Document:

exv10w3

Exhibit 10.3

QUIKSILVER, INC.

2000 STOCK INCENTIVE PLAN1

(As Amended and Restated through February 5, 2009)

ARTICLE ONE

GENERAL PROVISIONS

1.1. PURPOSE OF THE PLAN

     This amended and restated 2000 Stock Incentive Plan is intended to promote the interests of
Quiksilver, Inc., a Delaware corporation, by providing eligible persons in the Corporation’s
service with the opportunity to acquire a proprietary interest, or otherwise increase their
proprietary interest, in the Corporation as an incentive for them to remain in such service.

     Capitalized terms not otherwise defined herein shall have the meanings assigned to such terms
in the attached Appendix.

1.2. STRUCTURE OF THE PLAN

     A. The Plan as hereby amended and restated is divided into four separate equity incentive
programs:

	 	•	 	the Discretionary Option Grant Program, under which eligible persons may, at the
discretion of the Plan Administrator, be granted options to purchase shares of Common Stock,
	 
	 	•	 	the Restricted Stock Program, under which eligible persons may be awarded restricted
shares of Common Stock by and at the discretion of the Plan Administrator, that vest upon,
among other things, the completion of a designated service period and/or the attainment of
pre-established performance milestones or other criteria,
	 
	 	•	 	the Restricted Stock Unit Program, under which eligible persons may be awarded
restricted stock units by and at the discretion of the Plan Administrator, that vest upon,
among other things, the completion of a designated service period and/or the attainment of
pre-established performance milestones or other criteria, and
	 
	 	•	 	the Director Automatic Grant Program under which Eligible Directors shall
automatically receive option grants and restricted shares of Common Stock at designated
intervals over their period of Board service.

 

			
	1	 	All share amounts in this document have been revised
to reflect a 2 for 1 stock split effected through a stock dividend on April
30, 2003 and a 2 for 1 stock split effected through a stock dividend on April 27, 2005.

 

 

     B. The provisions of Articles One and Six shall apply to all equity programs under the Plan
and shall govern the interests of all persons under the Plan.

1.3. ADMINISTRATION OF THE PLAN

     A. The Primary Committee shall have sole and exclusive authority to administer the
Discretionary Option Grant, Restricted Stock and Restricted Stock Unit Programs with respect to
Section 16 Insiders. Administration of the Discretionary Option Grant, Restricted Stock and
Restricted Stock Unit Programs with respect to all other persons eligible to participate in those
programs may, at the Board’s discretion, be vested in the Primary Committee or a Secondary
Committee, or the Board may retain the power to administer those programs with respect to all such
persons. However, any discretionary Awards to members of the Primary Committee must be authorized
and approved by a disinterested majority of the Board.

     B. Members of the Primary Committee or any Secondary Committee shall serve for such period of
time as the Board may determine and may be removed by the Board at any time. The Board may also at
any time terminate the functions of any Secondary Committee and reassume all powers and authority
previously delegated to such committee.

     C. Each Plan Administrator shall, within the scope of its administrative functions under the
Plan, have full power and authority (subject to the provisions of the Plan) to establish such rules
and regulations as it may deem appropriate for proper administration of the Discretionary Option
Grant, Restricted Stock and Restricted Stock Unit Programs and to make such determinations under,
and issue such interpretations of, the provisions of those programs and any outstanding Awards
thereunder as it may deem necessary or advisable. Decisions of the Plan Administrator within the
scope of its administrative functions under the Plan shall be final and binding on all parties who
have an interest in the Discretionary Option Grant, Restricted Stock and Restricted Stock Unit
Programs under its jurisdiction or any Award thereunder.

     D. Service on the Primary Committee or the Secondary Committee shall constitute service as a
Board member, and members of each such committee shall accordingly be entitled to full
indemnification and reimbursement as Board members for their service on such committee. No member
of the Primary Committee or the Secondary Committee shall be liable for any act or omission made in
good faith with respect to the Plan or any Award under the Plan.

     E. Administration of the Director Automatic Grant Program shall be self-executing in
accordance with the terms of that program, and no Plan Administrator shall exercise any
discretionary functions with respect to any Award under that program.

1.4. ELIGIBILITY

     A. The persons eligible to participate in the Discretionary Option Grant, Restricted Stock and
Restricted Stock Unit Programs are as follows:

          (i) Employees,

          (ii) non-employee members of the Board or the board of directors of any Parent or Subsidiary,
and

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          (iii) consultants and other independent advisors who provide services to the Corporation (or
any Parent or Subsidiary).

     B. Each Plan Administrator shall, within the scope of its administrative jurisdiction under
the Plan, have full authority to determine (i) with respect to Awards made under the Discretionary
Option Grant Program, which eligible persons are to receive such Awards, the time or times when
those Awards are to be made, the number of shares to be covered by each such Award, the status of
any awarded option as either an Incentive Option or a Non-Statutory Option, the exercise price per
share in effect for each Award (subject to the limitations set forth in Article Two), the time or
times when each Award is to vest and become exercisable and the maximum term for which the Award is
to remain outstanding and (ii) with respect to Awards under the Restricted Stock and Restricted
Stock Unit Programs, which eligible persons are to receive such Awards, the time or times when the
Awards are to be made, the number of shares subject to each Award, the vesting schedule applicable
to the shares subject to such Award, and the cash consideration, if any, payable for such shares.

     C. The Plan Administrator shall have the absolute discretion to grant options, Restricted
Stock and Restricted Stock Units in accordance with the Discretionary Option Grant Program, the
Restricted Stock Program and the Restricted Stock Unit Program.

     D. Eligible Directors for purposes of the Director Automatic Grant Program shall be limited to
members of the Board who are not, at the time of such determination, employees of the Corporation
(or any Parent or Subsidiary).

1.5. STOCK SUBJECT TO THE PLAN

     A. The stock issuable under the Plan shall be shares of authorized but unissued or reacquired
Common Stock, including shares repurchased by the Corporation on the open market. The number of
shares of Common Stock reserved for issuance over the term of the Plan shall not exceed 33,444,836
shares. Such share reserve consists of (i) the number of shares estimated to remain available for
issuance, as of the Plan Effective Date, under the Predecessor Plans as last approved by the
Corporation’s stockholders, including the shares subject to outstanding options under those
Predecessor Plans, (ii) an increase of 2,000,000 shares approved by the Corporation’s stockholders
in connection with the adoption of this Plan, (iii) an increase of 2,800,000 shares approved by the
Corporation’s stockholders on March 30, 2001, (iv) an increase of 2,400,000 shares approved by the
Corporation’s stockholders on March 26, 2002 (v) an increase of 3,200,000 shares approved by the
Corporation’s stockholders on March 28, 2003, (vi) an increase of 5,600,000 shares approved by the
Corporation’s stockholders on March 26, 2004, (vii) an increase of 1,500,000 shares approved by the
Corporation’s stockholders on March 24, 2005, (viii) an increase of 1,000,000 shares approved by
the Corporation’s stockholders on March 24, 2006 and (ix) an increase of 2,000,000 shares approved
by the Corporation’s stockholders on March 16, 2007.

     B. No one person participating in the Plan may receive Awards for more than 800,000 shares of
Common Stock in the aggregate per calendar year. To the extent required by Section 162(m) of the
Code, shares subject to options or stock appreciation rights which are canceled shall continue to
be counted against the limit.

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     C. The maximum number of shares of Common Stock reserved for issuance pursuant to Awards of
Restricted Stock and Restricted Stock Units under the Plan is 800,000.

     D. Shares of Common Stock subject to outstanding Awards under the Plan (including options
incorporated into this Plan from the Predecessor Plans) shall be available for subsequent issuance
under the Plan to the extent those Awards expire or terminate for any reason prior to the issuance
of the shares of Common Stock subject to those Awards. Unvested shares issued under the Plan and
subsequently canceled or repurchased by the Corporation at the original exercise or issue price
paid per share pursuant to the Corporation’s repurchase rights under the Plan shall be added back
to the number of shares of Common Stock reserved for issuance under the Plan and shall accordingly
be available for subsequent reissuance under the Plan. However, should the exercise price of an
option under the Plan be paid with shares of Common Stock or should shares of Common Stock
otherwise issuable under the Plan be withheld by the Corporation in satisfaction of the withholding
taxes incurred in connection with the exercise of an option or the issuance of shares under the
Plan, then the number of shares of Common Stock available for issuance under the Plan shall be
reduced by the gross number of shares for which the option is exercised or the gross number of
shares issued under the Plan, and not by the net number of shares of Common Stock issued to the
holder of such option or stock issuance. Shares of Common Stock underlying one or more stock
appreciation rights exercised under the Plan shall NOT be available for subsequent issuance under
the Plan.

     E. If any change is made to the Common Stock by reason of any stock split, stock dividend,
recapitalization, combination of shares, exchange of shares or other change affecting the
outstanding Common Stock as a class without the Corporation’s receipt of consideration, appropriate
adjustments shall be made by the Plan Administrator to (i) the maximum number and/or class of
securities issuable under the Plan, (ii) the maximum number and/or class of securities for which
any one person may be granted Awards under the Plan per calendar year, (iii) the number and/or
class of securities for which grants are subsequently to be made under the Director Automatic Grant
Program to new and continuing Eligible Directors, (iv) the number and/or class of securities and
the exercise or base price per share (or any other cash consideration payable per share) in effect
under each outstanding Award under the Discretionary Option Grant and Director Automatic Grant
Programs, (v) the number and/or class of securities and exercise price per share in effect under
each outstanding option incorporated into this Plan from the Predecessor Plans, (vi) the number
and/or class of securities subject to each outstanding Award under the Restricted Stock and
Restricted Stock Unit Programs and the cash consideration (if any) payable per share thereunder,
and (vii) the maximum number of shares which may be issued pursuant to Awards of Restricted Stock
and Restricted Stock Units under the Plan. Such adjustments to the outstanding Awards are to be
effected in a manner which shall preclude the enlargement or dilution of rights and benefits under
those Awards. The adjustments determined by the Plan Administrator shall be final, binding and
conclusive.

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ARTICLE TWO

DISCRETIONARY OPTION GRANT PROGRAM

2.1. OPTION TERMS

     Each option shall be evidenced by one or more documents in the form approved by the Plan
Administrator; provided, however, that each such document shall comply with the terms specified
below. Each document evidencing an Incentive Option shall, in addition, be subject to the
provisions of the Plan applicable to such options.

     A. EXERCISE PRICE.

          1. The exercise price per share shall be fixed by the Plan Administrator but shall not be less
than one hundred percent (100%) of the Fair Market Value per share of Common Stock on the option
grant date. The Plan Administrator may not reset the exercise price of outstanding options or
stock appreciation rights and may not grant new options or stock appreciation rights in exchange
for the cancellation of outstanding options or stock appreciation rights with a higher exercise
price.

          2. The exercise price shall become immediately due upon exercise of the option and shall be
payable in one or more of the forms specified below:

               (i) cash or check made payable to the Corporation,

               (ii) shares of Common Stock valued at Fair Market Value on the Exercise Date and held for the
period (if any) necessary to avoid any additional charges to the Corporation’s earnings for
financial reporting purposes, or

               (iii) to the extent the option is exercised for vested shares, through a special sale and
remittance procedure pursuant to which the Optionee shall concurrently provide irrevocable
instructions to (a) a Corporation-designated brokerage firm to effect the immediate sale of the
purchased shares and remit to the Corporation, out of the sale proceeds available on the settlement
date, sufficient funds to cover the aggregate exercise price payable for the purchased shares plus
all applicable federal, state and local income and employment taxes required to be withheld by the
Corporation by reason of such exercise and (b) the Corporation to deliver the certificates for the
purchased shares directly to such brokerage firm in order to complete the sale.

          Except to the extent such sale and remittance procedure is utilized, payment of the exercise
price for the purchased shares must be made on the Exercise Date.

     B. EXERCISE AND TERM OF OPTIONS. Each option shall be exercisable at such time or times,
during such period and for such number of shares as shall be determined by the Plan Administrator
and set forth in the documents evidencing the option. However, no option shall have a term in
excess of ten (10) years measured from the option grant date.

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     C. EFFECT OF TERMINATION OF SERVICE.

          1. The following provisions shall govern the exercise of any options held by the Optionee at
the time of cessation of Service or death:

               (i) Any option outstanding at the time of the Optionee’s cessation of Service for any reason
shall remain exercisable for such period of time thereafter as shall be determined by the Plan
Administrator and set forth in the documents evidencing the option or otherwsie specifically
authorized by the Plan Administrator in its sole discretion pursuant to an express written
agreement with Optionee, but no such option shall be exercisable after the expiration of the option
term.

               (ii) Any option held by the Optionee at the time of death and exercisable in whole or in part
at that time may be subsequently exercised by the personal representative of the Optionee’s estate
or by the person or persons to whom the option is transferred pursuant to the Optionee’s will or
the laws of inheritance or by the Optionee’s designated beneficiary or beneficiaries of that
option.

               (iii) Should the Optionee’s Service be terminated for Misconduct or should the Optionee
otherwise engage in Misconduct while holding one or more outstanding options under this Article
Two, then all those options shall terminate immediately and cease to be outstanding.

               (iv) During the applicable post-Service exercise period, the option may not be exercised in
the aggregate for more than the number of vested shares for which that option is at the time
exercisable. No additional shares shall vest under the option following the Optionee’s cessation
of Service, except to the extent (if any) specifically authorized by the Plan Administrator in its
sole discretion pursuant to an express written agreement with the Optionee. Upon the expiration of
the applicable exercise period or (if earlier) upon the expiration of the option term, the option
shall terminate and cease to be outstanding for any shares for which the option has not been
exercised.

          2. The Plan Administrator shall have complete discretion, exercisable either at the time an
option is granted or at any time while the option remains outstanding, to:

               (i) extend the period of time for which the option is to remain exercisable following the
Optionee’s cessation of Service from the limited exercise period otherwise in effect for that
option to such greater period of time as the Plan Administrator shall deem appropriate, but in no
event beyond the expiration of the option term, and/or

               (ii) permit the option to be exercised, during the applicable post- Service exercise period,
not only with respect to the number of vested shares of Common Stock for which such option is
exercisable at the time of the Optionee’s cessation of Service but also with respect to one or more
additional installments in which the Optionee would have vested had the Optionee continued in
Service.

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     D. STOCKHOLDER RIGHTS. The holder of an option shall have no stockholder rights with respect
to the shares subject to the option until such person shall have exercised the option, paid the
exercise price and become a holder of record of the purchased shares.

     E. REPURCHASE RIGHTS. The Plan Administrator shall have the discretion to grant options which
are exercisable for unvested shares of Common Stock. Should the Optionee cease Service while
holding such unvested shares, the Corporation shall have the right to repurchase, at the exercise
price paid per share, any or all of those unvested shares. The terms upon which such repurchase
right shall be exercisable (including the period and procedure for exercise and the appropriate
vesting schedule for the purchased shares) shall be established by the Plan Administrator and set
forth in the document evidencing such repurchase right.

     F. TRANSFERABILITY OF OPTIONS. The transferability of options granted under the Plan shall be
governed by the following provisions:

          (i) Incentive Options. During the lifetime of the Optionee, Incentive Options shall
be exercisable only by the Optionee and shall not be assignable or transferable other than by will
or the laws of inheritance following the Optionee’s death.

          (ii) Non-Statutory Options. Non-Statutory Options shall be subject to the same
limitation on transfer as Incentive Options, except that the Plan Administrator may structure one
or more Non-Statutory Options so that the option may be assigned in whole or in part during the
Optionee’s lifetime by gift or pursuant to a domestic relations order to one or more Family Members
of the Optionee or to a trust established exclusively for Optionee and/or one or more such Family
Members. The assigned portion may only be exercised by the person or persons who acquire a
proprietary interest in the option pursuant to the assignment. The terms applicable to the
assigned portion shall be the same as those in effect for the option immediately prior to such
assignment and shall be set forth in such documents issued to the assignee as the Plan
Administrator may deem appropriate.

          (iii) Beneficiary Designation. Notwithstanding the foregoing, the Optionee may
designate one or more persons as the beneficiary or beneficiaries of his or her outstanding options
under this Article Two (whether Incentive Options or Non-Statutory Options), and those options
shall, in accordance with such designation, automatically be transferred to such beneficiary or
beneficiaries upon the Optionee’s death while holding those options. Such beneficiary or
beneficiaries shall take the transferred options subject to all the terms and conditions of the
applicable agreement evidencing each such transferred option, including (without limitation) the
limited time period during which the option may be exercised following the Optionee’s death.

2.2. INCENTIVE OPTIONS

     The terms specified below, together with any additions, deletions or changes thereto imposed
from time to time pursuant to the provisions of the Code governing Incentive Options, shall be
applicable to all Incentive Options. Except as modified by the provisions of this Section 2.2, all
the provisions of Articles One, Two and Six shall be applicable to Incentive Options.

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Options which are specifically designated as Non-Statutory Options when issued under the Plan
shall not be subject to the terms of this Section 2.2.

     A. ELIGIBILITY. Incentive Options may only be granted to Employees.

     B. DOLLAR LIMITATION. The aggregate Fair Market Value of the shares of Common Stock
(determined as of the respective date or dates of grant) for which one or more options granted to
any Employee under the Plan (or any other option plan of the Corporation or any Parent or
Subsidiary) may for the first time become exercisable as Incentive Options during any one calendar
year shall not exceed the sum of One Hundred Thousand Dollars ($100,000). To the extent the
Employee holds two (2) or more such options which become exercisable for the first time in the same
calendar year, then for purposes of the foregoing limitation on the exercisability of those options
as Incentive Options, such options shall be deemed to become first exercisable in that calendar
year on the basis of the chronological order in which they were granted, except to the extent
otherwise provided under applicable law or regulation.

     C. 10% STOCKHOLDER. If any Employee to whom an Incentive Option is granted is a 10%
Stockholder, then the exercise price per share shall not be less than one hundred ten percent
(110%) of the Fair Market Value per share of Common Stock on the option grant date, and the option
term shall not exceed five (5) years measured from the option grant date.

2.3. CORPORATE TRANSACTION/CHANGE IN CONTROL/HOSTILE TAKE-OVER

     A. No Award outstanding under the Discretionary Option Grant Program at the time of a
Corporate Transaction shall vest and become exercisable on an accelerated basis if and to the
extent that (i) such Award is, in connection with the Corporate Transaction, assumed by the
successor corporation (or parent thereof) or otherwise continued in full force and effect pursuant
to the express terms of the Corporate Transaction or (ii) such Award is replaced with a cash
incentive program of the successor corporation which preserves the spread (the excess of the Fair
Market Value of those shares over the exercise price in effect for the shares) existing at the time
of the Corporate Transaction on the shares of Common Stock as to which the Award is not otherwise
at that time vested and exercisable and provides for subsequent payout in accordance with the same
exercise/vesting schedule applicable to those shares or (iii) the acceleration of such Award is
subject to other limitations imposed by the Plan Administrator. However, if none of the foregoing
conditions are satisfied, each Award outstanding under the Discretionary Option Grant Program at
the time of the Corporate Transaction shall automatically accelerate so that each such Award shall,
immediately prior to the effective date of the Corporate Transaction, vest and become exercisable
as to all shares of Common Stock at the time subject to such Award and may be exercised for any or
all of those shares as fully vested shares of Common Stock.

     B. All outstanding repurchase rights under the Discretionary Option Grant Program shall
automatically terminate, and the shares of Common Stock subject to those terminated rights shall
immediately vest in full, in the event of any Corporate Transaction, except to the extent: (i)
those repurchase rights are to be assigned to the successor corporation (or parent thereof) in
connection with the Corporate Transaction or otherwise continue in full force and effect pursuant
to the express terms of the Corporate Transaction or (ii) such accelerated vesting is precluded by
other limitations imposed by the Plan Administrator.

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     C. Immediately following the consummation of the Corporate Transaction, all outstanding Awards
under the Discretionary Option Grant Program shall terminate and cease to be outstanding, except to
the extent assumed by the successor corporation (or parent thereof) in connection with the
Corporate Transaction or otherwise expressly continued in full force and effect pursuant to the
express terms of the Corporate Transaction.

     D. Each Award which is assumed in connection with a Corporate Transaction or otherwise
continued in effect shall be appropriately adjusted, immediately after such Corporate Transaction,
to apply to the number and class of securities which would have been issuable to the Optionee in
consummation of such Corporate Transaction had the Award been exercised immediately prior to such
Corporate Transaction. Appropriate adjustments to reflect such Corporate Transaction shall also be
made to (i) the exercise price payable per share under each outstanding Award, provided the
aggregate exercise price payable for such securities shall remain the same, (ii) the maximum number
and/or class of securities available for issuance over the remaining term of the Plan, and (iii)
the maximum number and/or class of securities for which any one person may be granted Awards under
the Plan per calendar year. To the extent the actual holders of the Corporation’s outstanding
Common Stock receive cash consideration for their Common Stock in consummation of the Corporate
Transaction, the successor corporation may, in connection with the assumption of the outstanding
Awards under the Discretionary Option Grant Program, substitute one or more shares of its own
common stock with a fair market value equivalent to the cash consideration paid per share of Common
Stock in such Corporate Transaction.

