EXHIBIT 10.28

 

THE SPORTS AUTHORITY, INC.

SALARIED EMPLOYEES’ STOCK OPTION AND STOCK AWARD PLAN

 

1. Purpose. The Sports Authority, Inc. Salaried Employees’ Stock Option and
Stock Award Plan (the “Plan”) is intended to be a broadly-based plan designed to
attract, retain and reward full-time salaried employees of the Company and its
“Subsidiaries” (business entities which have a majority of their equity
interests owned directly or indirectly by the Company), other than “executive
officers,” as defined in Securities Exchange Act Rule 3b-7 or “officers,” as
defined in Securities Exchange Act Rule 16a-1(f) (“Executive Officers”). The
Plan is intended to increase the proprietary interest in the Company of such
persons by providing further opportunity for ownership of the Company’s common
shares, $.01 par value (the “Shares”) and to increase the incentives to such
persons to contribute to the success of the Company’s business.

 

2. Administration. The Plan shall be administered by the Compensation Committee
of the Board of Directors (the “Board”) consisting of not less than two
directors of the Company appointed by the Board (the “Committee”). Members of
the Committee shall be appointed by and serve at the pleasure of the Board.

 

The Committee shall have sole discretion and authority to construe and interpret
the Plan, to make factual determinations and to establish and amend rules for
the administration of the Plan. The Committee shall have no obligation to treat
persons uniformly, except to the extent otherwise specifically provided in the
Plan. All actions which may be taken by the Committee under the Plan may be
taken by the Board. All actions by the Committee or the Board may be taken in
its sole discretion and shall be conclusive and binding on all parties.

 

3. Grants Under the Plan; Shares Reserved. Grants under the Plan may consist of
grants of nonqualified stock options (“Options”) or restricted or unrestricted
stock awards (“Stock Awards”). All Options and Stock Awards shall be subject to
the terms and conditions set forth herein and to such other terms and conditions
consistent with this Plan as the Committee deems appropriate and as are
specified in writing by the Committee to the individual in (i) a Stock Option
Agreement for the grant of an Option or (ii) a Stock Award Agreement for the
grant of Stock Awards (or an amendment to either of the foregoing). The
Committee shall approve the form and provisions of each Stock Option Agreement
and Stock Award Agreement.

 

The number of Shares reserved for issuance pursuant to Options and Stock Awards
under the Plan shall be 1,600,000 Shares, subject to adjustment as described in
Section 9 below. In no event may more than 500,000 Shares be used for grants of
Stock Awards, subject to adjustment as described in Section 9 below. The maximum
aggregate number of Shares that shall be subject to grants made under the Plan
to any individual during any calendar year shall be 250,000 Shares, subject to
adjustment as described in Section 9 below. Shares to be issued under the Plan
may be either authorized and unissued Shares or issued Shares which shall have
been reacquired by the Company. In

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the event that any outstanding Options or Stock Awards expires or is cancelled,
surrendered or terminated for any reason, the Shares allocable to the
unexercised portion of such Options or the unvested portion of such Stock Awards
may again be subjected to a grant or be issued under the Plan.

 

4. Grant of Options.

 

(a) General Powers of Committee; Employees Eligible for Grants. The Committee
may grant Options to full-time salaried employees of the Company or its
Subsidiaries (“Employees”), other than Employees who are Executive Officers
(Employees who receive Options are referred to as “Optionees”).

 

The Committee shall have sole discretion, in accordance with the provisions of
the Plan, to determine to whom an Option is granted, the number of Shares
covered by the Option and the terms and conditions of the Option, and shall have
the authority to accelerate the vesting or exercisability of any Option. In
making such determinations, the Committee may consider the position and
responsibilities of the Optionee, the nature and value to the Company of his or
her services and accomplishments, his or her present and potential contribution
to the success of the Company, and such other factors as the Committee may deem
relevant, but shall not be required to treat Optionees uniformly.

