DUCK HEAD APPAREL COMPANY, INC.
INCENTIVE STOCK AWARD PLAN
Effective February 15, 2000
Amended and Restated August 22, 2000
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DUCK HEAD APPAREL COMPANY, INC.
INCENTIVE STOCK AWARD PLAN
ARTICLE I
THE PLAN
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Sec. 1.1 NAME.
This plan shall be known as the "Incentive Stock Award Plan" (the
"Plan").
Sec. 1.2 PURPOSES
The purposes of the Plan are to establish or increase the equitable
ownership in Duck Head Apparel Company, Inc. (the "Company") by key and middle
level management employees of the Company and/or its subsidiaries and to provide
incentives to key and middle level management employees of the Company and/or
its subsidiaries through the prospect of such common stock ownership. By thus
achieving ownership or the prospect of ownership of the Company's common stock
by such employees, the Company expects to attract, retain and motivate
exceptionally well qualified and competent individuals in key and middle level
management positions.
ARTICLE II
PARTICIPANTS
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Sec. 2.1 ELIGIBILITY
Any officer of other key management employee or middle level management
employee of the Company or any subsidiary shall be eligible to receive an
Incentive Stock Award (an "Award").
ARTICLE III
ADMINISTRATION
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Sec. 3.1 SELECTION OF AWARDS
The Board of Directors (the "Board") of the Company shall have the
authority from time to time to select key and middle level management employees
("Participants") to receive Awards and the number of shares to be awarded under
each such Award. In its discretion, the Board may delegate its authority under
the Plan to a committee of the Board (the "Committee") composed solely of two or
more "Non-Employee Directors" ( as defined in Rule 16b-3 promulgated under the
Securities Exchange Act of 1934, as amended, or any applicable successor rule or
regulation (the "Exchange Act").
Sec. 3.2 INTERPRETATION OF PLAN
The Board (or Committee, as applicable) shall have full and final authority to
interpret and administer the Plan and to determine and interpret the terms and
conditions of each Incentive Stock Award Agreement.
ARTICLE IV
SHARES ELIGIBLE TO BE GRANTED UNDER THE PLAN
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Sec. 4.1 NUMBER OF SHARES
Subject to the provisions of Section 4.2, the aggregate number of
shares of common stock of the Company which may be awarded under the Plan shall
not exceed 200,000 shares. Such shares may be either shares previously issued
and thereafter acquired by the Company or they may be authorized but unissued
shares. Any shares covered by an Award (or portion thereof) that have been
forfeited pursuant to the provisions of the applicable Incentive Stock Award
Agreement shall again become available for the purposes of the Plan.
Sec. 4.2 ANTI-DILUTION
In the event that the outstanding shares of common stock of the Company
hereafter are changed into or exchanged for a different number or kind of shares
or other securities of the Company or of another corporation, or cash or other
property, by reason of a merger, consolidation, reorganization,
recapitalization, reclassification, combination of shares, stock split, stock
dividend or similar event:
(a) the aggregate number and kind of shares subject to Awards
which shall have been or may thereafter be granted hereunder and the per
Participant share grant limit set forth in Section 5.1 shall be adjusted
appropriately; and
(b) the new, additional or different shares and securities and
the cash and other property into which the shares subject to outstanding Awards
would have been converted (had the shares covered by such Awards been
outstanding) shall be considered to be property granted by and subject to the
Awards and shall be subject to all of the conditions and restrictions applicable
to such Awards and the shares subject to such Awards.
The foregoing adjustments and the manner of application of the
foregoing provisions shall be determined solely by the Board (or Committee, as
applicable), and any such adjustment may provide for the elimination of
fractional shares or security interests.
ARTICLE V
AWARD
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Sec. 5.1 AWARD GRANT
The Board (or Committee, as applicable) shall determine from time to
time who is to be a Participant and the number of shares to be awarded;
provided, that during any calendar year no Participant may be awarded an
aggregate of more than 75,000 shares (subject to adjustment pursuant to Section
4.2) of common stock under the Plan. Such determination shall be recorded in the
minutes of the meeting at which such determination was made.
