As filed with the Securities and Exchange Commission on July 31, 2000.
Registration No. 333-_________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
BIG DOG HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
Delaware 52-1868665
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
121 Gray Avenue
Santa Barbara, California 93101
(805) 963-8727
(Address of principal executive offices)
Amended and Restated 1997 Performance Award Plan
(Full title of the plan)
ANTHONY J. WALL
Executive Vice President and General Counsel
Big Dog Holdings, Inc.
121 Gray Avenue
Santa Barbara, California 93101
(805) 963-8727
Fax: (805) 962-9460
(Name and address of agent for service)
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Telephone number, including area code, of agent for service: (805) 963-8727
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CALCULATION OF REGISTRATION FEE
Maximum Maximum
Title of Amount offering aggregate Amount of
securities to be price offering registration
to be registered registered per unit price fee
--------------------------------------------------------------------------------
Common Stock, 2,000,000(1) $4.625(2) $9,250,000(2) $2,442.00(2)
par value $.01 shares
per share
(1) This Registration Statement covers, in addition to the number of shares of
Common Stock stated above, options and other rights to purchase or acquire
the shares of Common Stock covered by this Registration Statement and,
pursuant to Rule 416, an additional indeterminate number of shares which by
reason of certain events specified in the Plan may become subject to the
Plan.
(2) Pursuant to Rule 457(h), the maximum offering price, per share and in the
aggregate, and the registration fee were calculated based upon the average
of the high and low prices of the Common Stock, as reported in the NASDAQ
Consolidated National Market Quotation System as of July 28, 2000.
<PAGE>
PART I
INFORMATION REQUIRED IN THE
SECTION 10(a) PROSPECTUS
The documents containing the information specified in Part I of Form S-8
(plan information and registrant information) will be sent or given to employees
as specified by Securities and Exchange Commission Rule 428(b)(1). Such
documents need not be filed with the Securities and Exchange Commission either
as part of this Registration Statement or as prospectuses or prospectus
supplements pursuant to Rule 424. These documents, which include the statement
of availability required by Item 2 of Form S-8, and the documents incorporated
by reference in this Registration Statement pursuant to Item 3 of Form S-8 (Part
II hereof), taken together, constitute a prospectus that meets the requirements
of Section 10(a) of the Securities Act of 1933.
<PAGE>
PART II
INFORMATION REQUIRED IN THE
REGISTRATION STATEMENT
Item 3. Incorporation of Certain Documents by Reference
The following documents of Big Dog Holdings, Inc. (the "Company") filed
with the Securities and Exchange Commission are incorporated herein by
reference:
(a) Report on Form 10-K for the Company filed March 31, 2000;
(b) Report on Form 10-Q for the Company filed May 12, 2000; and
(c) The description of the Company's Common Stock contained in its
Registration Statementon Form 8-A dated August 7, 1997, and any
amendment or report filed for the purpose of updating such
description.
All documents subsequently filed by the Company pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act of 1934 (the "Exchange Act")
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 the
prospectus and to be a part hereof from the date of filing of such documents.
Any statement contained herein or in a document, all or a portion of which is
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 other subsequently filed
document which also is or 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 amended, to constitute
a part of this Registration Statement.
Item 4. Description of Securities
The Company's Common Stock, par value $.01 per share, (the "Common Stock")
is registered pursuant to Section 12 of the Exchange Act, and, therefore, the
description of securities is omitted.
Item 5. Interests of Named Experts and Counsel
Anthony J. Wall, Executive Vice President, General Counsel and Secretary,
is an optionee under the Plan.
Item 6. Indemnification of Directors and Officers
To the extent permitted by Section 145 of the General Corporation Law of
Delaware, the Company's Bylaws provide for indemnification of directors and
officers of the Company against any expenses, liabilities and other matters. The
Company's Bylaws require the Company to advance expenses incurred by a director
in defending any action, suit or proceeding by reason of the fact that he is or
was a director of the Company (or was serving at the Company's request as an
officer or director of another corporation), upon receipt of an undertaking by
or on behalf of such director to repay such amount if it shall ultimately be
determined that he is not entitled to be indemnified by the Company under the
Delaware General Corporation Law. The advancement of expenses, as well as
indemnification, under the Company's Bylaws is not exclusive of any other rights
which those seeking indemnification or advances may have.
The Company's Certificate of Incorporation eliminates personal liability of
directors to the Company or its stockholders for monetary damages for breach of
fiduciary duty as a director, except for: (i) any breach of the duty of loyalty
to the Company or its stockholders; (ii) acts or omissions not in good faith or
which involve intentional misconduct or knowing violations of law; (iii)
liability under Section 174 of the Delaware General Corporation Law relating to
certain unlawful dividends and stock repurchases; or (iv) any transaction from
which the director derived an improper personal benefit.
Individual indemnification agreements (the "Indemnification Agreements")
have been entered into by the Company with its directors and officers. The
Indemnification Agreements provide for indemnification to the fullest extent
permitted by law and provide contractual assurance to directors and officers
that indemnity and advancement of expenses will be available to them regardless
of any amendment or revocation of the Company's Bylaws.
The Company's Bylaws permit the Company to purchase and maintain insurance
on behalf of any director, officer, employee or agent of the Company against
liability asserted against him or her in any such capacity, whether or not the
Company would have the power to indemnify him against such liability under the
provisions of the Bylaws.
Item 7. Exemption from Registration Claimed
Not applicable.
Item 8. Exhibits
See the attached Exhibit Index.
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 Securities Act of 1933 (the "Securities Act");
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the 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 the Registration
Statement; and
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in
the Registration Statement or any material change to
such information in the Registration Statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do 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 Exchange Act that are incorporated by
reference in the Registration Statement;
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-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 offering.
(b) The undersigned registrant hereby undertakes that, for purposes
of determining any liability under the Securities Act, each
filing of the registrant's annual report pursuant to Section
13(a) or Section 15(d) of the Exchange Act (and, where
applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the 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.
(h) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and
controlling persons of the registrant pursuant to the provisions
described in Item 6 above, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Securities 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 Securities Act and will be 6governed by the final
adjudication of such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, 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 Santa Barbara, State of
California, on July 31, 2000.
BIG DOG HOLDINGS, INC.
By: /s/ Andrew D. Feshbach
Andrew D. Feshbach
President and Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Andrew
W. Feshbach, Anthony J. Wall and Roberta Morris his or her true and lawful
attorneys-in-fact and agents, each acting alone, with full powers of
substitution and resubstitution, for him or her and in his or her name, place
and stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and to file the same,
with all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, each acting alone, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents, each acting alone, or his substitute or substitutes, may lawfully do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Signature Title Date
/s/ Fred Kayne Chairman of the Board July 31, 2000
Fred Kayne*
/s/ Andrew D. Feshbach President, Chief Executive Officer July 31, 2000
Andrew D. Feshbach (Principal Executive Officer) and
Director
/s/ Roberta Morris Chief Financial Officer July 31, 20009
Roberta Morris (Principal Financial Officer and
Principal Accounting Officer)
/s/ Steven C. Good Director July 31, 2000
Steven C. Good
/s/ Robert H. Schnell Director July 31, 2000
Robert H. Schnell*
/s/ Kenneth Solomon Director July 31, 2000
Kenneth Solomon
/s/ David J. Walsh Director July 31, 2000
David J. Walsh*
*Also a member of the Compensation Committee.
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description
4.1 Big Dog Holdings, Inc. Amended and Restated 1997 Performance Award Plan (as
of February 5, 1998)(the "Performance Plan")
4.2 Terms and Conditions for Nonqualified Options Granted under the Amended and
Restated 1997 Performance Award Plan
4.3 Form of Nonqualified Stock Option Agreement
4.4 Form of Eligible Director Nonqualified Stock Option Agreement
4.5 Form of Amended Nonqualified Stock Option Agreement, originally granted
under the Formula Provisions of the Performance Plan
5. Opinion of Anthony J. Wall, General Counsel to Big Dog Holdings, Inc.
(opinion re legality)
24.1 Consent of Independent Accountants
24.2 Consent of General Counsel (included in Exhibit 5)
25. Power of Attorney (included in this Registration Statement under
"Signatures")
<PAGE>
Exhibit 4.1
BIG DOG HOLDINGS, INC.
AMENDED AND RESTATED
1997 PERFORMANCE AWARD PLAN
(As of February 5, 1998)
<PAGE>
BIG DOG HOLDINGS, INC.
AMENDED AND RESTATED
1997 PERFORMANCE AWARD PLAN
(AS OF FEBRUARY 5, 1998)
1. The Plan
1.1. Purpose. The purpose of this Plan is to promote the success of the Company
and the interests of its stockholders by attracting, motivating, retaining
and rewarding directors, officers, employees and other eligible persons
with awards and incentives for high levels of individual performance and
improved financial performance of the Company. "Corporation" means Big Dog
Holdings, Inc. and "Company" means the Corporation and its Subsidiaries,
collectively. These terms and other capitalized terms are defined in
Section 7.
1.2. Administration and Authorization; Power and Procedure
1.2.1. Committee. This Plan will be administered by and all Awards will be
authorized by the Committee. Action of the Committee with respect to the
administration of this Plan will be taken pursuant to a majority vote or by
written consent of its members.
1.2.2. Plan Awards; Interpretation; Power of Committee. Subject to the express
provisions of this Plan and any express limitations on the delegated
authority of a Committee, the Committee will have the authority to:
a. determine eligibility and the particular Eligible Persons who will receive
Awards;
b. grant Awards to Eligible Persons, determine the price at which securities
will be offered or awarded and the amount of securities to be offered or
awarded to any of such persons, and determine the other specific terms and
conditions of such Awards consistent with the express limits of this Plan,
and establish the installments (if any) in which such Awards will become
exercisable or will vest, or determine that no delayed exercisability or
vesting is required, and establish the events of termination or reversion
of such Awards;
c. approve the forms of Award Agreements (which need not be identical either
as to type of Award or among Participants);
d. construe and interpret this Plan and any agreements defining the rights and
obligations of the Company and Employee Participants under this Plan,
further define the terms used in this Plan, and prescribe, amend and
rescind rules and regulations relating to the administration of this Plan;
e. cancel, modify, or waive the Corporation's rights with respect to, or
modify, discontinue, suspend, or terminate any or all outstanding Awards
held by Eligible Persons, subject to any required consent under Section
6.6;
f. accelerate or extend the exercisability or extend the term of any or all
such outstanding Awards within the maximum ten-year term of Awards under
Section 1.6; and
g. make all other determinations and take such other action as contemplated by
this Plan or as may be necessary or advisable for the administration of
this Plan and the effectuation of its purposes.
