EXHIBIT 10.2


 


1995
NONEMPLOYEE DIRECTOR STOCK INCENTIVE PLAN


CUTTER &
BUCK INC.


(Restated as of September 19,
1995)


 


A.                                   Purpose
of the Plan.  The purposes of this
1995 Nonemployee Director Stock Incentive 
Plan (the “Plan”) are to promote the long-term success of CUTTER &
BUCK INC. (the “Corporation”) by creating a long-term mutuality of interests
between the Nonemployee directors and shareholders of the Corporation, to
provide an additional inducement for such directors to remain with the
Corporation, and to provide a means through which the Corporation may attract
able persons to serve as directors of the Corporation.


 


2.                                       Administration.


 


a.                                       The
Plan shall be administered by a Committee (the “Committee”) appointed by the
Board of Directors of the Corporation (the “Board”) and consisting of not less
than two members of the Board.  The
Committee shall keep records of action taken at its meetings.  A majority of the Committee shall constitute
a quorum at any meeting, and the acts of a majority of the members present at
any meeting at which a quorum is present, or acts approved in writing by all
the members of the Committee, shall be the acts of the Committee.


 


b.                                      The
Committee shall interpret the Plan and prescribe such rules, regulations and
procedures in connection with the operations of the Plan as it shall deem to be
necessary and advisable for the administration of the Plan consistent with the
purposes of the Plan.  All questions of
interpretation and application of the Plan, or as to stock options granted
under the Plan, shall be subject to the determination of the Committee, which
shall be final and binding.


 


c.                                       Notwithstanding
the above, the selection of the directors to whom stock options are to be
granted, the timing of such grants, the number of shares subject to any stock
option, the exercise price of any stock option, the periods during which any
stock option may be exercised and the term of any stock option shall be as
hereinafter provided, and the Committee shall have no discretion as to such matter.


 


3.                                       Shares
Available Under the Plan.  The
aggregate number of shares which may be issued and as to which grants of stock
options may be made under the Plan is 73,239 shares of the common stock of the
Corporation (without taking into effect any split of such shares), having no
par value (the “Common Stock”), subject to adjustment and substitution as set
forth in Section 6.  If any stock
option granted under the Plan is canceled by mutual consent or terminates or
expires for any reason without having been exercised in full, the number of
shares subject to such option shall again be available for purposes of the
Plan.  The shares which may be issued
under the Plan may be authorized but unissued shares, treasury shares, or both.


 


4.                                       Grant
of Stock Options.  On the third
business day following the day of each annual meeting of the shareholders of
the Corporation, each person who is then a member of the Board and who is not
then an employee of the Corporation or any of its subsidiaries and is not then
an independent consultant (other than in his or her capacity as a member of the
Board) to the Corporation or any of its subsidiaries (collectively a “Nonemployee
Director”) shall be granted,


 


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automatically and without
further action by the Board or the Committee, a “nonstatutory stock option”
(i.e., a stock option which does not qualify under Section 422 or 423 of
the Internal Revenue Code of 1986 (the “Code”)) to purchase 3,468 shares of
Common Stock, subject to adjustment and substitution as set forth in Section 6.  If the number of shares then remaining
available for the grant of stock options under the Plan at any time is not
sufficient for each Nonemployee Director then eligible to be granted an option
for 3,468 shares (or the number of adjusted or substituted shares pursuant to Section 6),
then each such Nonemployee Director shall be granted an option for a number of
whole shares equal to the number of shares then remaining available divided by
the number of Nonemployee Directors then eligible for grant of an option in
accordance with this Section 4, disregarding any fractions of a share.


 


5.                                       Terms
and Conditions of Stock Options. 
Stock options granted under the Plan shall be subject to the following
terms and conditions:


 


a.                                       The
purchase price at which each stock option may be exercised (the “Option Price”)
shall be one hundred percent (100%) of the fair market value of the shares of
Common Stock covered by the stock option on the date of grant, determined as
provided in Section 5.g.


