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Exhibit 10.1
THE FLORSHEIM SHOE COMPANY
1994 STOCK OPTION PLAN
(As Amended and Restated as of March 23, 2000)
1. Objectives of the Plan.
The Florsheim Shoe Company 1994 Stock Option Plan (the "Plan") of The
Florsheim Shoe Company (the "Corporation") is intended to encourage and provide
opportunities for ownership of the Corporation's Common Stock by such key
employees (including officers) of the Corporation and any subsidiaries of the
Corporation as the Board of Directors of the Corporation (the "Board") or a
committee thereof constituted for this purpose may from time to time determine.
The Plan is also intended to provide incentives for such employees to put forth
maximum efforts for the successful operation of the Corporation and its
subsidiaries. By extending to such key employees the opportunity to acquire
proprietary interests in the Corporation and to participate in its success, the
Plan may be expected to benefit the Corporation and its shareholders by making
it possible for the Corporation and its subsidiaries to attract and retain the
best available talent and by providing such key employees with added incentives
to increase the value of the Corporation's stock.
2. Stock Subject to the Plan.
There are reserved for issue under the Plan 1,000,000 shares of the
Common Stock, without nominal or par value, of the Corporation (the "Shares").
Such Shares may be, in whole or in part, as the Board shall from time to time
determine, authorized but unissued Shares, or issued Shares which shall have
been reacquired by the Corporation. The maximum number of Shares with respect to
which options may be granted to any individual during any calendar year is
300,000 and the maximum number of Shares with respect to which options may be
granted to any individual during the term of the Plan is 500,000.
3. Administration.
Subject to the express provisions of the Plan, the Plan shall be
administered by the Executive Compensation and Stock Option Committee of the
Board (the "Committee"), and the Committee shall have plenary authority, in its
discretion, to determine the individuals to whom, and the time or times at
which, options, if any, shall be granted, the type of option to be granted
(e.g., incentive or nonqualified) and the number of Shares to be subject to an
option. Subject to the express provisions of the Plan, the Committee shall also
have plenary authority to interpret the Plan, to prescribe, amend and rescind
rules and regulations regarding it, and to take whatever action is necessary to
carry out the purposes of the Plan. The Committee's determinations on matters
referred to in this Section 3 shall be conclusive.
4. The Committee.
The Committee shall consist of three or more members of the Board. The
Committee shall be appointed by the Board, which may from time to time designate
the number to serve on the Committee, appoint members of the Committee in
substitution for members previously appointed and fill vacancies, however
caused, in the Committee. No member of the Board while a member of the Committee
shall be eligible to receive an option under the Plan. The Committee shall elect
one of its members as its Chairman and shall hold its meetings at such times and
places as it may determine. A majority of the members shall constitute a quorum.
Any determination reduced to writing and signed by all the members of the
Committee shall be fully as effective as if it had been made by a majority vote
at a meeting duly called and held. The Committee may appoint a secretary, shall
keep minutes of its meetings and shall make such rules and regulations for the
conduct of its business as it shall deem advisable.
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5. Eligibility.
Options may be granted only to key employees (which term as used herein
includes officers) of the Corporation and of its subsidiary corporations (the
"subsidiaries) as the term "subsidiary corporation" is defined in Section 424(f)
of the Internal Revenue Code of 1986, as amended, (the "Code"). For the purposes
of the Plan the term "employee" shall be an individual with an "employment
relationship" as defined in Section 421 (Treasury Regulation Section 1.421-7(h))
of the Code. A member of the Board or of the board of directors of a subsidiary
who is not also an employee of the Corporation or of one of its subsidiaries
shall not be eligible to receive an option. Nothing contained in the Plan shall
be construed to limit the right of the Corporation to grant options otherwise
than under the Plan in connection with (i) the employment of any person, (ii)
the acquisition, by purchase, lease, merger, consolidation or otherwise, of the
business or assets of another corporation, firm or association, including grants
to employees thereof who become employees of the Corporation or a subsidiary, or
(iii) other proper corporate purposes.
6. Nonqualified Stock Options.
Unless it is designated an incentive stock option by the Committee, any
option granted under the Plan shall be nonqualified and shall be in such form as
the Committee may from time to time approve. Any such nonqualified stock option
shall be subject to the following terms and conditions and shall contain such
additional terms and conditions, not inconsistent with the provisions of the
Plan, as the Committee shall deem desirable:
(a) Option Price. The option price of Shares purchasable under an
option shall be determined by the Committee in accordance with procedures
established by the Committee.