 

(b) Options In Lieu of Bonuses. Pursuant to its powers under Section 4(a), and
without limiting the foregoing, the Committee may grant Options to Employees
wholly or partially in lieu of bonuses otherwise payable under any annual bonus
plan of the Company. The Committee shall have sole discretion to determine the
method of valuing such Options and bonuses for this purpose, and shall be
entitled to grant Options of equal, greater or lesser value, as so determined,
than the bonuses that such Options replace. The Committee shall have sole
discretion to vary such valuation methods among individual Optionees and from
one grant to the next.

 

(c) General Provisions. All Options granted under the Plan shall be subject to
and governed by the provisions of the Plan, including the terms and conditions
set forth in this Section 4 and Section 5 hereof and by such other terms and
conditions, not inconsistent with the Plan, as shall be determined by the
Committee. The date on which an Option shall be granted shall be the date that
the Optionee, the number of Shares optioned and the terms and conditions of the
Option are determined by the Committee, or as otherwise specified by the
Committee. Each Option shall be evidenced by a Stock Option Agreement in such
form as the Committee may from time to time approve.

 

5. Terms and Conditions of Options.

 

(a) Option Price. The purchase price of each Option granted under the Plan shall
be determined by the Committee and shall not be less than the Fair Market Value
(as defined below) of a Share on the date of grant of such Option. Fair Market
Value of a Share for purposes of the Plan shall be deemed to be the closing
price on the

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New York Stock Exchange Composite Transactions Tape (or its equivalent as
determined by the Committee, if the Shares are not traded on the New York Stock
Exchange) of a Share for the relevant valuation date or, if Shares are not
traded on that date, the trading day immediately prior to the relevant valuation
date.

 

(b) Period of Option, Vesting and When Exercisable.

 

(i) The Committee shall establish the term of each Option, which shall not
exceed ten years from the date of grant. An Option granted under the Plan may
not be exercised after its term or the applicable time limit specified in
Section 5(b)(iii). Any Option not exercised within the aforementioned time
period shall automatically terminate at the expiration of such period.

 

(ii) The time or times during which Options may become nonforfeitable (“vest”)
or become exercisable, and any conditions pertaining to the vesting or
exercisability thereof, shall be determined by the Committee and specified in
the Stock Option Agreement. The Committee may grant Options that permit the
Optionee to exercise the Options before they vest and receive restricted Shares
that will vest over the remainder of the Option’s vesting period.
Notwithstanding the foregoing, vesting and exercisability shall be accelerated
if termination of the employment of the Optionee results from death or total and
permanent disability, if termination of the employment of the Optionee occurs at
or after age 65 and the Optionee has ten or more years of full-time service with
the Company or a Subsidiary, or if and to the extent that the Committee may so
determine in its sole discretion.

 

(iii) An Option may be exercised by an Optionee only while such Optionee is in
the employ of, or providing services to, the Company or a Subsidiary or within
three months thereafter, or within such longer period as the Committee may
establish in its sole discretion, and only if any limitation upon the vesting of
and the right to exercise such option under Section 5(b)(ii) has been removed or
has expired prior to termination of employment and exercise is not otherwise
precluded hereunder; provided that (i) if at the date of termination of
employment, the optionee has ten or more years of full-time service with the
Company or a Subsidiary or if termination of employment results from death or
total and permanent disability, such three month period shall be extended to
three years, and (ii) for then-vested options granted in lieu of bonuses, such
three month period shall be extended to three months after the date such options
were scheduled to first become exercisable. Employment or service with a
Subsidiary shall be deemed terminated on the date a former Subsidiary ceases to
be a Subsidiary of the Company.