 


b.                                      The
Option Price shall be paid in full upon exercise, in cash in United States
dollars (including check, bank draft or money order); provided, however, that
in lieu of such cash the person exercising the stock option may pay the Option
Price in whole or in part by delivering to the Corporation shares of the Common
Stock having a fair market value on the date of exercise of the stock option,
determined as provided in Section 5.g, equal to the Option Price for the
shares being purchased; except that (i) any portion of the Option Price
representing a fraction of a share shall in any event be paid in cash, and (ii) no
shares of the Common Stock which have been held for less than six months may be
delivered in payment of the Option Price of a stock option.  Delivery of shares may also be accomplished
through the effective transfer to the Corporation of shares held by a broker or
other agent.  The Corporation will also
cooperate with any person exercising a stock option who participates in a
cashless exercise program of a broker or other agent under which all or part of
the shares received upon exercise of the stock option are sold through the
broker or other agent or under which the broker or other agent make a loan to
such person.  Notwithstanding the
foregoing, the exercise of the stock option shall not be deemed to occur and no
shares of Common Stock will be issued by the Corporation upon exercise of the
stock option until the Corporation has received payment of the Option Price in
full.  The date of exercise of a stock
option shall be determined under procedures established by the Committee, and
as of the date of exercise, the person exercising the stock option shall be
considered for all purposes to be the owner of the shares of Common Stock with
respect to which the stock option has been exercised.  Payment of the Option Price with shares shall
not increase the number of shares of the Common Stock which may be issued under
the Plan as provided in Section 3.


 


c.                                       No
stock option shall be exercisable during the first six months of its term
except in case of death as provided in Section 5.e.  Subject to the preceding sentence and subject
to Section 5.e, which provides for earlier termination of a stock option
under certain circumstances, each stock option shall be exercisable for ten
years from the date of grant and not thereafter.  A stock option to the extent exercisable at
any time may be exercised in whole or in part.


 


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d.                                      No
stock option shall be transferable by the grantee otherwise than by will, or if
the grantee dies intestate, by the laws of descent and distribution of the
state of domicile of the grantee at the time of death.  All stock options shall be exercisable during
the lifetime of the grantee only by the grantee or the grantee’s guardian or
legal representative.  These restrictions
on transferability shall not apply to the extent such restrictions are not at
the time required for the Plan to continue to meet the requirements of Rule 16b-3
under the Securities Exchange Act of 1934 (the “1934 Act”), or any successor
rule.


 


e.                                       If
a grantee ceases to be a director of the Corporation for any reason, any
outstanding stock options held by the grantee shall be exercisable according to
the following provisions:


 


(i)                                     If a grantee
ceases to be a director of the Corporation for any reason other than
resignation, removal for cause, or death, any outstanding stock option held by
such grantee shall be exercisable by the grantee (but only if exercisable by
the grantee immediately prior to ceasing to be director) at any time prior to
the expiration date of such stock option or within three years after the date
the grantee ceases to be a director, whichever is the shorter period;


 


(ii)                                  If during his term of
office as a director a grantee resigns from the Board or is removed from office
for cause, any outstanding stock option held by the grantee which is not
exercisable by the grantee immediately prior to resignation or removal shall
terminate as of the date of resignation or removal, and any outstanding stock
option held by the grantee which is exercisable by the grantee immediately
prior to resignation or removal shall be exercisable by the grantee at any time
prior to the expiration date of such stock option or within three months after
the date of resignation or removal of the grantee, whichever is the shorter
period;


 


(iii)                               Following the death of a
grantee during service as a director of the Corporation, any outstanding stock
option held by the grantee at the time of death (whether or not exercisable by
the grantee immediately prior to death) shall be exercisable by the person
entitled to do so under the will of the grantee, or, if the grantee shall fail
to make testamentary disposition of the stock option or shall die intestate, by
the legal representative of the grantee at any time prior to the expiration
date of such stock option or within three years after the date of death of the
grantee, whichever is the shorter period;


 


(iv)                              Following the death of a
grantee after ceasing to be a director and during a period when a stock option
is exercisable under clause (ii) above, the stock option shall be
exercisable by such person entitled to do so under the will of the grantee or
by such legal representative at any time prior to the expiration date of the
stock option or within one year after the date of death, whichever is the
shorter period; and


 


(v)                                 Following the death of
a grantee after ceasing to be a director of the Corporation and during a period
when a stock option is exercisable under clause (iii) above, the
stock option shall be exercisable by such person entitled to do so under the
will of the grantee or by such legal representative at any time during the
shorter of the following two periods:  (a) until
the expiration date of the stock option or (b) until three years after the


 


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grantee ceased being a
director of the Corporation or one year after the date of death of the grantee
(whichever is longer).


 


A stock option held by a
grantee who has ceased to be a director of the Corporation shall terminate upon
the expiration of the applicable exercise period, if any, specified in this Section 5.e.


 


f.                                         All
stock options shall be confirmed by an agreement, or an amendment thereto,
which shall be executed on behalf of the Corporation by the Chief Executive
Officer (if other than the President), the President or any Vice President and
by the grantee.