     E. The Plan Administrator shall have the discretionary authority to structure one or more
outstanding Awards under the Discretionary Option Grant Program so that those Awards shall,
immediately prior to the effective date of such Corporate Transaction, vest and become exercisable
for all the shares of Common Stock at the time subject to those Awards and may be exercised for any
or all of those shares as fully vested shares of Common Stock, whether or not those Awards are to
be assumed or otherwise continued in full force and effect pursuant to the terms of the Corporate
Transaction. In addition, the Plan Administrator shall have the discretionary authority to
structure one or more of the Corporation’s repurchase rights under the Discretionary Option Grant
Program so that those rights shall immediately terminate at the time of such Corporate Transaction
and shall not be assignable to the successor corporation (or parent thereof), and the shares
subject to those terminated rights shall accordingly vest in full at the time of such Corporate
Transaction.

     F. The Plan Administrator shall have full power and authority to structure one or more
outstanding Awards under the Discretionary Option Grant Program so that those Awards shall
immediately vest and become exercisable for all the shares of Common Stock at the time subject to
those Awards in the event the Optionee’s Service is subsequently terminated by reason of an
Involuntary Termination within a designated period (not to exceed eighteen (18) months) following
the effective date of any Corporate Transaction in which those Awards do not otherwise vest on an
accelerated basis. Any Awards so accelerated shall remain exercisable as to fully vested shares
until the expiration or sooner termination of their term. In addition, the Plan Administrator may
structure one or more of the Corporation’s repurchase rights under the Discretionary Option Grant
Program so that those rights shall immediately terminate with respect

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to any shares held by the Optionee at the time of his or her Involuntary Termination, and the
shares subject to those terminated repurchase rights shall accordingly vest in full at that time.

     G. The Plan Administrator shall have the discretionary authority to structure one or more
outstanding Awards under the Discretionary Option Grant Program so that those Awards shall,
immediately prior to the effective date of a Change in Control or Hostile Take-Over, as the case
may be, vest and become exercisable for all the shares of Common Stock at the time subject to those
Awards and may be exercised for any or all of those shares as fully vested shares of Common Stock.
In addition, the Plan Administrator shall have the discretionary authority to structure one or more
of the Corporation’s repurchase rights under the Discretionary Option Grant Program so that those
rights shall terminate automatically upon the consummation of such Change in Control or Hostile
Take-Over, as the case may be, and the shares subject to those terminated rights shall thereupon
vest in full. Alternatively, the Plan Administrator may condition the automatic acceleration of one
or more outstanding Awards under the Discretionary Option Grant Program and the termination of one
or more of the Corporation’s outstanding repurchase rights under such program upon the Involuntary
Termination of the Optionee’s Service within a designated period (not to exceed eighteen (18)
months) following the effective date of such Change in Control or Hostile Take-Over, as the case
may be. Each Award so accelerated shall remain exercisable for fully vested shares until the
expiration or sooner termination of their term.

     H. The portion of any Incentive Option accelerated in connection with a Corporate Transaction
or Change in Control or Hostile Take-Over shall remain exercisable as an Incentive Option only to
the extent the applicable One Hundred Thousand Dollar ($100,000) limitation is not exceeded. To the
extent such dollar limitation is exceeded, the accelerated portion of such option shall be
exercisable as a Nonstatutory Option under the Federal tax laws.

     I. Awards outstanding shall in no way affect the right of the Corporation to adjust,
reclassify, reorganize or otherwise change its capital or business structure or to merge,
consolidate, dissolve, liquidate or sell or transfer all or any part of its business or assets.

2.4. STOCK APPRECIATION RIGHTS

     A. The Plan Administrator shall have full power and authority to grant to selected Optionees
tandem stock appreciation rights and/or limited stock appreciation rights.

     B. The following terms shall govern the grant and exercise of tandem stock appreciation
rights:

          (i) One or more Optionees may be granted the right, exercisable upon such terms as the Plan
Administrator may establish, to elect between the exercise of the underlying option for shares of
Common Stock and the surrender of that option in exchange for a distribution from the Corporation
in an amount equal to the excess of (a) the Fair Market Value (on the option surrender date) of the
number of shares in which the Optionee is at the time vested under the surrendered option (or
surrendered portion thereof) over (b) the aggregate exercise price payable for such shares.

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          (ii) No such option surrender shall be effective unless it is approved by the Plan
Administrator, either at the time of the actual option surrender or at any earlier time. If the
surrender is so approved, then the distribution to which the Optionee shall be entitled may be made
in shares of Common Stock valued at Fair Market Value on the option surrender date, in cash, or
partly in shares and partly in cash, as the Plan Administrator shall in its sole discretion deem
appropriate.

          (iii) If the surrender of an option is not approved by the Plan Administrator, then the
Optionee shall retain whatever rights the Optionee had under the surrendered option (or surrendered
portion thereof) on the option surrender date and may exercise such rights at any time prior to the
later of (a) five (5) business days after the receipt of the rejection notice or (b) the last day
on which the option is otherwise exercisable in accordance with the terms of the documents
evidencing such option, but in no event may such rights be exercised more than ten (10) years after
the option grant date.

     C. The following terms shall govern the grant and exercise of limited stock appreciation
rights:

          (i) One or more Section 16 Insiders may be granted limited stock appreciation rights with
respect to their outstanding options.

          (ii) Upon the occurrence of a Hostile Take-Over, each individual holding one or more options
with such a limited stock appreciation right shall have the unconditional right (exercisable for a
thirty (30)-day period following such Hostile Take-Over) to surrender each such option to the
Corporation. In return for the surrendered option, the Optionee shall receive a cash distribution
from the Corporation in an amount equal to the excess of (A) the Take-Over Price of the shares of
Common Stock at the time subject to such option (whether or not the option is otherwise at that
time exercisable for those shares) over (B) the aggregate exercise price payable for those shares.
Such cash distribution shall be paid within five (5) days following the option surrender date.

          (iii) At the time such limited stock appreciation right is granted, the Plan Administrator
shall pre-approve any subsequent exercise of that right in accordance with the terms of this
Paragraph C. Accordingly, no further approval of the Plan Administrator or the Board shall be
required at the time of the actual option surrender and cash distribution.

ARTICLE THREE

RESTRICTED STOCK PROGRAM

3.1. RESTRICTED STOCK TERMS

     A. ISSUANCES. Shares of Restricted Stock may be issued under the Restricted Stock Program at
the discretion of the Plan Administrator through direct and immediate issuances without any
intervening option grants. Each such issuance of Restricted Stock shall be evidenced by a
Restricted Stock Agreement that complies with the terms specified below and such other provisions
as the Plan Administrator shall determine. Participants shall have no rights

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with respect to the shares of Restricted Stock covered by a Restricted Stock Agreement until
the Participant has paid the full purchase price, if any, to the Corporation and has executed and
delivered to the Corporation the applicable Restricted Stock Agreement.

     B. PURCHASE PRICE.

          1. The purchase price per share of Restricted Stock issued under the Restricted Stock Program
shall be fixed by the Plan Administrator in its sole discretion, including no consideration or such
minimum consideration as may be required by applicable law.

          2. Shares of Restricted Stock may be issued under the Restricted Stock Program for any of the
following items of consideration that the Plan Administrator may deem appropriate in each
individual instance:

               (i) cash or check made payable to the Corporation; or

               (ii) any other valid form of consideration permissible under the Delaware General Corporation
Law at the time such shares are issued.

     C. VESTING PROVISIONS

          1. Shares of Restricted Stock issued under the Restricted Stock Program may, in the discretion
of the Plan Administrator, vest in one or more installments over the Participant’s period of
Service and/or upon attainment of specified performance objectives or such other criteria as the
Plan Administrator shall determine. The elements of the vesting schedule applicable to any
unvested shares of Restricted Stock issued under the Restricted Stock Program shall be determined
by the Plan Administrator and incorporated into the Restricted Stock Agreement. Notwithstanding
the foregoing, Awards of Restricted Stock issued subject to time-based vesting under the Restricted
Stock Program may not be made with a vesting schedule providing for full vesting in less than three
years from the date awarded. Awards of Restricted Stock issued subject to performance-based
vesting, as provided in Section 3.1.C.2 below, may not vest unless the Participant remains in the
Corporation’s Service for at least one year following the date awarded.

          2. The Plan Administrator shall also have the discretionary authority, consistent with Code
Section 162(m), to structure one or more Awards under the Restricted Stock Program so that the
shares of Restricted Stock subject to those Awards shall vest upon the achievement of certain
pre-established corporate performance goals based on one or more of the following criteria: (i)
return on total shareholder equity; (ii) earnings or net income per share of Common Stock; (iii)
net income or operating income; (iv) earnings before interest, taxes, depreciation, amortization
and stock-based compensation costs, or operating income before depreciation and amortization; (v)
sales or revenue targets; (vi) return on assets, capital or investment; (vii) cash flow; (viii)
market share; (ix) cost reduction goals; (x) budget comparisons; (xi) implementation or completion
of projects or processes strategic or critical to the Corporation’s business operations; (xii)
measures of customer satisfaction; (xiii) any combination of, or a specified increase in, any of
the foregoing; and (xiv) the formation of joint ventures, research and development collaborations,
marketing or customer service collaborations, or the completion of other corporate transactions
intended to enhance the

12

 

Corporation’s revenue or profitability or expand its customer base; provided, however, that
for purposes of items (ii), (iii), (iv) and (vii) above, the Plan Administrator may, at the time
the Awards under the Restricted Stock Program are made, specify certain adjustments to such items
as reported in accordance with generally accepted accounting principles in the U.S. (“GAAP”), which
will exclude from the calculation of those performance goals one or more of the following: certain
charges related to acquisitions, stock-based compensation, employer payroll tax expense on certain
stock option exercises, settlement costs, restructuring costs, gains or losses on strategic
investments, non-operating gains or losses, certain other non-cash charges, valuation allowance on
deferred tax assets, and the related income tax effects, purchases of property and equipment, and
any extraordinary non-recurring items as described in Accounting Principles Board Opinion No. 30,
provided that such adjustments are in conformity with those reported by the Corporation on a
non-GAAP basis. In addition, such performance goals may be based upon the attainment of specified
levels of the Corporation’s performance under one or more of the measures described above relative
to the performance of other entities and may also be based on the performance of any of the
Corporation’s business groups or divisions or any Parent or Subsidiary. Performance goals may
include a minimum threshold level of performance below which no award will be earned, levels of
performance at which specified portions of an award will be earned and a maximum level of
performance at which an award will be fully earned. The Plan Administrator may provide that, if
the actual level of attainment for any performance objective is between two specified levels, the
amount of the Award attributable to that performance objective shall be interpolated on a
straight-line basis.

          3. Any new, substituted or additional securities or other property (including money paid other
than as a regular cash dividend) which the Participant may have the right to receive with respect
to the Participant’s unvested shares of Restricted Stock by reason of any stock dividend, stock
split, recapitalization, combination of shares, exchange of shares or other change affecting the
outstanding Common Stock as a class without the Corporation’s receipt of consideration shall be
issued subject to (i) the same vesting requirements applicable to the Participant’s unvested shares
of Restricted Stock and (ii) such escrow arrangements as the Plan Administrator shall deem
appropriate.

          4. The Participant shall have full voting rights with respect to any shares of Restricted
Stock issued to the Participant under the Restricted Stock Program, whether or not the
Participant’s interest in those shares is vested. Unless otherwise provided by the Plan
Administrator in the Restricted Stock Agreement, Participant shall also have the right to receive
any regular cash dividends paid on such shares. The Plan Administrator may apply any restrictions
to the dividends that the Plan Administrator deems appropriate. Without limiting the generality of
the preceding sentence, if the grant or vesting of shares of Restricted Stock is designed to comply
with the requirements of the performance-based exception from the tax deductibility limitations of
Code Section 162(m), the Plan Administrator may apply any restrictions it deems appropriate to the
payment of dividends declared with respect to such shares of Restricted Stock, such that the
dividends and/or the shares of Restricted Stock maintain eligibility for such exception.

          5. The effect which death, Permanent Disability, termination of Service (other than for
Misconduct) or other event designated by the Plan Administrator is to have upon

13

 

the vesting schedule of a Restricted Stock Award shall be determined by the Plan Administrator
and incorporated into the Restricted Stock Agreement.

          6. Should the Participant’s Service be terminated for Misconduct or should the Participant
otherwise engage in Misconduct while holding one or more unvested shares of Restricted Stock, then
all such unvested shares of Restricted Stock shall be immediately surrendered to the Corporation
for cancellation, and the Participant shall have no further stockholder rights with respect to
those shares. To the extent the surrendered shares of Restricted Stock were previously issued to
the Participant for consideration paid in cash, cash equivalent or otherwise, the Corporation shall
repay to the Participant the same form of consideration as the Participant paid for the surrendered
shares.

          7. Should the Participant cease to remain in Service while holding one or more unvested shares
of Restricted Stock issued under the Restricted Stock Program or should the performance objectives
or other criteria not be attained with respect to one or more such unvested shares of Restricted
Stock, then those shares shall be immediately surrendered to the Corporation for cancellation, and
the Participant shall have no further stockholder rights with respect to those shares. To the
extent the surrendered shares were previously issued to the Participant for consideration paid in
cash, cash equivalent or otherwise, the Corporation shall repay to the Participant the same form of
consideration as the Participant paid for the surrendered shares.

          8. In the event of the Participant’s death, Permanent Disability, termination of Service
(other than for Misconduct), retirement or a Corporate Transaction or Change in Control, the Plan
Administrator may in its discretion waive the surrender and cancellation of one or more unvested
shares of Restricted Stock (or other assets attributable thereto) which would otherwise occur upon
the cessation of the Participant’s Service or the non-attainment of the performance objectives or
other criteria applicable to those shares. The Plan Administrator shall not otherwise have
discretion to waive the surrender and cancellation of unvested shares of Restricted Stock (or other
assets attributable thereto) which would otherwise occur pursuant to a previously determined
vesting schedule. Any such waiver shall result in the immediate vesting of the Participant’s
interest in the shares of Restricted Stock as to which the waiver applies. Such waiver may be
effected at any time, whether before or after the Participant’s cessation of Service or the
attainment or non-attainment of the applicable performance objectives or other criteria. However,
no vesting requirements tied to the attainment of performance objectives may be waived with respect
to shares that were intended at the time of issuance to qualify as performance-based compensation
under Code Section 162(m), except as otherwise provided in Section 3.2.D of this Article Three.

3.2. CORPORATE TRANSACTION/CHANGE IN CONTROL

     A. No shares of Restricted Stock shall vest at the time of a Corporate Transaction on an
accelerated basis if and to the extent that (i) the Restricted Stock Agreement is, in connection
with the Corporate Transaction, continued or assumed by the successor corporation (or parent
thereof) or otherwise continued in full force and effect pursuant to the express terms of the
Corporate Transaction, (ii) substitution of new agreements of comparable value covering shares of
the successor corporation (or parent thereof) in exchange for such shares of Restricted Stock,

14

 

with appropriate adjustments as to the number and kind of shares and purchase price, is
provided for pursuant to the express terms of the Corporate Transaction or (iii) such accelerated
vesting is precluded by other limitations imposed by the Plan Administrator. However, if none of
the foregoing conditions are satisfied, immediately prior to the effective date of the Corporate
Transaction, all the shares of Restricted Stock shall automatically vest in full.

     B. The Plan Administrator shall have the discretionary authority, exercisable either at the
time the unvested shares of Restricted Stock are issued or at any time while they remain
outstanding under the Plan, to provide that the unvested shares of Restricted Stock shall
immediately vest upon a Corporate Transaction or Change in Control or upon an event or events
associated with or following such transactions, including termination of Service.

     C. If the Restricted Stock Agreement is continued or assumed by a successor corporation (or
parent thereof) or otherwise continued in full force and effect pursuant to the terms of the
Corporate Transaction or such accelerated vesting is precluded by other limitations imposed by the
Plan Administrator, each outstanding Award under the Restricted Stock Program in effect shall be
adjusted immediately after the consummation of that Corporate Transaction to apply to the number
and class of securities into which the shares of Restricted Stock subject to the Award immediately
prior to the Corporate Transaction would have been converted upon consummation of such Corporate
Transaction had those shares actually been outstanding and vested at that time, and appropriate
adjustments shall also be made to the consideration (if any) payable per share thereunder, provided
that the aggregate amount of such consideration shall remain the same.

     D. The Plan Administrator’s authority under Paragraph B of this Section 3.2 shall also extend
to any Awards intended to qualify as performance-based compensation under Code Section 162(m), even
though the automatic vesting of those Awards pursuant to Paragraph B of this Section 3.2 may result
in their loss of performance-based status under Code Section 162(m).

3.3. TRANSFERABILITY OF RESTRICTED STOCK

     Unvested shares of Restricted Stock may not be assigned, transferred, pledged or otherwise
encumbered or disposed of other than by will or the laws of inheritance following the Participant’s
death. Upon vesting, and after all other conditions and restrictions applicable to such shares of
Restricted Stock have been satisfied or lapse (including satisfaction of any applicable Withholding
Tax) pursuant to the applicable Restricted Stock Agreement, such shares of Restricted Stock shall
become freely transferable (subject to any restrictions under applicable securities laws) by
Participant.

3.4. DELIVERY OF SHARES/LEGENDS

     Unvested shares of Restricted Stock may, in the Plan Administrator’s discretion, be issued in
book entry or certificate form and shall remain in the possession or control of the Corporation
until such shares have vested, and all other conditions and restrictions applicable to such shares
have been satisfied or lapse (including satisfaction of any applicable Withholding Tax), in
accordance with the terms of the Restricted Stock Agreement. If issued in certificate form, such
certificates shall include such restrictive legends as deemed appropriate by the Plan

15

 

Administrator. The Plan Administrator may require a stock power endorsed in blank with
respect to shares of Restricted Stock whether or not certificated.

ARTICLE FOUR

RESTRICTED STOCK UNIT PROGRAM

4.1. RESTRICTED STOCK UNIT TERMS

     A. ISSUANCES. Restricted Stock Units which entitle the Participant to receive shares of
Common Stock underlying those units over the Participant’s period of Service and/or upon attainment
of specified performance objectives or such other criteria as the Plan Administrator shall
determine may be issued under the Restricted Stock Unit Program at the discretion of the Plan
Administrator. Each such issuance of Restricted Stock Units shall be evidenced by a Restricted
Stock Unit Agreement that complies with the terms specified below and such other provisions as the
Plan Administrator shall determine. Participants shall have no rights with respect to the
Restricted Stock Units covered by a Restricted Stock Unit Agreement until the Participant has paid
the full purchase price, if any, to the Corporation and has executed and delivered to the
Corporation the applicable Restricted Stock Unit Agreement.

     B. PURCHASE PRICE.

          1. The purchase price for Restricted Stock Units issued under the Restricted Stock Unit
Program shall be fixed by the Plan Administrator in its sole discretion, including no consideration
or such minimum consideration as may be required by applicable law.

          2. Restricted Stock Units may be issued under the Restricted Stock Unit Program for any of the
following items of consideration that the Plan Administrator may deem appropriate in each
individual instance:

               (i) cash or check made payable to the Corporation; or

               (ii) any other valid form of consideration permissible under the Delaware General Corporation
Law at the time such units are issued.

     C. VESTING PROVISIONS

          1. Restricted Stock Units issued under the Restricted Stock Unit Program may, in the
discretion of the Plan Administrator, vest in one or more installments over the Participant’s
period of Service and/or upon attainment of specified performance objectives or such other criteria
as the Plan Administrator shall determine. The elements of the vesting schedule applicable to any
unvested Restricted Stock Units issued under the Restricted Stock Unit Program shall be determined
by the Plan Administrator and incorporated into the Restricted Stock Unit Agreement.
Notwithstanding the foregoing, Awards of Restricted Stock Units issued subject to time-based
vesting under the Restricted Stock Unit Program may not be made with a vesting schedule providing
for full vesting in less than three years from the date awarded. Awards of Restricted Stock Units
issued subject to performance-based vesting, as provided in

16

 

Section 4.1.C.2 below, may not vest unless the Participant remains in the Corporation’s
Service for at least one year following the date awarded.

          2. The Plan Administrator shall also have the discretionary authority, consistent with Code
Section 162(m), to structure one or more Awards under the Restricted Stock Unit Program so that the
Restricted Stock Units subject to those Awards shall vest upon the achievement of certain
pre-established corporate performance goals based on one or more of the following criteria: (i)
return on total shareholder equity; (ii) earnings or net income per share of Common Stock; (iii)
net income or operating income; (iv) earnings before interest, taxes, depreciation, amortization
and stock-based compensation costs, or operating income before depreciation and amortization; (v)
sales or revenue targets; (vi) return on assets, capital or investment; (vii) cash flow; (viii)
market share; (ix) cost reduction goals; (x) budget comparisons; (xi) implementation or completion
of projects or processes strategic or critical to the Corporation’s business operations; (xii)
measures of customer satisfaction; (xiii) any combination of, or a specified increase in, any of
the foregoing; and (xiv) the formation of joint ventures, research and development collaborations,
marketing or customer service collaborations, or the completion of other corporate transactions
intended to enhance the Corporation’s revenue or profitability or expand its customer base;
provided, however, that for purposes of items (ii), (iii), (iv) and (vii) above, the Plan
Administrator may, at the time the Awards under the Restricted Stock Unit Program are made, specify
certain adjustments to such items as reported in accordance with GAAP, which will exclude from the
calculation of those performance goals one or more of the following: certain charges related to
acquisitions, stock-based compensation, employer payroll tax expense on certain stock option
exercises, settlement costs, restructuring costs, gains or losses on strategic investments,
non-operating gains or losses, certain other non-cash charges, valuation allowance on deferred tax
assets, and the related income tax effects, purchases of property and equipment, and any
extraordinary non-recurring items as described in Accounting Principles Board Opinion No. 30,
provided that such adjustments are in conformity with those reported by the Corporation on a
non-GAAP basis. In addition, such performance goals may be based upon the attainment of specified
levels of the Corporation’s performance under one or more of the measures described above relative
to the performance of other entities and may also be based on the performance of any of the
Corporation’s business groups or divisions or any Parent or Subsidiary. Performance goals may
include a minimum threshold level of performance below which no award will be earned, levels of
performance at which specified portions of an award will be earned and a maximum level of
performance at which an award will be fully earned. The Plan Administrator may provide that, if
the actual level of attainment for any performance objective is between two specified levels, the
amount of the Award attributable to that performance objective shall be interpolated on a
straight-line basis.

