EXHIBIT 10(h)

K2 1999 STOCK OPTION PLAN

1. PURPOSE. The purpose of this Plan is to provide a means whereby K2 Inc. (the
“Company”) may, through the grant of options to purchase Common Stock of the
Company, attract and retain persons of ability as key employees (including
officers and directors who are also employees) and as nonemployee directors and
motivate such persons to exert their best efforts on behalf of the Company and
any Subsidiary. When used in the Plan with reference to employment, the term
“Company” shall include Subsidiaries of the Company. As used herein the term
“Subsidiary” shall mean any legal entity, 50% or more of the voting equity of
which is owned or controlled directly or indirectly by the Company.

2. SHARES SUBJECT TO THE PLAN. Options may be granted by the Company from time
to time to key employees and nonemployee directors of the Company to purchase
shares of Common Stock ($1.00 par value) of the Company (“Common Stock”), and
may be either authorized and unissued or held by the Company in its treasury.
The maximum number of shares of Common Stock with respect to which options may
be granted under the Plan shall be 1,400,000 shares, subject to adjustment as
provided in Section 4(i). If any option granted under the Plan shall terminate,
expire or, with the consent of the optionee, be canceled, new options may
thereafter be granted covering such shares. Anything contained herein to the
contrary notwithstanding, the aggregate number of shares of Common Stock with
respect to which options may be granted during any calendar year to any employee
or nonemployee director shall be limited to 150,000 and 20,000, respectively.

3. ADMINISTRATION OF THE PLAN. The Plan shall be administered by the Board of
Directors or a committee of the Board (the “Committee”) consisting of not less
than two members appointed by the Board of Directors of the Company. Each member
of the Committee shall be a member of the Board who qualifies both as an
“outside director” within the meaning of Section 162(m) of the Internal Revenue
Code of 1986, as amended from time to time (the “Code”), and as a “non-employee
director” within the meaning of Rule 16b-3 under the Securities Exchange Act of
1934. Any vacancy occurring in the membership of the Committee shall be filled
by appointment of the Board.

Subject to the provisions of the Plan, the Board or the Committee shall have the
power to:

(a) determine and designate from time to time those employees of the Company to
whom options are to be granted and the number of shares to be optioned to each
such employee;

(b) determine from time to time the number of options and basis of granting
options to nonemployee directors;

(c) authorize the granting of options which qualify as incentive stock options
within the meaning of Section 422 of the Code (“Incentive Stock Options”), and
options which do not qualify as Incentive Stock Options, both of which are
referred to herein as options;

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(d) determine the number of shares subject to each option;

(e) determine the time or times and the manner when each option shall be
exercisable and the duration of the exercise period, which period shall in no
event exceed ten years from the date the option is granted;

(f) extend the term of an option (including extension by reason of an optionee’s
death, permanent disability or retirement) but not beyond ten years from the
date of the grant.

The Board or the Committee may interpret the Plan, prescribe, amend and rescind
any rules and regulations necessary or appropriate for the administration of the
Plan, and make such other determinations and take such other action as it deems
necessary or advisable, subject to the terms and provisions of the Plan. Without
limiting the generality of the foregoing sentence, the Board or the Committee
may, in its discretion, treat all or any portion of any period during which an
optionee is on military leave or on an approved leave of absence from the
Company as a period of employment of such optionee by the Company for purposes
of accrual of his or her rights under his or her option; provided, however, that
no option may be granted to an employee while he or she is on a leave of
absence. Any interpretation, determination or other action made or taken by the
Board or the Committee shall be final, binding and conclusive.

4. TERMS AND CONDITIONS OF OPTIONS. Each option granted under the Plan shall be
evidenced by an agreement, in form approved by the Board or the Committee, which
shall be subject to the following express terms and conditions and to such other
terms and conditions as the Board or the Committee may deem appropriate:

(a) OPTION PERIOD. Each option agreement shall specify the period for which the
option thereunder is granted (which in no event shall exceed ten years from the
date of grant) and shall provide that the option shall expire at the end of such
period.

