the shares of Stock offered for sale
or sold under the Plan are offered or sold pursuant to an exemption from
registration under the Securities Act, the Company may restrict the
transfer of such shares and may legend the Stock certificates representing
such shares in such manner as it deems advisable to ensure the
availability of any such exemption.
TAX WITHHOLDING. Notwithstanding any other provision of the Plan, the
Company, a Subsidiary or an Affiliate, as appropriate, shall have the
right to deduct from all Awards cash and/or Stock, valued at Fair Market
Value on the date of payment, in an amount necessary to satisfy all
Federal, state or local taxes as required by law to be withheld with
respect
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to such Awards and, in the case of Awards paid in Stock, the Holder or
other person receiving such Stock may be required to pay to the Company or
a Subsidiary, as appropriate, prior to delivery of such Stock, the amount
of any such taxes which the Company or Subsidiary is required to withhold,
if any, with respect to such Stock. Subject in particular cases to the
disapproval of the Committee, the Company may accept shares of Stock of
equivalent Fair Market Value in payment of such withholding tax
obligations if the Holder of the Award elects to make payment in such
manner.
CLAIM TO AWARDS AND EMPLOYMENT RIGHTS. No employee or other person shall
have any claim or right to be granted an Award under the Plan or, having
been selected for the grant of an Award, to be selected for a grant of any
other Award. Neither the Plan nor any action taken hereunder shall be
construed as giving any Participant any right to be retained in the employ
or service of the Company, a Subsidiary or an Affiliate.
DESIGNATION AND CHANGE OF BENEFICIARY. Each Participant shall file with
the Committee a written designation of one or more persons as the
beneficiary who shall be entitled to receive the amounts payable with
respect to an Award of Performance Share Units, Phantom Stock Units or
Restricted Stock, if any, due under the Plan upon his death. A Participant
may, from time to time, revoke or change his beneficiary designation
without the consent of any prior beneficiary by filing a new designation
with the Committee. The last such designation received by the Committee
shall be controlling; provided, however, that no designation, or change or
revocation thereof, shall be effective unless received by the Committee
prior to the Participant's death, and in no event shall it be effective as
of a date prior to such receipt. If no beneficiary designation is filed by
the Participant, the beneficiary shall be deemed to be his or her spouse
or, if the Participant is unmarried at the time of death, his or her
estate.
PAYMENTS TO PERSONS OTHER THAN PARTICIPANTS. If the Committee shall find
that any person to whom any amount is payable under the Plan is unable to
care for his affairs because of illness or accident, or is a minor, or has
died, then any payment due to such person or his estate (unless a prior
claim therefor has been made by a duly appointed legal representative)
may, if the Committee so directs the Company, be paid to his spouse,
child, relative, an institution maintaining or having custody of such
person, or any other person deemed by the Committee to be a proper
recipient on behalf of such person otherwise entitled to payment. Any such
payment shall be a complete discharge of the liability of the Committee
and the Company therefor.
NO LIABILITY OF COMMITTEE MEMBERS. No member of the Committee shall be
personally liable by reason of any contract or other instrument executed
by such member or on his behalf in his
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capacity as a member of the Committee nor for any mistake of judgment made
in good faith, and the Company shall indemnify and hold harmless each
member of the Committee and each other employee, officer or director of
the Company to whom any duty or power relating to the administration or
interpretation of the Plan may be allocated or delegated, against any cost
or expense (including counsel fees) or liability (including any sum paid
in settlement of a claim) arising out of any act or omission to act in
connection with the Plan unless arising out of such person's own fraud or
willful bad faith; provided, however, that approval of the Board shall be
required for the payment of any amount in settlement of a claim against
any such person. The foregoing right of indemnification shall not be
exclusive of any other rights of indemnification to which such persons may
be entitled under the Company's Articles of Incorporation or By-Laws, as a
matter of law, or otherwise, or any power that the Company may have to
indemnify them or hold them harmless.
GOVERNING LAW. The Plan shall be governed by and construed in accordance
with the internal laws of the State of New York without regard to the
principles of conflicts of law thereof.
FUNDING. Except as provided under Section 10, no provision of the Plan
shall require the Company, for the purpose of satisfying any obligations
under the Plan, to purchase assets or place any assets in a trust or other
entity to which contributions are made or otherwise to segregate any
assets, nor shall the Company maintain separate bank accounts, books,
records or other evidence of the existence of a segregated or separately
maintained or administered fund for such purposes. Holders shall have no
rights under the Plan other than as unsecured general creditors of the
Company, except that insofar as they may have become entitled to payment
of additional compensation by performance of services, they shall have the
same rights as other employees under general law.
