COLUMBIA SPORTSWEAR COMPANY
1997 STOCK INCENTIVE PLAN, AS AMENDED
1. PURPOSE. The purpose of this Stock Incentive Plan (the "Plan") is
to enable Columbia Sportswear Company (the "Company") to attract and retain
the services of (1) selected employees, officers and directors of the Company
and (2) selected nonemployee agents, consultants, advisors and independent
contractors of the Company.
2. SHARES SUBJECT TO THE PLAN. Subject to adjustment as provided
below and in SECTION 13, the shares to be offered under the Plan shall
consist of Common Stock of the Company, and the total number of shares of
Common Stock that may be issued under the Plan shall not exceed 2,500,000
shares. The shares issued under the Plan may be authorized and unissued
shares or reacquired shares. If an option, stock appreciation right or
performance unit granted under the Plan expires, terminates or is cancelled,
the unissued shares subject to such option, stock appreciation right or
performance unit shall again be available under the Plan. If shares sold or
awarded as a bonus under the Plan are forfeited to or repurchased by the
Company, the number of shares forfeited or repurchased shall again be
available under the Plan.
3. EFFECTIVE DATE AND DURATION OF PLAN.
(a) EFFECTIVE DATE. The Plan shall become effective as of March
12, 1997. No option, stock appreciation right or performance unit granted
under the Plan shall become exercisable, however, until the Plan is approved
by the affirmative vote of the holders of a majority of the shares of Common
Stock represented at a shareholders meeting at which a quorum is present, and
any such awards under the Plan before such approval shall be conditioned on
and subject to such approval. Subject to this limitation, options, stock
appreciation rights and performance units may be granted and shares may be
awarded as bonuses or sold under the Plan at any time after the effective
date and before termination of the Plan.
(b) DURATION. The Plan shall continue in effect until all shares
available for issuance under the Plan have been issued and all restrictions
on such shares have lapsed. The Board of Directors may suspend or terminate
the Plan at any time except with respect to options, performance units and
shares subject to restrictions then outstanding under the Plan. Termination
shall not affect any outstanding options, any right of the Company to
repurchase shares or the forfeitability of shares issued under the Plan.
4. ADMINISTRATION.
(a) BOARD OF DIRECTORS. The Plan shall be administered by the
Board of Directors of the Company, which shall determine and designate from
time to time the individuals to whom awards shall be made, the amount of the
awards and the other terms and conditions of the awards. Subject to the
provisions of the Plan, the Board of Directors may from time to time adopt
and amend rules and regulations relating to administration of the Plan,
advance the lapse of any waiting period, accelerate any exercise date, waive
or modify any restriction applicable to shares (except those restrictions
imposed by law) and make all other determinations in the judgment of the
Board of Directors necessary or desirable for the administration of the Plan.
The interpretation and construction of the provisions of the Plan and
related agreements by the Board of Directors shall be final and conclusive.
The Board of Directors may correct any defect or supply any omission or
reconcile any inconsistency in the Plan or in any related agreement in the
manner and to the extent it shall deem expedient to carry the Plan into
effect, and it shall be the sole and final judge of such expediency.
(b) COMMITTEE. The Board of Directors may delegate to the
Compensation Committee of the Board of Directors (the "Committee") any or all
authority for administration of the Plan. If authority is delegated to the
Committee, all references to the Board of Directors in the Plan shall mean
and relate to the Committee, except (i) as otherwise provided by the Board of
Directors, (ii) that only the Board of Directors may amend or terminate the
Plan as provided in SECTIONS 3 and 13 and (iii) that if the Committee
includes officers of the Company, the Committee shall not be permitted to
grant options to persons who are officers of the Company.
