EXHIBIT 10.1
QUIKSILVER, INC.
2000 STOCK INCENTIVE PLAN(1)
(As Amended and Restated through February 6, 2007)
ARTICLE ONE
GENERAL PROVISIONS
1.1. PURPOSE OF THE PLAN
This amended and restated 2000 Stock Incentive Plan is intended to promote
the interests of Quiksilver, Inc., a Delaware corporation, by providing eligible
persons in the Corporation's service with the opportunity to acquire a
proprietary interest, or otherwise increase their proprietary interest, in the
Corporation as an incentive for them to remain in such service.
Capitalized terms not otherwise defined herein shall have the meanings
assigned to such terms in the attached Appendix.
1.2. STRUCTURE OF THE PLAN
A. The Plan as hereby amended and restated shall be divided into four
separate equity incentive programs:
- the Discretionary Option Grant Program, under which eligible
persons may, at the discretion of the Plan Administrator, be
granted options to purchase shares of Common Stock,
- the Restricted Stock Program, under which eligible persons may be
awarded restricted shares of Common Stock by and at the
discretion of the Plan Administrator, that vest upon, among other
things, the completion of a designated service period and/or the
attainment of pre-established performance milestones or other
criteria,
- the Restricted Stock Unit Program, under which eligible persons
may be awarded restricted stock units by and at the discretion of
the Plan Administrator, that vest upon, among other things, the
completion of a designated service period and/or the attainment
of pre-established performance milestones or other criteria, and
- the Director Automatic Grant Program under which Eligible
Directors shall automatically receive option grants and
restricted shares of Common Stock at designated intervals over
their period of Board service.
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(1) All share amounts in this document have been revised to reflect a 2 for 1
stock split effected through a stock dividend on April 30, 2003 and a 2 for
1 stock split effected through a stock dividend on April 27, 2005.
B. The provisions of Articles One and Six shall apply to all equity
programs under the Plan and shall govern the interests of all persons under the
Plan.
1.3. ADMINISTRATION OF THE PLAN
A. The Primary Committee shall have sole and exclusive authority to
administer the Discretionary Option Grant, Restricted Stock and Restricted Stock
Unit Programs with respect to Section 16 Insiders. Administration of the
Discretionary Option Grant, Restricted Stock and Restricted Stock Unit Programs
with respect to all other persons eligible to participate in those programs may,
at the Board's discretion, be vested in the Primary Committee or a Secondary
Committee, or the Board may retain the power to administer those programs with
respect to all such persons. However, any discretionary Awards to members of the
Primary Committee must be authorized and approved by a disinterested majority of
the Board.
B. Members of the Primary Committee or any Secondary Committee shall serve
for such period of time as the Board may determine and may be removed by the
Board at any time. The Board may also at any time terminate the functions of any
Secondary Committee and reassume all powers and authority previously delegated
to such committee.
C. Each Plan Administrator shall, within the scope of its administrative
functions under the Plan, have full power and authority (subject to the
provisions of the Plan) to establish such rules and regulations as it may deem
appropriate for proper administration of the Discretionary Option Grant,
Restricted Stock and Restricted Stock Unit Programs and to make such
determinations under, and issue such interpretations of, the provisions of those
programs and any outstanding Awards thereunder as it may deem necessary or
advisable. Decisions of the Plan Administrator within the scope of its
administrative functions under the Plan shall be final and binding on all
parties who have an interest in the Discretionary Option Grant, Restricted Stock
and Restricted Stock Unit Programs under its jurisdiction or any Award
thereunder.
D. Service on the Primary Committee or the Secondary Committee shall
constitute service as a Board member, and members of each such committee shall
accordingly be entitled to full indemnification and reimbursement as Board
members for their service on such committee. No member of the Primary Committee
or the Secondary Committee shall be liable for any act or omission made in good
faith with respect to the Plan or any Award under the Plan.
E. Administration of the Director Automatic Grant Program shall be
self-executing in accordance with the terms of that program, and no Plan
Administrator shall exercise any discretionary functions with respect to any
Award under that program.
1.4. ELIGIBILITY
A. The persons eligible to participate in the Discretionary Option Grant,
Restricted Stock and Restricted Stock Unit Programs are as follows:
(i) Employees,
(ii) non-employee members of the Board or the board of directors of
any Parent or Subsidiary, and
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(iii) consultants and other independent advisors who provide services
to the Corporation (or any Parent or Subsidiary).
B. Each Plan Administrator shall, within the scope of its administrative
jurisdiction under the Plan, have full authority to determine (i) with respect
to Awards made under the Discretionary Option Grant Program, which eligible
persons are to receive such Awards, the time or times when those Awards are to
be made, the number of shares to be covered by each such Award, the status of
any awarded option as either an Incentive Option or a Non-Statutory Option, the
exercise price per share in effect for each Award (subject to the limitations
set forth in Article Two), the time or times when each Award is to vest and
become exercisable and the maximum term for which the Award is to remain
outstanding and (ii) with respect to Awards under the Restricted Stock and
Restricted Stock Unit Programs, which eligible persons are to receive such
Awards, the time or times when the Awards are to be made, the number of shares
subject to each Award, the vesting schedule applicable to the shares subject to
such Award, and the purchase price, if any, for such shares.
C. The Plan Administrator shall have the absolute discretion to grant
options, Restricted Stock and Restricted Stock Units in accordance with the
Discretionary Option Grant Program, the Restricted Stock Program and the
Restricted Stock Unit Program, respectively.
D. Eligible Directors for purposes of the Director Automatic Grant Program
shall be limited to members of the Board who are not, at the time of such
determination, employees of the Corporation (or any Parent or Subsidiary).
1.5. STOCK SUBJECT TO THE PLAN
A. The stock issuable under the Plan shall be shares of authorized but
unissued or reacquired Common Stock, including shares repurchased by the
Corporation on the open market. The number of shares of Common Stock reserved
for issuance over the term of the Plan shall not exceed 33,444,836 shares. Such
share reserve consists of (i) the number of shares estimated to remain available
for issuance, as of the Plan Effective Date, under the Predecessor Plans as last
approved by the Corporation's stockholders, including the shares subject to
outstanding options under those Predecessor Plans, (ii) an increase of 2,000,000
shares approved by the Corporation's stockholders in connection with the
adoption of this Plan, (iii) an increase of 2,800,000 shares approved by the
Corporation's stockholders on March 30, 2001, (iv) an increase of 2,400,000
shares approved by the Corporation's stockholders on March 26, 2002 (v) an
increase of 3,200,000 shares approved by the Corporation's stockholders on March
28, 2003, (vi) an increase of 5,600,000 shares approved by the Corporation's
stockholders on March 26, 2004, (vii) an increase of 1,500,000 shares approved
by the Corporation's stockholders on March 24, 2005, (viii) an increase of
1,000,000 shares approved by the Corporation's stockholders on March 24, 2006
and (ix) an increase of 2,000,000 shares approved by the Corporation's
stockholders on March 16, 2007.
B. No one person participating in the Plan may receive Awards for more than
800,000 shares of Common Stock in the aggregate per calendar year. To the extent
required by Section 162(m) of the Code, shares subject to options or stock
appreciation rights which are canceled shall continue to be counted against the
limit.
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C. The maximum number of shares of Common Stock reserved for issuance
pursuant to Awards of Restricted Stock and Restricted Stock Units under the Plan
is 800,000.
D. Shares of Common Stock subject to outstanding Awards (including options
incorporated into this Plan from the Predecessor Plans) shall be available for
subsequent issuance under the Plan to the extent those Awards expire or
terminate for any reason prior to the issuance of the shares of Common Stock
subject to those Awards. Unvested shares issued under the Plan and subsequently
canceled or repurchased by the Corporation at the original exercise or issue
price paid per share pursuant to the Corporation's repurchase rights under the
Plan shall be added back to the number of shares of Common Stock reserved for
issuance under the Plan and shall accordingly be available for subsequent
reissuance under the Plan. However, should the exercise price of an option under
the Plan be paid with shares of Common Stock or should shares of Common Stock
otherwise issuable under the Plan be withheld by the Corporation in satisfaction
of the withholding taxes incurred in connection with the exercise of an option
or the issuance of shares under the Plan, then the number of shares of Common
Stock available for issuance under the Plan shall be reduced by the gross number
of shares for which the option is exercised or the gross number of shares issued
under the Plan, and not by the net number of shares of Common Stock issued to
the holder of such option or stock issuance. Shares of Common Stock underlying
one or more stock appreciation rights exercised under the Plan shall NOT be
available for subsequent issuance under the Plan.
E. If any change is made to the Common Stock by reason of any stock split,
stock dividend, recapitalization, combination of shares, exchange of shares or
other change affecting the outstanding Common Stock as a class without the
Corporation's receipt of consideration, appropriate adjustments shall be made by
the Plan Administrator to (i) the maximum number and/or class of securities
issuable under the Plan, (ii) the maximum number and/or class of securities for
which any one person may be granted Awards under the Plan per calendar year,
(iii) the number and/or class of securities for which grants are subsequently to
be made under the Director Automatic Grant Program to new and continuing
Eligible Directors, (iv) the number and/or class of securities and the exercise
or base price per share (or any other cash consideration payable per share) in
effect under each outstanding Award under the Discretionary Option Grant and
Director Automatic Grant Programs, (v) the number and/or class of securities and
exercise price per share in effect under each outstanding option incorporated
into this Plan from the Predecessor Plans, (vi) the number and/or class of
securities subject to each outstanding Award under the Restricted Stock and
Restricted Stock Unit Programs and the cash consideration (if any) payable per
share thereunder, and (vii) the maximum number of shares which may be issued
pursuant to Awards of Restricted Stock and Restricted Stock Units under the
Plan. Such adjustments to the outstanding Awards are to be effected in a manner
which shall preclude the enlargement or dilution of rights and benefits under
those Awards. The adjustments determined by the Plan Administrator shall be
final, binding and conclusive.
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ARTICLE TWO
DISCRETIONARY OPTION GRANT PROGRAM
2.1. OPTION TERMS
Each option shall be evidenced by one or more documents in the form
approved by the Plan Administrator; provided, however, that each such document
shall comply with the terms specified below. Each document evidencing an
Incentive Option shall, in addition, be subject to the provisions of the Plan
applicable to such options.
A. EXERCISE PRICE.
1. The exercise price per share shall be fixed by the Plan
Administrator but shall not be less than one hundred percent (100%) of the Fair
Market Value per share of Common Stock on the option grant date. The Plan
Administrator may not reset the exercise price of outstanding options and may
not grant new options in exchange for the cancellation of outstanding options
with a higher exercise price.
2. The exercise price shall become immediately due upon exercise of
the option and shall be payable in one or more of the forms specified below:
(i) cash or check made payable to the Corporation,
(ii) shares of Common Stock held for the requisite period
necessary to avoid a charge to the Corporation's earnings for financial
reporting purposes and valued at Fair Market Value on the Exercise Date, or
(iii) to the extent the option is exercised for vested shares,
through a special sale and remittance procedure pursuant to which the Optionee
shall concurrently provide irrevocable instructions to (a) a
Corporation-designated brokerage firm to effect the immediate sale of the
purchased shares and remit to the Corporation, out of the sale proceeds
available on the settlement date, sufficient funds to cover the aggregate
exercise price payable for the purchased shares plus all applicable federal,
state and local income and employment taxes required to be withheld by the
Corporation by reason of such exercise and (b) the Corporation to deliver the
certificates for the purchased shares directly to such brokerage firm in order
to complete the sale.
Except to the extent such sale and remittance procedure is utilized,
payment of the exercise price for the purchased shares must be made on the
Exercise Date.
B. EXERCISE AND TERM OF OPTIONS. Each option shall be exercisable at such
time or times, during such period and for such number of shares as shall be
determined by the Plan Administrator and set forth in the documents evidencing
the option. However, no option shall have a term in excess of ten (10) years
measured from the option grant date.
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C. EFFECT OF TERMINATION OF SERVICE.
1. The following provisions shall govern the exercise of any options
held by the Optionee at the time of cessation of Service or death:
(i) Any option outstanding at the time of the Optionee's
cessation of Service for any reason shall remain exercisable for such period of
time thereafter as shall be determined by the Plan Administrator and set forth
in the documents evidencing the option, but no such option shall be exercisable
after the expiration of the option term.
(ii) Any option held by the Optionee at the time of death and
exercisable in whole or in part at that time may be subsequently exercised by
the personal representative of the Optionee's estate or by the person or persons
to whom the option is transferred pursuant to the Optionee's will or the laws of
inheritance or by the Optionee's designated beneficiary or beneficiaries of that
option.
(iii) Should the Optionee's Service be terminated for Misconduct
or should the Optionee otherwise engage in Misconduct while holding one or more
outstanding options under this Article Two, then all those options shall
terminate immediately and cease to be outstanding.
(iv) During the applicable post-Service exercise period, the
option may not be exercised in the aggregate for more than the number of vested
shares for which that option is at the time exercisable. No additional shares
shall vest under the option following the Optionee's cessation of Service,
except to the extent (if any) specifically authorized by the Plan Administrator
in its sole discretion pursuant to an express written agreement with the
Optionee. Upon the expiration of the applicable exercise period or (if earlier)
upon the expiration of the option term, the option shall terminate and cease to
be outstanding for any vested shares for which the option has not been
exercised.
2. The Plan Administrator shall have complete discretion, exercisable
either at the time an option is granted or at any time while the option remains
outstanding, to:
(i) extend the period of time for which the option is to remain
exercisable following the Optionee's cessation of Service from the limited
exercise period otherwise in effect for that option to such greater period of
time as the Plan Administrator shall deem appropriate, but in no event beyond
the expiration of the option term, and/or
(ii) permit the option to be exercised, during the applicable
post- Service exercise period, not only with respect to the number of vested
shares of Common Stock for which such option is exercisable at the time of the
Optionee's cessation of Service but also with respect to one or more additional
installments in which the Optionee would have vested had the Optionee continued
in Service.
D. STOCKHOLDER RIGHTS. The holder of an option shall have no stockholder
rights with respect to the shares subject to the option until such person shall
have exercised the option, paid the exercise price and become a holder of record
of the purchased shares.
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E. REPURCHASE RIGHTS. The Plan Administrator shall have the discretion to
grant options which are exercisable for unvested shares of Common Stock. Should
the Optionee cease Service while holding such unvested shares, the Corporation
shall have the right to repurchase, at the exercise price paid per share, any or
all of those unvested shares. The terms upon which such repurchase right shall
be exercisable (including the period and procedure for exercise and the
appropriate vesting schedule for the purchased shares) shall be established by
the Plan Administrator and set forth in the document evidencing such repurchase
right.
F. TRANSFERABILITY OF OPTIONS. The transferability of options granted under
the Plan shall be governed by the following provisions:
(i) Incentive Options. During the lifetime of the Optionee, Incentive
Options shall be exercisable only by the Optionee and shall not be assignable or
transferable other than by will or the laws of inheritance following the
Optionee's death.
(ii) Non-Statutory Options. Non-Statutory Options shall be subject to
the same restriction as Incentive Options, except that the Plan Administrator
may structure one or more Non-Statutory Options so that the option may be
assigned in whole or in part during the Optionee's lifetime to one or more
Family Members or to a trust established exclusively for Optionee and/or one or
more such Family Members or to Optionee's former spouse, to the extent such
assignment is in connection with Optionee's estate plan or pursuant to a
domestic relations order. The assigned portion may only be exercised by the
person or persons who acquire a proprietary interest in the option pursuant to
the assignment. The terms applicable to the assigned portion shall be the same
as those in effect for the option immediately prior to such assignment and shall
be set forth in such documents issued to the assignee as the Plan Administrator
may deem appropriate.
(iii) Beneficiary Designation. Notwithstanding the foregoing, the
Optionee may designate one or more persons as the beneficiary or beneficiaries
of his or her outstanding options under this Article Two (whether Incentive
Options or Non-Statutory Options), and those options shall, in accordance with
such designation, automatically be transferred to such beneficiary or
beneficiaries upon the Optionee's death while holding those options. Such
beneficiary or beneficiaries shall take the transferred options subject to all
the terms and conditions of the applicable agreement evidencing each such
transferred option, including (without limitation) the limited time period
during which the option may be exercised following the Optionee's death.
2.2. INCENTIVE OPTIONS
The terms specified below, together with any additions, deletions or
changes thereto imposed from time to time pursuant to the provisions of the Code
governing Incentive Options, shall be applicable to all Incentive Options.
Except as modified by the provisions of this Section 2.2, all the provisions of
Articles One, Two and Six shall be applicable to Incentive Options. Options
which are specifically designated as Non-Statutory Options when issued under the
Plan shall not be subject to the terms of this Section 2.2.
A. ELIGIBILITY. Incentive Options may only be granted to Employees.
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B. DOLLAR LIMITATION. The aggregate Fair Market Value of the shares of
Common Stock (determined as of the respective date or dates of grant) for which
one or more options granted to any Employee under the Plan (or any other option
plan of the Corporation or any Parent or Subsidiary) may for the first time
become exercisable as Incentive Options during any one calendar year shall not
exceed the sum of One Hundred Thousand Dollars ($100,000). To the extent the
Employee holds two (2) or more such options which become exercisable for the
first time in the same calendar year, then for purposes of the foregoing
limitation on the exercisability of those options as Incentive Options, such
options shall be deemed to become first exercisable in that calendar year on the
basis of the chronological order in which they were granted, except to the
extent otherwise provided under applicable law or regulation.
C. 10% STOCKHOLDER. If any Employee to whom an Incentive Option is granted
is a 10% Stockholder, then the exercise price per share shall not be less than
one hundred ten percent (110%) of the Fair Market Value per share of Common
Stock on the option grant date, and the option term shall not exceed five (5)
years measured from the option grant date.
2.3. CORPORATE TRANSACTION/CHANGE IN CONTROL/HOSTILE TAKE-OVER
A. No Award outstanding under the Discretionary Option Grant Program at the
time of a Corporate Transaction shall vest and become exercisable on an
accelerated basis if and to the extent that (i) such Award is, in connection
with the Corporate Transaction, assumed by the successor corporation (or parent
thereof) or otherwise continued in full force and effect pursuant to the express
terms of the Corporate Transaction or (ii) such Award is replaced with a cash
incentive program of the successor corporation which preserves the spread (the
excess of the Fair Market Value of those shares over the exercise price in
effect for the shares) existing at the time of the Corporate Transaction on the
shares of Common Stock as to which the Award is not otherwise at that time
vested and exercisable and provides for subsequent payout in accordance with the
same exercise/vesting schedule applicable to those shares or (iii) the
acceleration of such Award is subject to other limitations imposed by the Plan
Administrator. However, if none of the foregoing conditions are satisfied, each
Award outstanding under the Discretionary Option Grant Program at the time of
the Corporate Transaction shall automatically accelerate so that each such Award
shall, immediately prior to the effective date of the Corporate Transaction,
vest and become exercisable as to all shares of Common Stock at the time subject
to such Award and may be exercised for any or all of those shares as fully
vested shares of Common Stock.
B. All outstanding repurchase rights under the Discretionary Option Grant
Program shall automatically terminate, and the shares of Common Stock subject to
those terminated rights shall immediately vest in full, in the event of any
Corporate Transaction, except to the extent: (i) those repurchase rights are to
be assigned to the successor corporation (or parent thereof) in connection with
the Corporate Transaction or otherwise continue in full force and effect
pursuant to the express terms of the Corporate Transaction or (ii) such
accelerated vesting is precluded by other limitations imposed by the Plan
Administrator.
C. Immediately following the consummation of the Corporate Transaction, all
outstanding Awards under the Discretionary Option Grant Program shall terminate
and cease to be outstanding, except to the extent assumed by the successor
corporation (or parent thereof) in
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connection with the Corporate Transaction or otherwise expressly continued in
full force and effect pursuant to the express terms of the Corporate
Transaction.
D. Each Award which is assumed in connection with a Corporate Transaction
or otherwise continued in effect shall be appropriately adjusted, immediately
after such Corporate Transaction, to apply to the number and class of securities
which would have been issuable to the Optionee in consummation of such Corporate
Transaction had the Award been exercised immediately prior to such Corporate
Transaction. Appropriate adjustments to reflect such Corporate Transaction shall
also be made to (i) the exercise price payable per share under each outstanding
Award, provided the aggregate exercise price payable for such securities shall
remain the same, (ii) the maximum number and/or class of securities available
for issuance over the remaining term of the Plan, and (iii) the maximum number
and/or class of securities for which any one person may be granted Awards under
the Plan per calendar year. To the extent the actual holders of the
Corporation's outstanding Common Stock receive cash consideration for their
Common Stock in consummation of the Corporate Transaction, the successor
corporation may, in connection with the assumption of the outstanding Awards
under the Discretionary Option Grant Program, substitute one or more shares of
its own common stock with a fair market value equivalent to the cash
consideration paid per share of Common Stock in such Corporate Transaction.
E. The Plan Administrator shall have the discretionary authority to
structure one or more outstanding Awards under the Discretionary Option Grant
Program so that those Awards shall, immediately prior to the effective date of
such Corporate Transaction, vest and become exercisable for all the shares of
Common Stock at the time subject to those Awards and may be exercised for any or
all of those shares as fully vested shares of Common Stock, whether or not those
Awards are to be assumed or otherwise continued in full force and effect
pursuant to the terms of the Corporate Transaction. In addition, the Plan
Administrator shall have the discretionary authority to structure one or more of
the Corporation's repurchase rights under the Discretionary Option Grant Program
so that those rights shall immediately terminate at the time of such Corporate
Transaction and shall not be assignable to the successor corporation (or parent
thereof), and the shares subject to those terminated rights shall accordingly
vest in full at the time of such Corporate Transaction.
F. The Plan Administrator shall have full power and authority to structure
one or more outstanding Awards under the Discretionary Option Grant Program so
that those Awards shall immediately vest and become exercisable for all the
shares of Common Stock at the time subject to those Awards in the event the
Optionee's Service is subsequently terminated by reason of an Involuntary
Termination within a designated period (not to exceed eighteen (18) months)
following the effective date of any Corporate Transaction in which those Awards
do not otherwise vest on an accelerated basis. Any Awards so accelerated shall
remain exercisable as to fully vested shares until the expiration or sooner
termination of their term. In addition, the Plan Administrator may structure one
or more of the Corporation's repurchase rights under the Discretionary Option
Grant Program so that those rights shall immediately terminate with respect to
any shares held by the Optionee at the time of his or her Involuntary
Termination, and the shares subject to those terminated repurchase rights shall
accordingly vest in full at that time.
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G. The Plan Administrator shall have the discretionary authority to
structure one or more outstanding Awards under the Discretionary Option Grant
Program so that those Awards shall, immediately prior to the effective date of a
Change in Control or Hostile Take-Over, as the case may be, vest and become
exercisable for all the shares of Common Stock at the time subject to those
Awards and may be exercised for any or all of those shares as fully vested
shares of Common Stock. In addition, the Plan Administrator shall have the
discretionary authority to structure one or more of the Corporation's repurchase
rights under the Discretionary Option Grant Program so that those rights shall
terminate automatically upon the consummation of such Change in Control or
Hostile Take-Over, as the case may be, and the shares subject to those
terminated rights shall thereupon vest in full. Alternatively, the Plan
Administrator may condition the automatic acceleration of one or more
outstanding Awards under the Discretionary Option Grant Program and the
termination of one or more of the Corporation's outstanding repurchase rights
under such program upon the Involuntary Termination of the Optionee's Service
within a designated period (not to exceed eighteen (18) months) following the
effective date of such Change in Control or Hostile Take-Over, as the case may
be. Each Award so accelerated shall remain exercisable for fully vested shares
until the expiration or sooner termination of their term.
H. The portion of any Incentive Option accelerated in connection with a
Corporate Transaction or Change in Control or Hostile Take-Over shall remain
exercisable as an Incentive Option only to the extent the applicable One Hundred
Thousand Dollar ($100,000) limitation is not exceeded. To the extent such dollar
limitation is exceeded, the accelerated portion of such option shall be
exercisable as a Nonstatutory Option under the Federal tax laws.
I. Awards outstanding shall in no way affect the right of the Corporation
to adjust, reclassify, reorganize or otherwise change its capital or business
structure or to merge, consolidate, dissolve, liquidate or sell or transfer all
or any part of its business or assets.
2.4. STOCK APPRECIATION RIGHTS
A. The Plan Administrator shall have full power and authority to grant to
selected Optionees tandem stock appreciation rights and/or limited stock
appreciation rights.
B. The following terms shall govern the grant and exercise of tandem stock
appreciation rights:
(i) One or more Optionees may be granted the right, exercisable upon
such terms as the Plan Administrator may establish, to elect between the
exercise of the underlying option for shares of Common Stock and the surrender
of that option in exchange for a distribution from the Corporation in an amount
equal to the excess of (a) the Fair Market Value (on the option surrender date)
of the number of shares in which the Optionee is at the time vested under the
surrendered option (or surrendered portion thereof) over (b) the aggregate
exercise price payable for such shares.
(ii) No such option surrender shall be effective unless it is approved
by the Plan Administrator, either at the time of the actual option surrender or
at any earlier time. If the surrender is so approved, then the distribution to
which the Optionee shall be entitled may be
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made in shares of Common Stock valued at Fair Market Value on the option
surrender date, in cash, or partly in shares and partly in cash, as the Plan
Administrator shall in its sole discretion deem appropriate.
(iii) If the surrender of an option is not approved by the Plan
Administrator, then the Optionee shall retain whatever rights the Optionee had
under the surrendered option (or surrendered portion thereof) on the option
surrender date and may exercise such rights at any time prior to the later of
(a) five (5) business days after the receipt of the rejection notice or (b) the
last day on which the option is otherwise exercisable in accordance with the
terms of the documents evidencing such option, but in no event may such rights
be exercised more than ten (10) years after the option grant date.
C. The following terms shall govern the grant and exercise of limited stock
appreciation rights:
(i) One or more Section 16 Insiders may be granted limited stock
appreciation rights with respect to their outstanding options.