NONTRANSFERABILITY. A person's rights and interest under the Plan,
including amounts payable, may not be sold, assigned, donated, or
transferred or otherwise disposed of, mortgaged, pledged or encumbered
except, in the event of a Holder's death, to a designated beneficiary to
the extent permitted by the Plan, or in the absence of such designation,
by will or the laws of descent and distribution; provided, however, the
Committee may, in its sole discretion, allow for transfer of Awards other
than Incentive Stock Options to other persons or entities, subject to such
conditions or limitations as it may establish.
RELIANCE ON REPORTS. Each member of the Committee and each member of the
Board shall be fully justified in relying, acting or failing to act, and
shall not be liable for having so relied, acted or failed to act in good
faith, upon any report made by the independent public accountant of the
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Company and its Subsidiaries and Affiliates and upon any other information
furnished in connection with the Plan by any person or persons other than
himself.
RELATIONSHIP TO OTHER BENEFITS. No payment under the Plan shall be taken
into account in determining any benefits under any pension, retirement,
profit sharing, group insurance or other benefit plan of the Company or
any Subsidiary except as otherwise specifically provided in such other
plan.
EXPENSES. The expenses of administering the Plan shall be borne by the
Company and its Subsidiaries and Affiliates.
PRONOUNS. Masculine pronouns and other words of masculine gender shall
refer to both men and women.
TITLES AND HEADINGS. The titles and headings of the sections in the Plan
are for convenience of reference only, and in the event of any conflict,
the text of the Plan, rather than such titles or headings shall control.
TERMINATION OF EMPLOYMENT. For all purposes herein, a person who transfers
from employment or service with the Company to employment or service with
a Subsidiary or Affiliate or vice versa shall not be deemed to have
terminated employment or service with the Company, a Subsidiary or
Affiliate.
CHANGES IN CAPITAL STRUCTURE
Awards granted under the Plan and any agreements evidencing such
Awards, the maximum number of shares of Stock subject to all Awards and the
maximum number of shares of Stock with respect to which any one person may be
granted Options or SARs during any year shall be subject to adjustment or
substitution, as determined by the Committee in its sole discretion, as to the
number, price or kind of a share of Stock or other consideration subject to
such Awards or as otherwise determined by the Committee to be equitable (i) in
the event of changes in the outstanding Stock or in the capital structure of
the Company by reason of stock dividends, stock splits, reverse stock splits,
recapitalizations, reorganizations, mergers, consolidations, combinations,
exchanges, or other relevant changes in capitalization occurring after the Date
of Grant of any such Award or (ii) in the event of any change in applicable
laws or any change in circumstances which results in or would result in any
substantial dilution or enlargement of the rights granted to, or available for,
Participants in the Plan, or which otherwise warrants equitable adjustment
because it interferes with the intended operation of the Plan. In addition, in
the event of any such adjustments or substitution, the aggregate number of
shares of Stock available under the Plan shall be appropriately adjusted by the
Committee, whose determination shall be conclusive. Any adjustment in Incentive
Stock Options under this Section 14 shall be made only to the extent not
constituting a "modification"
-22-
within the meaning of Section 424(h)(3) of the Code, and any adjustments under
this Section 14 shall be made in a manner which does not adversely affect the
exemption provided pursuant to Rule 16b-3 under the Exchange Act. Further, with
respect to Awards intended to qualify as "performance-based compensation" under
Section 162(m) of the Code, such adjustments or substitutions shall be made
only to the extent that the Committee determines that such adjustments or
substitutions may be made without a loss of deductibility for Awards under
Section 162(m) of the Code. The Company shall give each Participant notice of
an adjustment hereunder and, upon notice, such adjustment shall be conclusive
and binding for all purposes.
Notwithstanding the above, in the event of any of the following:
A. The Company is merged or consolidated with another
corporation or entity and, in connection therewith,
consideration is received by shareholders of the Company in a
form other than stock or other equity interests of the
surviving entity;
B. All or substantially all of the assets of the Company are
acquired by another person;
C. The reorganization or liquidation of the Company; or
D. The Company shall enter into a written agreement to undergo
an event described in clauses A, B or C above,
then the Committee may, in its discretion and upon at least 10 days advance
notice to the affected persons, cancel any outstanding Awards and pay to the
Holders thereof, in cash or stock, or any combination thereof, the value of
such Awards based upon the price per share of Stock received or to be received
by other shareholders of the Company in the event. The terms of this Section 14
may be varied by the Committee in any particular Award agreement.