 


g.                                      Fair
market value of the Common Stock shall be the mean between the following
prices, as applicable, for the date as of which fair market value is to be
determined, as quoted in The Wall Street Journal
(or in such other reliable publication as the Committee, in its discretion, may
determine to rely upon):  (i) if the
Common Stock is listed on the New York Stock Exchange, the highest and lowest
sales prices per share of the Common Stock as quoted in the NYSE-Composite
Transactions listing for such date, (ii) if the Common Stock is not listed
on such exchange, the highest and lowest sales prices per share of the Common
Stock for such date on (or on any composite index including) the principal
United States securities exchange registered under the 1934 Act on which the
Common Stock is listed, or (iii) if the Common Stock is not listed on any
such exchange, the highest and lowest sales prices per share of the Common
Stock for such date on the National Association of Securities Dealers Automated
Quotations System or any successor system then in use (“NASDAQ”).  If there are no such sale price quotations
for the date as of which fair market value is to be determined but there are
such sale price quotations within a reasonable period both before and after
such date, then fair market value shall be determined by taking a weighted
average of the means between the highest and lowest sales prices per share of
the Common Stock as so quoted on the nearest date before and the nearest date
after the date as of which fair market value is to be determined.  The average should be weighted inversely by
the respective numbers of trading days between the selling dates and the date
as of which fair market value is to be determined.  If there are no such sale price quotations on
or within a reasonable period both before and after the date as of which fair
market value is to be determined, then fair market value of the Common Stock
shall be the mean between the bona fide bid and asked prices per share of
Common Stock as so quoted for such date on NASDAQ, or if none, the weighted
average of the means between such bona fide bid and asked prices on the nearest
trading date before and the nearest trading date after the date as of which
fair market value is to be determined, if both such dates are within a
reasonable period.  The average is to be determined
in the manner described above in this Section 5.g.  If the fair market value of the Common Stock
cannot be determined on the basis previously set forth in this Section 5.g
for the date as of which fair market value is to be determined, the Committee
shall in good faith determine the fair market value of the Common Stock on such
date.  Fair market value shall be
determined without regard to any restriction other than a restriction which, by
its terms, will never lapse.


 


h.                                      The
obligation of the Corporation to issue shares of the Common Stock under the
Plan shall be subject to (i) the effectiveness of a registration statement
under the Securities Act of 1933, as amended, with respect to such shares, if
deemed necessary or appropriate by counsel for the Corporation, (ii) the
condition that the shares shall have been listed (or authorized for listing
upon official notice of issuance) upon each stock exchange, if any, on which
the Common Stock may then be listed and (iii) all other applicable laws,
regulations, rules and


 


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orders which may then be
in effect.


 


Subject to the foregoing
provision of this Section 5 and the other provisions of the Plan, any
stock option granted under the Plan shall be subject to such restrictions and
other terms and conditions, if any, as shall be determined, in its discretion,
by the Committee and set forth in the agreement referred to in Section 5.f,
or an amendment thereto; except that in no event shall the Committee or the Board
have any power or authority which would cause the Plan to fail to be a plan
described in Rule 16b-3(c)(2)(ii), or any successor rule.


 


6.                                       Adjustment
and Substitution of Shares.  If a
dividend or other distribution shall be declared upon the Common Stock payable
in shares of the Common Stock, then (i) the number of shares of the Common
Stock set forth in Section 4, (ii) the number of shares of the Common
Stock then subject to any outstanding stock options, and (iii) the number
of shares of the Common Stock which may be issued under the Plan but are not
then subject to outstanding stock options on the date fixed for determining the
shareholders entitled to receive such stock dividend or distribution, shall be
adjusted by adding thereto the number of shares of the Common Stock which would
have been distributable thereon if such shares had been outstanding on such
date.


 


If the outstanding shares
of the Common Stock shall be changed into or exchangeable for a different
number or kind of shares of stock or other securities of the Corporation or
another corporation, whether through reorganization, reclassification,
recapitalization, stock split up, combination of shares, merger or
consolidation, then there shall be substituted for each share of the Common Stock
set forth in Section 4, for each share of the Common Stock subject to any
then outstanding stock option and for each share of the Common Stock which may
be issued under the Plan but which is not then subject to any outstanding stock
option, the number and kind of shares of stock or other securities into which
each outstanding share of the Common Stock shall be so changed or for which
each such share shall be exchangeable.