(ii) Upon the occurrence of a Hostile Take-Over, each individual
holding one or more options with such a limited stock appreciation right shall
have the unconditional right (exercisable for a thirty (30)-day period following
such Hostile Take-Over) to surrender each such option to the Corporation. In
return for the surrendered option, the Optionee shall receive a cash
distribution from the Corporation in an amount equal to the excess of (A) the
Take-Over Price of the shares of Common Stock at the time subject to such option
(whether or not the option is otherwise at that time exercisable for those
shares) over (B) the aggregate exercise price payable for those shares. Such
cash distribution shall be paid within five (5) days following the option
surrender date.
(iii) At the time such limited stock appreciation right is granted,
the Plan Administrator shall pre-approve any subsequent exercise of that right
in accordance with the terms of this Paragraph C. Accordingly, no further
approval of the Plan Administrator or the Board shall be required at the time of
the actual option surrender and cash distribution.
ARTICLE THREE
RESTRICTED STOCK PROGRAM
3.1. RESTRICTED STOCK TERMS
A. ISSUANCES. Shares of Restricted Stock may be issued under the Restricted
Stock Program at the discretion of the Plan Administrator through direct and
immediate issuances without any intervening option grants. Each such issuance of
Restricted Stock shall be evidenced by a Restricted Stock Agreement that
complies with the terms specified below and such other provisions as the Plan
Administrator shall determine. Participants shall have no rights with respect to
the shares of Restricted Stock covered by a Restricted Stock Agreement until the
Participant has paid the full purchase price, if any, to the Corporation and has
executed and delivered to the Corporation the applicable Restricted Stock
Agreement.
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B. PURCHASE PRICE.
1. The purchase price per share of Restricted Stock issued under the
Restricted Stock Program shall be fixed by the Plan Administrator in its sole
discretion, including no consideration or such minimum consideration as may be
required by applicable law.
2. Shares of Restricted Stock may be issued under the Restricted Stock
Program for any of the following items of consideration that the Plan
Administrator may deem appropriate in each individual instance:
(i) cash or check made payable to the Corporation; or
(ii) any other valid form of consideration permissible under the
Delaware General Corporation Law at the time such shares are issued.
C. VESTING PROVISIONS
1. Shares of Restricted Stock issued under the Restricted Stock
Program may, in the discretion of the Plan Administrator, vest in one or more
installments over the Participant's period of Service and/or upon attainment of
specified performance objectives or such other criteria as the Plan
Administrator shall determine. The elements of the vesting schedule applicable
to any unvested shares of Restricted Stock issued under the Restricted Stock
Program shall be determined by the Plan Administrator and incorporated into the
Restricted Stock Agreement.
2. The Plan Administrator shall also have the discretionary authority,
consistent with Code Section 162(m), to structure one or more Awards under the
Restricted Stock Program so that the shares of Restricted Stock subject to those
Awards shall vest upon the achievement of certain pre-established corporate
performance goals based on one or more of the following criteria: (i) return on
total shareholder equity; (ii) earnings or net income per share of Common Stock;
(iii) net income or operating income; (iv) earnings before interest, taxes,
depreciation, amortization and stock-compensation costs, or operating income
before depreciation and amortization; (v) sales or revenue targets; (vi) return
on assets, capital or investment; (vii) cash flow; (viii) market share; (ix)
cost reduction goals; (x) budget comparisons; (xi) implementation or completion
of projects or processes strategic or critical to the Corporation's business
operations; (xii) measures of customer satisfaction; (xiii) any combination of,
or a specified increase in, any of the foregoing; and (xiv) the formation of
joint ventures, research and development collaborations, marketing or customer
service collaborations, or the completion of other corporate transactions
intended to enhance the Corporation's revenue or profitability or expand its
customer base; provided, however, that for purposes of items (ii), (iii) and
(vii) above, the Plan Administrator may, at the time the Awards under the
Restricted Stock Program are made, specify certain adjustments to such items as
reported in accordance with generally accepted accounting principles in the U.S.
("GAAP"), which will exclude from the calculation of those performance goals one
or more of the following: certain charges related to acquisitions, stock-based
compensation, employer payroll tax expense on certain stock option exercises,
settlement costs, restructuring costs, gains or losses on strategic investments,
non-operating gains or losses, certain other non-cash charges,
12
valuation allowance on deferred tax assets, and the related income tax effects,
purchases of property and equipment, and any extraordinary non-recurring items
as described in Accounting Principles Board Opinion No. 30, provided that such
adjustments are in conformity with those reported by the Corporation on a
non-GAAP basis. In addition, such performance goals may be based upon the
attainment of specified levels of the Corporation's performance under one or
more of the measures described above relative to the performance of other
entities and may also be based on the performance of any of the Corporation's
business groups or divisions or any Parent or Subsidiary. Performance goals may
include a minimum threshold level of performance below which no award will be
earned, levels of performance at which specified portions of an award will be
earned and a maximum level of performance at which an award will be fully
earned. The Plan Administrator may provide that, if the actual level of
attainment for any performance objective is between two specified levels, the
amount of the Award attributable to that performance objective shall be
interpolated on a straight-line basis.
3. Any new, substituted or additional securities or other property
(including money paid other than as a regular cash dividend) which the
Participant may have the right to receive with respect to the Participant's
unvested shares of Restricted Stock by reason of any stock dividend, stock
split, recapitalization, combination of shares, exchange of shares or other
change affecting the outstanding Common Stock as a class without the
Corporation's receipt of consideration shall be issued subject to (i) the same
vesting requirements applicable to the Participant's unvested shares of
Restricted Stock and (ii) such escrow arrangements as the Plan Administrator
shall deem appropriate.
4. The Participant shall have full voting rights with respect to any
shares of Restricted Stock issued to the Participant under the Restricted Stock
Program, whether or not the Participant's interest in those shares is vested.
Unless otherwise provided by the Plan Administrator in the Restricted Stock
Agreement, Participant shall also have the right to receive any regular cash
dividends paid on such shares. The Plan Administrator may apply any restrictions
to the dividends that the Plan Administrator deems appropriate. Without limiting
the generality of the preceding sentence, if the grant or vesting of shares of
Restricted Stock is designed to comply with the requirements of the
performance-based exception from the tax deductibility limitations of Code
Section 162(m), the Plan Administrator may apply any restrictions it deems
appropriate to the payment of dividends declared with respect to such shares of
Restricted Stock, such that the dividends and/or the shares of Restricted Stock
maintain eligibility for such exception.
5. The effect which death, Permanent Disability, termination of
Service (other than for Misconduct) or other event designated by the Plan
Administrator is to have upon the vesting schedule of a Restricted Stock Award
shall be determined by the Plan Administrator and incorporated into the
Restricted Stock Agreement.
6. Should the Participant's Service be terminated for Misconduct or
should the Participant otherwise engage in Misconduct while holding one or more
unvested shares of Restricted Stock, then all such unvested shares of Restricted
Stock shall be immediately surrendered to the Corporation for cancellation, and
the Participant shall have no further stockholder rights with respect to those
shares. To the extent the surrendered shares of Restricted Stock were previously
issued to the Participant for consideration paid in cash, cash
13
equivalent or otherwise, the Corporation shall repay to the Participant the same
form of consideration as the Participant paid for the surrendered shares.
7. Should the Participant cease to remain in Service while holding one
or more unvested shares of Restricted Stock issued under the Restricted Stock
Program or should the performance objectives or other criteria not be attained
with respect to one or more such unvested shares of Restricted Stock, then those
shares shall be immediately surrendered to the Corporation for cancellation, and
the Participant shall have no further stockholder rights with respect to those
shares. To the extent the surrendered shares were previously issued to the
Participant for consideration paid in cash, cash equivalent or otherwise, the
Corporation shall repay to the Participant the same form of consideration as the
Participant paid for the surrendered shares.
8. The Plan Administrator may in its discretion waive the surrender
and cancellation of one or more unvested shares of Restricted Stock (or other
assets attributable thereto) which would otherwise occur upon the cessation of
the Participant's Service or the non-attainment of the performance objectives or
other criteria applicable to those shares. Any such waiver shall result in the
immediate vesting of the Participant's interest in the shares of Restricted
Stock as to which the waiver applies. Such waiver may be effected at any time,
whether before or after the Participant's cessation of Service or the attainment
or non-attainment of the applicable performance objectives or other criteria.
However, no vesting requirements tied to the attainment of performance
objectives may be waived with respect to shares that were intended at the time
of issuance to qualify as performance-based compensation under Code Section
162(m), except in the event of the Participant's Involuntary Termination or as
otherwise provided in Section 3.2.D of this Article Three.
3.2. CORPORATE TRANSACTION/CHANGE IN CONTROL
A. No shares of Restricted Stock shall vest at the time of a Corporate
Transaction on an accelerated basis if and to the extent that (i) the Restricted
Stock Agreement is, in connection with the Corporate Transaction, continued or
assumed by the successor corporation (or parent thereof) or otherwise continued
in full force and effect pursuant to the express terms of the Corporate
Transaction, (ii) substitution of new agreements of comparable value covering
shares of the successor corporation (or parent thereof) in exchange for such
shares of Restricted Stock, with appropriate adjustments as to the number and
kind of shares and purchase price, is provided for pursuant to the express terms
of the Corporate Transaction or (iii) such accelerated vesting is precluded by
other limitations imposed by the Plan Administrator. However, if none of the
foregoing conditions are satisfied, immediately prior to the effective date of
the Corporate Transaction, all the shares of Restricted Stock shall
automatically vest in full.
B. The Plan Administrator shall have the discretionary authority,
exercisable either at the time the unvested shares of Restricted Stock are
issued or at any time while they remain outstanding under the Plan, to provide
that the unvested shares of Restricted Stock shall immediately vest upon a
Corporate Transaction or Change in Control or upon an event or events associated
with or following such transactions, including termination of Service.
14
C. If the Restricted Stock Agreement is continued or assumed by a successor
corporation (or parent thereof) or otherwise continued in full force and effect
pursuant to the terms of the Corporate Transaction or such accelerated vesting
is precluded by other limitations imposed by the Plan Administrator, each
outstanding Award under the Restricted Stock Program in effect shall be adjusted
immediately after the consummation of that Corporate Transaction to apply to the
number and class of securities into which the shares of Restricted Stock subject
to the Award immediately prior to the Corporate Transaction would have been
converted upon consummation of such Corporate Transaction had those shares
actually been outstanding and vested at that time, and appropriate adjustments
shall also be made to the consideration (if any) payable per share thereunder,
provided that the aggregate amount of such consideration shall remain the same.
D. The Plan Administrator's authority under Paragraph B of this Section 3.2
shall also extend to any Awards intended to qualify as performance-based
compensation under Code Section 162(m), even though the automatic vesting of
those Awards pursuant to Paragraph B of this Section 3.2 may result in their
loss of performance-based status under Code Section 162(m).
3.3. TRANSFERABILITY OF RESTRICTED STOCK
Unvested shares of Restricted Stock may not be assigned, transferred,
pledged or otherwise encumbered or disposed of other than by will or the laws of
inheritance following the Participant's death. Upon vesting, and after all other
conditions and restrictions applicable to such shares of Restricted Stock have
been satisfied or lapse (including satisfaction of any applicable Withholding
Tax) pursuant to the applicable Restricted Stock Agreement, such shares of
Restricted Stock shall become freely transferable (subject to any restrictions
under applicable securities laws) by Participant.
3.4. DELIVERY OF SHARES/LEGENDS
Unvested shares of Restricted Stock may, in the Plan Administrator's
discretion, be issued in book entry or certificate form and shall remain in the
possession or control of the Corporation until such shares have vested, and all
other conditions and restrictions applicable to such shares have been satisfied
or lapse (including satisfaction of any applicable Withholding Tax), in
accordance with the terms of the Restricted Stock Agreement. If issued in
certificate form, such certificates shall include such restrictive legends as
deemed appropriate by the Plan Administrator. The Plan Administrator may require
a stock power endorsed in blank with respect to shares of Restricted Stock
whether or not certificated.
ARTICLE FOUR
RESTRICTED STOCK UNIT PROGRAM
4.1. RESTRICTED STOCK UNIT TERMS
A. ISSUANCES. Restricted Stock Units which entitle the Participant to
receive shares of Common Stock underlying those units over the Participant's
period of Service and/or upon attainment of specified performance objectives or
such other criteria as the Plan
15
Administrator shall determine may be issued under the Restricted Stock Unit
Program at the discretion of the Plan Administrator. Each such issuance of
Restricted Stock Units shall be evidenced by a Restricted Stock Unit Agreement
that complies with the terms specified below and such other provisions as the
Plan Administrator shall determine. Participants shall have no rights with
respect to the Restricted Stock Units covered by a Restricted Stock Unit
Agreement until the Participant has paid the full purchase price, if any, to the
Corporation and has executed and delivered to the Corporation the applicable
Restricted Stock Unit Agreement.
B. PURCHASE PRICE.
1. The purchase price for Restricted Stock Units issued under the
Restricted Stock Unit Program shall be fixed by the Plan Administrator in its
sole discretion, including no consideration or such minimum consideration as may
be required by applicable law.
2. Restricted Stock Units may be issued under the Restricted Stock
Unit Program for any of the following items of consideration that the Plan
Administrator may deem appropriate in each individual instance:
(i) cash or check made payable to the Corporation; or
(ii) any other valid form of consideration permissible under the
Delaware General Corporation Law at the time such units are issued.
C. VESTING PROVISIONS
1. Restricted Stock Units issued under the Restricted Stock Unit
Program may, in the discretion of the Plan Administrator, vest in one or more
installments over the Participant's period of Service and/or upon attainment of
specified performance objectives or such other criteria as the Plan
Administrator shall determine. The elements of the vesting schedule applicable
to any unvested Restricted Stock Units issued under the Restricted Stock Unit
Program shall be determined by the Plan Administrator and incorporated into the
Restricted Stock Unit Agreement.
2. The Plan Administrator shall also have the discretionary authority,
consistent with Code Section 162(m), to structure one or more Awards under the
Restricted Stock Unit Program so that the Restricted Stock Units subject to
those Awards shall vest upon the achievement of certain pre-established
corporate performance goals based on one or more of the following criteria: (i)
return on total shareholder equity; (ii) earnings or net income per share of
Common Stock; (iii) net income or operating income; (iv) earnings before
interest, taxes, depreciation, amortization and stock-compensation costs, or
operating income before depreciation and amortization; (v) sales or revenue
targets; (vi) return on assets, capital or investment; (vii) cash flow; (viii)
market share; (ix) cost reduction goals; (x) budget comparisons; (xi)
implementation or completion of projects or processes strategic or critical to
the Corporation's business operations; (xii) measures of customer satisfaction;
(xiii) any combination of, or a specified increase in, any of the foregoing; and
(xiv) the formation of joint ventures, research and development collaborations,
marketing or customer service collaborations, or the completion of other
corporate transactions intended to enhance the Corporation's revenue or
profitability or expand its customer base; provided, however, that for
16
purposes of items (ii), (iii) and (vii) above, the Plan Administrator may, at
the time the Awards under the Restricted Stock Unit Program are made, specify
certain adjustments to such items as reported in accordance with GAAP, which
will exclude from the calculation of those performance goals one or more of the
following: certain charges related to acquisitions, stock-based compensation,
employer payroll tax expense on certain stock option exercises, settlement
costs, restructuring costs, gains or losses on strategic investments,
non-operating gains or losses, certain other non-cash charges, valuation
allowance on deferred tax assets, and the related income tax effects, purchases
of property and equipment, and any extraordinary non-recurring items as
described in Accounting Principles Board Opinion No. 30, provided that such
adjustments are in conformity with those reported by the Corporation on a
non-GAAP basis. In addition, such performance goals may be based upon the
attainment of specified levels of the Corporation's performance under one or
more of the measures described above relative to the performance of other
entities and may also be based on the performance of any of the Corporation's
business groups or divisions or any Parent or Subsidiary. Performance goals may
include a minimum threshold level of performance below which no award will be
earned, levels of performance at which specified portions of an award will be
earned and a maximum level of performance at which an award will be fully
earned. The Plan Administrator may provide that, if the actual level of
attainment for any performance objective is between two specified levels, the
amount of the Award attributable to that performance objective shall be
interpolated on a straight-line basis.
3. The Participant shall not have any stockholder rights with respect
to the shares of Common Stock subject to a Restricted Stock Unit until that
Award vests, all other conditions and restrictions applicable to such Restricted
Stock Unit have been satisfied or lapsed (including satisfaction of any
applicable Withholding Tax) pursuant to the applicable Restricted Stock Unit
Agreement, and the shares of Common Stock are actually issued thereunder.
However, dividend-equivalent units may be paid or credited, either in cash or in
actual or phantom shares of Common Stock, on outstanding Restricted Stock Unit
Awards, subject to such terms and conditions as the Plan Administrator may deem
appropriate.
4. The effect which death, Permanent Disability, termination of
Service (other than for Misconduct) or other event designated by the Plan
Administrator is to have upon the vesting schedule of a Restricted Stock Unit
Award shall be determined by the Plan Administrator and incorporated into the
Restricted Stock Unit Agreement.
5. Should the Participant's Service be terminated for Misconduct or
should the Participant otherwise engage in Misconduct while holding one or more
unvested Restricted Stock Units, then all such unvested Restricted Stock Units
shall be immediately and automatically canceled, no shares of Common Stock will
be issued in satisfaction of those units, and the Participant shall have no
further rights with respect to those units. To the extent the canceled
Restricted Stock Units were previously issued to the Participant for
consideration paid in cash, cash equivalent or otherwise, the Corporation shall
repay to the Participant the same form of consideration as the Participant paid
for the canceled units.
6. Should the Participant cease to remain in Service while holding one
or more unvested Restricted Stock Units issued under the Restricted Stock Unit
Program or should the performance objectives not be attained with respect to one
or more such unvested Restricted
17
Stock Units, then those units shall be immediately and automatically canceled,
no shares of Common Stock will be issued in satisfaction of those units, and the
Participant shall have no further rights with respect to those units. To the
extent the canceled Restricted Stock Units were previously issued to the
Participant for consideration paid in cash, cash equivalent or otherwise, the
Corporation shall repay to the Participant the same form of consideration as the
Participant paid for the canceled units.
7. Outstanding Restricted Stock Units under the Restricted Stock Unit
Program shall automatically terminate, and no shares of Common Stock shall
actually be issued in satisfaction of those units, if the performance goals or
other criteria established for such units or the Service requirements
established for such units are not attained or satisfied. The Plan
Administrator, however, shall have the discretionary authority to issue vested
shares of Common Stock under one or more outstanding Restricted Stock Units as
to which the designated performance goals or other criteria or Service
requirements have not been attained or satisfied. However, no vesting
requirements tied to the attainment of performance goals may be waived with
respect to Awards of Restricted Stock Units which were at the time of grant
intended to qualify as performance-based compensation under Code Section 162(m),
except in the event of the Participant's Involuntary Termination or as otherwise
provided in Section 4.2.D of this Article Four.
4.2. CORPORATE TRANSACTION/CHANGE IN CONTROL
A. No Restricted Stock Units shall vest at the time of a Corporate
Transaction on an accelerated basis if and to the extent that (i) the Restricted
Stock Unit Agreement is, in connection with the Corporate Transaction, continued
or assumed by the successor corporation (or parent thereof) or otherwise
continued in full force and effect pursuant to the express terms of the
Corporate Transaction, (ii) substitution of new agreements of comparable value
covering shares of the successor corporation (or parent thereof) in exchange for
such Restricted Stock Units, with appropriate adjustments as to the number and
kind of shares and purchase price, is provided for pursuant to the terms of the
Corporate Transaction or (iii) such accelerated vesting is precluded by other
limitations imposed by the Plan Administrator. However, if none of the foregoing
conditions are satisfied, immediately prior to the effective date of the
Corporate Transaction, all the unvested Restricted Stock Units shall
automatically vest in full.
B. The Plan Administrator shall have the discretionary authority,
exercisable either at the time the unvested Restricted Stock Units are issued or
at any time while they remain outstanding under the Plan, to provide that the
unvested Restricted Stock Units shall immediately vest upon a Corporate
Transaction or Change in Control or upon an event or events associated with or
following such transactions, including termination of Service.
C. If the Restricted Stock Unit Agreement is continued or assumed by a
successor corporation (or parent thereof) or otherwise continued in full force
and effect pursuant to the express terms of the Corporate Transaction or such
accelerated vesting is precluded by other limitations imposed by the Plan
Administrator, each outstanding Award under the Restricted Stock Unit Program in
effect shall be adjusted immediately after the consummation of that Corporate
Transaction to apply to the number and class of securities into which the shares
of Common Stock underlying those Restricted Stock Units subject to the Award
immediately prior
18
to the Corporate Transaction would have been converted in consummation of such
Corporate Transaction had those units actually been outstanding and vested at
that time, and appropriate adjustments shall also be made to the consideration
(if any) payable per unit thereunder, provided that the aggregate amount of such
consideration shall remain the same.
D. The Plan Administrator's authority under Paragraph B of this Section 4.2
shall also extend to any Awards intended to qualify as performance-based
compensation under Code Section 162(m), even though the automatic vesting of
those Awards pursuant to Paragraph B of this Section 4.2 may result in their
loss of performance-based status under Code Section 162(m).
4.3. TRANSFERABILITY OF RESTRICTED STOCK UNITS
Until vested, Restricted Stock Units may not be assigned, transferred,
pledged or otherwise encumbered or disposed of other than by will or the laws of
inheritance following the Participant's death. Upon vesting, and after all other
conditions and restrictions applicable to such Common Stock subject to such
Restricted Stock Units have been satisfied or lapse (including satisfaction of
any applicable Withholding Tax) pursuant to the applicable Restricted Stock Unit
Agreement, the shares of Common Stock subject to such Restricted Stock Unit
shall become freely transferable (subject to any restrictions under applicable
securities laws) by Participant.
4.4. DELIVERY OF SHARES/COMPLIANCE WITH SECTION 409A
A. Upon vesting and satisfaction of all other conditions and restrictions
applicable to the Restricted Stock Units (including satisfaction of any
applicable Withholding Tax) pursuant to the applicable Restricted Stock Unit
Agreement, certificates representing the shares of Common Stock underlying such
Restricted Stock Units shall be issued to Participant.
B. Notwithstanding the foregoing, the Plan Administrator may permit or
require a Participant to defer such Participant's delivery of shares of Common
Stock that would otherwise be due to such Participant with respect to the
Restricted Stock Units. If any such deferral or election is required or
admitted, the Plan Administrator shall, in its sole discretion, establish rules
and procedures for such delivery deferrals which shall be consistent with the
requirements of Code Section 409A and the Treasury regulations and rules
promulgated thereunder.
ARTICLE FIVE
DIRECTOR AUTOMATIC GRANT PROGRAM
5.1. TERMS
This Article Five of the Plan has been amended and restated effective as of
February 6, 2007, subject to stockholder approval at the 2007 Annual Meeting of
Stockholders. All options outstanding under the Automatic Option Grant Program
on February 6, 2007 shall continue in full force and effect in accordance with
the existing terms of the agreements evidencing those options, and no change in
this amended and restated Article Five shall affect those options. In the event
the stockholders do not approve the amended and restated provisions of this
Article Five at the 2007 Annual Meeting of Stockholders, the provisions of the
Automatic Option Grant Program as in effect immediately prior to this amendment
and restatement shall remain in full force and effect.
19
A. GRANT/ISSUANCE DATES. Grants and issuances under this amended and
restated Article Five shall be made on the dates specified below:
1. On the date of each annual meeting of stockholders, beginning with
the 2007 Annual Meeting of Stockholders, each individual who is to continue to
serve as an Eligible Director, whether or not that individual is standing for
re-election to the Board at that particular annual meeting, shall automatically
be issued 5,000 shares of Restricted Stock and granted a Non-Statutory Option to
purchase 7,500 shares of Common Stock, provided that such individual has served
as an Eligible Director for at least six (6) months. Notwithstanding the
foregoing, all Eligible Directors at the Corporation's 2007 Annual Meeting of
Stockholders will be entitled to receive the grants set forth in this Section
5.1.A.1 even though they may not have served as an Eligible Director for six
months prior to the date of such annual meeting. There shall be no limit on the
number of such annual option grants and Restricted Stock Awards any one Eligible
Director may receive over his or her period of Board Service.
2. Each individual who is first elected or appointed as an Eligible
Director at any time on or after the 2007 Annual Meeting of Stockholders, other
than at an annual meeting of stockholders, shall, on the date he or she
commences Service as an Eligible Director, automatically be issued 5,000 shares
of Restricted Stock and granted a Non-Statutory Option to purchase 7,500 shares
of Common Stock.
3. Each such issuance of Restricted Stock pursuant to the Director
Automatic Grant Program shall be evidenced by a Restricted Stock Agreement that
complies with the terms specified below. Participants shall have no rights with
respect to the shares of Restricted Stock covered by a Restricted Stock
Agreement until the Participant has executed and delivered to the Corporation
the applicable Restricted Stock Agreement.
B. OPTION EXERCISE PRICE
1. The exercise price per share for each option granted under this
Article Five shall be equal to one hundred percent (100%) of the Fair Market
Value per share of Common Stock on the option grant date.
2. The exercise price shall be payable in one or more of the
alternative forms authorized under the Discretionary Option Grant Program.
Except to the extent the sale and remittance procedure specified thereunder is
utilized, payment of the exercise price for the purchased shares must be made on
the Exercise Date.
C. OPTION TERM. Each option shall have a term of seven (7) years measured
from the option grant date.
D. EXERCISE AND VESTING OF OPTIONS. Each option shall be immediately
exercisable and fully vested as of the grant date for any or all of the option
shares.
20
E. TRANSFERABILITY OF OPTIONS. Each option granted under the Director
Automatic Grant Program may be assigned in whole or in part during the
Optionee's lifetime to one or more Family Members of the Optionee or to a trust
established exclusively for Optionee and/or one or more such Family Members or
to Optionee's former spouse, to the extent such assignment is in connection with
the Optionee's estate plan or pursuant to a domestic relations order. The
assigned portion may only be exercised by the person or persons who acquire a
proprietary interest in the option pursuant to the assignment. The terms
applicable to the assigned portion shall be the same as those in effect for the
option immediately prior to such assignment and shall be set forth in such
documents issued to the assignee as the Plan Administrator may deem appropriate.
