<PAGE>
As filed with the Securities and Exchange Commission on July 21, 1997
Registration No. 333-________
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------
COLDWATER CREEK INC.
(Exact name of registrant as specified in its charter)
DELAWARE 82-0419266
(State or other jurisdiction (IRS Employer Identification No.)
of incorporation or organization)
ONE COLDWATER CREEK DRIVE
SANDPOINT, IDAHO 83864
(Address of principal executive offices) (Zip Code)
----------------
1996 STOCK OPTION/STOCK ISSUANCE PLAN
EMPLOYEE STOCK PURCHASE PLAN
(Full title of the Plans)
----------------
DENNIS PENCE,
PRESIDENT, CHIEF EXECUTIVE OFFICER AND
VICE CHAIRMAN OF THE BOARD
COLDWATER CREEK INC.
ONE COLDWATER CREEK DRIVE
SANDPOINT, IDAHO 83864
(208) 263-2266
(Name, address including zip code, and telephone number, including area
code, of agent for service)
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
- -------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------
Proposed Proposed
Title of Maximum Maximum
Securities Amount Offering Aggregate Amount of
to be to be Price Offering Registration
Registered Registered(1) per Share(2) Price(2) Fee
---------- ------------- ------------ -------- ---
<S> <C> <C> <C> <C>
1996 Stock Option/Stock
Issuance Plan:
Options to purchase 1,111,847 N/A N/A N/A
Common Stock
Common Stock, $.01 1,111,847 shares $27.6875 $30,784,264 $9,329
par value
Employee Stock Purchase 750,000 shares $27.6875 $20,765,625 $6,293
Plan
Aggregate Filing Fee: $15,622
- -------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------
</TABLE>
(1) This Registration Statement shall also cover any additional shares of
Common Stock which become issuable under the 1996 Stock Option/Stock
Issuance Plan and/or the Employee Stock Purchase Plan by reason of any
stock dividend, stock split, recapitalization or other similar transaction
effected without the receipt of consideration which results in an increase
in the number of the outstanding shares of Common Stock of Coldwater Creek
Inc.
(2) Calculated solely for purposes of this offering under Rule 457(h) of
the Securities Act of 1933, as amended, on the basis of the average of
the high and low selling prices per share of Common Stock of Coldwater
Creek Inc. on July 14, 1997, as reported by the Nasdaq National
Market.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. INCORPORATION OF DOCUMENTS BY REFERENCE
Coldwater Creek Inc. (the "Registrant") hereby incorporates by
reference into this Registration Statement the following documents
previously filed with the Securities and Exchange Commission (the "SEC"):
(a) The Registrant's Annual Report on Form 10-K for the fiscal year
ended March 1, 1997, filed with the SEC on May 30, 1997;
(b) The Registrant's Quarterly Report on Form 10-Q for the quarter
ended June 30, 1997, filed with the SEC on July 15, 1997; and
(c) The Registrant's Registration Statement No. 00-021915 on Form 8-A
filed with the SEC on December 30, 1996 pursuant to Section 12 of
the Securities Exchange Act of 1934, as amended (the "1934 Act"),
in which there is described the terms, rights and provisions
applicable to the Registrant's outstanding Common Stock.
All reports and definitive proxy or information statements filed
pursuant to Section 13(a), 13(c), 14 or 15(d) of the 1934 Act after the date
of this Registration Statement and prior to the filing of a post-effective
amendment which indicates that all securities offered hereby have been sold
or which deregisters all securities then remaining unsold shall be deemed to
be incorporated by reference into this Registration Statement and to be a
part hereof from the date of filing of such documents. Any statement
contained in a document incorporated or deemed to be incorporated by
reference herein shall be deemed to be modified or superseded for purposes of
this Registration Statement to the extent that a statement contained herein
or in any subsequently filed document which also is deemed to be incorporated
by reference herein modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Registration Statement.
Item 4. DESCRIPTION OF SECURITIES
Not Applicable.
Item 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
Not Applicable.
Item 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Registrant's Certificate of Incorporation limits the liability of
directors to the maximum extent permitted by Delaware law. Delaware law
provides that a director of a corporation will not be personally liable for
monetary damages for breach of such individual's fiduciary duties as a
director except for liability (i) for any breach of such director's duty of
loyalty to the corporation, (ii) for acts or omissions not in good faith or
that involve intentional misconduct or a knowing violation of law, (iii)
for unlawful payments of dividends or unlawful stock repurchases or
redemptions as provided in Section 174 of the Delaware General Corporation
Law, or (iv) for any transaction from which a director derives an improper
personal benefit.
The Registrant's Bylaws provide that the Registrant will indemnify its
directors and may indemnify its officers, employees and other agents to the
full extent permitted by law. Indemnification under the Registrant's Bylaws
permits the Registrant to advance expenses incurred by an indemnified party
in connection with the defense of any action or proceeding arising out of
such party's status or service as a director, officer, employee or other
agent of the Registrant upon an undertaking by such party to repay such
advances if it is ultimately determined that such party is not entitled to
indemnification.
<PAGE>
The Registrant has entered into separate indemnification agreements
with each of its directors and certain of its officers. These agreements
require the Registrant, among other things, to indemnify such director or
officer against expenses (including attorneys' fees), judgments, fines and
settlements incurred by such individual in connection with any action, suit
or proceeding arising out of such individual's status or service as a
director or officer of the Registrant acting at the request of the
Registrant to the maximum extent permitted by applicable law, subject to
certain limitations.
Item 7. EXEMPTION FROM REGISTRATION CLAIMED
Not Applicable.
Item 8. EXHIBITS
Number Exhibit
------ -------
4 Instruments Defining Rights of Shareholders. Reference is made
to Registrant's Registration Statement No. 00-021915 on Form 8-A
which is incorporated herein by reference pursuant to Item 3(c).
5 Opinion and consent of Brobeck, Phleger & Harrison LLP.
23.1 Consent of Arthur Andersen LLP, Independent Public Accountants.
23.2 Consent of Brobeck, Phleger & Harrison LLP is contained in
Exhibit 5.
24 Power of Attorney. Reference is made to page II-4 of this
Registration Statement.
99.1 1996 Stock Option/Stock Issuance Plan.
99.2 Form of Notice of Grant of Stock Option.
99.3 Form of Stock Option Agreement.
99.4 Form of Addendum to Stock Option Agreement (Involuntary
Termination Following Change in Control).
99.5 Form of Addendum to Stock Option Agreement (Involuntary
Termination Following Corporate Transaction).
99.6 Form of Notice of Grant of Automatic Stock Option (Initial
Grant).
99.7 Form of Notice of Grant of Automatic Stock Option (Annual Grant).
99.8 Form of Automatic Stock Option Agreement.
99.9 Form of Stock Issuance Agreement.
99.10 Form of Addendum to Stock Issuance Agreement (Involuntary
Termination Following Change in Control).
99.11 Form of Addendum to Stock Issuance Agreement (Involuntary
Termination Following Corporate Transaction).
99.12 Employee Stock Purchase Plan.
99.13 Form of Enrollment/Change Form.
99.14 Form of Stock Purchase Agreement.
Item 9. UNDERTAKINGS
A. The undersigned Registrant hereby undertakes: (1) to file,
during any period in which offers or sales are being made, a post-effective
amendment to this Registration Statement (i) to include any prospectus
required by Section 10(a)(3) of the 1933 Act, (ii) to reflect in the
prospectus any facts or events arising after the effective date of this
Registration Statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a fundamental
change in the information set forth in this Registration Statement and
(iii) to include any material information with respect to the plan of
distribution not previously disclosed in this Registration Statement or any
material change to such information in this Registration Statement;
PROVIDED, however, that clauses (1)(i) and (1)(ii) shall not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Registrant
pursuant to Section 13 or Section 15(d) of the 1934 Act that are
incorporated by reference into this Registration Statement; (2) that for
the purpose of determining any liability under the 1933 Act each such post-
II-2.
<PAGE>
effective amendment shall be deemed to be a new registration statement
relating to the securities offered therein and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof; and (3) to remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the Registrant's 1996 Stock Option/Stock Issuance Plan and/or
the Employee Stock Purchase Plan.
B. The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the 1933 Act, each filing of the Registrant's
annual report pursuant to Section 13(a) or Section 15(d) of the 1934 Act that
is incorporated by reference into this Registration Statement shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.
C. Insofar as indemnification for liabilities arising under the 1933
Act may be permitted to directors, officers, or controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that, in the opinion of the SEC, such indemnification is
against public policy as expressed in the 1933 Act, and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer, or controlling person of the Registrant in the
successful defense of any action, suit, or proceeding) is asserted by such
director, officer, or controlling person in connection with the securities
being registered, the Registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the 1933 Act and will be governed by
the final adjudication of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended, the Registrant certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on Form S-8, and has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Sandpoint, State of
Idaho on this 15th day of July, 1997.
COLDWATER CREEK INC.
By: /s/ Dennis Pence
----------------------------------
Dennis Pence
President, Chief Executive Officer
and Vice Chairman of the Board
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS:
That the undersigned officers and directors of Coldwater Creek,
Inc., a Delaware corporation, do hereby constitute and appoint Dennis Pence
and Donald Robson and each of them, the lawful attorneys-in-fact and agents
with full power and authority to do any and all acts and things and to
execute any and all instruments which said attorneys and agents, and any one
of them, determine may be necessary or advisable or required to enable said
corporation to comply with the Securities Act of 1933, as amended, and any
rules or regulations or requirements of the Securities and Exchange
Commission in connection with this Registration Statement. Without limiting
the generality of the foregoing power and authority, the powers granted
include the power and authority to sign the names of the undersigned officers
and directors in the capacities indicated below to this Registration
Statement, to any and all amendments, both pre-effective and post-effective,
and supplements to this Registration Statement, and to any and all
instruments or documents filed as part of or in conjunction with this
Registration Statement or amendments or supplements thereof, and each of the
undersigned hereby ratifies and confirms that all said attorneys and agents,
or any one of them, shall do or cause to be done by virtue hereof. This
Power of Attorney may be signed in several counterparts.
IN WITNESS WHEREOF, each of the undersigned has executed this Power
of Attorney as of the date indicated.
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated.
Signature Title Date
- --------- ----- ----
/s/ Dennis Pence President, Chief Executive July 15, 1997
- ------------------------ Officer and Vice Chairman of the
Dennis Pence Board (Principal Executive Officer)
II-4.
<PAGE>
Signature Title Date
- --------- ----- ----
/s/ Ann Pence Chairman of the Board of Directors July 15, 1997
- ------------------------ and Director
Ann Pence
/s/ Donald Robson Chief Financial Officer, July 15, 1997
- ------------------------ Treasurer, Secretary and Director
Donald Robson (Principal Financial and Accounting
Officer)
/s/ Robert H. McCall Director July 15, 1997
- ------------------------
Robert H. McCall, CPA
/s/ James R. Alexander Director July 15, 1997
- ------------------------
James R. Alexander
/s/ Curt Hecker Director July 15, 1997
- ------------------------
Curt Hecker
II-5.
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
EXHIBITS
TO
FORM S-8
UNDER
SECURITIES ACT OF 1933
COLDWATER CREEK INC.
<PAGE>
EXHIBIT INDEX
Number Exhibit
------ -------
4 Instruments Defining Rights of Shareholders. Reference is made
to Registrant's Registration Statement No. 00-021915 on Form 8-A
which is incorporated herein by reference pursuant to Item 3(c).
5 Opinion and consent of Brobeck, Phleger & Harrison LLP.
23.1 Consent of Arthur Andersen LLP, Independent Public Accountants.
23.2 Consent of Brobeck, Phleger & Harrison LLP is contained in
Exhibit 5.
24 Power of Attorney. Reference is made to page II-4 of this
Registration Statement.
99.1 1996 Stock Option/Stock Issuance Plan.
99.2 Form of Notice of Grant of Stock Option.
99.3 Form of Stock Option Agreement.
99.4 Form of Addendum to Stock Option Agreement (Involuntary
Termination Following Change in Control).
99.5 Form of Addendum to Stock Option Agreement (Involuntary
Termination Following Corporate Transaction).
99.6 Form of Notice of Grant of Automatic Stock Option (Initial
Grant).
99.7 Form of Notice of Grant of Automatic Stock Option (Annual Grant).
99.8 Form of Automatic Stock Option Agreement.
99.9 Form of Stock Issuance Agreement.
99.10 Form of Addendum to Stock Issuance Agreement (Involuntary
Termination Following Change in Control).
99.11 Form of Addendum to Stock Issuance Agreement (Involuntary
Termination Following Corporate Transaction).
99.12 Employee Stock Purchase Plan.
99.13 Form of Enrollment/Change Form.
99.14 Form of Stock Purchase Agreement.
<PAGE>
EXHIBIT 5
Opinion and consent of Brobeck, Phleger & Harrison LLP
July 17, 1997
Coldwater Creek Inc.
One Coldwater Creek Drive
Sandpoint, Idaho 83864
Re: Registration Statement for Offering of
an aggregate of 1,861,847 Shares of Common Stock
------------------------------------------------
Ladies and Gentlemen:
We refer to your registration on Form S-8 (the "Registration
Statement") under the Securities Act of 1933, as amended, of (i) 1,111,847
shares of the Common Stock of Coldwater Creek Inc. (the "Company") under the
Company's 1996 Stock Option/Stock Issuance Plan and (ii) 750,000 shares of
Common Stock under the Company's Employee Stock Purchase Plan. We advise you
that, in our opinion, when such shares have been issued and sold pursuant to
the applicable provisions of the 1996 Stock Option/Stock Issuance Plan and
the Employee Stock Purchase Plan and in accordance with the Registration
Statement, such shares will be duly authorized, validly issued, fully paid
and non-assessable shares of the Company's Common Stock.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
/s/ Brobeck, Phleger & Harrison LLP
BROBECK, PHLEGER & HARRISON LLP
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement (Form S-8) of our report dated
April 4, 1997 included in Coldwater Creek Inc.'s Form 10-K for the year ended
March 1, 1997.
/s/ ARTHUR ANDERSEN LLP
Boise, Idaho
July 14, 1997
<PAGE>
EXHIBIT 99.1
COLDWATER CREEK INC.
1996 STOCK OPTION/STOCK ISSUANCE PLAN
ARTICLE ONE
GENERAL
I. PURPOSE OF THE PLAN
A. This 1996 Stock Option/Stock Issuance Plan (the "Plan") is
intended to promote the interests of Coldwater Creek Inc., a Delaware
corporation (the "Corporation"), by providing eligible individuals 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 the service of the Corporation (or its parent or subsidiary corporations).
B. The Discretionary Option Grant and Stock Issuance Programs of
the Plan became effective on March 4, 1996, upon the adoption of the Plan by
the Corporation's Board of Directors. Such date is hereby designated the
"Plan Effective Date." The Automatic Option Grant Program became effective
on January 28, 1997, the date on which the Underwriting Agreement for the
initial public offering of the Corporation's Common Stock was executed and
priced. Such date is hereby designated as the "Automatic Option Grant
Program Effective Date."
II. DEFINITIONS
A. For purposes of the Plan, the following definitions
shall be in effect:
AUTOMATIC OPTION GRANT PROGRAM EFFECTIVE DATE: January 28, 1997.
BOARD: the Corporation's Board of Directors.
CHANGE IN CONTROL: a change in ownership or control of the
Corporation effected through either of the following transactions at any time
after the Section 12(g) Registration Date:
(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
<PAGE>
stockholders which the Board does not recommend such stockholders to
accept; 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 such election or
nomination was approved by the Board.
CODE: the Internal Revenue Code of 1986, as amended.
COMMITTEE: the committee of two (2) or more non-employee Board
members appointed by the Board to administer the Plan.
COMMON STOCK: shares of the Corporation's common stock.
CORPORATE TRANSACTION: 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.
DISABILITY: the inability of an individual 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 not less than twelve (12)
months. However, for purposes of the Automatic Option Grant Program,
Disability shall mean the inability of the non-employee Board member 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.
2.
<PAGE>
EMPLOYEE: an individual who performs services while in the employ
of the Corporation or one or more parent or subsidiary corporations, subject
to the control and direction of the employer entity not only as to the work
to be performed but also as to the manner and method of performance.
EXERCISE DATE: the date on which the Corporation shall have
received written notice of the option exercise.
FAIR MARKET VALUE: the Fair Market Value per share of Common Stock
determined in accordance with the following provisions:
- If the Common Stock is not at the time listed
or admitted to trading on any national securities
exchange but is traded on the Nasdaq National Market,
then the Fair Market Value shall be the closing selling
price per share on the date in question, as such price is
reported by the National Association of Securities
Dealers on the Nasdaq National Market. If there is no
reported closing selling price for the Common Stock on
the date in question, then the closing selling price on
the last preceding date for which such quotation exists
shall be determinative of Fair Market Value.
- If the Common Stock is at the time listed or
admitted to trading on any national securities exchange,
then the Fair Market Value shall be the closing selling
price per share on the date in question on the exchange
determined by the Plan Administrator to be the primary
market for the Common Stock, as such price is officially
quoted in the composite tape of transactions on such
exchange. If there is no reported sale of Common Stock
on such exchange on the date in question, then the Fair
Market Value shall be the closing selling price on the
exchange on the last preceding date for which such
quotation exists.
- If the Common Stock is on the date in question
neither listed nor admitted to trading on any national
securities exchange nor traded on the Nasdaq National
Market, then the Fair Market Value of the Common Stock on
such date shall be determined by the Plan Administrator
after taking into account such factors as the Plan
Administrator shall deem appropriate.
- For any option granted on the Automatic Option
Grant Program Effective Date, the Fair Market Value per
share of Common Stock shall be deemed equal to the price
per share at which the Common Stock is sold in the
initial public offering pursuant to the Underwriting
Agreement.
INCENTIVE OPTION: a stock option which satisfies the requirements
of Code Section 422.
3.
<PAGE>
INVOLUNTARY TERMINATION: the termination of any individual's
Service 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 level of
responsibility, (B) a reduction in his or her level of
compensation (including base salary, fringe benefits and
participation in corporate-performance based bonus or
incentive programs) by more than fifteen percent (15%) 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.
MISCONDUCT: 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).
1933 ACT: the Securities Act of 1933, as amended from time to time.
1934 ACT: the Securities Exchange Act of 1934, as amended from
time to time.
NON-STATUTORY OPTION: a stock option not intended to meet the
requirements of Code Section 422.
OPTIONEE: a person to whom an option is granted under the
Discretionary Option Grant or Automatic Option Grant Program.