5. TYPES OF AWARDS; ELIGIBILITY. The Board of Directors may, from
time to time, take the following action, separately or in combination, under
the Plan: (i) grant Incentive Stock Options, as defined in Section 422 of
the Internal Revenue Code of 1986, as amended (the "Code"), as provided in
SECTIONS 6(a) and 6(b); (ii) grant options other than Incentive Stock Options
("Non-Statutory Stock Options") as provided in SECTIONS 6(a) and 6(c); (iii)
award stock bonuses as provided in SECTION 7; (iv) sell shares subject to
restrictions as provided in SECTION 8; (v) grant stock appreciation rights as
provided in SECTION 9; (vi) grant cash bonus rights as provided in SECTION
10; and (vii) grant performance units as provided in SECTION 11. Any such
awards may be made to employees, including employees who are officers or
directors, and to other individuals described in SECTION 1 who the Board of
Directors believes have made or will make an important contribution to the
Company; PROVIDED, HOWEVER, that only employees of the Company shall be
eligible to receive Incentive Stock Options under the Plan. The Board of
Directors shall select the individuals to whom awards shall be made and shall
specify the action taken with respect to each individual to whom an award is
made. At the discretion of the Board of Directors, an individual may be
given an election to surrender an award in exchange for the grant of a new
award. No employee may be granted options or stock appreciation rights under
the Plan for more than an aggregate of 100,000 shares
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of Common Stock in connection with the hiring of the employee or 100,000
shares of Common Stock in any calendar year otherwise.
6. OPTION GRANTS.
(a) GENERAL RULES RELATING TO OPTIONS.
(i) TERMS OF GRANT. The Board of Directors may grant options
under the Plan. With respect to each option grant, the Board of Directors
shall determine the number of shares subject to the option, the option
price, the period of the option, the time or times at which the option may
be exercised and whether the option is an Incentive Stock Option (subject
to the provisions of Section 6(b)) or a Non-Statutory Stock Option. At the
time of the grant of an option or at any time thereafter, the Board of
Directors may provide that an optionee who exercised an option with Common
Stock of the Company shall automatically receive a new option to purchase
additional shares equal to the number of shares surrendered and may specify
the terms and conditions of such new options.
(ii) EXERCISE OF OPTIONS. Except as provided in SECTION
6(a)(iv) or as determined by the Board of Directors, no option granted
under the Plan may be exercised unless at the time of such exercise the
optionee is employed by or in the service of the Company and shall have
been so employed or provided such service continuously since the date the
option was granted. Absence on leave or on account of illness or
disability under rules established by the Board of Directors shall not,
however, be deemed an interruption of employment or service for this
purpose. Unless otherwise determined by the Board of Directors, vesting of
options shall not continue during an absence on leave (including an
extended illness) or on account of disability. Except as provided in
SECTIONS 6(a)(iv) and 12, options granted under the Plan may be exercised
from time to time over the period stated in each option in such amounts and
at such times as shall be prescribed by the Board of Directors, provided
that options shall not be exercised for fractional shares. Unless
otherwise determined by the Board of Directors, if an optionee does not
exercise an option in any one year with respect to the full number of
shares to which the optionee is entitled in that year, the optionee's
rights shall be cumulative and the optionee may purchase those shares in
any subsequent year during the term of the option.
(iii) NONTRANSFERABILITY. Each Incentive Stock Option and,
unless otherwise determined by the Board of Directors, each other option
granted under the Plan by its terms shall be nonassignable and
nontransferable by the optionee, either voluntarily or by operation of law,
except by will or by the laws of descent and distribution of the state or
country of the optionee's domicile at the time of death.
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(iv) TERMINATION OF EMPLOYMENT OR SERVICE.
(A) GENERAL RULE. Unless otherwise determined by the Board
of Directors, in the event an optionee's employment or service with
the Company terminates for any reason other than because of physical
disability or death as provided in SECTIONS 6(a)(iv)(B) and (C), his
or her option may be exercised at any time before the expiration date
of the option or the expiration of 30 days after the date of
termination, whichever is the shorter period, but only if and to the
extent the optionee was entitled to exercise the option at the date of
termination.
(B) TERMINATION BECAUSE OF TOTAL DISABILITY.