1.2.3. Binding Determinations. Any action taken by, or inaction of, the
Corporation, any Subsidiary, the Board or the Committee relating or
pursuant to this Plan will be within the absolute discretion of that entity
or body and will be conclusive and binding upon all persons. No member of
the Board or Committee, or officer of the Corporation or any Subsidiary,
will be liable for any such action or inaction of the entity or body, of
another person or, except in circumstances involving bad faith, of himself
or herself. Subject only to compliance with the express provisions hereof,
the Board and Committee may act in their absolute discretion in matters
within their authority related to this Plan.
1.2.4. Reliance on Experts. In making any determination or in taking or not
taking any action under this Plan, the Committee or the Board, as the case
may be, may obtain and may rely upon the advice of experts, including
professional advisors to the Corporation. No director, officer or agent of
the Company will be liable for any such action or determination taken or
made or omitted in good faith.
1.2.5. Bifurcation of Plan Administration; Delegation. Subject to the limits of
Section 7, the Board may delegate different levels of authority to
different Committees with administration and grant authority under this
Plan, provided that each designated Committee granting any Awards hereunder
shall consist exclusively of a member or members of the Board. A majority
of the members of the acting Committee shall constitute a quorum. The vote
of a majority of a quorum or the unanimous written consent of the Committee
shall constitute action by the Committee. A Committee may delegate
ministerial, non-discretionary functions to individuals who are officers or
employees of the Company.
1.3. Participation. Discretionary Awards may be granted by the Committee only to
those persons that the Committee determines to be Eligible Persons. An
Eligible Person who has been granted an Award may, if otherwise eligible,
be granted additional Awards if the Committee so determines.
1.4. Shares Available for Awards; Share Limits.
1.4.1. Shares Available. Subject to the provisions of Section 6.2, the capital
stock that may be delivered under this Plan will be shares of the
Corporation's authorized but unissued Common Stock and any shares of its
Common Stock held as treasury shares. The shares may be delivered for any
lawful consideration.
1.4.2. Share Limits. The maximum number of shares of Common Stock that may be
delivered pursuant to Awards granted to Eligible Persons under this Plan
will not exceed two million (2,000,000) shares (the "Share Limit"). The
maximum number of shares subject to those options and Stock Appreciation
Rights that are granted during any calendar year to any one individual will
be limited to three hundred thousand (300,000) and the maximum individual
limit on the number of shares in the aggregate subject to all Awards that
during any calendar year are granted under this Plan to any one individual
will be three hundred thousand (300,000). Each of the foregoing numerical
limits will be subject to adjustment as contemplated by this Section 1.4
and Section 6.2.
1.4.3. Share Reservation. No Award may be granted under this Plan unless, on the
date of grant, the sum of (a) the maximum number of shares issuable at any
time pursuant to such Award, plus (b) the number of shares that have
previously been issued pursuant to Awards granted under this Plan, other
than reacquired shares available for reissue consistent with any applicable
legal limitations, plus (c) the maximum number of shares that may be issued
at any time after such date of grant pursuant to Awards that are
outstanding on such date, does not exceed the Share Limit. Shares that are
subject to or underlie Awards that expire or for any reason are canceled or
terminated, are forfeited, fail to vest, or for any other reason are not
paid or delivered under this Plan, as well as reacquired shares, will
again, except to the extent prohibited by law, be available for subsequent
Awards under the Plan. Except as limited by law, if an Award is or may be
settled only in cash, such Award need not be counted against any of the
limits under this Section 1.4.
1.5. Grant of Awards. Subject to the express provisions of this Plan, the
Committee will determine the number of shares of Common Stock subject to
each Award, the price (if any) to be paid for the shares or the Award and,
in the case of performance share awards, in addition to matters addressed
in Section 1.2.2, the specific objectives, goals and performance criteria
(such as an increase in sales, market value, earnings or book value over a
base period, the years of service before vesting, the relevant job
classification or level of responsibility or other factors) that further
define the terms of the performance share award. Each Award will be
evidenced by an Award Agreement signed by the Corporation and, if required
by the Committee, by the Participant.
1.6. Award Period. Any Option, SAR, warrant or similar right shall expire and
any other Award shall either vest or be forfeited not more than 10 years
after the date of grant; provided, however, that any payment of cash or
delivery of stock pursuant to an Award may be delayed until a future date
if specifically authorized by the Committee in writing.
1.7. Limitations on Exercise and Vesting of Awards.
1.7.1. Provisions for Exercise. Unless the Committee otherwise expressly
provides, no Award will be exercisable or will vest until at least six
months after the initial Award Date, and once exercisable an Award will
remain exercisable until the expiration or earlier termination of the
Award.
1.7.2. Procedure. Any exercisable Award will be deemed to be exercised when the
Corporation receives written notice of such exercise from the Participant,
together with any required payment made in accordance with Section 2.2.2 or
the applicable Award Agreement.
1.7.3.Fractional Shares/Minimum Issue. Fractional share interests will be
disregarded, but may be accumulated. The Committee, however, may determine
in the case of Eligible Persons that cash, other securities, or other
property will be paid or transferred in lieu of any fractional share
interests. No fewer than 100 shares may be purchased on exercise of any
Award at one time unless the number purchased is the total number at the
time available for purchase under the Award.
1.8. Acceptance of Notes to Finance Exercise. The Corporation may, with the
Committee's express approval, accept one or more notes from any Eligible
Person in connection with the exercise or receipt of any outstanding Award;
but any such note will be subject to the following terms and conditions:
1.8.1. Principal. The principal of the note will not exceed the amount required
to be paid to the Corporation upon the exercise or receipt of one or more
Awards under the Plan and the note will be delivered directly to the
Corporation in consideration of such exercise or receipt.
1.8.2. Tern. The initial term of the note will be determined by the Committee;
but the term of the note, including extensions, will not exceed a period of
five years.
1.8.3. Recourse; Security. The note will provide for full recourse to the
Participant and will bear interest at a rate determined by the Committee
but not less than the interest rate necessary to avoid the imputation of
interest under the Code. If required by the Committee or by applicable law,
the note will be secured by a pledge of any shares or rights financed
thereby in compliance with applicable law. The terms, repayment provisions,
and collateral release provisions of the note and the pledge securing the
note will conform with applicable rules and regulations of the Federal
Reserve Board as then in effect.
1.8.4. Termination of Employment. If the employment or term of service of the
Participant terminates, the unpaid principal balance of the note will
become due and payable on the 10th business day after such termination; but
if a sale of such shares would cause such Participant to incur liability
under Section 16(b) of the Exchange Act, the unpaid balance will become due
and payable on the 10th business day after the first day on which a sale of
such shares could have been made without incurring such liability assuming
for these purposes that there are no other transactions (or deemed
transactions in securities of this Corporation) by the Participant after
such termination.
1.9.No Transferability; Limited Exception to Transfer Restrictions
1.9.1. Limit on Exercise and Transfer . Unless otherwise expressly provided in
(or pursuant to) this Section 1.9, by applicable law and by the Award
Agreement, as the same may be amended, (a) all Awards are non-transferable
and will not be subject in any manner to sale, transfer, anticipation,
alienation, assignment, pledge, encumbrance or charge; Awards will be
exercised only by the Participant; and (b) amounts payable or shares
issuable pursuant to an Award will be delivered only to (or for the account
of) the Participant.
1.9.2. Exceptions. The Committee may permit Awards to be exercised by and paid
only to certain persons or entities related to the Participant pursuant to
such conditions and procedures as the Committee may establish. Any
permitted transfer will be subject to the condition that the Committee
receive evidence satisfactory to it that the transfer is being made for
estate and/or tax planning purposes and without consideration (other than
nominal consideration). ISOs and Restricted Stock Awards, however, will be
subject to any and all additional transfer restrictions under the Code.
1.9.3. Further Exceptions to Limits on Transfer. The exercise and transfer
restrictions in Section 1.9.1 will not apply to:
a. transfers to the Corporation,
b. the designation of a beneficiary to receive benefits if the
Participant dies or, if the Participant has died, transfers to or
exercise by the Participant's beneficiary, or, in the absence of a
validly designated beneficiary, transfers by will or the laws of
descent and distribution,
c. transfers pursuant to a QDRO if approved or ratified by the Committee,
d. if the Participant has suffered a disability, permitted transfers
or exercises on behalf of the Participant by the Participant's legal
representative, or
e. the authorization by the Committee of "cashless exercise" procedures
with third parties who provide financing for the purpose of (or who
otherwise facilitate) the exercise of Awards consistent with
applicable laws and the express authorization of the Committee.
2. Options
2.1. Grants. One or more Options may be granted under this Section to any
Eligible Person. Each Option granted will be designated in the applicable
Award Agreement, by the Committee as either an Incentive Stock Option,
subject to Section 2.3, or a Non-Qualified Stock Option.
2.2. Option Price.
2.2.1. Pricing Limits. The purchase price per share of the Common Stock covered
by each Option will be determined by the Committee at the time of the
Award, but in the case of Incentive Stock Options will not be less than
100% (110% in the case of a Participant described in Section 2.4) of the
Fair Market Value of the Common Stock on the date of grant and in all cases
will not be less than the par value thereof.
2.2.2. . The purchase price of any shares purchased on exercise of an Option
granted under this Section will be paid in full at the time of each
purchase in one or a combination of the following methods: (a) in cash or
by electronic funds transfer; (b) by certified or cashier's check payable
to the order of the Corporation; (c) if authorized by the Committee or
specified in the applicable Award Agreement, by a promissory note of the
Participant consistent with the requirements of Section 1.8; (d) by notice
and third party payment in such manner as may be authorized by the
Committee; or (e) by the delivery of shares of Common Stock of the
Corporation already owned by the Participant, but the Committee may in its
absolute discretion limit the Participant's ability to exercise an Award by
delivering such shares, and any shares delivered that were initially
acquired upon exercise of a stock option must have been owned by the
Participant at least six months as of the date of delivery. Shares of
Common Stock used to satisfy the exercise price of an Option will be valued
at their Fair Market Value on the date of exercise. Without limiting the
generality of the foregoing, the Committee may provide that the Option can
be exercised and payment made by delivering a properly executed exercise
notice together with irrevocable instructions to a broker to promptly
deliver to the Corporation the amount of sale proceeds necessary to pay the
exercise price and, unless otherwise prohibited by the Committee or
applicable law, any applicable tax withholding under Section 6.5. The
Corporation will not be obligated to deliver certificates for the shares
unless and until it receives full payment of the exercise price therefor
and any related withholding obligations have been satisfied.