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Sec. 5.2 INCENTIVE STOCK AWARD AGREEMENT
A Participant shall be entitled to receive an Award only upon execution
of an Incentive Stock Award Agreement with the Company. Such Incentive Stock
Award Agreement shall be substantially in the form attached hereto but may be
modified form time to time by the Board (or Committee, as applicable) consistent
with the terms of this Plan.
Sec. 5.3 CASH PURCHASE PRICE OF STOCK
The cash purchase price to be paid by each Participant in connection
with receiving shares covered by an Award (or portion thereof) that has vested
pursuant to the provisions of an Incentive Stock Award Agreement shall be $0.01
per share and such sum shall be payable prior to issuance to the Participant of
the certificate(s) representing such shares.
Sec. 5.4 FORFEITURE OF AN AWARD (OR PORTION THEREOF)
The Incentive Stock Award Agreement shall set forth the circumstances
under which the Award granted thereby (or portion thereof) shall be forfeited.
Unless the Board (or Committee, as applicable) determines otherwise at the date
of grant, the Award shall be forfeited upon the termination of employment of the
Participant with the Company, or any subsidiary thereof, for any reason other
than death, retirement or permanent total disability, prior to the date set
forth in the Incentive Stock Award Agreement when the Award (or relevant portion
thereof) shall vest.
With respect to any portion of an Award whose vesting is contingent on
the performance of the Company, the Participant or any subsidiary, division or
other subdivision of the Company over a specified period, unless the Board (or
Committee, as applicable) determines otherwise at the date of grant, upon the
termination of employment of the Participant by reason of, but only by reason
of, death, retirement or permanent total disability prior to the end of the
performance period, the unvested shares of such portion of the Award shall vest
as follows: On the date on which the performance period ends, the portion of the
Award contingent upon performance shall vest with respect to a number of shares
equal to (x) the number of shares as to which the Award would have vested had
the Participant still been an employee at the end of the performance period,
times (y) the quotient of the number of days during the performance period that
the Participant was an employee of the Company divided by the total number of
days in the performance period. Any portion of an Award whose vesting is
contingent on the Participant's continued service with the Company or a
subsidiary of the Company shall be forfeited upon the Participant's termination
of employment with the Company, or any subsidiary thereof, by reason of death,
disability, or retirement prior to the vesting date of such portion of the
Award.
The forfeiture circumstances may vary among the shares covered by an
Award. In the event an Award (or portion thereof) shall be forfeited pursuant to
the terms of the applicable Incentive Stock Award Agreement, the Participant
shall immediately have no further rights under such Award (or portion thereof)
or in the shares covered thereby.
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Sec. 5.5 VESTING OF AN AWARD (OR PORTION THEREOF)
(a) The Incentive Stock Award Agreement shall set forth the
circumstances under which the Award granted thereby (or portion thereof) shall
vest. With respect to any Award (or portion of an Award) intended to qualify as
"performance-based compensation" under Section 162(m)(4)(C) of the Code and the
regulations promulgated thereunder, (i) these circumstances shall consist of the
achievement of one or more performance-based goals established by the Committee,
and such performance-based goals shall be based on one of, or a combination of,
the following factors, as the Committee deems appropriate: total stockholder
return; revenues, sales, net income, EBIT, EBITDA, stock price, and/or earnings
per share; return on assets, net assets, and/or capital; return on stockholders'
equity; debt/equity ratio; working capital; safety; quality; the Company's
financial performance or the performance of the Company's stock versus peers;
cost reduction; productivity; market mix; or economic value added; (ii) the
Committee shall establish the performance-related goals in writing no later than
90 days after the commencement of the period of service to which the Award
relates (and in all events before 25% of the period of service has elapsed); and
(iii) the Award shall be made by a Committee, which shall consist solely of two
or more directors who are "outside directors" within the meaning of Treasury
Regulation Section 1.162-27(e)(3). The vesting circumstances may vary among the
shares covered by an Award.(b) In the event an Award (or portion thereof) shall
vest pursuant to the terms of the applicable Incentive Stock Award Agreement,
the Company shall issue and deliver, or cause to be issued and delivered, to the
Participant or his or her legal representative, free from any legend and any
other restriction (other than those required by federal or state securities laws
or any other applicable law), certificate(s) for the number of shares covered by
the vested portion of the Award, subject to receipt by the Company of the cash
purchase price described in Section 5.3 above. In addition, at or about such
time the Company shall pay to or on behalf of the Participant in cash an amount
that will be approximately sufficient, after the payment of all applicable
federal and state income taxes, to pay the federal and state income taxes which
the Participant will incur by virtue of the vesting of such Award (or portion
thereof). With respect to any Award (or portion of an Award) intended to qualify
as "performance-based compensation" under Section 162(m)(4)(C) of the Code and
the regulations promulgated thereunder, no issue of shares, delivery of any
certificates or payments shall occur, however, unless and until a Committee
consisting solely of two or more directors who are "outside directors" within
the meaning of Treasury Regulation Section 1.162-27(e)(3) has previously
certified in writing that the relevant performance-based goal(s) have been met.