 


In case of any adjustment
or substitution as provided for in the first two paragraphs of this Section 6,
the aggregate Option Price for all shares subject to each then outstanding
stock option prior to such adjustment or substitution shall be the aggregate
Option Price for all shares of stock or other securities (including any
fraction) to which such shares shall have been adjusted or which shall have
been substituted for such shares.  Any
new Option Price per share shall be carried to at least three decimal places
with the last decimal place rounded upwards to the nearest whole number.


 


If the outstanding of the
Common Stock shall be changed in value by reason of any spinoff, split off or
split up, or dividend in partial liquidation, dividend in property other than
cash or extraordinary distribution to holders of the Common Stock, the Committee
shall make any adjustments to any then outstanding stock option which it
determines are equitably required to prevent dilution or enlargement of the
rights of grantees which would otherwise result from any such transaction.


 


No adjustment or substitution
provided for in this Section 6 shall require the Corporation to issue or
sell a fraction of a share or other security. 
Accordingly, all fractional shares or other securities which result from
any such adjustment or substitution shall be eliminated and not carried forward
to any subsequent adjustment or substitution.


 


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Except as provided in
this Section 6, a grantee shall have no rights by reason of any issue by
the Corporation of stock of any class or securities convertible into stock of
any class, any subdivision or consolidation of shares of stock of any class,
the payment of any stock dividend or any other increase or decrease in the
number of shares of stock of any class.


 


7.                                       Effect
of the Plan on the Rights of Corporation and Shareholders.  Nothing in the Plan, in any stock option
granted under the Plan, or in any stock option agreement shall confer any right
to any person to continue as a director of the Corporation or interfere in any
way with the rights of the shareholders of the Corporation or the Board to
elect and remove directors.


 


8.                                       Amendment
and Termination.  The right to amend
or to terminate the Plan at any time are hereby specifically reserved to the
Board; provided always that no such termination shall terminate any outstanding
stock options granted under the Plan; and provided further that no amendment of
the Plan shall (i) be made without stockholder approval if stockholder
approval of the amendment is at the time required for stock options under the
Plan to qualify for the exemption from Section 16(b) of the 1934 Act
provided by Rule 16b-3, or any successor rule, or by the rules of any
stock exchange on which the Common Stock may then be listed, (ii) amend
more than once every six months the provision of the Plan relating to the
selection of the directors to whom stock options are to be granted, the timing
of such grants, the number of shares subject to any stock option, the exercise
price of any stock option, the periods during which any stock option may be
exercised and the term of any stock option other than to comport with changes
in the Internal Revenue Code of 1986, as amended (the “Code”) or the rules and
regulations thereunder or (iii) otherwise amend the Plan in any manner
that would cause stock options under the Plan not to qualify for the exemption
provided by Rule 16b-3, or any successor rule.  No amendment or termination of the Plan
shall, without the written consent of the holder of a stock option theretofore
awarded under the Plan, adversely affect the rights of such holder with respect
thereto.


 


Notwithstanding anything
contained in the preceding paragraph or any other provision of the Plan or any
stock option agreement, the Board shall have the power to amend the Plan in any
manner deemed necessary or advisable for stock options granted under the Plan
to qualify for the exemption provided by Rule 16b-3 (or any successor rule relating
to exemption from Section 16(b) of the 1934 Act), and any such
amendment shall, to the extent deemed necessary or advisable by the Board, be
applicable to any outstanding stock options theretofore granted under the Plan
notwithstanding any contrary provisions contained in any stock option
agreement.  In the event of any such
amendment to the Plan, the holder of any stock option outstanding under the
Plan shall, upon request of the Committee and as a condition to the
exercisability of such option, execute a conforming amendment in the form
prescribed by the Committee to the stock option agreement referred to in Section 5.f
within such reasonable time as the Committee shall specify in such request.


 


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9.                                       Effective
Date and Duration of Plan.  The Plan
shall become effective upon approval by the affirmative vote of the holders of
a majority of the Common Stock and preferred stock present in person or by
proxy and entitled to vote at a duly called and convened meeting of such
holders.  If such approval is obtained prior
to the annual meeting of shareholders in 1995, the Plan shall be effective on
the date of such meeting, the first stock options shall be granted on the third
business day thereafter and the last stock options granted under the Plan shall
be granted on the third business day after the annual meeting of shareholders
in 2004.


 


 


	
  Date Approved by Board
  of Directors of

  Company: June 27, 1995

  
	
   

  
	
   

  
	
  Date Approved by
  Shareholders of

  Company: July 20, 1995

  



 


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