2.3. Limitations on Grant and Terms of Incentive Stock Options
2.3.1. $100,000 Limit. To the extent that the aggregate "Fair Market Value" of
stock with respect to which incentive stock options first become
exercisable by a Participant in any calendar year exceeds $100,000, taking
into account both Common Stock subject to Incentive Stock Options under
this Plan and stock subject to incentive stock options under all other
plans of the Company or any parent corporation, such options will be
treated as Nonqualified Stock Options. For this purpose, the "Fair Market
Value" of the stock subject to options will be determined as of the date
the options were awarded. In reducing the number of options treated as
incentive stock options to meet the $100,000 limit, the most recently
granted options will be reduced first. To the extent a reduction of
simultaneously granted options is necessary to meet the $100,000 limit, the
Committee may, in the manner and to the extent permitted by law, designate
which shares of Common Stock are to be treated as shares acquired pursuant
to the exercise of an Incentive Stock Option.
2.3.2Option Period. Subject to Section 1.6, each Option and all rights
thereunder will expire no later than 10 years after the Award Date.
2.3.3. Other. Incentive Stock Options may only be granted to Eligible Employees
of the Corporation or a Subsidiary that satisfies the other eligibility
requirements of the Code. There will be imposed in any Award Agreement
relating to Incentive Stock Options such other terms and conditions as from
time to time are required in order that the Option be an "incentive stock
option" as that term is defined in Section 422 of the Code.
2.4. Limits on 10% Holders. No Incentive Stock Option may be granted to any
person who, at the time the Option is granted, owns (or is deemed to own
under Section 424(d) of the Code) shares of outstanding Common Stock
possessing more than 10% of the total combined voting power of all classes
of stock of the Corporation, unless the exercise price of such Option is at
least 110% of the Fair Market Value of the stock subject to the Option and
such Option by its terms is not exercisable after the expiration of five
years from the date such Option is granted.
2.5. Option Repricing/Cancellation and Regrant/Waiver of Restrictions.. Subject
to Section 1.4 and Section 6.6 and the specific limitations on Awards
contained in this Plan, the Committee from time to time may authorize,
generally or in specific cases only, for the benefit of any Eligible Person
any adjustment in the exercise or purchase price, the vesting schedule, the
number of shares subject to, the restrictions upon or the term of, an Award
granted under this Section by cancellation of an outstanding Award and a
subsequent regranting of an Award, by amendment, by substitution of an
outstanding Award, by waiver or by other legally valid means. Such
amendment or other action may result among other changes in an exercise or
purchase price that is higher or lower than the exercise or purchase price
of the original or prior Award, provide for a greater or lesser number of
shares subject to the Award, or provide for a longer or shorter vesting or
exercise period.
2.6. Effects of Termination of Employment; Termination of Subsidiary Status;
Discretionary Provisions
2.6.1. Options--Resignation or Dismissal. If the Participant's employment by (or
other service specified in the Award Agreement to) the Company terminates
for any reason (the date of such termination being referred to as the
"Severance Date") other than Retirement, Total Disability or death, or "for
cause" (as determined in the discretion of the Committee), the Participant
will have, unless otherwise provided in the Award Agreement and subject to
earlier termination pursuant to or as contemplated by Section 1.6 or 6.2,
three months after the Severance Date to exercise any Option to the extent
it has become exercisable on the Severance Date. In the case of a
termination "for cause", the Option will terminate on the Severance Date.
In other cases, the Option, to the extent not exercisable on the Severance
Date, will terminate.
2.6.2. Options--Death or Disability. If the Participant's employment by (or
specified service to) the Company terminates as a result of Total
Disability or death, the Participant, Participant's Personal Representative
or the Participant's Beneficiary, as the case may be, will have, unless
otherwise provided in the Award Agreement and subject to earlier
termination pursuant to or as contemplated by Section 1.6 or 6.2, until 12
months after the Severance Date to exercise any Option to the extent it
will have become exercisable by the Severance Date. Any Option to the
extent not exercisable on the Severance Date will terminate
2.6.3. Options--Retirement If the Participant's employment by (or specified
service to) the Company terminates as a result of Retirement, the
Participant, Participant's Personal Representative or the Participant's
Beneficiary, as the case may be, will have, unless otherwise provided in
the Award Agreement and subject to earlier termination pursuant to or as
contemplated by Section 1.6 or 6.2, until 12 months after the Severance
Date to exercise any Nonqualified Stock Option (three months after the
Severance Date in the case of an Incentive Stock Option) to the extent it
will have become exercisable by the Severance Date. The Option, to the
extent not exercisable on the Severance Date, will terminate.
2.6.4. Certain SARs. Any SAR granted concurrently or in tandem with an Option
will have the same post-termination provisions and exercisability periods
as the Option to which it relates, unless the Committee otherwise provides.
2.6.5. Other Awards. The Committee will establish in respect of each other Award
granted hereunder the Participant's rights and benefits (if any) if the
Participant's employment is terminated and in so doing may make
distinctions based upon the cause of termination and the nature of the
Award.
2.6.6. Committee Discretion. Notwithstanding the foregoing provisions of this
Section 2.6, in the event of, or in anticipation of, a termination of
employment with the Company for any reason, other than discharge for cause,
the Committee may increase the portion of the Participant's Award available
to the Participant, or Participant's Beneficiary or Personal
Representative, as the case may be, or, subject to the provisions of
Section 1.6, extend the exercisability period upon such terms as the
Committee determines and expressly sets forth in or by amendment to the
Award Agreement.
2.7. Options and Rights in Substitution for stock Optons Granted by Other
Corporations. Options and Stock Appreciation Rights may be granted to
Eligible Persons under this Plan in substitution for employee stock options
granted by other entities to persons who are or who will become Eligible
Persons in respect of the Company, in connection with a distribution,
merger or reorganization by or with the granting entity or an affiliated
entity, or the acquisition by the Company, directly or indirectly, of all
or a substantial part of the stock or assets of the employing entity.
3. Stock Appreciation Rights(Including Limited Stock Appreciation Rights)
3.1. Grants. The Committee may grant to any Eligible Person Stock Appreciation
Rights either concurrently with the grant of another Award or in respect of
an outstanding Award, in whole or in part, or independently of any other
Award. Any Stock Appreciation Right granted in connection with an Incentive
Stock Option will contain such terms as may be required to comply with the
provisions of Section 422 of the Code and the regulations promulgated
thereunder, unless the holder otherwise agrees.
3.2. Exercise of Stock Appreciation Rights
3.2.1. Exercicsability. Unless the Award Agreement or the Committee otherwise
provides, a Stock Appreciation Right related to another Award will be
exercisable at such time or times, and to the extent, that the related
Award will be exercisable.
3.2.2. Effect on Available Shares. To the extent that a Stock Appreciation Right
is exercised, only the actual number of delivered shares of Common Stock
will be charged against the maximum amount of Common Stock that may be
delivered pursuant to Awards under this Plan. The number of shares subject
to the Stock Appreciation Right and the related Option of the Participant
will, however, be reduced by the number of underlying shares as to which
the exercise related, unless the Award Agreement otherwise provides.
3.2.3. Stand-Along SARs. A Stock Appreciation Right granted independently of any
other Award will be exercisable pursuant to the terms of the Award
Agreement but in no event earlier than six months after the Award Date,
except in the case of death or Total Disability.
3.2.4. Proportionate Reduction. If an SAR extends to less than all the shares
covered by the related Award and if a portion of the related Award is
thereafter exercised, the number of shares subject to the unexercised SAR
shall be reduced only if and to the extent that the remaining number of
shares covered by such related Award is less than the remaining number of
shares subject to such SAR.
3.3 Payment
3.3.1. Amount. Unless the Committee otherwise provides, upon exercise of a Stock
Appreciation Right and the attendant surrender of an exercisable portion of
any related Award, the Participant will be entitled to receive subject to
Sectio 6.5 payment of an amount determined by multiplying a. the difference
obtained by subtracting the exercise price per share of
Common Stock under the related Award (if applicable) or the initial
share value specified in the Award from the Fair Market Value of a share
of Common Stock on the date of exercise of the Stock Appreciation Right,
by
b. the number of shares with respect to which the Stock Appreciation Right
has been exercised.
3.3.2. Form of Payment. The Committee, in its sole discretion, will determine
the form in which payment will be made of the amount determined under
Section 3.3.1 above, either solely in cash, solely in shares of Common
Stock (valued at Fair Market Value on the date of exercise of the Stock
Appreciation Right), or partly in such shares and partly in cash, but the
Committee will have determined that such exercise and payment are
consistent with applicable law. If the Committee permits the Participant to
elect to receive cash or shares (or a combination thereof) on such
exercise, any such election will be subject to such conditions as the
Committee may impose.
3.4. Limited Stock Appreciation Rights. The Committee may grant to any Eligible
Person Stock Appreciation Rights exercisable only upon or in respect of a
change in control or any other specified event ("Limited SARs") and such
Limited SARs may relate to or operate in tandem or combination with or
substitution for Options, other SARs or other Awards (or any combination
thereof), and may be payable in cash or shares based on the spread between
the base price of the SAR and a price based upon or equal to the Fair
Market Value of the Shares during a specified period or at a specified time
within a specified period before, after or including the date of such
event.