(b) Option Period. The term of an option shall be fixed by the
Committee, but no option shall be exercisable after the expiration of ten years
from the date the option is granted.
(c) Exercisability. Options shall be exercisable at such time or times
as determined by the Committee at or subsequent to grant; provided, however,
that except as provided in Subsections (f), (g) and (h) of this Section 6, no
option may be exercised at any time unless the holder is then a regular employee
of the Corporation or a subsidiary and has continuously remained an employee at
all times since the date of granting of the option. If any option granted under
the Plan shall expire or terminate for any reason without ever having been
exercised in full, the unissued shares subject thereto shall again be available
for the purposes of the Plan. The proceeds of the sale of Shares subject to
options are to be added to the general funds of the Corporation.
(d) Method of Exercise. Options which are exercisable may be exercised
in whole or in part at any time during the option period, by completing and
delivering to the Corporation an option exercise form provided by the
Corporation specifying the number of Shares to be purchased. Such form shall be
accompanied by payment in full of the purchase price in cash. No shares shall be
issued until full payment therefor has been made.
(e) Nontransferability of Options. No option shall be transferable by
the optionee otherwise than by will or by the laws of descent and distribution,
and such options shall be exercisable, during the optionee's lifetime, only by
the optionee.
(f) Termination by Reason of Death. If an optionee's employment by the
Corporation or any subsidiary terminates by reason of death, as to those Shares
with respect to which the option had become exercisable (under the provisions of
the particular option) on the date of death, the stock option may thereafter be
exercised by the legal representative of the estate or by the legatee of the
optionee under the will of the optionee, during a period of six months from the
date of such death or until the expiration of the stated period of the option,
whichever period is shorter.
(g) Termination by Reason of Retirement or Permanent Disability. If an
optionee's employment by the
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Corporation or any subsidiary terminates by reason of retirement or permanent
disability, as to those Shares with respect to which the option had become
exercisable (under the provisions of the particular option) on the date of
termination of employment, any stock option held by such optionee may thereafter
be exercised during a period of three months from the date of such termination
of employment or the expiration of the stated period of the option, whichever
period is shorter; provided, however, that if the optionee dies within such
three-month period, any unexercised stock option held by such optionee shall
thereafter be exercisable, to the extent to which it was exercisable at the time
of death, for a period of six months from the date of such death or for the
stated period of the option, whichever period is shorter.
(h) Other Termination. If an optionee's employment terminates for any
reason other than death, permanent disability, or retirement, as to those Shares
with respect to which the option had become exercisable (under the provisions of
the particular option) on the date of termination of employment, any option held
by such optionee may thereafter be exercised during a period of one month from
the date of such termination of employment or the expiration of the stated
period of the option, whichever period is shorter; provided, however, that if
the optionee dies within such one-month period, any unexercised option held by
such optionee shall thereafter be exercisable, to the extent to which it was
exercisable at the time of death, for a period of six months from the date of
such death or for the stated period of the option, whichever period is shorter.
(i) Option Buyout. The Committee may at any time offer to repurchase an
option, other than an option which has been held for less than six months by an
optionee who is subject to Section 16(b) of the Securities Exchange Act of 1934
(the "1934 Act"), based on such terms and conditions as the Committee shall
establish and communicate to the optionee at the time that such offer is made.
7. Incentive Stock Options.
Any option granted under the Plan shall, at the discretion of the
Committee, qualify as an incentive stock option as defined in Section 422(b) of
the Code and shall be in such form as the Committee may from time to time
approve. Any such incentive stock option shall be subject to the following terms
and conditions in addition to those set forth in Section 6 and shall contain
such additional terms and conditions, not inconsistent with the provisions of
the Plan, as the Committee shall deem desirable.
(a) Eligibility. Incentive stock options shall not be granted to any
individual who, at the time the option is granted, owns stock possessing more
than ten percent of the total combined voting power of all classes of stock of
the Corporation or its parent corporation (as the term "parent corporation" is
defined in Section 424(e) of the Code) or its subsidiaries (a "Ten Percent
Shareholder") unless: 1) the option price is at least 110% of the fair market
value of the Shares subject to the option, and 2) the option states that it is
not exercisable after the expiration of five years from the date the option is
granted. Incentive stock options shall not be granted to a person who is not a
Ten Percent Shareholder unless the option price is at least 100% of the fair
market value of the Shares subject to the option on the date the option is
granted.