Unless otherwise determined by the Board of Directors, in the event an
optionee's employment or service with the Company terminates because
of total disability, his or her option may be exercised at any time
before the expiration date of the option or the expiration of 12
months after the date of termination, whichever is the shorter period,
but only if and to the extent the optionee was entitled to exercise
the option at the date of termination. The term "total disability"
means a medically determinable mental or physical impairment that is
expected to result in death or has lasted or is expected to last for a
continuous period of 12 months or more and that causes the optionee to
be unable, in the opinion of the Company and two independent
physicians, to perform his or her duties as an employee, director,
officer or consultant of the Company and to be engaged in any
substantial gainful activity. Total disability shall be deemed to
have occurred on the first day after the Company and the two
independent physicians have furnished their opinion of total
disability to the Company.
(C) TERMINATION BECAUSE OF DEATH. Unless otherwise
determined by the Board of Directors, in the event of an optionee's
death while employed by or providing service to the Company, his or
her option may be exercised at any time before the expiration date of
the option or the expiration of 12 months after the date of death,
whichever is the shorter period, but only if and to the extent the
optionee was entitled to exercise the option at the date of death and
only by the person or persons to whom the optionee's rights under the
option shall pass by the optionee's will or by the laws of descent and
distribution of the state or country of domicile at the time of death.
(D) AMENDMENT OF EXERCISE PERIOD APPLICABLE TO TERMINATION.
The Board of Directors, at the time of grant or, with respect to an
option that is not an Incentive Stock Option, at any time thereafter,
may extend the 30-day and 12-month exercise periods any length of time
not longer than the original expiration date of the option, and may
increase
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the portion of an option that is exercisable, subject to such
terms and conditions as the Board of Directors may determine.
(E) FAILURE TO EXERCISE OPTION. To the extent that the
option of any deceased optionee or any optionee whose employment or
service terminates is not exercised within the applicable period, all
further rights to purchase shares pursuant to the option shall cease
and terminate.
(v) PURCHASE OF SHARES. Unless the Board of Directors
determines otherwise, shares may be acquired pursuant to an option granted
under the Plan only upon the Company's receipt of written notice from the
optionee of the optionee's intention to exercise, specifying the number of
shares as to which the optionee desires to exercise the option and the date
on which the optionee desires to complete the transaction, and if required
in order to comply with the Securities Act of 1933, as amended, containing
a representation that it is the optionee's present intention to acquire the
shares for investment and not with a view to distribution. Unless the
Board of Directors determines otherwise, on or before the date specified
for completion of the purchase of shares pursuant to an option, the
optionee must have paid the Company the full purchase price of those shares
in cash (including, with the consent of the Board of Directors, cash that
may be the proceeds of a loan from the Company (provided that, with respect
to an Incentive Stock Option, such loan is approved at the time of option
grant)) or, with the consent of the Board of Directors, in whole or in
part, in Common Stock of the Company valued at fair market value,
restricted stock, performance units or other contingent awards denominated
in either stock or cash, promissory notes and other forms of consideration.
The fair market value of Common Stock provided in payment of the purchase
price shall be the closing price of the Common Stock as reported in THE
WALL STREET JOURNAL on the last trading day before the date the option is
exercised if the Common Stock is publicly traded, or such other reported
value of the Common Stock as shall be specified by the Board of Directors.
No shares shall be issued until full payment for the shares has been made.
With the consent of the Board of Directors (which, in the case of an
Incentive Stock Option, shall be given only at the time of grant), an
optionee may request the Company to apply automatically the shares to be
received upon the exercise of a portion of a stock option (even though
stock certificates have not yet been issued) to satisfy the purchase price
for additional portions of the option. Each optionee who has exercised an
option shall, immediately upon notification of the amount due, if any, pay
to the Company in cash amounts necessary to satisfy any applicable federal,
state and local tax withholding requirements. If additional withholding is
or becomes required beyond any amount deposited before delivery of the
certificates, the optionee shall pay such amount to the Company on demand.
