EXHIBIT 4.1


 


GOLF
GALAXY, INC.


AMENDED
AND RESTATED


1996
STOCK OPTION AND INCENTIVE PLAN


 


The purpose of the Golf Galaxy, Inc. 1996 Stock
Option and Incentive Plan (the “Plan”) is to promote the growth and
profitability of Golf Galaxy, Inc. (the “Company”) and its Affiliates by
providing its employees, consultants and other service providers with an
incentive to achieve long-term corporate objectives, to attract and retain
persons of outstanding competence, and to provide such persons with an equity
interest in the Company.


 


1.             Stock Subject to Plan.  An aggregate of One Million (1,000,000) shares (the “Shares”) of the
Common Stock, par value $.01 per share, (“Common Stock”) of the Company may be
subject to awards granted under the Plan. 
Of such aggregate Plan limit, the maximum number of shares of Common
Stock that may be issued as Incentive Stock Options under the Plan shall be
limited to One Million (1,000,000) shares. 
The number of shares authorized for issuance under the Plan may be
increased from time to time by approval of the Board of Directors and, if
required pursuant to Rule 16b-3 under the Securities Exchange Act of 1934
or the applicable rules of any securities exchange or the NASD, the
shareholders of the Company.  Such Shares
may be authorized but unissued Common Stock or authorized and issued Common
Stock that has been or may be acquired by the Company.  Shares that are subject to an award which
expires or is terminated unexercised, or which are reacquired by the Company
upon the forfeiture of restricted Shares, shall again be available for issuance
under the Plan.


 


2.                                       Administration.


 


a.             Board of
Directors or Committee.  The
Plan shall be administered by the Board of Directors (the “Board”) or a
Compensation Committee established by the Board of Directors (the “Committee”).  Any such Committee may be comprised of the
entire Board or, if the Board so determines, of two or more members of the
Board.


 


b.             Powers and
Duties.  The Board or
Committee shall have the authority to make rules and regulations governing
the administration of the Plan; to select the eligible employees, consultants
and other service providers to whom awards shall be granted; to determine the
type, amount, size, and terms of awards; to determine the time when awards
shall be granted; to determine whether any restrictions shall be placed on
Shares purchased pursuant to any option or issued pursuant to any award; and to
make all other determinations necessary or advisable for the administration of
the Plan.  The Board or Committee’s
determinations need not be uniform, and may be made by it selectively among
persons who are eligible to receive awards under the Plan, whether or not such
persons are similarly situated.  All
interpretations, decisions, or determinations made by the Board or Committee
pursuant to the Plan shall be final and conclusive.


 





















 


3.                                      Eligibility;
Participants.


 


a.             Any persons who provides services
to the Company or any of its Affiliates as an employee, consultant or other
service provider shall be eligible to receive awards under the Plan.  Eligible persons may be selected to receive
awards individually or by group or category (for example, by pay grade) as the
Board or Committee may determine.  The
selection of officers of the Company to receive awards under the Plan and the
terms of any award granted to such officers shall be approved by the Board or
Committee.  The Board or Committee, in
its sole discretion, may delegate to one or more officers of the Company the
authority to select persons who are not officers to receive awards under the
Plan and to establish the terms of awards granted to such persons.


 


b.             A person who has been granted an
award under this Plan, or under any predecessor plan, may be granted additional
awards if the Board or Committee shall so determine.  Except to the extent otherwise provided in
the agreement evidencing an award, the granting of an award under this Plan
shall not affect any outstanding award previously granted under this Plan or
under any other plan of the Company or any Affiliate.


 


c.             For purposes of this Plan, the term
“Affiliate” shall mean any “parent corporation” 
or “subsidiary corporation” of the Company, as those terms are defined
in Sections 424(e) and 424(f) of the Internal Revenue Code of 1986,
as amended.