The Optionee may also designate one or more persons as the beneficiary or
beneficiaries of his or her outstanding options under this Article Five, and
those options shall, in accordance with such designation, automatically be
transferred to such beneficiary or beneficiaries upon the Optionee's death while
holding those options. Such beneficiary or beneficiaries shall take the
transferred options subject to all the terms and conditions of the applicable
agreement evidencing each such transferred option, including (without
limitation) the limited time period during which the option may be exercised
following the Optionee's death.
F. TERMINATION OF BOARD SERVICE. The following provisions shall govern the
exercise of any outstanding options under the Director Automatic Grant Program
held by the Optionee at the time the Optionee ceases to serve as a Board member:
(i) Subject to (ii) below, the Optionee (or, in the event of
Optionee's death, the personal representative of the Optionee's estate or the
person or persons to whom the option is transferred pursuant to the Optionee's
will or the laws of inheritance or the designated beneficiary or beneficiaries
of such option) shall have a twelve (12)-month period following the date of such
cessation of Board service in which to exercise each such option.
(ii) In no event shall the option remain exercisable after the
expiration of the option term. Upon the expiration of the twelve (12)-month
exercise period or (if earlier) upon the expiration of the option term, the
option shall terminate and cease to be outstanding for any shares for which the
option has not been exercised.
G. VESTING OF RESTRICTED STOCK. Each Restricted Stock Award under the
Director Automatic Grant Program shall vest in a series of three successive
annual installments over the three-year period measured from the grant date of
such Award.
1. The annual vesting dates for Restricted Stock Awards pursuant to
Section 5.1.A.1 shall be as follows:
(i) 1,666 shares of Restricted Stock shall vest on the earlier of
(i) the first anniversary of the grant date of such Award or (ii) the day
immediately preceding the date of the first annual meeting of stockholders
following the grant date of such Award;
(ii) 1,666 shares of Restricted Stock shall vest on the earlier
of (i) the second anniversary of the grant date of such Award or (ii) the day
immediately preceding the date of the second annual meeting of stockholders
following the grant date of such Award; and
21
(iii) 1,667 shares of Restricted Stock shall vest on the earlier
of (i) the third anniversary of the grant date of such Award or (ii) the day
immediately preceding the date of the third annual meeting of stockholders
following the grant date of such Award.
2. The annual vesting dates for Restricted Stock Awards pursuant to
Section 5.1.A.2 shall be as follows:
(i) 1,666 shares of Restricted Stock shall vest on the first
anniversary of the grant date of such Award;
(ii) 1,666 shares of Restricted Stock shall vest on the second
anniversary of the grant date of such Award; and
(iii) 1,667 shares of Restricted Stock shall vest on the third
anniversary of the grant date of such Award.
The Board member shall not vest in any additional shares of Restricted Stock
following his or her cessation of Service as a Board member; provided, however,
that each Restricted Stock Award held by an Eligible Director under the Director
Automatic Grant Program will immediately vest in full upon his or her cessation
of Board Service by reason of death or Permanent Disability. Upon the cessation
of Service of any Board member while holding one or more unvested shares of
Restricted Stock issued under the Director Automatic Grant Program, those
unvested shares of Restricted Stock shall be immediately surrendered to the
Corporation for cancellation, and the Board member shall have no further
stockholder rights with respect to those shares.
3. Unvested shares of Restricted Stock may be issued in book entry or
certificate form and shall remain in the possession or control of the
Corporation until such shares have vested, and all other conditions and
restrictions applicable to such shares have been satisfied or lapse (including
satisfaction of any applicable Withholding Tax), in accordance with the terms of
the Restricted Stock Agreement. If issued in certificate form, such certificates
shall include restrictive legends. A stock power endorsed in blank with respect
to shares of Restricted Stock whether or not certificated will be required.
H. TRANSFERABILITY OF RESTRICTED STOCK. Unvested shares of Restricted Stock
may not be assigned, transferred, pledged or otherwise encumbered or disposed of
other than by will or the laws of inheritance following the Participant's death.
Upon vesting, and after all other conditions and restrictions applicable to such
shares of Restricted Stock have been satisfied or lapse (including satisfaction
of any applicable Withholding Tax) pursuant to the applicable Restricted Stock
Agreement, such shares of Restricted Stock shall become freely transferable
(subject to any restrictions under applicable securities laws) by Participant.
22
5.2. CORPORATE TRANSACTION/CHANGE IN CONTROL/HOSTILE TAKE-OVER
A. In the event of a Corporate Transaction while the Eligible Director
remains a Board member, the following provisions shall apply:
(i) Immediately following the consummation of the Corporate
Transaction, each automatic option grant shall terminate and cease to be
outstanding, except to the extent assumed by the successor corporation (or
parent thereof) or otherwise continued in full force and effect pursuant to the
express terms of the Corporate Transaction.
(ii) The shares of Restricted Stock subject to any outstanding
Restricted Stock Award made to such Eligible Director under the Director
Automatic Grant Program which remain unvested at the time of such Corporate
Transaction shall, immediately prior to the effective date of the Corporate
Transaction, automatically vest in full.
B. In the event of a Change in Control while the Eligible Director remains
a Board member, the following provisions shall apply:
(i) Each automatic option grant to such Eligible Director under the
Director Automatic Grant Program shall remain exercisable for such option shares
until the expiration or sooner termination of the option term or the surrender
of the option in connection with a Hostile Take-Over.
(ii) The shares of Restricted Stock subject to any outstanding
Restricted Stock Award made to such Eligible Director under the Director
Automatic Grant Program which remain unvested at the time of such Change in
Control shall, immediately prior to the effective date of the Change in Control,
automatically vest in full.
C. Upon the occurrence of a Hostile Take-Over while the Eligible Director
remains a Board member, the Eligible Director shall have a thirty (30)-day
period in which to surrender to the Corporation each of his or her outstanding
option grants under the Director Automatic Grant Program. The Eligible Director
shall in return be entitled to a cash distribution from the Corporation in an
amount equal to the excess of (i) the Take-Over Price of the shares of Common
Stock at the time subject to each surrendered option (whether or not the
Eligible Director is otherwise at the time vested in those shares) over (ii) the
aggregate exercise price payable for such shares. Such cash distribution shall
be paid within five (5) days following the surrender of the option to the
Corporation. No approval or consent of the Board or any Plan Administrator shall
be required at the time of the actual option surrender and cash distribution.
D. Each option which is assumed in connection with a Corporate Transaction
or otherwise continued in full force or effect shall be appropriately adjusted,
immediately after such Corporate Transaction, to apply to the number and class
of securities which would have been issuable to the Eligible Director in
consummation of such Corporate Transaction had the option been exercised
immediately prior to such Corporate Transaction. Appropriate adjustments to
reflect such Corporate Transaction shall also be made to (i) the exercise price
payable per share under each outstanding option, provided the aggregate exercise
price payable for such securities shall remain the same and (ii) the number
and/or class of securities for which grants are subsequently to be made under
the Director Automatic Grant Program to new and continuing Eligible Directors.
To the extent the actual holders of the Corporation's outstanding Common Stock
receive cash consideration for their Common Stock in consummation of the
Corporate Transaction, the successor corporation may, in connection with the
assumption of the outstanding options under the Director Automatic Grant
Program, substitute one or more shares of its own common stock with a fair
market value equivalent to the cash consideration paid per share of Common Stock
in such Corporate Transaction.
23
E. The existence of any Awards under the Director Automatic Grant Program
shall in no way affect the right of the Corporation to adjust, reclassify,
reorganize or otherwise change its capital or business structure or to merge,
consolidate, dissolve, liquidate or sell or transfer all or any part of its
business or assets.
5.3. REMAINING TERMS
A. The remaining terms of each option granted under the Director Automatic
Grant Program shall be the same as the terms in effect for option grants made
under the Discretionary Option Grant Program.
B. The remaining terms of each Restricted Stock Award under the Director
Automatic Grant Program shall be the same as the terms in effect for Restricted
Stock Awards under the Restricted Stock Program.
ARTICLE SIX
MISCELLANEOUS
6.1. TAX WITHHOLDING
A. The Corporation's obligation to deliver shares of Common Stock upon the
issuance, exercise or vesting of Awards under the Plan shall be subject to the
satisfaction of all applicable federal, state and local income and employment
tax withholding requirements.
B. The Plan Administrator may, in its discretion, provide any or all
Optionees or Participants to whom Awards are made under the Plan (other than
Awards made under the Director Automatic Grant Program) with the right to use
either or both of the following methods to satisfy all or part of the
Withholding Taxes to which those holders may become subject in connection with
the issuance, exercise or vesting of those Awards:
Stock Withholding: The election to have the Corporation withhold, from
the shares of Common Stock otherwise issuable upon the issuance, exercise or
vesting of those Awards, a portion of those shares with an aggregate Fair Market
Value equal to the amount of the minimum Withholding Taxes required to be
withheld by law (using the minimum statutory withholding rates).
Stock Delivery: The election to deliver to the Corporation, at the
time the Award is issued, exercised or vests, one or more shares of Common Stock
previously acquired by such Optionee or Participant (other than in connection
with the option issuance, exercise or vesting triggering the Withholding Taxes)
with an aggregate Fair Market Value equal to the amount of the minimum
Withholding Taxes required to be withheld by law (using the minimum statutory
withholding rates). The shares of Common Stock so delivered shall not be added
to the shares of Common Stock authorized for issuance under the Plan.
24
6.2. EFFECTIVE DATE AND TERM OF THE PLAN
A. The Plan became effective on the Plan Effective Date. Awards may be
granted under the Discretionary Option Grant Program, the Restricted Stock
Program, the Restricted Stock Unit Program and the Director Automatic Grant
Program.
B. The Plan shall serve as the successor to the Predecessor Plans, and no
further option grants shall be made under the Predecessor Plans after the Plan
Effective Date. All options outstanding under the Predecessor Plans on the Plan
Effective Date were incorporated into the Plan at that time and shall be treated
as outstanding options under the Plan. However, each outstanding option so
incorporated shall continue to be governed solely by the terms of the documents
evidencing such option, and no provision of the Plan shall be deemed to affect
or otherwise modify the rights or obligations of the holders of such
incorporated options with respect to their acquisition of shares of Common
Stock.
C. One or more provisions of the Plan, including (without limitation) the
option/vesting acceleration provisions of Article Two relating to Corporate
Transactions, Change in Control and Hostile Take-Over may, in the Plan
Administrator's discretion, be extended to one or more options incorporated from
the Predecessor Plans which do not otherwise contain such provisions.
D. The Plan was amended and restated by the Board on February 6, 2007 (the
"2007 Restatement"), subject to stockholder approval at the 2007 Annual Meeting
of Stockholders, to (i) increase the number of shares of Common Stock reserved
for issuance under the Plan; (ii) authorize the Restricted Stock and Restricted
Stock Unit Programs; (iii) designate a series of performance criteria that may
be utilized in the future as a condition to the vesting of one or more
restricted stock and restricted stock unit awards under the Plan to qualify the
compensation attributable to those awards as performance-based compensation for
Code Section 162(m) purposes; (iv) eliminate the Salary Investment Option Grant
and Director Fee Option Grant Programs currently authorized under the Plan; (v)
eliminate the financing provisions previously available under the Plan; (vi)
restructure the Director Automatic Grant Program in effect for new and
continuing Eligible Directors to reduce the number of shares of Common Stock
subject to automatic stock option grants and add restricted stock awards to be
made to each new and continuing Eligible Director; and (vii) effect various
technical and clarifying revisions to facilitate Plan administration. Such
revisions shall not become effective unless the stockholders approve the 2007
Restatement at the 2007 Annual Meeting of Stockholders. Should the Corporation's
stockholders not approve the 2007 Restatement at the 2007 Annual Meeting of
Stockholders, then none of the changes and revisions effected to the Plan by the
2007 Restatement shall become effective. The Plan will, however, continue in
effect as it existed immediately prior to February 6, 2007, and Awards will
continue to be made under the Plan until all the shares available for issuance
under the Plan have been issued pursuant to Awards made under the Plan. In
addition, the Automatic Option Grant Program will continue in effect in
accordance with the provisions of that program as they existed immediately prior
to February 6, 2007.
25
E. The Plan shall terminate upon the earliest to occur of (i) March 31,
2010, (ii) the date on which all shares available for issuance under the Plan
shall have been issued as fully-vested shares or (iii) the termination of all
outstanding Awards in connection with a Corporate Transaction. Should the Plan
terminate on March 31, 2010, then all Awards outstanding at that time shall
continue to have force and effect in accordance with the provisions of the
documents evidencing such Awards.
6.3. AMENDMENT OF THE PLAN.
Except as provided below, the Board shall have complete and exclusive power
and authority to amend, modify, suspend or terminate the Plan in any or all
respects. However, no such amendment, modification, suspension or termination
shall adversely affect the rights and obligations with respect to Awards at the
time outstanding under the Plan unless the Optionee or the Participant consents
to such amendment or modification or, unless approved by the stockholders,
permit the Plan Administrator to reset the exercise price of outstanding options
or grant new Awards in exchange for the cancellation of outstanding options with
a higher exercise price. In addition, stockholder approval will be required for
any amendment to the Plan that would (i) materially increase the benefits
accruing to the Optionees and Participants under the Plan or materially reduce
the price at which shares of Common Stock may be issued or purchased under the
Plan, (ii) materially increase the aggregate number of securities that may be
issued under the Plan, (iii) materially modify the requirements as to
eligibility for participation in the Plan, (iv) materially extend the term of
the Plan or (v) expand the type of awards available for issuance under the Plan,
then to the extent required by applicable law, or deemed necessary or advisable
by the Plan Administrator or the Board of Directors, such amendment shall be
subject to stockholder approval.
6.4. USE OF PROCEEDS
Any cash proceeds received by the Corporation from the sale of shares of
Common Stock under the Plan shall be used for general corporate purposes.
6.5. REGULATORY APPROVALS
A. The implementation of the Plan, the grant of any Award and the issuance
of shares of Common Stock in connection with the issuance, exercise or vesting
of any Award shall be subject to the Corporation's procurement of all approvals
and permits required by regulatory authorities having jurisdiction over the
Plan, Awards made under the Plan and the shares of Common Stock issuable
pursuant to those Awards.
B. No shares of Common Stock or other assets shall be issued or delivered
under the Plan unless and until there shall have been compliance with all
applicable requirements of Federal and state securities laws, including the
filing and effectiveness of the Form S-8 registration statement for the shares
of Common Stock issuable under the Plan, and all applicable listing requirements
of any stock exchange (or over-the-counter market, if applicable) on which
Common Stock is then listed for trading.
26
6.6. NO EMPLOYMENT/SERVICE RIGHTS
Nothing in the Plan shall confer upon the Optionee or the Participant any
right to continue in Service for any period of specific duration or interfere
with or otherwise restrict in any way the rights of the Corporation (or any
Parent or Subsidiary employing or retaining such person) or of the Optionee or
the Participant, which rights are hereby expressly reserved by each, to
terminate such person's Service at any time for any reason, with or without
cause.
27
APPENDIX
The following definitions shall be in effect under the Plan:
A. AWARD shall mean any of the following stock or stock-based awards
authorized for issuance or grant under the Plan: stock option, stock
appreciation right, Restricted Stock or Restricted Stock Unit award.
B. BOARD shall mean the Corporation's Board of Directors.
C. CHANGE IN CONTROL shall mean a change in ownership or control of the
Corporation effected through either of the following transactions:
(i) the acquisition, directly or indirectly by any person or related
group of persons (other than the Corporation or a person that directly or
indirectly controls, is controlled by, or is under common control with, the
Corporation), of beneficial ownership (within the meaning of Rule 13d-3 of the
1934 Act) of securities possessing more than fifty percent (50%) of the total
combined voting power of the Corporation's outstanding securities pursuant to a
tender or exchange offer made directly to the Corporation's stockholders, or
(ii) a change in the composition of the Board over a period of
thirty-six (36) consecutive months or less such that a majority of the Board
members ceases, by reason of one or more contested elections for Board
membership, to be comprised of individuals who either (A) have been Board
members continuously since the beginning of such period or (B) have been elected
or nominated for election as Board members during such period by at least a
majority of the Board members described in clause (A) who were still in office
at the time the Board approved such election or nomination.
D. CODE shall mean the Internal Revenue Code of 1986, as amended.
E. COMMON STOCK shall mean the Corporation's common stock.
F. CORPORATE TRANSACTION shall mean either of the following stockholder-
approved transactions to which the Corporation is a party:
(i) a merger or consolidation in which securities possessing more than
fifty percent (50%) of the total combined voting power of the Corporation's
outstanding securities are transferred to a person or persons different from the
persons holding those securities immediately prior to such transaction, or
(ii) the sale, transfer or other disposition of all or substantially
all of the Corporation's assets in complete liquidation or dissolution of the
Corporation.
G. CORPORATION shall mean Quiksilver, Inc., a Delaware corporation, and any
corporate successor to all or substantially all of the assets or voting stock of
Quiksilver, Inc. which shall by appropriate action adopt the Plan.
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H. DIRECTOR AUTOMATIC GRANT PROGRAM shall mean the director automatic grant
program in effect under Article Five of the Plan for the Eligible Directors.
I. DISCRETIONARY OPTION GRANT PROGRAM shall mean the discretionary option
grant program in effect under Article Two of the Plan.
J. ELIGIBLE DIRECTOR shall mean a Board member who is not, at the time of
such determination, an employee of the Corporation (or any Parent or Subsidiary)
and who is accordingly eligible to participate in the Director Automatic Grant
Program in accordance with the eligibility provisions of Articles One and Five.
K. EMPLOYEE shall mean an individual who is in the employ of the
Corporation (or any Parent or Subsidiary), subject to the control and direction
of the employer entity as to both the work to be performed and the manner and
method of performance.
L. EXERCISE DATE shall mean the date on which the Corporation shall have
received written notice of the option exercise.
M. FAIR MARKET VALUE per share of Common Stock on any relevant date shall
be determined in accordance with the following provisions:
(i) If the Common Stock is at the time listed on any established stock
exchange or over-the-counter market, then the Fair Market Value shall be the
closing selling price per share of Common Stock (or closing bid, if no sales
were reported) as quoted on such exchange or market, determined by the Plan
Administrator to be the primary market for the Common Stock, at the close of
regular hours trading (i.e., before after-hours trading begins) on the date in
question as reported in the Wall Street Journal or such other source as the Plan
Administrator deems reliable. If there is no closing selling price (or closing
bid, if no sales were reported) for the Common Stock on the date in question,
then the Fair Market Value shall be the closing selling price (or closing bid if
no sales were reported) on the last preceding date for which such quotation
exists.
(ii) If the Common Stock is at the time not listed on any established
stock exchange or over-the-counter market, the Fair Market Value shall be
determined by the Board in good faith.
N. FAMILY MEMBER means, with respect to a particular Optionee or
Participant, any child, stepchild, grandchild, parent, stepparent, grandparent,
spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law,
son-in-law, daughter-in-law, brother-in-law or sister-in-law.
O. HOSTILE TAKE-OVER shall mean the acquisition, directly or indirectly, by
any person or related group of persons (other than the Corporation or a person
that directly or indirectly controls, is controlled by, or is under common
control with, the Corporation) of beneficial ownership (within the meaning of
Rule 13d-3 of the 1934 Act) of securities possessing more than fifty percent
(50%) of the total combined voting power of the Corporation's outstanding
securities pursuant to a tender or exchange offer made directly to the
Corporation's stockholders which the Board does not recommend such stockholders
to accept.
29
P. INCENTIVE OPTION shall mean an option which satisfies the requirements
of Code Section 422.
Q. INVOLUNTARY TERMINATION shall mean the termination of the Service of any
individual which occurs by reason of:
(i) such individual's involuntary dismissal or discharge by the
Corporation for reasons other than Misconduct, or
(ii) such individual's voluntary resignation following (A) a change in
his or her position with the Corporation which materially reduces his or her
duties and responsibilities or the level of management to which he or she
reports, (B) a reduction in his or her level of compensation (including base
salary, fringe benefits and target bonus under any corporate-performance based
bonus or incentive programs) by more than twenty percent (20%) or (C) a
relocation of such individual's place of employment by more than fifty (50)
miles, provided and only if such change, reduction or relocation is effected by
the Corporation without the individual's consent.
R. MISCONDUCT shall mean the commission of any act of fraud, embezzlement
or dishonesty by the Optionee or Participant, any unauthorized use or disclosure
by such person of confidential information or trade secrets of the Corporation
(or any Parent or Subsidiary), or any other intentional misconduct by such
person adversely affecting the business or affairs of the Corporation (or any
Parent or Subsidiary) in a material manner. The foregoing definition shall not
be deemed to be inclusive of all the acts or omissions which the Corporation (or
any Parent or Subsidiary) may consider as grounds for the dismissal or discharge
of any Optionee, Participant or other person in the Service of the Corporation
(or any Parent or Subsidiary).
S. 1934 ACT shall mean the Securities Exchange Act of 1934, as amended.
T. NON-STATUTORY OPTION shall mean an option not intended to satisfy the
requirements of Code Section 422.
U. OPTIONEE shall mean any person to whom an option is granted under the
Discretionary Option Grant or Director Automatic Grant Program.
V. PARENT shall mean any corporation (other than the Corporation) in an
unbroken chain of corporations ending with the Corporation, provided each
corporation in the unbroken chain (other than the Corporation) owns, at the time
of the determination, stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.
W. PARTICIPANT shall mean any person who is issued shares of Restricted
Stock under the Restricted Stock Program or under the Director Automatic Grant
Program, and any person who is issued Restricted Stock Units under the
Restricted Stock Unit Program.
X. PERMANENT DISABILITY OR PERMANENTLY DISABLED shall mean the inability of
the Optionee or the Participant to engage in any substantial gainful activity by
reason of any medically determinable physical or mental impairment expected to
result in death or to be of
30
continuous duration of twelve (12) months or more. However, solely for purposes
of the Director Automatic Grant Program, Permanent Disability or Permanently
Disabled shall mean the inability of the Eligible Director to perform his or her
usual duties as a Board member by reason of any medically determinable physical
or mental impairment expected to result in death or to be of continuous duration
of twelve (12) months or more.
Y. PLAN shall mean the Corporation's 2000 Stock Incentive Plan, as amended
and restated and set forth in this document.
Z. PLAN ADMINISTRATOR shall mean the particular entity, whether the Primary
Committee, the Board or the Secondary Committee, which is authorized to
administer the Discretionary Option Grant, Restricted Stock and Restricted Stock
Unit Programs with respect to one or more classes of eligible persons, to the
extent such entity is carrying out its administrative functions under those
programs with respect to the persons under its jurisdiction.
AA. PLAN EFFECTIVE DATE shall mean March 31, 2000.
BB. PREDECESSOR PLANS shall mean the Corporation's (i) 1996 Stock Option
Plan, (ii) the 1998 Nonemployee Directors' Stock Option Plan, (iii) the 1995
Nonemployee Directors' Stock Option Plan and (iv) the 1992 Nonemployee
Directors' Stock Option Plan, as each of those plans was in effect immediately
prior to the Plan Effective Date hereunder.
CC. PRIMARY COMMITTEE shall mean the committee of two (2) or more Eligible
Directors appointed by the Board to administer the Discretionary Option Grant,
Restricted Stock and Restricted Stock Unit Programs with respect to Section 16
Insiders.
DD. RESTRICTED STOCK shall mean shares of Common Stock issued to a
Participant pursuant to the Restricted Stock or Director Automatic Grant
Program, subject to such restrictions and conditions as are established pursuant
to such Restricted Stock or Director Automatic Grant Program.
EE. RESTRICTED STOCK AGREEMENT shall mean the agreement entered into by the
Corporation and the Participant at the time of grant of Restricted Stock under
the Restricted Stock or Automatic Director Grant Programs.
FF. RESTRICTED STOCK PROGRAM shall mean the discretionary Restricted Stock
program under Article Three of the Plan.
GG. RESTRICTED STOCK UNIT shall mean the right to receive one share of
Common Stock issued pursuant to the Restricted Stock Unit Program, subject to
such restrictions and conditions as are established pursuant to the Restricted
Stock Unit Program.
HH. RESTRICTED STOCK UNIT AGREEMENT shall mean the agreement entered into
by the Corporation and the Participant at the time of grant of Restricted Stock
Units under the Restricted Stock Unit Program.
II. RESTRICTED STOCK UNIT PROGRAM shall mean the discretionary Restricted
Stock Unit program under Article Four of the Plan.
31
JJ. SECONDARY COMMITTEE shall mean a committee of one or more Board members
appointed by the Board to administer the Discretionary Option Grant, Restricted
Stock and Restricted Stock Unit Programs with respect to eligible persons other
than Section 16 Insiders.
KK. SECTION 16 INSIDER shall mean an officer or director of the Corporation
subject to the short-swing profit liabilities of Section 16 of the 1934 Act.
LL. SERVICE shall mean the performance of services for the Corporation (or
any Parent or Subsidiary) by a person in the capacity of an Employee, an
Eligible Director or a consultant or independent advisor, except to the extent
otherwise specifically provided in the documents evidencing the Award made to
such person. For purposes of the Plan, an Optionee or Participant shall be
deemed to cease Service immediately upon the occurrence of either of the
following events: (i) the Optionee or Participant no longer performs services in
any of the foregoing capacities for the Corporation or any Parent or Subsidiary;
or (ii) the entity for which the Optionee or Participant is performing such
services ceases to remain a Parent or Subsidiary of the Corporation, even though
the Optionee or Participant may subsequently continue to perform services for
that entity.
MM. SUBSIDIARY shall mean any corporation (other than the Corporation) in
an unbroken chain of corporations beginning with the Corporation, provided each
corporation (other than the last corporation) in the unbroken chain owns, at the
time of the determination, stock possessing fifty percent (50%) or more of the
total combined voting power of all classes of stock in one of the other
corporations in such chain.