If the optionee fails to pay the amount demanded, the Company may withhold
that amount from other amounts payable by the Company to the optionee,
including salary, subject to applicable law. With the consent of the Board
of Directors an optionee may satisfy this obligation, in whole or in part,
by having the Company
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withhold from the shares to be issued upon exercise that number of shares
that would satisfy the withholding amount due or by delivering to the
Company Common Stock to satisfy the withholding amount. Upon the exercise
of an option, the number of shares reserved for issuance under the Plan
shall be reduced by the number of shares issued upon exercise of the
option.
(b) INCENTIVE STOCK OPTIONS. Incentive Stock Options shall be
subject to the following additional terms and conditions:
(i) LIMITATION ON AMOUNT OF GRANTS. If the aggregate fair
market value of stock (determined as of the date the option with respect to
such stock is granted) with respect to which Incentive Stock Options
granted under this Plan (and any other stock incentive plan of the Company
or its parent or subsidiary corporations) are exercisable for the first
time by an employee during any calendar year exceeds $100,000, the portion
of the option or options not exceeding $100,000 will be treated as an
Incentive Stock Option and the portion of the option exceeding $100,000
will be treated as a Non-Statutory Stock Option. The preceding sentence
will be applied by taking options into account in the order in which they
were granted. The Company may designate stock that is treated as acquired
pursuant to exercise of an option that is in part an Incentive Stock Option
and in part a Non-Statutory Stock Option as Incentive Stock Option stock by
issuing a separate certificate for that stock and identifying the
certificate as Incentive Stock Option stock in its stock records. In the
absence of such a designation, each share of stock issued pursuant to
exercise of the option will be treated in part as Incentive Stock Option
stock and in part as Non-Statutory Stock Option stock.
(ii) LIMITATIONS ON GRANTS TO 10 PERCENT SHAREHOLDERS.
An Incentive Stock Option may be granted under the Plan to an employee
possessing more than 10 percent of the total combined voting power of all
classes of stock of the Company only if the option price is at least
110 percent of the fair market value, as described in SECTION 6(b)(iv), of
the Common Stock subject to the option on the date it is granted and the
option by its terms is not exercisable after the expiration of five years
from the date it is granted.
(iii) DURATION OF OPTIONS. Subject to SECTIONS 6(a)(ii) and
6(b)(ii), Incentive Stock Options granted under the Plan shall continue in
effect for the period fixed by the Board of Directors, except that no
Incentive Stock Option shall be exercisable after the expiration of 10
years from the date it is granted.
(iv) OPTION PRICE. The option price per share shall be
determined by the Board of Directors at the time of grant. Except as
provided in SECTION 6(b)(ii), the option price shall not be less than
100 percent of the fair market value of the Common Stock covered by the
Incentive Stock Option at the date the option is granted. The fair market
value shall be deemed to be the closing price of the
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Common Stock as reported in THE WALL STREET JOURNAL on the day before the
date the option is granted if the stock is publicly traded, or, if there
has been no sale on that date, on the last preceding date on which a sale
occurred, or such other value of the Common Stock as shall be specified by
the Board of Directors.
(v) LIMITATION ON TIME OF GRANT. No Incentive Stock Option
shall be granted on or after the 10th anniversary of the effective date of
the Plan.
(vi) CONVERSION OF INCENTIVE STOCK OPTIONS. The Board of
Directors may at any time, without the optionee's consent, convert an
Incentive Stock Option to a Non-Statutory Stock Option.
(c) NON-STATUTORY STOCK OPTIONS. Non-Statutory Stock Options shall
be subject to the following terms and conditions, in addition to those set forth
in SECTION 6(a) above:
(i) OPTION PRICE. The option price for Non-Statutory Stock
Options shall be determined by the Board of Directors at the time of grant
and may be any amount determined by the Board of Directors.
(ii) DURATION OF OPTIONS. Non-Statutory Stock Options granted
under the Plan shall continue in effect for the period fixed by the Board
of Directors.