          3. The Participant shall not have any stockholder rights with respect to the shares of Common
Stock subject to a Restricted Stock Unit until that Award vests, all other conditions and
restrictions applicable to such Restricted Stock Unit have been satisfied or lapsed (including
satisfaction of any applicable Withholding Tax) pursuant to the applicable Restricted Stock Unit
Agreement, and the shares of Common Stock are actually issued thereunder. However,
dividend-equivalent units may be paid or credited, either in cash or in actual or phantom shares of
Common Stock, on outstanding Restricted Stock Unit Awards, subject to such terms and conditions as
the Plan Administrator may deem appropriate.

17

 

          4. The effect which death, Permanent Disability, termination of Service (other than for
Misconduct) or other event designated by the Plan Administrator is to have upon the vesting
schedule of a Restricted Stock Unit Award shall be determined by the Plan Administrator and
incorporated into the Restricted Stock Unit Agreement.

          5. Should the Participant’s Service be terminated for Misconduct or should the Participant
otherwise engage in Misconduct while holding one or more unvested Restricted Stock Units, then all
such unvested Restricted Stock Units shall be immediately and automatically canceled, no shares of
Common Stock will be issued in satisfaction of those units, and the Participant shall have no
further rights with respect to those units. To the extent the canceled Restricted Stock Units were
previously issued to the Participant for consideration paid in cash, cash equivalent or otherwise,
the Corporation shall repay to the Participant the same form of consideration as the Participant
paid for the canceled units.

          6. Should the Participant cease to remain in Service while holding one or more unvested
Restricted Stock Units issued under the Restricted Stock Unit Program or should the performance
objectives not be attained with respect to one or more such unvested Restricted Stock Units, then
those units shall be immediately and automatically canceled, no shares of Common Stock will be
issued in satisfaction of those units, and the Participant shall have no further rights with
respect to those units. To the extent the canceled Restricted Stock Units were previously issued
to the Participant for consideration paid in cash, cash equivalent or otherwise, the Corporation
shall repay to the Participant the same form of consideration as the Participant paid for the
canceled units.

          7. Outstanding Restricted Stock Units under the Restricted Stock Unit Program shall
automatically terminate, and no shares of Common Stock shall actually be issued in satisfaction of
those units, if the performance goals or other criteria established for such units or the Service
requirements established for such units are not attained or satisfied. The Plan Administrator,
however, shall have the discretionary authority to issue vested shares of Common Stock under one or
more outstanding Restricted Stock Units as to which the designated performance goals or other
criteria or Service requirements have not been attained or satisfied, but only in the event of the
Participant’s death, Permanent Disability, termination of Service (other than for Misconduct),
retirement or a Corporate Transaction or Change in Control. The Plan Administrator shall not
otherwise have discretion to waive the surrender and cancellation of unvested Restricted Stock
Units (or other assets attributable thereto) which would otherwise occur pursuant to a previously
determined vesting schedule. However, no vesting requirements tied to the attainment of
performance goals may be waived with respect to Awards of Restricted Stock Units which were at the
time of grant intended to qualify as performance-based compensation under Code Section 162(m),
except as otherwise provided in Section 4.2.D of this Article Four.

4.2. CORPORATE TRANSACTION/CHANGE IN CONTROL

     A. No Restricted Stock Units shall vest at the time of a Corporate Transaction on an
accelerated basis if and to the extent that (i) the Restricted Stock Unit Agreement is, in
connection with the Corporate Transaction, continued or assumed by the successor corporation (or
parent thereof) or otherwise continued in full force and effect pursuant to the express terms of

18

 

the Corporate Transaction, (ii) substitution of new agreements of comparable value covering
shares of the successor corporation (or parent thereof) in exchange for such Restricted Stock
Units, with appropriate adjustments as to the number and kind of shares and purchase price, is
provided for pursuant to the terms of the Corporate Transaction or (iii) such accelerated vesting
is precluded by other limitations imposed by the Plan Administrator. However, if none of the
foregoing conditions are satisfied, immediately prior to the effective date of the Corporate
Transaction, all the unvested Restricted Stock Units shall automatically vest in full.

     B. The Plan Administrator shall have the discretionary authority, exercisable either at the
time the unvested Restricted Stock Units are issued or at any time while they remain outstanding
under the Plan, to provide that the unvested Restricted Stock Units shall immediately vest upon a
Corporate Transaction or Change in Control or upon an event or events associated with or following
such transactions, including termination of Service.

     C. If the Restricted Stock Unit Agreement is continued or assumed by a successor corporation
(or parent thereof) or otherwise continued in full force and effect pursuant to the express terms
of the Corporate Transaction or such accelerated vesting is precluded by other limitations imposed
by the Plan Administrator, each outstanding Award under the Restricted Stock Unit Program in effect
shall be adjusted immediately after the consummation of that Corporate Transaction to apply to the
number and class of securities into which the shares of Common Stock underlying those Restricted
Stock Units subject to the Award immediately prior to the Corporate Transaction would have been
converted in consummation of such Corporate Transaction had those units actually been outstanding
and vested at that time, and appropriate adjustments shall also be made to the consideration (if
any) payable per unit thereunder, provided that the aggregate amount of such consideration shall
remain the same.

     D. The Plan Administrator’s authority under Paragraph B of this Section 4.2 shall also extend
to any Awards intended to qualify as performance-based compensation under Code Section 162(m), even
though the automatic vesting of those Awards pursuant to Paragraph B of this Section 4.2 may result
in their loss of performance-based status under Code Section 162(m).

4.3. TRANSFERABILITY OF RESTRICTED STOCK UNITS

     Until vested, Restricted Stock Units may not be assigned, transferred, pledged or otherwise
encumbered or disposed of other than by will or the laws of inheritance following the Participant’s
death. Upon vesting, and after all other conditions and restrictions applicable to such Common
Stock subject to such Restricted Stock Units have been satisfied or lapse (including satisfaction
of any applicable Withholding Tax) pursuant to the applicable Restricted Stock Unit Agreement, the
shares of Common Stock subject to such Restricted Stock Unit shall become freely transferable
(subject to any restrictions under applicable securities laws) by Participant.

4.4. DELIVERY OF SHARES/COMPLIANCE WITH SECTION 409A

     A. Upon vesting and satisfaction of all other conditions and restrictions applicable to the
Restricted Stock Units (including satisfaction of any applicable Withholding Tax) pursuant to

19

 

the applicable Restricted Stock Unit Agreement, certificates representing the shares of Common
Stock underlying such Restricted Stock Units shall be issued to Participant.

     B. Notwithstanding the foregoing, the Plan Administrator may permit or require a Participant
to defer such Participant’s delivery of shares of Common Stock that would otherwise be due to such
Participant with respect to the Restricted Stock Units. If any such deferral or election is
required or permitted, the Plan Administrator shall, in its sole discretion, establish rules and
procedures for such delivery deferrals which shall be consistent with the requirements of Code
Section 409A and the Treasury regulations and rules promulgated thereunder, and including the
requirement that the deferral election be entered into at the time of the grant and that the
delivery date thereof be consistent with a permissible distribution date under Code Section 409A.

ARTICLE FIVE

DIRECTOR AUTOMATIC GRANT PROGRAM

5.1. TERMS

     This Article Five of the Plan was amended and restated effective as of February 6, 2007. All
options outstanding under the Automatic Option Grant Program on February 6, 2007 continued in full
force and effect in accordance with the existing terms of the agreements evidencing those options,
and no change in this Article Five affected those options.

     A. GRANT/ISSUANCE DATES. Grants and issuances under this amended and restated Article Five
shall be made on the dates specified below:

          1. On the date of each annual meeting of stockholders, beginning with the 2007 Annual Meeting
of Stockholders, each individual who is to continue to serve as an Eligible Director, whether or
not that individual is standing for re-election to the Board at that particular annual meeting,
shall automatically be issued 5,000 shares of Restricted Stock and granted a Non-Statutory Option
to purchase 7,500 shares of Common Stock, provided that such individual has served as an Eligible
Director for at least six (6) months. Notwithstanding the foregoing, all Eligible Directors at the
Corporation’s 2007 Annual Meeting of Stockholders will be entitled to receive the grants set forth
in this Section 5.1.A.1 even though they may not have served as an Eligible Director for six months
prior to the date of such annual meeting. There shall be no limit on the number of such annual
option grants and Restricted Stock Awards any one Eligible Director may receive over his or her
period of Board Service.

          2. Each individual who is first elected or appointed as an Eligible Director at any time on or
after the 2007 Annual Meeting of Stockholders, other than at an annual meeting of stockholders,
shall, on the date he or she commences Service as an Eligible Director, automatically be issued
5,000 shares of Restricted Stock and granted a Non-Statutory Option to purchase 7,500 shares of
Common Stock.

          3. Each such issuance of Restricted Stock pursuant to the Director Automatic Grant Program
shall be evidenced by a Restricted Stock Agreement that complies with the terms

20

 

specified below. Participants shall have no rights with respect to the shares of Restricted
Stock covered by a Restricted Stock Agreement until the Participant has executed and delivered to
the Corporation the applicable Restricted Stock Agreement.

     B. OPTION EXERCISE PRICE

          1. The exercise price per share for each option granted under this Article Five shall be equal
to one hundred percent (100%) of the Fair Market Value per share of Common Stock on the option
grant date.

          2. The exercise price shall be payable in one or more of the alternative forms authorized
under the Discretionary Option Grant Program. Except to the extent the sale and remittance
procedure specified thereunder is utilized, payment of the exercise price for the purchased shares
must be made on the Exercise Date.

     C. OPTION TERM. Each option shall have a term of seven (7) years measured from the option
grant date.

     D. EXERCISE AND VESTING OF OPTIONS. Each option shall be immediately exercisable and fully
vested as of the grant date for any or all of the option shares.

     E. TRANSFERABILITY OF OPTIONS. Each option granted under the Director Automatic Grant Program
may be assigned in whole or in part during the Optionee’s lifetime by gift or pursuant to a
domestic relations order to one or more Family Members of the Optionee or to a trust established
exclusively for Optionee and/or one or more such Family Members. The assigned portion may only be
exercised by the person or persons who acquire a proprietary interest in the option pursuant to the
assignment. The terms applicable to the assigned portion shall be the same as those in effect for
the option immediately prior to such assignment and shall be set forth in such documents issued to
the assignee as the Plan Administrator may deem appropriate. The Optionee may also designate one
or more persons as the beneficiary or beneficiaries of his or her outstanding options under this
Article Five, and those options shall, in accordance with such designation, automatically be
transferred to such beneficiary or beneficiaries upon the Optionee’s death while holding those
options. Such beneficiary or beneficiaries shall take the transferred options subject to all the
terms and conditions of the applicable agreement evidencing each such transferred option, including
(without limitation) the limited time period during which the option may be exercised following the
Optionee’s death.

     F. TERMINATION OF BOARD SERVICE. The following provisions shall govern the exercise of any
outstanding options under the Director Automatic Grant Program held by the Optionee at the time the
Optionee ceases to serve as a Board member:

          (i) Subject to (ii) below, the Optionee (or, in the event of Optionee’s death, the personal
representative of the Optionee’s estate or the person or persons to whom the option is transferred
pursuant to the Optionee’s will or the laws of inheritance or the designated beneficiary or
beneficiaries of such option) shall have a twelve (12)-month period following the date of such
cessation of Board service in which to exercise each such option.

21

 

          (ii) In no event shall the option remain exercisable after the expiration of the option term.
Upon the expiration of the twelve (12)-month exercise period or (if earlier) upon the expiration of
the option term, the option shall terminate and cease to be outstanding for any shares for which
the option has not been exercised.

     G. VESTING OF RESTRICTED STOCK. Each Restricted Stock Award under the Director Automatic
Grant Program shall vest in a series of three successive annual installments over the three-year
period measured from the grant date of such Award.

          1. The annual vesting dates for Restricted Stock Awards pursuant to Section 5.1.A.1 shall be
as follows:

               (i) 1,666 shares of Restricted Stock shall vest on the earlier of (i) the first anniversary of
the grant date of such Award or (ii) the day immediately preceding the date of the first annual
meeting of stockholders following the grant date of such Award;

               (ii) 1,666 shares of Restricted Stock shall vest on the earlier of (i) the second anniversary
of the grant date of such Award or (ii) the day immediately preceding the date of the second annual
meeting of stockholders following the grant date of such Award; and

               (iii) 1,667 shares of Restricted Stock shall vest on the earlier of (i) the third anniversary
of the grant date of such Award or (ii) the day immediately preceding the date of the third annual
meeting of stockholders following the grant date of such Award.

          2. The annual vesting dates for Restricted Stock Awards pursuant to Section 5.1.A.2 shall be
as follows:

               (i) 1,666 shares of Restricted Stock shall vest on the first anniversary of the grant date of
such Award;

               (ii) 1,666 shares of Restricted Stock shall vest on the second anniversary of the grant date
of such Award; and

               (iii) 1,667 shares of Restricted Stock shall vest on the third anniversary of the grant date
of such Award.

The Board member shall not vest in any additional shares of Restricted Stock following his or her
cessation of Service as a Board member; provided, however, that each Restricted Stock Award held by
an Eligible Director under the Director Automatic Grant Program will immediately vest in full upon
his or her cessation of Board Service by reason of death or Permanent Disability. Upon the
cessation of Service of any Board member while holding one or more unvested shares of Restricted
Stock issued under the Director Automatic Grant Program, those unvested shares of Restricted Stock
shall be immediately surrendered to the Corporation for cancellation, and the Board member shall
have no further stockholder rights with respect to those shares.

          3. Unvested shares of Restricted Stock may be issued in book entry or certificate form and
shall remain in the possession or control of the Corporation until such shares

22

 

have vested, and all other conditions and restrictions applicable to such shares have been
satisfied or lapse (including satisfaction of any applicable Withholding Tax), in accordance with
the terms of the Restricted Stock Agreement. If issued in certificate form, such certificates
shall include restrictive legends. A stock power endorsed in blank with respect to shares of
Restricted Stock whether or not certificated will be required.

     H. TRANSFERABILITY OF RESTRICTED STOCK. Unvested shares of Restricted Stock may not be
assigned, transferred, pledged or otherwise encumbered or disposed of other than by will or the
laws of inheritance following the Participant’s death. Upon vesting, and after all other
conditions and restrictions applicable to such shares of Restricted Stock have been satisfied or
lapse (including satisfaction of any applicable Withholding Tax) pursuant to the applicable
Restricted Stock Agreement, such shares of Restricted Stock shall become freely transferable
(subject to any restrictions under applicable securities laws) by Participant.

5.2. CORPORATE TRANSACTION/CHANGE IN CONTROL/HOSTILE TAKE-OVER

     A. In the event of a Corporate Transaction while the Eligible Director remains a Board member,
the following provisions shall apply:

          (i) Immediately following the consummation of the Corporate Transaction, each automatic option
grant shall terminate and cease to be outstanding, except to the extent assumed by the successor
corporation (or parent thereof) or otherwise continued in full force and effect pursuant to the
express terms of the Corporate Transaction.

          (ii) The shares of Restricted Stock subject to any outstanding Restricted Stock Award made to
such Eligible Director under the Director Automatic Grant Program which remain unvested at the time
of such Corporate Transaction shall, immediately prior to the effective date of the Corporate
Transaction, automatically vest in full.

     B. In the event of a Change in Control while the Eligible Director remains a Board member, the
following provisions shall apply:

          (i) Each automatic option grant to such Eligible Director under the Director Automatic Grant
Program shall remain exercisable for such option shares until the expiration or sooner termination
of the option term or the surrender of the option in connection with a Hostile Take-Over.

          (ii) The shares of Restricted Stock subject to any outstanding Restricted Stock Award made to
such Eligible Director under the Director Automatic Grant Program which remain unvested at the time
of such Change in Control shall, immediately prior to the effective date of the Change in Control,
automatically vest in full.

     C. Upon the occurrence of a Hostile Take-Over while the Eligible Director remains a Board
member, the Eligible Director shall have a thirty (30)-day period in which to surrender to the
Corporation each of his or her outstanding option grants under the Director Automatic Grant
Program. The Eligible Director shall in return be entitled to a cash distribution from the
Corporation in an amount equal to the excess of (i) the Take-Over Price of the shares of Common
Stock at the time subject to each surrendered option (whether or not the Eligible

23

 

Director is otherwise at the time vested in those shares) over (ii) the aggregate exercise
price payable for such shares. Such cash distribution shall be paid within five (5) days following
the surrender of the option to the Corporation. No approval or consent of the Board or any Plan
Administrator shall be required at the time of the actual option surrender and cash distribution.

     D. Each option which is assumed in connection with a Corporate Transaction or otherwise
continued in full force or effect shall be appropriately adjusted, immediately after such Corporate
Transaction, to apply to the number and class of securities which would have been issuable to the
Eligible Director in consummation of such Corporate Transaction had the option been exercised
immediately prior to such Corporate Transaction. Appropriate adjustments to reflect such Corporate
Transaction shall also be made to (i) the exercise price payable per share under each outstanding
option, provided the aggregate exercise price payable for such securities shall remain the same and
(ii) the number and/or class of securities for which grants are subsequently to be made under the
Director Automatic Grant Program to new and continuing Eligible Directors. To the extent the
actual holders of the Corporation’s outstanding Common Stock receive cash consideration for their
Common Stock in consummation of the Corporate Transaction, the successor corporation may, in
connection with the assumption of the outstanding options under the Director Automatic Grant
Program, substitute one or more shares of its own common stock with a fair market value equivalent
to the cash consideration paid per share of Common Stock in such Corporate Transaction.

     E. The existence of any Awards under the Director Automatic Grant Program shall in no way
affect the right of the Corporation to adjust, reclassify, reorganize or otherwise change its
capital or business structure or to merge, consolidate, dissolve, liquidate or sell or transfer all
or any part of its business or assets.

5.3. REMAINING TERMS

     A. The remaining terms of each option granted under the Director Automatic Grant Program shall
be the same as the terms in effect for option grants made under the Discretionary Option Grant
Program.

     B. The remaining terms of each Restricted Stock Award under the Director Automatic Grant
Program shall be the same as the terms in effect for Restricted Stock Awards under the Restricted
Stock Program.

ARTICLE SIX

MISCELLANEOUS

6.1. TAX WITHHOLDING

     A. The Corporation’s obligation to deliver shares of Common Stock upon the issuance, exercise
or vesting of Awards under the Plan shall be subject to the satisfaction of all applicable federal,
state and local income and employment tax withholding requirements.

     B. The Plan Administrator may, in its discretion, provide any or all Optionees or Participants
to whom Awards are made under the Plan (other than Awards made under the

24

 

Director Automatic Grant Program) with the right to use either or both of the following
methods to satisfy all or part of the Withholding Taxes to which those holders may become subject
in connection with the issuance, exercise or vesting of those Awards:

          Stock Withholding: The election to have the Corporation withhold, from the shares of Common
Stock otherwise issuable upon the issuance, exercise or vesting of those Awards, a portion of those
shares with an aggregate Fair Market Value equal to the percentage of the Withholding Taxes (not to
exceed one hundred percent (100%)) designated by the Optionee or Participant and make a cash
payment equal to such Fair Market Value directly to the appropriate taxing authorities on such
individual’s behalf.

          Stock Delivery: The election to deliver to the Corporation, at the time the Award is issued,
exercised or vests, one or more shares of Common Stock previously acquired by such Optionee or
Participant (other than in connection with the option issuance, exercise or vesting triggering the
Withholding Taxes) with an aggregate Fair Market Value equal to the percentage of the Withholding
Taxes (not to exceed one hundred percent (100%)) designated by such holder. The shares of Common
Stock so delivered shall not be added to the shares of Common Stock authorized for issuance under
the Plan.

6.2. EFFECTIVE DATE AND TERM OF THE PLAN

     A. The Plan became effective on the Plan Effective Date. Awards may be granted under the
Discretionary Option Grant Program, the Restricted Stock Program, the Restricted Stock Unit Program
and the Director Automatic Grant Program.

     B. The Plan shall serve as the successor to the Predecessor Plans, and no further option
grants shall be made under the Predecessor Plans after the Plan Effective Date. All options
outstanding under the Predecessor Plans on the Plan Effective Date were incorporated into the Plan
at that time and shall be treated as outstanding options under the Plan. However, each outstanding
option so incorporated shall continue to be governed solely by the terms of the documents
evidencing such option, and no provision of the Plan shall be deemed to affect or otherwise modify
the rights or obligations of the holders of such incorporated options with respect to their
acquisition of shares of Common Stock.