NN. TAKE-OVER PRICE shall mean the greater of (i) the Fair Market Value per
share of Common Stock on the date the option is surrendered to the Corporation
in connection with a Hostile Take-Over or (ii) the highest reported price per
share of Common Stock paid by the tender offeror in effecting such Hostile
Take-Over through the acquisition of Common Stock. However, if the surrendered
option is an Incentive Option, the Take-Over Price shall not exceed the clause
(i) price per share.
OO. 10% STOCKHOLDER shall mean the owner of stock (as determined under Code
Section 424(d)) possessing more than ten percent (10%) of the total combined
voting power of all classes of stock of the Corporation (or any Parent or
Subsidiary).
PP. WITHHOLDING TAXES shall mean the federal, state and local income and
employment withholding taxes to which the Optionee or Participant may become
subject in connection with the issuance, exercise or vesting of an Award made to
him or her under the Plan.
32
(QUIKSILVER LOGO)
NOTICE OF GRANT OF STOCK OPTION
(STANDARD EMPLOYEE FORM)
Notice is hereby given of the following option grant (the "Option") to
purchase shares of the Common Stock of Quiksilver, Inc. (the "Corporation"):
Optionee: ___________ Grant Date: ________
Number of Options Shares: ___________ Exercise Price: ________
Type of Option: ______ Incentive Stock Expiration Date: ________
Option
______ Non-Statutory
Stock Option
Exercise and Vesting Schedule: Subject to the limitations contained in this
Option and the Plan, this Option shall vest and become exercisable in
installments as follows:
Number of Shares Date of Earliest Exercise
(Installment) (Vesting)
- ---------------- -------------------------
In no event shall the Option become exercisable for any additional Option
Shares after Optionee's cessation of Service.
Optionee understands and agrees that the Option is granted subject to and
in accordance with the terms of the Quiksilver, Inc. amended and restated 2000
Stock Incentive Plan (the "Plan"). Optionee further agrees to be bound by the
terms of the Plan and the terms of the Option as set forth in the Stock Option
Agreement attached hereto as Exhibit A. Optionee hereby acknowledges the receipt
of a copy of the official prospectus for the Plan in the form attached hereto as
Exhibit B. A copy of the Plan is available upon request made to the Corporate
Secretary at the Corporation's principal offices.
Employment at Will. Nothing in this Notice or in the attached Stock Option
Agreement or in the Plan shall confer upon Optionee any right to continue in
Service for any period of specific duration or interfere with or otherwise
restrict in any way the rights of the Corporation (or any Parent or Subsidiary
employing or retaining Optionee) or of Optionee, which rights are hereby
expressly reserved by each, to terminate Optionee's Service at any time for any
reason, with or without cause.
Definitions. All capitalized terms in this Notice shall have the meaning
assigned to them in this Notice or in the attached Stock Option Agreement.
Date:
------------------------------
QUIKSILVER, INC.
- ------------------------------------- By:
OPTIONEE ------------------------------------
Title:
---------------------------------
Address:
- ------------------------------------- ATTACHMENTS
- ------------------------------------- Exhibit A - Stock Option Agreement
- ------------------------------------- Exhibit B - Plan Summary and Prospectus
EXHIBIT A
QUIKSILVER, INC.
STOCK OPTION AGREEMENT
RECITALS
A. The Board has adopted the Plan for the purpose of retaining the
services of selected Employees, non-employee members of the Board (or the board
of directors of any Parent or Subsidiary) and consultants and other independent
advisors who provide services to the Corporation (or any Parent or Subsidiary).
B. Optionee is to render valuable services to the Corporation (or a
Parent or Subsidiary), and this Agreement is executed pursuant to, and is
intended to carry out the purposes of, the Plan in connection with the
Corporation's grant of an option to Optionee.
C. All capitalized terms in this Agreement shall have the meaning
assigned to them in the attached Appendix.
NOW, THEREFORE, it is hereby agreed as follows:
1. GRANT OF OPTION. The Corporation hereby grants to Optionee, as of
the Grant Date, an option to purchase up to the number of Option Shares
specified in the Grant Notice. The Option Shares shall be purchasable from time
to time during the option term specified in Paragraph 2 at the Exercise Price.
2. OPTION TERM. This option shall have a maximum term of ten (10)
years measured from the Grant Date and shall accordingly expire at the close of
business on the Expiration Date, unless sooner terminated in accordance with
Paragraph 5 or 6.
3. LIMITED TRANSFERABILITY.
(a) If this option is designated a Non-Statutory Option in the
Grant Notice, then this option may be assigned in whole or in part during
Optionee's lifetime only to one or more Family Members or to a trust established
for the exclusive benefit of Optionee and/or one or more such Family Members or
to Optionee's former spouse, to the extent such assignment is in connection with
the Optionee's estate plan or pursuant to a domestic relations order. The
assigned portion shall be exercisable only by the person or persons who acquire
a proprietary interest in the option pursuant to such assignment. The terms
applicable to the assigned portion shall be the same as those in effect for this
option immediately prior to such assignment.
(b) Except as provided in Paragraph 3(a) above, this option shall
be neither transferable nor assignable by Optionee other than by will or the
laws of inheritance following Optionee's death and may be exercised, during
Optionee's lifetime, only by Optionee. However, Optionee may designate one or
more persons as the beneficiary or beneficiaries of this
(Employee Form)
A-1
option, and this option shall, in accordance with such designation,
automatically be transferred to such beneficiary or beneficiaries upon the
Optionee's death while holding this option. Such beneficiary or beneficiaries
shall take the transferred option subject to all the terms and conditions of
this Agreement, including (without limitation) the limited time period during
which this option may, pursuant to Paragraph 5, be exercised following
Optionee's death.
4. DATES OF EXERCISE. This option shall become exercisable for the
Option Shares in one or more installments as specified in the Grant Notice. As
the option becomes exercisable for such installments, those installments shall
accumulate, and the option shall remain exercisable for the accumulated
installments until the Expiration Date or sooner termination of the option term
under Paragraph 5 or 6. Notwithstanding the foregoing, should the Optionee elect
to exercise this option during any period during which the Optionee is under
investigation by the Corporation for Misconduct, then any Option Shares acquired
by the Optionee as a result of such exercise and/or the net proceeds of any sale
or sales of those acquired Option Shares (the gross sale proceeds less any
Exercise Price payment or withholding taxes due the Corporation in broker
commissions) during such period shall be held by the Corporation in escrow until
such time as the investigation is satisfactorily completed.
5. CESSATION OF SERVICE/TERMINATION OF OPTION. The option term
specified in Paragraph 2 shall terminate (and this option shall cease to be
outstanding) prior to the Expiration Date should any of the following provisions
become applicable:
(a) Should Optionee cease to remain in Service for any reason
(other than death, Permanent Disability or Misconduct) while holding this
option, then Optionee shall have a period of three (3) months (commencing with
the date of such cessation of Service) during which to exercise this option, but
in no event shall this option be exercisable at any time after the Expiration
Date.
(b) Should Optionee die while holding this option, then the
personal representative of Optionee's estate or the person or persons to whom
the option is transferred pursuant to Optionee's will or the laws of inheritance
shall have the right to exercise this option. However, if Optionee has
designated one or more beneficiaries of this option, then those persons shall
have the exclusive right to exercise this option following Optionee's death. Any
such right to exercise this option shall lapse, and this option shall cease to
be outstanding, upon the earlier of (i) the expiration of the twelve (12)-month
period measured from the date of Optionee's death or (ii) the Expiration Date.
(c) Should Optionee cease Service by reason of Permanent
Disability while holding this option, then Optionee shall have a period of
twelve (12) months (commencing with the date of such cessation of Service)
during which to exercise this option. In no event shall this option be
exercisable at any time after the Expiration Date.
(d) The applicable post-Service exercise period in effect for
this option pursuant to the foregoing provisions of this Paragraph 5 shall
automatically be extended by an additional period of time equal in duration to
any interval within that otherwise applicable post-Service exercise period in
which the exercise of this option or the immediate sale of the Option Shares
acquired hereunder cannot be effected in compliance with applicable federal and
state securities laws, but in no event shall such an extension result in the
continuation of this option beyond the Expiration Date.
(Employee Form)
A-2
(e) During the limited period of post-Service exercisability,
this option may not be exercised in the aggregate for more than the number of
Option Shares for which the option is exercisable at the time of Optionee's
cessation of Service. Upon the expiration of such limited exercise period or (if
earlier) upon the Expiration Date, this option shall terminate and cease to be
outstanding for any exercisable Option Shares for which the option has not been
exercised. However, this option shall, immediately upon Optionee's cessation of
Service for any reason, terminate and cease to be outstanding with respect to
any Option Shares for which this option is not otherwise at that time
exercisable.
(f) Should Optionee's Service be terminated for Misconduct or
should Optionee otherwise engage in any Misconduct while this option is
outstanding, then this option shall terminate immediately and cease to remain
outstanding.
6. SPECIAL ACCELERATION OF OPTION.
(a) This option, to the extent outstanding at the time of a
Corporate Transaction but not otherwise fully exercisable, shall NOT vest or
become exercisable on an accelerated basis if and to the extent: (i) this option
is, in connection with the Corporate Transaction, to be assumed by the successor
corporation (or parent thereof) or otherwise continued in full force and effect
pursuant to the terms of the Corporate Transaction or (ii) this option is to be
replaced with a cash incentive program of the successor corporation which
preserves the spread existing at the time of the Corporate Transaction on any
Option Shares for which this option is not otherwise at that time exercisable
(the excess of the Fair Market Value of those Option Shares over the aggregate
Exercise Price payable for such shares) and provides for subsequent payout in
accordance with the same option exercise/vesting schedule for those Option
Shares set forth in the Grant Notice. However, if none of the foregoing
conditions apply to this option at the time of the Corporate Transaction, then
this option shall automatically accelerate so that such option shall,
immediately prior to the effective date of that Corporate Transaction, become
exercisable for all the shares of Common Stock at the time subject to this
option and may be exercised for any or all of those shares as fully vested
shares of Common Stock.
(b) Immediately following the Corporate Transaction, this option
shall terminate and cease to be outstanding, except to the extent assumed by the
successor corporation (or parent thereof) in connection with the Corporate
Transaction or otherwise continued in full force and effect pursuant to the
terms of the Corporate Transaction.
(c) If this option is assumed in connection with a Corporate
Transaction or otherwise continued in effect, then this option shall be
appropriately adjusted, immediately after such Corporate Transaction, to apply
to the number and class of securities which would have been issuable to Optionee
in consummation of such Corporate Transaction had the option been exercised
immediately prior to such Corporate Transaction, and appropriate adjustments
shall also be made to the Exercise Price, provided the aggregate Exercise Price
shall remain the same. To the extent the actual holders of the Corporation's
outstanding Common
(Employee Form)
A-3
Stock receive cash consideration for their Common Stock in consummation of the
Corporate Transaction, the successor corporation may, in connection with the
assumption of this option, substitute one or more shares of its own common stock
with a fair market value equivalent to the cash consideration paid per share of
Common Stock in such Corporate Transaction.
(d) This Agreement shall not in any way affect the right of the
Corporation to adjust, reclassify, reorganize or otherwise change its capital or
business structure or to merge, consolidate, dissolve, liquidate or sell or
transfer all or any part of its business or assets.
7. ADJUSTMENT IN OPTION SHARES. Should any change be made to the
Common Stock by reason of any stock split, stock dividend, recapitalization,
combination of shares, exchange of shares or other change affecting the
outstanding Common Stock as a class without the Corporation's receipt of
consideration, appropriate adjustments shall be made to (i) the total number
and/or class of securities subject to this option and (ii) the Exercise Price in
order to reflect such change and thereby preclude a dilution or enlargement of
benefits hereunder.
8. STOCKHOLDER RIGHTS. The holder of this option shall not have any
stockholder rights with respect to the Option Shares until such person shall
have exercised the option, paid the Exercise Price and become a holder of record
of the purchased shares.
9. MANNER OF EXERCISING OPTION.
(a) In order to exercise this option with respect to all or any
part of the Option Shares for which this option is at the time exercisable,
Optionee (or any other person or persons exercising the option) must take the
following actions:
(i) Execute and deliver to the Corporation a Notice of
Exercise for the Option Shares for which the option is exercised.
(ii) Pay the aggregate Exercise Price for the purchased
shares in one or more of the following forms:
(A) cash or check made payable to the Corporation;
(B) shares of Common Stock held by Optionee (or any
other person or persons exercising the option) for the requisite period
necessary to avoid a charge to the Corporation's earnings for financial
reporting purposes and valued at Fair Market Value on the Exercise Date; or
(C) through a special sale and remittance procedure
pursuant to which Optionee (or any other person or persons exercising the
option) shall concurrently provide irrevocable instructions to (i) a
Corporation-designated brokerage firm to effect the immediate sale of the
purchased shares and remit to the Corporation, out of the sale proceeds
available on the settlement date, sufficient funds to cover the aggregate
Exercise Price payable for the purchased shares plus all applicable Federal,
state and local income and employment taxes required to be withheld by the
Corporation by reason of such exercise and (ii) the Corporation to deliver the
certificates for the purchased shares directly to such brokerage firm in order
to complete the sale.
(Employee Form)
A-4
Except to the extent the sale and remittance procedure is
utilized in connection with the option exercise, payment of the Exercise Price
must accompany the Notice of Exercise delivered to the Corporation in connection
with the option exercise.
(iii) Furnish to the Corporation appropriate documentation
that the person or persons exercising the option (if other than Optionee) have
the right to exercise this option.
(iv) Make appropriate arrangements with the Corporation (or
Parent or Subsidiary employing or retaining Optionee) for the satisfaction of
all Federal, state and local income and employment tax withholding requirements
applicable to the option exercise.
(b) As soon as practical after the Exercise Date, the Corporation
shall issue to or on behalf of Optionee (or any other person or persons
exercising this option) a certificate for the purchased Option Shares, with the
appropriate legends affixed thereto.
(c) In no event may this option be exercised for any fractional
shares.
10. COMPLIANCE WITH LAWS AND REGULATIONS.
(a) The exercise of this option and the issuance of the Option
Shares upon such exercise shall be subject to compliance by the Corporation and
Optionee with all applicable requirements of law relating thereto and with all
applicable regulations of any stock exchange (or over-the-counter market, if
applicable) on which the Common Stock may be listed for trading at the time of
such exercise and issuance.
(b) The inability of the Corporation to obtain approval from any
regulatory body having authority deemed by the Corporation to be necessary to
the lawful issuance and sale of any Common Stock pursuant to this option shall
relieve the Corporation of any liability with respect to the non-issuance or
sale of the Common Stock as to which such approval shall not have been obtained.
The Corporation, however, shall use its best efforts to obtain all such
approvals.
11. SUCCESSORS AND ASSIGNS. Except to the extent otherwise provided in
Paragraphs 3 and 6, the provisions of this Agreement shall inure to the benefit
of, and be binding upon, the Corporation and its successors and assigns and
Optionee, Optionee's assigns, the legal representatives, heirs and legatees of
Optionee's estate and any beneficiaries of this option designated by Optionee.
12. NOTICES. Any notice required to be given or delivered to the
Corporation under the terms of this Agreement shall be in writing and addressed
to the Corporation at its principal corporate offices. Any notice required to be
given or delivered to Optionee shall be in writing and addressed to Optionee at
the address indicated below Optionee's signature line on the Grant Notice. All
notices shall be deemed effective upon personal delivery or upon deposit in the
U.S. mail, postage prepaid and properly addressed to the party to be notified.
(Employee Form)
A-5
13. CONSTRUCTION. This Agreement and the option evidenced hereby are
made and granted pursuant to the Plan and are in all respects limited by and
subject to the terms of the Plan. All decisions of the Plan Administrator with
respect to any question or issue arising under the Plan or this Agreement shall
be conclusive and binding on all persons having an interest in this option.
14. GOVERNING LAW. The interpretation, performance and enforcement of
this Agreement shall be governed by the laws of the State of California without
resort to that State's conflict-of-laws rules.
15. EXCESS SHARES. If the Option Shares covered by this Agreement
exceed, as of the Grant Date, the number of shares of Common Stock which may
without stockholder approval be issued under the Plan, then this option shall be
void with respect to those excess shares, unless stockholder approval of an
amendment sufficiently increasing the number of shares of Common Stock issuable
under the Plan is obtained in accordance with the provisions of the Plan.
16. ADDITIONAL TERMS APPLICABLE TO AN INCENTIVE OPTION. In the event
this option is designated an Incentive Option in the Grant Notice, the following
terms and conditions shall also apply to the grant:
(a) This option shall cease to qualify for favorable tax
treatment as an Incentive Option if (and to the extent) this option is exercised
for one or more Option Shares: (A) more than three (3) months after the date
Optionee ceases to be an Employee for any reason other than death or Permanent
Disability or (B) more than twelve (12) months after the date Optionee ceases to
be an Employee by reason of Permanent Disability.
(b) No installment under this option shall qualify for favorable
tax treatment as an Incentive Option if (and to the extent) the aggregate Fair
Market Value (determined at the Grant Date) of the Common Stock for which such
installment first becomes exercisable hereunder would, when added to the
aggregate value (determined as of the respective date or dates of grant) of the
Common Stock or other securities for which this option or any other Incentive
Options granted to Optionee prior to the Grant Date (whether under the Plan or
any other option plan of the Corporation or any Parent or Subsidiary) first
become exercisable during the same calendar year, exceed One Hundred Thousand
Dollars ($100,000) in the aggregate. Should such One Hundred Thousand Dollar
($100,000) limitation be exceeded in any calendar year, this option shall
nevertheless become exercisable for the excess shares in such calendar year as a
Non-Statutory Option.
(c) Should the exercisability of this option be accelerated upon
a Corporate Transaction, then this option shall qualify for favorable tax
treatment as an Incentive Option only to the extent the aggregate Fair Market
Value (determined at the Grant Date) of the Common Stock for which this option
first becomes exercisable in the calendar year in which the Corporate
Transaction occurs does not, when added to the aggregate value (determined as of
the
(Employee Form)
A-6
respective date or dates of grant) of the Common Stock or other securities for
which this option or one or more other Incentive Options granted to Optionee
prior to the Grant Date (whether under the Plan or any other option plan of the
Corporation or any Parent or Subsidiary) first become exercisable during the
same calendar year, exceed One Hundred Thousand Dollars ($100,000) in the
aggregate. Should the applicable One Hundred Thousand Dollar ($100,000)
limitation be exceeded in the calendar year of such Corporate Transaction, the
option may nevertheless be exercised for the excess shares in such calendar year
as a Non-Statutory Option.
(d) Should Optionee hold, in addition to this option, one or more
other options to purchase Common Stock which become exercisable for the first
time in the same calendar year as this option, then, for purposes of the
foregoing limitations on the exercisability of such options as Incentive
Options, this option and each of those other options shall be deemed to become
first exercisable in that calendar year on the basis of the chronological order
in which they were granted, except to the extent otherwise provided under
applicable law or regulation.
(Employee Form)
A-7
EXHIBIT A-1
NOTICE OF EXERCISE
I hereby notify Quiksilver, Inc. (the "Corporation") that I elect to
purchase ______________ shares of the Corporation's Common Stock (the "Purchased
Shares") at the option exercise price of $__________ per share (the "Exercise
Price") pursuant to that certain option (the "Option") granted to me under the
Corporation's amended and restated 2000 Stock Incentive Plan on _______________,
_____
Concurrently with the delivery of this Exercise Notice to the
Corporation, I shall hereby pay to the Corporation the Exercise Price for the
Purchased Shares in accordance with the provisions of my agreement with the
Corporation (or other documents) evidencing the Option and shall deliver
whatever additional documents may be required by such agreement as a condition
for exercise. Alternatively, I may utilize the special broker-dealer sale and
remittance procedure specified in my agreement to effect payment of the Exercise
Price.
,
- ---------------------------- ----
Date
----------------------------------------
Optionee
Address:
-------------------------------
-------------------------------
-------------------------------
Print name in exact manner it is to
appear on the stock certificate:
----------------------------------------
Address to which certificate is to be
----------------------------------------
sent, if different from address
----------------------------------------
above:
----------------------------------------
Social Security Number:
----------------------------------------
(Employee Form)
A-8
APPENDIX
The following definitions shall be in effect under the Agreement:
A. AGREEMENT shall mean this Stock Option Agreement.
B. BOARD shall mean the Corporation's Board of Directors.
C. CODE shall mean the Internal Revenue Code of 1986, as amended.
D. COMMON STOCK shall mean shares of the Corporation's common stock.
E. CORPORATE TRANSACTION shall mean either of the following
stockholder-approved transactions to which the Corporation is a party:
(i) a merger or consolidation in which securities possessing more
than fifty percent (50%) of the total combined voting power of the
Corporation's outstanding securities are transferred to a person or
persons different from the persons holding those securities
immediately prior to such transaction, or
(ii) the sale, transfer or other disposition of all or
substantially all of the Corporation's assets in complete liquidation
or dissolution of the Corporation.
F. CORPORATION shall mean Quiksilver, Inc., a Delaware corporation,
and any successor corporation to all or substantially all of the assets or
voting stock of Quiksilver, Inc. which shall by appropriate action adopt the
Plan.
G. EMPLOYEE shall mean an individual who is in the employ of the
Corporation (or any Parent or Subsidiary), subject to the control and direction
of the employer entity as to both the work to be performed and the manner and
method of performance.
H. EXERCISE DATE shall mean the date on which the option shall have
been exercised in accordance with Paragraph 9 of the Agreement.
I. EXERCISE PRICE shall mean the exercise price per Option Share as
specified in the Grant Notice.
J. EXPIRATION DATE shall mean the date on which the option expires as
specified in the Grant Notice.
K. FAIR MARKET VALUE per share of Common Stock on any relevant date
shall be determined in accordance with the following provisions:
(i) If the Common Stock is at the time listed on any established
stock exchange or over-the-counter market, then the Fair Market Value
shall be the closing selling price per share of
(Employee Form)
A-9
Common Stock (or closing bid, if no sales were reported) as quoted on
such exchange or market, determined by the Plan Administrator to be
the primary market for the Common Stock, at the close of regular hours
trading (i.e., before after-hours trading begins) on the date in
question as reported in the Wall Street Journal or such other source
as the Plan Administrator deems reliable. If there is no closing
selling price (or closing bid, if no sales were reported) for the
Common Stock on the date in question, then the Fair Market Value shall
be the closing selling price (or closing bid if no sales were
reported) on the last preceding date for which such quotation exists.
(ii) If the Common Stock is at the time not listed on any
established stock exchange or over-the-counter market, the Fair Market
Value shall be determined by the Board in good faith.
L. FAMILY MEMBER shall mean, with respect to the Optionee, any child,
stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse,
sibling, niece, nephew, mother-in-law, father-in-law, son-in-law,
daughter-in-law, brother-in-law or sister-in-law.
M. GRANT DATE shall mean the date of grant of the option as specified
in the Grant Notice.
N. GRANT NOTICE shall mean the Notice of Grant of Stock Option
accompanying the Agreement, pursuant to which Optionee has been informed of the
basic terms of the option evidenced hereby.
O. INCENTIVE OPTION shall mean an option which satisfies the
requirements of Code Section 422.
P. MISCONDUCT shall mean the commission of any act of fraud,
embezzlement or dishonesty by Optionee, any unauthorized use or disclosure by
Optionee of confidential information or trade secrets of the Corporation (or any
Parent or Subsidiary), or any other intentional misconduct by Optionee adversely
affecting the business or affairs of the Corporation (or any Parent or
Subsidiary) in a material manner. The foregoing definition shall not be deemed
to be inclusive of all the acts or omissions which the Corporation (or any
Parent or Subsidiary) may consider as grounds for the dismissal or discharge of
Optionee or any other individual in the Service of the Corporation (or any
Parent or Subsidiary).
Q. NON-STATUTORY OPTION shall mean an option not intended to satisfy
the requirements of Code Section 422.
R. NOTICE OF EXERCISE shall mean the notice of exercise in
substantially the form attached hereto as Exhibit A-1.
S. OPTION SHARES shall mean the number of shares of Common Stock
subject to the option as specified in the Grant Notice.
(Employee Form)
A-10
T. OPTIONEE shall mean the person to whom the option is granted as
specified in the Grant Notice.
U. PARENT shall mean any corporation (other than the Corporation) in
an unbroken chain of corporations ending with the Corporation, provided each
corporation in the unbroken chain (other than the Corporation) owns, at the time
of the determination, stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.
V. PERMANENT DISABILITY shall mean the inability of Optionee to engage
in any substantial gainful activity by reason of any medically determinable
physical or mental impairment which is expected to result in death or has lasted
or can be expected to last for a continuous period of twelve (12) months or
more.
W. PLAN shall mean the Corporation's amended and restated 2000 Stock
Incentive Plan.
X. PLAN ADMINISTRATOR shall mean either the Board or a committee of
the Board acting in its capacity as administrator of the Plan.
Y. SERVICE shall mean the Optionee's performance of services for the
Corporation (or any Parent or Subsidiary) in the capacity of an Employee, a
non-employee member of the board of directors or a consultant or independent
advisor. An Optionee shall be deemed to cease Service immediately upon the
occurrence of either of the following events: (i) the Optionee no longer
performs services in any of the foregoing capacities for the Corporation or any
Parent or Subsidiary; or (ii) the entity for which the Optionee is performing
such services ceases to remain a Parent or Subsidiary of the Corporation, even
though the Optionee may subsequently continue to perform services for that
entity.
Z. SUBSIDIARY shall mean any corporation (other than the Corporation)
in an unbroken chain of corporations beginning with the Corporation, provided
each corporation (other than the last corporation) in the unbroken chain owns,
at the time of the determination, stock possessing fifty percent (50%) or more
of the total combined voting power of all classes of stock in one of the other
corporations in such chain.
