AGREEMENT REGARDING PLAN OF RECAPITALIZATION
This Agreement Regarding Plan of Recapitalization (this "Agreement") is
made this 23rd day of March, 1998, by and among Columbia Sportswear Company,
an Oregon corporation (the "Company"), and the shareholders of the Company
(collectively the "Shareholders" and each individually a "Shareholder")
listed on SCHEDULE A attached hereto.
RECITALS
A. The Shareholders constitute the holders of all of the issued and
outstanding capital stock of the Company. The Shareholders own the shares of
Company voting common stock ("Voting Stock") and Company nonvoting common
stock ("Nonvoting Stock") listed on SCHEDULE A.
B. The Company has filed a registration statement on Form S-1 with the
Securities and Exchange Commission (the "SEC") and contemplates completion of
its initial public offering (the "IPO"). The managing underwriter of the IPO
has recommended, for marketing and pricing reasons, that the Company enter
the public market with a single class voting structure.
C. The Company has received an opinion from Corporate Valuations, Inc.
concluding that an equal dollar value of stock holdings of each Shareholder
will be maintained, both before and after an exchange of existing Nonvoting
Stock for newly issued Voting Stock, if (1) Gertrude Boyle receives in the
exchange 1.0 share of Voting Stock for each 0.58643200 shares of Voting Stock
held by her immediately before the exchange, (2) each other holder of Voting
Stock receives in the exchange 1.0 share of Voting Stock for each 0.93500000
shares of Voting Stock held by the shareholder immediately before the
exchange, and (3) each holder of the Company's Nonvoting Stock receives in
the exchange 1.0 share of Voting Stock for each 1.0 share of Nonvoting Stock
held by the shareholder immediately before the exchange.
D. Gertrude Boyle, who currently owns 1,528,000 shares of Voting
Stock, would receive 2,605,588 shares of Voting Stock upon an exchange in
which she receives 1.0 share of Voting Stock for each 0.58643200 shares of
Voting Stock held by her immediately before the exchange, which represents
1,077,588 shares of Voting Stock more than she currently owns.
E. Timothy P. Boyle, who currently owns 830,800 shares of Voting
Stock, would receive 888,556 shares of Voting Stock upon an exchange in which
he receives 1.0 share of Voting Stock for each 0.93500000 shares of Voting
Stock held by him immediately before the exchange, which represents 57,756
shares of Voting Stock more than he currently owns.
F. Sarah Bany, who currently owns 130,000 shares of Voting Stock,
would receive 139,037 shares of Voting Stock upon an exchange in which she
receives 1.0 share of Voting Stock for each 0.93500000 shares of Voting Stock
held by her immediately before the exchange, which represents 9,037 shares of
Voting Stock more than she currently owns.
G. Don Richard Santorufo, who currently owns 275,948 shares of Voting
Stock, would receive 295,132 shares of Voting Stock upon an exchange in which
he receives 1.0 share of Voting Stock for each 0.93500000 shares of Voting
Stock held by him immediately before the exchange, which represents 19,184
shares of Voting Stock more than he currently owns.
H. The board of directors of the Company (the "Board") has determined
that the plan of recapitalization provided for herein (the "Plan") is fair
to, and in the best interests of, the holders of the Company's capital stock.
Resolutions of the Board are attached hereto as EXHIBIT A.
I. The Board and the Shareholders intend that the holdings of each
Shareholder will revert to their respective holdings of Voting Stock and
Nonvoting Stock that existed prior to the Effective Time (as defined below)
if the registration statement for the IPO is not declared effective by the
SEC on or before April 30, 1998, or if the IPO does not close within 15 days
of the date the registration statement for the IPO is declared effective by
the SEC.
NOW, THEREFORE, in consideration of the mutual promises contained
herein, the parties agree as follows:
1. RECAPITALIZATION. Subject to the terms and conditions of this
Agreement, and in accordance with the provisions of the Oregon Business
Corporation Act (the "OBCA"), at the Effective Time (as defined below) the
capital stock of the Company shall be recapitalized (the "Recapitalization")
as follows:
(a) The Company shall issue to Gertrude Boyle, without any action
on her part, 1,077,588 shares of fully paid and nonassessable Voting Stock.
(b) The Company shall issue to Timothy P. Boyle, without any
action on his part, 57,756 shares of fully paid and nonassessable Voting
Stock.