 


4.             Awards.  The Board or Committee may make
awards to eligible persons in the form of stock options which are intended to
qualify as “Incentive Stock Options” within the meaning of Section 422 of
the Internal Revenue Code of 1986, as amended, or stock options which are not
intended to so qualify (“Non-qualified Options”), or awards of restricted
stock, or any combination thereof.


 


5.             Stock Options.  A stock option granted pursuant to the Plan
shall entitle the optionee, upon exercise, to purchase Shares at a specified
price during a specified period.  Options
shall be subject to such terms and conditions as the Board or Committee shall
from time to time approve; provided, that each option shall be subject
to the following requirements:


 


a.             Type of
Option.  Each option shall be
identified in the agreement pursuant to which it is granted as an Incentive
Stock Option or as a Non-qualified Option, as the case may be.


 


b.             Term.  No option shall be exercisable
more than 121 months after the date on which it is granted.


 


c.             Payment.  The purchase price of Shares
subject to an option shall be payable in full at the time the option is
exercised.  Payment may be made in cash,
in shares of Common Stock having an aggregate fair market value on the date of
exercise which is not less than the option price, or by a combination of cash
and such shares, as the Board or


 





















 


Committee may determine,
and subject to such terms and conditions as the Board or Committee deem
appropriate.


 


d.             Options Not
Transferable.  Options shall
not be transferable except to the extent permitted by the agreement evidencing
such option; provided, that in no event shall any option be transferable
by the optionee, other than by will or the laws of descent and
distribution.  Options shall be exercised
during an optionee’s lifetime only by such optionee.  If, pursuant to the agreement evidencing any
option, such option remains exercisable after the optionee’s death, it may be
exercised, to the extent permitted by such agreement, by the personal
representative of the optionee’s estate or by any person who acquired the right
to exercise such option by bequest, inheritance, or otherwise by reason of the
optionee’s death.


 


e.             Incentive
Stock Options.  If an option
is an Incentive Stock Option, it shall be subject to the following additional
requirements:


 


i.              Incentive Stock Options may be
granted only to persons who are employees of the Company or of an Affiliate.


 


ii.             The purchase price of Shares that
are subject to an Incentive Stock Option shall not be less than 100% of the
fair market value of such Shares at the time the option is granted, as
determined in good faith by the Board or Committee.


 


iii.            The aggregate fair market value
(determined at the time the option is granted) of the Shares with respect to
which Incentive Stock Options are exercisable by the optionee for the first
time during any calendar year, under this Plan or any other plan of the Company
or any Affiliate, shall not exceed $100,000.


 


iv.            An Incentive Stock Option shall not
be exercisable more than ten years after the date on which it is granted.


 


v.             The purchase price of Shares that
are subject to an Incentive Stock Option granted to an employee who, at the
time such option is granted, owns 10% or more of the total combined voting
power of all classes of stock of the Company or of an Affiliate shall not be
less than 110% of the fair market value of such Shares on the date such option
is granted, and such option may not be exercisable more than five years after
the date on which it is granted.  For the
purposes of this subparagraph, the rules of Section 424(d) of
the Code shall apply in determining the stock ownership of any employee.


 


Subject to the forgoing,
options may be made exercisable in one or more installments, upon the happening
of certain events, upon the fulfillment of certain conditions, or upon such
other terms and conditions as the Board or Committee shall determine.


 


6.             Restricted Stock.  Restricted stock awards granted
pursuant to the Plan shall entitle the holder to receive Shares,


 





















 


subject to forfeiture if
specified conditions are not satisfied at the end of a specified period.  Restricted stock awards shall be subject to
such terms and conditions as the Board or Committee shall from time to time
approve; provided, that each award shall be subject to the following
requirements:


 


a.             Restricted
Period.  The Board or
Committee shall establish a period (the “Restricted Period”) at the time an
award is granted during which the holder will not be permitted to sell,
transfer, pledge, encumber, or assign the Shares subject to the award.  The Board or Committee may provide for the
lapse of restrictions in installments, or upon the occurrence of certain
events, where deemed appropriate.  Any
attempt by a holder to dispose of restricted Shares in a manner contrary to the
applicable restrictions shall be void, and of no force and effect.