     C. One or more provisions of the Plan, including (without limitation) the option/vesting
acceleration provisions of Article Two relating to Corporate Transactions, Change in Control and
Hostile Take-Over may, in the Plan Administrator’s discretion, be extended to one or more options
incorporated from the Predecessor Plans which do not otherwise contain such provisions.

     D. The Plan was amended and restated by the Board on February 5, 2009 (the “2009
Restatement”), subject to stockholder approval at the 2009 Annual Meeting of Stockholders, to (i)
extend the term of the Plan through February 5, 2019; (ii) establish minimum vesting periods for
Restricted Stock issued under the Restricted Stock Program and Restricted Stock Units issued under
the Restricted Stock Unit Program; (iii) limit discretionary acceleration of established vesting
schedules by the Plan Administrator for Restricted Stock issued under the Restricted Stock Program
and Restricted Stock Units issued under the Restricted Stock Unit Program; and

25

 

(iv) effect various technical and clarifying revisions to facilitate administration of the
Plan. Such revisions shall not become effective unless the stockholders approve the 2009
Restatement at the 2009 Annual Meeting of Stockholders. Should the Corporation’s stockholders not
approve the 2009 Restatement at the 2009 Annual Meeting of Stockholders, then none of the changes
and revisions effected to the Plan by the 2009 Restatement shall become effective. The Plan will,
however, continue in effect as it existed immediately prior to February 5, 2009, and Awards will
continue to be made under the Plan until all the shares available for issuance under the Plan have
been issued pursuant to Awards made under the Plan. In addition, the Director Automatic Grant
Program will continue in effect in accordance with the provisions of that program as they existed
immediately prior to February 5, 2009.

     E. The Plan shall terminate upon the earliest to occur of (i) February 5, 2019, (ii) the date
on which all shares available for issuance under the Plan shall have been issued as fully- vested
shares or (iii) the termination of all outstanding Awards in connection with a Corporate
Transaction. Should the Plan terminate on February 5, 2019, then all Awards outstanding at that
time shall continue to have force and effect in accordance with the provisions of the documents
evidencing such Awards.

6.3. AMENDMENT OF THE PLAN.

     Except as provided below, the Board shall have complete and exclusive power and authority to
amend, modify, suspend or terminate the Plan in any or all respects. However, no such amendment,
modification, suspension or termination shall adversely affect the rights and obligations with
respect to Awards at the time outstanding under the Plan unless the Optionee or the Participant
consents to such amendment or modification or, unless approved by the stockholders, permit the Plan
Administrator to reset the exercise price of outstanding options or grant new Awards in exchange
for the cancellation of outstanding options with a higher exercise price. In addition, stockholder
approval will be required for any amendment to the Plan that would (i) materially increase the
benefits accruing to the Optionees and Participants under the Plan or materially reduce the price
at which shares of Common Stock may be issued or purchased under the Plan, (ii) materially increase
the aggregate number of securities that may be issued under the Plan, (iii) materially modify the
requirements as to eligibility for participation in the Plan, (iv) materially extend the term of
the Plan or (v) expand the type of awards available for issuance under the Plan, then to the extent
required by applicable law, or deemed necessary or advisable by the Plan Administrator or the Board
of Directors, such amendment shall be subject to stockholder approval.

6.4. USE OF PROCEEDS

     Any cash proceeds received by the Corporation from the sale of shares of Common Stock under
the Plan shall be used for general corporate purposes.

6.5. REGULATORY APPROVALS

     A. The implementation of the Plan, the grant of any Award and the issuance of shares of Common
Stock in connection with the issuance, exercise or vesting of any Award shall be subject to the
Corporation’s procurement of all approvals and permits required by regulatory

26

 

authorities having jurisdiction over the Plan, Awards made under the Plan and the shares of
Common Stock issuable pursuant to those Awards.

     B. No shares of Common Stock or other assets shall be issued or delivered under the Plan
unless and until there shall have been compliance with all applicable requirements of Federal and
state securities laws, including the filing and effectiveness of the Form S-8 registration
statement for the shares of Common Stock issuable under the Plan, and all applicable listing
requirements of any stock exchange on which Common Stock is then listed for trading.

6.6. NO EMPLOYMENT/SERVICE RIGHTS

     Nothing in the Plan shall confer upon the Optionee or the Participant any right to continue in
Service for any period of specific duration or interfere with or otherwise restrict in any way the
rights of the Corporation (or any Parent or Subsidiary employing or retaining such person) or of
the Optionee or the Participant, which rights are hereby expressly reserved by each, to terminate
such person’s Service at any time for any reason, with or without cause.

27

 

APPENDIX

     The following definitions shall be in effect under the Plan:

     A. Award shall mean any of the following stock or stock-based awards authorized for
issuance or grant under the Plan: stock option, stock appreciation right, Restricted Stock or
Restricted Stock Unit award.

     B. Board shall mean the Corporation’s Board of Directors.

     C. Change in Control shall mean a change in ownership or control of the Corporation
effected through either of the following transactions:

          (i) the acquisition, directly or indirectly by any person or related group of persons (other
than the Corporation or a person that directly or indirectly controls, is controlled by, or is
under common control with, the Corporation), of beneficial ownership (within the meaning of Rule
13d-3 of the 1934 Act) of securities possessing more than fifty percent (50%) of the total combined
voting power of the Corporation’s outstanding securities pursuant to a tender or exchange offer
made directly to the Corporation’s stockholders, or

          (ii) a change in the composition of the Board over a period of thirty-six (36) consecutive
months or less such that a majority of the Board members ceases, by reason of one or more contested
elections for Board membership, to be comprised of individuals who either (A) have been Board
members continuously since the beginning of such period or (B) have been elected or nominated for
election as Board members during such period by at least a majority of the Board members described
in clause (A) who were still in office at the time the Board approved such election or nomination.

     D. Code shall mean the Internal Revenue Code of 1986, as amended.

     E. Common Stock shall mean the Corporation’s common stock.

     F. Corporate Transaction shall mean either of the following stockholder- approved
transactions to which the Corporation is a party:

          (i) a merger or consolidation in which securities possessing more than fifty percent (50%) of
the total combined voting power of the Corporation’s outstanding securities are transferred to a
person or persons different from the persons holding those securities immediately prior to such
transaction, or

          (ii) the sale, transfer or other disposition of all or substantially all of the Corporation’s
assets in complete liquidation or dissolution of the Corporation.

     G. Corporation shall mean Quiksilver, Inc., a Delaware corporation, and any corporate
successor to all or substantially all of the assets or voting stock of Quiksilver, Inc. which shall
by appropriate action adopt the Plan.

28

 

     H. Director Automatic Grant Program shall mean the director automatic grant program in
effect under Article Five of the Plan for the Eligible Directors.

     I. Discretionary Option Grant Program shall mean the discretionary option grant
program in effect under Article Two of the Plan.

     J. Eligible Director shall mean a Board member who is not, at the time of such
determination, an employee of the Corporation (or any Parent or Subsidiary) and who is accordingly
eligible to participate in the Director Automatic Grant Program in accordance with the eligibility
provisions of Articles One and Five.

     K. Employee shall mean an individual who is in the employ of the Corporation (or any
Parent or Subsidiary), subject to the control and direction of the employer entity as to both the
work to be performed and the manner and method of performance.

     L. Exercise Date shall mean the date on which the Corporation shall have received
written notice of the option exercise.

     M. Fair Market Value per share of Common Stock on any relevant date shall be
determined in accordance with the following provisions:

          (i) If the Common Stock is at the time traded on the Nasdaq Global Select Market (or the
Nasdaq Global Market), then the Fair Market Value shall be the closing selling price per share of
Common Stock at the close of regular hours trading (i.e., before after-hours trading begins) on the
Nasdaq Global Stock Market (or the Nasdaq Global Market) on the date in question, as such price is
reported by The Wall Street Journal. If there is no closing selling price for the Common Stock on
the date in question, then the Fair Market Value shall be the closing selling price on the last
preceding date for which such quotation exists.

          (ii) If the Common Stock is at the time listed on any other Stock Exchange, then the Fair
Market Value shall be the closing selling price per share of Common Stock at the close of regular
hours trading (i.e., before after-hours trading begins) on the date in question on the Stock
Exchange determined by the Plan Administrator to be the primary market for the Common Stock, as
such price is officially quoted in the composite tape of transactions on such exchange. If there
is no closing selling price for the Common Stock on the date in question, then the Fair Market
Value shall be the closing selling price on the last preceding date for which such quotation
exists.

          (iii) If the Common Stock is at the time not listed on any established stock exchange,
the Fair Market Value shall be determined by the Board in good faith.

     N. Family Member means, with respect to a particular Optionee or Participant, any
child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling,
niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law or
sister-in-law.

     O. Hostile Take-Over shall mean the acquisition, directly or indirectly, by any person
or related group of persons (other than the Corporation or a person that directly or

29

 

indirectly controls, is controlled by, or is under common control with, the Corporation) of
beneficial ownership (within the meaning of Rule 13d-3 of the 1934 Act) of securities possessing
more than fifty percent (50%) of the total combined voting power of the Corporation’s outstanding
securities pursuant to a tender or exchange offer made directly to the Corporation’s stockholders
which the Board does not recommend such stockholders to accept.

     P. Incentive Option shall mean an option which satisfies the requirements of Code
Section 422.

     Q. Involuntary Termination shall mean the termination of the Service of any individual
which occurs by reason of:

          (i) such individual’s involuntary dismissal or discharge by the Corporation for reasons other
than Misconduct, or

          (ii) such individual’s voluntary resignation following (A) a change in his or her position
with the Corporation which materially reduces his or her duties and responsibilities or the level
of management to which he or she reports, (B) a reduction in his or her level of compensation
(including base salary, fringe benefits and target bonus under any corporate-performance based
bonus or incentive programs) by more than twenty percent (20%) or (C) a relocation of such
individual’s place of employment by more than fifty (50) miles, provided and only if such change,
reduction or relocation is effected by the Corporation without the individual’s consent.

     R. Misconduct shall mean the commission of any act of fraud, embezzlement or
dishonesty by the Optionee or Participant, any unauthorized use or disclosure by such person of
confidential information or trade secrets of the Corporation (or any Parent or Subsidiary), or any
other intentional misconduct by such person adversely affecting the business or affairs of the
Corporation (or any Parent or Subsidiary) in a material manner. The foregoing definition shall not
be deemed to be inclusive of all the acts or omissions which the Corporation (or any Parent or
Subsidiary) may consider as grounds for the dismissal or discharge of any Optionee, Participant or
other person in the Service of the Corporation (or any Parent or Subsidiary).

     S. 1934 Act shall mean the Securities Exchange Act of 1934, as amended.

     T. Non-Statutory Option shall mean an option not intended to satisfy the requirements
of Code Section 422.

     U. Optionee shall mean any person to whom an option is granted under the Discretionary
Option Grant or Director Automatic Grant Program.

     V. Parent shall mean any corporation (other than the Corporation) in an unbroken chain
of corporations ending with the Corporation, provided each corporation in the unbroken chain (other
than the Corporation) owns, at the time of the determination, stock possessing fifty percent (50%)
or more of the total combined voting power of all classes of stock in one of the other corporations
in such chain.

30

 

     W. Participant shall mean any person who is issued shares of Restricted Stock under
the Restricted Stock Program or under the Director Automatic Grant Program, and any person who is
issued Restricted Stock Units under the Restricted Stock Unit Program.

     X. Permanent Disability Or Permanently Disabled shall mean the inability of the
Optionee or the Participant to engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment which is both (i) expected to result in death
or determined to be total and permanent by two (2) physicians selected by the Corporation or its
insurers and acceptable to the Optionee or the Participant (or the Optionee’s or Participant’s
legal representative), and (ii) to the extent the Optionee is eligible to participate in the
Corporation’s long-term disability plan, entitles the Optionee or the Participant to the payment of
long-term disability benefits from the Corporation’s long-term disability plan. The process for
determining a Permanent Disability in accordance with the foregoing shall be completed no later
than the later of (i) the close of the calendar year in which the Optionee’s or the Participant’s
Service terminates by reason of the physical or mental impairment triggering the determination
process or (ii) the fifteenth day of the third calendar month following such termination of
Service. However, solely for purposes of the Director Automatic Grant Program, Permanent Disability
or Permanently Disabled shall mean the inability of the Eligible Director to perform his or her
usual duties as a Board member by reason of any medically determinable physical or mental
impairment expected to result in death or to be of continuous duration of twelve (12) months or
more.

     Y. Plan shall mean the Corporation’s 2000 Stock Incentive Plan, as amended and
restated and set forth in this document.

     Z. Plan Administrator shall mean the particular entity, whether the Primary Committee,
the Board or the Secondary Committee, which is authorized to administer the Discretionary Option
Grant, Restricted Stock and Restricted Stock Unit Programs with respect to one or more classes of
eligible persons, to the extent such entity is carrying out its administrative functions under
those programs with respect to the persons under its jurisdiction.

     AA. Plan Effective Date shall mean March 31, 2000.

     BB. Predecessor Plans shall mean the Corporation’s (i) 1996 Stock Option Plan, (ii)
the 1998 Nonemployee Directors’ Stock Option Plan, (iii) the 1995 Nonemployee Directors’ Stock
Option Plan and (iv) the 1992 Nonemployee Directors’ Stock Option Plan, as each of those plans was
in effect immediately prior to the Plan Effective Date hereunder.

     CC. Primary Committee shall mean the committee of two (2) or more Eligible Directors
appointed by the Board to administer the Discretionary Option Grant, Restricted Stock and
Restricted Stock Unit Programs with respect to Section 16 Insiders.

     DD. Restricted Stock shall mean shares of Common Stock issued to a Participant
pursuant to the Restricted Stock or Director Automatic Grant Program, subject to such restrictions
and conditions as are established pursuant to such Restricted Stock or Director Automatic Grant
Program.

31

 

     EE. Restricted Stock Agreement shall mean the agreement entered into by the
Corporation and the Participant at the time of grant of Restricted Stock under the Restricted Stock
or Automatic Director Grant Programs.

     FF. Restricted Stock Program shall mean the discretionary Restricted Stock program
under Article Three of the Plan.

     GG. Restricted Stock Unit shall mean the right to receive one share of Common Stock
issued pursuant to the Restricted Stock Unit Program, subject to such restrictions and conditions
as are established pursuant to the Restricted Stock Unit Program.

     HH. Restricted Stock Unit Agreement shall mean the agreement entered into by the
Corporation and the Participant at the time of grant of Restricted Stock Units under the Restricted
Stock Unit Program.

     II. Restricted Stock Unit Program shall mean the discretionary Restricted Stock Unit
program under Article Four of the Plan.

     JJ. Secondary Committee shall mean a committee of one or more Board members appointed
by the Board to administer the Discretionary Option Grant, Restricted Stock and Restricted Stock
Unit Programs with respect to eligible persons other than Section 16 Insiders.

     KK. Section 16 Insider shall mean an officer or director of the Corporation subject to
the short-swing profit liability provisions of Section 16 of the 1934 Act.

     LL. Service shall mean the performance of services for the Corporation (or any Parent
or Subsidiary) by a person in the capacity of an Employee, an Eligible Director or a consultant or
independent advisor, except to the extent otherwise specifically provided in the documents
evidencing the Award made to such person. For purposes of the Plan, an Optionee or Participant
shall be deemed to cease Service immediately upon the occurrence of either of the following events:
(i) the Optionee or Participant no longer performs services in any of the foregoing capacities for
the Corporation or any Parent or Subsidiary; or (ii) the entity for which the Optionee or
Participant is performing such services ceases to remain a Parent or Subsidiary of the Corporation,
even though the Optionee or Participant may subsequently continue to perform services for that
entity.

     MM. Stock Exchange shall mean the American Stock Exchange, the Nasdaq Global Select
Market, the Nasdaq Global Market or the New York Stock Exchange.

     NN. Subsidiary shall mean any corporation (other than the Corporation) in an unbroken
chain of corporations beginning with the Corporation, provided each corporation (other than the
last corporation) in the unbroken chain owns, at the time of the determination, stock possessing
fifty percent (50%) or more of the total combined voting power of all classes of stock in one of
the other corporations in such chain.

     OO. Take-Over Price shall mean the greater of (i) the Fair Market Value per share of
Common Stock on the date the option is surrendered to the Corporation in connection with a Hostile
Take-Over or (ii) the highest reported price per share of Common Stock paid by the

32

 

tender offeror in effecting such Hostile Take-Over through the acquisition of Common Stock.
However, if the surrendered option is an Incentive Option, the Take-Over Price shall not exceed the
clause (i) price per share.

     PP. 10% Stockholder shall mean the owner of stock (as determined under Code Section
424(d)) possessing more than ten percent (10%) of the total combined voting power of all classes of
stock of the Corporation (or any Parent or Subsidiary).

     QQ. Withholding Taxes shall mean the federal, state and local income and employment
withholding taxes to which the Optionee or Participant may become subject in connection with the
issuance, exercise or vesting of an Award made to him or her under the Plan.

33

 

NOTICE OF GRANT OF STOCK OPTION

(Standard Employee Form)

     Notice is hereby given of the following option grant (the “Option”) to purchase shares of the
Common Stock of Quiksilver, Inc. (the “Corporation”):

	 	 	 	 	 	 	 
	Optionee:

	 	 	 	Grant Date:
	 	 
	Number of Options Shares:

	 	 	 	Exercise Price:
	 	 
	Type of Option:

	 	o Incentive Stock Option
	 	Expiration Date:
	 	 
	 

	 	o Non-Statutory Stock Option	 	 	 	 

     Exercise and Vesting Schedule: Subject to the limitations contained in this Option
and the Plan, this Option shall vest and become exercisable in installments as follows:

	 	 	 
	Number of Shares	 	Date of Earliest Exercise
	(Installment)	 	(Vesting)
	 	 	 

     In no event shall the Option become exercisable for any additional Option Shares after
Optionee’s cessation of Service.

     Optionee understands and agrees that the Option is granted subject to and in accordance with
the terms of the Quiksilver, Inc. amended and restated 2000 Stock Incentive Plan (the “Plan”).
Optionee further agrees to be bound by the terms of the Plan and the terms of the Option as set
forth in the Stock Option Agreement attached hereto as Exhibit A. Optionee hereby
acknowledges the receipt of a copy of the official prospectus for the Plan in the form attached
hereto as Exhibit B. A copy of the Plan is available upon request made to the Corporate
Secretary at the Corporation’s principal offices.

     Employment at Will. Nothing in this Notice or in the attached Stock Option Agreement
or in the Plan shall confer upon Optionee any right to continue in Service for any period of
specific duration or interfere with or otherwise restrict in any way the rights of the Corporation
(or any Parent or Subsidiary employing or retaining Optionee) or of Optionee, which rights are
hereby expressly reserved by each, to terminate Optionee’s Service at any time for any reason, with
or without cause.

     Definitions. All capitalized terms in this Notice shall have the meaning assigned to
them in this Notice or in the attached Stock Option Agreement.

	 	 	 	 	 	 	 	 	 	 	 	 	 
	Date:
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 

	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	QUIKSILVER, INC.	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	OPTIONEE	 	 	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 

	 	 
	Address:	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	ATTACHMENTS	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Exhibit A — Stock Option Agreement	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 

 

EXHIBIT A

QUIKSILVER, INC.

STOCK OPTION AGREEMENT

RECITALS

          A. The Board has adopted the Plan for the purpose of retaining the services of selected
Employees, non-employee members of the Board (or the board of directors of any Parent or
Subsidiary) and consultants and other independent advisors who provide services to the Corporation
(or any Parent or Subsidiary).

          B. Optionee is to render valuable services to the Corporation (or a Parent or Subsidiary), and
this Agreement is executed pursuant to, and is intended to carry out the purposes of, the Plan in
connection with the Corporation’s grant of an option to Optionee.

          C. All capitalized terms in this Agreement shall have the meaning assigned to them in the
attached Appendix.

          NOW, THEREFORE, it is hereby agreed as follows:

          1. Grant of Option. The Corporation hereby grants to Optionee, as of the Grant Date,
an option to purchase up to the number of Option Shares specified in the Grant Notice. The Option
Shares shall be purchasable from time to time during the option term specified in Paragraph 2 at
the Exercise Price.

          2. Option Term. This option shall have a maximum term of ten (10) years measured from
the Grant Date and shall accordingly expire at the close of business on the Expiration Date, unless
sooner terminated in accordance with Paragraph 5 or 6.

          3. Limited Transferability.

               (a) If this option is designated a Non-Statutory Option in the Grant Notice, then this option
may be assigned in whole or in part during Optionee’s lifetime only by gift or pursuant to a
domestic relations order to one or more Family Members of the Optionee or to a trust established
for the exclusive benefit of Optionee and/or one or more such Family Members. The assigned portion
shall be exercisable only by the person or persons who acquire a proprietary interest in the option
pursuant to such assignment. The terms applicable to the assigned portion shall be the same as
those in effect for this option immediately prior to such assignment.