(Employee Form)
A-11
(QUIKSILVER LOGO)
NOTICE OF GRANT OF STOCK OPTION
(SELECTED OFFICER FORM)
Notice is hereby given of the following option grant (the "Option") to
purchase shares of the Common Stock of Quiksilver, Inc. (the "Corporation"):
Optionee: ___________ Grant Date: ________
Number of Options Shares: ___________ Exercise Price: ________
Type of Option: [ ] Incentive Stock Expiration Date: ________
Option
[ ] Non-Statutory
Stock Option
Exercise and Vesting Schedule: Subject to the limitations contained in this
Option and the Plan, this Option shall vest and become exercisable in
installments as follows:
Number of Shares Date of Earliest
(Installment) Exercise (Vesting)
- ---------------- ------------------
In no event shall the Option become exercisable for any additional Option
Shares after Optionee's cessation of Service.
Optionee understands and agrees that the Option is granted subject to and
in accordance with the terms of the Quiksilver, Inc. amended and restated 2000
Stock Incentive Plan (the "Plan"). Optionee further agrees to be bound by the
terms of the Plan and the terms of the Option as set forth in the Stock Option
Agreement attached hereto as Exhibit A. Optionee hereby acknowledges the receipt
of a copy of the official prospectus for the Plan in the form attached hereto as
Exhibit B. A copy of the Plan is available upon request made to the Corporate
Secretary at the Corporation's principal offices.
Employment at Will. Nothing in this Notice or in the attached Stock Option
Agreement or in the Plan shall confer upon Optionee any right to continue in
Service for any period of specific duration or interfere with or otherwise
restrict in any way the rights of the Corporation (or any Parent or Subsidiary
employing or retaining Optionee) or of Optionee, which rights are hereby
expressly reserved by each, to terminate Optionee's Service at any time for any
reason, with or without cause.
Definitions. All capitalized terms in this Notice shall have the meaning
assigned to them in this Notice or in the attached Stock Option Agreement.
Date:
--------------------
QUIKSILVER, INC.
By:
- ------------------------------------- ------------------------------------
OPTIONEE Title:
---------------------------------
Address:
- ------------------------------------- ATTACHMENTS
- ------------------------------------- Exhibit A - Stock Option Agreement
- ------------------------------------- Exhibit B - Plan Summary and Prospectus
EXHIBIT A
QUIKSILVER, INC.
STOCK OPTION AGREEMENT
RECITALS
A. The Board has adopted the Plan for the purpose of retaining the
services of selected Employees, non-employee members of the Board (or the board
of directors of any Parent or Subsidiary) and consultants and other independent
advisors who provide services to the Corporation (or any Parent or Subsidiary).
B. Optionee is to render valuable services to the Corporation (or a
Parent or Subsidiary), and this Agreement is executed pursuant to, and is
intended to carry out the purposes of, the Plan in connection with the
Corporation's grant of an option to Optionee.
C. All capitalized terms in this Agreement shall have the meaning
assigned to them in the attached Appendix.
NOW, THEREFORE, it is hereby agreed as follows:
1. GRANT OF OPTION. The Corporation hereby grants to Optionee, as of
the Grant Date, an option to purchase up to the number of Option Shares
specified in the Grant Notice. The Option Shares shall be purchasable from time
to time during the option term specified in Paragraph 2 at the Exercise Price.
2. OPTION TERM. This option shall have a maximum term of _____ (___)
years measured from the Grant Date and shall accordingly expire at the close of
business on the Expiration Date, unless sooner terminated in accordance with
Paragraph 5 or 6.
3. LIMITED TRANSFERABILITY.
(a) If this option is designated a Non-Statutory Option in the
Grant Notice, then this option may be assigned in whole or in part during
Optionee's lifetime only to one or more Family Members or to a trust established
for the exclusive benefit of Optionee and/or one or more such Family Members or
to Optionee's former spouse, to the extent such assignment is in connection with
the Optionee's estate plan or pursuant to a domestic relations order. The
assigned portion shall be exercisable only by the person or persons who acquire
a proprietary interest in the option pursuant to such assignment. The terms
applicable to the assigned portion shall be the same as those in effect for this
option immediately prior to such assignment.
(b) Except as provided in Paragraph 3(a) above, this option shall
be neither transferable nor assignable by Optionee other than by will or the
laws of inheritance following Optionee's death and may be exercised, during
Optionee's lifetime, only by Optionee. However, Optionee may designate one or
more persons as the beneficiary or beneficiaries of this
(Selected Officer Form)
A-1
option, and this option shall, in accordance with such designation,
automatically be transferred to such beneficiary or beneficiaries upon the
Optionee's death while holding this option. Such beneficiary or beneficiaries
shall take the transferred option subject to all the terms and conditions of
this Agreement, including (without limitation) the limited time period during
which this option may, pursuant to Paragraph 5, be exercised following
Optionee's death.
4. DATES OF EXERCISE. This option shall become exercisable for the
Option Shares in one or more installments as specified in the Grant Notice. As
the option becomes exercisable for such installments, those installments shall
accumulate, and the option shall remain exercisable for the accumulated
installments until the Expiration Date or sooner termination of the option term
under Paragraph 5 or 6. Notwithstanding the foregoing, should the Optionee elect
to exercise this option during any period during which the Optionee is under
investigation by the Corporation for Misconduct, then any Option Shares acquired
by the Optionee as a result of such exercise and/or the net proceeds of any sale
or sales of those acquired Option Shares (the gross sale proceeds less any
Exercise Price payment or withholding taxes due the Corporation in broker
commissions) during such period shall be held by the Corporation in escrow until
such time as the investigation is satisfactorily completed.
5. CESSATION OF SERVICE/TERMINATION OF OPTION. The option term
specified in Paragraph 2 shall terminate (and this option shall cease to be
outstanding) prior to the Expiration Date should any of the following provisions
become applicable:
(a) Should Optionee cease to remain in Service by reason of
Optionee terminating his or her Service with the Corporation for other than Good
Reason, as such term is defined in Optionee's employment agreement in effect on
the date of grant of this option (the "Employment Agreement"), while holding
this option, then Optionee shall have a period of three (3) months (commencing
with the date of such cessation of Service) during which to exercise this
option, but in no event shall this option be exercisable at any time after the
Expiration Date.
(b) Should Optionee die while holding this option, then the
personal representative of Optionee's estate or the person or persons to whom
the option is transferred pursuant to Optionee's will or the laws of inheritance
shall have the right to exercise this option. However, if Optionee has
designated one or more beneficiaries of this option, then those persons shall
have the exclusive right to exercise this option following Optionee's death. Any
such right to exercise this option shall lapse, and this option shall cease to
be outstanding, upon the earlier of (i) the expiration of the twelve (12)-month
period measured from the date of Optionee's death or (ii) the Expiration Date.
(c) Should Optionee cease Service by reason of Permanent
Disability while holding this option, then Optionee shall have a period of
twelve (12) months (commencing with the date of such cessation of Service)
during which to exercise this option. In no event shall this option be
exercisable at any time after the Expiration Date.
(d) Should Optionee cease Service by reason of termination by the
Corporation without Cause (other than as a result of Optionee's death, Permanent
Disability or Misconduct), as such term is defined in the Employment Agreement,
or by Optionee for Good Reason, as such term is defined in the Employment
Agreement, while holding this option, then
(Selected Officer Form)
A-2
Optionee shall have a period of twelve (12) months (commencing with the date of
such cessation of Service) during which to exercise this option. In no event
shall this option be exercisable at any time after the Expiration Date.
(e) The applicable post-Service exercise period in effect for
this option pursuant to the foregoing provisions of this Paragraph 5 shall
automatically be extended by an additional period of time equal in duration to
any interval within that otherwise applicable post-Service exercise period in
which the exercise of this option or the immediate sale of the Option Shares
acquired hereunder cannot be effected in compliance with applicable federal and
state securities laws, but in no event shall such an extension result in the
continuation of this option beyond the Expiration Date.
(f) During the limited period of post-Service exercisability,
this option may not be exercised in the aggregate for more than the number of
Option Shares for which the option is exercisable at the time of Optionee's
cessation of Service. Upon the expiration of such limited exercise period or (if
earlier) upon the Expiration Date, this option shall terminate and cease to be
outstanding for any exercisable Option Shares for which the option has not been
exercised. However, this option shall, immediately upon Optionee's cessation of
Service for any reason, terminate and cease to be outstanding with respect to
any Option Shares for which this option is not otherwise at that time
exercisable.
(g) Should Optionee's Service be terminated for Misconduct or
Cause, as such term is defined in the Employment Agreement, or should Optionee
otherwise engage in any Misconduct while this option is outstanding, then this
option shall terminate immediately and cease to remain outstanding.
6. SPECIAL ACCELERATION OF OPTION.
(a) This option, to the extent outstanding at the time of a
Corporate Transaction but not otherwise fully exercisable, shall NOT vest or
become exercisable on an accelerated basis if and to the extent: (i) this option
is, in connection with the Corporate Transaction, to be assumed by the successor
corporation (or parent thereof) or otherwise continued in full force and effect
pursuant to the terms of the Corporate Transaction or (ii) this option is to be
replaced with a cash incentive program of the successor corporation which
preserves the spread existing at the time of the Corporate Transaction on any
Option Shares for which this option is not otherwise at that time exercisable
(the excess of the Fair Market Value of those Option Shares over the aggregate
Exercise Price payable for such shares) and provides for subsequent payout in
accordance with the same option exercise/vesting schedule for those Option
Shares set forth in the Grant Notice. However, if none of the foregoing
conditions apply to this option at the time of the Corporate Transaction, then
this option shall automatically accelerate so that such option shall,
immediately prior to the effective date of that Corporate Transaction, become
exercisable for all the shares of Common Stock at the time subject to this
option and may be exercised for any or all of those shares as fully vested
shares of Common Stock.
(b) Immediately following the Corporate Transaction, this option
shall terminate and cease to be outstanding, except to the extent assumed by the
successor corporation (or parent thereof) in connection with the Corporate
Transaction or otherwise continued in full force and effect pursuant to the
terms of the Corporate Transaction.
(Selected Officer Form)
A-3
(c) If this option is assumed in connection with a Corporate
Transaction or otherwise continued in effect, then this option shall be
appropriately adjusted, immediately after such Corporate Transaction, to apply
to the number and class of securities which would have been issuable to Optionee
in consummation of such Corporate Transaction had the option been exercised
immediately prior to such Corporate Transaction, and appropriate adjustments
shall also be made to the Exercise Price, provided the aggregate Exercise Price
shall remain the same. To the extent the actual holders of the Corporation's
outstanding Common Stock receive cash consideration for their Common Stock in
consummation of the Corporate Transaction, the successor corporation may, in
connection with the assumption of this option, substitute one or more shares of
its own common stock with a fair market value equivalent to the cash
consideration paid per share of Common Stock in such Corporate Transaction.
(d) This Agreement shall not in any way affect the right of the
Corporation to adjust, reclassify, reorganize or otherwise change its capital or
business structure or to merge, consolidate, dissolve, liquidate or sell or
transfer all or any part of its business or assets.
(e) This option, to the extent outstanding at the time Optionee
ceases Service with the Corporation by reason of Optionee's death, Permanent
Disability, termination by the Corporation without Cause (as defined in the
Employment Agreement) or termination by Optionee for Good Reason (as defined in
the Employment Agreement) but not otherwise fully exercisable, shall
automatically accelerate so that this option shall immediately prior to such
termination of Service, become exercisable for all of the Option Shares at the
time subject to this option and may be exercised for any or all of those Option
Shares as fully vested shares of Common Stock.
7. ADJUSTMENT IN OPTION SHARES. Should any change be made to the
Common Stock by reason of any stock split, stock dividend, recapitalization,
combination of shares, exchange of shares or other change affecting the
outstanding Common Stock as a class without the Corporation's receipt of
consideration, appropriate adjustments shall be made to (i) the total number
and/or class of securities subject to this option and (ii) the Exercise Price in
order to reflect such change and thereby preclude a dilution or enlargement of
benefits hereunder.
8. STOCKHOLDER RIGHTS. The holder of this option shall not have any
stockholder rights with respect to the Option Shares until such person shall
have exercised the option, paid the Exercise Price and become a holder of record
of the purchased shares.
(Selected Officer Form)
A-4
9. MANNER OF EXERCISING OPTION.
(a) In order to exercise this option with respect to all or any
part of the Option Shares for which this option is at the time exercisable,
Optionee (or any other person or persons exercising the option) must take the
following actions:
(i) Execute and deliver to the Corporation a Notice of
Exercise for the Option Shares for which the option is exercised.
(ii) Pay the aggregate Exercise Price for the purchased
shares in one or more of the following forms:
(A) cash or check made payable to the Corporation;
(B) shares of Common Stock held by Optionee (or any
other person or persons exercising the option) for the requisite period
necessary to avoid a charge to the Corporation's earnings for financial
reporting purposes and valued at Fair Market Value on the Exercise Date; or
(C) through a special sale and remittance procedure
pursuant to which Optionee (or any other person or persons exercising the
option) shall concurrently provide irrevocable instructions to (i) a
Corporation-designated brokerage firm to effect the immediate sale of the
purchased shares and remit to the Corporation, out of the sale proceeds
available on the settlement date, sufficient funds to cover the aggregate
Exercise Price payable for the purchased shares plus all applicable Federal,
state and local income and employment taxes required to be withheld by the
Corporation by reason of such exercise and (ii) the Corporation to deliver the
certificates for the purchased shares directly to such brokerage firm in order
to complete the sale.
Except to the extent the sale and remittance procedure is
utilized in connection with the option exercise, payment of the Exercise Price
must accompany the Notice of Exercise delivered to the Corporation in connection
with the option exercise.
(iii) Furnish to the Corporation appropriate documentation
that the person or persons exercising the option (if other than Optionee) have
the right to exercise this option.
(iv) Make appropriate arrangements with the Corporation (or
Parent or Subsidiary employing or retaining Optionee) for the satisfaction of
all Federal, state and local income and employment tax withholding requirements
applicable to the option exercise.
(b) As soon as practical after the Exercise Date, the Corporation
shall issue to or on behalf of Optionee (or any other person or persons
exercising this option) a certificate for the purchased Option Shares, with the
appropriate legends affixed thereto.
(c) In no event may this option be exercised for any fractional
shares.
(Selected Officer Form)
A-5
10. COMPLIANCE WITH LAWS AND REGULATIONS.
(a) The exercise of this option and the issuance of the Option
Shares upon such exercise shall be subject to compliance by the Corporation and
Optionee with all applicable requirements of law relating thereto and with all
applicable regulations of any stock exchange (or over-the-counter market, if
applicable) on which the Common Stock may be listed for trading at the time of
such exercise and issuance.
(b) The inability of the Corporation to obtain approval from any
regulatory body having authority deemed by the Corporation to be necessary to
the lawful issuance and sale of any Common Stock pursuant to this option shall
relieve the Corporation of any liability with respect to the non-issuance or
sale of the Common Stock as to which such approval shall not have been obtained.
The Corporation, however, shall use its best efforts to obtain all such
approvals.
11. SUCCESSORS AND ASSIGNS. Except to the extent otherwise provided in
Paragraphs 3 and 6, the provisions of this Agreement shall inure to the benefit
of, and be binding upon, the Corporation and its successors and assigns and
Optionee, Optionee's assigns, the legal representatives, heirs and legatees of
Optionee's estate and any beneficiaries of this option designated by Optionee.
12. NOTICES. Any notice required to be given or delivered to the
Corporation under the terms of this Agreement shall be in writing and addressed
to the Corporation at its principal corporate offices. Any notice required to be
given or delivered to Optionee shall be in writing and addressed to Optionee at
the address indicated below Optionee's signature line on the Grant Notice. All
notices shall be deemed effective upon personal delivery or upon deposit in the
U.S. mail, postage prepaid and properly addressed to the party to be notified.
13. CONSTRUCTION. This Agreement and the option evidenced hereby are
made and granted pursuant to the Plan and are in all respects limited by and
subject to the terms of the Plan. All decisions of the Plan Administrator with
respect to any question or issue arising under the Plan or this Agreement shall
be conclusive and binding on all persons having an interest in this option.
14. GOVERNING LAW. The interpretation, performance and enforcement of
this Agreement shall be governed by the laws of the State of California without
resort to that State's conflict-of-laws rules.
15. EXCESS SHARES. If the Option Shares covered by this Agreement
exceed, as of the Grant Date, the number of shares of Common Stock which may
without stockholder approval be issued under the Plan, then this option shall be
void with respect to those excess shares, unless stockholder approval of an
amendment sufficiently increasing the number of shares of Common Stock issuable
under the Plan is obtained in accordance with the provisions of the Plan.
16. ADDITIONAL TERMS APPLICABLE TO AN INCENTIVE OPTION. In the event
this option is designated an Incentive Option in the Grant Notice, the following
terms and conditions shall also apply to the grant:
(a) This option shall cease to qualify for favorable tax
treatment as an Incentive Option if (and to the extent) this option is exercised
for one or more Option Shares: (A) more than three (3) months after the date
Optionee ceases to be an Employee for any reason
(Selected Officer Form)
A-6
other than death or Permanent Disability or (B) more than twelve (12) months
after the date Optionee ceases to be an Employee by reason of Permanent
Disability.
(b) No installment under this option shall qualify for favorable
tax treatment as an Incentive Option if (and to the extent) the aggregate Fair
Market Value (determined at the Grant Date) of the Common Stock for which such
installment first becomes exercisable hereunder would, when added to the
aggregate value (determined as of the respective date or dates of grant) of the
Common Stock or other securities for which this option or any other Incentive
Options granted to Optionee prior to the Grant Date (whether under the Plan or
any other option plan of the Corporation or any Parent or Subsidiary) first
become exercisable during the same calendar year, exceed One Hundred Thousand
Dollars ($100,000) in the aggregate. Should such One Hundred Thousand Dollar
($100,000) limitation be exceeded in any calendar year, this option shall
nevertheless become exercisable for the excess shares in such calendar year as a
Non-Statutory Option.
(c) Should the exercisability of this option be accelerated upon
a Corporate Transaction, then this option shall qualify for favorable tax
treatment as an Incentive Option only to the extent the aggregate Fair Market
Value (determined at the Grant Date) of the Common Stock for which this option
first becomes exercisable in the calendar year in which the Corporate
Transaction occurs does not, when added to the aggregate value (determined as of
the respective date or dates of grant) of the Common Stock or other securities
for which this option or one or more other Incentive Options granted to Optionee
prior to the Grant Date (whether under the Plan or any other option plan of the
Corporation or any Parent or Subsidiary) first become exercisable during the
same calendar year, exceed One Hundred Thousand Dollars ($100,000) in the
aggregate. Should the applicable One Hundred Thousand Dollar ($100,000)
limitation be exceeded in the calendar year of such Corporate Transaction, the
option may nevertheless be exercised for the excess shares in such calendar year
as a Non-Statutory Option.
(d) Should Optionee hold, in addition to this option, one or more
other options to purchase Common Stock which become exercisable for the first
time in the same calendar year as this option, then, for purposes of the
foregoing limitations on the exercisability of such options as Incentive
Options, this option and each of those other options shall be deemed to become
first exercisable in that calendar year on the basis of the chronological order
in which they were granted, except to the extent otherwise provided under
applicable law or regulation.
(Selected Officer Form)
A-7
EXHIBIT A-1
NOTICE OF EXERCISE
I hereby notify Quiksilver, Inc. (the "Corporation") that I elect to
purchase ______________ shares of the Corporation's Common Stock (the "Purchased
Shares") at the option exercise price of $__________ per share (the "Exercise
Price") pursuant to that certain option (the "Option") granted to me under the
Corporation's amended and restated 2000 Stock Incentive Plan on _______________,
_____
Concurrently with the delivery of this Exercise Notice to the
Corporation, I shall hereby pay to the Corporation the Exercise Price for the
Purchased Shares in accordance with the provisions of my agreement with the
Corporation (or other documents) evidencing the Option and shall deliver
whatever additional documents may be required by such agreement as a condition
for exercise. Alternatively, I may utilize the special broker-dealer sale and
remittance procedure specified in my agreement to effect payment of the Exercise
Price.
,
- --------------------------- ----
Date
----------------------------------------
Optionee
Address:
-------------------------------
-------------------------------
-------------------------------
Print name in exact manner it is to
appear on the stock certificate: ----------------------------------------
Address to which certificate is to be ----------------------------------------
sent, if different from address
above: ----------------------------------------
----------------------------------------
Social Security Number: ----------------------------------------
(Selected Officer Form)
A-8
APPENDIX
The following definitions shall be in effect under the Agreement:
A. AGREEMENT shall mean this Stock Option Agreement.
B. BOARD shall mean the Corporation's Board of Directors.
C. CODE shall mean the Internal Revenue Code of 1986, as amended.
D. COMMON STOCK shall mean shares of the Corporation's common stock.
E. CORPORATE TRANSACTION shall mean either of the following
stockholder-approved transactions to which the Corporation is a party:
(i) a merger or consolidation in which securities possessing more
than fifty percent (50%) of the total combined voting power of the
Corporation's outstanding securities are transferred to a person or
persons different from the persons holding those securities
immediately prior to such transaction, or
(ii) the sale, transfer or other disposition of all or
substantially all of the Corporation's assets in complete liquidation
or dissolution of the Corporation.
F. CORPORATION shall mean Quiksilver, Inc., a Delaware corporation,
and any successor corporation to all or substantially all of the assets or
voting stock of Quiksilver, Inc. which shall by appropriate action adopt the
Plan.
G. EMPLOYEE shall mean an individual who is in the employ of the
Corporation (or any Parent or Subsidiary), subject to the control and direction
of the employer entity as to both the work to be performed and the manner and
method of performance.
H. EXERCISE DATE shall mean the date on which the option shall have
been exercised in accordance with Paragraph 9 of the Agreement.
I. EXERCISE PRICE shall mean the exercise price per Option Share as
specified in the Grant Notice.
J. EXPIRATION DATE shall mean the date on which the option expires as
specified in the Grant Notice.
K. FAIR MARKET VALUE per share of Common Stock on any relevant date
shall be determined in accordance with the following provisions:
(i) If the Common Stock is at the time listed on any established
stock exchange or over-the-counter market, then the Fair Market Value
shall be the closing selling price per share of
(Selected Officer Form)
A-9
Common Stock (or closing bid, if no sales were reported) as quoted on
such exchange or market, determined by the Plan Administrator to be
the primary market for the Common Stock, at the close of regular hours
trading (i.e., before after-hours trading begins) on the date in
question as reported in the Wall Street Journal or such other source
as the Plan Administrator deems reliable. If there is no closing
selling price (or closing bid, if no sales were reported) for the
Common Stock on the date in question, then the Fair Market Value shall
be the closing selling price (or closing bid if no sales were
reported) on the last preceding date for which such quotation exists.
(ii) If the Common Stock is at the time not listed on any
established stock exchange or over-the-counter market, the Fair Market
Value shall be determined by the Board in good faith.
L. FAMILY MEMBER shall mean, with respect to the Optionee, any child,
stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse,
sibling, niece, nephew, mother-in-law, father-in-law, son-in-law,
daughter-in-law, brother-in-law or sister-in-law.
M. GRANT DATE shall mean the date of grant of the option as specified
in the Grant Notice.
N. GRANT NOTICE shall mean the Notice of Grant of Stock Option
accompanying the Agreement, pursuant to which Optionee has been informed of the
basic terms of the option evidenced hereby.
O. INCENTIVE OPTION shall mean an option which satisfies the
requirements of Code Section 422.
P. MISCONDUCT shall mean the commission of any act of fraud,
embezzlement or dishonesty by Optionee, any unauthorized use or disclosure by
Optionee of confidential information or trade secrets of the Corporation (or any
Parent or Subsidiary), or any other intentional misconduct by Optionee adversely
affecting the business or affairs of the Corporation (or any Parent or
Subsidiary) in a material manner. The foregoing definition shall not be deemed
to be inclusive of all the acts or omissions which the Corporation (or any
Parent or Subsidiary) may consider as grounds for the dismissal or discharge of
Optionee or any other individual in the Service of the Corporation (or any
Parent or Subsidiary).
Q. NON-STATUTORY OPTION shall mean an option not intended to satisfy
the requirements of Code Section 422.
R. NOTICE OF EXERCISE shall mean the notice of exercise in
substantially the form attached hereto as Exhibit A-1.
S. OPTION SHARES shall mean the number of shares of Common Stock
subject to the option as specified in the Grant Notice.
(Selected Officer Form)
A-10
T. OPTIONEE shall mean the person to whom the option is granted as
specified in the Grant Notice.
U. PARENT shall mean any corporation (other than the Corporation) in
an unbroken chain of corporations ending with the Corporation, provided each
corporation in the unbroken chain (other than the Corporation) owns, at the time
of the determination, stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.
V. PERMANENT DISABILITY shall mean the inability of Optionee to engage
in any substantial gainful activity by reason of any medically determinable
physical or mental impairment which is expected to result in death or has lasted
or can be expected to last for a continuous period of twelve (12) months or
more.
W. PLAN shall mean the Corporation's amended and restated 2000 Stock
Incentive Plan.
X. PLAN ADMINISTRATOR shall mean either the Board or a committee of
the Board acting in its capacity as administrator of the Plan.
Y. SERVICE shall mean the Optionee's performance of services for the
Corporation (or any Parent or Subsidiary) in the capacity of an Employee, a
non-employee member of the board of directors or a consultant or independent
advisor. An Optionee shall be deemed to cease Service immediately upon the
occurrence of either of the following events: (i) the Optionee no longer
performs services in any of the foregoing capacities for the Corporation or any
Parent or Subsidiary; or (ii) the entity for which the Optionee is performing
such services ceases to remain a Parent or Subsidiary of the Corporation, even
though the Optionee may subsequently continue to perform services for that
entity.
Z. SUBSIDIARY shall mean any corporation (other than the Corporation)
in an unbroken chain of corporations beginning with the Corporation, provided
each corporation (other than the last corporation) in the unbroken chain owns,
at the time of the determination, stock possessing fifty percent (50%) or more
of the total combined voting power of all classes of stock in one of the other
corporations in such chain.