(b) OPTION PRICE. The option price per share shall be determined by the Board or
the Committee at the time any option is granted, and shall be not less than the
fair market value (but in no event less than the par value) of the Common Stock
of the Company on the date the option is granted.

(c) EXERCISE OF OPTION. No part of any option may be exercised until the
optionee shall have remained in the employ of the Company for such period after
the date on which the option is granted as the Board or the Committee may
specify in the option agreement, subject to any provision in the option
agreement for the acceleration of exercisability in the event of a
change-in-control of the Company.

(d) PAYMENT OF PURCHASE PRICE UPON EXERCISE. The purchase price of the shares as
to which an option shall be exercised shall be paid to the Company at the time
of exercise either (i) in cash (including the proceeds of a “cashless exercise”
with the assistance of a broker), or (ii) by delivering Common Stock of the
Company already owned by the optionee and having a total fair market value on
the date of such delivery equal to the purchase price, (iii) by delivering a
combination of cash and Common Stock of the Company having a total fair market
value on the date of such delivery equal to the purchase price; or

 

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(iv) by a reduction of such number of shares otherwise issuable pursuant to such
option as has a total fair market value on the date of exercise equal to the
purchase price. The Board or the Committee may authorize a loan to any optionee
to enable the exercise of options and the payment of withholding taxes arising
from such exercise.

(e) EXERCISE IN THE EVENT OF DEATH OR TERMINATION OF EMPLOYMENT. (1) If an
optionee’s employment by the Company shall terminate because of his or her
death, retirement or permanent disability, his or her option may be exercised,
to the extent provided in the option agreement, by him or her or by the person
or persons to whom the optionee’s rights under the option pass by designation
pursuant to Section 5, or, absent a designation, by will or applicable law, or
if no such person has such right, by the executor or administrator of his or her
estate, at any time, or from time to time, but not later than the earlier of
(i) the expiration date specified pursuant to paragraph (a) of this Section 4 or
(ii) the expiration of the period, if any, prescribed in the agreement for such
an exercise. (2) If an optionee’s employment shall terminate for any reason
other than death, retirement or permanent disability, all right to exercise his
or her option shall terminate at the date of such termination of employment or
after the expiration of any period specified in the option agreement..

(f) EXERCISE IN THE EVENT A NONEMPLOYEE DIRECTOR CEASES TO BE A DIRECTOR. If a
nonemployee director shall cease to be a director because of his or her death,
retirement pursuant to any age limitation for the service of directors, or
permanent disability, his or her option may be exercised, to the extent provided
in the option agreement, by him or her or by the person or persons to whom the
optionee’s rights under the option pass by designation pursuant to Section 5,
or, absent a designation, by will or applicable law, or if no such person has
such right, by the executor or administrator of his or her estate, at any time,
or from time to time, but not later than the earlier of (i) the expiration date
specified pursuant to paragraph (a) of this Section 4 or (ii) the expiration of
the period, if any, prescribed in the agreement for such an exercise. If a
nonemployee director shall cease to be a director for any reason other than
death, retirement pursuant to any age limitation for the service of directors or
permanent disability, all right to exercise his or her option shall terminate 90
days following the date such person ceases to be a director.

(g) TRANSFERABILITY OF OPTIONS. No option granted under the Plan shall be
transferable other than by will or by the laws of descent and distribution.
During the lifetime of the optionee an option shall be exercisable only by him
or her.

(h) INVESTMENT REPRESENTATION. Upon demand by the Board or the Committee, the
optionee shall deliver to the Committee at the time of any exercise of an option
a written representation that the shares to be acquired upon such exercise are
to be acquired for investment and not for resale or with a view to the
distribution thereof. Upon such demand, delivery of such representation prior to
the delivery of any shares issued upon exercise of an option and prior to the
expiration of the option period shall be a condition precedent to the right of
the optionee or such other person to purchase any shares (and each option
agreement shall contain an undertaking to deliver such a representation).