(c) No stock certificate shall be delivered to a Participant or his or
her legal representative unless and until the Participant or his or her legal
representative shall have paid to the Company in cash the full amount of all
federal and state withholding or other employment taxes applicable to the
taxable income of such Participant resulting from the vesting of such Award (or
portion thereof).
(d) (i) Upon any Change of Control, all outstanding Awards, to the
extent not vested, shall become immediately vested in their entirety. "Change of
Control" shall mean the occurrence of any one of the following: (a) the sale,
lease, transfer, conveyance or other disposition (other than by way of merger or
consolidation), in one or a series of related transactions, of all or
substantially all of the assets of the Company and its subsidiaries taken as a
whole to any "person" (within the meaning of Section 13(d) of the Exchange Act)
other than one or more wholly-owned subsidiaries of the Company; (b) the
adoption of a plan relating to the liquidation or dissolution of the Company;
(c) the first day on which a majority of the members of the Board are not
Continuing Directors; or (d) the consummation of any transaction (including
without limitation any merger, share exchange or consolidation) the result of
which is that any "person" (as defined above), other than an Exempt Person or
Exempt Persons, becomes, directly or indirectly, the "beneficial owner" (as
defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that an entity
or person shall be deemed to have "beneficial ownership" of all shares that any
such entity or person has the
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right to acquire, whether such right is exercisable immediately or only after
the passage of time) of more than 30% of the outstanding common stock of the
Company; provided that the transactions covered by this clause (d) shall not
include the acquisition by the Company of its common stock; provided further,
however, that if (x) any "person" (as defined above) becomes, directly or
indirectly, the "beneficial owner" (as defined above) of more than 30% of the
outstanding common stock of the Company solely as a result of acquisition by the
Company of its common stock, (y) such "person" thereafter acquires any
additional shares of common stock of the Company and (z) immediately after such
acquisition such "person" is, directly or indirectly, the "beneficial owner" (as
defined above) of 30% or more of the outstanding common stock of the Company,
then such additional acquisition shall constitute a Change of Control.
(ii) "Exempt Person" shall mean (a) the Company, (b) any
wholly-owned subsidiary of the Company, (c) any individual who immediately
before the transaction is an executive officer of the Company, (d) any employee
benefit plan of the Company or any of its wholly-owned subsidiaries or (e) any
entity or person holding shares of common stock for or pursuant to the terms of
any such plan if such entity or person is not a beneficiary of or participant in
such plan.
(iii) "Continuing Directors" shall mean, as of any date, any
member of the Board who (i) was a member of the Board on the date this Plan was
adopted by the Board or (ii) was nominated for election or elected to the Board
with the approval of a majority of the Continuing Directors who were members of
the Board at the time of such nomination or election.
Sec. 5.6 NO RIGHTS AS SHAREHOLDER
Until the issuance and delivery to the Participant of certificate(s)
for such shares by reason of the vesting of an Award (or portion thereof) and
payment of the applicable cash purchase price, the Participant shall have none
of the rights of a shareholder with respect to the shares covered by an Award.