PARTICIPANT: a person who is issued Common Stock under the Stock
Issuance Program.
PLAN ADMINISTRATOR: either the Board or the Committee, to the
extent the Committee is at the time responsible for the administration of the
Plan in accordance with Section IV of Article One.
PLAN EFFECTIVE DATE: March 4, 1996.
4.
<PAGE>
SECTION 12(g) REGISTRATION DATE: January 28, 1997, the date on
which the initial registration of the Common Stock under Section 12(g) of the
1934 Act became effective.
SERVICE: the performance of services on a periodic basis for the
Corporation (or any parent or subsidiary corporation) in the capacity of an
Employee, a non-employee member of the board of directors or an independent
consultant or advisor, except to the extent otherwise specifically provided
in the applicable stock option or stock issuance agreement.
10% STOCKHOLDER: 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 corporation.
B. The following provisions shall be applicable in determining
the parent and subsidiary corporations of the Corporation:
Any corporation (other than the Corporation) in
an unbroken chain of corporations ending with the
Corporation shall be considered to be a PARENT of the
Corporation, provided each such 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.
Each corporation (other than the Corporation)
in an unbroken chain of corporations beginning with the
Corporation shall be considered to be a SUBSIDIARY of the
Corporation, provided each such 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.
III. STRUCTURE OF THE PLAN
A. STOCK PROGRAMS. The Plan shall be divided into three (3) se
parate components: the Discretionary Option Grant Program spec ified in
Article Two, the Stock Issuance Program specified in Article Three and the
Automatic Option Grant Program specified in Article Four. Under the
Discretionary Option Grant Program, eligible individuals may, at the
discretion of the Plan Administrator, be granted options to purchase shares
of Common Stock in accordance with the provisions of Article Two. Under the
Stock Issuance Program, eligible individuals may be issued shares of Common
Stock directly, either through the immediate purchase of such shares at a
price not less than one hundred percent (100%) of the Fair Market Value of
the shares at the time of issuance or as a bonus for services rendered the
Corporation. Under the Automatic Option Grant Program, each
5.
<PAGE>
individual serving as a non-employee Board member on the Automatic Option
Grant Program Effective Date and each individual who first joins the Board as
a non-employee director at any time after such Effective Date shall at
periodic intervals receive option grants to purchase shares of Common Stock
in accordance with the provisions of the Automatic Option Grant Program of
Article Four, with the first such grants to be made on the Automatic Option
Grant Program Effective Date.
B. GENERAL PROVISIONS. Unless the context clearly indicates
otherwise, the provisions of Articles One and Five shall apply to the
Discretionary Option Grant Program, the Automatic Option Grant Program and
the Stock Issuance Program and shall accordingly govern the interests of all
individuals under the Plan.
IV. ADMINISTRATION OF THE PLAN
A. Until the Section 12(g) Registration Date, both the
Discretionary Option Grant and Stock Issuance Programs shall be administered
by the Board. From and after such Section 12(g) Registration Date, the
Discretionary Option Grant and Stock Issuance Programs shall be administered
solely and exclusively by the Committee, if appointed, or the Board, if a
Committee is not appointed.
B. Members of the Committee shall serve for such period of time
as the Board may determine and shall be subject to removal by the Board at
any time.
C. The Plan Administrator shall have full power and authority
(subject to the express provisions of the Plan) to establish rules and
regulations for the proper administration of the Discretionary Option Grant
and Stock Issuance Programs and to make such determinations under, and issue
such interpretations of, the provisions of such programs and any outstanding
option grants or stock issuances thereunder as it may deem necessary or
advisable. Decisions of the Plan Administrator shall be final and binding on
all parties who have an interest in the Discretionary Option Grant or Stock
Issuance Program or any outstanding option or share issuance thereunder.
D. Administration of the Automatic Option Grant Program shall be
self-executing in accordance with the express terms and conditions of Article
Four, and the Plan Administrator shall exercise no discretionary functions
with respect to the grant of options pursuant to that program, but may amend
such options in accordance with the provisions of Article Four.
V. OPTION GRANTS AND STOCK ISSUANCES
A. The persons eligible to participate in the Discretionary
Option Grant Program under Article Two and the Stock Issuance Program
under Article Three shall be limited to the following:
6.
<PAGE>
(i) officers and other key employees of the Corporation (or
its parent or subsidiary corporations) who render services which
contribute to the management, growth and financial success of the
Corporation (or its parent or subsidiary corporations);
(ii) non-employee members of the Board; and
(iii) those consultants or other independent advisors
who provide valuable services to the Corporation (or its parent or
subsidiary corporations).
B. A Board member shall not vote as a member of the Board or a
member of the Committee concerning any award, or amendment of any award, to
such Board member pursuant to the Discretionary Option Grant Program or the
Stock Issuance Program, other than an award or amendment that applies
uniformly to all non-employee Board members and shall absent himself or
herself from the discussion of any such award.
C. The Plan Administrator shall have full authority to determine,
(i) with respect to the option grants made under the Discretionary Option
Grant Program, which eligible individuals are to receive option grants, the
time or times when such options are to be granted, the number of shares to be
covered by each such grant, the status of the granted option as either an
Incentive Option or a Non-Statutory Option, the time or times at which each
granted option is to become exercisable and the maximum term for which the
option may remain outstanding and (ii), with respect to stock issuances under
the Stock Issuance Program, the number of shares to be issued to each
Participant, the vesting schedule (if any) to be applicable to the issued
shares and the consideration for which such shares are to be issued.
VI. STOCK SUBJECT TO THE PLAN
A. Shares of Common Stock shall be available for issuance under
the Plan and shall be drawn from either the Corporation's authorized but
unissued shares of Common Stock or from reacquired shares of Common Stock,
including shares repurchased by the Corporation on the open market. The
maximum number of shares of Common Stock which may be issued over the term of
the Plan shall not exceed 1,111,847shares, subject to adjustment from time to
time in accordance with the provisions of this Section VI.
B. In no event shall the aggregate number of shares of Common
Stock for which any one individual participating in the Plan may be granted
stock options and direct stock issuances exceed 250,793(1)/ shares per calendar
year.
- -------------------------
(1)/Adjusted to reflect the .67195-for-1 forward stock split effected on
January 4, 1997.
7.
<PAGE>
C. Should one or more outstanding options under this Plan expire
or terminate for any reason prior to exercise in full (including any option
cancelled in accordance with the cancellation-regrant provisions of Section
IV of Article Two of the Plan), then the shares subject to the portion of
each option not so exercised shall be available for subsequent option grants
under the Plan. All share issuances under the Plan, whether or not the
shares are subsequently repurchased by the Corporation pursuant to its
repurchase rights under the Plan, shall reduce on a share-for-share basis the
number of shares of Common Stock available for subsequent issuance under the
Plan. In addition, should the exercise price of an outstanding 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 outstanding option under the Plan or the vesting of a direct
share issuance made 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 which vest under the share
issuance, and not by the net number of shares of Common Stock actually issued
to the holder of such option or share issuance.
D. Should any change be made to the Common Stock issuable under
the Plan 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, then appropriate adjustments shall be made 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 individual participating
in the Plan may be granted stock options and direct stock issuances in the
aggregate per calendar year, (iii) the number and/or class of securities for
which automatic option grants are to be subsequently made per eligible
non-employee Board member under the Automatic Option Grant Program and (iv)
the number and/or class of securities and price per share in effect under
each option outstanding under either the Discretionary Option Grant or
Automatic Option Grant Program. Such adjustments to the outstanding options
are to be effected in a manner which shall preclude the enlargement or
dilution of rights and benefits under such options. The adjustments
determined by the Plan Administrator shall be final, binding and conclusive.
8.
<PAGE>
ARTICLE TWO
DISCRETIONARY OPTION GRANT PROGRAM
I. TERMS AND CONDITIONS OF OPTIONS
Options granted pursuant to the Discretionary Option Grant Program
shall be authorized by action of the Plan Administrator and may, at the Plan
Administrator's discretion, be either Incentive Options or Non-Statutory
Options. Individuals who are not Employees of the Corporation or its parent
or subsidiary corporations may only be granted Non-Statutory Options. Each
granted option shall be evidenced by one or more instruments in the form
approved by the Plan Administrator; PROVIDED, however, that each such
instrument shall comply with the terms and conditions specified below. Each
instrument evidencing an Incentive Option shall, in addition, be subject to
the applicable provisions of Section II of this Article Two.
A. EXERCISE PRICE.
1. The exercise price per share shall be fixed by the Plan
Administrator in accordance with the following provisions:
(i) The exercise price per share of Common Stock
subject to an Incentive Option shall in no event be less than one
hundred percent (100%) of the Fair Market Value of such Common Stock on
the grant date.
(ii) The exercise price per share of Common Stock
subject to a Non-Statutory Option shall in no event be less than
eighty-five percent (85%) of the Fair Market Value of such Common Stock
on the grant date.
2. The exercise price shall become immediately due upon
exercise of the option and shall, subject to the provisions of Section I of
Article Five, be payable in cash or check made payable to the Corporation.
Should the Corporation's outstanding Common Stock be registered under Section
12(g) of the Exchange Act at the time the option is exercised, then the
exercise price may also be paid as follows:
(i) in shares of Common Stock held by the Optionee 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
9.
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(ii) 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 written
instructions (a) to 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 purchase and (b) to the Corporation to deliver the
certificates for the purchased shares directly to such brokerage firm in
order to complete the sale transaction.
3. 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. TERM AND EXERCISE OF OPTIONS. Each option granted under this
Discretionary Option Grant Program shall be exercisable at such time or times
and during such period as is determined by the Plan Administrator and set
forth in the instrument evidencing the grant. No such option, however, shall
have a maximum term in excess of ten (10) years from the grant date.
During the lifetime of the Optionee, Incentive Options shall be
exercisable only by the Optionee and shall not be assignable or transferable
by the Optionee other than by will or by the laws of descent and distribution
following the Optionee's death. However, a Non-Statutory Option may, in
connection with the Optionee's estate plan, be assigned in whole or in part
during the Optionee's lifetime to one or more members of the Optionee's
immediate family or to a trust established exclusively for one or more such
family members. 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.
C. Termination of Service.
1. Except to the extent otherwise provided pursuant to
subsection C.2 below, the following provisions shall govern the exercise
period applicable to any options held by the Optionee at the time of
cessation of Service or death:
(i) Should the Optionee cease to remain in
Service for any reason other than death or Disability,
then the period during which each outstanding option held
by such Optionee is to remain exercisable shall be
10.
<PAGE>
limited to the three (3)-month period following the date
of such cessation of Service.
(ii) Should such Service terminate by reason of
Disability, then the period during which each outstanding
option held by the Optionee is to remain exercisable
shall be limited to the twelve (12)-month period
following the date of such cessation of Service.
(iii) Should the Optionee die while holding one
or more outstanding options, then the period during which
each such option is to remain exercisable shall be
limited to the twelve (12)-month period following the
date of the Optionee's death. During such limited
period, the option may be 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 in accordance with the laws of
descent and distribution.
(iv) Should the Optionee's Service be
terminated for Misconduct, then all outstanding options
held by the Optionee shall terminate immediately and
cease to be outstanding.
(v) Under no circumstances, however, shall any
such option be exercisable after the specified expiration
date of the option term.
(vi) 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 the option is exercisable on the date of the
Optionee's cessation of Service. 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 exercisable for any vested shares for
which the option has not been exercised. However, the
option shall, immediately upon the Optionee's cessation
of Service for any reason, terminate and cease to be
outstanding with respect to any option shares for which
the option is not at that time exercisable or in which
the Optionee is not otherwise at that time vested.
(vii) In the event of an Involuntary Termination
following a Corporate Transaction or a Change in Control,
the provisions of Section III of this Article Two shall
govern the period for which the outstanding options are
to remain exercisable following the Optionee's cessation
of Service and shall supersede any provisions to the
contrary in this Section.
2. The Plan Administrator shall have complete discretion,
exercisable either at the time the option is granted or at any time while the
option remains outstanding,
11.
<PAGE>
- to extend the period of time for which the option is
to remain exercisable following the Optionee's cessation of Service or
death from the limited period in effect under subsection C.1 of this
Article Two to such greater period of time as the Plan Administrator
shall deem appropriate; PROVIDED, that in no event shall such option be
exercisable after the specified expiration date of the option term;
and/or
- to permit one or more options held by the Optionee
under this Article Two to be exercised, during the limited post-Service
exercise period applicable under this paragraph C., not only with
respect to the number of vested shares of Common Stock for which each
such option is exercisable at the time of the Optionee's cessation of
Service but also with respect to one or more subsequent installments
in which the Optionee would otherwise have vested had such cessation of
Service not occurred.
D. STOCKHOLDER RIGHTS. An Optionee shall have no stockholder
rights with respect to any shares covered by the option until such individual
shall have exercised the option, paid the exercise price and become the
holder of record of the purchased shares.
E. UNVESTED SHARES. The Plan Administrator shall have the
discretion to authorize the issuance of unvested shares of Common Stock under
this Discretionary Option Grant Program. 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 and conditions 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 agreement evidencing such
repurchase right.
II. INCENTIVE OPTIONS
Incentive Options may only be granted to individuals who are
Employees, and the terms and conditions specified below shall be applicable
to all Incentive Options granted under the Plan. Except as modified by the
provisions of this Section II, all provisions of Articles One, Two and Five
shall be applicable to Incentive Options. Any Options specifically
designated as Non-Statutory shall not be subject to such terms and conditions.
A. DOLLAR LIMITATION. The aggregate Fair Market Value
(determined as of the respective date or dates of grant) of the Common Stock
for which one or more options granted to any Employee under this Plan (or any
other option plan of the Corporation or its parent or subsidiary
corporations) may for the first time become exercisable as incentive stock
options under the Federal tax laws 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, the foregoing limitation on the
exercisability of such options
12.
<PAGE>
as incentive stock options under the Federal tax laws shall be applied on the
basis of the order in which such options are granted. Should the number of
shares of Common Stock for which any Incentive Option first becomes
exercisable in any calendar year exceed the applicable One Hundred Thousand
Dollar ($100,000) limitation, then that option may nevertheless be exercised
in that calendar year for the excess number of shares as a Non-Statutory
Option under the Federal tax laws.
B. 10% STOCKHOLDER. If any individual 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 grant date, and the option term shall
not exceed five (5) years measured from the grant date.
III. CORPORATE TRANSACTION/CHANGE IN CONTROL
A. In the event of any Corporate Transaction, each outstanding
option shall automatically accelerate so that each such option shall,
immediately prior to the effective date of the Corporate Transaction, become
fully exercisable with respect to the total number of shares of Common Stock
at the time subject to such option and may be exercised for any or all of
those shares as fully-vested shares of Common Stock. However, an outstanding
option shall not so accelerate if and to the extent: (i) such option is, in
connection with the Corporate Transaction, either to be assumed by the
successor corporation (or parent thereof) or to be replaced with a comparable
option to purchase shares of the capital stock of the successor corporation
(or parent thereof), (ii) such option is to be replaced with a cash incentive
program of the successor corporation which preserves the spread existing on
the unvested option shares at the time of the Corporate Transaction and
provides for subsequent payout in accordance with the same vesting schedule
applicable to such option or (iii) the acceleration of such option is subject
to other limitations imposed by the Plan Administrator at the time of the
option grant. The determination of option comparability under clause (i)
above shall be made by the Plan Administrator, and its determination shall be
final, binding and conclusive.
B. All outstanding repurchase rights shall also terminate
automatically, 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
such Corporate Transaction or (ii) such accelerated vesting is precluded by
other limitations imposed by the Plan Administrator at the time the
repurchase right is issued.
C. Immediately following the consummation of the Corporate
Transaction, all outstanding options shall terminate and cease to be
outstanding, except to the extent assumed by the successor corporation (or
parent thereof).
13.
<PAGE>
D. Each option which is assumed in connection with a Corporate
Transaction 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 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, (ii) the maximum number and/or class of
securities available for issuance under the remaining term of the Plan and
(iii) the maximum number and/or class of securities for which any one person
may be granted stock options and direct stock issuances under the Plan per
calendar year.
E. The Plan Administrator shall have full power and authority to
grant options under the Discretionary Option Grant Program which will
automatically accelerate in the event the Optionee's Service subsequently
terminates by reason of an Involuntary Termination within a designated period
(not to exceed twelve (12) months) following the effective date of any
Corporate Transaction in which those options are assumed or replaced and do
not otherwise accelerate. Any options so accelerated shall remain
exercisable for fully-vested shares until the EARLIER of (i) the expiration
of the option term or (ii) the expiration of the one (1)-year period measured
from the effective date of the Involuntary Termination. In addition, the
Plan Administrator may structure one or more of the Corporation's outstanding
repurchase rights so that those rights shall immediately terminate with
respect to any unvested shares held by the Optionee at the time of such
Involuntary Termination, and the shares subject to those terminated
repurchase rights shall accordingly vest in full upon such Involuntary
Termination.
F. The Plan Administrator shall have full power and authority to
grant options under the Discretionary Option Grant Program which will
automatically accelerate in the event the Optionee's Service subsequently
terminates by reason of an Involuntary Termination within a designated period
(not to exceed twelve (12) months) following the effective date of any Change
in Control. Each option so accelerated shall remain exercisable for
fully-vested shares until the EARLIER of (i) the expiration of the option
term or (ii) the expiration of the one (1)-year period measured from the
effective date of the Involuntary Termination. In addition, the Plan
Administrator may structure one or more of the Corporation's outstanding
repurchase rights so that those rights shall immediately terminate with
respect to any unvested shares held by the Optionee at the time of such
Involuntary Termination, and the shares subject to those terminated
repurchase rights shall accordingly vest in full.
G. The portion of any Incentive Option accelerated in connection
with a Corporate Transaction or Change in Control shall remain exercisable as
an Incentive Option only to the extent the applicable One Hundred Thousand
Dollar limitation is not exceeded. To the extent such dollar limitation is
exceeded, the accelerated portion of such option shall be exercisable as a
Non-Statutory Option under the Federal tax laws.
14.
<PAGE>
H. The outstanding options 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.
IV. CANCELLATION AND REGRANT OF OPTIONS
The Plan Administrator shall have the authority to effect, at any
time and from time to time, with the consent of the affected Optionees, the
cancellation of any or all outstanding options under this Article Two and to
grant in substitution new options under the Plan covering the same or
different numbers of shares of Common Stock but with an exercise price per
share not less than (i) one hundred percent (100%) of the Fair Market Value
per share of Common Stock on the new grant date in the case of a grant of an
Incentive Option, (ii) one hundred ten percent (110%) of such Fair Market
Value in the case of a grant of an Incentive Option to a 10% Stockholder or
(iii) eighty-five percent (85%) of such Fair Market Value in the case of all
other grants.