(i) ADJUSTMENTS IN EVENT OF CHANGE IN COMMON STOCK. In the event of any change
in the Common Stock of the Company by reason of any stock dividend,

 

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recapitalization, reorganization, merger, consolidation, split-up, combination
or exchange of shares, or rights offering to purchase Common Stock at a price
substantially below fair market value, or of any similar change affecting the
Common Stock, the number and kind of shares which thereafter may be optioned and
sold under the Plan and the number and kind of shares subject to option in
outstanding option agreements and the purchase price per share thereunder shall
be appropriately adjusted consistent with such change in such manner as the
Board or the Committee may deem equitable to prevent substantial dilution or
enlargement of the rights granted to, or available for, participants in the
Plan.

(j) OPTIONEES TO HAVE NO RIGHT AS A STOCKHOLDER. No optionee shall have any
rights as a stockholder with respect to any shares subject to his or her option
prior to the date of issuance to him or her of a certificate or certificates for
such shares.

(k) PLAN AND OPTION NOT TO CONFER RIGHTS WITH RESPECT TO CONTINUANCE of
EMPLOYMENT. The Plan and any option granted under the Plan shall not confer upon
any optionee any right with respect to continuance of employment by the Company,
nor shall they interfere in any way with the right of the Company to terminate
his or her employment at any time.

(l) TAX WITHHOLDING. The Board or the Committee may authorize options that
permit tax withholding obligations arising upon exercise to be paid by having
the Company withhold shares having a total fair market value on the date of such
delivery equal to the amount required.

(m) LIMITATION ON VALUE OF INCENTIVE STOCK OPTIONS. The aggregate fair market
value (determined as of the time the option is granted) of the stock for which
Incentive Stock Options granted to any one employee under this Plan and under
all stock option plans of the Company and its Subsidiaries may by their terms
first become exercisable during any calendar year shall not exceed $100,000.

(n) PROHIBITION ON REPRICING. No option granted hereunder shall be amended to
reduce the exercise price thereof, or surrendered in exchange for a replacement
option having a lower price; provided that this provision shall not restrict or
prohibit any antidilution adjustment or other action in accordance with
paragraph (i) above.

5. DESIGNATION OF BENEFICIARIES. An optionee may file with the Company a written
designation of a beneficiary or beneficiaries under the Plan and may from time
to time revoke or change any such designation of beneficiary. Any designation of
beneficiary under the Plan shall be controlling over any other disposition,
testamentary or otherwise; provided, however, that if the Board or the Committee
shall be in doubt as to the entitlement of any such beneficiary to any option,
it may determine to recognize only the legal representative of such optionee, in
which case the Company, the Board, the Committee and the members thereof shall
not be under any further liability to anyone.

6. COMPLIANCE WITH GOVERNMENT LAW AND REGULATIONS. The Plan, the grant and
exercise of options thereunder, and the obligation of the Company to sell and
deliver shares under such options, shall be subject to all applicable laws,
rules and regulations

 

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and to such approvals by any government or regulatory agency as may be required.
The Company shall not be required to issue or deliver any certificates for
shares of Common Stock prior to (i) the listing of such shares on any stock
exchange on which the Common Stock may then be listed and (ii) the completion of
any registration or qualification of such shares under any state or federal law,
or any ruling or regulation of any governmental body which the Company shall, in
its sole discretion, determine to be necessary or advisable.

7. AMENDMENT OR DISCONTINUANCE OF THE PLAN. The Board of Directors of the
Company may at any time amend or discontinue the Plan; provided, however, that,
subject to the provisions of Section 4(i) no action of the Board of Directors or
of the Committee may (i) increase the number of shares with respect to which
options may be granted under the Plan, (ii) permit the granting of any option at
an option price less than that determined in accordance with Section 4(b),
(iii) modify Section 4(n) to permit the reprising of options, or (iv) permit the
extension or granting of options which expire beyond the ten-year period
provided for in Sections 3(e) and 4(a). Without the written consent of an
optionee, no amendment or discontinuance of the Plan shall alter or impair any
option previously granted to him or her under the Plan.

8. EFFECTIVE DATE OF THE PLAN. The effective date of the Plan shall be the date
of approval of the Plan by stockholders of the Company holding not less than a
majority of the votes of the shares present and voting at a meeting at which the
Plan is proposed for approval.

9. NAME. The Plan shall be known as the “K2 1999 Stock Option Plan.”

 

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