4. Restricted Stock Awards.
4.1. Grants. The Committee may grant one or more Restricted Stock Awards to any
Eligible Person. Each Restricted Stock Award Agreement will specify the
number of shares of Common Stock to be issued to the Participant, the date
of such issuance, the consideration for such shares (but not less than the
minimum lawful consideration under applicable state law) by the
Participant, the extent (if any) to which and the time (if ever) at which
the Participant will be entitled to dividends, voting and other rights in
respect of the shares prior to vesting, and the restrictions (which may be
based on performance criteria, passage of time or other factors or any
combination thereof) imposed on such shares and the conditions of release
or lapse of such restrictions. Such restrictions will not lapse earlier
than six months after the Award Date, except to the extent the Committee
may otherwise provide. Stock certificates evidencing shares of Restricted
Stock pending the lapse of the restrictions ("Restricted Shares") will bear
a legend making appropriate reference to the restrictions imposed hereunder
and will be held by the Corporation or by a third party designated by the
Committee until the restrictions on such shares have lapsed and the shares
have vested in accordance with the provisions of the Award and Section 1.7.
Upon issuance of the Restricted Stock Award, the Participant may be
required to provide such further assurance and documents as the Committee
may require to enforce the restrictions.
4.2. Restrictions
4.2.1. Pre-Vesting Restraints. Except as provided in Sections 4.1 and 1.9,
restricted shares comprising any Restricted Stock Award may not be sold,
assigned, transferred, pledged or otherwise disposed of or encumbered,
either voluntarily or involuntarily, until the restrictions on such shares
have lapsed and the shares have become vested.
4.2.2. Dividend and Voting Rights. Unless otherwise provided in the applicable
Award Agreement, a Participant receiving a Restricted Stock Award will be
entitled to cash dividend and voting rights for all shares issued even
though they are not vested, but such rights will terminate immediately as
to any Restricted Shares which cease to be eligible for vesting.
4.2.3. Cash Payments. If the Participant has been paid or received cash
(including any dividends) in connection with the Restricted Stock Award,
the Award Agreement will specify whether and to what extent such cash will
be returned (with or without an earnings factor) as to any restricted
shares that cease to be eligible for vesting.
4.3. Return to the Corporation. Unless the Committee otherwise expressly
provides, Restricted Shares that remain subject to restrictions at the time
of termination of employment or are subject to other conditions to vesting
that have not been satisfied by the time specified in the applicable Award
Agreement will not vest and will be returned to the Corporation in such
manner and on such terms as the Committee provides.
5. Performance Share Awards and Stock Bonuses
5.1. Grants of Performance Share Awards. The Committee may grant Performance
Share Awards to Eligible Employees based upon such factors as the Committee
deems relevant in light of the specific type and terms of the award. An
Award Agreement will specify the maximum number of shares of Common Stock
(if any) subject to the Performance Share Award, the consideration (but not
less than the minimum lawful consideration) to be paid for any such shares
as may be issuable to the Participant, the duration of the Award and the
conditions upon which delivery of any shares or cash to the Participant
will be based. The amount of cash or shares or other property that may be
deliverable pursuant to such Award will be based upon the degree of
attainment over a specified period of not more than 10 years (a
"performance cycle") as may be established by the Committee of such
measure(s) of the performance of the Company (or any part thereof) or the
Participant as may be established by the Committee. The Committee may
provide for full or partial credit, prior to completion of such performance
cycle or the attainment of the performance achievement specified in the
Award, in the event of the Participant's death, Retirement, or Total
Disability, a Change in Control Event or in such other circumstances as the
Committee (consistent with Section 6.10.3(b), if applicable) may determine.
5.2. Special Performance-Based Share Awards. Options or SARs granted with an
exercise price not less than Fair Market Value at the applicable date of
grant for Section 162(m) purposes to Eligible Employees which otherwise
satisfy the conditions to deductibility under Section 162(m) of the Code
are deemed "Qualifying Awards". Without limiting the generality of the
foregoing, and in addition to Qualifying Awards granted under other
provisions of this Plan, other performance-based awards within the meaning
of Section 162(m) of the Code ("Performance-Based Awards"), whether in the
form of restricted stock, performance stock, phantom stock or other rights,
the vesting of which depends on the performance of the Company on a
consolidated, segment, subsidiary, or division basis, with reference to
revenue growth, net earnings (before or after taxes or before or after
taxes, interest, depreciation, and/or amortization), cash flow, return on
equity or on assets or on net investment, or cost containment or reduction,
or any combination thereof (the "business criteria") relative to
preestablished performance goals, may be granted under this Plan. To the
extent so defined, these terms are used as applied under generally accepted
accounting principles and in the Company's financial reporting. The
applicable business criterion or criteria and the specific performance
goals must be approved by the Committee in advance of applicable deadlines
under the Code and while the performance relating to such goals remains
substantially uncertain. The applicable performance measurement period may
be not less than one (except as provided in Section 1.6) nor more than 10
years. Other types of performance and non-performance awards may also be
granted under the other provisions of this Plan. The following provisions
relate to all Performance-Based Awards (other than Qualifying Awards)
granted under this Plan:
5.2.1. Eligible Class. The eligible class of persons for Awards under this
Section is executive officers of the Corporation.
5.2.2. Maximum Award. Subject to Section 1.4.2, in no event will grants in any
calendar year to any one individual under this Section 5.2 relate to more
than three hundred thousand (300,000) shares or, (if payable solely in
cash) a cash amount of more than one million dollars ($1,000,000).
5.2.3. Committee Certification. To the extent required by Section 162(m), before
any Performance-Based Award under this Section 5.2 is paid, the Committee
must certify that the material terms of the Performance-Based Award were
satisfied.
5.2.4. Terms and Conditions of Awards. The Committee will have discretion to
determine the restrictions or other limitations of the individual Awards
under this Section 5.2 (including the authority to reduce Awards, payouts
or vesting or to pay no Awards, in its sole discretion, if the Committee
preserves such authority at the time of grant by language to this effect in
its authorizing resolutions or otherwise).
5.2.5. Stock Payout Features. In lieu of cash payment of an Award, the Committee
may require or allow all or a portion of the Award to be paid in the form
of stock, Restricted Shares, an Option, or another Award.
5.2.6. Adjustments for Material Changes. Performance goals or other features of
an Award under this Section 5.2 may provide that they (a) shall be adjusted
to reflect a change in corporate capitalization, a corporate transaction
(such as a reorganization, combination, separation, or merger) or a
complete or partial corporate liquidation, or (b) shall be calculated
either without regard for or to reflect any change in accounting policies
or practices affecting the Company and/or the business criteria or
performance goals or targets, or (c) shall be adjusted for any other
circumstance or event, or (d) any combination of (a) through (c), but only
to the extent in each case that such adjustment or determination in respect
of Performance-Based Awards would be consistent with the requirements of
Section 162(m) to qualify as performance-based compensation.
5.3. Grants of Stock Bonuses. The Committee may grant a Stock Bonus to any
Eligible Person to reward exceptional or special services, contributions or
achievements in the manner and on such terms and conditions (including any
restrictions on such shares) as determined from time to time by the
Committee. The number of shares so awarded will be determined by the
Committee. The Award may be granted independently or in lieu of a cash
bonus.
5.4. Deferred Payments. The Committee may authorize for the benefit of any
Eligible Person the deferral of any payment of cash or shares that may
become due or of cash otherwise payable under this Plan, and provide for
accredited benefits thereon based upon such deferment, at the election or
at the request of such Participant, subject to the other terms of this
Plan. Such deferral will be subject to such further conditions,
restrictions or requirements as the Committee may impose, subject to any
then vested rights of Participants.
5.5. Cash Bonus Awards.
5.5.1. Performance Goals. The Committee may establish a program of annual
incentive awards that are payable in cash to Eligible Persons based upon
the extent to which performance goals are met during the performance
period. The performance goals may depend upon the performance of the
Company on a consolidated, subsidiary division basis with reference to
revenues, net earnings (before or after interest, taxes, depreciation, or
amortization), cash flow, return on equity or on assets or net investment,
cost containment or reduction, or achievement of strategic goals (or any
combination of such factors). In addition, the award may depend upon the
Eligible Employee's individual performance.
5.5.2. Payment in Restricted Stock. In lieu of cash payment of an Award, the
Committee may require or allow all or a portion of the Award to be paid in
the form of stock, Restricted Stock, an Option or other Award.
6. Other Provisions
6.1. Rights of Eligible Persons, Participants and Beneficiaries
6.1.1. Employment Status. Status as an Eligible Person will not be construed as
a commitment that any Award will be made under this Plan to an Eligible
Person or to Eligible Persons generally.
6.1.2. No Employment Contract. Nothing contained in this Plan (or in any other
documents related to this Plan or to any Award) will confer upon any
Eligible Person or other Participant any right to continue in the employ or
other service of the Company or constitute any contract or agreement of
employment or other service, nor will interfere in any way with the right
of the Company to otherwise change such person's compensation or other
benefits or to terminate the employment of such person, with or without
cause, but nothing contained in this Plan or any related document will
adversely affect any independent contractual right of such person without
the Participant's consent.
6.1.3. Plan Not Funded. Awards payable under this Plan will be payable in shares
or from the general assets of the Corporation, and (except as provided in
Section 1.4.3) no special or separate reserve, fund or deposit will be made
to assure payment of such Awards. No Participant, Beneficiary or other
person will have any right, title or interest in any fund or in any
specific asset (including shares of Common Stock, except as expressly
otherwise provided) of the Company by reason of any Award hereunder.
Neither the provisions of this Plan (or of any related documents), nor the
creation or adoption of this Plan, nor any action taken pursuant to the
provisions of this Plan will create, or be construed to create, a trust of
any kind or a fiduciary relationship between the Company and any
Participant, Beneficiary or other person. To the extent that a Participant,
Beneficiary or other person acquires a right to receive payment pursuant to
any Award hereunder, such right will be no greater than the right of any
unsecured general creditor of the Company.
6.2. Adjustments; Acceleration
6.2.1. Adjustments. The following provisions will apply if any extraordinary
dividend or other extraordinary distribution occurs in respect of the
Common Stock (whether in the form of cash, Common Stock, other securities,
or other property), or any reclassification, recapitalization, stock split
(including a stock split in the form of a stock dividend), reverse stock
split, reorganization, merger, combination, consolidation, split-up,
spin-off, combination, repurchase, or exchange of Common Stock or other
securities of the Corporation, or any similar, unusual or extraordinary
corporate transaction (or event in respect of the Common Stock) or a sale
of substantially all the assets of the Corporation as an entirety occurs.