15.
<PAGE>
ARTICLE THREE
STOCK ISSUANCE PROGRAM
I. TERMS AND CONDITIONS OF STOCK ISSUANCES
Shares of Common Stock may be issued under the Stock Issuance
Program directly without any intervening option grants. Each such stock
issuance shall be evidenced by a Stock Issuance Agreement which complies with
the terms specified below.
A. The shares shall be issued for such valid consideration as the
Plan Administrator may deem appropriate, but the value of such consideration
as determined by the Plan Administrator shall not be less than one hundred
percent (100%) of the Fair Market Value of the issued shares of Common Stock
on the issuance date.
B. The Plan Administrator shall have full power and authority to
issue shares of Common Stock under the Stock Issuance Program as a bonus for
past services rendered to the Corporation (or any parent or subsidiary). All
such bonus shares shall be fully and immediately vested upon issuance.
C. Subject to the provisions of Section I of Article Five, shares
of Common Stock may be issued under the Stock Issuance Program for any of the
following items of consideration which the Plan Administrator may deem
appropriate in each individual instance: (i) cash or check made payable to
the Corporation, or (ii) past services rendered to the Corporation (or any
Parent or Subsidiary).
D. Shares of Common Stock issued under the Stock Issuance Program
may, in the discretion of the Plan Administrator, be fully and immediately
vested upon issuance or may vest in one or more installments over the
Participant's period of Service or upon attainment of specified performance
objectives. The elements of the vesting schedule applicable to any unvested
shares of Common Stock issued under the Stock Issuance Program, namely:
(i) the Service period to be completed by
the Participant or the performance objectives to be attained,
(ii) the number of installments in which the
shares are to vest,
(iii) the interval or intervals (if any) which
are to lapse between installments, and
16.
<PAGE>
(iv) the effect which death, Permanent Disability
or other event designated by the Plan Administrator is to have upon the
vesting schedule,
shall be determined by the Plan Administrator and incorporated into the Stock
Issuance Agreement.
E. 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 Common 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 Common Stock and (ii) such escrow arrangements as the Plan
Administrator shall deem appropriate.
F. The Participant shall have full stockholder rights with
respect to any shares of Common Stock issued to the Participant under the
Stock Issuance Program, whether or not the Participant's interest in those
shares is vested. Accordingly, the Participant shall have the right to vote
such shares and to receive any regular cash dividends paid on such shares.
G. Should the Participant cease to remain in Service while
holding one or more unvested shares of Common Stock issued under the Stock
Issuance Program or should the performance objectives not be attained with
respect to one or more such unvested shares of Common 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 or cash equivalent (including
the Participant's purchase-money indebtedness), the Corporation shall repay
to the Participant the cash consideration paid for the surrendered shares and
shall cancel the unpaid principal balance of any outstanding purchase-money
note of the Participant attributable to such surrendered shares.
H. The Plan Administrator shall have full power and authority,
exercisable upon a Participant's termination of Service, to waive the
surrender and cancellation of any or all unvested shares of Common Stock (or
other assets attributable thereto) at the time held by that Participant, if
the Plan Administrator determines such waiver to be an appropriate severance
benefit for the Participant.
II. CORPORATE TRANSACTION/CHANGE IN CONTROL
A. All of the Corporation's outstanding repurchase rights under
the Stock Issuance Program shall terminate automatically, and all the shares
of Common Stock subject to those terminated rights shall immediately vest in
full, in the event of any Corporate
17.
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Transaction, except to the extent (i) those repurchase rights are assigned to
the successor corporation (or parent thereof) in connection with such
Corporate Transaction or (ii) such accelerated vesting is precluded by other
limitations imposed in the Stock Issuance Agreement.
B. The Plan Administrator shall have the discretionary authority
to structure one or more of the Corporation's repurchase rights under the
Stock Issuance Program in such manner that those repurchase rights shall
automatically terminate, and all the shares of Common Stock subject to those
terminated rights shall immediately vest in full, in the event the
Participant's Service should subsequently terminate by reason of an
Involuntary Termination within twelve (12) months following the effective
date of any Corporate Transaction in which those repurchase rights are
assigned to the successor corporation (or parent thereof).
C. The Plan Administrator shall have the discretionary authority
to structure one or more of the Corporation's repurchase rights under the
Stock Issuance Program in such manner that those repurchase rights shall
automatically terminate, and all the shares of Common Stock subject to those
terminated rights shall immediately vest in full, in the event the
Participant's Service should subsequently terminate by reason of an
Involuntary Termination within twelve (12) months following the effective
date of any Change in Control.
III. SHARE ESCROW/LEGENDS
Unvested shares may, in the Plan Administrator's discretion, be
held in escrow by the Corporation until the Participant's interest in such
shares vests or may be issued directly to the Participant with restrictive
legends on the certificates evidencing those unvested shares.
18.
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ARTICLE FOUR
AUTOMATIC OPTION GRANT PROGRAM
I. ELIGIBILITY
The individuals eligible to receive automatic option grant s
pursuant to the provisions of this Article Four program shall be limited to
those individuals who are serving as non-employee Board members on the
Automatic Option Grant Program Effective Date or who are first elected or
appointed as non-employee Board members on or after such Effective Date,
whether through appointment by the Board or election by the Corporation's
stockholders.
II. TERMS AND CONDITIONS OF AUTOMATIC OPTION GRANTS
A. GRANT DATES. Option grants shall be made under this Article
Four on the dates specified below:
1. INITIAL GRANT. Each individual serving as a non-employee
Board member on the Automatic Option Grant Program Effective Date shall
automatically be granted on that date a Non-Statutory Option to purchase
13,376 shares of Common Stock upon the terms and conditions of this Article
Four. Each individual who is first elected or appointed as a non-employee
Board member after the Automatic Option Grant Program Effective Date shall
automatically be granted, on the date of such initial election or
appointment, a Non-Statutory Option to purchase 13,376 shares of Common Stock
upon the terms and con ditions of this Article Four. In no event, however,
shall a non-employee Board member be eligible to receive such an initial
option grant if such individual has at any time been in the prior employ of
the Corporation (or any parent or subsidiary corporation).
2. ANNUAL GRANT. On the date of each Annual Stockholders
Meeting, beginning with the first Annual Meeting held after the Section 12(g)
Registration Date, each individual who will continue to serve as a
non-employee Board member shall automatically be granted, whether or not
such individual is standing for re-election as a Board member at that Annual
Meeting, a Non-Statutory Option to purchase an additional 1,672 shares of
Common Stock upon the terms and conditions of this Article Four, provided he
or she has served as a non-employee Board member for at least six (6) months
prior to the date of such Annual Meeting. Non-employee Board members who have
previously been in the employ of the Corporation (or any parent or
subsidiary) shall be eligible to receive such annual option grants over their
continued period of Board service.
19.
<PAGE>
There shall be no limit on the number of shares for which any o ne
non-employee Board member may be granted stock options under this Article
Four over his or her period of Board service.
B. EXERCISE PRICE. The exercise price per share of Common Stock
subject to each automatic option grant made under this Article Four shall be
equal to one hundred percent (100%) of the Fair Market Value per share of
Common Stock on the automatic grant date.
C. PAYMENT. The exercise price shall be payable in one of the
alternative forms specified below:
(i) full payment in cash or check drawn to the
Corporation's order;
(ii) full payment in 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 (as such term is defined below);
(iii) full payment in a combination of 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 and cash or check drawn
to the Corporation's order; or
(iv) to the extent the option is exercised for
vested shares, full payment through a sale and remittance procedure
pursuant to which the Optionee shall provide irrevocable written
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 and (II) the Corporation to deliver the certificates
for the purchased shares directly to such brokerage firm in order
to complete the sale transaction.
Except to the extent the sale and remittance procedure specified
above is used for the exercise of the option for vested shares, payment of
the exercise price for the purchased shares must accompany the exercise
notice.
D. OPTION TERM. Each automatic grant under this Article Four
shall have a maximum term of ten (10) years measured from the automatic grant
date.
20.
<PAGE>
E. EXERCISABILITY/VESTING. Each automatic grant shall be
immediately exercisable for any or all of the option shares. However, any
shares purchased under the option shall be subject to repurchase by the
Corporation, at the exercise price paid per share, upon the Optionee's
cessation of Board service prior to vesting in those shares in accordance
with the applicable schedule below:
INITIAL GRANT. Each initial 13,376-share automatic grant
shall vest, and the Corporation's repurchase right shall lapse, in a series
of three (3) equal and successive annual installments over the Optionee's
period of continued service as a Board member, with the first such
installment to vest upon Optionee's completion of one (1) year of Board
service measured from the automatic grant date.
ANNUAL GRANT. Each additional 1,672-share automatic grant
shall vest, and the Corporation's repurchase right shall lapse, upon the
Optionee's completion of one (1) year of Board service measured from the
automatic grant date.
F. LIMITED TRANSFERABILITY. Each automatic option grant may, in
connection with the Optionee's estate plan, be assigned in whole or in part
during the Optionee's lifetime to one or more members of the Optionee's
immediate family or to a trust established exclusively for one or more such
family members. 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.
G. EFFECT OF TERMINATION OF BOARD MEMBERSHIP. The following
provisions shall govern the exercise of any outstanding options held by the
Optionee under this Article Four at the time the Optionee ceases to serve as
a Board member:
(i) 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 in accordance with the laws of descent and
distribution) shall have a two (2)-year period following the date of
such cessation of Board service in which to exercise each such option.
However, each option shall, immediately upon the Optionee's cessation of
Board service, terminate and cease to remain outstanding with respect to
any option shares in which the Optionee is not otherwise vested on
the date of such cessation of Board service.
(ii) During the two (2)-year period, the
option may not be exercised in the aggregate for more than the
number of vested shares for which the option is exercisable at the time
of the Optionee's cessation of Board service. However, should the
Optionee cease to serve as a Board
21.
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member by reason of death or Disability, then all shares at the time
subject to the option shall immediately vest so that such option may,
during the two (2)-year exercise period following such cessation of
Board service, be exercised for all or any portion of such shares as
fully-vested shares.
(iii) In no event shall the option remain exercisable
after the expiration of the option term.
H. STOCKHOLDER RIGHTS. The holder of an automatic option grant
under this Article Three shall have none of the rights of a stockholder with
respect to any shares subject to such option until such individual shall have
exercised the option, paid the exercise price and become the holder of record
of the purchased shares.
I. REMAINING TERMS. The remaining terms and conditions of each
automatic option grant shall be the same as the terms for option grants made
under the Discretionary Option Grant Program.
III. CORPORATE TRANSACTION/CHANGE IN CONTROL
A. In the event of any Corporate Transaction, the shares of
Common Stock at the time subject to each outstanding option under this
Article Four but not otherwise vested shall automatically vest in full so
that each such option shall, immediately prior to the specified effective
date for the Corporate Transaction, become fully exercisable for all of the
shares of Common Stock at the time subject to that option and may be
exercised for all or any portion of those shares as fully-vested shares of
Common Stock. Immediately following the consummation of the Corporate
Transaction, all automatic option grants under this Article Four shall
terminate and cease to be outstanding, except to the extent assumed by the
successor corporation or parent thereof.
B. Each outstanding option under this Article Four which is
assumed in connection with a Corporate Transaction outstanding shall be
appropriately adjusted, immediately after such Corporate Transaction, to
apply and pertain to the number and class of securities which would have been
issuable to the Optionee in the consummation of such Corporate Transaction,
had the option been exercised immediately prior to such Corporate
Transaction. Appropriate adjustments shall also be made to (i) the class and
number of securities available for issuance under the Plan following th e
consummation of such Corporate Transaction, and (ii) the exercise price
payable per share, PROVIDED the aggregate exercise price payable for such
securities shall remain the same.
C. In connection with any Change in Control of the Corporation,
the shares of Common Stock at the time subject to each outstanding option
under this Article Four but not otherwise vested shall automatically vest in
full so that each such option shall, immediately prior to the specified
effective date for the Change in Control, become fully exercisable for all of
the shares of Common Stock at the time subject to that option and
22.
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may be exercised for all or any portion of those shares as fully-vested
shares of Common Stock. Each such option shall remain so exercisable for all
the option shares following the Change in Control, until the expiration or
sooner termination of the option term.
D. The automatic option grants outstanding under this Article
Four 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.
IV. AMENDMENT OF THE AUTOMATIC GRANT PROVISIONS
A. LIMITED AMENDMENTS. No amendment to the provisions of this
Automatic Option Grant Program may be made within six (6) months after a
previous amendment to such provisions that was made before August 15, 1996,
other than to the extent necessary to comply with applicable Federal income
tax laws and regulations.
B. AMENDMENT OF OPTIONS. Stock options granted under the
Automatic Grant Program may be amended at any time on or after the date of
their grant in any manner consistent with the provisions of this Plan
relating to options granted under the Discretionary Grant Program.
23.
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ARTICLE FIVE
MISCELLANEOUS
I. LOANS OR INSTALLMENT PAYMENTS
A. The Plan Administrator may, in its discretion, assist any
Optionee or Participant (including an Optionee or Participant who is an
officer of the Corporation) in the exercise of one or more options granted to
such Optionee under the Discretionary Option Grant Program or the purchase of
one or more shares issued to such Participant under the Stock Issuance
Program, including the satisfaction of any Federal, state and local income
and employment tax obligations arising therefrom, by (i) authorizing the
extension of a loan from the Corporation to such Optionee or Participant or
(ii) permitting the Optionee or Participant to pay the exercise price or
purchase price for the purchased Common Stock in installments over a period
of years. The terms of any loan or installment method of payment (including
the interest rate and terms of repayment) shall be upon such terms as the
Plan Administrator specifies in the applicable option or issuance agreement
or otherwise deems appropriate at the time such exercise price or purchase
price becomes due and payable. Loans or installment payments may be
authorized with or without security or collateral. In all events, the
maximum credit available to the Optionee or Participant may not exceed the
option or purchase price of the acquired shares (less the par value of such
shares) plus any Federal, state and local income and employment tax
liability incurred by the Optionee or Participant in connection with the
acquisition of such shares.
B. The Plan Administrator may, in its absolute discretion,
determine that one or more loans extended under this financial assistance
program shall be subject to forgiveness in whole or in part upon such terms
and conditions as the Plan Administrator may deem appropriate.
II. AMENDMENT OF THE PLAN AND AWARDS
A. The Board has complete and exclusive power and authority to
amend or modify the Plan (or any component thereof) in any or all respects
whatsoever. However, (i) no such amendment or modification shall adversely
affect rights and obligations with respect to o ptions at the time
outstanding under the Plan, nor adversely af fect the rights of any
Participant with respect to Common Stock issued under the Stock Issuance
Program prior to such action, unless the Optionee or Participant consents to
such amendment, and (ii) any amendment made to the Automatic Option Grant
Program (or any options outstanding thereunder) shall be in compliance with
the limitation of Section IV of Article Four. In addition, the Board may
not, without the approval of the Corporation's stockholders, amend the Plan
(i) to materially increase the maximum number of shares issuable under the
Plan or the number of shares for which automatic options may be granted to
newly-elected or continuing Eligible Directors under Article Four of the Plan
or
24.
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the maximum number of shares for which any one individual participating in
the Plan may be granted stock options and direct s tock issuances in the
aggregate per calendar year, except for permissible adjustments under Section
VI.C. of Article One, or (ii) in any manner that the Board determines
requires stockholder approval under applicable law or regulatory standards.
B. (i) Options to purchase shares of Common Stock may be granted
under the Discretionary Option Grant Program and (ii) shares of Common
Stock may be issued under the Stock Issuance Program, which are in both
instances in excess of the number of shares then available for issuance under
the Plan, provided any excess shares actually issued under the Discretionary
Option Grant Program or the Sto ck Issuance Program are held in escrow until
stockholder approval is obtained for a sufficient increase in the number of
shares available for issuance under the Plan. If such stockholder approv al
is not obtained within twelve (12) months after the date the first such
excess option grants or excess share issuances are made, then (I) any
unexercised excess options shall terminate and cease to be exercisable and
(II) the Corporation shall promptly refund the purchase price paid for any
excess shares actually issued under the Plan and held in escrow, together
with interest (at the applicable Short Term Federal Rate) for the period the
shares were held in escrow.
III. TAX WITHHOLDING
A. The Corporation's obligation to deliver shares of Common Stock
upon the exercise of stock options for such shares or the vesting of such
shares under the Plan shall be subject to the satisfaction of all applicable
Federal, state and local income tax and employment tax withholding
requirements.
B. The Plan Administrator may, in its discretion and in
accordance with the provisions of this Section III and such supplemental
rules as the Plan Administrator may from time to time adopt (including the
applicable safe-harbor provisions of Rule 16b-3 of the Securities and
Exchange Commission), provide any or all holders of Non-Statutory Options
(other than the automatic grants made pursuant to Article Four of the Plan)
or unvested shares under the Plan with the right to use shares of Common
Stock in satisfaction of all or part of the Federal, state and local income
and employment tax liabilities incurred by such holders in connection with
the exercise of their options or the vesting of their shares (the "Taxes").
Such right may be provided to any such holder in either or both of the
following formats:
- The holder of the Non-Statutory Option or unvested
shares may be provided with the election to have the Corporation
withhold, from the shares of Common Stock otherwise issuable upon the
exercise of such Non-Statutory Option or t he vesting of such shares, a
portion of those shares with an aggregate Fair Market Value equal to
the percentage of the applicable Taxes (not to exceed one hundred
percent (100%)) designated by the holder.
25.
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- The Plan Administrator may, in its discretion,
provide the holder of the Non-Statutory Option or the unvested shares
with the election to deliver to the Corporation, at the time the
Non-Statutory Option is exercised or the shares vest, one or more shares
of Common Stock previously acquired by such individual (other than in
connection with the option exercise or share vesting triggering the
Taxes) with an aggregate Fair Market Value equal to the percentage of
the Taxes incurred in connection with such option exercise or share
vesting (not to exceed one hundred percent (100%)) designated by the
holder.