(Selected Officer Form)
A-11
(QUIKSILVER LOGO)
NOTICE OF GRANT OF
NON-EMPLOYEE DIRECTOR AUTOMATIC STOCK OPTION
(ANNUAL MEETING AND INITIAL GRANT FORM)
Notice is hereby given of the following option grant (the "Option") to
purchase shares of the Common Stock of Quiksilver, Inc. (the "Corporation"):
Optionee: ___________ Grant Date: ________
Number of Options Shares: 5,000 Exercise Price: ________
Type of Option: [ ] Incentive Stock Expiration Date: ________
Option
[X] Non-Statutory
Stock Option
Exercise and Vesting Schedule: The option shall be fully vested and
exercisable immediately upon grant.
Optionee understands and agrees that the Option is granted subject to and
in accordance with the terms of the Director Automatic Grant Program under the
Quiksilver, Inc. amended and restated 2000 Stock Incentive Plan (the "Plan").
Optionee further agrees to be bound by the terms of the Plan and the terms of
the Option as set forth in the Automatic Stock Option Agreement attached hereto
as Exhibit A. Optionee hereby acknowledges the receipt of a copy of the official
prospectus for the Plan in the form attached hereto as Exhibit B. A copy of the
Plan is available upon request made to the Corporate Secretary at the
Corporation's principal offices.
Impairment of Rights. Nothing in this Notice or in the attached Automatic
Stock Option Agreement or in the Plan shall interfere with or otherwise restrict
in any way the rights of the Corporation and the Corporation's stockholders to
remove Optionee from the Board at any time in accordance with the provisions of
applicable law.
Definitions. All capitalized terms in this Notice shall have the meaning
assigned to them in this Notice or in the attached Stock Option Agreement.
Date:
--------------------
QUIKSILVER, INC.
By:
- ------------------------------------- ------------------------------------
OPTIONEE Title:
---------------------------------
Address:
- ------------------------------------- ATTACHMENTS
- ------------------------------------- Exhibit A - Automatic Stock Option
Agreement
- ------------------------------------- Exhibit B - Plan Summary and Prospectus
EXHIBIT A
AUTOMATIC STOCK OPTION AGREEMENT
RECITALS
A. The Corporation has implemented an automatic grant program under
the Plan pursuant to which eligible non-employee members of the Board will
automatically receive option grants at periodic intervals over their period of
Board service to provide such individuals with a meaningful incentive to
continue to serve as members of the Board.
B. Optionee is an eligible non-employee Board member, and this
Agreement is executed pursuant to, and is intended to carry out the purposes of,
the Plan in connection with the automatic grant of an option to purchase shares
of Common Stock under the Plan.
C. All capitalized terms in this Agreement shall have the meaning
assigned to them in the attached Appendix.
NOW, THEREFORE, it is hereby agreed as follows:
1. GRANT OF OPTION. The Corporation hereby grants to Optionee, as of
the Grant Date, a Non-Statutory Option to purchase up to the number of Option
Shares specified in the Grant Notice. The Option Shares shall be purchasable
from time to time during the option term specified in Paragraph 2 at the
Exercise Price.
2. OPTION TERM. This option shall have a maximum term of seven (7)
years measured from the Grant Date and shall accordingly expire at the close of
business on the Expiration Date, unless sooner terminated in accordance with
Paragraph 5 or 6.
3. LIMITED TRANSFERABILITY.
(a) This option may be assigned in whole or in part during
Optionee's lifetime only to one or more Family Members or to a trust established
for the exclusive benefit of Optionee and/or one or more such Family Members or
to Optionee's former spouse, to the extent such assignment is in connection with
the Optionee's estate plan or pursuant to a domestic relations order. The
assigned portion shall be exercisable only by the person or persons who acquire
a proprietary interest in the option pursuant to such assignment. The terms
applicable to the assigned portion shall be the same as those in effect for this
option immediately prior to such assignment.
(b) Except as provided in Paragraph 3(a) above, this option shall
be neither transferable nor assignable by Optionee other than by will or the
laws of inheritance following Optionee's death and may be exercised, during
Optionee's lifetime, only by Optionee. However, Optionee may designate one or
more persons as the beneficiary or beneficiaries of this option, and this option
shall, in accordance with such designation, automatically be transferred to such
beneficiary or beneficiaries upon the Optionee's death while holding this
option. Such
(Non-Employee Director Form)
A-1
beneficiary or beneficiaries shall take the transferred option subject to all
the terms and conditions of this Agreement, including (without limitation) the
limited time period during which this option may, pursuant to Paragraph 5, be
exercised following Optionee's death.
4. DATES OF EXERCISE. This option shall be fully vested and
immediately exercisable for the Option Shares and shall remain so until the
Expiration Date or sooner termination of the option term under Paragraph 5 or 6.
5. CESSATION OF BOARD SERVICE/TERMINATION OF OPTION. Should Optionee's
Service as a Board member cease while this option is outstanding, then the
option term specified in Paragraph 2 shall terminate (and this option shall
cease to be outstanding) prior to the Expiration Date in accordance with the
following provisions:
(a) Should Optionee cease to serve as a Board member for any
reason while this option is outstanding, then the period during which this
option may be exercised shall be reduced to a twelve (12)-month period measured
from the date of such cessation of Board Service, but in no event shall this
option be exercisable at any time after the Expiration Date. During such limited
period of exercisability, Optionee (or the person or persons to whom this option
is transferred pursuant to a permitted transfer under Paragraph 3) may exercise
this option with respect to any Option Shares for which the option has not been
exercised. Upon the expiration of such limited exercise period or (if earlier)
upon the Expiration Date, this option shall terminate and cease to be
outstanding for any exercisable Option Shares for which the option has not been
exercised.
(b) The applicable post-Service exercise period in effect for
this option pursuant to the foregoing provisions of this Paragraph 5 shall
automatically be extended by an additional period of time equal in duration to
any interval within that otherwise applicable post-Service exercise period in
which the exercise of this option or the immediate sale of the Option Shares
acquired hereunder cannot be effected in compliance with applicable federal and
state securities laws, but in no event shall such an extension result in the
continuation of this option beyond the Expiration Date.
6. Corporate Transaction/Hostile Take-Over.
(a) Immediately following a Corporate Transaction, this option
shall terminate and cease to be outstanding, except to the extent assumed by the
successor corporation (or parent thereof) in connection with the Corporate
Transaction or otherwise continued in full force and effect pursuant to the
terms of the Corporate Transaction.
(b) If this option is assumed in connection with a Corporate
Transaction or otherwise continued in effect, then this option shall be
appropriately adjusted, immediately after such Corporate Transaction, to apply
to the number and class of securities which would have been issuable to Optionee
in consummation of such Corporate Transaction had the option been exercised
immediately prior to such Corporate Transaction, and appropriate adjustments
shall also be made to the Exercise Price, provided the aggregate Exercise Price
shall remain the same. To the extent the actual holders of the Corporation's
outstanding Common Stock receive cash consideration for their Common Stock in
consummation of the Corporate
(Non-Employee Director Form)
A-2
Transaction, the successor corporation may, in connection with the assumption of
this option, substitute one or more shares of its own common stock with a fair
market value equivalent to the cash consideration paid per share of Common Stock
in such Corporate Transaction.
(c) This Agreement shall not in any way affect the right of the
Corporation to adjust, reclassify, reorganize or otherwise change its capital or
business structure or to merge, consolidate, dissolve, liquidate or sell or
transfer all or any part of its business or assets.
(d) Upon the occurrence of a Hostile Take-Over while Optionee
remains a Board member, the Optionee shall have a thirty (30)-day period
immediately following the consummation of the Hostile Take-Over in which to
surrender to the Corporation this option in exchange for a cash distribution
from the Corporation in an amount equal to the excess of (i) the Take-Over Price
of the shares of Common Stock at the time subject to this option less (ii) the
aggregate Exercise Price payable for such shares. This Paragraph 6(d) limited
stock appreciation right shall in all events terminate upon the expiration or
sooner termination of the option term and may not be assigned or transferred by
Optionee, except to the extent the option is transferred in accordance with the
provisions of this Agreement.
(e) To exercise the Paragraph 6(d) limited stock appreciation
right, Optionee must, during the applicable thirty (30)-day exercise period,
provide the Corporation with written notice of the option surrender in which
there is specified the number of Option Shares as to which the option is being
surrendered. Such notice must be accompanied by the return of Optionee's copy of
this Agreement, together with any written amendments to such Agreement. The cash
distribution shall be paid to Optionee within five (5) business days following
such delivery date. The exercise of such limited stock appreciation right in
accordance with the terms of this Paragraph 6 has been pre-approved pursuant to
the express provisions of the Director Automatic Grant Program, and neither the
approval of the Plan Administrator nor the consent of the Board shall be
required at the time of the actual option surrender and cash distribution. Upon
receipt of the cash distribution, this option shall be canceled with respect to
the shares subject to the surrendered option (or the surrendered portion) and
Optionee shall cease to have any further right to acquire those Option Shares
under this Agreement. This option shall, however, remain outstanding for the
balance of the Option Shares (if any) in accordance with the terms and
provisions of this Agreement, and the Corporation shall accordingly issue a
replacement stock option agreement (substantially in the same form as this
Agreement) for those remaining Option Shares.
7. Adjustment in Option Shares. Should any change be made to the
Common Stock by reason of any stock split, stock dividend, recapitalization,
combination of shares, exchange of shares or other change affecting the
outstanding Common Stock as a class without the Corporation's receipt of
consideration, appropriate adjustments shall be made to (i) the total number
and/or class of securities subject to this option and (ii) the Exercise Price in
order to reflect such change and thereby preclude a dilution or enlargement of
benefits hereunder.
(Non-Employee Director Form)
A-3
8. STOCKHOLDER RIGHTS. The holder of this option shall not have any
stockholder rights with respect to the Option Shares until such person shall
have exercised the option, paid the Exercise Price and become a holder of record
of the purchased shares.
9. MANNER OF EXERCISING OPTION.
(a) In order to exercise this option with respect to all or any
part of the Option Shares for which this option is at the time exercisable,
Optionee (or any other person or persons exercising the option) must take the
following actions:
(i) Execute and deliver to the Corporation a Notice of
Exercise for the Option Shares for which the option is exercised.
(ii) Pay the aggregate Exercise Price for the purchased
shares in one or more of the following forms:
(A) cash or check made payable to the Corporation;
(B) shares of Common Stock held by Optionee (or any
other person or persons exercising the option) for the requisite period
necessary to avoid a charge to the Corporation's earnings for financial
reporting purposes and valued at Fair Market Value on the Exercise Date; or
(C) through a special sale and remittance procedure
pursuant to which Optionee (or any other person or persons exercising the
option) shall concurrently provide irrevocable instructions to (i) a
Corporation-designated brokerage firm to effect the immediate sale of the
purchased shares and remit to the Corporation, out of the sale proceeds
available on the settlement date, sufficient funds to cover the aggregate
Exercise Price payable for the purchased shares plus all applicable Federal,
state and local income and employment taxes required to be withheld by the
Corporation by reason of such exercise and (ii) the Corporation to deliver the
certificates for the purchased shares directly to such brokerage firm in order
to complete the sale.
Except to the extent the sale and remittance procedure is
utilized in connection with the option exercise, payment of the Exercise Price
must accompany the Notice of Exercise delivered to the Corporation in connection
with the option exercise.
(iii) Furnish to the Corporation appropriate documentation
that the person or persons exercising the option (if other than Optionee) have
the right to exercise this option.
(iv) Make appropriate arrangements with the Corporation (or
Parent or Subsidiary employing or retaining Optionee) for the satisfaction of
all Federal, state and local income and employment tax withholding requirements
applicable to the option exercise.
(Non-Employee Director Form)
A-4
(b) As soon as practical after the Exercise Date, the Corporation
shall issue to or on behalf of Optionee (or any other person or persons
exercising this option) a certificate for the purchased Option Shares, with the
appropriate legends affixed thereto.
(c) In no event may this option be exercised for any fractional
shares.
10. COMPLIANCE WITH LAWS AND REGULATIONS.
(a) The exercise of this option and the issuance of the Option
Shares upon such exercise shall be subject to compliance by the Corporation and
Optionee with all applicable requirements of law relating thereto and with all
applicable regulations of any stock exchange (or over-the-counter market, if
applicable) on which the Common Stock may be listed for trading at the time of
such exercise and issuance.
(b) The inability of the Corporation to obtain approval from any
regulatory body having authority deemed by the Corporation to be necessary to
the lawful issuance and sale of any Common Stock pursuant to this option shall
relieve the Corporation of any liability with respect to the non-issuance or
sale of the Common Stock as to which such approval shall not have been obtained.
The Corporation, however, shall use its best efforts to obtain all such
approvals.
11. SUCCESSORS AND ASSIGNS. Except to the extent otherwise provided in
Paragraphs 3 and 6, the provisions of this Agreement shall inure to the benefit
of, and be binding upon, the Corporation and its successors and assigns and
Optionee, Optionee's assigns, the legal representatives, heirs and legatees of
Optionee's estate and any beneficiaries of this option designated by Optionee.
12. NOTICES. Any notice required to be given or delivered to the
Corporation under the terms of this Agreement shall be in writing and addressed
to the Corporation at its principal corporate offices. Any notice required to be
given or delivered to Optionee shall be in writing and addressed to Optionee at
the address indicated below Optionee's signature line on the Grant Notice. All
notices shall be deemed effective upon personal delivery or upon deposit in the
U.S. mail, postage prepaid and properly addressed to the party to be notified.
13. CONSTRUCTION. This Agreement and the option evidenced hereby are
made and granted pursuant to the Plan and are in all respects limited by and
subject to the terms of the Plan. All decisions of the Plan Administrator with
respect to any question or issue arising under the Plan or this Agreement shall
be conclusive and binding on all persons having an interest in this option.
14. GOVERNING LAW. The interpretation, performance and enforcement of
this Agreement shall be governed by the laws of the State of California without
resort to that State's conflict-of-laws rules.
(Non-Employee Director Form)
A-5
15. EXCESS SHARES. If the Option Shares covered by this Agreement
exceed, as of the Grant Date, the number of shares of Common Stock which may
without stockholder approval be issued under the Plan, then this option shall be
void with respect to those excess shares, unless stockholder approval of an
amendment sufficiently increasing the number of shares of Common Stock issuable
under the Plan is obtained in accordance with the provisions of the Plan.
(Non-Employee Director Form)
A-6
EXHIBIT A-1
NOTICE OF EXERCISE
I hereby notify Quiksilver, Inc. (the "Corporation") that I elect to
purchase ______________ shares of the Corporation's Common Stock (the "Purchased
Shares") at the option exercise price of $__________ per share (the "Exercise
Price") pursuant to that certain option (the "Option") granted to me under the
Corporation's amended and restated 2000 Stock Incentive Plan on _______________,
_____.
Concurrently with the delivery of this Exercise Notice to the
Corporation, I shall hereby pay to the Corporation the Exercise Price for the
Purchased Shares in accordance with the provisions of my agreement with the
Corporation (or other documents) evidencing the Option and shall deliver
whatever additional documents may be required by such agreement as a condition
for exercise. Alternatively, I may utilize the special broker-dealer sale and
remittance procedure specified in my agreement to effect payment of the Exercise
Price.
,
- --------------------------- ----
Date
----------------------------------------
Optionee
Address:
-------------------------------
-------------------------------
-------------------------------
Print name in exact manner it is to
appear on the stock certificate: ----------------------------------------
Address to which certificate is to be
sent, if different from address above: ----------------------------------------
----------------------------------------
----------------------------------------
Social Security Number: ----------------------------------------
(Non-Employee Director Form)
A-7
APPENDIX
The following definitions shall be in effect under the Agreement:
A. AGREEMENT shall mean this Stock Option Agreement.
B. BOARD shall mean the Corporation's Board of Directors.
C. CODE shall mean the Internal Revenue Code of 1986, as amended.
D. COMMON STOCK shall mean shares of the Corporation's common stock.
E. CORPORATE TRANSACTION shall mean either of the following
stockholder-approved transactions to which the Corporation is a party:
(i) a merger or consolidation in which securities possessing more
than fifty percent (50%) of the total combined voting power of the
Corporation's outstanding securities are transferred to a person or
persons different from the persons holding those securities
immediately prior to such transaction, or
(ii) the sale, transfer or other disposition of all or
substantially all of the Corporation's assets in complete liquidation
or dissolution of the Corporation.
F. CORPORATION shall mean Quiksilver, Inc., a Delaware corporation,
and any successor corporation to all or substantially all of the assets or
voting stock of Quiksilver, Inc. which shall by appropriate action adopt the
Plan.
G. EXERCISE DATE shall mean the date on which the option shall have
been exercised in accordance with Paragraph 9 of the Agreement.
H. EXERCISE PRICE shall mean the exercise price per Option Share as
specified in the Grant Notice.
I. EXPIRATION DATE shall mean the date on which the option expires as
specified in the Grant Notice.
J. FAIR MARKET VALUE per share of Common Stock on any relevant date
shall be determined in accordance with the following provisions:
(i) If the Common Stock is at the time listed on any established
stock exchange or over-the-counter market, then the Fair Market Value
shall be the closing selling price per share of Common Stock (or
closing bid, if no sales were reported) as quoted on such exchange or
market, determined by the Plan Administrator to be the primary market
for the Common Stock, at the close of regular hours trading (i.e.,
before after-hours trading
(Non-Employee Director Form)
A-8
begins) on the date in question as reported in the Wall Street Journal
or such other source as the Plan Administrator deems reliable. If
there is no closing selling price (or closing bid, if no sales were
reported) for the Common Stock on the date in question, then the Fair
Market Value shall be the closing selling price (or closing bid if no
sales were reported) on the last preceding date for which such
quotation exists.
(ii) If the Common Stock is at the time not listed on any
established stock exchange or over-the-counter market, the Fair Market
Value shall be determined by the Board in good faith.
K. FAMILY MEMBER shall mean, with respect to the Optionee, any child,
stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse,
sibling, niece, nephew, mother-in-law, father-in-law, son-in-law,
daughter-in-law, brother-in-law or sister-in-law.
L. GRANT DATE shall mean the date of grant of the option as specified
in the Grant Notice.
M. GRANT NOTICE shall mean the Notice of Grant of Stock Option
accompanying the Agreement, pursuant to which Optionee has been informed of the
basic terms of the option evidenced hereby.
N. HOSTILE TAKE-OVER shall mean the acquisition, directly or
indirectly, by any person or related group of persons (other than the
Corporation or a person that directly or indirectly controls, is controlled by,
or is under common control with, the Corporation) of beneficial ownership
(within the meaning of Rule 13d-3 of the 1934 Act) of securities possessing more
than fifty percent (50%) of the total combined voting power of the Corporation's
outstanding securities pursuant to a tender or exchange offer made directly to
the Corporation's stockholders which the Board does not recommend such
stockholders to accept.
O. NON-STATUTORY OPTION shall mean an option not intended to satisfy
the requirements of Code Section 422.
P. NOTICE OF EXERCISE shall mean the notice of exercise in
substantially the form attached hereto as Exhibit A-1.
Q. OPTION SHARES shall mean the number of shares of Common Stock
subject to the option as specified in the Grant Notice.
R. OPTIONEE shall mean the person to whom the option is granted as
specified in the Grant Notice.
S. PARENT shall mean any corporation (other than the Corporation) in
an unbroken chain of corporations ending with the Corporation, provided each
corporation in the unbroken chain (other than the Corporation) owns, at the time
of the determination, stock
(Non-Employee Director Form)
A-9
possessing fifty percent (50%) or more of the total combined voting power of all
classes of stock in one of the other corporations in such chain.
T. PERMANENT DISABILITY shall mean the inability of Optionee to engage
in any substantial gainful activity by reason of any medically determinable
physical or mental impairment which is expected to result in death or has lasted
or can be expected to last for a continuous period of twelve (12) months or
more.
U. PLAN shall mean the Corporation's amended and restated 2000 Stock
Incentive Plan.
V. PLAN ADMINISTRATOR shall mean either the Board or a committee of
the Board acting in its capacity as administrator of the Plan.
W. SERVICE shall mean the Optionee's performance of services for the
Corporation (or any Parent or Subsidiary) in the capacity of an Employee, a
non-employee member of the board of directors or a consultant or independent
advisor. An Optionee shall be deemed to cease Service immediately upon the
occurrence of either of the following events: (i) the Optionee no longer
performs services in any of the foregoing capacities for the Corporation or any
Parent or Subsidiary; or (ii) the entity for which the Optionee is performing
such services ceases to remain a Parent or Subsidiary of the Corporation, even
though the Optionee may subsequently continue to perform services for that
entity.
X. SUBSIDIARY shall mean any corporation (other than the Corporation)
in an unbroken chain of corporations beginning with the Corporation, provided
each corporation (other than the last corporation) in the unbroken chain owns,
at the time of the determination, stock possessing fifty percent (50%) or more
of the total combined voting power of all classes of stock in one of the other
corporations in such chain.
Y. TAKE-OVER PRICE shall mean the greater of (i) the Fair Market Value
per share of Common Stock on the date the option is surrendered to the
Corporation in connection with a Hostile Take-Over or (ii) the highest reported
price per share of Common Stock paid by the tender offeror in effecting such
Hostile Take-Over through the acquisition of Common Stock.
Z. 1934 ACT shall mean the Securities Exchange Act of 1934, as
amended.
(Non-Employee Director Form)
A-10
EXHIBIT B
PLAN SUMMARY AND PROSPECTUS
(Non-Employee Director)
B-1
(QUIKSILVER LOGO)
NOTICE OF GRANT OF ATHLETE STOCK OPTION
(ATHLETE FORM)
Notice is hereby given of the following option grant (the "Option") to
purchase shares of the Common Stock of Quiksilver, Inc. (the "Corporation"):
Optionee: ___________ Grant Date: ________
Number of Options Shares: ___________ Exercise Price: ________
Type of Option: [ ] Incentive Stock Expiration Date: ________
Option
[X] Non-Statutory
Stock Option
Exercise and Vesting Schedule: Subject to the limitations contained in this
Option and the Plan, this Option shall vest and become exercisable in
installments as follows:
Number of Shares Date of Earliest Exercise
(Installment) (Vesting)
- ---------------- -------------------------
Optionee understands and agrees that the Option is granted subject to and
in accordance with the terms of the Quiksilver, Inc. amended and restated 2000
Stock Incentive Plan (the "Plan"). Optionee further agrees to be bound by the
terms of the Plan and the terms of the Option as set forth in the Stock Option
Agreement attached hereto as Exhibit A. Optionee hereby acknowledges the receipt
of a copy of the official prospectus for the Plan in the form attached hereto as
Exhibit B. A copy of the Plan is available upon request made to the Corporate
Secretary at the Corporation's principal offices.
Services at Will. Nothing in this Notice or in the attached Stock Option
Agreement or in the Plan shall confer upon Optionee any right to continue in
Service for any period of specific duration or interfere with or otherwise
restrict in any way the rights of the Corporation (or any Parent or Subsidiary
employing or retaining Optionee) or of Optionee, which rights are hereby
expressly reserved by each, to terminate Optionee's Service at any time for any
reason, with or without cause.
Definitions. All capitalized terms in this Notice shall have the meaning
assigned to them in this Notice or in the attached Stock Option Agreement.
Date:
--------------------
QUIKSILVER, INC.
By:
- ------------------------------------- ------------------------------------
OPTIONEE Title:
---------------------------------
Address:
- ------------------------------------- ATTACHMENTS
- ------------------------------------- Exhibit A - Stock Option Agreement
- ------------------------------------- Exhibit B - Plan Summary and Prospectus
EXHIBIT A
QUIKSILVER, INC.
STOCK OPTION AGREEMENT
RECITALS
A. The Board has adopted the Plan for the purpose of retaining the
services of selected Employees, non-employee members of the Board (or the board
of directors of any Parent or Subsidiary) and consultants and other independent
advisors who provide services to the Corporation (or any Parent or Subsidiary).
B. Optionee is to render valuable services to the Corporation (or a
Parent or Subsidiary), and this Agreement is executed pursuant to, and is
intended to carry out the purposes of, the Plan in connection with the
Corporation's grant of an option to Optionee.
C. All capitalized terms in this Agreement shall have the meaning
assigned to them in the attached Appendix.
NOW, THEREFORE, it is hereby agreed as follows:
1. GRANT OF OPTION. The Corporation hereby grants to Optionee, as of
the Grant Date, a Non-Statutory Option to purchase up to the number of Option
Shares specified in the Grant Notice. The Option Shares shall be purchasable
from time to time during the option term specified in Paragraph 2 at the
Exercise Price.
2. OPTION TERM. This option shall have a maximum term of _____ (___)
years measured from the Grant Date and shall accordingly expire at the close of
business on the Expiration Date, unless sooner terminated in accordance with
Paragraph 5 or 6.
3. LIMITED TRANSFERABILITY.
(a) This option may be assigned in whole or in part during
Optionee's lifetime only to one or more Family Members or to a trust established
for the exclusive benefit of Optionee and/or one or more such Family Members or
to Optionee's former spouse, to the extent such assignment is in connection with
the Optionee's estate plan or pursuant to a domestic relations order. The
assigned portion shall be exercisable only by the person or persons who acquire
a proprietary interest in the option pursuant to such assignment. The terms
applicable to the assigned portion shall be the same as those in effect for this
option immediately prior to such assignment.
(b) Except as provided in Paragraph 3(a) above, this option shall
be neither transferable nor assignable by Optionee other than by will or the
laws of inheritance following Optionee's death and may be exercised, during
Optionee's lifetime, only by Optionee. However, Optionee may designate one or
more persons as the beneficiary or beneficiaries of this option, and this option
shall, in accordance with such designation, automatically be transferred to such
beneficiary or beneficiaries upon the Optionee's death while holding this
option. Such beneficiary or beneficiaries shall take the transferred option
subject to all the terms and
(Athlete Form)
A-1
conditions of this Agreement, including (without limitation) the limited time
period during which this option may, pursuant to Paragraph 5, be exercised
following Optionee's death.