 

(iv) In the event of the disability of an Optionee, an Option which is otherwise
exercisable may be exercised as provided in the Stock Option Agreement by the
Optionee’s legal representative or guardian. In the event of the death of an
Optionee, either before or after termination of employment, an Option which is
otherwise exercisable may be exercised as provided in the Stock Option Agreement
by the person or persons whom the Optionee shall have designated in writing on
forms prescribed by

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and filed with the Committee (“Beneficiaries”), or, if no such designation has
been made, by the person or persons to whom the Optionee’s rights shall have
passed by will or the laws of descent and distribution (“Successor(s)”). The
Committee may require an indemnity and or such evidence or other assurances as
it may deem necessary in connection with an exercise by a legal representative,
guardian, Beneficiary or Successor.

 

(c) Exercise and Payment.

 

(i) Subject to the provisions of Section 5(b), an Option may be exercised by
notice (in the form prescribed by the Committee) to the Company specifying the
number of Shares to be purchased. Payment for the number of Shares purchased
upon the exercise of an Option shall be made in full at the price provided for
in the applicable Stock Option Agreement. Such purchase price shall be paid (x)
by the delivery to the Company of cash (including check or similar draft) in
United States dollars or whole Shares (subject to any restrictions the Committee
may impose), or a combination thereof; (y) by payment through a broker in
accordance with procedures permitted by Regulation T of the Federal Reserve
Board, or (z) by such other method as the Committee approves. Shares used in
payment of the purchase price shall be valued at their Fair Market Value as of
the date notice of exercise is received by the Company. Any Shares delivered to
the Company shall be in such form as is acceptable to the Company and shall have
been held by the Optionee for the requisite period to avoid adverse accounting
consequences to the Company with respect to the Option.

 

(ii) The Company may defer making delivery of Shares under the Plan until
satisfactory arrangements have been made for the payment of any tax attributable
to exercise of the Option. The Committee may, in its sole discretion, permit an
Optionee to elect, in such form and at such time as the Committee may prescribe,
to pay all or a portion of all taxes arising in connection with the exercise of
an Option by electing to (y) have the Company withhold whole Shares, or (z)
deliver other whole Shares previously owned by the Optionee having a Fair Market
Value not greater than the amount to be withheld; provided that the Fair Market
Value of any Shares to be withheld shall not exceed the Optionee’s minimum
applicable withholding tax rate for federal (including FICA), state and local
tax liabilities associated with the transaction.

 

(d) Termination of Option by Optionee. An Optionee may at any time elect, in a
written notice filed with the Committee, to terminate an Option with respect to
any number of shares as to which such Option shall not have been exercised.

 

(e) Nontransferability. No Option or any rights with respect thereto shall be
subject to any debts or liabilities of an Optionee, nor be assignable or
transferable except by will or the laws of descent and distribution or as
described in subsection (b)(iv) above; provided that, if and to the extent
permitted by the Committee, Options and related rights may be transferred during
the Optionee’s lifetime to one or more of the Optionee’s family members or
trusts or other entities established for the benefit of family members, and such
transferees may exercise rights thereunder in accordance with the terms hereof.

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(f) Rights as a Stockholder. An Optionee shall have no rights as a record holder
with respect to Shares covered by his or her Option until the date of issuance
to him or her of a certificate evidencing such Shares after the exercise of such
Option and payment in full of the purchase price. No adjustment will be made for
cash dividends for which the record date is prior to the date such certificate
is issued.

 

6. Grant of Stock Awards

 

(a) General Powers of Committee. The Committee may grant Stock Awards,
consisting of restricted or unrestricted Shares, to an Employee (“Grantee”) of
the Company or its Subsidiaries upon such terms as the Committee deems
appropriate. The Committee shall have sole discretion, in accordance with the
provisions of the Plan, to determine to whom Stock Awards are granted, the
number of Shares subject to the Stock Awards, the nature and duration of any
restrictions, and the terms and conditions of each grant. In making such
determinations, the Committee may consider the position and responsibilities of
the Employee, the nature and value to the Company of his or her services and
accomplishments, his or her present and potential contribution to the success of
the Company, and such other factors as the Committee may deem relevant, but
shall not be required to treat eligible persons uniformly.