IV. EFFECTIVE DATE AND TERM OF PLAN
A. The Discretionary Option Grant and Stock Issuance Programs of
this Plan became effective immediately upon the Plan's adoption by the Board
on March 4, 1996 (the "Plan Effective Date"). The Plan was also approved by
the Corporation's stockholders on the Plan Effective Date. The Automatic
Option Grant Program became effective on January 28, 1997 (the "Automatic
Option Grant Program Effective Date").
B. The Plan shall terminate upon the EARLIER of (i) March 3, 2006
or (ii) the date on which all shares available for issuance und er the Plan
shall have been issued pursuant to the exercise of the options granted under
the Plan or the issuance of shares (whether vested or unvested) under the
Stock Issuance Program. If the date of termination is determined under
clause (i) above, then all option grants and unvested share issuances
outstanding on such date shall thereafter continue to have force and effect
in accordance with the provisions of the instruments evidencing such grants
or issuance.
V. REGULATORY APPROVALS
The implementation of the Plan and the granting of any option or
issuance of shares under the Plan shall be subject to the Corporation's
procurement of all approvals and permits required by regul atory authorities
having jurisdiction over the Plan, the options granted under it, and the
Common Stock issued pursuant to it.
VI. USE OF PROCEEDS
Any cash proceeds received by the Corporation from the sale of
shares pursuant to option grants or share issuances under the Plan
shall be used for general corporate purposes.
VII. NO EMPLOYMENT/SERVICE RIGHTS
Neither the action of the Corporation in establishing the Plan, nor
any action taken by the Plan Administrator hereunder, nor any provision of
the Plan shall be construed so as to grant any indiv idual the right to
remain in the employ or service of the Corporation (or any parent or
subsidiary corporation) for any period of specific duration, and the
26.
<PAGE>
Corporation (or any parent or subsidiary corporation retaining the services
of such individual) may terminate such individual's employment or service at
any time and for any reason, with or without cause.
VIII. MISCELLANEOUS PROVISIONS
A. Except as otherwise expressly provided under the Plan, the
right to acquire Common Stock or other assets under the Plan may not be
assigned, encumbered or otherwise transferred by any Optionee or Participant.
B. The provisions of the Plan relating to the exercise of options
and the vesting of shares shall be governed by the laws of the State of
Delaware without resort to that State's conflict-of-laws rules.
C. The provisions of the Plan shall inure to the benefit of, and
be binding upon, the Corporation and its successors or assigns, whether by
Corporate Transaction or otherwise, and the Participants and Optionees, the
legal representatives of their respective estates, their respective heirs or
legatees and their permitted as signees.
27.
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EXHIBIT 99.2
COLDWATER CREEK INC.
NOTICE OF GRANT OF STOCK OPTION
Notice is hereby given of the following option grant (the "Option") to
purchase shares of the Common Stock of Coldwater Creek Inc. (the "Corporation"):
OPTIONEE: ___________________________________________________________
GRANT DATE: _________________________________________________________
VESTING COMMENCEMENT DATE: __________________________________________
EXERCISE PRICE: $ ________________________________________ per share
NUMBER OF OPTION SHARES: _____________________________________ shares
EXPIRATION DATE: ____________________________________________________
TYPE OF OPTION: ________ Incentive Stock Option
________ Non-Statutory Stock Option
EXERCISE SCHEDULE: The Option shall become exercisable for the Option
Shares in a series of four (4) successive equal annual installments
upon Optionee's completion of each year of Service over the four (4)-
year period measured from the Vesting Commencement Date. In no event,
however, 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 Coldwater Creek Inc. 1996 Stock
Option/Stock Issuance 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 as Exhibit A.
Optionee hereby acknowledges 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.
NUMBER OF OPTION SHARES SUBJECT TO REDUCTION. The Number of Option
Shares specified in this Notice is at a level which the Plan Administrator
considered commensurate with Optionee's position and compensation with the
Corporation as of the Grant Date of the Option. In the event that Optionee's
position with the Corporation is changed for any reason to a position of less
responsibility and compensation (the "Change"),
<PAGE>
the Plan Administrator may, in its sole discretion, reduce the number of
Option Shares that are subject to the Option but have not yet become
exercisable in accordance with the Exercise Schedule, effective as of the
time of the Change. In such event, the Option shall remain outstanding with
respect to such lesser number of Option Shares, and shall continue to be
governed by the terms of the Option as evidenced by the Stock Option
Agreement attached hereto as Exhibit A. The Exercise Schedule shall remain
in place, provided, however, that each installment of Option Shares scheduled
to become exercisable after the effective date of the Change shall be reduced
proportionately to reflect the new reduced number of Option Shares subject to
the Option. Optionee shall be notified of the reduction in the aggregate
number of Option Shares and of the reduced number of Option Shares which
shall become exercisable pursuant to each installment under the Exercise
Schedule. Immediately upon the Change, Optionee shall lose all rights and
entitlement with respect to the number of Option Shares by which the Option
is reduced.
NO EMPLOYMENT OR SERVICE CONTRACT. Nothing in this Notice 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.
____________________, 199_
Date
COLDWATER CREEK INC.
By: _________________________________
Title: _________________________________
________________________________________
OPTIONEE
Address: _______________________________
________________________________________
ATTACHMENT
EXHIBIT A: STOCK OPTION AGREEMENT
EXHIBIT B: PLAN SUMMARY AND PROSPECTUS
2.
<PAGE>
EXHIBIT A
STOCK OPTION AGREEMENT
<PAGE>
EXHIBIT B
PLAN SUMMARY AND PROSPECTUS
<PAGE>
EXHIBIT 99.3
COLDWATER CREEK INC.
STOCK OPTION AGREEMENT
RECITALS
A. The Board has adopted the Plan for the purpose of retaining the
services of select individuals who provide valuable services to the
Corporation (or any Parent or Subsidiary).
B. Optionee is an individual who is to render such 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.
The Number of Option Shares specified in the Grant Notice is at a
level which the Plan Administrator considered commensurate with Optionee's
position and compensation with the Corporation as of the Grant Date. In the
event that Optionee's position with the Corporation is changed for any reason
to a position of less responsibility and compensation (the "Change"), the
Plan Administrator may, in its sole discretion, reduce the number of Option
Shares that are subject to the Option but have not yet become exercisable in
accordance with the Exercise Schedule, effective as of the time of the
Change. In such event, the Option shall remain outstanding with respect to
such lesser number of Option Shares, and shall continue to be governed by the
terms of the Option as evidenced by this Agreement. The Exercise Schedule
shall remain in place, provided, however, that each installment of Option
Shares scheduled to become exercisable after the effective date of the Change
shall be reduced proportionately to reflect the new reduced number of Option
Shares subject to the Option. Optionee shall be notified of the reduction in
the aggregate number of Option Shares and of the reduced number of Option
Shares which shall become exercisable pursuant to each installment under the
Exercise Schedule.
<PAGE>
Immediately upon the Change, Optionee shall lose all rights and entitlement
with respect to the number of Option Shares by which the Option is reduced.
2. OPTION TERM. This option shall have a 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, 6 or 17.
3. LIMITED TRANSFERABILITY. This option shall be neither
transferable nor assignable by Optionee other than by will or by the laws of
descent and distribution following Optionee's death and may be exercised,
during Optionee's lifetime, only by Optionee. However, if this option is
designated a Non-Statutory Option in the Grant Notice, then this option may,
in connection with the Optionee's estate plan, be assigned in whole or in
part during Optionee's lifetime to one or more members of the Optionee's
immediate family or to a trust established for the exclusive benefit of one
or more such family members. 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 and shall be set forth in such documents issued to the
assignee as the Plan Administrator may deem appropriate.
4. DATES OF EXERCISE. This option shall become exercisable for
the Option Shares in a series of installments in accordance with the Exercise
Schedule, subject to adjustment in the event of a Change as described in
Paragraph 1. As the option becomes exercisable for one or more 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, 6 or 17.
5. CESSATION OF SERVICE. The option term specified in Paragraph 2
shall terminate and this option shall ceases to be outstanding prior to the
Expiration Date should any of the following provisions become applicable:
(i) Should Optionee cease to remain in Service for any
reason (other than death, Disability or Misconduct) while this option
is outstanding, 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.
(ii) Should Optionee die while this option is
outstanding, 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 in accordance with the laws of descent and
distribution shall have the right to exercise this option. Such right
shall lapse and this option shall cease to be outstanding upon the
EARLIER of (i) the expiration of the twelve (12)-
2.
<PAGE>
month period measured from the date of Optionee's death or (ii) the
Expiration Date.
(iii) Should Optionee cease Service by reason of
Disability while this option is outstanding, 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.
(iv) During the applicable post-Service exercise
period, this option may not be exercised in the aggregate for more
than the number of Option Shares for which the option is exercisable
at 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 of
those Option Shares for which the option has not been exercised.
However, this option shall, immediately upon Optionee's cessation of
service, terminate and cease to be outstanding with respect to any
Option Shares for which this option is not otherwise at that time
exercisable.
(v) Should Optionee's Service be terminated for
Misconduct, then this option shall immediately terminate and cease to
be outstanding.
6. SPECIAL ACCELERATION OF OPTION.
(a) In the event of a Corporate Transaction, this option, to
the extent outstanding at the time of such transaction but not otherwise
fully exercisable, shall automatically accelerate so that this option shall,
immediately prior to the specified effective date for the Corporate
Transaction, become fully exercisable for all of the shares of Common Stock
at the time subject to this option and may be exercised for all or any
portion of those shares as fully-vested shares of Common Stock. No such
acceleration of this option, however, shall occur if and to the extent: (i)
this option is, in connection with the Corporate Transaction, either to be
assumed by the successor corporation (or parent thereof) or to be replaced
with a comparable option to purchase shares of the capital stock of the
successor corporation (or parent thereof) or (ii) this option is to be
replaced with a cash incentive program of the successor corporation which
preserves the spread existing on the Option Shares at the time of the
Corporate Transaction (the excess of the Fair Market Value of the Option
Shares over the aggregate Exercise Price payable for such shares) and
provides for subsequent pay-out in accordance with the same exercise schedule
in effect for the option pursuant to the Exercise Schedule. The
determination of option comparability under clause (i) shall be made by the
Plan Administrator, and such determination shall be final, binding and
conclusive.
3.
<PAGE>
(b) This option shall terminate and cease to be outstanding
immediately upon the consummation of such Corporate Transaction, except to
the extent assumed by the successor corporation or parent thereof in
connection with such Corporate Transaction. To the extent this option is
assumed in connection with a Corporate Transaction, appropriate adjustments
shall be made, immediately after such Corporate Transaction, so that the
option shall 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.
(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.
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 the
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; or
4.
<PAGE>
(B) a promissory note payable to the Corporation, but
only to the extent authorized by the Plan Administrator in accordance
with Paragraph 14;
(C) in 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
(D) through a special sale and remittance procedure
pursuant to which Optionee (or any other person or persons exercising
the option) shall concurrently provide irrevocable written
instructions (I) to 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) to 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) Execute and deliver to the Corporation such
written representations as may be requested by the Corporation in
order for it to comply with the applicable requirements of Federal and
state securities laws.
(v) 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.
5.
<PAGE>
(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 the Nasdaq National
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 permitted assigns and the legal
representatives, heirs and legatees of Optionee's estate.
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. FINANCING. The Plan Administrator may, in its absolute
discretion and without any obligation to do so, permit Optionee to pay the
Exercise Price for the purchased Option Shares by delivering a promissory
note. The terms of any such promissory note (including the interest rate, the
requirements for collateral and the terms of repayment) shall be established
by the Plan Administrator in its sole discretion.
14. 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.
6.
<PAGE>
15. GOVERNING LAW. The interpretation, performance and enforcement
of this Agreement shall be governed by the laws of the State of Idaho without
resort to that State's conflict-of-laws rules.
16. STOCKHOLDER APPROVAL.
(a) The grant of this option is subject to approval of the
Plan by the Corporation's stockholders within twelve (12) months after the
adoption of the Plan by the Board. NOTWITHSTANDING ANY PROVISION OF THIS
AGREEMENT TO THE CONTRARY, THIS OPTION MAY NOT BE EXERCISED IN WHOLE OR IN
PART UNTIL SUCH STOCKHOLDER APPROVAL IS OBTAINED. In the event that such
stockholder approval is not obtained, then this option shall terminate in its
entirety and Optionee shall have no further rights to acquire any Option
Shares hereunder.
(b) 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 such 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.
17. 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:
(i) 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: (i) more than three
(3) months after the date Optionee ceases to be an Employee for any
reason other than death or Disability or (ii) more than twelve (12)
months after the date Optionee ceases to be an Employee by reason of
Disability.
(ii) 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 any earlier installments of
Common Stock and 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
7.
<PAGE>
shall nevertheless become exercisable for the excess shares in such
calendar year as a Non-Statutory Option.
(iii) 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.
(iv) 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 the foregoing limitations on the exercisability of such
options as Incentive Options shall be applied on the basis of the
order in which such options are granted.
8.
<PAGE>
EXHIBIT I
NOTICE OF EXERCISE
I hereby notify Coldwater Creek, 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 1996 Stock Option/Stock Issuance Plan on
_________________, 199_.
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.
________________________, 199_
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 Number: ________________________________________
<PAGE>
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 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 Coldwater Creek Inc. a Delaware corporation.
G. 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 not less than twelve (12)
months.
H. 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.
I. EXERCISE DATE shall mean the date on which the option shall have
been exercised in accordance with Paragraph 9 of the Agreement.
J. EXERCISE PRICE shall mean the exercise price per share as specified
in the Grant Notice.
A-1.
<PAGE>
K. EXERCISE SCHEDULE shall mean the exercise schedule specified in the
Grant Notice, subject to adjustment by the Plan Administrator in the event of
a Change, as described in Paragraph 1 of this Agreement.
L. EXPIRATION DATE shall mean the date on which the option expires as
specified in the Grant Notice.
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 not at the time listed or
admitted to trading on any national securities exchange but is traded
on the Nasdaq National Market, the Fair Market Value shall be the
closing selling price per share on the date in question, as such price
is reported by the National Association of Securities dealers through
the Nasdaq National Market. If there is no reported closing selling
price for the Common Stock on the date in question, then the closing
selling price on the last preceding date for which such quotation
exists shall be determinative of Fair Market Value.
(ii) If the Common Stock is at the time listed or admitted
to trading on any national securities exchange, then the Fair Market
Value shall be the closing selling price per share on the date in
question on the exchange determined by the Plan Administrator to be
the primary market for the Common Stock, as such price is officially
quoted in the composite tape of transactions on such exchange. If
there is no reported sale of Common Stock on such exchange on the date
in question, then the Fair Market Value shall be the closing selling
price on the exchange on the last preceding date for which such
quotation exists.
(iii) If the Common Stock is on the date in question neither
listed nor admitted to trading on any national securities exchange nor
traded on the Nasdaq National Market, then the Fair Market Value of
the Common Stock on such date shall be determined by the Plan
Administrator after taking into account such factors as the Plan
Administrator shall deem appropriate.
N. GRANT DATE shall mean the date of grant of the option as specified
in the Grant Notice.
O. 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.
P. INCENTIVE OPTION shall mean an option which satisfies the
requirements of Code Section 422.
A-2.
<PAGE>
Q. 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 the Optionee or any other person in the Service of the
Corporation (or any parent or subsidiary).
R. 1933 ACT shall mean the Securities Act of 1933, as amended from time
to time.
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. NOTICE OF EXERCISE shall mean the notice of exercise in the form
attached hereto as Exhibit I.
V. OPTION SHARES shall mean the number of shares of Common Stock
subject to the option.
W. OPTIONEE shall mean the person to whom the option is granted as
specified in the Grant Notice.
X. PARENT shall mean any corporation (other than the Corporation) in an
unbroken chain of corporations ending with the Corporation, provided each
such 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.
Y. PLAN shall mean the Corporation's 1996 Stock Option/Stock Issuance
Plan.
Z. PLAN ADMINISTRATOR shall mean either the Board or a committee of
Board members, to the extent the committee is at the time responsible for the
administration of the Plan.
AA. SERVICE shall mean the Optionee's performance of services on a
periodic basis 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.
BB. SUBSIDIARY shall mean any corporation (other than the Corporation)
in an unbroken chain of corporations beginning with the Corporation, provided
each such
A-3.
<PAGE>
corporation in the unbroken chain (other than the last corporation in such
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.
A-4.
<PAGE>
EXHIBIT 99.4
ADDENDUM
TO
STOCK OPTION AGREEMENT
The following provisions are hereby incorporated into, and are
hereby made a part of, that certain Stock Option Agreement (the "Option
Agreement") by and between Coldwater Creek, Inc. (the "Corporation") and
____________________ ("Optionee") evidencing the stock option (the "Option")
granted on __________________, 199_ to Optionee under the terms of the
Corporation's 1996 Stock Option/Stock Issuance Plan, and such provisions
shall be effective immediately. All capitalized terms in this Addendum, to
the extent not otherwise defined herein, shall have the meanings assigned to
them in the Option Agreement.
INVOLUNTARY TERMINATION FOLLOWING
CHANGE IN CONTROL
1. The Option shall not accelerate upon the occurrence of a Change
in Control, and the Option shall, over Optionee's continued period of Service
after the Change in Control, continue to become exercisable for the Option
Shares in accordance with the provisions of the Option Agreement. However,
immediately upon an Involuntary Termination of Optionee's Service within
twelve (12) months following the Change in Control, the Option, to the extent
outstanding at the time but not otherwise fully exercisable, shall
automatically accelerate so that the Option shall become immediately
exercisable for all the Option Shares at the time subject to the Option and
may be exercised for any or all of those Option Shares as fully vested
shares. The Option shall remain so exercisable until the EARLIER of (i) the
Expiration Date or (ii) the expiration of the one (1)-year period measured
from the date of the Involuntary Termination.
2. For purposes of this Addendum, a CHANGE IN CONTROL shall be
deemed to occur in the event of 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 Securities Exchange Act of 1934, as amended) 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, 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
<PAGE>
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 such election or nomination was approved by the Board.
3. For purposes of this Addendum, an INVOLUNTARY TERMINATION shall
mean the termination of Optionee's Service by reason of:
(i) Optionee's involuntary dismissal or discharge by the
Corporation for reasons other than Misconduct, or
(ii) Optionee's voluntary resignation following (A) a change in
Optionee's position with the Corporation (or Parent or Subsidiary employing
Optionee) which materially reduces Optionee's level of responsibility, (B)
a reduction in Optionee's level of compensation (including base salary,
fringe benefits and participation in any corporate-performance based bonus
or incentive programs) by more than fifteen percent (15%) or (C) a
relocation of Optionee'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 Optionee's consent.