EFFECT OF CHANGE IN CONTROL
Except to the extent reflected in a particular Award agreement:
-23-
In the event of a Change in Control, notwithstanding any vesting schedule
with respect to an Award of Options (including Director Stock Options),
SARs, Phantom Stock Units or Restricted Stock, such Option or SAR shall
become immediately exercisable with respect to 100 percent of the shares
subject to such Option or SAR, and the Restricted Period shall expire
immediately with respect to 100 percent of such Phantom Stock Units or
shares of Restricted Stock.
In the event of a Change in Control, all incomplete Award Periods in
effect on the date the Change in Control occurs shall end on the date of
such change, and the Committee shall (i) determine the extent to which
Performance Goals with respect to each such Award Period have been met
based upon such audited or unaudited financial information then available
as it deems relevant, (ii) cause to be paid to each Participant partial or
full Awards with respect to Performance Goals for each such Award Period
based upon the Committee's determination of the degree of attainment of
Performance Goals, and (iii) cause all previously deferred Awards to be
settled in full as soon as possible.
In addition, in the event of a Change in Control, the Committee may in its
discretion and upon at least 10 days' advance notice to the affected
persons, cancel any outstanding Awards and pay to the Holders thereof, in
cash or stock, or any combination thereof, the value of such Awards based
upon the price per share of Stock received or to be received by other
shareholders of the Company in the event.
The obligations of the Company under the Plan shall be binding upon any
successor corporation or organization resulting from the merger,
consolidation or other reorganization of the Company, or upon any
successor corporation or organization succeeding to substantially all of
the assets and business of the Company. The Company agrees that it will
make appropriate provisions for the preservation of Participant's rights
under the Plan in any agreement or plan which it may enter into or adopt
to effect any such merger, consolidation, reorganization or transfer of
assets.
NONEXCLUSIVITY OF THE PLAN
Neither the adoption of this Plan by the Board nor the submission of
this Plan to the stockholders of the Company for approval shall be construed as
creating any limitations on the power of the Board to adopt such other
incentive arrangements as it may deem desirable, including, without limitation,
the granting of stock options otherwise than under this Plan, and such
arrangements may be either applicable generally or only in specific cases.
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AMENDMENTS AND TERMINATION
The Board may at any time terminate the Plan. Subject to Section 14,
with the express written consent of an individual Participant, the Board or the
Committee may cancel or reduce or otherwise alter outstanding Awards if, in its
judgment, the tax, accounting, or other effects of the Plan or potential
payouts thereunder would not be in the best interest of the Company. The Board
or the Committee may, at any time, or from time to time, amend or suspend and,
if suspended, reinstate, the Plan in whole or in part; provided, however, that
without further stockholder approval neither the Board nor the Committee shall
make any amendment to the Plan which would materially alter the Plan or which
would specifically:
Materially increase the maximum number of shares of Stock which may be
issued pursuant to Awards, except as provided in Section 14;
Change the maximum Option Price;
Extend the maximum Option Period;
Extend the termination date of the Plan; or
Change the class of persons eligible to receive Awards under the Plan;
EFFECT OF SECTION 162(M) OF THE CODE
Generally, in order for Options and SARs to qualify as
"performance-based compensation" (within the meaning of Section 162(m) of the
Code), they must be issued under a plan approved by the shareholders of a
company, granted by a Disinterested Committee and must have a per share
exercise price no less than the Fair Market Value of one share of Stock as of
the date of grant. In addition, the plan must state the maximum number of
shares that may be granted with respect to Options or SARs to any person during
a specified time period.
Because the Company was a subsidiary of BEC, a "publicly held
corporation" (within the meaning of Section 162(m) of the Code), that became
"publicly held" (within the meaning of Section 162(m) of the Code) as a result
of a spinoff, the Plan is exempt from the shareholder approval requirements of
Section 162(m) of the Code for a period of time pursuant to Treasury Regulation
Section 1.167-27(f)(4)(iii). The Company may rely on this exemption only for
Options and SARs granted prior to the first regularly scheduled meeting of the
shareholders of the Company that occurs more than twelve months after the date
that the
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Company so became a publicly held corporation. Thereafter, in order for Options
and SARs to qualify as "performance-based compensation" (within the meaning of
Section 162(m) of the Code) the shareholder approval requirements of Section
162(m) of the Code must be satisfied and the Plan must be approved by a vote of
the shareholders of the Company.