 

(b) General Provisions. Stock Awards granted under the Plan shall be subject to
and governed by the provisions of the Plan and by the terms and conditions set
forth in this Section 6 and by such other terms and conditions, not inconsistent
with the Plan, as shall be determined by the Committee. The date on which Stock
Awards shall be granted shall be the date that the Grantee, the number of Shares
granted and the terms and conditions of the grant are determined by the
Committee, or as otherwise specified by the Committee. Each grant of Stock
Awards shall be evidenced by a Stock Award Agreement in such form as the
Committee may from time to time approve.

 

(c) Restrictions; Restricted Period.

 

(i) The Committee shall determine for each grant of Stock Awards the period, if
any, during which transferability shall be restricted and any conditions which
must be met during or at the expiration of such period in order for the grant to
become vested (the “Restricted Period”). If any condition contained in a grant
of Stock Awards is not met within the period of time it is required to be met,
the grant shall be forfeited. Stock Awards may be granted with or without
vesting restrictions, as the Committee determines.

 

(ii) The conditions which must be met for a grant of Stock Awards to become
vested may include performance goals of whatever type or nature as the Committee
may determine, to be met by the Grantee, the Grantee’s business unit, the
Company and its Subsidiaries as a whole, or any combination of the foregoing.
Any such performance goal may be waived in whole or in part at any time by the
Committee, in its sole discretion.

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(iii) Except as otherwise determined by the Committee in the Stock Award
Agreement, the conditions which must be met for a grant of Stock Awards to
become vested shall include the Grantee’s continued employment by the Company or
its Subsidiaries during the Restricted Period. This condition shall be deemed
satisfied and the Restricted Period shall be deemed completed (subject to the
satisfaction or waiver by the Committee of any performance goals described in
subsection (ii) above) if termination of employment of the grantee results from
death or total and permanent disability, if termination of employment of the
grantee occurs at or after age 65 and the grantee has ten or more years of
full-time service with the Company or a Subsidiary, or if and to the extent that
the Committee may determine in its sole discretion.

 

(iv) The Committee may allow Grantees to defer the payment of Stock Awards and
may provide for the payment of dividend equivalents with respect to deferred
Shares.

 

(d) Manner of Holding and Delivering Certificates for Stock Awards. Each
certificate issued for Stock Awards shall be registered in the name of the
Grantee and deposited with the Company or its designee in an escrow account,
accompanied by a stock power executed in blank by the Grantee covering the Stock
Awards. At the end of the Restricted Period, certificates representing the
number of Shares to which the Grantee is then entitled shall be released from
escrow and delivered to the Grantee free and clear of all restrictions. As an
alternative, the Committee may establish appropriate procedures with respect to
non-certificated Shares. The Company may defer delivering Shares until
satisfactory arrangements have been made for the payment of any tax attributable
to the grant or vesting of such Shares. The Committee may, in its sole
discretion, permit a Grantee to elect, in such form and at such time as the
Committee may prescribe, to pay all or a portion of all taxes arising in
connection with a Stock Award by electing to have the Company withhold whole
Shares, provided that the amount to be withheld shall not exceed the Grantee’s
minimum applicable withholding tax rate for federal (including FICA), state and
local tax liabilities associated with the transaction.

 

(e) Nontransferability. No restricted Stock Awards granted or held under the
Plan shall be subject to any debts or liabilities of a Grantee, nor be
assignable or transferable except by will or the laws of descent and
distribution.

 

(f) Rights as a Stockholder. Except for the restrictions and limitations
described in the Plan, a Grantee holding Stock Awards shall have all of the
rights of a record holder of the Shares, including the right to receive
dividends paid on those Shares and the right to vote them at meetings of
shareholders of the Company.