The Committee will, in such manner and to such extent (if any) as it deems
appropriate and equitable
a. proportionately adjust any or all of (i) the number and type of shares of
Common Stock (or other securities) that thereafter may be made the subject
of Awards (including the specific maxima and numbers of shares set forth
elsewhere in this Plan), (ii) the number, amount and type of shares of
Common Stock (or other securities or property) subject to any or all
outstanding Awards,(iii) the grant, purchase, or exercise price of any or
all outstanding Awards, (iv) the securities, cash or other property
deliverable upon exercise of any outstanding Awards, or (v) the performance
standards appropriate to any outstanding Awards, or
b. in the case of an extraordinary dividend or other distribution,
recapitalization, reclassification, merger, reorganization, consolidation,
combination, sale of assets, split up, exchange, or spin off, make
provision for a cash payment or for the substitution or exchange of any or
all outstanding Awards or the cash, securities or property deliverable to
the holder of any or all outstanding Awards based upon the distribution or
consideration payable to holders of the Common Stock of the Corporation
upon or in respect of such event. In each case, with respect to Awards of
Incentive Stock Options, no such adjustment will be made that would cause
the Plan to violate Section 422 or 424(a) of the Code or any successor
provisions without the written consent of holders materially adversely
affected thereby. In any of such events, the Committee may take such action
sufficiently prior to such event if necessary to permit the Participant to
realize the benefits intended to be conveyed with respect to the underlying
shares in the same manner as is available to stockholders generally.
6.2.2. Acceleration of Awards Upon Change in Control. Unless prior to a Change
in Control Event the Committee determines that, upon its occurrence,
benefits under any or all Awards will not accelerate or determines that
only certain or limited benefits under any or all Awards will be
accelerated and the extent to which they will be accelerated, and/or
establishes a different time in respect of such Event for such
acceleration, then upon the occurrence of a Change in Control Event:
a. each Option and Stock Appreciation Right will become immediately
exercisable,
b. Restricted Stock will immediately vest free of restrictions, and c. each
Performance Share Award will become payable to the Participant.
However, in the case of a transaction intended to be accounted for as a
pooling of interests transaction, the Committee shall have no discretion
with respect to the foregoing acceleration of Awards. The Committee may
override the limitations on acceleration in this Section 6.2.2 by express
provision in the Award Agreement and may accord any Eligible Person a right
to refuse any acceleration, whether pursuant to the Award Agreement or
otherwise, in such circumstances as the Committee may approve. Any
acceleration of Awards will comply with applicable legal requirements.
6.2.3. Possible Early Termination of Accelerated Awards. If any Option or other
right to acquire Common Stock under this Plan has been fully accelerated as
required or permitted by Section 6.2.2 but is not exercised prior to (a) a
dissolution of the Corporation, or (b) an event described in Section 6.2.1
that the Corporation does not survive, or (c) the consummation of an event
described in Section 6.1 involving a Change of Control approved by the
Board, such Option or right will terminate, subject to any provision that
has been expressly made by the Committee through a plan of reorganization
approved by the Board or otherwise for the survival, substitution,
assumption, exchange or other settlement of such Option or right.
6.2.4. Golden Parachute Limitations. Unless otherwise specified in an Award
Agreement, no Award will be accelerated under this Plan to an extent or in
a manner that would not be fully deductible by the Company for federal
income tax purposes because of Section 280G of the Code, nor will any
payment hereunder be accelerated if any portion of such accelerated payment
would not be deductible by the Company because of Section280G of the Code.
If a holder would be entitled to benefits or payments hereunder and under
any other plan or program that would constitute "parachute payments" as
defined in Section 280G of the Code, then the holder may by written notice
to the Company designate the order in which such parachute payments will be
reduced or modified so that the Company is not denied federal income tax
deductions for any "parachute payments" because of Section 280G of the
Code.
6.3. Effect of Termination of Employment. The Committee will establish in
respect of each Award granted to an Eligible Person the effect of a
termination of employment on the rights and benefits thereunder and in so
doing may make distinctions based upon the cause of termination.
6.4. Compliance with Laws. This Plan, the granting and vesting of Awards under
this Plan and the offer, issuance and delivery of shares of Common Stock
and/or the payment of money under this Plan or under Awards granted
hereunder are subject to compliance with all applicable federal and state
laws, rules and regulations (including but not limited to state and federal
securities law, federal margin requirements) and to such approvals by any
listing, regulatory or governmental authority as may, in the opinion of
counsel for the Corporation, be necessary or advisable in connection
therewith. Any securities delivered under this Plan will be subject to such
restrictions, and to any restrictions the Committee may require to preserve
a pooling of interests under generally accepted accounting principles, and
the person acquiring such securities will, if requested by the Corporation,
provide such assurances and representations to the Corporation as the
Corporation may deem necessary or desirable to assure compliance with all
applicable legal requirements.
6.5. Tax Withholding
6.5.1. Provision for Tax Withholding Offset. Upon any exercise, vesting, or
payment of any Award or upon the disposition of shares of Common Stock
acquired pursuant to the exercise of an Incentive Stock Option prior to
satisfaction of the holding period requirements of Section 422 of the Code,
the Company shall have the right at its option to (i) require the
Participant (or Personal Representative or Beneficiary, as the case may be)
to pay or provide for payment of the amount of any taxes which the Company
may be required to withhold with respect to such Award event or payment or
(ii) deduct from any amount payable in cash the amount of any taxes which
the Company may be required to withhold with respect to such cash payment.
In any case where a tax is required to be withheld in connection with the
delivery of shares of Common Stock under this Plan, the Committee may in
its sole discretion (subject to Section 6.4) grant (either at the time of
the Award or thereafter) to the Participant the right to elect, pursuant to
such rules and subject to such conditions as the Committee may establish,
to have the Corporation reduce the number of shares to be delivered by (or
otherwise reacquire) the appropriate number of shares valued at their then
Fair Market Value, to satisfy such withholding obligation.
6.5.2. Tax Loans. If so provided in the Award Agreement, the Company may, to the
extent permitted by law, authorize a loan to an Eligible Person in the
amount of any taxes that the Company may be required to withhold with
respect to shares of Common Stock received (or disposed of, as the case may
be) pursuant to a transaction described in Section 6.5.1. Such a loan will
be for a term, at a rate of interest and pursuant to such other terms and
conditions as the Company, under applicable law may establish and such loan
need not comply with the provisions of Section 1.8.
6.6. Plan Amendment, Termination and Suspension
6.6.1. Board Athorization. The Board may, at any time, terminate or, from time
to time, amend, modify or suspend this Plan, in whole or in part. No Awards
may be granted during any suspension of this Plan or after termination of
this Plan, but the Committee will retain jurisdiction as to Awards then
outstanding in accordance with the terms of this Plan.
6.6.2. Stockholder Approval. To the extent then required under Sections 422 and
424 of the Code or any other applicable law, or deemed necessary or
advisable by the Board, any amendment to this Plan shall be subject to
stockholder approval. The changes to this Plan approved by the Board prior
to May 1, 1998 to redefine the term Other Eligible Person to permit the
grant of additional discretionary Awards to, and to permit the amendment of
formula Awards then outstanding and held by, Non-Employee Directors, and to
increase Plan and Award share limits shall be subject to stockholder
approval.
6.6.3. Amendments to Awards. Without limiting any other express authority of the
Committee under but subject to the express limits of this Plan, the
Committee by agreement or resolution may waive conditions of or limitations
on Awards to Eligible Persons that the Committee in the prior exercise of
its discretion has imposed, without the consent of a Participant, and may
make other changes to the terms and conditions of Awards that do not affect
in any manner materially adverse to the Participant, the Participant's
rights and benefits under an Award.
6.6.4. Limitations on amendments to Plan and Awads. No amendment, suspension or
termination of this Plan or change of or affecting any outstanding Award
will, without written consent of the Participant, affect in any manner
materially adverse to the Participant any rights or benefits of the
Participant or obligations of the Corporation under any Award granted under
this Plan prior to the effective date of such change. Changes contemplated
by Section 6.2 will not be deemed to constitute changes or amendments for
purposes of this Section 6.6.
6.6.5. Amendments to Formula Awards. Options granted under the formula Award
feature of Section 8 of the prior version of this Plan may be amended by
the Board or a duly authorized Committee of the Board in a manner permitted
under this Plan in respect of Options granted to Eligible Employees.
6.7. Privileges of Stock Ownership. Except as otherwise expressly authorized by
the Committee or this Plan, a Participant will not be entitled to any
privilege of stock ownership as to any shares of Common Stock not actually
delivered to and held of record by the Participant. No adjustment will be
made for dividends or other rights as a stockholder for which a record date
is prior to such date of delivery.
6.8. Effective Date of the Plan. The Plan was first approved by the Board
effective as of August 1, 1997, and, as amended and restated as of
September 12, 1997, then approved by the Board and by the Corporation's
stockholders. The Plan was further amended and restated in its entirety by
the Board as of January 1, 1998 and February 5, 1998. The restatement as of
February 5, 1998 is subject to stockholder approval and if not so approved
will be rescinded, leaving the restatement as of January 1, 1998 in effect,
subject to Section 6.6.
6.9. Term of the Plan. No Award will be granted under this Plan after July 31,
2007 (the "termination date"). Unless otherwise expressly provided in this
Plan or in an applicable Award Agreement, any Award granted prior to the
termination date may extend beyond such date, and all authority of the
Committee with respect to Awards hereunder, including the authority to
amend an Award, will continue during any suspension of this Plan and in
respect of Awards outstanding on the termination date.
6.10. Governing Law/Construction/Severability
6.10.1. Choice of Law. This Plan, the Awards, all documents evidencing Awards
and all other related documents will be governed by, and construed in
accordance with the laws of the state of California.
6.10.2. Severability. If a court of competent jurisdiction holds any provision
invalid and unenforceable, the remaining provisions of this Plan will
continue in effect.
6.10.3. Plan Construction.
a. Rule 16b-3. It is the intent of the Corporation that transactions involving
the Awards under this Plan, in the case of Participants who are or may be
subject to Section 16 of the Exchange Act, satisfy to the extent feasible
the requirements for applicable exemptions under Rule 16 so that such
persons (unless they otherwise agree) will be entitled to the benefits of
Rule 16b-3 or other exemptive rules under Section 16 of the Exchange Act in
respect of those transactions and will not be subjected to avoidable
liability thereunder.
b. Section 162(m). It is the further intent of the Company that Options or
SARs with an exercise or base price not less than Fair Market Value on the
date of grant and Performance-Based Awards under Section 5.2 of this Plan
that are granted to or held by a person subject to Section 162(m) of the
Code will qualify as performance-based compensation under Section 162(m) of
the Code to the extent that the Committee authorizing the Award (or the
payment thereof, as the case may be) satisfies the administrative
requirements thereof. This Plan shall be interpreted consistent with such
intent.