(c) The Company shall issue to Sarah Bany, without any action on
her part, 9,037 shares of fully paid and nonassessable Voting Stock.
(d) The Company shall issue to Don Richard Santorufo, without any
action on his part, 19,184 shares of fully paid and nonassessable Voting
Stock.
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(e) Pursuant to an amendment to the Company's Restated Articles of
Incorporation, each 1.0 share then outstanding of Nonvoting Stock shall,
without any action on the part of the holder thereof, be recapitalized as,
and converted into, 1.0 fully paid and nonassessable share of Voting Stock of
the Company.
(f) All shares of Voting Stock issued and outstanding immediately
before the Effective Time shall be unaffected and shall remain issued and
outstanding at and after the Effective Time.
2. EFFECTIVE TIME. The Recapitalization shall become effective in
accordance with the Company's Second Amended and Restated Articles of
Incorporation substantially in the form of EXHIBIT B attached hereto with the
Secretary of State of the State of Oregon (the "Restated Articles"). The
Restated Articles shall be filed prior to the time the registration statement
registering the IPO (File No. 333-43199) (the "Registration Statement") is
declared effective by the SEC. The date and time when the Recapitalization
shall become effective is referred to herein as the Effective Time.
3. EXCHANGE. Upon surrender of a certificate or certificates formerly
representing shares of Nonvoting Stock, the holder thereof shall be entitled
to receive in exchange a new certificate evidencing the shares of Voting
Stock into which such shares were recapitalized and converted.
4. RESTRICTED STOCK AND OPTIONS.
(a) The Company shall take such actions as are necessary with
respect to any restricted stock agreement between the Company and any
employee of the Company to provide that the shares issued to any holder of
restricted stock in the Recapitalization shall be issued with regard to, and
shall remain subject to, the restrictions set forth in such restricted stock
agreement.
(b) The Company shall take such actions as are necessary to cause
each option to purchase Nonvoting Stock to be adjusted so that, subject to
the terms and conditions of the Company's Stock Incentive Plan and the terms
and conditions of such options, upon exercise the holder will be entitled to
acquire 1.0 share of Voting Stock for each former right to purchase 1.0 share
of Nonvoting Stock; provided, however, that options to acquire Nonvoting
Stock shall not be adjusted to entitle holders to acquire Voting Stock if the
Registration Statement is not declared effective by the SEC on or before
April 30, 1998 or if the IPO does not close within 15 days of the date the
Registration Statement is declared effective by the SEC.
5. CONDITIONS PRECEDENT TO CONSUMMATION OF THE RECAPITALIZATION. The
consummation of the Recapitalization is subject to the satisfaction or waiver
at or prior to the Effective Time of each of the following conditions:
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(a) LITIGATION. No action, proceeding, or investigation shall
have been instituted or threatened prior to the Effective Time before any
court or administrative body to restrain, enjoin, or otherwise prevent the
consummation of the Plan or this Agreement or the transactions contemplated
hereby or to recover any damages or obtain other relief as a result of the
Plan or this Agreement or the transactions contemplated hereby, and no
restraining order or injunction issued by any court of competent jurisdiction
shall be in effect prohibiting the consummation of the Plan or this Agreement
or any of the transactions contemplated hereby.
(b) ACTIONS AND PROCEEDINGS. All actions, proceedings,
instruments, and documents required to carry out the transactions
contemplated by, or incidental to, the Plan or this Agreement and all other
related legal matters, including the Consent of Shareholders attached hereto
as EXHIBIT C, shall have been completed to the reasonable satisfaction of the
Company, and such counsel shall have been furnished with certified copies of
such corporate actions and proceedings and such other instruments and
documents as such counsel shall have reasonably requested.