7. STOCK BONUSES. The Board of Directors may award shares under the
Plan as stock bonuses. Shares awarded as a bonus shall be subject to the
terms, conditions and restrictions determined by the Board of Directors. The
restrictions may include restrictions concerning transferability and
forfeiture of the shares awarded, together with such other restrictions as
may be determined by the Board of Directors. The Board of Directors may
require the recipient to sign an agreement as a condition of the award, but
may not require the recipient to pay any monetary consideration other than
amounts necessary to satisfy tax withholding requirements. The agreement may
contain any terms, conditions, restrictions, representations and warranties
required by the Board of Directors. The certificates representing the shares
awarded shall bear any legends required by the Board of Directors. The
Company may require any recipient of a stock bonus to pay to the Company in
cash upon demand amounts necessary to satisfy any applicable federal, state
or local tax withholding requirements. If the recipient fails to pay the
amount demanded, the Company may withhold that amount from other amounts
payable by the Company to the recipient, including salary, subject to
applicable law. With the consent of the Board of Directors, a recipient may
deliver Common Stock to the Company to satisfy this withholding obligation.
Upon the issuance of a stock bonus, the number of shares reserved for
issuance under the Plan shall be reduced by the number of shares issued.
8. RESTRICTED STOCK. The Board of Directors may issue shares under the
Plan for such consideration (including promissory notes and services) as
determined by the
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Board of Directors. Shares issued under the Plan shall be subject to the
terms, conditions and restrictions determined by the Board of Directors. The
restrictions may include restrictions concerning transferability, repurchase
by the Company and forfeiture of the shares issued, together with such other
restrictions as may be determined by the Board of Directors. All Common
Stock issued pursuant to this SECTION 8 shall be subject to a purchase
agreement, which shall be executed by the Company and the prospective
recipient of the shares before the delivery of certificates representing such
shares to the recipient. The purchase agreement may contain any terms,
conditions, restrictions, representations and warranties required by the
Board of Directors. The certificates representing the shares shall bear any
legends required by the Board of Directors. The Company may require any
purchaser of restricted stock to pay to the Company in cash upon demand
amounts necessary to satisfy any applicable federal, state or local tax
withholding requirements. If the purchaser fails to pay the amount demanded,
the Company may withhold that amount from other amounts payable by the
Company to the purchaser, including salary, subject to applicable law. With
the consent of the Board of Directors, a purchaser may deliver Common Stock
to the Company to satisfy this withholding obligation. Upon the issuance of
restricted stock, the number of shares reserved for issuance under the Plan
shall be reduced by the number of shares issued.
9. STOCK APPRECIATION RIGHTS.
(a) GRANT. Stock appreciation rights may be granted under the Plan
by the Board of Directors, subject to such rules, terms and conditions as the
Board of Directors may determine.
(b) EXERCISE.
(i) Each stock appreciation right shall entitle the holder, upon
exercise, to receive from the Company in exchange therefor an amount equal
in value to the excess of the fair market value on the date of exercise of
one share of Common Stock of the Company over its fair market value on the
date of grant (or, in the case of a stock appreciation right granted in
connection with an option, the excess of the fair market value of one share
of Common Stock of the Company over the option price per share under the
option to which the stock appreciation right relates), multiplied by the
number of shares covered by the stock appreciation right or the option, or
portion thereof, that is surrendered. Payment by the Company upon
exercise of a stock appreciation right may be made in Common Stock valued
at fair market value, in cash or partly in Common Stock and partly in cash,
all as determined by the Board of Directors.
(ii) A stock appreciation right shall be exercisable only at the
time or times established by the Board of Directors. If a stock
appreciation right is granted in connection with an option, the following
rules shall apply: (1) the stock appreciation right shall be exercisable
only to the extent and on the same conditions that the related option may
be exercised; (2) the stock appreciation right shall be
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exercisable only when the fair market value of the stock exceeds the option
price of the related option; (3) the stock appreciation right shall be for
no more than 100 percent of the excess of the fair market value of the
stock at the time of exercise over the option price; (4) upon exercise of
the stock appreciation right, the option or portion thereof to which the
stock appreciation right relates terminates; and (5) upon exercise of the
option, the related stock appreciation right or portion thereof terminates.