 


b.             Rights
During Restricted Period.  Except
to the extent otherwise provided in this paragraph 6 or under the terms of any
restricted stock agreement, during the Restricted Period the holder of
restricted Shares shall have all of the rights of a shareholder in the Company
with respect to such Shares, including the right to vote the Shares and to
receive dividends and other distributions with respect to the Shares; provided,
that all stock dividends, stock rights, and stock issued upon split-ups or
reclassifications of Shares shall be subject to the same restrictions as the
Shares with respect to which such stock dividends, rights, or additional stock
are issued, and may be held in custody as provided below in this paragraph 6
until restrictions thereon shall have lapsed.


 


c.             Forfeitures.  Except to the extent otherwise
provided in the restricted stock agreement, all Shares then subject to any
restriction shall be forfeited to the Company without further obligation of the
Company to the holder thereof, and all rights of the holder with respect to
such Shares shall terminate, if the holder shall cease to provide services to
the Company and its Affiliates as an employee, consultant or other service
provider, or if any condition established by the Board or Committee for the
release of any restriction shall not have occurred, prior to the expiration of
the Restricted Period.


 


d.             Custody.  The Board or Committee may provide
that the certificates evidencing restricted Shares shall be held in custody by
a bank or other institution, or by the Company or any Affiliate, until the
restrictions thereon have lapsed, and may require that the holder of any
restricted Shares shall have delivered to the Company one or more stock powers,
endorsed in blank, relating to the restricted Shares as a condition of
receiving the award.


 


e.             Certificates.  A recipient of a restricted stock
award shall be issued a certificate or certificates evidencing the Shares
subject to such award.  Such certificates
shall be registered in the name of the recipient, and may bear an appropriate
legend referring to the terms, conditions, and restrictions applicable to such
award, which legend shall be in substantially the following form:


 





















 


“The transferability of this certificate and the
shares represented hereby are subject to the terms and conditions (including
forfeiture) of the Golf Galaxy, Inc. 1996 Stock Option and Incentive Plan
and an Agreement entered into between the registered owner and Golf Galaxy, Inc.  Copies of such Plan and Agreement are on file
in the stores of Golf Galaxy, Inc.”


 


f.              Gifts,
Etc.  Notwithstanding any
other provision of this paragraph 6, the Board or Committee may permit a gift
of restricted stock to the holder’s spouse, child, stepchild, grandchild, or
legal dependent, or to a trust whose sole beneficiary or beneficiaries shall be
the holder and/or any one or more of such persons; provided, that the
donee shall have entered into an agreement with the Company pursuant to which
it agrees that the restricted stock shall be subject to the same restrictions
in the hands of such donee as it was in the hands of the donor.


 


7.             Agreements.  Each option or award granted pursuant to the
Plan shall be evidenced by an agreement setting forth the terms and conditions
upon which it is granted.  Multiple
options or awards may be evidenced by a single agreement.  Subject to the limitations set forth in the
Plan, the Board or Committee may, with the consent of the person to whom an
award has been granted, amend any such agreement to modify the terms or
conditions governing the award evidenced thereby.


 


8.             Adjustments.  In the event of any change in the outstanding
Shares of Common Stock by reason of any stock dividend or split,
recapitalization, reclassification, combination, or exchange of Shares or other
similar corporate change, then if the Board or Committee shall determine, in
its sole discretion, that such change necessarily or equitably requires an
adjustment in the number of Shares subject to an award, in the option price or
value of an award, or in the maximum number of Shares subject to this Plan,
such adjustments shall be made by the Board or Committee and shall be
conclusive and binding for all purposes of this Plan.  No adjustment shall be made in connection
with the issuance by the Company of any warrants, rights, or options to acquire
additional Common Stock or of securities convertible into Common Stock.