6.11.Captions. Captions and headings are given to the sections and subsections
of this Plan solely as a convenience to facilitate reference. Such headings
will not be deemed in any way material or relevant to the construction or
interpretation of this Plan or any provision thereof.
6.12.Effect of Change of Subsidiary Status. For purposes of this Plan and any
Award hereunder, if an entity ceases to be a Subsidiary a termination of
employment and service will be deemed to have occurred with respect to each
Eligible Person in respect of such Subsidiary who does not continue as an
Eligible Person in respect of another entity within the Company.
6.13.Non-Exclusivity of Plan. Nothing in this Plan will limit or be deemed to
limit the authority of the Board or the Committee to grant awards or
authorize any other compensation, with or without reference to the Common
Stock, under any other plan or authority.
7. Definitions
"Award" means an award of any Option, Stock Appreciation Right, Restricted
Stock, Stock Bonus, performance share award, dividend equivalent or deferred
payment right or other right or security that would constitute a "derivative
security" under Rule 16a-1(c) of the Exchange Act, or any combination thereof,
whether alternative or cumulative, authorized by and granted under this Plan.
"Award Agreement" means any writing setting forth the terms of an Award
that has been authorized by the Committee.
"Award Date" means the date upon which the Committee took the action
granting an Award or such later date as the Committee designates as the Award
Date at the time of the Award.
"Award Period" means the period beginning on an Award Date and ending on
the expiration date of such Award.
"Beneficiary" means the person, persons, trust or trusts designated by a
Participant or, in the absence of a designation, entitled by will or the laws of
descent and distribution, to receive the benefits specified in the Award
Agreement and under this Plan if the Participant dies, and means the
Participant's executor or administrator if no other Beneficiary is designated
and able to act under the circumstances.
"Board" means the Board of Directors of the Corporation.
"Change in Control Event" means any of the following:
a. Approval by the stockholders of the Corporation of the dissolution or
liquidation of the Corporation;
b. Approval by the stockholders of the Corporation of an agreement to
merge or consolidate, or otherwise reorganize, with or into one or
more entities that are not Subsidiaries or other affiliates, as a
result of which less than 50% of the outstanding voting securities of
the surviving or resulting entity immediately after the reorganization
are, or will be, owned, directly or indirectly, by stockholders of the
Corporation immediately before such reorganization (assuming for
purposes of such determination that there is no change in the record
ownership of the Corporation's securities from the record date for
such approval until such reorganization and that such record owners
hold no securities of the other parties to such reorganization), but
including in such determination any securities of the other parties to
such reorganization held by affiliates of the Corporation);
c. Approval by the stockholders of the Corporation of the sale of
substantially all of the Corporation's business and/or assets to a
person or entity that is not a Subsidiary or other affiliate; or;
d. Any "person" (as such term is used in Sections 13(d) and 14(d) of the
Exchange Act but excluding any person described in and satisfying the
conditions of Rule 13d-1(b)(1) thereunder), other than a Current
Affiliate, becomes the beneficial owner (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of the
Corporation representing more than 50% of the combined voting power of
the Corporation's then outstanding securities entitled to then vote
generally in the election of directors of the Corporation; provided,
however, that a Change of Control will not be deemed to have occurred
if a Current Affiliate transfers to an organization described under
Section 501 of the Code beneficial ownership of more than 50% of the
combined voting power of the Corporation's then outstanding securities
entitled to then vote generally in the election of directors of the
Corporation; or
e. During any period not longer than two consecutive years, individuals
who at the beginning of such period constituted the Board cease to
constitute at least a majority thereof, unless the election, or the
nomination for election by the Corporation's stockholders, of each new
Board member was approved by a vote of at least three-fourths of the
Board members then still in office who were Board members at the
beginning of such period (including for these purposes, new members
whose election or nomination was so approved).
"Current Affiliate" means Fred Kayne or any of his affiliates (within the
meaning of the Exchange Act), successors, heirs, descendants or members of his
immediate family.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time. "Commission" means the Securities and Exchange Commission.
"Committee" means the Board or any one or more committees of director(s)
appointed by the Board to administer this Plan with respect to the Awards within
the scope of authority delegated by the Board. At least one committee will be
comprised only of two or more directors, each of whom, in respect of any
decision involving both (i) a Participant affected by the decision who is or may
be subject to Section 162(m) of the Code and (ii) compensation intended as
performance-based compensation within the meaning of Section 162(m) of the Code,
will be Disinterested; in acting on any transaction with or for the benefit of a
Section 16 Person, the participating members of such Committee also shall be
Non-Employee Directors within the meaning of Rule 16b-3 under the Exchange Act.
"Common Stock" means the Common Stock of the Corporation and such other
securities or property as may become the subject of Awards, or become subject to
Awards, pursuant to an adjustment made under Section 6.2 of this Plan.
"Company" means, collectively, the Corporation and its Subsidiaries.
"Corporation" means Big Dog Sportswear, a Delaware corporation, and its
successors.
"Disinterested" means a director who is an "outside director" within the
meaning of Section 162(m) of the Code any applicable legal or regulatory
requirements.
"Eligible Employee" means an officer (whether or not a director) or
employee of the Company.
"Eligible Person" means an Eligible Employee, or any Other Eligible Person,
as determined by the Committee.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended. "Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time.
"Fair Market Value" on any date means (a) if the stock is listed or
admitted to trade on a national securities exchange, the closing price of the
stock on the Composite Tape, as published in the Western Edition of The Wall
Street Journal, of the principal national securities exchange on which the stock
is so listed or admitted to trade, on such date, or, if there is no trading of
the stock on such date, then the closing price of the stock as quoted on such
Composite Tape on the next preceding date on which there was trading in such
shares; (b) if the stock is not listed or admitted to trade on a national
securities exchange, the last/closing price for the stock on such date, as
furnished by the National Association of Securities Dealers, Inc. ("NASD")
through the NASDAQ National Market Reporting System or a similar organization if
the NASD is no longer reporting such information; (c) if the stock is not listed
or admitted to trade on a national securities exchange and is not reported on
the National Market Reporting System, the mean between the bid and asked price
for the stock on such date, as furnished by the NASD or a similar organization;
or (d) if the stock is not listed or admitted to trade on a national securities
exchange, is not reported on the National Market Reporting System and if bid and
asked prices for the stock are not furnished by the NASD or a similar
organization, the value as established by the Committee at such time for
purposes of this Plan.
"Incentive Stock Option" means an Option that is designated and intended as
an incentive stock option within the meaning of Section 422 of the Code, the
award of that contains such provisions (including but not limited to the receipt
of stockholder approval of this Plan, if the award is made prior to such
approval) and is made under such circumstances and to such persons as may be
necessary to comply with that section.
"Nonqualified Stock Option" means an Option that is designated as a
Nonqualified Stock Option and will include any Option intended as an Incentive
Stock Option that fails to meet the applicable legal requirements thereof. Any
Option granted hereunder that is not designated as an incentive stock option
will be deemed to be designated a nonqualified stock option under this Plan and
not an incentive stock option under the Code.
"Non-Employee Director" means a member of the Board of Directors of the
Corporation who is not an officer or employee of the Company. For purposes of
this Plan, the Chairman of the Board` will be deemed an officer of the Company.
"Option" means an option to purchase Common Stock granted under this Plan.
The Committee will designate any Option granted to an Eligible Person as a
Nonqualified Stock Option or an Incentive Stock Option.
"Other Eligible Person" means (a) any individual consultant or advisor or
agent who renders or has rendered bona fide services (other than services in
connection with the offering or sale of securities of the Company in a capital
raising transaction) to the Company, and who (to the extent provided in the next
sentence) is selected to participate in this Plan by the Committee; or (b) any
director. A person who is neither an employee, officer nor director who provides
bona fide services to the Company may be selected as an Other Eligible Person
only if such person's participation in this Plan would not adversely affect (c)
the Corporation's eligibility to use Form S-8 to register under the Securities
Act of 1933, as amended, the offering of shares issuable under this Plan by the
Company or (d) the Corporation's compliance with any other applicable laws.
"Participant" means an Eligible Person who has been granted an Award under
this Plan and a Non-Employee Director who received an Award under Section 8 of
the prior version of this Plan.
"Performance Share Award" means an Award of a right to receive shares of
Common Stock under Section 5.1, or to receive shares of Common Stock or other
compensation (including cash) under Section 5.2, the issuance or payment of that
is contingent upon, among other conditions, the attainment of performance
objectives specified by the Committee.
"Personal Representative" means the person or persons who, upon the
disability or incompetence of a Participant, has acquired on behalf of the
Participant, by legal proceeding or otherwise, the power to exercise the rights
or receive benefits under this Plan by virtue of having become the legal
representative of the Participant.
"Plan" means this Amended and Restated 1997 Performance Award Plan, as
amended from time to time.
"QDRO" means a qualified domestic relations order as defined in Section
414(p) of the Code or Title I, Section 206(d)(3) of ERISA (to the same extent as
if this Plan were subject thereto), or the applicable rules thereunder.
"Restricted Shares" or "Restricted Stock" means shares of Common Stock
awarded to a Participant under this Plan, subject to payment of such
consideration, if any, and such conditions on vesting (which may include, among
others, the passage of time, specified performance objectives or other factors)
and such transfer and other restrictions as are established in or pursuant to
this Plan and the related Award Agreement, for so long as such shares remain
unvested under the terms of the applicable Award Agreement.
"Retirement" means retirement with the consent of the Company or, from
active service as an employee or officer of the Company on or after attaining
age 55 with ten or more years of service or age 65.
"Rule 16b-3" means Rule 16b-3 as promulgated by the Commission pursuant to
the Exchange Act, as amended from time to time.
"Section 16 Person" means a person subject to Section 16(a) of the Exchange
Act.
"Securities Act" means the Securities Act of 1933, as amended from time to
time.