(iii) The Board of Directors may withdraw any stock appreciation
right granted under the Plan at any time and may impose any conditions upon
the exercise of a stock appreciation right or adopt rules and regulations
from time to time affecting the rights of holders of stock appreciation
rights. Such rules and regulations may govern the right to exercise stock
appreciation rights granted before adoption or amendment of such rules and
regulations, as well as stock appreciation rights granted thereafter.
(iv) For purposes of this SECTION 9, the fair market value of
the Common Stock shall be determined as of the date the stock appreciation
right is exercised, under the methods set forth in SECTION 6(b)(iv).
(v) No fractional shares shall be issued upon exercise of a
stock appreciation right. In lieu thereof, cash may be paid in an amount
equal to the value of the fraction or, if the Board of Directors shall
determine, the number of shares may be rounded downward to the next whole
share.
(vi) Each stock appreciation right granted in connection with an
Incentive Stock Option, and unless otherwise determined by the Board of
Directors, each other stock appreciation right granted under the Plan by
its terms shall be nonassignable and nontransferable by the holder, either
voluntarily or by operation of law, except by will or by the laws of
descent and distribution of the state or country of the holder's domicile
at the time of death, and each stock appreciation right by its terms shall
be exercisable during the holder's lifetime only by the holder.
(vii) Each participant who has exercised a stock appreciation
right shall, upon notification of the amount due, pay to the Company in
cash amounts necessary to satisfy any applicable federal, state and local
tax withholding requirements. If the participant fails to pay the amount
demanded, the Company may withhold that amount from other amounts payable
by the Company to the participant, including salary, subject to applicable
law. With the consent of the Board of Directors, a participant may satisfy
this obligation, in whole or in part, by having the Company withhold from
any shares to be issued upon exercise that number of shares that would
satisfy the withholding amount due or by delivering Common Stock to the
Company to satisfy the withholding amount.
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(viii) Upon the exercise of a stock appreciation right for
shares, the number of shares reserved for issuance under the Plan shall be
reduced by the number of shares issued. Cash payments of stock
appreciation rights shall not reduce the number of shares of Common Stock
reserved for issuance under the Plan.
10. CASH BONUS RIGHTS.
(a) GRANT. The Board of Directors may grant cash bonus rights under
the Plan in connection with (i) options granted or previously granted,
(ii) stock appreciation rights granted or previously granted, (iii) stock
bonuses awarded or previously awarded and (iv) shares sold or previously sold
under the Plan. Cash bonus rights will be subject to such rules, terms and
conditions as the Board of Directors may determine. Unless otherwise determined
by the Board of Directors, each cash bonus right granted under the Plan by its
terms shall be nonassignable and nontransferable by the holder, either
voluntarily or by operation of law, except by will or by the laws of descent and
distribution of the state or country of the holder's domicile at the time of
death. The payment of a cash bonus shall not reduce the number of shares of
Common Stock reserved for issuance under the Plan.
(b) CASH BONUS RIGHTS IN CONNECTION WITH OPTIONS. A cash bonus right
granted in connection with an option will entitle an optionee to a cash bonus
when the related option is exercised (or terminates in connection with the
exercise of a stock appreciation right related to the option) in whole or in
part if, in the sole discretion of the Board of Directors, the bonus right will
result in a tax deduction that the Company has sufficient taxable income to use.
If an optionee purchases shares upon exercise of an option and does not exercise
a related stock appreciation right, the amount of the bonus, if any, shall be
determined by multiplying the excess of the total fair market value of the
shares to be acquired upon exercise over the total option price for the shares
by the applicable bonus percentage. If the optionee exercises a related stock
appreciation right in connection with the termination of an option, the amount
of the bonus, if any, shall be determined by multiplying the total fair market
value of the shares and cash received pursuant to the exercise of the stock
appreciation right by the applicable bonus percentage. The bonus percentage
applicable to a bonus right, including a previously granted bonus right, may be
changed from time to time at the sole discretion of the Board of Directors but
shall in no event exceed 75 percent.