               (b) Except as provided in Paragraph 3(a) above, this option shall be neither transferable nor
assignable by Optionee other than by will or the laws of inheritance following Optionee’s death and
may be exercised, during Optionee’s lifetime, only by Optionee. However, Optionee may designate
one or more persons as the beneficiary or beneficiaries of this option, and this option shall, in
accordance with such designation, automatically be transferred to

A-1
(Employee Form)

 

such beneficiary or beneficiaries upon the Optionee’s death while holding this option. Such
beneficiary or beneficiaries shall take the transferred option subject to all the terms and
conditions of this Agreement, including (without limitation) the limited time period during which
this option may, pursuant to Paragraph 5, be exercised following Optionee’s death.

          4. Dates of Exercise. This option shall become exercisable for the Option Shares in
one or more installments as specified in the Grant Notice. As the option becomes exercisable for
such installments, those installments shall accumulate, and the option shall remain exercisable for
the accumulated installments until the Expiration Date or sooner termination of the option term
under Paragraph 5 or 6. Notwithstanding the foregoing, should the Optionee elect to exercise this
option during any period during which the Optionee is under investigation by the Corporation for
Misconduct, then any Option Shares acquired by the Optionee as a result of such exercise and/or the
net proceeds of any sale or sales of those acquired Option Shares (the gross sale proceeds less any
Exercise Price payment or withholding taxes due the Corporation in broker commissions) during such
period shall be held by the Corporation in escrow until such time as the investigation is
satisfactorily completed.

          5. Cessation of Service/Termination of Option. The option term specified in Paragraph
2 shall terminate (and this option shall cease to be outstanding) prior to the Expiration Date
should any of the following provisions become applicable:

               (a) Should Optionee cease to remain in Service for any reason (other than death, Permanent
Disability or Misconduct) while holding this option, then Optionee shall have a period of three (3)
months (commencing with the date of such cessation of Service) during which to exercise this
option, but in no event shall this option be exercisable at any time after the Expiration Date.

               (b) Should Optionee die while holding this option, then the personal representative of
Optionee’s estate or the person or persons to whom the option is transferred pursuant to Optionee’s
will or the laws of inheritance shall have the right to exercise this option. However, if Optionee
has designated one or more beneficiaries of this option, then those persons shall have the
exclusive right to exercise this option following Optionee’s death. Any such right to exercise
this option shall lapse, and this option shall cease to be outstanding, upon the earlier of
(i) the expiration of the twelve (12)-month period measured from the date of Optionee’s death or
(ii) the Expiration Date.

               (c) Should Optionee cease Service by reason of Permanent Disability while holding this option,
then Optionee shall have a period of twelve (12) months (commencing with the date of such cessation
of Service) during which to exercise this option. In no event shall this option be exercisable at
any time after the Expiration Date.

               (d) The applicable post-Service exercise period in effect for this option pursuant to the
foregoing provisions of this Paragraph 5 shall automatically be extended by an additional period of
time equal in duration to any interval within that otherwise applicable post-Service exercise
period in which the exercise of this option or the immediate sale of the Option Shares acquired
hereunder cannot be effected in compliance with applicable federal and state

A-2
(Employee Form)

 

securities laws, but in no event shall such an extension result in the continuation of this option
beyond the Expiration Date.

               (e) During the limited period of post-Service exercisability, this option may not be exercised
in the aggregate for more than the number of Option Shares for which the option is exercisable at
the time of Optionee’s cessation of Service. Upon the expiration of such limited exercise period
or (if earlier) upon the Expiration Date, this option shall terminate and cease to be outstanding
for any exercisable Option Shares for which the option has not been exercised. However, this
option shall, immediately upon Optionee’s cessation of Service for any reason, terminate and cease
to be outstanding with respect to any Option Shares for which this option is not otherwise at that
time exercisable.

               (f) Should Optionee’s Service be terminated for Misconduct or should Optionee otherwise engage
in any Misconduct while this option is outstanding, then this option shall terminate immediately
and cease to remain outstanding.

          6.
Special Acceleration of Option.

               (a) This option, to the extent outstanding at the time of a Corporate Transaction but not
otherwise fully exercisable, shall NOT vest or become exercisable on an accelerated basis if and to
the extent: (i) this option is, in connection with the Corporate Transaction, to be assumed by the
successor corporation (or parent thereof) or otherwise continued in full force and effect pursuant
to the terms of the Corporate Transaction or (ii) this option is to be replaced with a cash
incentive program of the successor corporation which preserves the spread existing at the time of
the Corporate Transaction on any Option Shares for which this option is not otherwise at that time
exercisable (the excess of the Fair Market Value of those Option Shares over the aggregate Exercise
Price payable for such shares) and provides for subsequent payout in accordance with the same
option exercise/vesting schedule for those Option Shares set forth in the Grant Notice. However,
if none of the foregoing conditions apply to this option at the time of the Corporate Transaction,
then this option shall automatically accelerate so that such option shall, immediately prior to the
effective date of that Corporate Transaction, become exercisable for all the shares of Common Stock
at the time subject to this option and may be exercised for any or all of those shares as fully
vested shares of Common Stock.

               (b) Immediately following the Corporate Transaction, this option shall terminate and cease to
be outstanding, except to the extent assumed by the successor corporation (or parent thereof) in
connection with the Corporate Transaction or otherwise continued in full force and effect pursuant
to the terms of the Corporate Transaction.

               (c) If this option is assumed in connection with a Corporate Transaction or otherwise
continued in effect, then this option shall be appropriately adjusted, immediately after such
Corporate Transaction, to apply to the number and class of securities which would have been
issuable to Optionee in consummation of such Corporate Transaction had the option been exercised
immediately prior to such Corporate Transaction, and appropriate adjustments shall also be made to
the Exercise Price, provided the aggregate Exercise Price shall remain the same. To the
extent the actual holders of the Corporation’s outstanding Common

A-3
(Employee Form)

 

Stock receive cash consideration for their Common Stock in consummation of the Corporate
Transaction, the successor corporation may, in connection with the assumption of this option,
substitute one or more shares of its own common stock with a fair market value equivalent to the
cash consideration paid per share of Common Stock in such Corporate Transaction.

               (d) This Agreement shall not in any way affect the right of the Corporation to adjust,
reclassify, reorganize or otherwise change its capital or business structure or to merge,
consolidate, dissolve, liquidate or sell or transfer all or any part of its business or assets.

          7.
Adjustment in Option Shares. Should any change be made to the Common Stock by
reason of any stock split, stock dividend, recapitalization, combination of shares, exchange of
shares or other change affecting the outstanding Common Stock as a class without the Corporation’s
receipt of consideration, appropriate adjustments shall be made to (i) the total number and/or
class of securities subject to this option and (ii) the Exercise Price in order to reflect such
change and thereby preclude a dilution or enlargement of benefits hereunder.

          8.

Stockholder Rights. The holder of this option shall not have any stockholder
rights with respect to the Option Shares until such person shall have exercised the option, paid
the Exercise Price and become a holder of record of the purchased shares.

          9. Manner of Exercising Option.

               (a) In order to exercise this option with respect to all or any part of the Option Shares for
which this option is at the time exercisable, Optionee (or any other person or persons exercising
the option) must take the following actions:

                    (i) Execute and deliver to the Corporation a Notice of Exercise for the Option Shares for
which the option is exercised.

                    (ii) Pay the aggregate Exercise Price for the purchased shares in one or more of the following
forms:

                         (A) cash or check made payable to the Corporation;

                         (B) shares of Common Stock valued at Fair Market Value on the Exercise Date and held by
Optionee (or any other person or persons exercising the option) for the period, if any, necessary
to avoid any charge to the Corporation’s earnings for financial reporting purposes; or

                         (C) through a special sale and remittance procedure pursuant to which Optionee (or any other
person or persons exercising the option) shall concurrently provide irrevocable instructions to (i)
a Corporation-designated brokerage firm to effect the immediate sale of the purchased shares and
remit to the Corporation, out of the sale proceeds available on the settlement date, sufficient
funds to cover the aggregate Exercise Price payable for the purchased shares plus all applicable
Federal, state and local income and employment taxes required to be withheld by the Corporation by
reason of such exercise and

A-4
(Employee Form)

 

(ii) the Corporation to deliver the certificates for the purchased shares directly to such
brokerage firm in order to complete the sale.

               Except to the extent the sale and remittance procedure is utilized in connection with the
option exercise, payment of the Exercise Price must accompany the Notice of Exercise delivered to
the Corporation in connection with the option exercise.

                    (iii) Furnish to the Corporation appropriate documentation that the person or persons
exercising the option (if other than Optionee) have the right to exercise this option.

                    (iv) Make appropriate arrangements with the Corporation (or Parent or Subsidiary employing or
retaining Optionee) for the satisfaction of all Federal, state and local income and employment tax
withholding requirements applicable to the option exercise.

               (b) As soon as practical after the Exercise Date, the Corporation shall issue to or on behalf
of Optionee (or any other person or persons exercising this option) a certificate for the purchased
Option Shares, with the appropriate legends affixed thereto.

               (c) In no event may this option be exercised for any fractional shares.

          10.
Compliance with Laws and Regulations.

               (a) The exercise of this option and the issuance of the Option Shares upon such exercise shall
be subject to compliance by the Corporation and Optionee with all applicable requirements of law
relating thereto and with all applicable regulations of any stock exchange (or over-the-counter
market, if applicable) on which the Common Stock may be listed for trading at the time of such
exercise and issuance.

               (b) The inability of the Corporation to obtain approval from any regulatory body having
authority deemed by the Corporation to be necessary to the lawful issuance and sale of any Common
Stock pursuant to this option shall relieve the Corporation of any liability with respect to the
non-issuance or sale of the Common Stock as to which such approval shall not have been obtained.
The Corporation, however, shall use its best efforts to obtain all such approvals.

          11. Successors and Assigns. Except to the extent otherwise provided in Paragraphs 3
and 6, the provisions of this Agreement shall inure to the benefit of, and be binding upon, the
Corporation and its successors and assigns and Optionee, Optionee’s assigns, the legal
representatives, heirs and legatees of Optionee’s estate and any beneficiaries of this option
designated by Optionee.

          12. Notices. Any notice required to be given or delivered to the Corporation under
the terms of this Agreement shall be in writing and addressed to the Corporation at its principal
corporate offices. Any notice required to be given or delivered to Optionee shall be in writing
and addressed to Optionee at the address indicated below Optionee’s signature line on

A-5
(Employee Form)

 

the Grant Notice. All notices shall be deemed effective upon personal delivery or upon deposit in
the U.S. mail, postage prepaid and properly addressed to the party to be notified.

          13. Construction. This Agreement and the option evidenced hereby are made and granted
pursuant to the Plan and are in all respects limited by and subject to the terms of the Plan. All
decisions of the Plan Administrator with respect to any question or issue arising under the Plan or
this Agreement shall be conclusive and binding on all persons having an interest in this option.

          14. Governing Law. The interpretation, performance and enforcement of this Agreement
shall be governed by the laws of the State of California without resort to that State’s
conflict-of-laws rules.

          15. Excess Shares. If the Option Shares covered by this Agreement exceed, as of the
Grant Date, the number of shares of Common Stock which may without stockholder approval be issued
under the Plan, then this option shall be void with respect to those excess shares, unless
stockholder approval of an amendment sufficiently increasing the number of shares of Common Stock
issuable under the Plan is obtained in accordance with the provisions of the Plan.

          16. Additional Terms Applicable to an Incentive Option. In the event this option is
designated an Incentive Option in the Grant Notice, the following terms and conditions shall also
apply to the grant:

               (a) This option shall cease to qualify for favorable tax treatment as an Incentive Option if
(and to the extent) this option is exercised for one or more Option Shares: (A) more than three (3)
months after the date Optionee ceases to be an Employee for any reason other than death or
Permanent Disability or (B) more than twelve (12) months after the date Optionee ceases to be an
Employee by reason of Permanent Disability.

               (b) No installment under this option shall qualify for favorable tax treatment as an Incentive
Option if (and to the extent) the aggregate Fair Market Value (determined at the Grant Date) of the
Common Stock for which such installment first becomes exercisable hereunder would, when added to
the aggregate value (determined as of the respective date or dates of grant) of the Common Stock or
other securities for which this option or any other Incentive Options granted to Optionee prior to
the Grant Date (whether under the Plan or any other option plan of the Corporation or any Parent or
Subsidiary) first become exercisable during the same calendar year, exceed One Hundred Thousand
Dollars ($100,000) in the aggregate. Should such One Hundred Thousand Dollar ($100,000) limitation
be exceeded in any calendar year, this option shall nevertheless become exercisable for the excess
shares in such calendar year as a Non-Statutory Option.

               (c) Should the exercisability of this option be accelerated upon a Corporate Transaction, then
this option shall qualify for favorable tax treatment as an Incentive Option only to the extent the
aggregate Fair Market Value (determined at the Grant Date) of the Common Stock for which this
option first becomes exercisable in the calendar year in which the Corporate Transaction occurs
does not, when added to the aggregate value (determined as of the

A-6
(Employee Form)

 

respective date or dates of grant) of the Common Stock or other securities for which this option or
one or more other Incentive Options granted to Optionee prior to the Grant Date (whether under the
Plan or any other option plan of the Corporation or any Parent or Subsidiary) first become
exercisable during the same calendar year, exceed One Hundred Thousand Dollars ($100,000) in the
aggregate. Should the applicable One Hundred Thousand Dollar ($100,000) limitation be exceeded in
the calendar year of such Corporate Transaction, the option may nevertheless be exercised for the
excess shares in such calendar year as a Non-Statutory Option.

               (d) Should Optionee hold, in addition to this option, one or more other options to purchase
Common Stock which become exercisable for the first time in the same calendar year as this option,
then, for purposes of the foregoing limitations on the exercisability of such options as Incentive
Options, this option and each of those other options shall be deemed to become first exercisable in
that calendar year on the basis of the chronological order in which they were granted, except to
the extent otherwise provided under applicable law or regulation.

A-7
(Employee Form)

 

Exhibit A-1

NOTICE OF EXERCISE

          I hereby notify Quiksilver, Inc. (the “Corporation”) that I elect to purchase                      shares
of the Corporation’s Common Stock (the “Purchased Shares”) at the option exercise price of
$                     per share (the “Exercise Price”) pursuant to that certain option (the “Option”) granted
to me under the Corporation’s amended and restated 2000 Stock Incentive Plan on  
                   
                   ,
___

          Concurrently with the delivery of this Exercise Notice to the Corporation, I shall hereby pay
to the Corporation the Exercise Price for the Purchased Shares in accordance with the provisions of
my agreement with the Corporation (or other documents) evidencing the Option and shall deliver
whatever additional documents may be required by such agreement as a condition for exercise.
Alternatively, I may utilize the special broker-dealer sale and remittance procedure specified in
my agreement to effect payment of the Exercise Price.

	 	 	 	 	 	 	 	 
	                                        ,                     
	 	 	 	 	 	 
	Date
	 	 	 	 	 	 
	 	 	 	 	 

	 

	 	 	 	Optionee	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	Address:  	 	 
	 

	 	 	 	 	 	 

	 

	 	 	 	 	 	 

	 

	 	 	 	 	 	 

	Print name in exact manner it is to
	 	 	 	 	 	 
	appear on the stock certificate:	 	 	 	 

	 
	 	 	 	 	 	 
	Address to which certificate is to	 	 	 	 

	be sent, if different from address	 	 	 	 

	above:	 	 	 	 

	 
	 	 	 	 	 	 
	Social Security Number:	 	 	 	 

A-8
(Employee Form)

 

APPENDIX

          The following definitions shall be in effect under the Agreement:

          A. Agreement shall mean this Stock Option Agreement.

          B. Board shall mean the Corporation’s Board of Directors.

          C. Code shall mean the Internal Revenue Code of 1986, as amended.

          D. Common Stock shall mean shares of the Corporation’s common stock.

          E. Corporate Transaction shall mean either of the following stockholder-approved
transactions to which the Corporation is a party:

     (i) a merger or consolidation in which securities possessing more
than fifty percent (50%) of the total combined voting power of the
Corporation’s outstanding securities are transferred to a person or
persons different from the persons holding those securities immediately
prior to such transaction, or

     (ii) the sale, transfer or other disposition of all or substantially
all of the Corporation’s assets in complete liquidation or dissolution of
the Corporation.

          F. Corporation shall mean Quiksilver, Inc., a Delaware corporation, and any successor
corporation to all or substantially all of the assets or voting stock of Quiksilver, Inc. which
shall by appropriate action adopt the Plan.

          G. Employee shall mean an individual who is in the employ of the Corporation (or any
Parent or Subsidiary), subject to the control and direction of the employer entity as to both the
work to be performed and the manner and method of performance.

          H. Exercise Date shall mean the date on which the option shall have been exercised in
accordance with Paragraph 9 of the Agreement.

          I. Exercise Price shall mean the exercise price per Option Share as specified in the
Grant Notice.

          J. Expiration Date shall mean the date on which the option expires as specified in the
Grant Notice.

          K. Fair Market Value per share of Common Stock on any relevant date shall be
determined in accordance with the following provisions:

     (i) If the Common Stock is at the time traded on the Nasdaq Global
Select Market (or the Nasdaq Global Market), then the Fair Market Value
shall be the closing selling price per share of

A-9
(Employee Form)

 

Common Stock at the close of regular hours trading (i.e., before
after-hours trading begins) on the Nasdaq Global Stock Market (or the
Nasdaq Global Market) on the date in question, as such price is reported
by The Wall Street Journal. If there is no closing selling price for the
Common Stock on the date in question, then the Fair Market Value shall be
the closing selling price on the last preceding date for which such
quotation exists.

     (ii) If the Common Stock is at the time listed on any other Stock
Exchange, then the Fair Market Value shall be the closing selling price
per share of Common Stock at the close of regular hours trading (i.e.,
before after-hours trading begins) on the date in question on the Stock
Exchange determined by the Plan Administrator to be the primary market for
the Common Stock, as such price is officially quoted in the composite tape
of transactions on such exchange. If there is no closing selling price
for the Common Stock on the date in question, then the Fair Market Value
shall be the closing selling price on the last preceding date for which
such quotation exists.

     (iii) If the Common Stock is at the time not listed on any
established stock exchange, the Fair Market Value shall be determined by
the Board in good faith.

          L. Family Member shall mean, with respect to the Optionee, any child, stepchild,
grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew,
mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law or sister-in-law.

          M. Grant Date shall mean the date of grant of the option as specified in the Grant
Notice.

          N. Grant Notice shall mean the Notice of Grant of Stock Option accompanying the
Agreement, pursuant to which Optionee has been informed of the basic terms of the option evidenced
hereby.

          O. Incentive Option shall mean an option which satisfies the requirements of Code
Section 422.

          P. Misconduct shall mean the commission of any act of fraud, embezzlement or
dishonesty by Optionee, any unauthorized use or disclosure by Optionee of confidential information
or trade secrets of the Corporation (or any Parent or Subsidiary), or any other intentional
misconduct by Optionee adversely affecting the business or affairs of the Corporation (or any
Parent or Subsidiary) in a material manner. The foregoing definition shall not be deemed to be
inclusive of all the acts or omissions which the Corporation (or any Parent or Subsidiary) may
consider as grounds for the dismissal or discharge of Optionee or any other individual in the
Service of the Corporation (or any Parent or Subsidiary).

A-10
(Employee Form)

 

          Q. Non-Statutory Option shall mean an option not intended to satisfy the requirements
of Code Section 422.

          R. Notice of Exercise shall mean the notice of exercise in substantially the form
attached hereto as Exhibit A-1.

          S. Option Shares shall mean the number of shares of Common Stock subject to the option
as specified in the Grant Notice.

          T. Optionee shall mean the person to whom the option is granted as specified in the
Grant Notice.

          U. Parent shall mean any corporation (other than the Corporation) in an unbroken chain
of corporations ending with the Corporation, provided each corporation in the unbroken chain (other
than the Corporation) owns, at the time of the determination, stock possessing fifty percent (50%)
or more of the total combined voting power of all classes of stock in one of the other corporations
in such chain.

          V. Permanent Disability Or Permanently Disabled shall mean the inability of the
Optionee to engage in any substantial gainful activity by reason of any medically determinable
physical or mental impairment which is both (i) expected to result in death or determined to be
total and permanent by two (2) physicians selected by the Corporation or its insurers and
acceptable to the Optionee (or the Optionee’s legal representative), and (ii) to the extent the
Optionee is eligible to participate in the Corporation’s long-term disability plan, entitles the
Optionee to the payment of long-term disability benefits from the Corporation’s long-term
disability plan. The process for determining a Permanent Disability in accordance with the
foregoing shall be completed no later than the later of (i) the close of the calendar year in which
the Optionee’s Service terminates by reason of the physical or mental impairment triggering the
determination process or (ii) the fifteenth day of the third calendar month following such
termination of Service.

          W. Plan shall mean the Corporation’s amended and restated 2000 Stock Incentive Plan.

          X. Plan Administrator shall mean either the Board or a committee of the Board acting
in its capacity as administrator of the Plan.

          Y. Service shall mean the Optionee’s performance of services for the Corporation (or
any Parent or Subsidiary) in the capacity of an Employee, a non-employee member of the board of
directors or a consultant or independent advisor. An Optionee shall be deemed to cease Service
immediately upon the occurrence of either of the following events: (i) the Optionee no longer
performs services in any of the foregoing capacities for the Corporation or any Parent or
Subsidiary; or (ii) the entity for which the Optionee is performing such services ceases to remain
a Parent or Subsidiary of the Corporation, even though the Optionee may subsequently continue to
perform services for that entity.