4. DATES OF EXERCISE. This option shall become exercisable for the
Option Shares in one or more installments as specified in the Grant Notice. As
the option becomes exercisable for such installments, those installments shall
accumulate, and the option shall remain exercisable for the accumulated
installments until the Expiration Date or sooner termination of the option term
under Paragraph 5 or 6. Notwithstanding the foregoing, should the Optionee elect
to exercise this option during any period during which the Optionee is under
investigation by the Corporation for Misconduct, then any Option Shares acquired
by the Optionee as a result of such exercise and/or the net proceeds of any sale
or sales of those acquired Option Shares (the gross sale proceeds less any
Exercise Price payment or withholding taxes due the Corporation in broker
commissions) during such period shall be held by the Corporation in escrow until
such time as the investigation is satisfactorily completed.
5. CESSATION OF SERVICE/TERMINATION OF OPTION. The option term
specified in Paragraph 2 shall terminate (and this option shall cease to be
outstanding) prior to the Expiration Date should any of the following provisions
become applicable:
(a) Should Optionee cease to remain in Service for any reason
(other than death, Permanent Disability or Misconduct) while holding this
option, then Optionee shall have a period of three (3) months (commencing with
the date of such cessation of Service) during which to exercise this option, but
in no event shall this option be exercisable at any time after the Expiration
Date.
(b) Should Optionee die while holding this option, then the
personal representative of Optionee's estate or the person or persons to whom
the option is transferred pursuant to Optionee's will or the laws of inheritance
shall have the right to exercise this option. However, if Optionee has
designated one or more beneficiaries of this option, then those persons shall
have the exclusive right to exercise this option following Optionee's death. Any
such right to exercise this option shall lapse, and this option shall cease to
be outstanding, upon the earlier of (i) the expiration of the twelve (12)-month
period measured from the date of Optionee's death or (ii) the Expiration Date.
(c) Should Optionee cease Service by reason of Permanent
Disability while holding this option, then Optionee shall have a period of
twelve (12) months (commencing with the date of such cessation of Service)
during which to exercise this option. In no event shall this option be
exercisable at any time after the Expiration Date.
(d) The applicable post-Service exercise period in effect for
this option pursuant to the foregoing provisions of this Paragraph 5 shall
automatically be extended by an additional period of time equal in duration to
any interval within that otherwise applicable post-Service exercise period in
which the exercise of this option or the immediate sale of the Option Shares
acquired hereunder cannot be effected in compliance with applicable federal and
state securities laws, but in no event shall such an extension result in the
continuation of this option beyond the Expiration Date.
(e) During the limited period of post-Service exercisability,
this option may not be exercised in the aggregate for more than the number of
Option Shares for which the
(Athlete Form)
A-2
option is exercisable at the time of Optionee's cessation of Service. Upon the
expiration of such limited exercise period or (if earlier) upon the Expiration
Date, this option shall terminate and cease to be outstanding for any
exercisable Option Shares for which the option has not been exercised. However,
this option shall, immediately upon Optionee's cessation of Service for any
reason, terminate and cease to be outstanding with respect to any Option Shares
for which this option is not otherwise at that time exercisable.
(f) Should Optionee's Service be terminated for Misconduct or
should Optionee otherwise engage in any Misconduct while this option is
outstanding, then this option shall terminate immediately and cease to remain
outstanding.
6. SPECIAL ACCELERATION OF OPTION.
(a) This option, to the extent outstanding at the time of a
Corporate Transaction but not otherwise fully exercisable, shall NOT vest or
become exercisable if and to the extent: (i) this option is, in connection with
the Corporate Transaction, to be assumed by the successor corporation (or parent
thereof) or otherwise continued in full force and effect pursuant to the terms
of the Corporate Transaction or (ii) this option is to be replaced with a cash
incentive program of the successor corporation which preserves the spread
existing at the time of the Corporate Transaction on any Option Shares for which
this option is not otherwise at that time exercisable (the excess of the Fair
Market Value of those Option Shares over the aggregate Exercise Price payable
for such shares) and provides for subsequent payout in accordance with the same
option exercise/vesting schedule for those Option Shares set forth in the Grant
Notice. However, if none of the foregoing conditions apply to this option at the
time of the Corporate Transaction, then this option shall automatically
accelerate so that such option shall, immediately prior to the effective date of
that Corporate Transaction, become exercisable for all the shares of Common
Stock at the time subject to this option and may be exercised for any or all of
those shares as fully vested shares of Common Stock.
(b) Immediately following the Corporate Transaction, this option
shall terminate and cease to be outstanding, except to the extent assumed by the
successor corporation (or parent thereof) in connection with the Corporate
Transaction or otherwise continued in full force and effect pursuant to the
terms of the Corporate Transaction.
(c) If this option is assumed in connection with a Corporate
Transaction or otherwise continued in effect, then this option shall be
appropriately adjusted, immediately after such Corporate Transaction, to apply
to the number and class of securities which would have been issuable to Optionee
in consummation of such Corporate Transaction had the option been exercised
immediately prior to such Corporate Transaction, and appropriate adjustments
shall also be made to the Exercise Price, provided the aggregate Exercise Price
shall remain the same. To the extent the actual holders of the Corporation's
outstanding Common Stock receive cash consideration for their Common Stock in
consummation of the Corporate Transaction, the successor corporation may, in
connection with the assumption of this option, substitute one or more shares of
its own common stock with a fair market value equivalent to the cash
consideration paid per share of Common Stock in such Corporate Transaction.
(d) This Agreement shall not in any way affect the right of the
Corporation to adjust, reclassify, reorganize or otherwise change its capital or
business structure or to merge, consolidate, dissolve, liquidate or sell or
transfer all or any part of its business or assets.
(Athlete Form)
A-3
7. ADJUSTMENT IN OPTION SHARES. Should any change be made to the
Common Stock by reason of any stock split, stock dividend, recapitalization,
combination of shares, exchange of shares or other change affecting the
outstanding Common Stock as a class without the Corporation's receipt of
consideration, appropriate adjustments shall be made to (i) the total number
and/or class of securities subject to this option and (ii) the Exercise Price in
order to reflect such change and thereby preclude a dilution or enlargement of
benefits hereunder.
8. STOCKHOLDER RIGHTS. The holder of this option shall not have any
stockholder rights with respect to the Option Shares until such person shall
have exercised the option, paid the Exercise Price and become a holder of record
of the purchased shares.
9. MANNER OF EXERCISING OPTION.
(a) In order to exercise this option with respect to all or any
part of the Option Shares for which this option is at the time exercisable,
Optionee (or any other person or persons exercising the option) must take the
following actions:
(i) Execute and deliver to the Corporation a Notice of
Exercise for the Option Shares for which the option is exercised.
(ii) Pay the aggregate Exercise Price for the purchased
shares in one or more of the following forms:
(A) cash or check made payable to the Corporation;
(B) shares of Common Stock held by Optionee (or any
other person or persons exercising the option) for the requisite period
necessary to avoid a charge to the Corporation's earnings for financial
reporting purposes and valued at Fair Market Value on the Exercise Date; or
(C) through a special sale and remittance procedure
pursuant to which Optionee (or any other person or persons exercising the
option) shall concurrently provide irrevocable instructions to (i) a
Corporation-designated brokerage firm to effect the immediate sale of the
purchased shares and remit to the Corporation, out of the sale proceeds
available on the settlement date, sufficient funds to cover the aggregate
Exercise Price payable for the purchased shares plus all applicable Federal,
state and local income and employment taxes required to be withheld by the
Corporation by reason of such exercise and (ii) the Corporation to deliver the
certificates for the purchased shares directly to such brokerage firm in order
to complete the sale.
Except to the extent the sale and remittance procedure is
utilized in connection with the option exercise, payment of the Exercise Price
must accompany the Notice of Exercise delivered to the Corporation in connection
with the option exercise.
(Athlete Form)
A-4
(iii) Furnish to the Corporation appropriate documentation
that the person or persons exercising the option (if other than Optionee) have
the right to exercise this option.
(iv) Make appropriate arrangements with the Corporation (or
Parent or Subsidiary employing or retaining Optionee) for the satisfaction of
all Federal, state and local income and employment tax withholding requirements
applicable to the option exercise.
(b) As soon as practical after the Exercise Date, the Corporation
shall issue to or on behalf of Optionee (or any other person or persons
exercising this option) a certificate for the purchased Option Shares, with the
appropriate legends affixed thereto.
(c) In no event may this option be exercised for any fractional
shares.
10. COMPLIANCE WITH LAWS AND REGULATIONS.
(a) The exercise of this option and the issuance of the Option
Shares upon such exercise shall be subject to compliance by the Corporation and
Optionee with all applicable requirements of law relating thereto and with all
applicable regulations of any stock exchange (or over-the-counter market, if
applicable) on which the Common Stock may be listed for trading at the time of
such exercise and issuance.
(b) The inability of the Corporation to obtain approval from any
regulatory body having authority deemed by the Corporation to be necessary to
the lawful issuance and sale of any Common Stock pursuant to this option shall
relieve the Corporation of any liability with respect to the non-issuance or
sale of the Common Stock as to which such approval shall not have been obtained.
The Corporation, however, shall use its best efforts to obtain all such
approvals.
11. SUCCESSORS AND ASSIGNS. Except to the extent otherwise provided in
Paragraphs 3 and 6, the provisions of this Agreement shall inure to the benefit
of, and be binding upon, the Corporation and its successors and assigns and
Optionee, Optionee's assigns, the legal representatives, heirs and legatees of
Optionee's estate and any beneficiaries of this option designated by Optionee.
12. NOTICES. Any notice required to be given or delivered to the
Corporation under the terms of this Agreement shall be in writing and addressed
to the Corporation at its principal corporate offices. Any notice required to be
given or delivered to Optionee shall be in writing and addressed to Optionee at
the address indicated below Optionee's signature line on the Grant Notice. All
notices shall be deemed effective upon personal delivery or upon deposit in the
U.S. mail, postage prepaid and properly addressed to the party to be notified.
13. CONSTRUCTION. This Agreement and the option evidenced hereby are
made and granted pursuant to the Plan and are in all respects limited by and
subject to the terms of the Plan. All decisions of the Plan Administrator with
respect to any question or issue arising under the Plan or this Agreement shall
be conclusive and binding on all persons having an interest in this option.
(Athlete Form)
A-5
14. GOVERNING LAW. The interpretation, performance and enforcement of
this Agreement shall be governed by the laws of the State of California without
resort to that State's conflict-of-laws rules.
15. EXCESS SHARES. If the Option Shares covered by this Agreement
exceed, as of the Grant Date, the number of shares of Common Stock which may
without stockholder approval be issued under the Plan, then this option shall be
void with respect to those excess shares, unless stockholder approval of an
amendment sufficiently increasing the number of shares of Common Stock issuable
under the Plan is obtained in accordance with the provisions of the Plan.
(Athlete Form)
A-6
EXHIBIT A-1
NOTICE OF EXERCISE
I hereby notify Quiksilver, Inc. (the "Corporation") that I elect to
purchase ______________ shares of the Corporation's Common Stock (the "Purchased
Shares") at the option exercise price of $__________ per share (the "Exercise
Price") pursuant to that certain option (the "Option") granted to me under the
Corporation's amended and restated 2000 Stock Incentive Plan on _______________,
_____
Concurrently with the delivery of this Exercise Notice to the
Corporation, I shall hereby pay to the Corporation the Exercise Price for the
Purchased Shares in accordance with the provisions of my agreement with the
Corporation (or other documents) evidencing the Option and shall deliver
whatever additional documents may be required by such agreement as a condition
for exercise. Alternatively, I may utilize the special broker-dealer sale and
remittance procedure specified in my agreement to effect payment of the Exercise
Price.
,
- --------------------------- ----
Date
----------------------------------------
Optionee
Address:
-------------------------------
-------------------------------
-------------------------------
Print name in exact manner it is to
appear on the stock certificate: ----------------------------------------
Address to which certificate is to be ----------------------------------------
sent, if different from address
above: ----------------------------------------
----------------------------------------
Social Security Number: ----------------------------------------
(Athlete Form)
A-7
APPENDIX
The following definitions shall be in effect under the Agreement:
A. AGREEMENT shall mean this Stock Option Agreement.
B. BOARD shall mean the Corporation's Board of Directors.
C. CODE shall mean the Internal Revenue Code of 1986, as amended.
D. COMMON STOCK shall mean shares of the Corporation's common stock.
E. CORPORATE TRANSACTION shall mean either of the following
stockholder-approved transactions to which the Corporation is a party:
(i) a merger or consolidation in which securities possessing more
than fifty percent (50%) of the total combined voting power of the
Corporation's outstanding securities are transferred to a person or
persons different from the persons holding those securities
immediately prior to such transaction, or
(ii) the sale, transfer or other disposition of all or
substantially all of the Corporation's assets in complete liquidation
or dissolution of the Corporation.
F. CORPORATION shall mean Quiksilver, Inc., a Delaware corporation,
and any successor corporation to all or substantially all of the assets or
voting stock of Quiksilver, Inc. which shall by appropriate action adopt the
Plan.
G. EMPLOYEE shall mean an individual who is in the employ of the
Corporation (or any Parent or Subsidiary), subject to the control and direction
of the employer entity as to both the work to be performed and the manner and
method of performance.
H. EXERCISE DATE shall mean the date on which the option shall have
been exercised in accordance with Paragraph 9 of the Agreement.
I. EXERCISE PRICE shall mean the exercise price per Option Share as
specified in the Grant Notice.
J. EXPIRATION DATE shall mean the date on which the option expires as
specified in the Grant Notice.
K. FAIR MARKET VALUE per share of Common Stock on any relevant date
shall be determined in accordance with the following provisions:
(i) If the Common Stock is at the time listed on any established
stock exchange or over-the-counter market, then the Fair Market Value
shall be the closing selling price per share of Common Stock (or
closing bid, if no sales were reported) as quoted on such exchange or
market, determined by the Plan
(Athlete Form)
A-8
Administrator to be the primary market for the Common Stock, at the
close of regular hours trading (i.e., before after-hours trading
begins) on the date in question as reported in the Wall Street Journal
or such other source as the Plan Administrator deems reliable. If
there is no closing selling price (or closing bid, if no sales were
reported) for the Common Stock on the date in question, then the Fair
Market Value shall be the closing selling price (or closing bid if no
sales were reported) on the last preceding date for which such
quotation exists.
(ii) If the Common Stock is at the time not listed on any
established stock exchange or over-the-counter market, the Fair Market
Value shall be determined by the Board in good faith.
L. FAMILY MEMBER shall mean, with respect to the Optionee, any child,
stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse,
sibling, niece, nephew, mother-in-law, father-in-law, son-in-law,
daughter-in-law, brother-in-law or sister-in-law.
M. GRANT DATE shall mean the date of grant of the option as specified
in the Grant Notice.
N. GRANT NOTICE shall mean the Notice of Grant of Stock Option
accompanying the Agreement, pursuant to which Optionee has been informed of the
basic terms of the option evidenced hereby.
O. INCENTIVE OPTION shall mean an option which satisfies the
requirements of Code Section 422.
P. MISCONDUCT shall mean the commission of any act of fraud,
embezzlement or dishonesty by Optionee, any unauthorized use or disclosure by
Optionee of confidential information or trade secrets of the Corporation (or any
Parent or Subsidiary), or any other intentional misconduct by Optionee adversely
affecting the business or affairs of the Corporation (or any Parent or
Subsidiary) in a material manner. The foregoing definition shall not be deemed
to be inclusive of all the acts or omissions which the Corporation (or any
Parent or Subsidiary) may consider as grounds for the dismissal or discharge of
Optionee or any other individual in the Service of the Corporation (or any
Parent or Subsidiary).
Q. NON-STATUTORY OPTION shall mean an option not intended to satisfy
the requirements of Code Section 422.
R. NOTICE OF EXERCISE shall mean the notice of exercise in
substantially the form attached hereto as Exhibit A-1.
S. OPTION SHARES shall mean the number of shares of Common Stock
subject to the option as specified in the Grant Notice.
T. OPTIONEE shall mean the person to whom the option is granted as
specified in the Grant Notice.
(Athlete Form)
A-9
U. PARENT shall mean any corporation (other than the Corporation) in
an unbroken chain of corporations ending with the Corporation, provided each
corporation in the unbroken chain (other than the Corporation) owns, at the time
of the determination, stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.
V. PERMANENT DISABILITY shall mean the inability of Optionee to engage
in any substantial gainful activity by reason of any medically determinable
physical or mental impairment which is expected to result in death or has lasted
or can be expected to last for a continuous period of twelve (12) months or
more.
W. PLAN shall mean the Corporation's amended and restated 2000 Stock
Incentive Plan.
X. PLAN ADMINISTRATOR shall mean either the Board or a committee of
the Board acting in its capacity as administrator of the Plan.
Y. SERVICE shall mean the Optionee's performance of services for the
Corporation (or any Parent or Subsidiary) in the capacity of an Employee, a
non-employee member of the board of directors or a consultant or independent
advisor. An Optionee shall be deemed to cease Service immediately upon the
occurrence of either of the following events: (i) the Optionee no longer
performs services in any of the foregoing capacities for the Corporation or any
Parent or Subsidiary; or (ii) the entity for which the Optionee is performing
such services ceases to remain a Parent or Subsidiary of the Corporation, even
though the Optionee may subsequently continue to perform services for that
entity.
Z. SUBSIDIARY shall mean any corporation (other than the Corporation)
in an unbroken chain of corporations beginning with the Corporation, provided
each corporation (other than the last corporation) in the unbroken chain owns,
at the time of the determination, stock possessing fifty percent (50%) or more
of the total combined voting power of all classes of stock in one of the other
corporations in such chain.
(Athlete Form)
A-10
QUIKSILVER, INC.
RESTRICTED STOCK AGREEMENT
(NON-EMPLOYEE DIRECTOR AUTOMATIC GRANT - ANNUAL MEETING FORM)
DIRECTOR: _____________________
GRANT DATE: ___________________
NUMBER OF SHARES OF
RESTRICTED STOCK GRANTED: 5,000
THIS RESTRICTED STOCK AGREEMENT (this "Agreement") dated as of
[_______________], 200___ (the "Grant Date") is entered into by and between
Quiksilver, Inc., a Delaware corporation (the "Corporation"), and the Director
specified above, pursuant to the Director Automatic Grant Program under the
Quiksilver, Inc. amended and restated 2000 Stock Incentive Plan (the "Plan").
Capitalized terms used herein and not otherwise defined in the attached Appendix
or elsewhere herein shall have the meaning assigned to such terms in the Plan.
NOW, THEREFORE, in consideration of services rendered and to be
rendered by the Director, and the mutual promises made herein and the mutual
benefits to be derived therefrom, the parties agree as follows:
1. GRANT. Subject to the terms of this Agreement, the Corporation hereby
grants to the Director an aggregate of 5,000 restricted shares of Common Stock
of the Corporation (the "Restricted Stock").
2. VESTING.
(a) Time Vesting. Subject to Section 7 below, the Restricted Stock
shall vest, and restrictions shall lapse, as follows:
(i) 1,666 shares of Restricted Stock shall vest on the earlier of
(x) the first anniversary of the Grant Date or (y) the day immediately preceding
the date of the first annual meeting of stockholders of the Corporation
following the Grant Date;
(ii) 1,666 shares of Restricted Stock shall vest on the earlier
of (x) the second anniversary of the Grant Date or (y) the day immediately
preceding the date of the second annual meeting of stockholders of the
Corporation following the Grant Date;
(iii) 1,667 shares of Restricted Stock shall vest on the earlier
of (x) the third anniversary of the Grant Date or (y) the day immediately
preceding the date of the third annual meeting of stockholders of the
Corporation following the Grant Date.
(Non-Employee Director - Annual Meeting Form)
1
(b) Acceleration of Vesting Upon Corporate Transaction/Change in
Control. All of the Restricted Stock shall accelerate and vest and all
restrictions shall lapse, immediately prior to the effective date of a Corporate
Transaction or Change in Control.
(c) Acceleration of Vesting Upon Death or Permanent Disability. In the
event of the death or Permanent Disability of Director, all of the Restricted
Stock shall accelerate and vest and all restrictions shall lapse immediately
prior to such death or Permanent Disability.
3. CONTINUANCE OF SERVICE. Vesting of the Restricted Stock requires
continued Service of the Director as a member of the Corporation's Board of
Directors from the Grant Date through each applicable vesting date as a
condition to the vesting of the applicable installment of the Restricted Stock
and the rights and benefits under this Agreement. Nothing contained in this
Agreement or the Plan constitutes a service commitment by the Corporation,
confers upon the Director any right to remain in service to the Corporation,
interferes in any way with the right of the Corporation at any time to terminate
such services, or affects the right of the Corporation to increase or decrease
the Director's other compensation or benefits. Nothing in this section, however,
is intended to adversely affect any independent contractual right of the
Director without his or her consent thereto.
4. DIVIDEND AND VOTING RIGHTS. After the Grant Date, the Director shall be
entitled to voting rights and any regular cash dividends with respect to the
shares of Restricted Stock even though such shares are not vested, provided that
such rights shall terminate immediately as to any shares of Restricted Stock
that are forfeited pursuant to Section 7 below.
5. RESTRICTIONS ON TRANSFER. Prior to the time that they have become
vested, neither shares of the Restricted Stock, nor any interest therein, amount
payable in respect thereof, or Restricted Property (as defined in Section 8
hereof) may be sold, assigned, transferred, pledged or otherwise disposed of,
alienated or encumbered (collectively, a "Transfer"), either voluntarily or
involuntarily. The Transfer restrictions in the preceding sentence shall not
apply to (i) transfers to the Corporation, or (ii) transfers by will or the laws
of descent and distribution. After any shares of Restricted Stock have vested,
the Director shall be permitted to Transfer such shares of Restricted Stock,
subject to applicable securities law requirements, the Corporation's insider
trading policies, and other applicable laws and regulations.
6. STOCK CERTIFICATES.
(a) Book Entry Form. The Corporation shall issue the shares of
Restricted Stock either: (i) in certificate form as provided in Section 6(b)
below; or (ii) in book entry form, registered in the name of the Director with
notations regarding the applicable restrictions on transfer imposed under this
Agreement.
(b) Certificates to be Held by Corporation; Legend. Any certificates
representing shares of Restricted Stock that may be delivered to the Director by
the Corporation prior to vesting shall be redelivered to the Corporation to be
held by the Corporation until the restrictions on such shares shall have lapsed
and the shares shall thereby have become vested or the shares represented
thereby have been forfeited hereunder. Such certificates shall bear the
following legend:
(Non-Employee Director - Annual Meeting Form)
2
"The ownership of this certificate and the shares of stock evidenced
hereby and any interest therein are subject to substantial
restrictions on transfer under an Agreement entered into between the
registered owner and Quiksilver, Inc. A copy of such Agreement is on
file in the office of the Secretary of Quiksilver, Inc."
(c) Delivery of Certificates Upon Vesting. Promptly after shares of
Restricted Stock have vested, and all other conditions and restrictions
applicable to such Restricted Stock have been satisfied or lapse (including
satisfaction of any applicable Withholding Taxes), the Corporation shall, as
applicable, either remove the notations on any shares of Restricted Stock issued
in book entry form which have vested or deliver to the Director a certificate or
certificates evidencing the number of shares of Restricted Stock which have
vested (or, in either case, such lesser number of shares as may be permitted
pursuant to Section 9). The Director (or the beneficiary or personal
representative of the Director in the event of the Director's death or Permanent
Disability, as the case may be) shall deliver to the Corporation any
representations or other documents or assurances as the Corporation may deem
desirable to assure compliance with all applicable legal and accounting
requirements. The shares so delivered shall no longer be Restricted Stock
hereunder.
(d) Stock Power; Power of Attorney. Concurrently with the execution
and delivery of this Agreement, the Director shall deliver to the Corporation an
executed stock power in the form attached hereto as Exhibit A, in blank, with
respect to such shares. The Director, by acceptance of the Restricted Stock,
shall be deemed to appoint, and does so appoint by execution of this Agreement,
the Corporation and each of its authorized representatives as the Director's
attorney(s)-in-fact to effect any transfer of unvested forfeited shares of
Restricted Stock (or shares otherwise reacquired by the Corporation hereunder)
to the Corporation as may be required pursuant to the Plan or this Agreement and
to execute such documents as the Corporation or such representatives deem
necessary or advisable in connection with any such transfer.
7. EFFECT OF TERMINATION OF SERVICE. Subject to earlier vesting as provided
in Section 2 hereof, if the Director ceases to provide Service to the
Corporation as a member of the Corporation's Board of Directors, the Director's
shares of Restricted Stock (and related Restricted Property as defined in
Section 8 hereof) shall be forfeited to the Corporation to the extent such
shares have not become vested pursuant to Section 2 upon the date the Director's
Service as a member of the Board of Directors terminates (the "Severance Date"),
regardless of the reason for such termination (whether with or without cause,
voluntarily or involuntarily). Upon the occurrence of any forfeiture of shares
of Restricted Stock hereunder, such unvested, forfeited shares and related
Restricted Property shall be automatically transferred to the Corporation,
without any other action by the Director. No additional consideration shall be
paid by the Corporation with respect to such transfer. The Corporation may
exercise its powers under Section 6(d) hereof and take any other action
necessary or advisable to evidence such transfer. The Director shall deliver any
additional documents of transfer that the Corporation may request to confirm the
transfer of such unvested, forfeited shares and related Restricted Property to
the Corporation.
(Non-Employee Director - Annual Meeting Form)
3
8. ADJUSTMENTS UPON SPECIFIED EVENTS. If any change is made to the Common
Stock by reason of any stock split, stock dividend, recapitalization,
combination of shares, exchange of shares or other change affecting the
outstanding Common Stock as a class, appropriate adjustment shall be made to the
number and/or class of securities in effect under this Agreement. Such
adjustments to the outstanding Restricted Stock are to be effected in a manner
which shall preclude the enlargement or dilution of rights and benefits under
this Agreement. The adjustments determined by the Corporation shall be final,
binding and conclusive. If any adjustment shall be made pursuant to the
foregoing or any dividend other than a regular cash dividend is declared and the
shares of Restricted Stock are not fully vested upon such event or prior
thereto, the restrictions applicable to such shares of Restricted Stock shall
continue in effect with respect to any consideration or other securities (the
"Restricted Property" and, for the purposes of this Agreement, "Restricted
Stock" shall include "Restricted Property," unless the context otherwise
requires) received in respect of such Restricted Stock. Such Restricted Property
shall vest at such times and in such proportion as the shares of Restricted
Stock to which the Restricted Property is attributable vest, or would have
vested pursuant to the terms hereof if such shares of Restricted Stock had
remained outstanding.