(c) CASH BONUS RIGHTS IN CONNECTION WITH STOCK BONUS. A cash bonus
right granted in connection with a stock bonus will entitle the recipient to a
cash bonus payable when the stock bonus is awarded or restrictions, if any, to
which the stock is subject lapse. If bonus stock awarded is subject to
restrictions and is repurchased by the Company or forfeited by the holder, the
cash bonus right granted in connection with the stock bonus shall terminate and
may not be exercised. The amount and timing of payment of a cash bonus shall be
determined by the Board of Directors.
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(d) CASH BONUS RIGHTS IN CONNECTION WITH STOCK PURCHASES. A cash
bonus right granted in connection with the purchase of stock pursuant to
SECTION 8 will entitle the recipient to a cash bonus when the shares are
purchased or restrictions, if any, to which the stock is subject lapse. Any
cash bonus right granted in connection with shares purchased pursuant to
SECTION 8 shall terminate and may not be exercised in the event the shares
are repurchased by the Company or forfeited by the holder pursuant to
applicable restrictions. The amount of any cash bonus to be awarded and
timing of payment of a cash bonus shall be determined by the Board of
Directors.
(e) TAXES. The Company shall withhold from any cash bonus paid
pursuant to this SECTION 10 the amount necessary to satisfy any applicable
federal, state and local withholding requirements.
11. PERFORMANCE UNITS. The Board of Directors may grant performance
units consisting of monetary units which may be earned in whole or in part if
the Company achieves certain goals established by the Board of Directors over
a designated period of time, but not in any event more than 10 years. The
goals established by the Board of Directors may include earnings per share,
return on shareholders' equity, return on invested capital and such other
goals as the Board of Directors may establish. In the event that the minimum
performance goal established by the Board of Directors is not achieved at the
conclusion of a period, no payment shall be made to the participants. In the
event the maximum corporate goal is achieved, 100 percent of the monetary
value of the performance units shall be paid to or vested in the
participants. Partial achievement of the maximum goal may result in a
payment or vesting corresponding to the degree of achievement as determined
by the Board of Directors. Payment of an award earned may be in cash or in
Common Stock or a combination of both, and may be made when earned, or vested
and deferred, as the Board of Directors determines. Deferred awards shall
earn interest on the terms and at a rate determined by the Board of
Directors. Unless otherwise determined by the Board of Directors, each
performance unit granted under the Plan by its terms shall be nonassignable
and nontransferable by the holder, either voluntarily or by operation of law,
except by will or by the laws of descent and distribution of the state or
country of the holder's domicile at the time of death. Each participant who
has been awarded a performance unit shall, upon notification of the amount
due, pay to the Company in cash amounts necessary to satisfy any applicable
federal, state and local tax withholding requirements. If the participant
fails to pay the amount demanded, the Company may withhold that amount from
other amounts payable by the Company to the participant, including salary,
subject to applicable law. With the consent of the Board of Directors a
participant may satisfy this obligation, in whole or in part, by having the
Company withhold from any shares to be issued that number of shares that
would satisfy the withholding amount due or by delivering Common Stock to the
Company to satisfy the withholding amount. The payment of a performance unit
in cash shall not reduce the number of shares of Common Stock reserved for
issuance under the Plan. The number of shares reserved for issuance under
the Plan shall be reduced by the number of shares issued upon payment of an
award.
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12. CHANGES IN CAPITAL STRUCTURE.
(a) STOCK SPLITS; STOCK DIVIDENDS. If the outstanding Common
Stock of the Company is hereafter increased or decreased or changed into or
exchanged for a different number or kind of shares or other securities of the
Company by reason of any stock split, combination of shares, dividend payable
in shares, recapitalization or reclassification, appropriate adjustment shall
be made by the Board of Directors in the number and kind of shares available
for grants under the Plan. In addition, the Board of Directors shall make
appropriate adjustment in the number and kind of shares as to which
outstanding options, or portions thereof then unexercised, shall be
exercisable, so that the optionee's proportionate interest before and after
the occurrence of the event is maintained. Notwithstanding the foregoing,
the Board of Directors shall have no obligation to effect any adjustment that
would or might result in the issuance of fractional shares, and any
fractional shares resulting from any adjustment may be disregarded or
provided for in any manner determined by the Board of Directors. Any such
adjustments made by the Board of Directors shall be conclusive.