4. The provisions of Paragraph 1 of this Addendum shall govern the
period for which the Option is to remain exercisable following the
Involuntary Termination of Optionee's Service within twelve (12) months after
the Change in Control and shall supersede any provisions to the contrary in
Paragraph 5 of the Option Agreement.
IN WITNESS WHEREOF, Coldwater Creek, Inc. has caused this Addendum
to be executed by its duly authorized officer, and Optionee has executed this
Addendum, all as of the Effective Date specified below.
COLDWATER CREEK, INC.
By: ________________________________
Title: _____________________________
EFFECTIVE DATE: __________, 199_
____________________________________
Optionee
2.
<PAGE>
EXHIBIT 99.5
ADDENDUM
TO
STOCK OPTION AGREEMENT
The following provisions are hereby incorporated into, and are
hereby made a part of, that certain Stock Option Agreement (the "Option
Agreement") by and between Coldwater Creek, Inc. (the "Corporation") and
____________________ ("Optionee") evidencing the stock option (the "Option")
granted on ___________________, 199_ to Optionee under the terms of the
Corporation's 1996 Stock Option/Stock Issuance Plan, and such provisions
shall be effective immediately. All capitalized terms in this Addendum, to
the extent not otherwise defined herein, shall have the meanings assigned to
them in the Option Agreement.
INVOLUNTARY TERMINATION FOLLOWING
CORPORATE TRANSACTION
1. To the extent the Option is, in connection with a Corporate
Transaction, to be assumed or replaced with a comparable option in accordance
with Paragraph 6 of the Option Agreement, the Option shall not accelerate
upon the occurrence of that Corporate Transaction, and the Option shall
accordingly continue, over Optionee's period of Service after the Corporate
Transaction, to become exercisable for the Option Shares in one or more
installments in accordance with the provisions of the Option Agreement.
However, immediately upon an Involuntary Termination of Optionee's Service
within twelve (12) months following such Corporate Transaction, the Option
(or any replacement grant), to the extent outstanding at the time but not
otherwise fully exercisable, shall automatically accelerate so that the
Option shall become immediately exercisable for all the Option Shares at the
time subject to the Option and may be exercised for any or all of those
Option Shares as fully vested shares. The Option shall remain so exercisable
until the EARLIER of (i) the Expiration Date or (ii) the expiration of the
one (1)-year period measured from the date of the Involuntary Termination.
2. For purposes of this Addendum, an INVOLUNTARY TERMINATION shall
mean the termination of Optionee's Service by reason of:
(i) Optionee's involuntary dismissal or discharge by the
Corporation for reasons other than Misconduct, or
(ii) Optionee's voluntary resignation following (A) a change
in Optionee's position with the Corporation (or Parent or Subsidiary
employing Optionee) which materially reduces Optionee's level of
responsibility, (B) a reduction in Optionee's level of compensation
(including base salary, fringe benefits and participation in any
corporate-performance
<PAGE>
based bonus or incentive programs) by more than fifteen percent (15%)
or (C) a relocation of Optionee'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 Optionee's consent.
3. The provisions of Paragraph 1 of this Addendum shall govern the
period for which the Option is to remain exercisable following the
Involuntary Termination of Optionee's Service within twelve (12) months after
the Corporate Transaction and shall supersede any provisions to the contrary
in Paragraph 5 of the Option Agreement.
IN WITNESS WHEREOF, Coldwater Creek, Inc. has caused this Addendum
to be executed by its duly authorized officer, and Optionee has executed this
Addendum, all as of the Effective Date specified below.
COLDWATER CREEK, INC.
By: ________________________________
Title: _____________________________
EFFECTIVE DATE: __________, 199_
____________________________________
Optionee
2.
<PAGE>
EXHIBIT 99.6
INITIAL GRANT
COLDWATER CREEK INC.
NOTICE OF GRANT OF NON-EMPLOYEE DIRECTOR
AUTOMATIC STOCK OPTION
Notice is hereby given of the following option grant (the "Option")
to purchase shares of the Common Stock of Coldwater Creek Inc. (the
"Corporation"):
OPTIONEE: ___________________________________________________________
GRANT DATE: _________________________________________________________
EXERCISE PRICE: $ ________________________________________ per share
NUMBER OF OPTION SHARES: 13,376 shares
EXPIRATION DATE: ____________________________________________________
TYPE OF OPTION: Non-Statutory Stock Option
DATE EXERCISABLE: Immediately Exercisable
VESTING SCHEDULE: The Option Shares shall initially be unvested and
subject to repurchase by the Corporation at the Exercise Price paid
per share. Optionee shall acquire a vested interest in, and the
Corporation's repurchase right shall accordingly lapse with respect
to, the Option Shares in a series of three (3) equal and successive
annual installments over the Optionee's period of service as a member
of the Corporation's Board of Directors (the "Board") with the first
such installment to vest upon Optionee's completion of one (1) year of
Board service measured from the Grant Date.
Optionee understands and agrees that the Option is granted subject
to and in accordance with the terms of the automatic option grant program
under the Coldwater Creek Inc. 1996 Stock Option/Stock Issuance 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 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.
<PAGE>
REPURCHASE RIGHT. OPTIONEE HEREBY AGREES THAT ALL UNVESTED OPTION
SHARES ACQUIRED UPON THE EXERCISE OF THE OPTION SHALL NOT BE TRANSFERABLE AND
SHALL BE SUBJECT TO REPURCHASE BY THE CORPORATION, AT THE EXERCISE PRICE PAID
PER SHARE, UPON OPTIONEE'S TERMINATION OF SERVICE AS A MEMBER OF THE
CORPORATION'S BOARD OF DIRECTORS. THE TERMS AND CONDITIONS OF SUCH
REPURCHASE RIGHT SHALL BE SPECIFIED IN A STOCK PURCHASE AGREEMENT, IN FORM
AND SUBSTANCE SATISFACTORY TO THE CORPORATION, EXECUTED BY OPTIONEE AT THE
TIME OF THE OPTION EXERCISE.
NO IMPAIRMENT OF RIGHTS. Nothing in this Notice or in the attached
Automatic Stock Option Agreement or the Plan shall interfere with or
otherwise restrict in any way the rights of the Corporation or 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 Automatic Stock
Option Agreement.
DATED: ____________________, 199_
COLDWATER CREEK INC.
By: ________________________________
Title: ________________________________
_______________________________________
OPTIONEE
Address: ______________________________
_______________________________________
ATTACHMENTS
EXHIBIT A - AUTOMATIC STOCK OPTION AGREEMENT
EXHIBIT B - PLAN SUMMARY AND PROSPECTUS
2.
<PAGE>
EXHIBIT A
AUTOMATIC STOCK OPTION AGREEMENT<PAGE>
<PAGE>
EXHIBIT B
PLAN SUMMARY AND PROSPECTUS
<PAGE>
EXHIBIT 99.7
ANNUAL GRANT
COLDWATER CREEK INC.
NOTICE OF GRANT OF NON-EMPLOYEE DIRECTOR
AUTOMATIC STOCK OPTION
Notice is hereby given of the following option grant (the "Option") to
purchase shares of the Common Stock of Coldwater Creek Inc. (the "Corporation"):
OPTIONEE: __________________________________________________________
GRANT DATE: ________________________________________________________
EXERCISE PRICE: $ _______________________________________ per share
NUMBER OF OPTION SHARES: 1,672 shares
EXPIRATION DATE:____________________________________________________
TYPE OF OPTION: Non-Statutory Stock Option
DATE EXERCISABLE: Immediately Exercisable
VESTING SCHEDULE: The Option Shares shall initially be unvested and
subject to repurchase by the Corporation at the Exercise Price paid
per share. Optionee shall acquire a vested interest in, and the
Corporation's repurchase right shall accordingly lapse with respect
to, one hundred percent (100%) of the Option Shares upon the
Optionee's completion of one year of service as a member of the
Corporation's Board of Directors (the "Board") period measured from
the Grant Date. In no event shall any additional Option Shares vest
after Optionee's cessation of Board service.
Optionee understands and agrees that the Option is granted subject
to and in accordance with the terms of the automatic option grant program
under the Coldwater Creek Inc. 1996 Stock Option/Stock Issuance 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 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.
<PAGE>
REPURCHASE RIGHT. OPTIONEE HEREBY AGREES THAT ALL UNVESTED OPTION
SHARES ACQUIRED UPON THE EXERCISE OF THE OPTION SHALL NOT BE TRANSFERABLE AND
SHALL BE SUBJECT TO REPURCHASE BY THE CORPORATION, AT THE EXERCISE PRICE PAID
PER SHARE, UPON OPTIONEE'S TERMINATION OF SERVICE AS A MEMBER OF THE
CORPORATION'S BOARD OF DIRECTORS. THE TERMS AND CONDITIONS OF SUCH
REPURCHASE RIGHT SHALL BE SPECIFIED IN A STOCK PURCHASE AGREEMENT, IN FORM
AND SUBSTANCE SATISFACTORY TO THE CORPORATION, EXECUTED BY OPTIONEE AT THE
TIME OF THE OPTION EXERCISE.
NO IMPAIRMENT OF RIGHTS. Nothing in this Notice or in the attached
Automatic Stock Option Agreement or the Plan shall interfere with or
otherwise restrict in any way the rights of the Corporation or 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 Automatic Stock
Option Agreement.
DATED: __________________________________, 199_
COLDWATER CREEK INC.
By: ______________________________
Title: ______________________________
______________________________
OPTIONEE
Address: ____________________________
____________________________
ATTACHMENTS
EXHIBIT A - AUTOMATIC STOCK OPTION AGREEMENT
EXHIBIT B - PLAN SUMMARY AND PROSPECTUS
2.
<PAGE>
EXHIBIT A
AUTOMATIC STOCK OPTION AGREEMENT
<PAGE>
EXHIBIT B
PLAN SUMMARY AND PROSPECTUS
<PAGE>
EXHIBIT 99.8
COLDWATER CREEK INC.
AUTOMATIC STOCK OPTION AGREEMENT
RECITALS
A. The Corporation has implemented an automatic option grant program
under the Corporation's 1996 Stock Option/Stock Issuance Plan pursuant to
which eligible non-employee members of the Corporation's Board will
automatically receive special option grants at designated intervals over
their period of Board service in order to provide such individuals with a
meaningful incentive to continue to serve as a member 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 a stock option to
purchase shares of the Corporation's Common Stock under the Plan.
C. The granted option is intended to be a non-statutory option which
does NOT meet the requirements of Section 422 of the Internal Revenue Code.
D. All capitalized terms in this Agreement, to the extent not otherwise
defined in the 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 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, 6 or 7.
3. LIMITED TRANSFERABILITY. This option may, in connection with
the Optionee's estate plan, be assigned in whole or in part during Optionee's
lifetime to one or more members of the Optionee's immediate family or to a
trust established for the exclusive benefit of one or more such family
members. 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 and
shall be set forth in such documents issued to the assignee as the
Corporation may deem appropriate. Should the
<PAGE>
Optionee die while holding this option, then this option shall be transferred
in accordance with Optionee's will or the laws of descent and distribution.
4. EXERCISABILITY/VESTING.
(a) This option shall be immediately exercisable for any or
all of the Option Shares, whether or not the Option Shares are vested in
accordance with the Vesting Schedule set forth in the Grant Notice, and shall
remain so exercisable until the Expiration Date or the sooner termination of
the option term under Paragraph 5, 6 or 7.
(b) Optionee shall, in accordance with the Vesting Schedule
set forth in the Grant Notice, vest in the Option Shares in a series of
installments over his or her period of Board service. Vesting in the Option
Shares may be accelerated pursuant to the provisions of Paragraph 5, 6 or 7.
In no event, however, shall any additional Option Shares vest following
Optionee's cessation of service as a Board member.
5. CESSATION OF BOARD SERVICE. Should Optionee's service as a
Board member cease while this option remains 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:
(i) Should Optionee cease to serve as a Board member for
any reason (other than death or Disability) while holding this option,
then the period for exercising this option shall be reduced to a two (2)-
year period commencing with 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, this
option may not be exercised in the aggregate for more than the number of
Option Shares (if any) in which Optionee is vested on the date of his or
her cessation of Board service. Upon the EARLIER of (i) the expiration
of such two (2)-year period or (ii) the specified Expiration Date, the
option shall terminate and cease to be exercisable with respect to any
vested Option Shares for which the option has not been exercised.
(ii) Should Optionee die during the two (2)-year period
following his or her cessation of Board service, 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 in accordance with the
laws of descent and distribution shall have the right to exercise this
option for any or all of the Option Shares in which Optionee is vested at
the time of Optionee's cessation of Board service (less any Option Shares
purchased by Optionee after such cessation of Board service but prior to
death). Such right of exercise shall terminate, and this option shall
accordingly cease to be exercisable for such vested Option Shares, upon the
EARLIER of (i) the expiration of the two (2)-year period measured from the
date of Optionee's cessation of Board service or (ii) the specified
Expiration Date of the option term.
2.
<PAGE>
(iii) Should Optionee cease service as a Board member by
reason of death or Disability, then all Option Shares at the time subject
to this option but not otherwise vested shall immediately vest in full so
that Optionee (or the personal representative of Optionee's estate or the
person or persons to whom the option is transferred upon Optionee's death)
shall have the right to exercise this option for any or all of the Option
Shares as fully-vested shares of Common Stock at any time prior to the
EARLIER of (i) the expiration of the two (2)-year period measured from the
date of Optionee's cessation of Board service or (ii) the specified
Expiration Date.
(iv) Upon Optionee's cessation of Board service for any
reason other than death or Disability, this option shall immediately
terminate and cease to be outstanding with respect to any and all Option
Shares in which Optionee is not otherwise at that time vested in accordance
with the normal Vesting Schedule set forth in the Grant Notice or the
special vesting acceleration provisions of Paragraph 6 or 7 below.
6. CORPORATE TRANSACTION.
(a) In the event of a Corporate Transaction, all Option Shares
at the time subject to this option but not otherwise vested shall
automatically vest so that this option shall, immediately prior to the
specified effective date for the Corporate Transaction, become fully
exercisable for all of the Option Shares at the time subject to this option
and may be exercised for all or any portion of such shares as fully-vested
shares of Common Stock. Immediately following the consummation of the
Corporate Transaction, this option shall terminate and cease to be
outstanding except to the extent assumed by the successor corporation or its
parent company.
(b) If this option is assumed in connection with a Corporate
Transaction, 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 (i)
the class and number of securities available for issuance under the Plan
following the consummation of such Corporate Transaction and (ii) the
Exercise Price, PROVIDED the aggregate Exercise Price shall remain the same.
7. CHANGE IN CONTROL.
(a) All Option Shares subject to this option at the time of a
Change in Control but not otherwise vested shall automatically vest so that
this option shall, immediately prior to the effective date of such Change in
Control, become fully exercisable for all of the Option Shares at the time
subject to this option and may be exercised for all or any portion of such
shares as fully-vested shares of Common Stock. This option shall
3.
<PAGE>
remain exercisable for such fully-vested Option Shares until the EARLIEST to
occur of (i) the specified Expiration Date or (ii) the sooner termination of
this option in accordance with Paragraph 5 or 6.
8. 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; provided, however, that the aggregate
Exercise Price shall remain the same.
9. 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.
10. MANNER OF EXERCISING OPTION.
(a) In order to exercise this option for all or any part of
the Option Shares for which the option is at the time exercisable, Optionee
or, in the case of exercise after Optionee's death, Optionee's executor,
administrator, heir or legatee, as the case may be, must take the following
actions:
(i) To the extent the option is exercised for
vested Option Shares, the Secretary of the Corporation shall be
provided with written notice of the option exercise (the "Exercise
Notice") in substantially the form of Exhibit I attached hereto, in
which there is specified the number of vested Option Shares to be
purchased under the exercised option. To the extent that the option
is exercised for one or more unvested Option Shares, Optionee (or
other person exercising the option) shall deliver to the Secretary of
the Corporation a Purchase Agreement for those unvested Option Shares.
(ii) The Exercise Price for the purchased shares
shall be paid in one or more of the following alternative forms:
- cash or check made payable to the
Corporation's order; or
- 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
4.
<PAGE>
- to the extent the option is exercised for
vested Option Shares, through a special sale and remittance
procedure pursuant to which Optionee shall provide irrevocable
written instructions (A) to a Corporation-designated brokerage
firm to effect the immediate sale of the vested shares purchased
under the option 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 those shares plus
the applicable Federal, state and local income taxes required to
be withheld by the Corporation by reason of such exercise and (B)
to the Corporation to deliver the certificates for the purchased
shares directly to such brokerage firm in order to complete the
sale.
(iii) Appropriate documentation evidencing the
right to exercise this option shall be furnished the Corporation if
the person or persons exercising the option is other than Optionee.
(iv) Appropriate arrangement must be made with the
Corporation for the satisfaction of all Federal, state and local
income tax withholding requirements applicable to the option exercise.
(b) Except to the extent the sale and remittance procedure
specified above is utilized in connection with the exercise of the option for
vested Option Shares, payment of the Exercise Price for the purchased shares
must accompany the Exercise Notice or Purchase Agreement delivered to the
Corporation in connection with the option exercise.
(c) 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 or certificates representing
the purchased Option Shares. To the extent any such Option Shares are
unvested, the certificates for those Option Shares shall be endorsed with an
appropriate legend evidencing the Corporation's repurchase rights and may be
held in escrow with the Corporation until such shares vest.
(d) In no event may this option be exercised for fractional
shares.
11. NO IMPAIRMENT OF RIGHTS. This Agreement shall not in any way
affect the right of the Corporation to adjust, reclassify, reorganize or
otherwise make changes in its capital or business structure or to merge,
consolidate, dissolve, liquidate or sell or transfer all or any part of its
business or assets. Nor shall this Agreement in any way be construed or
interpreted so as to affect adversely or otherwise impair the right of the
Corporation or the stockholders to remove Optionee from the Board at any time
in accordance with the provisions of applicable law.
5.
<PAGE>
12. 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 the Nasdaq National
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. However, the Corporation shall use its best efforts
to obtain all such applicable approvals.
13. SUCCESSORS AND ASSIGNS. Except to the extent otherwise
provided in Paragraph 3 or 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 and the legal representatives, heirs
and legatees of Optionee's estate.
14. CONSTRUCTION/GOVERNING LAW. This Agreement and the option
evidenced hereby are made and granted pursuant to the automatic option grant
program in effect under the Plan and are in all respects limited by and
subject to the express terms and provisions of that program. The
interpretation, performance, and enforcement of this Agreement shall be
governed by the laws of the State of Idaho without resort to that State's
conflict-of-laws rules.