          Z. Stock Exchange shall mean the American Stock Exchange, the Nasdaq Global Select
Market, the Nasdaq Global Market or the New York Stock Exchange.

A-11
(Employee Form)

 

          AA. Subsidiary shall mean any corporation (other than the Corporation) in an unbroken
chain of corporations beginning with the Corporation, provided each corporation (other than the
last corporation) in the unbroken chain owns, at the time of the determination, stock possessing
fifty percent (50%) or more of the total combined voting power of all classes of stock in one of
the other corporations in such chain.

A-12
(Employee Form)

 

NOTICE OF GRANT OF STOCK OPTION

(Selected Officer Form)

     Notice is hereby given of the following option grant (the “Option”) to purchase shares of the
Common Stock of Quiksilver, Inc. (the “Corporation”):

	 	 	 	 	 	 	 
	Optionee:

	 	 	 	Grant Date:
	 	 
	Number of Options Shares:

	 	 	 	Exercise Price:
	 	 
	Type of Option:

	 	o Incentive Stock Option
	 	Expiration Date:
	 	 
	 

	 	o Non-Statutory Stock Option	 	 	 	 

     Exercise and Vesting Schedule: Subject to the limitations contained in this Option
and the Plan, this Option shall vest and become exercisable in installments as follows:

	 	 	 
	Number of Shares	 	Date of Earliest Exercise
	(Installment)	 	(Vesting)
	 	 	 

     In no event shall the Option become exercisable for any additional Option Shares after
Optionee’s cessation of Service.

     Optionee understands and agrees that the Option is granted subject to and in accordance with
the terms of the Quiksilver, Inc. amended and restated 2000 Stock Incentive Plan (the “Plan”).
Optionee further agrees to be bound by the terms of the Plan and the terms of the Option as set
forth in the Stock Option Agreement attached hereto as Exhibit A. Optionee hereby
acknowledges the receipt of a copy of the official prospectus for the Plan in the form attached
hereto as Exhibit B. A copy of the Plan is available upon request made to the Corporate
Secretary at the Corporation’s principal offices.

     Employment at Will. Nothing in this Notice or in the attached Stock Option Agreement
or in the Plan shall confer upon Optionee any right to continue in Service for any period of
specific duration or interfere with or otherwise restrict in any way the rights of the Corporation
(or any Parent or Subsidiary employing or retaining Optionee) or of Optionee, which rights are
hereby expressly reserved by each, to terminate Optionee’s Service at any time for any reason, with
or without cause.

     Definitions. All capitalized terms in this Notice shall have the meaning assigned to
them in this Notice or in the attached Stock Option Agreement.

	 	 	 	 	 	 	 	 	 	 	 	 	 
	Date:
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 

	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	QUIKSILVER, INC.	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	OPTIONEE	 	 	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 

	 	 
	Address:	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	ATTACHMENTS	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Exhibit A — Stock Option Agreement	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 

 

 

EXHIBIT A

QUIKSILVER, INC.

STOCK OPTION AGREEMENT

RECITALS

          A. The Board has adopted the Plan for the purpose of retaining the services of selected
Employees, non-employee members of the Board (or the board of directors of any Parent or
Subsidiary) and consultants and other independent advisors who provide services to the Corporation
(or any Parent or Subsidiary).

          B. Optionee is to render valuable services to the Corporation (or a Parent or Subsidiary), and
this Agreement is executed pursuant to, and is intended to carry out the purposes of, the Plan in
connection with the Corporation’s grant of an option to Optionee.

          C. All capitalized terms in this Agreement shall have the meaning assigned to them in the
attached Appendix.

          NOW, THEREFORE, it is hereby agreed as follows:

          1. Grant of Option. The Corporation hereby grants to Optionee, as of the Grant Date,
an option to purchase up to the number of Option Shares specified in the Grant Notice. The Option
Shares shall be purchasable from time to time during the option term specified in Paragraph 2 at
the Exercise Price.

          2.
Option Term. This option shall have a maximum term of ______ (___) years measured
from the Grant Date and shall accordingly expire at the close of business on the Expiration Date,
unless sooner terminated in accordance with Paragraph 5 or 6.

          3. Limited Transferability.

               (a) If this option is designated a Non-Statutory Option in the Grant Notice, then this option
may be assigned in whole or in part during Optionee’s lifetime only by gift or pursuant to a
domestic relations order to one or more Family Members of the Optionee or to a trust established
for the exclusive benefit of Optionee and/or one or more such Family Members. The assigned portion
shall be exercisable only by the person or persons who acquire a proprietary interest in the option
pursuant to such assignment. The terms applicable to the assigned portion shall be the same as
those in effect for this option immediately prior to such assignment.

               (b) Except as provided in Paragraph 3(a) above, this option shall be neither transferable nor
assignable by Optionee other than by will or the laws of inheritance following Optionee’s death and
may be exercised, during Optionee’s lifetime, only by Optionee. However, Optionee may designate
one or more persons as the beneficiary or beneficiaries of this option, and this option shall, in
accordance with such designation, automatically be transferred to

A-1

(Selected Officer Form)

 

 

such beneficiary or beneficiaries upon the Optionee’s death while holding this option. Such
beneficiary or beneficiaries shall take the transferred option subject to all the terms and
conditions of this Agreement, including (without limitation) the limited time period during which
this option may, pursuant to Paragraph 5, be exercised following Optionee’s death.

          4. Dates of Exercise. This option shall become exercisable for the Option Shares in
one or more installments as specified in the Grant Notice. As the option becomes exercisable for
such installments, those installments shall accumulate, and the option shall remain exercisable for
the accumulated installments until the Expiration Date or sooner termination of the option term
under Paragraph 5 or 6. Notwithstanding the foregoing, should the Optionee elect to exercise this
option during any period during which the Optionee is under investigation by the Corporation for
Misconduct, then any Option Shares acquired by the Optionee as a result of such exercise and/or the
net proceeds of any sale or sales of those acquired Option Shares (the gross sale proceeds less any
Exercise Price payment or withholding taxes due the Corporation in broker commissions) during such
period shall be held by the Corporation in escrow until such time as the investigation is
satisfactorily completed.

          5. Cessation of Service/Termination of Option. The option term specified in Paragraph
2 shall terminate (and this option shall cease to be outstanding) prior to the Expiration Date
should any of the following provisions become applicable:

               (a) Should Optionee cease to remain in Service by reason of Optionee terminating his or her
Service with the Corporation for other than Good Reason, as such term is defined in Optionee’s
employment agreement in effect on the date of grant of this option (the “Employment Agreement”),
while holding this option, then Optionee shall have a period of three (3) months (commencing with
the date of such cessation of Service) during which to exercise this option, but in no event shall
this option be exercisable at any time after the Expiration Date.

               (b) Should Optionee die while holding this option, then the personal representative of
Optionee’s estate or the person or persons to whom the option is transferred pursuant to Optionee’s
will or the laws of inheritance shall have the right to exercise this option. However, if Optionee
has designated one or more beneficiaries of this option, then those persons shall have the
exclusive right to exercise this option following Optionee’s death. Any such right to exercise
this option shall lapse, and this option shall cease to be outstanding, upon the earlier of
(i) the expiration of the twelve (12)-month period measured from the date of Optionee’s death or
(ii) the Expiration Date.

               (c) Should Optionee cease Service by reason of Permanent Disability while holding this option,
then Optionee shall have a period of twelve (12) months (commencing with the date of such cessation
of Service) during which to exercise this option. In no event shall this option be exercisable at
any time after the Expiration Date.

               (d) Should Optionee cease Service by reason of termination by the Corporation without Cause
(other than as a result of Optionee’s death, Permanent Disability or Misconduct), as such term is
defined in the Employment Agreement, or by Optionee for Good Reason, as such term is defined in the
Employment Agreement, while holding this option, then Optionee shall have a period of twelve (12)
months (commencing with the date of such cessation

A-2

(Selected Officer Form)

 

 

of Service) during which to exercise this option. In no event shall this option be
exercisable at any time after the Expiration Date.

               (e) The applicable post-Service exercise period in effect for this option pursuant to the
foregoing provisions of this Paragraph 5 shall automatically be extended by an additional period of
time equal in duration to any interval within that otherwise applicable post-Service exercise
period in which the exercise of this option or the immediate sale of the Option Shares acquired
hereunder cannot be effected in compliance with applicable federal and state securities laws, but
in no event shall such an extension result in the continuation of this option beyond the Expiration
Date.

               (f) During the limited period of post-Service exercisability, this option may not be exercised
in the aggregate for more than the number of Option Shares for which the option is exercisable at
the time of Optionee’s cessation of Service. Upon the expiration of such limited exercise period
or (if earlier) upon the Expiration Date, this option shall terminate and cease to be outstanding
for any exercisable Option Shares for which the option has not been exercised. However, this
option shall, immediately upon Optionee’s cessation of Service for any reason, terminate and cease
to be outstanding with respect to any Option Shares for which this option is not otherwise at that
time exercisable.

               (g) Should Optionee’s Service be terminated for Misconduct or Cause, as such term is defined
in the Employment Agreement, or should Optionee otherwise engage in any Misconduct while this
option is outstanding, then this option shall terminate immediately and cease to remain
outstanding.

          6.
Special Acceleration of Option.

               (a) This option, to the extent outstanding at the time of a Corporate Transaction but not
otherwise fully exercisable, shall NOT vest or become exercisable on an accelerated basis if and to
the extent: (i) this option is, in connection with the Corporate Transaction, to be assumed by the
successor corporation (or parent thereof) or otherwise continued in full force and effect pursuant
to the terms of the Corporate Transaction or (ii) this option is to be replaced with a cash
incentive program of the successor corporation which preserves the spread existing at the time of
the Corporate Transaction on any Option Shares for which this option is not otherwise at that time
exercisable (the excess of the Fair Market Value of those Option Shares over the aggregate Exercise
Price payable for such shares) and provides for subsequent payout in accordance with the same
option exercise/vesting schedule for those Option Shares set forth in the Grant Notice. However,
if none of the foregoing conditions apply to this option at the time of the Corporate Transaction,
then this option shall automatically accelerate so that such option shall, immediately prior to the
effective date of that Corporate Transaction, become exercisable for all the shares of Common Stock
at the time subject to this option and may be exercised for any or all of those shares as fully
vested shares of Common Stock.

               (b) Immediately following the Corporate Transaction, this option shall terminate and cease to
be outstanding, except to the extent assumed by the successor corporation

A-3

(Selected Officer Form)

 

 

(or parent thereof) in connection with the Corporate Transaction or otherwise continued in
full force and effect pursuant to the terms of the Corporate Transaction.

               (c) If this option is assumed in connection with a Corporate Transaction or otherwise
continued in effect, then this option shall be appropriately adjusted, immediately after such
Corporate Transaction, to apply to the number and class of securities which would have been
issuable to Optionee in consummation of such Corporate Transaction had the option been exercised
immediately prior to such Corporate Transaction, and appropriate adjustments shall also be made to
the Exercise Price, provided the aggregate Exercise Price shall remain the same. To the
extent the actual holders of the Corporation’s outstanding Common Stock receive cash consideration
for their Common Stock in consummation of the Corporate Transaction, the successor corporation may,
in connection with the assumption of this option, substitute one or more shares of its own common
stock with a fair market value equivalent to the cash consideration paid per share of Common Stock
in such Corporate Transaction.

               (d) This Agreement shall not in any way affect the right of the Corporation to adjust,
reclassify, reorganize or otherwise change its capital or business structure or to merge,
consolidate, dissolve, liquidate or sell or transfer all or any part of its business or assets.

               (e) This option, to the extent outstanding at the time Optionee ceases Service with the
Corporation by reason of Optionee’s death, Permanent Disability, termination by the Corporation
without Cause (as defined in the Employment Agreement) or termination by Optionee for Good Reason
(as defined in the Employment Agreement) but not otherwise fully exercisable, shall automatically
accelerate so that this option shall immediately prior to such termination of Service, become
exercisable for all of the Option Shares at the time subject to this option and may be exercised
for any or all of those Option Shares as fully vested shares of Common Stock.

          7. Adjustment in Option Shares. Should any change be made to the Common Stock by
reason of any stock split, stock dividend, recapitalization, combination of shares, exchange of
shares or other change affecting the outstanding Common Stock as a class without the Corporation’s
receipt of consideration, appropriate adjustments shall be made to (i) the total number and/or
class of securities subject to this option and (ii) the Exercise Price in order to reflect such
change and thereby preclude a dilution or enlargement of benefits hereunder.

          8. Stockholder Rights. The holder of this option shall not have any stockholder
rights with respect to the Option Shares until such person shall have exercised the option, paid
the Exercise Price and become a holder of record of the purchased shares.

          9. Manner of Exercising Option.

               (a) In order to exercise this option with respect to all or any part of the Option Shares for
which this option is at the time exercisable, Optionee (or any other person or persons exercising
the option) must take the following actions:

A-4

(Selected Officer Form)

 

 

                    (i) Execute and deliver to the Corporation a Notice of Exercise for the Option Shares for
which the option is exercised.

                    (ii) Pay the aggregate Exercise Price for the purchased shares in one or more of the following
forms:

                         (A) cash or check made payable to the Corporation;

                         (B) shares of Common Stock valued at Fair Market Value on the Exercise Date and held by
Optionee (or any other person or persons exercising the option) for the period, if any, necessary
to avoid any charge to the Corporation’s earnings for financial reporting purposes; or

                         (C) through a special sale and remittance procedure pursuant to which Optionee (or any other
person or persons exercising the option) shall concurrently provide irrevocable instructions to (i)
a Corporation-designated brokerage firm to effect the immediate sale of the purchased shares and
remit to the Corporation, out of the sale proceeds available on the settlement date, sufficient
funds to cover the aggregate Exercise Price payable for the purchased shares plus all applicable
Federal, state and local income and employment taxes required to be withheld by the Corporation by
reason of such exercise and (ii) the Corporation to deliver the certificates for the purchased
shares directly to such brokerage firm in order to complete the sale.

               Except to the extent the sale and remittance procedure is utilized in connection with the
option exercise, payment of the Exercise Price must accompany the Notice of Exercise delivered to
the Corporation in connection with the option exercise.

                    (iii) Furnish to the Corporation appropriate documentation that the person or persons
exercising the option (if other than Optionee) have the right to exercise this option.

                    (iv) Make appropriate arrangements with the Corporation (or Parent or Subsidiary employing or
retaining Optionee) for the satisfaction of all Federal, state and local income and employment tax
withholding requirements applicable to the option exercise.

               (b) As soon as practical after the Exercise Date, the Corporation shall issue to or on behalf
of Optionee (or any other person or persons exercising this option) a certificate for the purchased
Option Shares, with the appropriate legends affixed thereto.

               (c) In no event may this option be exercised for any fractional shares.

          10.
Compliance with Laws and Regulations.

               (a) The exercise of this option and the issuance of the Option Shares upon such exercise shall
be subject to compliance by the Corporation and Optionee with all applicable requirements of law
relating thereto and with all applicable regulations of any stock

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(Selected Officer Form)

 

 

exchange (or over-the-counter market, if applicable) on which the Common Stock may be listed
for trading at the time of such exercise and issuance.

               (b) The inability of the Corporation to obtain approval from any regulatory body having
authority deemed by the Corporation to be necessary to the lawful issuance and sale of any Common
Stock pursuant to this option shall relieve the Corporation of any liability with respect to the
non-issuance or sale of the Common Stock as to which such approval shall not have been obtained.
The Corporation, however, shall use its best efforts to obtain all such approvals.

          11. Successors and Assigns. Except to the extent otherwise provided in Paragraphs 3
and 6, the provisions of this Agreement shall inure to the benefit of, and be binding upon, the
Corporation and its successors and assigns and Optionee, Optionee’s assigns, the legal
representatives, heirs and legatees of Optionee’s estate and any beneficiaries of this option
designated by Optionee.

          12. Notices. Any notice required to be given or delivered to the Corporation under
the terms of this Agreement shall be in writing and addressed to the Corporation at its principal
corporate offices. Any notice required to be given or delivered to Optionee shall be in writing
and addressed to Optionee at the address indicated below Optionee’s signature line on the Grant
Notice. All notices shall be deemed effective upon personal delivery or upon deposit in the U.S.
mail, postage prepaid and properly addressed to the party to be notified.

          13. Construction. This Agreement and the option evidenced hereby are made and granted
pursuant to the Plan and are in all respects limited by and subject to the terms of the Plan. All
decisions of the Plan Administrator with respect to any question or issue arising under the Plan or
this Agreement shall be conclusive and binding on all persons having an interest in this option.

          14. Governing Law. The interpretation, performance and enforcement of this Agreement
shall be governed by the laws of the State of California without resort to that State’s
conflict-of-laws rules.

          15. Excess Shares. If the Option Shares covered by this Agreement exceed, as of the
Grant Date, the number of shares of Common Stock which may without stockholder approval be issued
under the Plan, then this option shall be void with respect to those excess shares, unless
stockholder approval of an amendment sufficiently increasing the number of shares of Common Stock
issuable under the Plan is obtained in accordance with the provisions of the Plan.

          16. Additional Terms Applicable to an Incentive Option. In the event this option is
designated an Incentive Option in the Grant Notice, the following terms and conditions shall also
apply to the grant:

               (a) This option shall cease to qualify for favorable tax treatment as an Incentive Option if
(and to the extent) this option is exercised for one or more Option Shares: (A) more than three (3)
months after the date Optionee ceases to be an Employee for any reason

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(Selected Officer Form)

 

 

other than death or Permanent Disability or (B) more than twelve (12) months after the date
Optionee ceases to be an Employee by reason of Permanent Disability.

               (b) No installment under this option shall qualify for favorable tax treatment as an Incentive
Option if (and to the extent) the aggregate Fair Market Value (determined at the Grant Date) of the
Common Stock for which such installment first becomes exercisable hereunder would, when added to
the aggregate value (determined as of the respective date or dates of grant) of the Common Stock or
other securities for which this option or any other Incentive Options granted to Optionee prior to
the Grant Date (whether under the Plan or any other option plan of the Corporation or any Parent or
Subsidiary) first become exercisable during the same calendar year, exceed One Hundred Thousand
Dollars ($100,000) in the aggregate. Should such One Hundred Thousand Dollar ($100,000) limitation
be exceeded in any calendar year, this option shall nevertheless become exercisable for the excess
shares in such calendar year as a Non-Statutory Option.

               (c) Should the exercisability of this option be accelerated upon a Corporate Transaction, then
this option shall qualify for favorable tax treatment as an Incentive Option only to the extent the
aggregate Fair Market Value (determined at the Grant Date) of the Common Stock for which this
option first becomes exercisable in the calendar year in which the Corporate Transaction occurs
does not, when added to the aggregate value (determined as of the respective date or dates of
grant) of the Common Stock or other securities for which this option or one or more other Incentive
Options granted to Optionee prior to the Grant Date (whether under the Plan or any other option
plan of the Corporation or any Parent or Subsidiary) first become exercisable during the same
calendar year, exceed One Hundred Thousand Dollars ($100,000) in the aggregate. Should the
applicable One Hundred Thousand Dollar ($100,000) limitation be exceeded in the calendar year of
such Corporate Transaction, the option may nevertheless be exercised for the excess shares in such
calendar year as a Non-Statutory Option.

               (d) Should Optionee hold, in addition to this option, one or more other options to purchase
Common Stock which become exercisable for the first time in the same calendar year as this option,
then, for purposes of the foregoing limitations on the exercisability of such options as Incentive
Options, this option and each of those other options shall be deemed to become first exercisable in
that calendar year on the basis of the chronological order in which they were granted, except to
the extent otherwise provided under applicable law or regulation.

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(Selected Officer Form)

 

 

Exhibit A-1

NOTICE OF EXERCISE

          I hereby notify Quiksilver, Inc. (the “Corporation”) that I elect to purchase                     
shares of the Corporation’s Common Stock (the “Purchased Shares”) at the option exercise price of
$                     per share (the “Exercise Price”) pursuant to that certain option (the “Option”) granted
to me under the Corporation’s amended and restated 2000 Stock Incentive Plan on  
               
                , ___

          Concurrently with the delivery of this Exercise Notice to the Corporation, I shall hereby pay
to the Corporation the Exercise Price for the Purchased Shares in accordance with the provisions of
my agreement with the Corporation (or other documents) evidencing the Option and shall deliver
whatever additional documents may be required by such agreement as a condition for exercise.
Alternatively, I may utilize the special broker-dealer sale and remittance procedure specified in
my agreement to effect payment of the Exercise Price.

____________________, _________

Date

	 	 	 	 	 
	 
	 	 
	 	Optionee 	 
	 
	 	Address: 	 	 
	 	 	 	 
	 	 	 	 
	 
	Print name in exact manner it is to 
appear on the stock
certificate: 	 	 
	 
	Address to which certificate is to 
be sent, if different from
address
 above: 	 	 
	 	 
	 	 
	 
	Social Security Number: 	 	 
	 

A-8

(Selected Officer Form)

 

 

APPENDIX

          The following definitions shall be in effect under the Agreement:

          A. Agreement shall mean this Stock Option Agreement.

          B. Board shall mean the Corporation’s Board of Directors.

          C. Code shall mean the Internal Revenue Code of 1986, as amended.

          D. Common Stock shall mean shares of the Corporation’s common stock.

          E. Corporate Transaction shall mean either of the following stockholder-approved
transactions to which the Corporation is a party:

     (i) a merger or consolidation in which securities possessing
more than fifty percent (50%) of the total combined voting power of
the Corporation’s outstanding securities are transferred to a person
or persons different from the persons holding those securities
immediately prior to such transaction, or

     (ii) the sale, transfer or other disposition of all or
substantially all of the Corporation’s assets in complete
liquidation or dissolution of the Corporation.