"Stock Appreciation Right" or "SAR" means a right authorized under this
Plan to receive a number of shares of Common Stock or an amount of cash, or a
combination of shares and cash, the aggregate amount or value of which is
determined by reference to a change in the Fair Market Value of the Common
Stock.
"Stock Bonus" means an Award of shares of Common Stock granted under this
Plan for no consideration other than past services and without restriction other
than such transfer or other restrictions as the Committee may deem advisable to
assure compliance with law.
"Subsidiary" means any corporation or other entity a majority of whose
outstanding voting stock or voting power is beneficially owned directly or
indirectly by the Corporation.
"Total Disability" means a disability where Participant is unable to
effectively engage in the material activities required for Participant's
position with the Company by reason of any medically determinable physical or
mental impairment that can be expected to result in death or that has lasted or
can be expected to last for a period of 90 consecutive days or for shorter
periods aggregating 180 days in any consecutive 12 month period.
<PAGE>
Exhibit 4.2
TERMS AND CONDITIONS FOR
NON-QUALIFIED OPTIONS GRANTED UNDER THE
AMENDED AND RESTATED 1997 PERFORMANCE AWARD PLAN
1. Exercisability of Option. The Option shall vest and become exercisable in
percentage installments of the aggregate number of shares of Common Stock
of the Company as set forth in the Option Agreement. The Option may be
exercised only to the extent the Option is exercisable and vested.
a. Cumulative Exercisability. To the extent the Optionee does not in any year
purchase all the shares that the Optionee may then exercise, the Optionee
has the right cumulatively thereafter to purchase any shares not so
purchased until the Option terminates or expires.
b. No Fractional Shares. Fractional share interests shall be disregarded, but
may be cumulated.
c. Minimum Exercise. No fewer than 100 shares may be purchased at any one
time, unless the number purchased is the total number at the time
exercisable under the Option.
2. Method oF Exercise of Option. To the extent exercisable, the Option may be
exercised by the delivery to the Company of a written notice from the
Optionee stating the number of shares to be purchased pursuant to the
Option and accompanied by payment:
a. made in cash or electronic funds transfer, or by certified or cashier's
check payable to the order of the Company, in the full amount of the
purchase price of the shares and amounts required to satisfy applicable
withholding taxes, or
b. by the delivery of shares that have been held by the Optionee for at least
six months, in accordance with Section 2.2.2(e) of the Plan, unless
otherwise provided by the Committee.
Other payment methods may be permitted only if expressly authorized by the
Committee with respect to this option or all options under the Plan. The
Option is non-transferable and may be exercised only by the Optionee,
except as the Committee may otherwise expressly permit.
3. Continuance of Employment Required. The vesting schedule requires continued
service through each applicable vesting date as a condition to the vesting
of the applicable installment and rights and benefits under this Agreement.
Partial service, even if substantial, during any vesting period will not
entitle the Optionee to any proportionate vesting or avoid or mitigate a
termination of rights and benefits upon or following a termination of
employment or service as provided in Section 4 below or under the Plan.
4. Effect of Termination of Employment or Death. If the Optionee's employment
by either the Company or any subsidiary terminates, the Option and all
other rights and benefits under this Agreement terminate except that the
Optionee may, at any time within the following periods after the Severance
Date, exercise the Option to the extent the Option was exercisable on the
Severance Date and has not otherwise expired:
a. Termination by the Company or a subsidiary, other than a Dismissal for
Cause (as defined below)--for a period of 3 months
b. Voluntary resignation (other than in anticipation of or in connection with
a Dismissal for Cause)--for a period of 3 months
c. Retirement--for a period of 12 months
d. Total Disability or death of Optionee --- for a period of 12 months In case
of a Dismissal for Cause or a voluntary resignation in anticipation of or
in connection with a Dismissal for Cause, the Option shall terminate
immediately, in its entirety.
"Dismissal for Cause" means the Company or a subsidiary has terminated
Optionee's employment because of any of the following:
a. Any wrongful act by Optionee that has resulted in the Optionee's personal
gain at the expense of the Company or any of its subsidiaries;
b. Optionee's refusal to perform assigned duties;
c. Optionee's incompetence, insubordination, negligence, willful misconduct,
breach of fiduciary duty, or conviction of (or pleading guilty or no
contest to) a crime (other than minor traffic violations or similar
offenses);
d. Optionee's being under the influence of, or using, distributing or
possessing, unauthorized or illegal drugs or intoxicating beverages while
on duty or on the Company's premises;
e. Suspicion or finding of Optionee's theft, embezzlement, breach of
confidentiality, fraud or dishonesty;
f. Optionee's willful destruction or defacement of the Company's, a visitor's,
or an employe's property;
g. Optionee's unauthorized disclosure or use of confidential or inside
information, or trade secrets;
h. Optionee's falsification or alteration of the Company's records;
i. Optionee's inappropriate unauthorized absences from work;
j. Optionee's violation of any policy or rule of the Company; or;
k. Optionee's unfair competition, disparagement of the Company, inducement of
an employee to terminate his or her employment with the Company, or any
other conduct that results or may be expected to result in a substantial
detriment to the business or reputation of the Company or any of its
subsidiaries.
In addition, if the Optionee's employment is terminated other than upon a
Dismissal for Cause, but the Optionee then commits or the Company then discovers
an act referred to in (a), (e), (f), (g), (h) or (k) after such termination, the
remaining Options held by such Optionee shall immediately terminate. Each case
shall be determined by the Committee in its sole discretion, whether before or
after the date of termination of employment.
5. Change in Subsidiary's Status; Leaves of Absence. If the Optionee is
employed by an entity that ceases to be a subsidiary, this event is deemed
for purposes of this Agreement to be a termination of the Optionee's
employment by the Company other than a Dismissal for Cause. Absence from
work caused by military service, authorized sick leave or other leave
approved in writing by the Company shall not be considered a termination of
employment by the Company for purposes of Section 4.
6. Notices. Any notice to be given shall be in writing and addressed to the
Company at its principal office, to the attention of the General Counsel,
and to the Optionee at his or her last address of record, or at such other
address as either party may hereafter designate in writing to the other for
purposes of notices in respect of the Option.
7. Optionee not a Stockholder. Neither the Optionee nor any other person
entitled to exercise the Option shall have any of the rights or privileges
of a stockholder of the Company as to any shares of Common Stock until the
issuance and delivery to him or her of a certificate evidencing the shares
registered in his or her name.
8. No Employment Commitment by Company. Nothing contained in these Terms and
Conditions or the Option Agreement or in the Plan constitutes an employment
commitment by the Company, affects Optionee's status as an employee at will
who is subject to termination without cause, confers upon Optionee any
right to remain employed by the Company or any subsidiary, interferes in
any way with the right of the Company or any subsidiary at any time to
terminate such employment, or affects the right of the Company or any
subsidiary to increase or decrease Optionee's other compensation.
9. Effect of Award Agreement. The Option Agreement shall be binding upon and
inure to the benefit of any successor or successors of the Company, except
to the extent the Committee determines otherwise.
10. Choice of Law. The constructive interpretation, performance and enforcement
of the Option Agreement and the Option shall be governed by the laws of the
State of California.
11. Defined Terms. Capitalized terms used herein or in the Option Agreement and
not otherwise defined herein shall have the meaning assigned by the Plan.
12. Plan. The Option and all rights of Optionee thereunder are subject to, and
the Optionee agrees to be bound by, all of the terms and conditions of the
provisions of the Plan. Unless otherwise expressly provided in these Terms
and Conditions, provisions of the Plan that confer discretionary authority
on the Committee do not (and shall not be deemed to) create any additional
rights in the Optionee not expressly set forth in the Optionee's Option
Agreement or in a written amendment thereto.
13. Arbitration of Claims. Any controversy or claim arising out of or relating
to the Option, the Option Agreement, the Plan, or these Terms and
Conditions, their enforcement or interpretation, or an alleged breach,
default, or misrepresentation in connection with any of their provisions,
shall be submitted to binding arbitration in accordance with the provisions
of the Optionee's agreement with the Company to submit all employment-
related disputes to arbitration. This understanding shall not be deemed to
limit in any way the provisions of Section 1.2.3 of the Plan, as to the
effect of actions by the Board or the Committee relating or pursuant to the
Plan as conclusive and binding on all persons and as to other matters.
<PAGE>
Exhibit 4.3
BIG DOG HOLDINGS, INC. [1997 PLAN]
(the "Company")
EMPLOYEE NONQUALIFIED STOCK OPTION AGREEMENT
THIS AGREEMENT is between the Company and the Optionee named below and evidences
the Company's grant to the Optionee of a Nonqualified Stock Option to purchase
authorized but unissued or treasury shares of the Company's Common Stock. The
Option is granted pursuant to and subject to the Company's Amended and Restated
1997 Performance Award Plan (the "Plan") and the Terms and Conditions for
NonQualified Stock Options Under the Plan (the "Terms"), incorporated herein by
this reference.
Optionee: ____________________ Exercise Price
Per Share: $_______1
Number of Shares: ____________________1
Grant Date: ___________ __, ____ Expires: _________ __,____2
Vesting Schedule: % Vesting Dates of Vesting1 2
--------- ------------ --, ----
--------- ------------ --, ----
--------- ------------ --, ----
--------- ------------ --, ----
--------- ------------ --, ----
Optionee accepts the Option and agrees to and acknowledges receipt of a copy of
the Plan and the Terms. Optionee further acknowledges he/she has received and
read the Mutual Agreement to Arbitrate Claims provisions of the Company's
Employee Handbook and agrees to be bound by the provisions of such agreement as
a condition of the grant of this Option.
----------
1. Subject to adjustment under Section 6.2 of the Plan.
2. Subject to early termination if the Optionee's employment terminates or in
certain other circumstances. See Sections 3 through 5 of the Terms and Sections
1.6 and 6.2 of the Plan for exceptions and additional details regarding possible
early termination of the Option.
BIG DOG HOLDINGS, INC. AGREED AND ACKNOWLEDGED:
(a Delaware corporation)
---------------------------------
By: _______________________________ Optione's Signature)
Its: ______________________________ _________________________________
Address
---------------------------------
City, State, Zip Code
<PAGE>
Exhibit 4.4
BIG DOG HOLDINGS, INC.