 


9.             Merger, Consolidation,
Reorganization, Liquidation, etc.  Subject
to the provisions of the agreement evidencing any award, if the Company shall
become a party to any corporate merger, consolidation, major acquisition of
property for stock, reorganization, or liquidation, the Board of Directors of
the Company shall have the power to make any arrangement it deems advisable
with respect to outstanding awards and in the number of Shares subject to this
Plan, which shall be binding for all purposes of this Plan, including, but not
limited to, the substitution of new awards for any awards then outstanding, the
assumption of any such awards, and the termination of such awards.


 


10.           Expenses of Plan.  The expenses of administering this Plan shall
be borne by the Company and its Affiliates.


 


11.           Reliance on Reports.  Each member of the Board or
Committee and each member of the Board of Directors shall


 





















 


be fully justified in
relying or acting in good faith upon any report made by the independent public
accountants of the Company and its Affiliates and upon any other information
furnished in connection with this Plan by any person or persons other than
himself.  In no event shall any person
who is or shall have been a member of the Board or Committee or of the Board of
Directors be liable for any determination made or other action taken or omitted
in reliance upon any such report or information, or for any action taken or
omitted, including the furnishing of information, in good faith.


 


12.           Rights as
Shareholder.  Except to the
extent otherwise specifically provided hereon, no recipient of any award shall
have any rights as a shareholder with respect to Shares sold or issued pursuant
to the Plan until certificates for such shares have been issued to such person.


 


13.           General Restrictions.  Each award granted pursuant to the
Plan shall be subject to the requirement that if, in the opinion of the Board
or Committee, the listing, registration, or qualification of any Shares related
thereto upon any securities exchange or under any state or federal law, the
consent or approval of any regulatory body, or an agreement by the recipient
with respect to the disposition of any such Shares, is necessary or desirable
as a condition of the issuance or sale of such Shares, such award shall not be
consummated unless and until such listing, registration, qualification,
consent, approval, or agreement is effected or obtained in form satisfactory to
the Board or Committee.


 


14.           Employment Rights.  Nothing in this Plan, or in any agreement
entered into hereunder, shall confer upon any person the right to continue to
provide services to the Company or an Affiliate as an employee, consultant, or
other service provider, or affect the right of the Company or Affiliate to
terminate such person’s service at any time, with or without cause.


 


15.           Withholding.  If the Company proposes or is
required to issue Shares pursuant to the Plan, it may require the recipient to
remit it, or may withhold from such award or from the recipient’s other
compensation, an amount, in the form of cash or Shares, sufficient to satisfy
any applicable federal, state, or local tax withholding requirements prior to
the delivery of any certificates for such Shares.


 


16.           Amendments.  The Board of Directors of the Company may at
any time, and from time to time, amend the Plan in any respect, except that no
amendment that would:


 


a.                                       materially
increase the benefits accruing to participants under the Plan;


 


b.             increase the number of Shares
available for issuance or sale pursuant to the Plan (other than as permitted by
paragraphs 8 and 9); or


 


c.                                       materially
modify the requirements as to eligibility for participation in the Plan;


 


shall be made without the
affirmative vote of shareholders holding at least a majority of the voting


 





















 


stock of the Company
represented in person or by proxy at a duly held shareholders’ meeting.


 


17.           Shareholder Approval.  The Plan shall be subject to approval by the shareholders
holding at least a majority of the voting stock of the Company represented in
person or by proxy and voting thereon at a duly held shareholders’ meeting, and
any award granted under the Plan prior to the date of such approval shall be
contingent upon such approval.


 


18.           Effective Date;
Duration.  This Plan shall be
effective as of October 30, 1996, subject to shareholder approval of the
Plan as described above on or before October 30, 1997.  No options or rights shall be granted under
the Plan after the earlier of (a) the date on which the Plan is terminated
by the Board of Directors of the Company; or (b) October 30,
2006.  Options or rights outstanding at
the termination of the Plan may continue to be exercised in accordance with
their terms after such termination.