          F. Corporation shall mean Quiksilver, Inc., a Delaware corporation, and any successor
corporation to all or substantially all of the assets or voting stock of Quiksilver, Inc. which
shall by appropriate action adopt the Plan.

          G. Employee shall mean an individual who is in the employ of the Corporation (or any
Parent or Subsidiary), subject to the control and direction of the employer entity as to both the
work to be performed and the manner and method of performance.

          H. Exercise Date shall mean the date on which the option shall have been exercised in
accordance with Paragraph 9 of the Agreement.

          I. Exercise Price shall mean the exercise price per Option Share as specified in the
Grant Notice.

          J. Expiration Date shall mean the date on which the option expires as specified in the
Grant Notice.

          K. Fair Market Value per share of Common Stock on any relevant date shall be
determined in accordance with the following provisions:

     (i) If the Common Stock is at the time traded on the Nasdaq
Global Select Market (or the Nasdaq Global Market), then the Fair
Market Value shall be the closing selling price per share of

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(Selected Officer Form)

 

 

Common Stock at the close of regular hours trading (i.e.,
before after-hours trading begins) on the Nasdaq Global Stock Market
(or the Nasdaq Global Market) on the date in question, as such price
is reported by The Wall Street Journal. If there is no closing
selling price for the Common Stock on the date in question, then the
Fair Market Value shall be the closing selling price on the last
preceding date for which such quotation exists.

     (ii) If the Common Stock is at the time listed on any other
Stock Exchange, then the Fair Market Value shall be the closing
selling price per share of Common Stock at the close of regular
hours trading (i.e., before after-hours trading begins) on the date
in question on the Stock Exchange determined by the Plan
Administrator to be the primary market for the Common Stock, as such
price is officially quoted in the composite tape of transactions on
such exchange. If there is no closing selling price for the Common
Stock on the date in question, then the Fair Market Value shall be
the closing selling price on the last preceding date for which such
quotation exists.

     (iii) If the Common Stock is at the time not listed on
any established stock exchange, the Fair Market Value shall be
determined by the Board in good faith.

          L. Family Member shall mean, with respect to the Optionee, any child, stepchild,
grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew,
mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law or sister-in-law.

          M. Grant Date shall mean the date of grant of the option as specified in the Grant
Notice.

          N. Grant Notice shall mean the Notice of Grant of Stock Option accompanying the
Agreement, pursuant to which Optionee has been informed of the basic terms of the option evidenced
hereby.

          O. Incentive Option shall mean an option which satisfies the requirements of Code
Section 422.

          P. Misconduct shall mean the commission of any act of fraud, embezzlement or
dishonesty by Optionee, any unauthorized use or disclosure by Optionee of confidential information
or trade secrets of the Corporation (or any Parent or Subsidiary), or any other intentional
misconduct by Optionee adversely affecting the business or affairs of the Corporation (or any
Parent or Subsidiary) in a material manner. The foregoing definition shall not be deemed to be
inclusive of all the acts or omissions which the Corporation (or any Parent or Subsidiary) may
consider as grounds for the dismissal or discharge of Optionee or any other individual in the
Service of the Corporation (or any Parent or Subsidiary).

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(Selected Officer Form)

 

 

          Q. Non-Statutory Option shall mean an option not intended to satisfy the requirements
of Code Section 422.

          R. Notice of Exercise shall mean the notice of exercise in substantially the form
attached hereto as Exhibit A-1.

          S. Option Shares shall mean the number of shares of Common Stock subject to the option
as specified in the Grant Notice.

          T. Optionee shall mean the person to whom the option is granted as specified in the
Grant Notice.

          U. Parent shall mean any corporation (other than the Corporation) in an unbroken chain
of corporations ending with the Corporation, provided each corporation in the unbroken chain (other
than the Corporation) owns, at the time of the determination, stock possessing fifty percent (50%)
or more of the total combined voting power of all classes of stock in one of the other corporations
in such chain.

          V. Permanent Disability Or Permanently Disabled shall mean the inability of the
Optionee to engage in any substantial gainful activity by reason of any medically determinable
physical or mental impairment which is both (i) expected to result in death or determined to be
total and permanent by two (2) physicians selected by the Corporation or its insurers and
acceptable to the Optionee (or the Optionee’s legal representative), and (ii) to the extent the
Optionee is eligible to participate in the Corporation’s long-term disability plan, entitles the
Optionee to the payment of long-term disability benefits from the Corporation’s long-term
disability plan. The process for determining a Permanent Disability in accordance with the
foregoing shall be completed no later than the later of (i) the close of the calendar year in which
the Optionee’s Service terminates by reason of the physical or mental impairment triggering the
determination process or (ii) the fifteenth day of the third calendar month following such
termination of Service.

          W. Plan shall mean the Corporation’s amended and restated 2000 Stock Incentive Plan.

          X. Plan Administrator shall mean either the Board or a committee of the Board acting
in its capacity as administrator of the Plan.

          Y. Service shall mean the Optionee’s performance of services for the Corporation (or
any Parent or Subsidiary) in the capacity of an Employee, a non-employee member of the board of
directors or a consultant or independent advisor. An Optionee shall be deemed to cease Service
immediately upon the occurrence of either of the following events: (i) the Optionee no longer
performs services in any of the foregoing capacities for the Corporation or any Parent or
Subsidiary; or (ii) the entity for which the Optionee is performing such services ceases to remain
a Parent or Subsidiary of the Corporation, even though the Optionee may subsequently continue to
perform services for that entity.

          Z. Stock Exchange shall mean the American Stock Exchange, the Nasdaq Global Select
Market, the Nasdaq Global Market or the New York Stock Exchange.

A-11

(Selected Officer Form)

 

 

          AA. Subsidiary shall mean any corporation (other than the Corporation) in an unbroken
chain of corporations beginning with the Corporation, provided each corporation (other than the
last corporation) in the unbroken chain owns, at the time of the determination, stock possessing
fifty percent (50%) or more of the total combined voting power of all classes of stock in one of
the other corporations in such chain.

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(Selected Officer Form)

 

 

NOTICE OF GRANT OF

NON-EMPLOYEE DIRECTOR AUTOMATIC STOCK OPTION

(Annual Meeting and Initial Grant Form)

     Notice is hereby given of the following option grant (the “Option”) to purchase shares of the
Common Stock of Quiksilver, Inc. (the “Corporation”):

	 	 	 	 	 	 	 	 	 
	Optionee:

	 	 	 	 	 	Grant Date:
	 	 
	Number of Options Shares:

	 	5,000	 	 	 	Exercise Price:	 	 
	Type of Option:

	 	o Incentive Stock Option
	 	Expiration Date:	 	 
	 

	 	þ Non-Statutory Stock Option
	 	 	 	 

     Exercise and Vesting Schedule: The option shall be fully vested and exercisable
immediately upon grant.

     Optionee understands and agrees that the Option is granted subject to and in accordance with
the terms of the Director Automatic Grant Program under the Quiksilver, Inc. amended and restated
2000 Stock Incentive Plan (the “Plan”). Optionee further agrees to be bound by the terms of the
Plan and the terms of the Option as set forth in the Automatic Stock Option Agreement attached
hereto as Exhibit A. Optionee hereby acknowledges the receipt of a copy of the official
prospectus for the Plan in the form attached hereto as Exhibit B. A copy of the Plan is
available upon request made to the Corporate Secretary at the Corporation’s principal offices.

     Impairment of Rights. Nothing in this Notice or in the attached Automatic Stock
Option Agreement or in the Plan shall interfere with or otherwise restrict in any way the rights of
the Corporation and the Corporation’s stockholders to remove Optionee from the Board at any time in
accordance with the provisions of applicable law.

     Definitions. All capitalized terms in this Notice shall have the meaning assigned to
them in this Notice or in the attached Stock Option Agreement.

	 	 	 	 	 	 	 	 	 	 	 	 	 
	Date:
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 

	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	QUIKSILVER, INC.	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	OPTIONEE	 	 	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 

	 	 
	Address:	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	ATTACHMENTS	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Exhibit A — Automatic Stock Option Agreement	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 

 

 

EXHIBIT A

AUTOMATIC STOCK OPTION AGREEMENT

RECITALS

          A. The Corporation has implemented an automatic grant program under the Plan pursuant to which
eligible non-employee members of the Board will automatically receive option grants at periodic
intervals over their period of Board service to provide such individuals with a meaningful
incentive to continue to serve as members of the Board.

          B. Optionee is an eligible non-employee Board member, and this Agreement is executed pursuant
to, and is intended to carry out the purposes of, the Plan in connection with the automatic grant
of an option to purchase shares of Common Stock under the Plan.

          C. All capitalized terms in this Agreement shall have the meaning assigned to them in the
attached Appendix.

          NOW, THEREFORE, it is hereby agreed as follows:

          1. Grant of Option. The Corporation hereby grants to Optionee, as of the Grant Date,
a Non-Statutory Option to purchase up to the number of Option Shares specified in the Grant Notice.
The Option Shares shall be purchasable from time to time during the option term specified in
Paragraph 2 at the Exercise Price.

          2. Option Term. This option shall have a maximum term of seven (7) years measured
from the Grant Date and shall accordingly expire at the close of business on the Expiration Date,
unless sooner terminated in accordance with Paragraph 5 or 6.

          3. Limited Transferability.

               (a) This option may be assigned in whole or in part during Optionee’s lifetime only by gift or
pursuant to a domestic relations order to one or more Family Members of the Optionee or to a trust
established for the exclusive benefit of Optionee and/or one or more such Family Members. The
assigned portion shall be exercisable only by the person or persons who acquire a proprietary
interest in the option pursuant to such assignment. The terms applicable to the assigned portion
shall be the same as those in effect for this option immediately prior to such assignment.

               (b) Except as provided in Paragraph 3(a) above, this option shall be neither transferable nor
assignable by Optionee other than by will or the laws of inheritance following Optionee’s death and
may be exercised, during Optionee’s lifetime, only by Optionee. However, Optionee may designate
one or more persons as the beneficiary or beneficiaries of this option, and this option shall, in
accordance with such designation, automatically be transferred to such beneficiary or beneficiaries
upon the Optionee’s death while holding this option. Such beneficiary or beneficiaries shall take
the transferred option subject to all the terms and

A-1
(Non-Employee Director)

 

conditions of this Agreement, including (without limitation) the limited time period during which
this option may, pursuant to Paragraph 5, be exercised following Optionee’s death.

          4. Dates of Exercise. This option shall be fully vested and immediately exercisable
for the Option Shares and shall remain so until the Expiration Date or sooner termination of the
option term under Paragraph 5 or 6.

          5. Cessation of Board Service/Termination of Option. Should Optionee’s Service as a
Board member cease while this option is outstanding, then the option term specified in Paragraph 2
shall terminate (and this option shall cease to be outstanding) prior to the Expiration Date in
accordance with the following provisions:

               (a) Should Optionee cease to serve as a Board member for any reason while this option is
outstanding, then the period during which this option may be exercised shall be reduced to a twelve
(12)-month period measured from the date of such cessation of Board Service, but in no event shall
this option be exercisable at any time after the Expiration Date. During such limited period of
exercisability, Optionee (or the person or persons to whom this option is transferred pursuant to a
permitted transfer under Paragraph 3) may exercise this option with respect to any Option Shares
for which the option has not been exercised. Upon the expiration of such limited exercise period
or (if earlier) upon the Expiration Date, this option shall terminate and cease to be outstanding
for any exercisable Option Shares for which the option has not been exercised.

               (b) The applicable post-Service exercise period in effect for this option pursuant to the
foregoing provisions of this Paragraph 5 shall automatically be extended by an additional period of
time equal in duration to any interval within that otherwise applicable post-Service exercise
period in which the exercise of this option or the immediate sale of the Option Shares acquired
hereunder cannot be effected in compliance with applicable federal and state securities laws, but
in no event shall such an extension result in the continuation of this option beyond the Expiration
Date.

          
6. Corporate Transaction/Hostile Take-Over.

               (a) Immediately following a Corporate Transaction, this option shall terminate and cease to be
outstanding, except to the extent assumed by the successor corporation (or parent thereof) in
connection with the Corporate Transaction or otherwise continued in full force and effect pursuant
to the terms of the Corporate Transaction.

               (b) If this option is assumed in connection with a Corporate Transaction or otherwise
continued in effect, then this option shall be appropriately adjusted, immediately after such
Corporate Transaction, to apply to the number and class of securities which would have been
issuable to Optionee in consummation of such Corporate Transaction had the option been exercised
immediately prior to such Corporate Transaction, and appropriate adjustments shall also be made to
the Exercise Price, provided the aggregate Exercise Price shall remain the same. To the
extent the actual holders of the Corporation’s outstanding Common Stock receive cash consideration
for their Common Stock in consummation of the Corporate Transaction, the successor corporation may,
in connection with the assumption of this option,

A-2
(Non-Employee Director)

 

substitute one or more shares of its own common stock with a fair market value equivalent to the
cash consideration paid per share of Common Stock in such Corporate Transaction.

               (c) This Agreement shall not in any way affect the right of the Corporation to adjust,
reclassify, reorganize or otherwise change its capital or business structure or to merge,
consolidate, dissolve, liquidate or sell or transfer all or any part of its business or assets.

               (d) Upon the occurrence of a Hostile Take-Over while Optionee remains a Board member, the
Optionee shall have a thirty (30)-day period immediately following the consummation of the Hostile
Take-Over in which to surrender to the Corporation this option in exchange for a cash distribution
from the Corporation in an amount equal to the excess of (i) the Take-Over Price of the shares of
Common Stock at the time subject to this option less (ii) the aggregate Exercise Price payable for
such shares. This Paragraph 6(d) limited stock appreciation right shall in all events terminate
upon the expiration or sooner termination of the option term and may not be assigned or transferred
by Optionee, except to the extent the option is transferred in accordance with the provisions of
this Agreement.

               (e) To exercise the Paragraph 6(d) limited stock appreciation right, Optionee must, during the
applicable thirty (30)-day exercise period, provide the Corporation with written notice of the
option surrender in which there is specified the number of Option Shares as to which the option is
being surrendered. Such notice must be accompanied by the return of Optionee’s copy of this
Agreement, together with any written amendments to such Agreement. The cash distribution shall be
paid to Optionee within five (5) business days following such delivery date. The exercise of such
limited stock appreciation right in accordance with the terms of this Paragraph 6 has been
pre-approved pursuant to the express provisions of the Director Automatic Grant Program, and
neither the approval of the Plan Administrator nor the consent of the Board shall be required at
the time of the actual option surrender and cash distribution. Upon receipt of the cash
distribution, this option shall be canceled with respect to the shares subject to the surrendered
option (or the surrendered portion) and Optionee shall cease to have any further right to acquire
those Option Shares under this Agreement. This option shall, however, remain outstanding for the
balance of the Option Shares (if any) in accordance with the terms and provisions of this
Agreement, and the Corporation shall accordingly issue a replacement stock option agreement
(substantially in the same form as this Agreement) for those remaining Option Shares.

          7.
Adjustment in Option Shares. Should any change be made to the Common Stock by
reason of any stock split, stock dividend, recapitalization, combination of shares, exchange of
shares or other change affecting the outstanding Common Stock as a class without the Corporation’s
receipt of consideration, appropriate adjustments shall be made to (i) the total number and/or
class of securities subject to this option and (ii) the Exercise Price in order to reflect such
change and thereby preclude a dilution or enlargement of benefits hereunder.

          8. Stockholder Rights. The holder of this option shall not have any stockholder
rights with respect to the Option Shares until such person shall have exercised the option, paid
the Exercise Price and become a holder of record of the purchased shares.

A-3
(Non-Employee Director)

 

          9. Manner of Exercising Option.

               (a) In order to exercise this option with respect to all or any part of the Option Shares for
which this option is at the time exercisable, Optionee (or any other person or persons exercising
the option) must take the following actions:

                    (i) Execute and deliver to the Corporation a Notice of Exercise for the Option Shares for
which the option is exercised.

                    (ii) Pay the aggregate Exercise Price for the purchased shares in one or more of the following
forms:

                         (A) cash or check made payable to the Corporation;

                         (B) shares of Common Stock valued at Fair Market Value on the Exercise Date and held by
Optionee (or any other person or persons exercising the option) for the period, if any, necessary
to avoid any charge to the Corporation’s earnings for financial reporting purposes; or

                         (C) through a special sale and remittance procedure pursuant to which Optionee (or any other
person or persons exercising the option) shall concurrently provide irrevocable instructions to (i)
a Corporation-designated brokerage firm to effect the immediate sale of the purchased shares and
remit to the Corporation, out of the sale proceeds available on the settlement date, sufficient
funds to cover the aggregate Exercise Price payable for the purchased shares plus all applicable
Federal, state and local income and employment taxes required to be withheld by the Corporation by
reason of such exercise and (ii) the Corporation to deliver the certificates for the purchased
shares directly to such brokerage firm in order to complete the sale.

               Except to the extent the sale and remittance procedure is utilized in connection with the
option exercise, payment of the Exercise Price must accompany the Notice of Exercise delivered to
the Corporation in connection with the option exercise.

                    (iii) Furnish to the Corporation appropriate documentation that the person or persons
exercising the option (if other than Optionee) have the right to exercise this option.

                    (iv) Make appropriate arrangements with the Corporation (or Parent or Subsidiary employing or
retaining Optionee) for the satisfaction of all Federal, state and local income and employment tax
withholding requirements applicable to the option exercise.

               (b) As soon as practical after the Exercise Date, the Corporation shall issue to or on behalf
of Optionee (or any other person or persons exercising this option) a certificate for the purchased
Option Shares, with the appropriate legends affixed thereto.

               (c) In no event may this option be exercised for any fractional shares.

A-4
(Non-Employee Director)

 

          10.
Compliance with Laws and Regulations.

               (a) The exercise of this option and the issuance of the Option Shares upon such exercise shall
be subject to compliance by the Corporation and Optionee with all applicable requirements of law
relating thereto and with all applicable regulations of any stock exchange (or over-the-counter
market, if applicable) on which the Common Stock may be listed for trading at the time of such
exercise and issuance.

               (b) The inability of the Corporation to obtain approval from any regulatory body having
authority deemed by the Corporation to be necessary to the lawful issuance and sale of any Common
Stock pursuant to this option shall relieve the Corporation of any liability with respect to the
non-issuance or sale of the Common Stock as to which such approval shall not have been obtained.
The Corporation, however, shall use its best efforts to obtain all such approvals.

          11. Successors and Assigns. Except to the extent otherwise provided in Paragraphs 3
and 6, the provisions of this Agreement shall inure to the benefit of, and be binding upon, the
Corporation and its successors and assigns and Optionee, Optionee’s assigns, the legal
representatives, heirs and legatees of Optionee’s estate and any beneficiaries of this option
designated by Optionee.

          12. Notices. Any notice required to be given or delivered to the Corporation under
the terms of this Agreement shall be in writing and addressed to the Corporation at its principal
corporate offices. Any notice required to be given or delivered to Optionee shall be in writing
and addressed to Optionee at the address indicated below Optionee’s signature line on the Grant
Notice. All notices shall be deemed effective upon personal delivery or upon deposit in the U.S.
mail, postage prepaid and properly addressed to the party to be notified.

          13. Construction. This Agreement and the option evidenced hereby are made and granted
pursuant to the Plan and are in all respects limited by and subject to the terms of the Plan. All
decisions of the Plan Administrator with respect to any question or issue arising under the Plan or
this Agreement shall be conclusive and binding on all persons having an interest in this option.

          14. Governing Law. The interpretation, performance and enforcement of this Agreement
shall be governed by the laws of the State of California without resort to that State’s
conflict-of-laws rules.

          15. Excess Shares. If the Option Shares covered by this Agreement exceed, as of the
Grant Date, the number of shares of Common Stock which may without stockholder approval be issued
under the Plan, then this option shall be void with respect to those excess shares, unless
stockholder approval of an amendment sufficiently increasing the number of shares of Common Stock
issuable under the Plan is obtained in accordance with the provisions of the Plan.

A-5
(Non-Employee Director)

 

Exhibit A-1

NOTICE OF EXERCISE

          I hereby notify Quiksilver, Inc. (the “Corporation”) that I elect to purchase                      shares
of the Corporation’s Common Stock (the “Purchased Shares”) at the option exercise price of
$                     per share (the “Exercise Price”) pursuant to that certain option (the “Option”) granted
to me under the Corporation’s amended and restated 2000 Stock Incentive Plan on                                         ,
___.

          Concurrently with the delivery of this Exercise Notice to the Corporation, I shall hereby pay
to the Corporation the Exercise Price for the Purchased Shares in accordance with the provisions of
my agreement with the Corporation (or other documents) evidencing the Option and shall deliver
whatever additional documents may be required by such agreement as a condition for exercise.
Alternatively, I may utilize the special broker-dealer sale and remittance procedure specified in
my agreement to effect payment of the Exercise Price.