ARTICLE VI
STOCK CERTIFICATE
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Sec. 6.1 STOCK CERTIFICATES
The Company shall not be required to issue or deliver, or cause to be
issued or delivered, any certificate for shares of stock of the Company pursuant
to an Incentive Stock Award Agreement executed hereunder prior to fulfillment of
all of the following conditions:
(a) the admission of such shares to listing on any over-
the-counter markets and stock exchanges on which the Company's stock is then
traded or listed;
(b) the completion of any registration or other qualification
of such shares under any federal or state law or under the rulings or
regulations of the Securities and Exchange Commission or any other governmental
regulatory body, that the Board (or Committee, as applicable) in its sole
discretion deems necessary or advisable;
(c) the obtaining of any approval or other clearance from any
federal or state governmental agency which the Board (or Committee, as
applicable) shall in its sole discretion determine to be necessary or advisable;
and
(d) the lapse of such reasonable period of time following the
vesting of an Award (or portion thereof) as the Board (or Committee, as
applicable) from time to time may establish for reasons of administrative
convenience.
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ARTICLE VII
TERMINATION, AMENDMENT AND MODIFICATION OF PLAN
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Sec. 7.1 TERMINATION, AMENDMENT AND MODIFICATION OF PLAN
The Board (or Committee, as applicable) may at any time and from time
to time and in any respect amend, modify or terminate the Plan; provided,
however, that no such action of the Board (or Committee, as applicable) without
approval of the shareholders of the Company may:
(a) increase the total number of shares of common stock
covered by the Plan except as contemplated in Section 4.2 hereof; or
(b) change the $0.01 per share cash purchase price under
Section 5.3;
provided further, that no termination, amendment or modification of the Plan
shall in any manner, without the consent of the Participant, affect any Award
previously made to a Participant under the Plan.
ARTICLE VIII
MISCELLANEOUS
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Sec. 8.1 EMPLOYMENT
Nothing in this Plan or in any Award granted hereunder or in any
Incentive Stock Award Agreement relating thereto shall confer upon any employee
the right to continue in the employ of the Company or any subsidiary.
Sec. 8.2 OTHER COMPENSATION PLANS
The adoption of this Plan shall not affect any other existing incentive
or compensation plans of the Company or any subsidiary, nor shall this Plan
preclude the Company from establishing any other forms of incentive or other
compensation for employees of the Company or any subsidiary.
Sec. 8.3 PLAN BINDING ON SUCCESSORS
This Plan shall be binding upon the successors and assigns of the
Company.
Sec. 8.4 SINGULAR, PLURAL; GENDER; HEADINGS
Whenever used herein, nouns in the singular shall include the plural,
and the masculine pronoun shall include the feminine gender. The headings in
this Plan or any Incentive Stock Award Agreement are and shall be for reference
purposes only and shall not affect the meaning or interpretation hereof or
thereof.
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Sec. 8.5 AWARD NOT TRANSFERABLE
A Participant shall have no right to transfer, assign or hypothecate an
Award or, until the portion of an Award covering such shares shall vest, the
shares covered by an Award, other than by will or the laws of descent and
distribution, and the rights of any purported owner, holder, pledgee or any
other person in possession of or claiming any right in such Award or shares
shall at all times be subject to the provisions of this Plan and the applicable
Incentive Stock Award Agreement.
Sec. 8.6 GOVERNING LAW
This Plan shall be governed, interpreted and enforced in accordance
with the laws of Georgia without regard to choice of law principles.
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DUCK HEAD APPAREL COMPANY, INC.
INCENTIVE STOCK AWARD AGREEMENT
THIS AGREEMENT, effective as of _____________________, _______, by and
between Duck Head Apparel Company, Inc., a Georgia corporation (the "Company"),
and __________________________ (the "Participant") evidences the grant by the
Company of an Incentive Stock Award (this "Award") to purchase an aggregate of
____________ shares of common stock of the Company subject to the terms of the
Company's Incentive Stock Award Plan and this Agreement.
Sec. 1. CASH PURCHASE PRICE
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The cash purchase price of the common stock subject to this Award is
$0.01 per share.
Sec. 2. ANTI-DILUTION
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In the event that the outstanding shares of common stock of the Company
hereafter are changed into or exchanged for a different number or kind of shares
or other securities of the Company or of another corporation, or cash or other
property, by reason of a merger, consolidation, reorganization,
recapitalization, reclassification, combination of shares, stock split, stock
dividend or similar event, the new, additional or different shares and
securities and the cash and other property into which the shares subject to this
Agreement would have been converted (had the shares covered by this Agreement
been outstanding) shall be considered to be property granted by and subject to
this Agreement and shall be subject to all of the conditions and restrictions
applicable to the Award evidenced by, and the shares subject to, this Agreement.