 

7. Limitations on Rights of Optionees and Grantees.

 

(a) Employment. No provision of the Plan, nor any term or condition of any grant
of an Option or Stock Awards, nor any action taken by the Committee, the Company
or a Subsidiary pursuant to the Plan, shall give or be construed as giving an

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Optionee or Grantee any right to be retained in the employ of the Company or any
Subsidiary, or affect or limit in any way the right of the Company or any
Subsidiary to terminate such employment by any Optionee or Grantee.

 

(b) Conditions. Notwithstanding anything contained herein to the contrary, all
rights with respect to all Options and Stock Awards are subject to the
conditions that the Optionee or Grantee not engage or have engaged in fraud,
embezzlement, defalcation, gross negligence in the performance or nonperformance
of the Optionee’s or Grantee’s duties (other than as a result of total and
permanent disability) or material failure or refusal to perform the Optionee’s
or Grantee’s duties at any time while in the employ of the Company or a
Subsidiary, and all rights with respect to all Options and Stock Awards are
subject to the conditions that the Optionee or Grantee not engage or have
engaged in activity directly or indirectly in competition with any business of
the Company or a Subsidiary, or in other conduct inimical to the best interests
of the Company or a Subsidiary, during the employment of the Optionee or Grantee
or following the Optionee’s or Grantee’s termination of employment. If it is
determined by the Committee that there has been a failure of any such condition,
all Options, and all rights with respect to all Options granted to such
Optionee, and all rights with respect to Stock Awards which shall not have then
vested shall immediately terminate and be null and void. If a restriction in
this Section 7(b) is determined to be overbroad or unenforceable in any respect,
such restriction may be modified or narrowed, either by a court or by the
Committee, so as to preserve and protect the legitimate interests of the Company
and its Subsidiaries, and without negating or impairing any other restrictions
or agreements set forth herein. The provisions of this Section 7(b) shall inure
to the benefit of any successor of the Company or a Subsidiary by merger or
otherwise.

 

8. Change in Control.

 

(a) As herein used a Change in Control shall be deemed to have occurred if:

 

(i) the “beneficial ownership” (as defined in Rule l3d-3 under the Exchange Act)
of securities representing more than 20% of the combined voting power of the
Company is acquired by any “person” as defined in section 13(d) or section 14(d)
of the Exchange Act (other than the Company or any trustee or other fiduciary
holding securities under an employee benefit plan of the Company), or

 

(ii) the shareholders of the Company approve a definitive agreement to merge or
consolidate the Company with or into another corporation or to sell or otherwise
dispose of all or substantially all of its assets, or adopt a plan of
liquidation, or

 

(iii) during any period of three consecutive years, individuals who at the
beginning of such period were members of the Board cease for any reason to
constitute at least a majority thereof (unless the election, or the nomination
for election by the Company’s shareholders, of each new director was approved by
a vote of at least a majority of the directors then still in office who were
directors at the beginning of such period).

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(b) Notice and Acceleration. Upon a Change in Control, (i) the Company shall
provide each Optionee and Grantee with outstanding Options and Stock Awards
written notice of such Change in Control, (ii) all outstanding Options shall
automatically accelerate and become fully exercisable and (iii) the restrictions
and conditions on all outstanding Stock Awards shall immediately lapse.

 

(c) Assumption of Options. Upon a Change in Control where the Company is not the
surviving corporation (or survives only as a subsidiary of another corporation),
unless the Committee determines otherwise, all outstanding Options that are not
exercised shall be assumed by, or replaced with comparable options by, the
surviving corporation.

 

(d) Other Alternatives. Notwithstanding the foregoing, in the event of a Change
in Control, the Committee may take one or both of the following actions: the
Committee may (i) require that Optionees surrender their outstanding Options in
exchange for a payment by the Company, in cash or Shares as determined by the
Committee, in an amount equal to the amount by which the then Fair Market Value
of the Shares subject to the Optionee’s unexercised Options exceeds the exercise
price of the Options, or (ii) after giving Optionees an opportunity to exercise
their outstanding Options, terminate any or all unexercised Options at such time
as the Committee deems appropriate. Such surrender or termination shall take
place as of the date of the Change in Control or such other date as the
Committee may specify.