ELIGIBLE DIRECTOR
NONQUALIFIED STOCK OPTION AGREEMENT
THIS AGREEMENT dated as of ____________, 200__, is between BIG DOG
HOLDINGS, INC., a Delaware corporation (the "Company"), and
__________________________ (the "Director"). The Company and the Director agree
to the terms and conditions of this Award Agreement under the 1997 Plan
described below.
1. Option Grant. This Agreement evidences the grant to the Director, as of
June 5, 1998, of an Option to purchase an aggregate of _________ shares of
Common Stock , subject to the terms and conditions and to adjustment as set
forth herein or pursuant to the Amended and Restated 1997 Performance Award
Plan, as amended from time to time (the "1997 Plan").
2. Exercise Price. The Option entitles the Director to purchase (subject to
the terms of Sections 3 through 5 below and to the extent exercisable) all
or any part of the Option shares at a price per share of $_____, which
equals or exceeds the Fair Market Value of the shares on the date of this
Agreement. The exercise price of the Option will be paid in full at the
time of each purchase in cash or by check or in shares of Common Stock
valued at their Fair Market Value on the date of exercise of the Option, or
partly in such shares and partly in cash, but any such shares used in
payment must be owned by the Participant at least six months prior to the
date of exercise.
3. Option Exercisability and Term. Subject to adjustment pursuant to the 1997
Plan, the Option will first become and remain exercisable as to _______
(20%) of the shares on _______________ and as to an additional _________
shares (20%) on each of the next four anniversaries of that date, in each
case subject to adjustments and acceleration under Section 5 below. The
Option will expire on ____________, 200_, unless earlier terminated in
accordance with the terms of the 1997 Plan or Section 4 or 5 below.
4. Service and Effect of Termination of Service. The Director agrees to serve
as a director, subject to and in accordance with the provisions of the
Company's Certificate of Incorporation, bylaws and applicable law. If the
Director's services as a member of the Board terminate, this Option will
terminate at the times and to the extent set forth below or pursuant to any
other applicable provisions of the 1997 Plan, including but not limited to
Section 6.6.5 of the 1997 Plan. If the Director's services as a member of
the Board terminate by reason of death, Disability or Retirement, the
Option will immediately become and will remain exercisable for two years
after the date of such termination or until ___________, 200_, whichever
first occurs. If the Director's services as a member of the Board terminate
for any other reason, any portion of the Option that is not then
exercisable will terminate and any portion of such Option that is then
exercisable may be exercised for six months after the date of such
termination or until ___________, 200__, whichever first occurs.
5. Adjustments; Acceleration; Termination. The Option will be subject to
adjustments, accelerations and terminations as provided in Section 6.2 of
the 1997 Plan, but only to the extent that in the case of a Change in
Control Event such effect and any Board or Committee action in respect
thereof is effected pursuant to the terms of a reorganization agreement
approved by stockholders of the Company or is otherwise consistent with the
effect on Options held by persons other than executive officers or
directors of the Company (or, if there are none, consistent in respect of
the underlying shares with the effect on stockholders generally).
Upon the occurrence of a Change in Control Event and acceleration under
Section 6.2.2 of the 1997 Plan, the Option will become immediately
exercisable in full.
The Option may be amended by the Board or a duly authorized Committee of
the Board in a manner permitted under the 1997 Plan in respect of Options
granted to Eligible Employees.
6. General Terms. The Option and this Amended Nonqualified Stock Option
Agreement are subject to, and the Company and the Director agree to be
bound by, the provisions of the 1997 Plan that apply to the Option. Such
provisions are incorporated herein by this reference. The Director has
received a copy of the 1997 Plan and has read its applicable provisions.
Capitalized terms not otherwise defined herein have the meaning set forth
in the 1997 Plan.
The parties have signed this NonQualified Stock Option Agreement as of
__________, 200__.
BIG DOG HOLDINGS, INC.
a Delaware corporation
By _________________________
Its ________________________
Participant/Director
-------------------------------
(Signature)
-------------------------------
(Print Name)
<PAGE>
Exhibit 4.5
BIG DOG HOLDINGS, INC.
ELIGIBLE DIRECTOR
AMENDED NONQUALIFIED STOCK OPTION AGREEMENT
(FORMULA OPTION)
THIS AGREEMENT dated as of April 1, 1998, is between BIG DOG HOLDINGS,
INC., a Delaware corporation (the "Company"), and ________________ (the
"Director") and amends in its entirety the NonQualified Stock Option Agreement
dated September 27, 1997. The Company and the Director agree to the terms and
conditions of this Award Agreement under the 1997 Plan described below.
Background
A. The Company has adopted an Amended and Restated 1997 Performance Award Plan
under which this Option was granted and, pursuant to amendments to the Plan
adopted as of February 5, 1998 (the "1997 Plan"), amended as of the date
hereof.
B. Pursuant to the Plan, the Company has granted an option (the "Option") to
the Director upon the terms and conditions evidenced hereby, as
contemplated by the 1997 Plan.
1. Option Grant. This Agreement evidences the grant to the Director, as of
September 27, 1997 (the "Option Date"), of an Option to purchase an
aggregate of 10,000 shares of Common Stock, par value $.01 per share, under
Section 8 of the 1997 Plan as then in effect, subject to the terms and
conditions and to adjustment as set forth herein or pursuant to the 1997
Plan.
2. Exercise Price. The Option entitles the Director to purchase (subject to
the terms of Sections 3 through 5 below and to the extent exercisable) all
or any part of the Option shares at a price per share of $6.50, which
represents the Fair Market Value of the shares on the Option Date. The
exercise price of the Option will be paid in full at the time of each
purchase in cash or by check or in shares of Common Stock valued at their
Fair Market Value on the date of exercise of the Option, or partly in such
shares and partly in cash, but any such shares used in payment must be
owned by the Participant at least six months prior to the date of exercise.
3. Option Exercisability and Term. Subject to adjustment pursuant to the 1997
Plan, the Option will first become and remain exercisable as to 2,000 (20%)
of the shares on April 1, 1999 and as to an additional 2,000 shares (20%)
on each of the next four anniversaries of that date, in each case subject
to adjustments and acceleration under Section 5 below. The Option will
expire on September 26, 2007, unless earlier terminated in accordance with
the terms of the 1997 Plan or Section 4 or 5 below.
4. Service and Effect of Termination of Service. The Director agrees to serve
as a director, subject to and in accordance with the provisions of the
Company's Certificate of Incorporation, bylaws and applicable law. If the
Director's services as a member of the Board terminate, this Option will
terminate at the times and to the extent set forth below or pursuant to any
other applicable provisions of the 1997 Plan, including but not limited to
Section 6.6.5 of the 1997 Plan. If the Director's services as a member of
the Board terminate by reason of death, Disability or Retirement, the
Option will immediately become and will remain exercisable for two years
after the date of such termination or until September 26, 2007, whichever
first occurs. If the Director's services as a member of the Board terminate
for any other reason, any portion of the Option that is not then
exercisable will terminate and any portion of such Option that is then
exercisable may be exercised for six months after the date of such
termination or until September 26, 2007, whichever first occurs.
5. Adjustments; Acceleration; Termination. The Option will be subject to
adjustments, accelerations and terminations as provided in Section 6.2 of
the 1997 Plan, but only to the extent that in the case of a Change in
Control Event such effect and any Board or Committee action in respect
thereof is effected pursuant to the terms of a reorganization agreement
approved by stockholders of the Company or is otherwise consistent with the
effect on Options held by persons other than executive officers or
directors of the Company (or, if there are none, consistent in respect of
the underlying shares with the effect on stockholders generally).
Upon the occurrence of a Change in Control Event and acceleration under
Section 6.2.2 of the 1997 Plan, the Option will become immediately
exercisable in full
The Option may be amended by the Board or a duly authorized Committee of
the Board in a manner permitted under this Plan inrespect of Options
granted to Eligible Employees.
6. General Terms. The Option and this Amended Nonqualified Stock Option
Agreement are subject to, and the Company and the Director agree to be
bound by, the provisions of the 1997 Plan that apply to the Option. Such
provisions are incorporated herein by this reference. The Director has
received a copy of the 1997 Plan and has read its applicable provisions.
Capitalized terms not otherwise defined herein have the meaning set forth
in the 1997 Plan.
7. Stockholder Approval. This Amended NonQualified Stock Option Agreement is
subject to approval of the 1997 Plan by the stockholders at their 1998
annual meeting.
<PAGE>
The parties have signed this Amended NonQualified Stock Option Agreement as
of April 1, 1998.
BIG DOG HOLDINGS, INC.
a Delaware corporation
By
----------------------------
Participant/Director
-----------------------------
Signature
-----------------------------
Print Name
-----------------------------
Address
-----------------------------
City, State, Zip Code
<PAGE>
Exhibit 5
July 31, 2000
Big Dog Holdings, Inc.
121 Gray Avenue
Santa Barbara, CA 93101
Re: Registration Statement on Form S-8 of
Big Dog Holdings, Inc.
Gentlemen:
At your request, I have examined the Registration Statement on Form S-8 to
be filed with the Securities and Exchange Commission in connection with the
registration under the Securities Act of 1933, as amended, of 2,000,000 shares
of Common Stock, par value $.01 per share, of the Company (the "Common Stock")
to be issued pursuant to the Big Dog Holdings, Inc. 1997 Performance Award Plan
(the "Plan"). I have examined the proceedings heretofore taken and to be taken
in connection with the authorization of the Plan and the Shares to be issued
pursuant to and in accordance with the Plan.
Based upon such examination and upon such matters of fact and law as I have
deemed relevant, I am of the opinion that the Common Stock has been duly
authorized by all necessary corporate action on the part of the Company and,
when issued in accordance with such authorization, the provisions of the Plan
and relevant agreements duly authorized by and in accordance with the terms of
the Plan, will be validly issued, fully paid and nonassessable.
I consent to the use of this opinion as an exhibit to the Registration
Statement.
Respectfully submitted,
/s/Anthony J. Wall
Anthony J. Wall
Executive Vice President
General Counsel
<PAGE>
Exhibit 24.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in the Registration Statement
of Big Dog Holdings, Inc. (the "Company") on Form S-8 of our report dated
February 15, 2000 except for Note 10, as to which date is March 1, 2000,
appearing in the Annual Report on Form 10-K of the Company for the year ended
December 31, 1999.
DELOITTE & TOUCHE LLP
Los Angeles, California
July 31, 2000