* * *
As adopted by the Board of Directors of
Bolle Inc. as of January , 1998
-26-
RULES OF THE BOLLE INC.
STOCK OPTION PLAN
FOR FRENCH EMPLOYEES
1. INTRODUCTION
Bolle Inc.(the "Company") has established the Bolle Inc. 1998 Stock Incentive
Plan (the "US Plan") for the benefit of certain employees of the Company, its
subsidiaries and affiliates, including its French Subsidiaries, BOLLE S.N.C.
and BOLLE DIFFUSION (the "Subsidiaries") of which the Company holds indirectly
100% of the capital. The Board of Directors of the Company has determined that
it is advisable to establish a sub-plan for the purposes of permitting stock
options granted under the US Plan to qualify for favorable French tax and
social security treatment. The Board of Directors, therefore, intends to
establish a sub-plan of the US Plan for the purpose of granting options which
qualify for the favorable tax and social security treatment in France
applicable to options granted under the Law n(0) 70-1322 of December 31, 1970,
as subsequently amended, to qualifying employees who are resident in France for
French tax purposes. The terms of the US Plan, as set out in Appendix 1 hereto,
shall, subject to the modifications in the following rules, constitute the
Bolle Inc. Stock Option Plan for French Employees (the "French Plan"). Under
the French Plan, the qualifying employees will be granted only stock options.
In no case will they be granted other Awards, as referred to in the US Plan.
2. DEFINITIONS
Terms used in the French Plan shall have the same meanings as set
forth in the US Plan, except as specifically provided herein.
For the purposes of this French Plan, the term "Option" shall have the
following meaning:
Purchase options, that are rights to acquire shares repurchased by the
Company prior to the grant of said options.
3. ENTITLEMENT TO PARTICIPATE
Any Employee of the Subsidiaries shall be eligible to receive Options
under the French Plan. However, options cannot be issued under the French Plan
to employees or executives owning more than ten percent (10%) of the Company's
capital shares or to individuals other than employees and corporate executives
of the Subsidiaries. Options may not be issued to directors of the
Subsidiaries, unless they are employed by the Subsidiaries.
4. OPTION PRICE
The Option Price per share of common stock payable pursuant to Options
issued hereunder shall be fixed by the Committee on the date the Option is
granted, but in no event shall the Option Price per share be less than the
greater of:
a. with respect to purchase options over the common stock, the
higher of either 95% of the average quotation price of such
common stock during the 20 days of quotation immediately
preceding the grant date or 95% of the average purchase price
paid for such common stock by the Company;
b. the minimum option exercise price permitted under the US
Plan.
5. EXERCISE OF AN OPTION
Upon exercise of an Option, the full Option Price will have to be paid
either by check or credit transfer.
The shares acquired upon exercise of an Option will be recorded in an account
in the name of the shareholder.
6. CHANGES IN CAPITALIZATION
In compliance with French law, neither the Option Price nor the number
of shares subject to an Option issued hereunder, shall be modified during the
Options' duration. Adjustments to the Option Price or number of shares subject
to an Option issued hereunder shall be made to preclude the dilution or
enlargement of benefits under such Option only in the case of one or more of
the following transactions by the Company:
a. an increase of corporate capital by cash contribution;
b. an issuance of convertible or exchangeable bonds;
c. a capitalization of retained earnings, profits, or issuance
premiums;
d. a distribution of retained earnings by payment in cash or shares;
and
e. a reduction of corporate capital by set off against losses.
7. DEATH
In the event of the death of a French Holder, said individual's heirs
may exercise the Option within 6 months following the death, but any vested
Option which remains
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unexercised shall expire 6 months following the date of the Holder's death.
8. INTERPRETATION
It is intended that Options granted under the French Plan shall
qualify for the favorable tax and social security treatment applicable to stock
options granted under the Law n(0) 70-1322 of December 31, 1970, as
subsequently amended, and in accordance with the relevant provisions set forth
by French tax law and the French tax administration. The terms of the French
Plan shall be interpreted accordingly.
9. AMENDMENTS
Subject to the terms of the US Plan, the Committee reserves the right
to amend or terminate the French Plan at any time.
10. ADOPTION
The French Plan was adopted by a meeting of the Board of Directors of
the Company, held on January __, 1998.
--------------------------
For Bolle Inc.
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