 

9. Adjustments. If there is any change in the number or class of Shares through
the declaration of Share dividends, or recapitalization, or combinations or
exchanges of such Shares or similar corporate transactions, or if the Committee
otherwise determines that, as a result of a corporate transaction involving a
change in the Company’s capitalization, it is appropriate to effect the
adjustments described in this Section, the aggregate number or class of Shares
with respect to which Options or Stock Awards may be granted or which may be
issued under the Plan, the per-person limits on grants, the number or class of
Shares covered by each outstanding Option and Stock Award grant, and the price
per Share of each Option, shall all be appropriately adjusted by the Committee;
provided that any fractional Shares resulting from such adjustment shall be
eliminated. If a new Option is substituted for the Option granted hereunder, or
an assumption of an Option granted hereunder is made, by reason of a corporate
merger, consolidation, acquisition of property or stock, split-up,
reorganization or liquidation, the new or assumed Option shall pertain to and
apply to the securities to which a holder of the number of Shares subject to the
Option would have been entitled.

 

10. Application of Funds. The proceeds received by the Company from the sale of
Shares pursuant to Options and Stock Awards granted under the Plan will be used
for general corporate purposes.

 

11. Effective Date and Term of Plan. The Plan shall become effective on February
1, 2001. The term during which Options and Stock Awards may be granted

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under the Plan shall expire on March 28, 2006. The term of Options granted and
Stock Awards made prior thereto, however, may extend beyond such date and the
provisions of the Plan shall continue to apply thereto.

 

12. Amendments. The Board may from time to time alter, amend, suspend or
discontinue the Plan; provided that stockholder approval shall be required for
any amendment that requires stockholder approval in order for any applicable
stock exchange requirements to be met. The Plan, each Option under the Plan and
the grant and exercise thereof, each grant of Stock Awards under the Plan, and
the obligation of the Company to sell and issue Shares under the Plan shall be
subject to all applicable laws, rules, regulations and governmental, stock
exchange and stockholder approvals, and the Committee may make such amendment or
modification thereto as it shall deem necessary to comply with any such laws,
rules and regulations or to obtain any such approvals.

 

13. Severability. If any provision of the Plan, any term or condition of any
Option or Stock Awards granted or form executed or to be executed thereunder or
any application thereof to any person or circumstance is invalid, such
provision, term, condition or application shall to that extent be void (or, in
the sole discretion of the Committee, such provision, term or condition may be
amended so as to avoid such invalidity), and shall not affect other provisions,
terms or conditions or applications thereof, and to this extent such provision,
term or condition is severable.

 

14. Grants in Connection with Corporate Transactions and Otherwise. Nothing
contained in this Plan shall be construed to (i) limit the right of the
Committee to make grants under this Plan in connection with the acquisition, by
purchase, lease, merger, consolidation or otherwise, of the business or assets
of any corporation, firm or association, including grants to employees thereof
who become Employees of the Company, or for other proper corporate purposes, or
(ii) limit the right of the Company to grant stock options or make other grants
outside of this Plan. Without limiting the foregoing, the Committee may make a
grant to an employee of another corporation who becomes an Employee by reason of
a corporate merger, consolidation, acquisition of stock or property,
reorganization or liquidation involving the Company or any of its subsidiaries
in substitution for a stock option or stock award grant made by such
corporation. The terms and conditions of the substitute grants may vary from the
terms and conditions required by the Plan and from those of the substituted
stock incentives. The Committee shall prescribe the provisions of the substitute
grants.

 

15. Governing Law. The Plan shall be applied and construed in accordance with
and governed by the laws of the State of Delaware, without regard to the
conflict of laws principles thereof, and applicable Federal law.

 

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