15. 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.
6.
<PAGE>
EXHIBIT I
NOTICE OF EXERCISE
I hereby notify Coldwater Creek 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 pursuant to the automatic option grant program under the Corporation's
1996 Stock Option/Stock Issuance Plan on __________________, 199_.
Concurrently with the delivery of this Exercise Notice to the
Secretary of 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 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 for any Purchased Shares in which I am
vested at the time of exercise.
_______________________, 199_
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: _______________________________________
<PAGE>
APPENDIX
The following definitions shall be in effect under the Agreement:
A. AGREEMENT shall mean this Automatic Stock Option Agreement.
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 which the Board
does not recommend such stockholders to accept, 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
A-1.
<PAGE>
(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 Coldwater Creek Inc., a Delaware corporation.
H. DISABILITY shall mean the inability of Optionee to perform his or
her usual duties as a Board member 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.
I. EXERCISE DATE shall mean the date on which the option shall have
been exercised in accordance with Paragraph 10 of the Agreement.
J. EXERCISE PRICE shall mean the exercise price payable per share as
specified in the Grant Notice.
K. EXPIRATION DATE shall mean the date on which the option term expires
as specified in the Grant Notice.
L. 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 traded on the Nasdaq
National Market, then the Fair Market Value shall be the closing
selling price per share of Common Stock on the date in question, as
the price is reported by the National Association of Securities
Dealers on the Nasdaq National Market or any successor system. If
there is no closing selling price for the Common Stock on the date in
question, then the Fair Market Value shall be the closing selling
price on the last preceding date for which such quotation exists.
(ii) If the Common Stock is at the time listed on any Stock
Exchange, then the Fair Market Value shall be the closing selling
price per share of Common Stock on the date in question on the Stock
Exchange determined by the Plan Administrator to be the primary market
for the Common Stock, as such price is officially quoted in the
composite tape of transactions on such exchange. If there is no
closing selling price for the Common Stock on the date in question,
then the Fair Market Value shall be the closing selling price on the
last preceding date for which such quotation exists.
M. GRANT DATE shall mean the date of grant of the option as specified
in the Grant Notice.
A-2.
<PAGE>
N. GRANT NOTICE shall mean the Notice of Grant of Automatic Stock Option
accompanying this Agreement, pursuant to which Optionee has been informed of the
basic terms of the option evidenced hereby.
O. 1934 ACT shall mean the Securities Exchange Act of 1934, as amended.
P. NON-STATUTORY OPTION shall mean an option not intended to satisfy
the requirements of Code Section 422.
Q. OPTION SHARES shall mean the number of shares of Common Stock
subject to the option.
R. OPTIONEE shall mean the person to whom the option is granted as
specified in the Grant Notice.
S. PLAN shall mean the Corporation's 1996 Stock Option/Stock Incentive
Plan.
T. PURCHASE AGREEMENT shall mean the stock purchase agreement (in form
and substance satisfactory to the Corporation) which must be executed at the
time the option is exercised for unvested Option Shares and which will
accordingly (i) grant the Corporation the right to repurchase, at the
Exercise Price, any and all of those Option Shares in which Optionee is not
otherwise vested at the time of his or her cessation of service as a Board
member and (ii) preclude the sale, transfer or other disposition of any of
the Option Shares purchased under such agreement while those Option Shares
remain subject to the repurchase right.
U. STOCK EXCHANGE shall mean the American Stock Exchange or the New
York Stock Exchange.
V. VESTING SCHEDULE shall mean the vesting schedule specified in the
Grant Notice, pursuant to which Optionee will vest in the Option Shares in
one or more installments over his or her period of Board service, subject to
acceleration in accordance with the provisions of the Agreement.
A-3.
<PAGE>
EXHIBIT 99.9
COLDWATER CREEK, INC.
STOCK ISSUANCE AGREEMENT
------------------------
AGREEMENT made as of this ____ day of _______________ 19__, by and
between Coldwater Creek, Inc., a Delaware corporation, and
________________________________, a Participant in the Corporation's 1996
Stock Option/Stock Issuance Plan.
All capitalized terms in this Agreement shall have the meaning
assigned to them in this Agreement or in the attached Appendix.
A. PURCHASE OF SHARES
1. PURCHASE. Participant hereby purchases shares of
Common Stock (the "Purchased Shares") pursuant to the provisions of the Stock
Issuance Program at the purchase price of $______ per share (the "Purchase
Price").
2. PAYMENT. Concurrently with the delivery of this Agreement to
the Corporation, Participant shall pay the Purchase Price for the Purchased
Shares in cash or check payable to the Corporation and shall deliver a
duly-executed blank Assignment Separate from Certificate (in the form
attached hereto as Exhibit I) with respect to the Purchased Shares.
3. STOCKHOLDER RIGHTS. Until such time as the Corporation
exercises the Repurchase Right, Participant (or any successor in interest)
shall have all the rights of a stockholder (including voting, dividend and
liquidation rights) with respect to the Purchased Shares, subject, however,
to the transfer restrictions of this Agreement.
4. ESCROW. The Corporation shall have the right to hold the
Purchased Shares in escrow until those shares have vested in accordance with
the Vesting Schedule.
5. COMPLIANCE WITH LAW. Under no circumstances shall shares of
Common Stock or other assets be issued or delivered to Participant pursuant
to the provisions of this Agreement unless, in the opinion of counsel for the
Corporation or its successors, there shall have been compliance with all
applicable requirements of Federal and state securities laws, all applicable
listing requirements of any stock exchange (or the Nasdaq National Market, if
applicable) on which the Common Stock is at the time listed for trading and
all other requirements of law or of any regulatory bodies having jurisdiction
over such issuance and delivery.
<PAGE>
B. TRANSFER RESTRICTIONS
1. RESTRICTION ON TRANSFER. Except for any Permitted Transfer,
Participant shall not transfer, assign, encumber or otherwise dispose of any
of the Purchased Shares which are subject to the Repurchase Right.
2. RESTRICTIVE LEGEND. The stock certificate for the Purchased
Shares shall be endorsed with the following restrictive legend:
"The shares represented by this certificate are unvested and
subject to certain repurchase rights granted to the Corporation and
accordingly may not be sold, assigned, transferred, encumbered, or in any
manner disposed of except in conformity with the terms of a written
agreement dated ______________, 199_ between the Corporation and the
registered holder of the shares (or the predecessor in interest to the
shares). A copy of such agreement is maintained at the Corporation's
principal corporate offices."
3. TRANSFEREE OBLIGATIONS. Each person (other than the
Corporation) to whom the Purchased Shares are transferred by means of a
Permitted Transfer must, as a condition precedent to the validity of such
transfer, acknowledge in writing to the Corporation that such person is bound
by the provisions of this Agreement and that the transferred shares are
subject to the Repurchase Right to the same extent such shares would be so
subject if retained by Participant.
C. REPURCHASE RIGHT
1. GRANT. The Corporation is hereby granted the right (the
"Repurchase Right"), exercisable at any time during the ninety (90)-day
period following the date Participant ceases for any reason to remain in
Service, to repurchase at the Purchase Price all or any portion of the
Purchased Shares in which Participant is not, at the time of his or her
cessation of Service, vested in accordance with the Vesting Schedule (such
shares to be hereinafter referred to as the "Unvested Shares").
2. EXERCISE OF THE REPURCHASE RIGHT. The Repurchase Right shall
be exercisable by written notice delivered to each Owner of the Unvested
Shares prior to the expiration of the ninety (90)-day exercise period. The
notice shall indicate the number of Unvested Shares to be repurchased and the
date on which the repurchase is to be effected, such date to be not more than
thirty (30) days after the date of such notice. The certificates
representing the Unvested Shares to be repurchased shall be delivered to the
Corporation prior to the close of business on the date specified for the
repurchase. Concurrently with the receipt of such stock certificates, the
Corporation shall pay to Owner, in cash or cash
2.
<PAGE>
equivalent (including the cancellation of any purchase-money indebtedness),
an amount equal to the Purchase Price previously paid for the Unvested Shares
to be repurchased from Owner.
3. TERMINATION OF THE REPURCHASE RIGHT. The Repurchase Right
shall terminate with respect to any Unvested Shares for which it is not
timely exercised under Paragraph C.2. In addition, the Repurchase Right
shall terminate and cease to be exercisable with respect to any and all
Purchased Shares in which Participant vests in accordance with the following
Vesting Schedule:
(i) Upon Participant's completion of one (1) year of
Service measured from ______________, 199__, Participant shall acquire
a vested interest in, and the Repurchase Right shall lapse with
respect to, twenty-five percent (25%) of the Purchased Shares.
(ii) Participant shall acquire a vested interest in, and the
Repurchase Right shall lapse with respect to, the remaining Purchased
Shares in a series of thirty six (36) successive equal monthly
installments upon Participant's completion of each additional month of
Service over the thirty-six (36)-month period measured from the
initial vesting date under subparagraph (i) above.
4. RECAPITALIZATION. Any new, substituted or additional
securities or other property (including cash paid other than as a regular
cash dividend) which is by reason of any Recapitalization distributed with
respect to the Purchased Shares shall be immediately subject to the
Repurchase Right, but only to the extent the Purchased Shares are at the time
covered by such right. Appropriate adjustments to reflect such distribution
shall be made to the number and/or class of securities subject to this
Agreement and to the price per share to be paid upon the exercise of the
Repurchase Right in order to reflect the effect of any such Recapitalization
upon the Corporation's capital structure; PROVIDED, however, that the
aggregate purchase price shall remain the same.
5. CORPORATE TRANSACTION.
(a) Immediately prior to the consummation of any Corporate
Transaction, the Repurchase Right shall automatically lapse in its entirety
and the Purchased Shares shall vest in full, except to the extent the
Repurchase Right is to be assigned to the successor corporation (or parent
thereof) in connection with the Corporate Transaction.
(b) To the extent the Repurchase Right remains in effect
following a Corporate Transaction, such right shall apply to the new capital
stock or other property (including any cash payments) received in exchange
for the Purchased Shares in consummation of the Corporate Transaction, but
only to the extent the Purchased Shares
3.
<PAGE>
are at the time covered by such right. Appropriate adjustments shall be made
to the price per share payable upon exercise of the Repurchase Right to
reflect the effect of the Corporate Transaction upon the Corporation's
capital structure; PROVIDED, however, that the aggregate purchase price shall
remain the same. The new securities or other property (including cash
payments) issued or distributed with respect to the Purchased Shares in
consummation of the Corporate Transaction shall immediately be deposited in
escrow with the Corporation (or the successor entity) and shall not be
released from escrow until Participant vests in such securities or other
property in accordance with the same Vesting Schedule in effect for the
Purchased Shares.
(c) The Repurchase Right may also be subject to termination in
whole or in part on an accelerated basis, and the Purchased Shares subject to
immediate vesting, in accordance with the terms of any special Addendum
attached to this Agreement.
D. SPECIAL TAX ELECTION
1. SECTION 83(b) ELECTION. Under Code Section 83, the excess of
the fair market value of the Purchased Shares on the date any forfeiture
restrictions applicable to such shares lapse over the Purchase Price paid for
such shares will be reportable as ordinary income on the lapse date. For
this purpose, the term "forfeiture restrictions" includes the right of the
Corporation to repurchase the Purchased Shares pursuant to the Repurchase
Right. Participant may elect under Code Section 83(b) to be taxed at the time
the Purchased Shares are acquired, rather than when and as such Purchased
Shares cease to be subject to such forfeiture restrictions. Such election
must be filed with the Internal Revenue Service within thirty (30) days after
the date of this Agreement. Even if the fair market value of the Purchased
Shares on the date of this Agreement equals the Purchase Price paid (and thus
no tax is payable), the election must be made to avoid adverse tax
consequences in the future. THE FORM FOR MAKING THIS ELECTION IS ATTACHED AS
EXHIBIT II HERETO. PARTICIPANT UNDERSTANDS THAT FAILURE TO MAKE THIS FILING
WITHIN THE APPLICABLE THIRTY (30)-DAY PERIOD WILL RESULT IN THE RECOGNITION
OF ORDINARY INCOME AS THE FORFEITURE RESTRICTIONS LAPSE.
2. FILING RESPONSIBILITY. PARTICIPANT ACKNOWLEDGES THAT IT IS
PARTICIPANT'S SOLE RESPONSIBILITY, AND NOT THE CORPORATION'S, TO FILE A
TIMELY ELECTION UNDER CODE SECTION 83(b), EVEN IF PARTICIPANT REQUESTS THE
CORPORATION OR ITS REPRESENTATIVES TO MAKE THIS FILING ON HIS OR HER BEHALF.
4.
<PAGE>
E. GENERAL PROVISIONS
1. ASSIGNMENT. The Corporation may assign the Repurchase Right to
any person or entity selected by the Board, including (without limitation)
one or more stockholders of the Corporation.
2. NO EMPLOYMENT OR SERVICE CONTRACT. Nothing in this Agreement
or in the Plan shall confer upon 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 Participant) or of Participant, which rights are
hereby expressly reserved by each, to terminate Participant's Service at any
time for any reason, with or without cause.
3. NOTICES. Any notice required to be given under this Agreement
shall be in writing and shall be deemed effective upon personal delivery or
upon deposit in the U.S. mail, registered or certified, postage prepaid and
properly addressed to the party entitled to such notice at the address
indicated below such party's signature line on this Agreement or at such
other address as such party may designate by ten (10) days advance written
notice under this paragraph to all other parties to this Agreement.
4. NO WAIVER. The failure of the Corporation in any instance to
exercise the Repurchase Right shall not constitute a waiver of any other
repurchase rights that may subsequently arise under the provisions of this
Agreement or any other agreement between the Corporation and Participant. No
waiver of any breach or condition of this Agreement shall be deemed to be a
waiver of any other or subsequent breach or condition, whether of like or
different nature.
5. CANCELLATION OF SHARES. If the Corporation shall make
available, at the time and place and in the amount and form provided in this
Agreement, the consideration for the Purchased Shares to be repurchased in
accordance with the provisions of this Agreement, then from and after such
time, the person from whom such shares are to be repurchased shall no longer
have any rights as a holder of such shares (other than the right to receive
payment of such consideration in accordance with this Agreement). Such
shares shall be deemed purchased in accordance with the applicable provisions
hereof, and the Corporation shall be deemed the owner and holder of such
shares, whether or not the certificates therefor have been delivered as
required by this Agreement.
6. PARTICIPANT UNDERTAKING. Participant hereby agrees to take
whatever additional action and execute whatever additional documents the
Corporation may deem necessary or advisable in order to carry out or effect
one or more of the obligations or restrictions imposed on either Participant
or the Purchased Shares pursuant to the provisions of this Agreement.
5.
<PAGE>
7. AGREEMENT IS ENTIRE CONTRACT. This Agreement constitutes the
entire contract between the parties hereto with regard to the subject matter
hereof. This Agreement is made pursuant to the provisions of the Plan and
shall in all respects be construed in conformity with the terms of the Plan.
8. GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Idaho without resort
to that State's conflict-of-laws rules.
9. COUNTERPARTS. This Agreement may be executed in counterparts,
each of which shall be deemed to be an original, but all of which together
shall constitute one and the same instrument.
10. SUCCESSORS AND ASSIGNS. The provisions of this Agreement shall
inure to the benefit of, and be binding upon, the Corporation and its
successors and assigns and upon Participant, Participant's assigns and the
legal representatives, heirs and legatees of Participant's estate, whether or
not any such person shall have become a party to this Agreement and have
agreed in writing to join herein and be bound by the terms hereof.
IN WITNESS WHEREOF, the parties have executed this Agreement on the
day and year first indicated above.
COLDWATER CREEK, INC.
By: _______________________
Title: ____________________
Address: __________________
___________________________
___________________________
PARTICIPANT
Address:___________________
___________________________
6.
<PAGE>
EXHIBIT I
ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED __________________________ hereby sell(s),
assign(s) and transfer(s) unto Coldwater Creek, Inc. (the "Corporation"),
______________ (______) shares of the Common Stock of the Corporation
standing in his or her name on the books of the Corporation represented by
Certificate No. ___________________ herewith and do(es) hereby irrevocably
constitute and appoint ____________________ Attorney to transfer the said
stock on the books of the Corporation with full power of substitution in the
premises. Dated:________________, 199_.
Signature _____________________________
INSTRUCTION: Please do not fill in any blanks other than the signature line.
Please sign exactly as you would like your name to appear on the issued stock
certificate. The purpose of this assignment is to enable the Corporation to
exercise the Repurchase Right without requiring additional signatures on the
part of Participant.
<PAGE>
EXHIBIT II
SECTION 83(B) TAX ELECTION
This statement is being made under Section 83(b) of the Internal Revenue
Code, pursuant to Treas. Reg. Section 1.83-2.
(1) The taxpayer who performed the services is:
Name:
Address:
Taxpayer Ident. No.:
(2) The property with respect to which the election is being made is ________
shares of the common stock of Coldwater Creek, Inc.
(3) The property was issued on ______________ , 199_.
(4) The taxable year in which the election is being made is the calendar year
199_.
(5) The property is subject to a repurchase right pursuant to which the
issuer has the right to acquire the property at the original purchase
price if for any reason taxpayer's employment with the issuer is
terminated. The issuer's repurchase right lapses in a series of
annual and monthly installments over a four (4)-year period ending
on _____________________________________________________.
(6) The fair market value at the time of transfer (determined without regard
to any restriction other than a restriction which by its terms will never
lapse) is $ _______ per share.
(7) The amount paid for such property is $ _______ per share.
(8) A copy of this statement was furnished to Coldwater Creek, Inc. for whom
taxpayer rendered the services underlying the transfer of property.
(9) This statement is executed on ________________________, 199__.
__________________________________ ______________________________________
Spouse (if any) Taxpayer
THIS ELECTION MUST BE FILED WITH THE INTERNAL REVENUE SERVICE CENTER WITH
WHICH TAXPAYER FILES HIS OR HER FEDERAL INCOME TAX RETURNS AND MUST BE MADE
WITHIN THIRTY (30) DAYS AFTER THE EXECUTION DATE OF THE STOCK ISSUANCE
AGREEMENT. THIS FILING SHOULD BE MADE BY REGISTERED OR CERTIFIED MAIL,
RETURN RECEIPT REQUESTED. PARTICIPANT MUST RETAIN TWO (2) COPIES OF THE
COMPLETED FORM FOR FILING WITH HIS OR HER FEDERAL AND STATE TAX RETURNS FOR
THE CURRENT TAX YEAR AND AN ADDITIONAL COPY FOR HIS OR HER RECORDS.