(b) MERGERS, REORGANIZATIONS, ETC. In the event of a merger,
consolidation, plan of exchange, acquisition of property or stock,
separation, reorganization or liquidation to which the Company is a party or
a sale of all or substantially all of the Company's assets (each, a
"Transaction"), the Board of Directors shall, in its sole discretion and to
the extent possible under the structure of the Transaction, select one of the
following alternatives for treating outstanding options under the Plan:
(i) Outstanding options shall remain in effect in accordance
with their terms.
(ii) Outstanding options shall be converted into options to
purchase stock in the corporation that is the surviving or acquiring
corporation in the Transaction. The amount, type of securities subject
thereto and exercise price of the converted options shall be determined by
the Board of Directors of the Company, taking into account the relative
values of the companies involved in the Transaction and the exchange rate,
if any, used in determining shares of the surviving corporation to be
issued to holders of shares of the Company. Unless otherwise determined by
the Board of Directors, the converted options shall be vested only to the
extent that the vesting requirements relating to options granted hereunder
have been satisfied.
(iii) The Board of Directors shall provide a 30-day period
before the consummation of the Transaction during which outstanding options
may be exercised to the extent then exercisable, and upon the expiration of
that 30-day period, all unexercised options shall immediately terminate.
The Board of Directors may, in its sole discretion, accelerate the
exercisability of options so that they are exercisable in full during that
30-day period.
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(c) DISSOLUTION OF THE COMPANY. In the event of the dissolution of
the Company, options shall be treated in accordance with SECTION 12(b)(iii).
(d) RIGHTS ISSUED BY ANOTHER CORPORATION. The Board of Directors may
also grant options, stock appreciation rights, performance units, stock bonuses
and cash bonuses and issue restricted stock under the Plan having terms,
conditions and provisions that vary from those specified in this Plan, provided
that any such awards are granted in substitution for, or in connection with the
assumption of, existing options, stock appreciation rights, stock bonuses, cash
bonuses, restricted stock and performance units granted, awarded or issued by
another corporation and assumed or otherwise agreed to be provided for by the
Company pursuant to or by reason of a Transaction.
13. AMENDMENT OF PLAN. The Board of Directors may at any time, and from
time to time, modify or amend the Plan in such respects as it shall deem
advisable because of changes in the law while the Plan is in effect or for any
other reason. Except as provided in SECTIONS 6(a)(iv), 9, 10 and 12, however,
no change in an award already granted shall be made without the written consent
of the holder of such award.
14. APPROVALS. The Company's obligations under the Plan are subject to
the approval of state and federal authorities or agencies with jurisdiction in
the matter. The Company will use its best efforts to take steps required by
state or federal law or applicable regulations, including rules and regulations
of the Securities and Exchange Commission and any stock exchange on which the
Company's shares may then be listed, in connection with the grants under the
Plan. The foregoing notwithstanding, the Company shall not be obligated to
issue or deliver Common Stock under the Plan if such issuance or delivery would
violate applicable state or federal securities laws.
15. EMPLOYMENT AND SERVICE RIGHTS. Nothing in the Plan or any award
pursuant to the Plan shall (i) confer upon any employee any right to be
continued in the employment of the Company or interfere in any way with the
Company's right to terminate such employee's employment at any time, for any
reason, with or without cause, or to decrease such employee's compensation or
benefits, or (ii) confer upon any person engaged by the Company any right to be
retained or employed by the Company or to the continuation, extension, renewal
or modification of any compensation, contract or arrangement with or by the
Company.
16. RIGHTS AS A SHAREHOLDER. The recipient of any award under the Plan
shall have no rights as a shareholder with respect to any Common Stock until the
date of issue to the recipient of a stock certificate for those shares. Except
as otherwise expressly provided in the Plan, no adjustment shall be made for
dividends or other rights for which the record date occurs before the date such
stock certificate is issued.
Adopted: March 12, 1997
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