(b) Limitation on Exercise of Options. The maximum aggregate fair
market value (determined at the time an option is granted) of the Shares with
respect to which incentive stock options are exercisable for the first time by
any optionee during any calendar year (under all plans of the Company and its
parent corporation and subsidiaries) shall not exceed $100,000. If the foregoing
$100,000 limit is exceeded with respect to an incentive stock option on account
of the acceleration of the exercise of the option pursuant to Section 8 of the
Plan, the portion of the incentive stock option in excess of the $100,000 limit
shall be treated as a nonqualified stock option. If the provisions of this
Section limit the exercisability of certain incentive stock options which would
otherwise become exercisable on account of termination of employment, the
Committee, in its sole discretion, shall determine the times at which such
incentive stock options become exercisable so that the provisions of this
Section 7(b) are not violated; provided, that in no event shall any incentive
stock option be exercisable more than ten years from the date it is granted
(five years in the case of incentive stock options granted to Ten Percent
Shareholders (described in Section 7(a)).
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8. Adjustment Upon Changes in Capitalization, Etc.
The aggregate number and class of shares reserved under the Plan and
with respect to which options may be granted to any individual, the number and
class of shares subject to each option granted pursuant to the Plan and the
option price per Share payable under each such option shall be appropriately and
equitably adjusted in the event of: any reclassification or increase or decrease
in the number of the issued Shares of the Corporation by reason of a split-up or
consolidation of Shares; the payment of a stock dividend; a recapitalization; a
combination or exchange of Shares; a spin-off; or any like capital adjustment.
Subject to the next paragraph, if the Corporation shall be reorganized or shall
be merged with or into or consolidated with any other corporation, or shall sell
all or substantially all of its assets or effect a complete liquidation, each
option, if any, then outstanding under the Plan, shall thereafter apply to such
number and kind of securities, cash or other property as would have been
issuable by reason of such reorganization, merger, consolidation, sale or
liquidation to a holder of the number of Shares which were subject to the
option, if any, immediately prior to such transaction.
In the event of a proposed transaction of the type set forth in the preceding
paragraph, the Committee may determine that each option then outstanding under
the Plan, shall terminate as of a date to be fixed by the Committee and approved
by the Board upon not less than thirty days' written notice to the optionee; and
may further determine when and to the extent that, any option granted at least
six months prior to such event to any optionee who has been an employee for one
year or more prior to the date of such notice, shall be accelerated and such
optionee shall be entitled to exercise such option without regard to any
installment provision of the option prior to the termination date fixed in said
notice; provided, however, that in no event shall the Committee have the right
to make any determination provided for in this paragraph, if doing so would make
any transaction ineligible for pooling of interest accounting treatment under
APB No. 16 or any successor provision that but for such determination would be
eligible for such treatment.
All adjustments under this Section 8 shall be made by the Committee, subject to
the approval of the Board, which action shall be final and conclusive.