<PAGE>
APPENDIX
The following definitions shall be in effect under the Agreement:
A. AGREEMENT shall mean this Stock Issuance 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 the Corporation's common stock.
E. CORPORATE TRANSACTION shall mean either of the following
stockholder-approved transactions:
(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 Coldwater Creek, Inc., a Delaware corporation.
G. OWNER shall mean Participant and all subsequent holders of the
Purchased Shares who derive their chain of ownership through a Permitted
Transfer from Participant.
H. 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.
I. PARTICIPANT shall mean the person to whom the Purchased Shares are
issued under the Stock Issuance Program.
A-1.
<PAGE>
J. PERMITTED TRANSFER shall mean (i) a gratuitous transfer of the
Purchased Shares, PROVIDED AND ONLY IF Participant obtains the Corporation's
prior written consent to such transfer, (ii) a transfer of title to the
Purchased Shares effected pursuant to Participant's will or the laws of
intestate succession following Participant's death or (iii) a transfer to the
Corporation in pledge as security for any purchase-money indebtedness
incurred by Participant in connection with the acquisition of the Purchased
Shares.
K. PLAN shall mean the Corporation's 1996 Stock Option/Stock Issuance
Plan.
L. PLAN ADMINISTRATOR shall mean either the Board or a committee of the
Board acting in its administrative capacity under the Plan.
M. PURCHASE PRICE shall have the meaning assigned to such term in
Paragraph A.1.
N. PURCHASED SHARES shall have the meaning assigned to such term in
Paragraph A.1.
O. RECAPITALIZATION shall mean any stock split, stock dividend,
recapitalization, combination of shares, exchange of shares or other change
affecting the Corporation's outstanding Common Stock as a class without the
Corporation's receipt of consideration.
P. REORGANIZATION shall mean any of the following transactions:
(i) a merger or consolidation in which the Corporation is
not the surviving entity,
(ii) a sale, transfer or other disposition of all or
substantially all of the Corporation's assets,
(iii) a reverse merger in which the Corporation is the
surviving entity but in which the Corporation's outstanding voting
securities are transferred in whole or in part to a person or persons
different from the persons holding those securities immediately prior
to the merger, or
(iv) any transaction effected primarily to change the state
in which the Corporation is incorporated or to create a holding
company structure.
Q. REPURCHASE RIGHT shall mean the right granted to the Corporation in
accordance with Article C.
A-2.
<PAGE>
R. SERVICE shall mean the Participant's performance of services on a
periodic basis for the Corporation (or any Parent or Subsidiary) in the
capacity of an employee, a non-employee member of the board of directors or
an independent consultant or advisor, except to the extent otherwise
specifically provided in the appicable stock option or stock issuance
agreement.
S. STOCK ISSUANCE PROGRAM shall mean the Stock Issuance Program under
the Plan.
T. 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.
U. VESTING SCHEDULE shall mean the vesting schedule specified in
Paragraph C.3, subject to the acceleration provisions of Paragraph C.5.
V. UNVESTED SHARES shall have the meaning assigned to such term in
Paragraph C.1.
A-3.
<PAGE>
EXHIBIT 99.10
ADDENDUM
TO
STOCK ISSUANCE AGREEMENT
The following provisions are hereby incorporated into, and are
hereby made a part of, that certain Stock Issuance Agreement dated 2-- (the
"Issuance Agreement") by and between Coldwater Creek, Inc. (the
"Corporation") and 1-- ("Participant") evidencing the stock issuance on such
date to Participant under the terms of the Corporation's 1996 Stock
Option/Stock Issuance Plan, and such provisions shall be effective
immediately. All capitalized terms in this Addendum, to the extent not
otherwise defined herein, shall have the meanings assigned to such terms in
the Issuance Agreement.
INVOLUNTARY TERMINATION FOLLOWING
CHANGE IN CONTROL
1. No accelerated vesting of the Purchased Shares shall occur upon
a Change in Control, and the Repurchase Right shall continue to remain in
full force and effect in accordance with the provisions of the Issuance
Agreement. The Participant shall, over Participant's continued period of
Service after the Change in Control, continue to vest in the Purchased Shares
in accordance with the provisions of the Issuance Agreement. However,
immediately upon an Involuntary Termination of Participant's Service within
twelve (12) months following the Change in Control, the Repurchase Right
shall terminate automatically and all the Purchased Shares shall vest in full.
2. For purposes of this Addendum, the following definitions shall
be in effect:
A CHANGE IN CONTROL shall be deemed to occur in the event of a
change in ownership or control of the Corporation effected through either of
the following transactions:
(i) the direct or indirect acquisition 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 Securities Exchange Act of 1934, as
amended) 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, or
<PAGE>
(ii) a change in the composition of the Board over a
period of thirty-six (36) 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 such
election or nomination was approved by the Board.
An INVOLUNTARY TERMINATION shall mean the termination of
Participant's Service by reason of:
(i) Participant's involuntary dismissal or discharge
by the Corporation for reasons other than Misconduct, or
(ii) Participant's voluntary resignation following (A)
a change in Participant's position with the Corporation (or Parent or
Subsidiary employing Participant) which materially reduces
Participant's level of responsibility, (B) a reduction in
Participant's level of compensation (including base salary, fringe
benefits and participation in any corporate-performance based bonus or
incentive programs) by more than fifteen percent (15%) or (C) a
relocation of Participant'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 Participant's
consent.
MISCONDUCT shall mean the commission of any act of fraud,
embezzlement or dishonesty by the Participant, any unauthorized use or
disclosure by the Participant of confidential information or trade secrets of
the Corporation (or any Parent or Subsidiary), or any other intentional
misconduct by the Participant 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 the Participant or other person in
the Service of the Corporation (or any Parent or Subsidiary).
2.
<PAGE>
IN WITNESS WHEREOF, Coldwater Creek, Inc. has caused this Addendum
to be executed by its duly-authorized officer, and Participant has executed
this Addendum, all as of the Effective Date specified below.
COLDWATER CREEK, INC.
By: _____________________________
Title: __________________________
_________________________________
1--, PARTICIPANT
EFFECTIVE DATE: _________________, 199_
3.
<PAGE>
EXHIBIT 99.11
ADDENDUM
TO
STOCK ISSUANCE AGREEMENT
The following provisions are hereby incorporated into, and are hereby
made a part of, that certain Stock Issuance Agreement dated 2-- (the
"Issuance Agreement") by and between Coldwater Creek, Inc. (the
"Corporation") and 1-- ("Participant") evidencing the stock issuance on such
date to Participant under the terms of the Corporation's 1996 Stock
Option/Stock Issuance Plan, and such provisions shall be effective
immediately. All capitalized terms in this Addendum, to the extent not
otherwise defined herein, shall have the meanings assigned to such terms in
the Issuance Agreement.
INVOLUNTARY TERMINATION FOLLOWING
CORPORATE TRANSACTION
1. To the extent the Repurchase Right is assigned to the successor
corporation (or parent thereof) in connection with a Corporate Transaction,
no accelerated vesting of the Purchased Shares shall occur upon such
Corporate Transaction, and the Repurchase Right shall continue to remain in
full force and effect in accordance with the provisions of the Issuance
Agreement. The Participant shall, over Participant's continued period of
Service after the Corporate Transaction, continue to vest in the Purchased
Shares in accordance with the provisions of the Issuance Agreement. However,
immediately upon an Involuntary Termination of Participant's Service within
twelve (12) months following the Corporate Transaction, the Repurchase Right
shall terminate automatically and all the Purchased Shares shall vest in full.
2. For purposes of this Addendum, the following definitions shall
be in effect:
An INVOLUNTARY TERMINATION shall mean the termination of
Participant's Service by reason of:
(i) Participant's involuntary dismissal or discharge by the
Corporation for reasons other than Misconduct, or
(ii) Participant's voluntary resignation following (A) a
change in participant's position with the Corporation (or Parent
or Subsidiary employing Participant) which materially reduces
Participant's level of responsibility, (B) a reduction in Participant's
level of compensation (including base salary, fringe benefits and
participation in any corporate-
<PAGE>
performance based bonus or incentive programs) by more than fifteen
percent (15%) or (C) a relocation of Participant'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
Participant's consent.
MISCONDUCT shall mean the commission of any act of fraud,
embezzlement or dishonesty by the Participant, any unauthorized use or
disclosure by the Participant of confidential information or trade secrets of
the Corporation (or any Parent or Subsidiary), or any other intentional
misconduct by the Participant 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 the Participant or other person in
the Service of the Corporation (or any Parent or Subsidiary).
IN WITNESS WHEREOF, Coldwater Creek, Inc. has caused this
Addendum to be executed by its duly-authorized officer, and Participant has
executed this Addendum, all as of the Effective Date specified below.
COLDWATER CREEK, INC.
By: _________________________________
Title: ______________________________
_____________________________________
1--,PARTICIPANT
EFFECTIVE DATE: _____________, 199_
2.
<PAGE>
Exhibit 99.12
COLDWATER CREEK INC.
EMPLOYEE STOCK PURCHASE PLAN
I. PURPOSE OF THE PLAN
This Employee Stock Purchase Plan is intended to promote the interests
of Coldwater Creek Inc. by providing eligible employees with the opportunity to
acquire a proprietary interest in the Corporation through participation in a
payroll-deduction based employee stock purchase plan designed to qualify under
Section 423 of the Code.
Capitalized terms herein shall have the meanings assigned to such
terms in the attached Appendix.
II. ADMINISTRATION OF THE PLAN
The Plan Administrator shall have full authority to interpret and
construe any provision of the Plan and to adopt such rules and regulations for
administering the Plan as it may deem necessary in order to comply with the
requirements of Code Section 423. Decisions of the Plan Administrator shall be
final and binding on all parties having an interest in the Plan.
III. STOCK SUBJECT TO PLAN
A. The stock purchasable under the Plan shall be shares of
authorized but unissued or reacquired Common Stock, including shares of
Common Stock purchased on the open market. The maximum number of shares of
Common Stock which may be issued over the term of the Plan shall not exceed
seven hundred fifty thousand (750,000) shares.
B. 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 maximum number and class of securities issuable under
the Plan, (ii) the maximum number and class of securities purchasable per
Participant on any one Purchase Date and (iii) the number and class of
securities and the price per share in effect under each outstanding purchase
right in order to prevent the dilution or enlargement of benefits thereunder.
IV. OFFERING PERIODS
A. Shares of Common Stock shall be offered for purchase under the
Plan through a series of successive offering periods until such time as (i) the
maximum number
<PAGE>
of shares of Common Stock available for issuance under the Plan shall have
been purchased or (ii) the Plan shall have been sooner terminated.
B. Each offering period shall be of such duration (not to exceed
twenty-four (24) months) as determined by the Plan Administrator prior to the
start date. The initial offering period shall commence on July 1, 1997 (the
"Effective Time") and terminate on the last business day in March 1999. The
next offering period shall commence on the first business day in April 1999, and
subsequent offering periods shall commence as designated by the Plan
Administrator.
C. Each offering period shall be comprised of a series of one or
more successive Purchase Intervals. Purchase Intervals shall run from the first
business day in April each year to the last business day in September of the
same year and from the first business day in October each year to the last
business day in March of the following year. However, the initial Purchase
Interval in effect under the initial offering period shall commence at the
Effective Time and terminate on the last business day in March 1998.
D. Should the Fair Market Value per share of Common Stock on any
Purchase Date within an offering period be less than the Fair Market Value per
share of Common Stock on the start date of that offering period, then that
offering period shall automatically terminate with the purchase of shares of
Common Stock on such Purchase Date, and a new offering period shall commence on
the next business day. The new offering period shall have a duration of twenty-
four (24) months, unless a shorter duration is established by the Plan
Administrator within five (5) business days following the start date of that
offering period.
V. ELIGIBILITY
A. Each individual who is an Eligible Employee on the start date of
any offering period under the Plan may enter that offering period on such start
date or on any subsequent Semi-Annual Entry Date within that offering period,
provided he or she remains an Eligible Employee.
B. Each individual who first becomes an Eligible Employee after the
start date of an offering period may enter that offering period on any
subsequent Semi-Annual Entry Date within that offering period on which he or she
is an Eligible Employee.
C. The date an individual enters an offering period shall be
designated his or her Entry Date for purposes of that offering period.
D. To participate in the Plan for a particular offering period, the
Eligible Employee must complete the enrollment forms prescribed by the Plan
Administrator (including a stock purchase agreement and a payroll deduction
authorization) and file such
2
<PAGE>
forms with the Plan Administrator (or its designate) on or before his or her
scheduled Entry Date.
VI. PAYROLL DEDUCTIONS
A. The payroll deduction authorized by the Participant for purposes
of acquiring shares of Common Stock during any offering period may be any
multiple of one percent (1%) of the Base Salary paid to the Participant during
each Purchase Interval within that offering period, up to a maximum of fifteen
percent (15%). The deduction rate so authorized shall continue in effect
throughout the offering period, except to the extent such rate is changed in
accordance with the following guidelines:
(i) The Participant may, at any time during the
offering period, reduce his or her rate of payroll deduction to become
effective as soon as possible after filing the appropriate form with
the Plan Administrator. The Participant may not, however, effect more
than one (1) such reduction per Purchase Interval.
(ii) The Participant may, prior to the commencement of
any new Purchase Interval within the offering period, increase the
rate of his or her payroll deduction by filing the appropriate form
with the Plan Administrator. The new rate (which may not exceed the
fifteen percent (15%) maximum) shall become effective as of the start
date of the first Purchase Interval following the filing of such form.
B. Payroll deductions shall begin on the first pay day following the
Participant's Entry Date into the offering period and shall (unless sooner
terminated by the Participant) continue through the pay day ending with or
immediately prior to the last day of that offering period. The amounts so
collected shall be credited to the Participant's book account under the Plan,
but no interest shall be paid on the balance from time to time outstanding in
such account. The amounts collected from the Participant shall not be held in
any segregated account or trust fund and may be commingled with the general
assets of the Corporation and used for general corporate purposes.
C. Payroll deductions shall automatically cease upon the termination
of the Participant's purchase right in accordance with the provisions of the
Plan.
D. The Participant's acquisition of Common Stock under the Plan on
any Purchase Date shall neither limit nor require the Participant's acquisition
of Common Stock on any subsequent Purchase Date, whether within the same or a
different offering period.
3
<PAGE>
VII. PURCHASE RIGHTS
A. GRANT OF PURCHASE RIGHT. A Participant shall be granted a
separate purchase right for each offering period in which he or she
participates. The purchase right shall be granted on the Participant's Entry
Date into the offering period and shall provide the Participant with the right
to purchase shares of Common Stock, in a series of successive installments over
the remainder of such offering period, upon the terms set forth below. The
Participant shall execute a stock purchase agreement embodying such terms and
such other provisions (not inconsistent with the Plan) as the Plan Administrator
may deem advisable.
Under no circumstances shall purchase rights be granted under the Plan
to any Eligible Employee if such individual would, immediately after the grant,
own (within the meaning of Code Section 424(d)) or hold outstanding options or
other rights to purchase, stock possessing five percent (5%) or more of the
total combined voting power or value of all classes of stock of the Corporation
or any Corporate Affiliate.
B. EXERCISE OF PURCHASE RIGHT. Each purchase right shall be
automatically exercised in installments on each successive Purchase Date within
the offering period, and shares of Common Stock shall accordingly be purchased
on behalf of each Participant (other than any Participant whose payroll
deductions have previously been refunded in accordance with the Termination of
Purchase Right provisions below) on each such Purchase Date. The purchase shall
be effected by applying the Participant's payroll deductions for the Purchase
Interval ending on such Purchase Date to the purchase of whole shares of Common
Stock at the purchase price in effect for the Participant for that Purchase
Date.
C. PURCHASE PRICE. The purchase price per share at which Common
Stock will be purchased on the Participant's behalf on each Purchase Date within
the offering period shall be equal to eighty-five percent (85%) of the LOWER of
(i) the Fair Market Value per share of Common Stock on the Participant's Entry
Date into that offering period or (ii) the Fair Market Value per share of Common
Stock on that Purchase Date.
D. NUMBER OF PURCHASABLE SHARES. The number of shares of Common
Stock purchasable by a Participant on each Purchase Date during the offering
period shall be the number of shares obtained by dividing the amount collected
from the Participant through payroll deductions during the Purchase Interval
ending with that Purchase Date by the purchase price in effect for the
Participant for that Purchase Date. However, the maximum number of shares of
Common Stock purchasable per Participant on any one Purchase Date shall not
exceed one thousand (1,000) shares, subject to periodic adjustments in the event
of certain changes in the Corporation's capitalization.
E. EXCESS PAYROLL DEDUCTIONS. Any payroll deductions not applied
to the purchase of shares of Common Stock on any Purchase Date because they are
not sufficient
4
<PAGE>
to purchase a whole share of Common Stock shall be held for the purchase of
Common Stock on the next Purchase Date. However, any payroll deductions not
applied to the purchase of Common Stock by reason of the limitation on the
maximum number of shares purchasable by the Participant on the Purchase Date
shall be promptly refunded.
F. TERMINATION OF PURCHASE RIGHT. The following provisions shall
govern the termination of outstanding purchase rights:
(i) A Participant may, at any time prior to the next
scheduled Purchase Date in the offering period, terminate his or her
outstanding purchase right by filing the appropriate form with the
Plan Administrator (or its designate), and no further payroll
deductions shall be collected from the Participant with respect to the
terminated purchase right. Any payroll deductions collected during
the Purchase Interval in which such termination occurs shall, at the
Participant's election, be promptly refunded or held for the purchase
of shares on the next Purchase Date. If no such election is made at
the time such purchase right is terminated, then the payroll
deductions collected with respect to the terminated right shall be
refunded as soon as possible.
(ii) The termination of such purchase right shall be
irrevocable, and the Participant may not subsequently rejoin the
offering period for which the terminated purchase right was granted.
In order to resume participation in any subsequent offering period,
such individual must re-enroll in the Plan (by making a timely filing
of the prescribed enrollment forms) on or before his or her scheduled
Entry Date into that offering period.