9. TAXES.
(a) Tax Withholding. The Corporation shall be entitled to require a
cash payment by or on behalf of the Director and/or to deduct from other
compensation payable to the Director any sums required with respect to
Withholding Taxes. Alternatively, the Director or other person in whom the
Restricted Stock vests may irrevocably elect, in such manner and at such time or
times prior to any applicable tax date as may be permitted or required under
rules established by the Corporation, to have the Corporation withhold and
reacquire shares of Restricted Stock at their Fair Market Value at the time of
vesting to satisfy all or part of the minimum Withholding Taxes of the
Corporation with respect to such vesting. Any election to have shares so held
back and reacquired shall be subject to such rules and procedures, which may
include prior approval of the Corporation, as the Corporation may impose, and
shall not be available if the Director makes or has made an election pursuant to
Section 83(b) of the Code with respect to such Restricted Stock.
(b) Tax Consequences to Director. Director acknowledges that the
issuance and the vesting of the Restricted Stock may have significant and
adverse tax consequences for Director and that Director has been advised by the
Corporation to review the Questions and Answers on Federal Income Tax
Consequences portion of the Corporation's Stock Plan Summary and Prospectus and
to consult Director's personal tax advisor regarding the consequences of the
issuance and vesting of the Restricted Stock to Director.
10. NOTICES. Any notice to be given under the terms of this Agreement shall
be in writing and addressed to the Corporation at its principal office to the
attention of the Secretary, and to the Director at the Director's last address
reflected on the Corporation's records. Any notice shall be delivered in person
or shall be enclosed in a properly sealed envelope, addressed as aforesaid,
registered or certified, and deposited (postage and registry or certification
fee prepaid) in a post office or branch office regularly maintained by the
United States Government. Any such notice shall be given only when received, but
shall be deemed to have been duly given five business days after the date mailed
in accordance with the foregoing provisions of this Section 10.
(Non-Employee Director - Annual Meeting Form)
4
11. PLAN. The Restricted Stock and all rights of the Director under this
Agreement are subject to the terms and conditions of the provisions of the Plan,
incorporated herein by reference. The Director agrees to be bound by the terms
of the Plan and this Agreement. The Director acknowledges having read and
understanding the Plan, the Plan Summary and Prospectus for the Plan, and this
Agreement.
12. ENTIRE AGREEMENT. This Agreement and the Plan together constitute the
entire agreement and supersede all prior understandings and agreements, written
or oral, of the parties hereto with respect to the subject matter hereof. The
Plan and this Agreement may be amended pursuant to Section 6.3 of the Plan. Such
amendment must be in writing and signed by the Corporation. The Corporation may,
however, unilaterally waive any provision hereof in writing to the extent such
waiver does not adversely affect the interests of the Director hereunder, but no
such waiver shall operate as or be construed to be a subsequent waiver of the
same provision or a waiver of any other provision hereof.
13. COUNTERPARTS. This Agreement may be executed simultaneously in any
number of counterparts, each of which shall be deemed an original but all of
which together shall constitute one and the same instrument.
14. SECTION HEADINGS. The section headings of this Agreement are for
convenience of reference only and shall not be deemed to alter or affect any
provision hereof.
15. GOVERNING LAW. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Delaware without regard to
conflict of law principles thereunder.
[Signature page follows]
(Non-Employee Director - Annual Meeting Form)
5
IN WITNESS WHEREOF, the Corporation has caused this Agreement to be
executed on its behalf by a duly authorized officer and the Director has
hereunto set his or her hand as of the date and year first above written.
QUIKSILVER, INC., A DELAWARE CORPORATION
By:
------------------------------------
Print Name:
----------------------------
Its:
-----------------------------------
DIRECTOR
----------------------------------------
Signature
----------------------------------------
Print Name
(Non-Employee Director - Annual Meeting Form)
6
APPENDIX
The following definitions shall be in effect under the Agreement:
A. "BOARD" shall mean the Corporation's Board of Directors.
B. "CHANGE IN CONTROL" shall mean a change in ownership or control of
the Corporation effected through either of the following transactions.
(i) the acquisition, directly or indirectly, by any person or
related group of persons (other than the Corporation or a person that directly
controls, is controlled by, or is under common control with, the Corporation),
of beneficial ownership (within the meaning of Rule 13d-3 of the 1934 Act) of
securities possessing more than fifty percent (50%) of the total combined voting
power of the Corporation's outstanding securities pursuant to a tender or
exchange offer made directly to the Corporation's stockholders, or
(ii) a change in the composition of the Board over a period of
thirty-six (36) consecutive months or less such that a majority of the Board
members ceases, by reason of one or more contested elections for Board
membership, to be comprised of individuals who either (A) have been Board
members continuously since the beginning of such period or (b) have been elected
or nominated for election as Board members during such period by at least a
majority of the Board members described in clause (A) who were still in office
at the time the Board approved such election or nomination.
C. "COMMON STOCK" shall mean the Corporation's common stock.
D. "CORPORATE TRANSACTION" shall mean either of the following
stockholder-approved transactions to which the Corporation is a party:
(i) a merger or consolidation in which securities possessing more
than fifty percent (50%) of the total combined voting power of the Corporation's
outstanding securities are transferred to a person or persons different from the
persons holding those securities immediately prior to such transaction, or
(ii) the sale, transfer or other disposition of all or
substantially all of the Corporation's assets in complete liquidation or
dissolution of the Corporation.
E. "FAIR MARKET VALUE" per share of Common Stock on any relevant date
shall be determined in accordance with the following provisions:
(i) If the Common Stock is at the time listed on any established
stock exchange or over-the-counter market, then the Fair Market Value shall be
the closing selling price per share of Common Stock (or closing bid, if no sales
were reported) as quoted on such exchange or market, determined by the Plan
Administrator to be the primary market for the Common Stock, at the close of
regular hours trading (i.e., before after-hours trading begins) on the date in
question as reported in the Wall Street Journal or such other source as the Plan
Administrator deems reliable. If there is no closing selling price (or closing
bid, if no sales were reported) for the Common Stock on the date in question,
then the Fair Market Value shall be the closing selling price (or closing bid if
no sales were reported) on the last preceding date for which such quotation
exists.
(Non-Employee Director - Annual Meeting Form)
7
(ii) If the Common Stock is at the time not listed on any
established stock exchange or over-the-counter market, the Fair Market Value
shall be determined by the Board in good faith.
F. "PERMANENT DISABILITY" or "PERMANENTLY DISABLED" shall mean the
inability of the Director to perform his or her usual duties as a Board member
by reason of any medically determinable physical or mental impairment expected
to result in death or to be of continuous duration of twelve (12) months or
more.
G. "SERVICE" shall mean the performance of services for the
Corporation by a person in the capacity of a member of the Corporation's Board
of Directors.
H. "WITHHOLDING TAXES" shall mean the federal, state and local income
and employment withholding taxes to which the Director may become subject in
connection with the issuance or vesting of shares of Restricted Stock or upon
the disposition of shares acquired pursuant to this Agreement.
(Non-Employee Director - Annual Meeting Form)
8
CONSENT OF SPOUSE
In consideration of the execution of the foregoing Restricted Stock
Agreement by Quiksilver, Inc., I, ___________________________, the spouse of the
Director therein named, do hereby join with my spouse in executing the foregoing
Restricted Stock Agreement and do hereby agree to be bound by all of the terms
and provisions thereof and of the Plan.
Dated: ________________, 200___
----------------------------------------
Signature of Spouse
----------------------------------------
Print Name
(Non-Employee Director - Annual Meeting Form)
9
STOCK POWER
FOR VALUE RECEIVED and pursuant to that certain Restricted Stock
Agreement between Quiksilver, Inc., a Delaware corporation (the "Corporation"),
and the individual named below (the "Individual") dated as of ______________,
200___, the Individual, hereby sells, assigns and transfers to the Corporation,
an aggregate __________ shares of Common Stock of the Corporation, standing in
the Individual's name on the books of the Corporation and represented by stock
certificate number(s) __________ to which this instrument is attached, and
hereby irrevocably constitutes and appoints ________________________ as his or
her attorney in fact and agent to transfer such shares on the books of the
Corporation, with full power of substitution in the premises.
Dated ,
-------------- ----
----------------------------------------
Signature
----------------------------------------
Print Name
(Instruction: Please do not fill in any blanks other than the signature
line. The purpose of the assignment is to enable the Corporation to exercise its
sale/purchase option set forth in the Restricted Stock Agreement without
requiring additional signatures on the part of the Individual.)
(Non-Employee Director - Annual Meeting Form)
10
QUIKSILVER, INC.
RESTRICTED STOCK AGREEMENT
(NON-EMPLOYEE DIRECTOR AUTOMATIC GRANT - INITIAL GRANT FORM)
DIRECTOR: _____________________
GRANT DATE: ___________________
NUMBER OF SHARES OF
RESTRICTED STOCK GRANTED: 5,000
THIS RESTRICTED STOCK AGREEMENT (this "Agreement") dated as of
[_______________], 200___ (the "Grant Date") is entered into by and between
Quiksilver, Inc., a Delaware corporation (the "Corporation"), and the Director
specified above, pursuant to the Director Automatic Grant Program under the
Quiksilver, Inc. amended and restated 2000 Stock Incentive Plan (the "Plan").
Capitalized terms used herein and not otherwise defined in the attached Appendix
or elsewhere herein shall have the meaning assigned to such terms in the Plan.
NOW, THEREFORE, in consideration of services rendered and to be
rendered by the Director, and the mutual promises made herein and the mutual
benefits to be derived therefrom, the parties agree as follows:
16. GRANT. Subject to the terms of this Agreement, the Corporation hereby
grants to the Director an aggregate of 5,000 restricted shares of Common Stock
of the Corporation (the "Restricted Stock").
17. VESTING.
(a) Time Vesting. Subject to Section 7 below, the Restricted Stock
shall vest, and restrictions shall lapse, as follows:
(i) 1,666 shares of Restricted Stock shall vest on the first
anniversary of the Grant Date;
(ii) 1,666 shares of Restricted Stock shall vest on the second
anniversary of the Grant Date;
(iii) 1,667 shares of Restricted Stock shall vest on the third
anniversary of the Grant Date.
(b) Acceleration of Vesting Upon Corporate Transaction/Change in
Control. All of the Restricted Stock shall accelerate and vest and all
restrictions shall lapse, immediately prior to the effective date of a Corporate
Transaction or Change in Control.
(Non-Employee Director - Initial Grant Form)
1
(c) Acceleration of Vesting Upon Death or Permanent Disability. In the
event of the death or Permanent Disability of Director, all of the Restricted
Stock shall accelerate and vest and all restrictions shall lapse immediately
prior to such death or Permanent Disability.
18. CONTINUANCE OF SERVICE. Vesting of the Restricted Stock requires
continued Service of the Director as a member of the Corporation's Board of
Directors from the Grant Date through each applicable vesting date as a
condition to the vesting of the applicable installment of the Restricted Stock
and the rights and benefits under this Agreement. Nothing contained in this
Agreement or the Plan constitutes a service commitment by the Corporation,
confers upon the Director any right to remain in service to the Corporation,
interferes in any way with the right of the Corporation at any time to terminate
such services, or affects the right of the Corporation to increase or decrease
the Director's other compensation or benefits. Nothing in this section, however,
is intended to adversely affect any independent contractual right of the
Director without his or her consent thereto.
19. DIVIDEND AND VOTING RIGHTS. After the Grant Date, the Director shall be
entitled to voting rights and any regular cash dividends with respect to the
shares of Restricted Stock even though such shares are not vested, provided that
such rights shall terminate immediately as to any shares of Restricted Stock
that are forfeited pursuant to Section 7 below.
20. RESTRICTIONS ON TRANSFER. Prior to the time that they have become
vested, neither shares of the Restricted Stock, nor any interest therein, amount
payable in respect thereof, or Restricted Property (as defined in Section 8
hereof) may be sold, assigned, transferred, pledged or otherwise disposed of,
alienated or encumbered (collectively, a "Transfer"), either voluntarily or
involuntarily. The Transfer restrictions in the preceding sentence shall not
apply to (i) transfers to the Corporation, or (ii) transfers by will or the laws
of descent and distribution. After any shares of Restricted Stock have vested,
the Director shall be permitted to Transfer such shares of Restricted Stock,
subject to applicable securities law requirements, the Corporation's insider
trading policies, and other applicable laws and regulations.
21. STOCK CERTIFICATES.
(a) Book Entry Form. The Corporation shall issue the shares of
Restricted Stock either: (i) in certificate form as provided in Section 6(b)
below; or (ii) in book entry form, registered in the name of the Director with
notations regarding the applicable restrictions on transfer imposed under this
Agreement.
(b) Certificates to be Held by Corporation; Legend. Any certificates
representing shares of Restricted Stock that may be delivered to the Director by
the Corporation prior to vesting shall be redelivered to the Corporation to be
held by the Corporation until the restrictions on such shares shall have lapsed
and the shares shall thereby have become vested or the shares represented
thereby have been forfeited hereunder. Such certificates shall bear the
following legend:
(Non-Employee Director - Initial Grant Form)
2
"The ownership of this certificate and the shares of stock evidenced
hereby and any interest therein are subject to substantial
restrictions on transfer under an Agreement entered into between the
registered owner and Quiksilver, Inc. A copy of such Agreement is on
file in the office of the Secretary of Quiksilver, Inc."
(c) Delivery of Certificates Upon Vesting. Promptly after shares of
Restricted Stock have vested, and all other conditions and restrictions
applicable to such Restricted Stock have been satisfied or lapse (including
satisfaction of any applicable Withholding Taxes), the Corporation shall, as
applicable, either remove the notations on any shares of Restricted Stock issued
in book entry form which have vested or deliver to the Director a certificate or
certificates evidencing the number of shares of Restricted Stock which have
vested (or, in either case, such lesser number of shares as may be permitted
pursuant to Section 9). The Director (or the beneficiary or personal
representative of the Director in the event of the Director's death or Permanent
Disability, as the case may be) shall deliver to the Corporation any
representations or other documents or assurances as the Corporation may deem
desirable to assure compliance with all applicable legal and accounting
requirements. The shares so delivered shall no longer be Restricted Stock
hereunder.
(d) Stock Power; Power of Attorney. Concurrently with the execution
and delivery of this Agreement, the Director shall deliver to the Corporation an
executed stock power in the form attached hereto as Exhibit A, in blank, with
respect to such shares. The Director, by acceptance of the Restricted Stock,
shall be deemed to appoint, and does so appoint by execution of this Agreement,
the Corporation and each of its authorized representatives as the Director's
attorney(s)-in-fact to effect any transfer of unvested forfeited shares of
Restricted Stock (or shares otherwise reacquired by the Corporation hereunder)
to the Corporation as may be required pursuant to the Plan or this Agreement and
to execute such documents as the Corporation or such representatives deem
necessary or advisable in connection with any such transfer.
22. EFFECT OF TERMINATION OF SERVICE. Subject to earlier vesting as
provided in Section 2 hereof, if the Director ceases to provide Service to the
Corporation as a member of the Corporation's Board of Directors, the Director's
shares of Restricted Stock (and related Restricted Property as defined in
Section 8 hereof) shall be forfeited to the Corporation to the extent such
shares have not become vested pursuant to Section 2 upon the date the Director's
Service as a member of the Board of Directors terminates (the "Severance Date"),
regardless of the reason for such termination (whether with or without cause,
voluntarily or involuntarily). Upon the occurrence of any forfeiture of shares
of Restricted Stock hereunder, such unvested, forfeited shares and related
Restricted Property shall be automatically transferred to the Corporation,
without any other action by the Director. No additional consideration shall be
paid by the Corporation with respect to such transfer. The Corporation may
exercise its powers under Section 6(d) hereof and take any other action
necessary or advisable to evidence such transfer. The Director shall deliver any
additional documents of transfer that the Corporation may request to confirm the
transfer of such unvested, forfeited shares and related Restricted Property to
the Corporation.
(Non-Employee Director - Initial Grant Form)
3
23. ADJUSTMENTS UPON SPECIFIED EVENTS. If any change is made to the Common
Stock by reason of any stock split, stock dividend, recapitalization,
combination of shares, exchange of shares or other change affecting the
outstanding Common Stock as a class, appropriate adjustment shall be made to the
number and/or class of securities in effect under this Agreement. Such
adjustments to the outstanding Restricted Stock are to be effected in a manner
which shall preclude the enlargement or dilution of rights and benefits under
this Agreement. The adjustments determined by the Corporation shall be final,
binding and conclusive. If any adjustment shall be made pursuant to the
foregoing or any dividend other than a regular cash dividend is declared and the
shares of Restricted Stock are not fully vested upon such event or prior
thereto, the restrictions applicable to such shares of Restricted Stock shall
continue in effect with respect to any consideration or other securities (the
"Restricted Property" and, for the purposes of this Agreement, "Restricted
Stock" shall include "Restricted Property," unless the context otherwise
requires) received in respect of such Restricted Stock. Such Restricted Property
shall vest at such times and in such proportion as the shares of Restricted
Stock to which the Restricted Property is attributable vest, or would have
vested pursuant to the terms hereof if such shares of Restricted Stock had
remained outstanding.
24. TAXES.
(a) Tax Withholding. The Corporation shall be entitled to require a
cash payment by or on behalf of the Director and/or to deduct from other
compensation payable to the Director any sums required with respect to
Withholding Taxes. Alternatively, the Director or other person in whom the
Restricted Stock vests may irrevocably elect, in such manner and at such time or
times prior to any applicable tax date as may be permitted or required under
rules established by the Corporation, to have the Corporation withhold and
reacquire shares of Restricted Stock at their Fair Market Value at the time of
vesting to satisfy all or part of the minimum Withholding Taxes of the
Corporation with respect to such vesting. Any election to have shares so held
back and reacquired shall be subject to such rules and procedures, which may
include prior approval of the Corporation, as the Corporation may impose, and
shall not be available if the Director makes or has made an election pursuant to
Section 83(b) of the Code with respect to such Restricted Stock.
(b) Tax Consequences to Director. Director acknowledges that the
issuance and the vesting of the Restricted Stock may have significant and
adverse tax consequences for Director and that Director has been advised by the
Corporation to review the Questions and Answers on Federal Income Tax
Consequences portion of the Corporation's Stock Plan Summary and Prospectus and
to consult Director's personal tax advisor regarding the consequences of the
issuance and vesting of the Restricted Stock to Director.
25. NOTICES. Any notice to be given under the terms of this Agreement shall
be in writing and addressed to the Corporation at its principal office to the
attention of the Secretary, and to the Director at the Director's last address
reflected on the Corporation's records. Any notice shall be delivered in person
or shall be enclosed in a properly sealed envelope, addressed as aforesaid,
registered or certified, and deposited (postage and registry or certification
fee prepaid) in a post office or branch office regularly maintained by the
United States Government. Any such notice shall be given only when received, but
shall be deemed to have been duly given five business days after the date mailed
in accordance with the foregoing provisions of this Section 10.
(Non-Employee Director - Initial Grant Form)
4
26. PLAN. The Restricted Stock and all rights of the Director under this
Agreement are subject to the terms and conditions of the provisions of the Plan,
incorporated herein by reference. The Director agrees to be bound by the terms
of the Plan and this Agreement. The Director acknowledges having read and
understanding the Plan, the Plan Summary and Prospectus for the Plan, and this
Agreement.
27. ENTIRE AGREEMENT. This Agreement and the Plan together constitute the
entire agreement and supersede all prior understandings and agreements, written
or oral, of the parties hereto with respect to the subject matter hereof. The
Plan and this Agreement may be amended pursuant to Section 6.3 of the Plan. Such
amendment must be in writing and signed by the Corporation. The Corporation may,
however, unilaterally waive any provision hereof in writing to the extent such
waiver does not adversely affect the interests of the Director hereunder, but no
such waiver shall operate as or be construed to be a subsequent waiver of the
same provision or a waiver of any other provision hereof.
28. COUNTERPARTS. This Agreement may be executed simultaneously in any
number of counterparts, each of which shall be deemed an original but all of
which together shall constitute one and the same instrument.
29. SECTION HEADINGS. The section headings of this Agreement are for
convenience of reference only and shall not be deemed to alter or affect any
provision hereof.
30. GOVERNING LAW. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Delaware without regard to
conflict of law principles thereunder.
[Signature page follows]
(Non-Employee Director - Initial Grant Form)
5
IN WITNESS WHEREOF, the Corporation has caused this Agreement to be
executed on its behalf by a duly authorized officer and the Director has
hereunto set his or her hand as of the date and year first above written.
QUIKSILVER, INC., A DELAWARE CORPORATION
By:
------------------------------------
Print Name:
----------------------------
Its:
-----------------------------------
DIRECTOR
----------------------------------------
Signature
----------------------------------------
Print Name
(Non-Employee Director - Initial Grant Form)
6
APPENDIX
The following definitions shall be in effect under the Agreement:
I. "BOARD" shall mean the Corporation's Board of Directors.
J. "CHANGE IN CONTROL" shall mean a change in ownership or control of
the Corporation effected through either of the following transactions.
(i) the acquisition, directly or indirectly, by any person or
related group of persons (other than the Corporation or a person that directly
controls, is controlled by, or is under common control with, the Corporation),
of beneficial ownership (within the meaning of Rule 13d-3 of the 1934 Act) of
securities possessing more than fifty percent (50%) of the total combined voting
power of the Corporation's outstanding securities pursuant to a tender or
exchange offer made directly to the Corporation's stockholders, or
(ii) a change in the composition of the Board over a period of
thirty-six (36) consecutive months or less such that a majority of the Board
members ceases, by reason of one or more contested elections for Board
membership, to be comprised of individuals who either (A) have been Board
members continuously since the beginning of such period or (b) have been elected
or nominated for election as Board members during such period by at least a
majority of the Board members described in clause (A) who were still in office
at the time the Board approved such election or nomination.
K. "COMMON STOCK" shall mean the Corporation's common stock.
L. "CORPORATE TRANSACTION" shall mean either of the following
stockholder-approved transactions to which the Corporation is a party:
(i) a merger or consolidation in which securities possessing more
than fifty percent (50%) of the total combined voting power of the Corporation's
outstanding securities are transferred to a person or persons different from the
persons holding those securities immediately prior to such transaction, or
(ii) the sale, transfer or other disposition of all or
substantially all of the Corporation's assets in complete liquidation or
dissolution of the Corporation.
M. "FAIR MARKET VALUE" per share of Common Stock on any relevant date
shall be determined in accordance with the following provisions:
(i) If the Common Stock is at the time listed on any established
stock exchange or over-the-counter market, then the Fair Market Value shall be
the closing selling price per share of Common Stock (or closing bid, if no sales
were reported) as quoted on such exchange or market, determined by the Plan
Administrator to be the primary market for the Common Stock, at the close of
regular hours trading (i.e., before after-hours trading begins) on the date in
question as reported in the Wall Street Journal or such other source as the Plan
Administrator deems reliable. If there is no closing selling price (or closing
bid, if no sales were reported) for the Common Stock on the date in question,
then the Fair Market Value shall be the closing selling price (or closing bid if
no sales were reported) on the last preceding date for which such quotation
exists.
(Non-Employee Director - Initial Grant Form)
7
(ii) If the Common Stock is at the time not listed on any
established stock exchange or over-the-counter market, the Fair Market Value
shall be determined by the Board in good faith.
N. "PERMANENT DISABILITY" or "PERMANENTLY DISABLED" shall mean the
inability of the Director to perform his or her usual duties as a Board member
by reason of any medically determinable physical or mental impairment expected
to result in death or to be of continuous duration of twelve (12) months or
more.
O. "SERVICE" shall mean the performance of services for the
Corporation by a person in the capacity of a member of the Corporation's Board
of Directors.
P. "WITHHOLDING TAXES" shall mean the federal, state and local income
and employment withholding taxes to which the Director may become subject in
connection with the issuance or vesting of shares of Restricted Stock or upon
the disposition of shares acquired pursuant to this Agreement.
(Non-Employee Director - Initial Grant Form)
8
CONSENT OF SPOUSE
In consideration of the execution of the foregoing Restricted Stock
Agreement by Quiksilver, Inc., I, ___________________________, the spouse of the
Director therein named, do hereby join with my spouse in executing the foregoing
Restricted Stock Agreement and do hereby agree to be bound by all of the terms
and provisions thereof and of the Plan.
Dated: , 200
---------------- ---
----------------------------------------
Signature of Spouse
----------------------------------------
Print Name
(Non-Employee Director - Initial Grant Form)
9
STOCK POWER
FOR VALUE RECEIVED and pursuant to that certain Restricted Stock
Agreement between Quiksilver, Inc., a Delaware corporation (the "Corporation"),
and the individual named below (the "Individual") dated as of ______________,
200___, the Individual, hereby sells, assigns and transfers to the Corporation,
an aggregate __________ shares of Common Stock of the Corporation, standing in
the Individual's name on the books of the Corporation and represented by stock
certificate number(s) __________ to which this instrument is attached, and
hereby irrevocably constitutes and appoints ________________________ as his or
her attorney in fact and agent to transfer such shares on the books of the
Corporation, with full power of substitution in the premises.
Dated ,
------------- ----
----------------------------------------
Signature
----------------------------------------
Print Name
(Instruction: Please do not fill in any blanks other than the signature line.
The purpose of the assignment is to enable the Corporation to exercise its
sale/purchase option set forth in the Restricted Stock Agreement without
requiring additional signatures on the part of the Individual.)
(Non-Employee Director - Initial Grant Form)
10