Anything to the contrary notwithstanding, upon a Change of Control (as
hereinafter defined) and, in the case of options granted on or after March 15,
1996, subsequent termination of an optionee's employment by the Corporation or
by the optionee as a result of a material breach by the Corporation of any
employment agreement between the optionee and the Corporation, each option
granted prior to such Change of Control shall become immediately exercisable in
full. As used herein, "Change of Control" shall mean any of the following
events:
(a) The acquisition (other than (i) from the Corporation or INTERCO
INCORPORATED or (ii) by Apollo (as hereinafter defined)) by any person, entity
or "group", within the meaning of Section 13(d)(3) or 14(d)(2) of the 1934 Act,
excluding, for this purpose, the Corporation or its subsidiaries, or any
employee benefit plan of the Corporation or its subsidiaries, of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the 1934 Act) of
20% or more of either the then outstanding Shares or the combined voting power
of the Corporation's then outstanding voting securities entitled to vote
generally in the election of directors if the beneficial ownership of such
person, entity or "group" exceeds the beneficial ownership of Shares and the
combined voting power of the Corporation's then outstanding securities entitled
to vote generally in the election of directors held by any person or entity that
acquired such Shares or securities having such voting power from the Corporation
and by Apollo; or
(b) Individuals who, as of the first anniversary of the Effective Date
(as defined in Section 12), constitute the Board (as of such date, the
"Incumbent Board"), cease for any reason to constitute at least a majority of
the Board; provided, that any person becoming a director subsequent to the first
anniversary of the Effective Date whose election, or nomination for election by
the Corporation's stockholders, was approved by a vote of at least a majority of
the directors then comprising the Incumbent Board (other than an election or
nomination of an individual whose initial assumption of office is in connection
with an actual or threatened election contest relating to
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the election of the directors of the Corporation, as such terms are used in Rule
14a-11 of Regulation 14A promulgated under the 1934 Act) shall be considered as
though such person were a member of the Incumbent Board; or
(c) Approval by the stockholders of the Corporation of a
reorganization, merger or consolidation, in each case, with respect to which
persons who were the stockholders of the Corporation immediately prior to such
reorganization, merger or consolidation do not, immediately thereafter, own,
directly or indirectly, more than 50% of the combined voting power entitled to
vote generally in the election of directors of the reorganized, merged or
consolidated company's then outstanding voting securities, or a liquidation or
dissolution of the Corporation or the sale of all or substantially all of the
assets of the Corporation, in each case, unless the transaction was approved by
a majority of the directors then comprising the Incumbent Board.
For purposes of the definition of "Change of Control", the term "Apollo" shall
mean Apollo Advisors, L.P. and Lion Advisors, L.P. and any entity that controls,
is controlled by or is under common control with Apollo Advisors, L.P. and Lion
Advisors, L.P., including accounts under common management.
9. Amendments and Termination.
The Board may amend, alter, or discontinue the Plan, but no amendment,
alteration, or discontinuation shall be made which would impair the rights of an
optionee under an option without the optionee's consent, or which without the
approval of the stockholders would, except as is provided in Section 8, increase
the total number of Shares reserved for the purpose of the Plan, change the
employees or class of employees eligible to participate in the Plan, or extend
the maximum option period under Section 6(b).
The Committee may amend the terms of any option theretofore granted,
prospectively or retroactively, but no such amendment shall impair the rights of
any optionee without the consent of the optionee. The Committee may also
substitute new options for previously granted options, including substitution
for previously granted options having higher option prices.
10. General Provisions.
(a) The Committee may require each person purchasing Shares pursuant to
an option under the Plan to represent to and agree with the Corporation in
writing that the optionee is acquiring the Shares without a view to distribution
thereof. The certificates for such Shares may include any legend which the
Committee deems appropriate to reflect any restrictions on transfer.
(b) All certificates for Shares delivered under the Plan shall be
subject to such stock-transfer orders and other restrictions as the Committee
may deem advisable under the rules, regulations, and other requirements of the
Securities and Exchange Commission, any stock exchange upon which the Shares are
then listed, and any applicable federal or state securities law, and the
Committee may cause a legend or legends to be put on any such certificates to
make appropriate reference to such restrictions.
(c) Nothing contained in the Plan shall prevent the Board from adopting
other or additional compensation arrangements, subject to stockholder approval
if such approval is required; and such arrangements may be either generally
applicable or applicable only in specific cases.
11. Taxes.
Following exercise of an option, the optionee shall, no later than the
date as of which an amount related to the option exercise first becomes
includable in the gross income of the optionee for federal, state or local tax
purposes, pay to the Corporation, or make arrangements satisfactory to the
Corporation regarding payment of, any federal, state, or local taxes of any kind
required by law to be withheld with respect to such amount and the Corporation
and its subsidiaries shall, to the extent permitted by law, have the right to
deduct any such taxes from any payment of any kind otherwise due to the
optionee.
12. Effective Date of Plan.
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The Plan became effective on October 19, 1994 the date it was adopted
by the Board and by the Company's then sole stockholder (the "Effective Date").
The Plan as amended and restated shall be effective as of March 23, 2000, the
date as of which it is adopted by the Executive Committee and Stock Option
Committee of the Board, subject to stockholder approval.
13. Term of Plan.
No option shall be granted pursuant to the Plan more than 10 years
after the Effective Date, but options theretofore granted may extend beyond and
be exercised after that date.