Sec. 3. RESTRICTIONS ON TRANSFER
The Participant may not transfer, assign or hypothecate any of the
Participant's rights under this Agreement or, until the portion of the Award
evidenced hereby covering such shares shall vest, the shares covered by the
Award, other than by will or the laws of descent and distribution, and such
rights shall be exercisable during the Participant's lifetime only by the
Participant.
Sec. 4. FORFEITURE OF AWARD (OR PORTION THEREOF)
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Upon the occurrence of the following circumstances prior to the vesting
of the Award (or portion thereof, as applicable), the Award (or portion thereof)
of shares set forth in this Agreement shall be forfeit, and the Participant
shall immediately have no further rights under the Award (or portion thereof) or
in the shares covered thereby:
[Insert forfeiture conditions established by the Board (or Committee,
if applicable).]
Sec. 5. VESTING OF AWARD (OR PORTION THEREOF)
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Upon the occurrence of the following circumstances, the Award (or
portion thereof, as applicable) of shares set forth in this Agreement shall
vest:[Insert vesting conditions established by the Board (or Committee, if
applicable).]
Upon the vesting of the Award (or portion thereof) set forth in this
Agreement pursuant to the terms of this Agreement, the Company shall issue and
deliver, or cause to be issued and delivered, to the Participant or his or her
legal representative, free from any legend and any other restriction (other than
those
<PAGE>
required by federal or state securities laws or any other applicable law),
certificate(s) for the number of shares covered by the vested portion of the
Award, subject to the receipt by the Company of the cash purchase price
described in Section 1 above. In addition, at or about such time the Company
shall pay the Participant in cash an amount that will be approximately
sufficient, after the payment of all applicable federal and state income taxes,
to pay the federal and state income taxes that the Participant will incur by
virtue of the vesting of such Award (or portion thereof).
No stock certificate shall be delivered to the Participant or his or
her legal representative unless and until the Participant shall have paid to the
Company in cash the full amount of all federal and state withholding and other
employment taxes applicable to the taxable income of the Participant resulting
from the vesting of the Participant's Award (or portion thereof).
Sec. 6. NO RIGHTS AS SHAREHOLDER
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Until the issuance and delivery to the Participant of certificate(s)
for shares by reason of the vesting of the Award evidenced by this Agreement (or
portion thereof) and payment of the applicable cash purchase price, the
Participant shall have none of the rights of a shareholder with respect to the
shares covered by an Award.
Sec. 7. STOCK CERTIFICATES
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The Company shall not be required to issue or deliver, or cause to be
issued or delivered, any certificate for shares of stock of the Company pursuant
to this Agreement, prior to fulfillment of all of the following conditions:
(a) the admission of such shares to listing on any over-the-counter
markets and stock exchanges on which the Company's stock is then traded or
listed;
(b) the completion of any registration or other qualification of such
shares under any federal or state law or under the rulings or regulations of the
Securities and Exchange Commission or any other governmental regulatory body
that the Board of Directors of the Company (or committee thereof, as applicable)
in its sole discretion deems necessary or advisable;
(c) the obtaining of any approval or other clearance from any federal
or state governmental agency that the Company's Board of Directors (or committee
thereof) shall in its sole discretion determine to be necessary or advisable;
and
(d) the lapse of such reasonable period of time following the vesting
of the Award (or portion thereof) set forth in this Agreement as the Company's
Board of Directors (or committee thereof) from time to time establish for
reasons of administrative convenience.
<PAGE>
Sec. 8. ENFORCEMENT
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This Agreement shall be construed, administered and enforced in
accordance with and subject to the terms of the Company's Incentive Stock Award
Plan, the terms of which are hereby incorporated herein by reference, and the
laws of the State of Georgia, without reference to choice of law principles.
Sec. 9. INCENTIVE STOCK AWARD PLAN
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Participant acknowledges receipt of the Incentive Stock Award Plan (the
"Plan") of the Company. The terms of the Plan are incorporated herein by
reference.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first written above.
DUCK HEAD APPAREL COMPANY, INC. PARTICIPANT
By:______________________________ ____________________________
Name:____________________________ Name:_______________________
Title:_____________________________