(iii) Should the Participant cease to remain an Eligible
Employee for any reason (including death, disability or change in
status) while his or her purchase right remains outstanding, then that
purchase right shall immediately terminate, and all of the
Participant's payroll deductions for the Purchase Interval in which
the purchase right so terminates shall be promptly refunded. However,
should the Participant cease to remain in active service by reason of
an approved unpaid leave of absence, then the Participant shall have
the right, exercisable up until the last business day of the Purchase
Interval in which such leave commences, to (a) withdraw all the
payroll deductions collected to date on his or her behalf for that
Purchase Interval or (b) have such funds held for the purchase of
shares on his or her behalf on the next scheduled Purchase Date. In
no event, however, shall any further payroll deductions be collected
on the Participant's behalf during such leave. Upon the Participant's
return to active service, his or her payroll deductions under the Plan
shall automatically resume at the rate in effect at the time the leave
began, unless the Participant withdraws from the Plan prior to his or
her return.
5
<PAGE>
G. CORPORATE TRANSACTION. Each outstanding purchase right shall
automatically be exercised, immediately prior to the effective date of any
Corporate Transaction, by applying the payroll deductions of each Participant
for the Purchase Interval in which such Corporate Transaction occurs to the
purchase of whole shares of Common Stock at a purchase price per share equal to
eighty-five percent (85%) of the LOWER of (i) the Fair Market Value per share of
Common Stock on the Participant's Entry Date into the offering period in which
such Corporate Transaction occurs or (ii) the Fair Market Value per share of
Common Stock immediately prior to the effective date of such Corporate
Transaction. However, the applicable limitation on the number of shares of
Common Stock purchasable per Participant shall continue to apply to any such
purchase.
The Corporation shall use its best efforts to provide at least ten
(10) days prior written notice of the occurrence of any Corporate Transaction,
and Participants shall, following the receipt of such notice, have the right to
terminate their outstanding purchase rights prior to the effective date of the
Corporate Transaction.
H. PRORATION OF PURCHASE RIGHTS. Should the total number of shares
of Common Stock which are to be purchased pursuant to outstanding purchase
rights on any particular date exceed the number of shares then available for
issuance under the Plan, the Plan Administrator shall make a pro-rata allocation
of the available shares on a uniform and nondiscriminatory basis, and the
payroll deductions of each Participant, to the extent in excess of the aggregate
purchase price payable for the Common Stock pro-rated to such individual, shall
be refunded.
I. ASSIGNABILITY. The purchase right shall be exercisable only by
the Participant and shall not be assignable or transferable by the Participant.
J. STOCKHOLDER RIGHTS. A Participant shall have no stockholder
rights with respect to the shares subject to his or her outstanding purchase
right until the shares are purchased on the Participant's behalf in accordance
with the provisions of the Plan and the Participant has become a holder of
record of the purchased shares.
VIII. ACCRUAL LIMITATIONS
A. No Participant shall be entitled to accrue rights to acquire
Common Stock pursuant to any purchase right outstanding under this Plan if and
to the extent such accrual, when aggregated with (i) rights to purchase Common
Stock accrued under any other purchase right granted under this Plan and (ii)
similar rights accrued under other employee stock purchase plans (within the
meaning of Code Section 423) of the Corporation or any Corporate Affiliate,
would otherwise permit such Participant to purchase more than Twenty-Five
Thousand Dollars ($25,000) worth of stock of the Corporation or any Corporate
Affiliate (determined on the basis of the Fair Market Value per share on the
date or dates such rights are granted) for each calendar year such rights are at
any time outstanding.
6
<PAGE>
B. For purposes of applying such accrual limitations, the following
provisions shall be in effect:
(i) The right to acquire Common Stock under each
outstanding purchase right shall accrue in a series of installments on
each successive Purchase Date during the offering period on which such
right remains outstanding.
(ii) No right to acquire Common Stock under any
outstanding purchase right shall accrue to the extent the Participant
has already accrued in the same calendar year the right to acquire
Common Stock under one (1) or more other purchase rights at a rate
equal to Twenty-Five Thousand Dollars ($25,000) worth of Common Stock
(determined on the basis of the Fair Market Value per share on the
date or dates of grant) for each calendar year such rights were at any
time outstanding.
C. If by reason of such accrual limitations, any purchase right of a
Participant does not accrue for a particular Purchase Interval, then the payroll
deductions which the Participant made during that Purchase Interval with respect
to such purchase right shall be promptly refunded.
D. In the event there is any conflict between the provisions of this
Article and one or more provisions of the Plan or any instrument issued
thereunder, the provisions of this Article shall be controlling.
IX. EFFECTIVE TIME AND TERM OF THE PLAN
A. The Plan was adopted by the Board and approved by the
stockholders of the Corporation on January 28, 1996 and shall become effective
at the Effective Time, PROVIDED no purchase rights granted under the Plan shall
be exercised, and no shares of Common Stock shall be issued hereunder, until the
Corporation shall have complied with all applicable requirements of the 1933 Act
(including the registration of the shares of Common Stock issuable under the
Plan on a Form S-8 registration statement filed with the Securities and Exchange
Commission), all applicable listing requirements of any stock exchange (or the
Nasdaq National Market, if applicable) on which the Common Stock is listed for
trading and all other applicable requirements established by law or regulation.
In the event such stockholder approval is not obtained, or such compliance is
not effected, within twelve (12) months after the date on which the Plan is
adopted by the Board, the Plan shall terminate and have no further force or
effect and all sums collected from Participants during the initial offering
period hereunder shall be refunded.
B. Unless sooner terminated by the Board, the Plan shall terminate
upon the EARLIEST to occur of (i) the last business day in January 2007, (ii)
the date on which all shares available for issuance under the Plan shall have
been sold pursuant to purchase rights
7
<PAGE>
exercised under the Plan or (iii) the date on which all purchase rights are
exercised in connection with a Corporate Transaction. No further purchase
rights shall be granted or exercised, and no further payroll deductions shall
be collected, under the Plan following such termination.
X. AMENDMENT OF THE PLAN
The Board may alter, amend, suspend or discontinue the Plan at any
time to become effective immediately following the close of any Purchase
Interval. However, the Board may not, without the approval of the Corporation's
stockholders, (i) materially increase the number of shares of Common Stock
issuable under the Plan or the maximum number of shares purchasable per
Participant on any one Purchase Date, except for permissible adjustments in the
event of certain changes in the Corporation's capitalization, (ii) alter the
purchase price formula so as to reduce the purchase price payable for the shares
of Common Stock purchasable under the Plan, or (iii) modify the eligibility
requirements for participation in the Plan.
XI. GENERAL PROVISIONS
A. All costs and expenses incurred in the administration of the Plan
shall be paid by the Corporation; however, each Plan Participant shall bear all
costs and expenses incurred by such individual in the sale or other disposition
of any shares purchased under the Plan.
B. Nothing in the Plan shall confer upon the Participant any right
to continue in the employ of the Corporation or any Corporate Affiliate for any
period of specific duration or interfere with or otherwise restrict in any way
the rights of the Corporation (or any Corporate Affiliate employing such person)
or of the Participant, which rights are hereby expressly reserved by each, to
terminate such person's employment at any time for any reason, with or without
cause.
C. The provisions of the Plan shall be governed by the laws of the
State of Delaware without resort to that State's conflict-of-laws rules.
8
<PAGE>
SCHEDULE A
CORPORATIONS PARTICIPATING IN
EMPLOYEE STOCK PURCHASE PLAN
AS OF THE EFFECTIVE TIME
Coldwater Creek Inc.
<PAGE>
APPENDIX
The following definitions shall be in effect under the Plan:
A. BASE SALARY shall mean the regular base salary paid to a
Participant by one or more Participating Companies during such individual's
period of participation in the Plan, plus any pre-tax contributions made by the
Participant to any Code Section 401(k) salary deferral plan or any Code Section
125 cafeteria benefit program now or hereafter established by the Corporation or
any Corporate Affiliate. The following items of compensation shall NOT be
included in Base Salary: (i) all overtime payments, bonuses, commissions,
profit-sharing distributions and other incentive-type payments and (ii) any and
all contributions (other than Code Section 401(k) or Code Section 125
contributions) made on the Participant's behalf by the Corporation or any
Corporate Affiliate under any employee benefit or welfare plan now or hereafter
established.
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 the Corporation's common stock.
E. CORPORATE AFFILIATE shall mean any "parent" or "subsidiary"
corporation of the Corporation, whether now existing or subsequently
established. "Parent" and "subsidiary" shall be determined as follows:
(i) "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, and
(ii) "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.
F. CORPORATE TRANSACTION shall mean either of the following
stockholder-approved transactions to which the Corporation is a party:
A-1
<PAGE>
(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 assets of the Corporation in complete
liquidation or dissolution of the Corporation.
G. CORPORATION shall mean Coldwater Creek Inc., a Delaware
corporation, and any corporate successor to all or substantially all of the
assets or voting stock of Coldwater Creek Inc. which shall by appropriate action
adopt the Plan.
H. EFFECTIVE TIME shall mean July 1, 1997. Any Corporate Affiliate
which becomes a Participating Corporation after such Effective Time shall
designate a subsequent Effective Time with respect to its employee-Participants.
I. ELIGIBLE EMPLOYEE shall mean any person who is employed by a
Participating Corporation on a basis under which he or she is regularly expected
to render more than twenty (20) hours of service per week for more than five (5)
months per calendar year for earnings considered wages under Code Section
3401(a).
J. ENTRY DATE shall mean the date an Eligible Employee first
commences participation in the offering period in effect under the Plan. The
earliest Entry Date under the Plan shall be the Effective Time.
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 traded on the Nasdaq
National Market, then the Fair Market Value shall be the closing
selling price per share of Common Stock on the date in question, as
such price is reported by the National Association of Securities
Dealers on the Nasdaq National Market or any successor system. If
there is no closing selling price for the Common Stock on the date in
question, then the Fair Market Value shall be the closing selling
price on the last preceding date for which such quotation exists.
(ii) If the Common Stock is at the time listed on any Stock
Exchange, then the Fair Market Value shall be the closing selling
price per share of Common Stock on the date in question on the Stock
Exchange determined by the Plan Administrator to be the primary market
for the Common Stock, as such price is officially quoted in the
composite tape of
A-2
<PAGE>
transactions on such exchange. If there is no closing selling price for
the Common Stock on the date in question, then the Fair Market Value
shall be the closing selling price on the last preceding date for which
such quotation exists.
L. 1933 ACT shall mean the Securities Act of 1933, as amended.
M. PARTICIPANT shall mean any Eligible Employee of a Participating
Corporation who is actively participating in the Plan.
N. PARTICIPATING CORPORATION shall mean the Corporation and such
Corporate Affiliate or Affiliates as may be authorized from time to time by the
Board to extend the benefits of the Plan to their Eligible Employees. The
Participating Corporations in the Plan as of the Effective Time are listed in
attached Schedule A.
O. PLAN shall mean the Corporation's Employee Stock Purchase Plan,
as set forth in this document.
P. PLAN ADMINISTRATOR shall mean the committee of two (2) or more
Board members appointed by the Board to administer the Plan.
Q. PURCHASE DATE shall mean the last business day of each Purchase
Interval. The initial Purchase Date shall be September 30, 1997.
R. PURCHASE INTERVAL shall mean each successive six (6)-month period
within the offering period at the end of which there shall be purchased shares
of Common Stock on behalf of each Participant. The initial Purchase Interval,
however, shall end on March 31, 1998.
S. SEMI-ANNUAL ENTRY DATE shall mean the first business day in April
and October each year on which an Eligible Employee may first enter an offering
period.
T. STOCK EXCHANGE shall mean either the American Stock Exchange or
the New York Stock Exchange.
U. UNDERWRITING AGREEMENT shall mean the agreement between the
Corporation and the underwriter or underwriters managing the initial public
offering of the Common Stock.
A-3
<PAGE>
COLDWATER CREEK, INC.
EMPLOYEE STOCK PURCHASE PLAN ("ESPP")
ENROLLMENT/CHANGE FORM
ACTION COMPLETE SECTIONS:
------ ------------------
SECTION 1: // New Enrollment 2, 3, 7 AND sign attached
ACTION Stock Purchase Agreement
// Change Payroll Deductions 2, 4, 7
// Terminate Payroll Deductions 2, 5, 7
// Leave of Absence 2, 6, 7
- -------------------------------------------------------------------------------
SECTION 2: Name______________________________________________________
PERSONNEL Last First MI Dept.
DATA
Home Address______________________________________________
Street
__________________________________________________________
City State Zip Code
Social Security #: / // // / - / // / - / // // // /
- -------------------------------------------------------------------------------
SECTION 3: Effective with the Purchase
NEW Interval Beginning: Payroll Deduction Amount: _____% of
ENROLLMENT base salary*
// April 1, 199_
// October 1, 199_ * Must be a multiple of 1% up to a
maximum of 15% of base salary
// Initial Offering Period -- July 1, 1997
- -------------------------------------------------------------------------------
SECTION 4: Effective with the Pay I authorize the following
CHANGE Period Beginning: _____________________ new level of payroll
PAYROLL Month, Day and Year deductions: ___% of
DEDUCTIONS base salary*
* Must be a multiple of 1%
up to a maximum of 15% of
base salary
NOTE: You may reduce your rate of payroll deductions once per
purchase interval to become effective as soon as possible
following the filing of the change form. You may also
increase your rate of payroll deductions to become
effective as of the start date of the next purchase
interval.
- -------------------------------------------------------------------------------
SECTION 5: Effective with the Your election to terminate
TERMINATE Pay Period Beginning:___________________ your payroll deductions
PAYROLL Month, Day and Year for the balance of the
DEDUCTIONS offering period cannot be
changed, and you may not
rejoin the offering period
at a later date. You will
not be able to resume
participation in the ESPP
until a new offering
period begins.
In connection with my voluntary termination of payroll deductions,
I elect the following action with respect to my ESPP payroll
deductions to date in the current six (6)-month purchase interval:
// Purchase shares of Coldwater Creek, Inc. at end of the interval
OR
// Refund ESPP payroll deductions collected
NOTE: If your employment terminates for any reason or your
eligibility status changes (LESS THAN 20 hrs/wk or LESS THAN 5
months/yr), you will immediately cease to participate in the
ESPP, and your ESPP payroll deductions collected in that
purchase interval will automatically be refunded to you.
- -------------------------------------------------------------------------------
SECTION 6 In connection with my unpaid leave of absence, I elect the
LEAVE OF following action with respect to my ESPP payroll
ABSENCE to date in the current purchase interval:
// Purchase shares of Coldwater Creek, Inc. at end of the interval
OR
// Refund ESPP payroll deductions collected
NOTE: If you take an unpaid leave of absence, your payroll
deductions will immediately cease. Upon your return to
active service, your payroll deductions will automatically
resume at the rate in effect for you at the time you
went on leave.
- -------------------------------------------------------------------------------
SECTION 7
AUTHORIZATION
I hereby authorize the specific action or actions indicated above.
______________________________ ____________________________________
Date Signature of Employee
<PAGE>
COLDWATER CREEK, INC.
STOCK PURCHASE AGREEMENT
I hereby elect to participate in the Employee Stock Purchase Plan (the
"ESPP") effective with the Entry Date specified below, and I hereby subscribe to
purchase shares of Common Stock of Coldwater Creek, Inc. (the "Corporation") in
accordance with the provisions of this Agreement and the ESPP. I hereby
authorize payroll deductions from each of my paychecks following my entry into
the ESPP in the 1% multiple of my base salary (not to exceed a maximum of 15%)
specified in my attached Enrollment Form.
Each offering period under the ESPP is divided into a series of successive
purchase intervals. The initial purchase interval is to begin on July 1, 1997
and end on March 31, 1998. Subsequent purchase intervals will each be of six
(6) months duration and will run from the first business day of April to the
last business day of September each year and from the first business day of
October each year until the last business day of March in the following year.
My participation will automatically remain in effect from one offering period to
the next in accordance with this Agreement and my payroll deduction
authorization, unless I withdraw from the ESPP or change the rate of my payroll
deduction or unless my employment status changes. I may reduce the rate of my
payroll deductions on one occasion per purchase interval, and I may increase my
rate of payroll deduction to become effective at the beginning of any subsequent
purchase interval within the offering period.
My payroll deductions will be accumulated for the purchase of shares of the
Corporation's Common Stock on the last business day of each purchase interval
within the offering period. The purchase price per share shall be equal to 85%
of the LOWER of (i) the fair market value per share of Common Stock on my entry
date into the offering period or (ii) the fair market value per share on the
semi-annual purchase date. I will also be subject to ESPP restrictions (i)
limiting the maximum number of shares which I may purchase on any one purchase
date to 1,000 shares and (ii) prohibiting me from purchasing more than $25,000
worth of Common Stock for each calendar year my purchase right remains
outstanding.
I may withdraw from the ESPP at any time prior to the last business day of
a purchase interval and elect either to have the Corporation refund all my
payroll deductions for that purchase interval or to have those payroll
deductions applied to the purchase of shares of the Corporation's Common Stock
at the end of such interval. However, I may not rejoin that particular offering
period at any later date. Upon the termination of my employment for any reason,
including death or disability, or my loss of eligible employee status, my
participation in the ESPP will immediately cease and all my payroll deductions
for the purchase interval in which my employment terminates or my loss of
eligibility occurs will automatically be refunded.
If I take an unpaid leave of absence, my payroll deductions will
immediately cease, and any payroll deductions for the purchase interval in which
my leave begins will, at my election, either be refunded or applied to the
purchase of shares of Common Stock at the end of that purchase interval. Upon my
return to active service, my payroll deductions will automatically resume at the
rate in effect when my leave began.
A stock certificate for the shares purchased on my behalf at the end of
each purchase interval will automatically be deposited into a brokerage account
which the Corporation will open on my behalf. I will notify the Corporation of
any sale or disposition of my ESPP shares, and I will satisfy all applicable
income and employment tax withholding requirements at the time of such sale or
disposition.
The Corporation has the right, exercisable in its sole discretion, to amend
or terminate the ESPP at any time, with such amendment or termination to become
effective immediately following the exercise of outstanding purchase rights at
the end of any current purchase interval. Should the Corporation elect to
terminate the ESPP, I will have no further rights to purchase shares of Common
Stock pursuant to this Agreement.
I have received a copy of the official Plan Prospectus summarizing the
major features of the ESPP. I have read this Agreement and the Prospectus and
hereby agree to be bound by the terms of both this Agreement and the ESPP. The
effectiveness of this Agreement is dependent upon my eligibility to participate
in the ESPP.
Date: ____________, 199__ ___________________________________
Signature of Employee
Printed Name: _____________________
Entry Date: _____________, 199__