6. CONDITION SUBSEQUENT TO CONSUMMATION OF THE RECAPITALIZATION. If
the Registration Statement is not declared effective by the SEC on or before
April 30, 1998, or if the closing of the IPO does not occur within 15 days of
the Registration Statement being declared effective by the SEC, then (1)
Gertrude Boyle will surrender for cancellation 1,077,588 shares of Voting
Stock issued to her pursuant to this Agreement and will exchange shares of
Voting Stock received by her pursuant to the Conversion set forth in the
Restated Articles for an equal number of shares of Nonvoting Stock, (2)
Timothy Boyle will surrender for cancellation 57,756 shares of Voting Stock
issued to him pursuant to this Agreement and will exchange shares of Voting
Stock received by him pursuant to the Conversion set forth in the Restated
Articles for an equal number of shares of Nonvoting Stock, (3) Sarah Bany
will surrender for cancellation 9,037 shares of Voting Stock issued to her
pursuant to this Agreement and will exchange shares of Voting Stock received
by her pursuant to the Conversion set forth in the Restated Articles for an
equal number of shares of Nonvoting Stock, (4) Don Richard Santorufo will
surrender for cancellation 19,184 shares of Voting Stock issued to him
pursuant to this Agreement and will exchange shares of Voting Stock received
by him pursuant to the Conversion set forth in the Restated Articles for an
equal number of shares of Nonvoting Stock and (5) all other parties to this
Agreement will exchange shares of Voting Stock received by them pursuant to
the Conversion set forth in the Restated Articles for an equal number of
shares of Nonvoting Stock (the "Reversion"). All share numbers set forth in
the foregoing sentence shall be appropriately adjusted to reflect the reverse
stock split set forth in the Restated Articles. The parties to this
Agreement agree to take any and all actions necessary or appropriate to cause
the Reversion if the IPO does not close or become effective by the time
specified above.
7. TERMINATION AND ABANDONMENT. This Plan and Agreement may be
terminated and the transactions contemplated hereby may be abandoned by the
Board at
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any time prior to the effectiveness of the Restated Articles in accordance
with Section 2 hereof.
8. SUCCESSORS AND ASSIGNS. The terms and conditions of this Agreement
shall inure to the benefit of and be binding upon the respective successors
and assigns of the parties.
9. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
Company: COLUMBIA SPORTSWEAR COMPANY
By:
-----------------------------------------------
Timothy P. Boyle, President
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SHAREHOLDERS:
/s/
-----------------------------------------------
Gertrude Boyle
/s/
-----------------------------------------------
Gertrude Boyle, Trustee, Gertrude Boyle Trust
#1 u/a dtd 12/15/97
/s/
-----------------------------------------------
Gertrude Boyle, Trustee, Gertrude Boyle Trust
#2 u/a dtd 12/15/97
/s/
-----------------------------------------------
Timothy P. Boyle
/s/
-----------------------------------------------
Mary R. Boyle, Trustee u/a/d September 18,
1997 f/b/o Molly E. Boyle
/s/
-----------------------------------------------
Mary R. Boyle, Trustee u/a/d September 18,
1997 f/b/o Joseph P. Boyle
/s/
-----------------------------------------------
Sarah A. Bany
/s/
-----------------------------------------------
David C. Bany, Trustee of the Bany Family
Trust u/a/d July 31, 1997
/s/
-----------------------------------------------
Sarah A. Bany, Trustee, Sarah A. Bany Trust
#1 u/a dtd 12/15/97
6
/s/
-----------------------------------------------
Sarah A. Bany, Trustee, Sarah A. Bany Trust
#2 u/a dtd 12/15/97
/s/
-----------------------------------------------
Don Richard Santorufo
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SCHEDULE A
Company Shareholders
Voting Non-Voting Total
------ ---------- -----
Gertrude Boyle 1,528,000 2,749,104 4,277,104
Tim Boyle 830,800 15,487,050 16,317,850
Sarah Bany 130,000 3,923,911 4,053,911
Don Santorufo 275,948 2,756,452 3,032,400
David C. Bany, -- 200,000 200,000
Trustee Bany
Family Trust
Mary R. Boyle, -- 105,000 105,000
Trustee fbo
Joseph Boyle
Mary R. Boyle, -- 105,000 105,000
Trustee fbo
Molly Boyle
Sarah A. Bany, -- 557,414 557,414
Trustee Sarah A.
Bany Trust #1 u/a
dtd 12/15/97
Sarah A. Bany, -- 557,414 557,414
Trustee Sarah A.
Bany Trust #2 u/a
dtd 12/15/97
Gertrude Boyle, -- 740,740 740,740
Trustee Gertrude Boyle
Trust #1 u/a dtd
12/15/97
Gertrude Boyle, -- 740,740 740,740
Trustee Gertrude Boyle
Trust #2 u/a dtd
12/15/97
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