	 	 	 	 	 	 	 	 
	                                        ,                     
	 	 	 	 	 	 
	Date
	 	 	 	 	 	 
	 	 	 	 	 

	 

	 	 	 	Optionee	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	Address:  	 	 
	 

	 	 	 	 	 	 

	 

	 	 	 	 	 	 

	 

	 	 	 	 	 	 

	Print name in exact manner it is to
	 	 	 	 	 	 
	appear on the stock certificate:	 	 	 	 

	 
	 	 	 	 	 	 
	Address to which certificate is to	 	 	 	 

	be sent, if different from address	 	 	 	 

	above:	 	 	 	 

	 
	 	 	 	 	 	 
	Social Security Number:	 	 	 	 

A-6
(Non-Employee Director)

 

APPENDIX

          The following definitions shall be in effect under the Agreement:

          A. Agreement shall mean this Stock Option Agreement.

          B. Board shall mean the Corporation’s Board of Directors.

          C. Code shall mean the Internal Revenue Code of 1986, as amended.

          D. Common Stock shall mean shares of the Corporation’s common stock.

          E. Corporate Transaction shall mean either of the following stockholder-approved
transactions to which the Corporation is a party:

     (i) a merger or consolidation in which securities possessing more
than fifty percent (50%) of the total combined voting power of the
Corporation’s outstanding securities are transferred to a person or
persons different from the persons holding those securities immediately
prior to such transaction, or

     (ii) the sale, transfer or other disposition of all or substantially
all of the Corporation’s assets in complete liquidation or dissolution of
the Corporation.

          F. Corporation shall mean Quiksilver, Inc., a Delaware corporation, and any successor
corporation to all or substantially all of the assets or voting stock of Quiksilver, Inc. which
shall by appropriate action adopt the Plan.

          G. Exercise Date shall mean the date on which the option shall have been exercised in
accordance with Paragraph 9 of the Agreement.

          H. Exercise Price shall mean the exercise price per Option Share as specified in the
Grant Notice.

          I. Expiration Date shall mean the date on which the option expires as specified in the
Grant Notice.

          J. Fair Market Value per share of Common Stock on any relevant date shall be
determined in accordance with the following provisions:

     (i) If the Common Stock is at the time traded on the Nasdaq Global
Select Market (or the Nasdaq Global Market), then the Fair Market Value
shall be the closing selling price per share of Common Stock at the close
of regular hours trading (i.e., before after-hours trading begins) on the
Nasdaq Global Stock Market (or the Nasdaq Global Market) on the date in
question, as such price is reported by The Wall Street Journal. If there
is no closing selling

A-7
(Non-Employee Director)

 

price for the Common Stock on the date in question, then the Fair Market
Value shall be the closing selling price on the last preceding date for
which such quotation exists.

     (ii) If the Common Stock is at the time listed on any other Stock
Exchange, then the Fair Market Value shall be the closing selling price
per share of Common Stock at the close of regular hours trading (i.e.,
before after-hours trading begins) on the date in question on the Stock
Exchange determined by the Plan Administrator to be the primary market for
the Common Stock, as such price is officially quoted in the composite tape
of transactions on such exchange. If there is no closing selling price
for the Common Stock on the date in question, then the Fair Market Value
shall be the closing selling price on the last preceding date for which
such quotation exists.

     (iii) If the Common Stock is at the time not listed on any
established stock exchange, the Fair Market Value shall be determined by
the Board in good faith.

          K. Family Member shall mean, with respect to the Optionee, any child, stepchild,
grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew,
mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law or sister-in-law.

          L. Grant Date shall mean the date of grant of the option as specified in the Grant
Notice.

          M. Grant Notice shall mean the Notice of Grant of Stock Option accompanying the
Agreement, pursuant to which Optionee has been informed of the basic terms of the option evidenced
hereby.

          N. Hostile Take-Over shall mean the acquisition, directly or indirectly, by any person
or related group of persons (other than the Corporation or a person that directly or indirectly
controls, is controlled by, or is under common control with, the Corporation) of beneficial
ownership (within the meaning of Rule 13d-3 of the 1934 Act) of securities possessing more than
fifty percent (50%) of the total combined voting power of the Corporation’s outstanding securities
pursuant to a tender or exchange offer made directly to the Corporation’s stockholders which the
Board does not recommend such stockholders to accept.

          O. Non-Statutory Option shall mean an option not intended to satisfy the requirements
of Code Section 422.

          P. Notice of Exercise shall mean the notice of exercise in substantially the form
attached hereto as Exhibit A-1.

          Q. Option Shares shall mean the number of shares of Common Stock subject to the option
as specified in the Grant Notice.

A-8
(Non-Employee Director)

 

          R. Optionee shall mean the person to whom the option is granted as specified in the
Grant Notice.

          S. Parent shall mean any corporation (other than the Corporation) in an unbroken chain
of corporations ending with the Corporation, provided each corporation in the unbroken chain (other
than the Corporation) owns, at the time of the determination, stock possessing fifty percent (50%)
or more of the total combined voting power of all classes of stock in one of the other corporations
in such chain.

          T. Permanent Disability shall mean the inability of Optionee to engage in any
substantial gainful activity by reason of any medically determinable physical or mental impairment
which is expected to result in death or has lasted or can be expected to last for a continuous
period of twelve (12) months or more.

          U. Plan shall mean the Corporation’s amended and restated 2000 Stock Incentive Plan.

          V. Plan Administrator shall mean either the Board or a committee of the Board acting
in its capacity as administrator of the Plan.

          W. Service shall mean the Optionee’s performance of services for the Corporation (or
any Parent or Subsidiary) in the capacity of an Employee, a non-employee member of the board of
directors or a consultant or independent advisor. An Optionee shall be deemed to cease Service
immediately upon the occurrence of either of the following events: (i) the Optionee no longer
performs services in any of the foregoing capacities for the Corporation or any Parent or
Subsidiary; or (ii) the entity for which the Optionee is performing such services ceases to remain
a Parent or Subsidiary of the Corporation, even though the Optionee may subsequently continue to
perform services for that entity.

          X. Stock Exchange shall mean the American Stock Exchange, the Nasdaq Global Select
Market, the Nasdaq Global Market or the New York Stock Exchange.

          Y. Subsidiary shall mean any corporation (other than the Corporation) in an unbroken
chain of corporations beginning with the Corporation, provided each corporation (other than the
last corporation) in the unbroken chain owns, at the time of the determination, stock possessing
fifty percent (50%) or more of the total combined voting power of all classes of stock in one of
the other corporations in such chain.

          Z. Take-Over Price shall mean the greater of (i) the Fair Market Value per share of
Common Stock on the date the option is surrendered to the Corporation in connection with a Hostile
Take-Over or (ii) the highest reported price per share of Common Stock paid by the tender offeror
in effecting such Hostile Take-Over through the acquisition of Common Stock.

          AA. 1934 Act shall mean the Securities Exchange Act of 1934, as amended.

A-9
(Non-Employee Director)

 

 

NOTICE OF GRANT OF ATHLETE STOCK OPTION

(Athlete Form)

     Notice is hereby given of the following option grant (the “Option”) to purchase shares of the
Common Stock of Quiksilver, Inc. (the “Corporation”):

	 	 	 	 	 	 	 
	Optionee:

	 	 	 	Grant Date:
	 	 
	Number of Options Shares:

	 	 	 	Exercise Price:
	 	 
	Type of Option:

	 	o Incentive Stock Option
	 	Expiration Date:
	 	 
	 

	 	þ Non-Statutory Stock Option	 	 	 	 

     Exercise and Vesting Schedule: Subject to the limitations contained in this Option
and the Plan, this Option shall vest and become exercisable in installments as follows:

	 	 	 
	Number of Shares	 	Date of Earliest Exercise
	(Installment)	 	(Vesting)
	 	 	 

     Optionee understands and agrees that the Option is granted subject to and in accordance with
the terms of the Quiksilver, Inc. amended and restated 2000 Stock Incentive Plan (the “Plan”).
Optionee further agrees to be bound by the terms of the Plan and the terms of the Option as set
forth in the Stock Option Agreement attached hereto as Exhibit A. Optionee hereby
acknowledges the receipt of a copy of the official prospectus for the Plan in the form attached
hereto as Exhibit B. A copy of the Plan is available upon request made to the Corporate
Secretary at the Corporation’s principal offices.

     Services at Will. Nothing in this Notice or in the attached Stock Option Agreement or
in the Plan shall confer upon Optionee any right to continue in Service for any period of specific
duration or interfere with or otherwise restrict in any way the rights of the Corporation (or any
Parent or Subsidiary employing or retaining Optionee) or of Optionee, which rights are hereby
expressly reserved by each, to terminate Optionee’s Service at any time for any reason, with or
without cause.

     Definitions. All capitalized terms in this Notice shall have the meaning assigned to
them in this Notice or in the attached Stock Option Agreement.

	 	 	 	 	 	 	 	 	 	 	 	 	 
	Date:
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 

	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	QUIKSILVER, INC.	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	OPTIONEE	 	 	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 

	 	 
	Address:	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	ATTACHMENTS	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Exhibit A — Stock Option Agreement	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 

 

 

EXHIBIT A

QUIKSILVER, INC.

STOCK OPTION AGREEMENT

RECITALS

          A. The Board has adopted the Plan for the purpose of retaining the services of selected
Employees, non-employee members of the Board (or the board of directors of any Parent or
Subsidiary) and consultants and other independent advisors who provide services to the Corporation
(or any Parent or Subsidiary).

          B. Optionee is to render valuable services to the Corporation (or a Parent or Subsidiary), and
this Agreement is executed pursuant to, and is intended to carry out the purposes of, the Plan in
connection with the Corporation’s grant of an option to Optionee.

          C. All capitalized terms in this Agreement shall have the meaning assigned to them in the
attached Appendix.

          NOW, THEREFORE, it is hereby agreed as follows:

          1. Grant of Option. The Corporation hereby grants to Optionee, as of the Grant Date,
a Non-Statutory Option to purchase up to the number of Option Shares specified in the Grant Notice.
The Option Shares shall be purchasable from time to time during the option term specified in
Paragraph 2 at the Exercise Price.

          
2. Option Term. This option shall have a maximum term of ______ (___) years measured
from the Grant Date and shall accordingly expire at the close of business on the Expiration Date,
unless sooner terminated in accordance with Paragraph 5 or 6.

          3. Limited Transferability.

               (a) This option may be assigned in whole or in part during Optionee’s lifetime only by gift or
pursuant to a domestic relations order to one or more Family Members of the Optionee or to a trust
established for the exclusive benefit of Optionee and/or one or more such Family Members. The
assigned portion shall be exercisable only by the person or persons who acquire a proprietary
interest in the option pursuant to such assignment. The terms applicable to the assigned portion
shall be the same as those in effect for this option immediately prior to such assignment.

               (b) Except as provided in Paragraph 3(a) above, this option shall be neither transferable nor
assignable by Optionee other than by will or the laws of inheritance following Optionee’s death and
may be exercised, during Optionee’s lifetime, only by Optionee. However, Optionee may designate
one or more persons as the beneficiary or beneficiaries of this option, and this option shall, in
accordance with such designation, automatically be transferred to such beneficiary or beneficiaries
upon the Optionee’s death while holding this option. Such beneficiary or beneficiaries shall take
the transferred option subject to all the terms and

 A-1

(Athlete Form)

 

 

conditions of this Agreement, including (without limitation) the limited time period during
which this option may, pursuant to Paragraph 5, be exercised following Optionee’s death.

          4. Dates of Exercise. This option shall become exercisable for the Option Shares in
one or more installments as specified in the Grant Notice. As the option becomes exercisable for
such installments, those installments shall accumulate, and the option shall remain exercisable for
the accumulated installments until the Expiration Date or sooner termination of the option term
under Paragraph 5 or 6. Notwithstanding the foregoing, should the Optionee elect to exercise this
option during any period during which the Optionee is under investigation by the Corporation for
Misconduct, then any Option Shares acquired by the Optionee as a result of such exercise and/or the
net proceeds of any sale or sales of those acquired Option Shares (the gross sale proceeds less any
Exercise Price payment or withholding taxes due the Corporation in broker commissions) during such
period shall be held by the Corporation in escrow until such time as the investigation is
satisfactorily completed.

          5. Cessation of Service/Termination of Option. The option term specified in Paragraph
2 shall terminate (and this option shall cease to be outstanding) prior to the Expiration Date
should any of the following provisions become applicable:

               (a) Should Optionee cease to remain in Service for any reason (other than death, Permanent
Disability or Misconduct) while holding this option, then Optionee shall have a period of three (3)
months (commencing with the date of such cessation of Service) during which to exercise this
option, but in no event shall this option be exercisable at any time after the Expiration Date.

               (b) Should Optionee die while holding this option, then the personal representative of
Optionee’s estate or the person or persons to whom the option is transferred pursuant to Optionee’s
will or the laws of inheritance shall have the right to exercise this option. However, if Optionee
has designated one or more beneficiaries of this option, then those persons shall have the
exclusive right to exercise this option following Optionee’s death. Any such right to exercise
this option shall lapse, and this option shall cease to be outstanding, upon the earlier of
(i) the expiration of the twelve (12)-month period measured from the date of Optionee’s death or
(ii) the Expiration Date.

               (c) Should Optionee cease Service by reason of Permanent Disability while holding this option,
then Optionee shall have a period of twelve (12) months (commencing with the date of such cessation
of Service) during which to exercise this option. In no event shall this option be exercisable at
any time after the Expiration Date.

               (d) The applicable post-Service exercise period in effect for this option pursuant to the
foregoing provisions of this Paragraph 5 shall automatically be extended by an additional period of
time equal in duration to any interval within that otherwise applicable post-Service exercise
period in which the exercise of this option or the immediate sale of the Option Shares acquired
hereunder cannot be effected in compliance with applicable federal and state securities laws, but
in no event shall such an extension result in the continuation of this option beyond the Expiration
Date.

               (e) During the limited period of post-Service exercisability, this option may not be exercised
in the aggregate for more than the number of Option Shares for which the

 A-2

(Athlete Form)

 

 

option is exercisable at the time of Optionee’s cessation of Service. Upon the expiration of
such limited exercise period or (if earlier) upon the Expiration Date, this option shall terminate
and cease to be outstanding for any exercisable Option Shares for which the option has not been
exercised. However, this option shall, immediately upon Optionee’s cessation of Service for any
reason, terminate and cease to be outstanding with respect to any Option Shares for which this
option is not otherwise at that time exercisable.

               (f) Should Optionee’s Service be terminated for Misconduct or should Optionee otherwise engage
in any Misconduct while this option is outstanding, then this option shall terminate immediately
and cease to remain outstanding.

          6. Special Acceleration of Option.

               (a) This option, to the extent outstanding at the time of a Corporate Transaction but not
otherwise fully exercisable, shall NOT vest or become exercisable if and to the extent: (i) this
option is, in connection with the Corporate Transaction, to be assumed by the successor corporation
(or parent thereof) or otherwise continued in full force and effect pursuant to the terms of the
Corporate Transaction or (ii) this option is to be replaced with a cash incentive program of the
successor corporation which preserves the spread existing at the time of the Corporate Transaction
on any Option Shares for which this option is not otherwise at that time exercisable (the excess of
the Fair Market Value of those Option Shares over the aggregate Exercise Price payable for such
shares) and provides for subsequent payout in accordance with the same option exercise/vesting
schedule for those Option Shares set forth in the Grant Notice. However, if none of the foregoing
conditions apply to this option at the time of the Corporate Transaction, then this option shall
automatically accelerate so that such option shall, immediately prior to the effective date of that
Corporate Transaction, become exercisable for all the shares of Common Stock at the time subject to
this option and may be exercised for any or all of those shares as fully vested shares of Common
Stock.

               (b) Immediately following the Corporate Transaction, this option shall terminate and cease to
be outstanding, except to the extent assumed by the successor corporation (or parent thereof) in
connection with the Corporate Transaction or otherwise continued in full force and effect pursuant
to the terms of the Corporate Transaction.

               (c) If this option is assumed in connection with a Corporate Transaction or otherwise
continued in effect, then this option shall be appropriately adjusted, immediately after such
Corporate Transaction, to apply to the number and class of securities which would have been
issuable to Optionee in consummation of such Corporate Transaction had the option been exercised
immediately prior to such Corporate Transaction, and appropriate adjustments shall also be made to
the Exercise Price, provided the aggregate Exercise Price shall remain the same. To the
extent the actual holders of the Corporation’s outstanding Common Stock receive cash consideration
for their Common Stock in consummation of the Corporate Transaction, the successor corporation may,
in connection with the assumption of this option, substitute one or more shares of its own common
stock with a fair market value equivalent to the cash consideration paid per share of Common Stock
in such Corporate Transaction.

               (d) This Agreement shall not in any way affect the right of the Corporation to adjust,
reclassify, reorganize or otherwise change its capital or business structure

 A-3

(Athlete Form)

 

 

or to merge, consolidate, dissolve, liquidate or sell or transfer all or any part of its
business or assets.

          7. Adjustment in Option Shares. Should any change be made to the Common Stock by
reason of any stock split, stock dividend, recapitalization, combination of shares, exchange of
shares or other change affecting the outstanding Common Stock as a class without the Corporation’s
receipt of consideration, appropriate adjustments shall be made to (i) the total number and/or
class of securities subject to this option and (ii) the Exercise Price in order to reflect such
change and thereby preclude a dilution or enlargement of benefits hereunder.

          8. Stockholder Rights. The holder of this option shall not have any stockholder
rights with respect to the Option Shares until such person shall have exercised the option, paid
the Exercise Price and become a holder of record of the purchased shares.

          9. Manner of Exercising Option.

               (a) In order to exercise this option with respect to all or any part of the Option Shares for
which this option is at the time exercisable, Optionee (or any other person or persons exercising
the option) must take the following actions:

                    (i) Execute and deliver to the Corporation a Notice of Exercise for the Option Shares for
which the option is exercised.

                    (ii) Pay the aggregate Exercise Price for the purchased shares in one or more of the following
forms:

                         (A) cash or check made payable to the Corporation;

                         (B) shares of Common Stock valued at Fair Market Value on the Exercise Date and held by
Optionee (or any other person or persons exercising the option) for the period, if any, necessary
to avoid any charge to the Corporation’s earnings for financial reporting purposes; or

                         (C) through a special sale and remittance procedure pursuant to which Optionee (or any other
person or persons exercising the option) shall concurrently provide irrevocable instructions to (i)
a Corporation-designated brokerage firm to effect the immediate sale of the purchased shares and
remit to the Corporation, out of the sale proceeds available on the settlement date, sufficient
funds to cover the aggregate Exercise Price payable for the purchased shares plus all applicable
Federal, state and local income and employment taxes required to be withheld by the Corporation by
reason of such exercise and (ii) the Corporation to deliver the certificates for the purchased
shares directly to such brokerage firm in order to complete the sale.

               Except to the extent the sale and remittance procedure is utilized in connection with the
option exercise, payment of the Exercise Price must accompany the Notice of Exercise delivered to
the Corporation in connection with the option exercise.

 A-4

(Athlete Form)

 

 

                    (iii) Furnish to the Corporation appropriate documentation that the person or persons
exercising the option (if other than Optionee) have the right to exercise this option.

                    (iv) Make appropriate arrangements with the Corporation (or Parent or Subsidiary employing or
retaining Optionee) for the satisfaction of all Federal, state and local income and employment tax
withholding requirements applicable to the option exercise.

               (b) As soon as practical after the Exercise Date, the Corporation shall issue to or on behalf
of Optionee (or any other person or persons exercising this option) a certificate for the purchased
Option Shares, with the appropriate legends affixed thereto.

               (c) In no event may this option be exercised for any fractional shares.

          10. Compliance with Laws and Regulations.

               (a) The exercise of this option and the issuance of the Option Shares upon such exercise shall
be subject to compliance by the Corporation and Optionee with all applicable requirements of law
relating thereto and with all applicable regulations of any stock exchange (or over-the-counter
market, if applicable) on which the Common Stock may be listed for trading at the time of such
exercise and issuance.

               (b) The inability of the Corporation to obtain approval from any regulatory body having
authority deemed by the Corporation to be necessary to the lawful issuance and sale of any Common
Stock pursuant to this option shall relieve the Corporation of any liability with respect to the
non-issuance or sale of the Common Stock as to which such approval shall not have been obtained.
The Corporation, however, shall use its best efforts to obtain all such approvals.

          11. Successors and Assigns. Except to the extent otherwise provided in Paragraphs 3
and 6, the provisions of this Agreement shall inure to the benefit of, and be binding upon, the
Corporation and its successors and assigns and Optionee, Optionee’s assigns, the legal
representatives, heirs and legatees of Optionee’s estate and any beneficiaries of this option
designated by Optionee.

          12. Notices. Any notice required to be given or delivered to the Corporation under
the terms of this Agreement shall be in writing and addressed to the Corporation at its principal
corporate offices. Any notice required to be given or delivered to Optionee shall be in writing
and addressed to Optionee at the address indicated below Optionee’s signature line on the Grant
Notice. All notices shall be deemed effective upon personal delivery or upon deposit in the U.S.
mail, postage prepaid and properly addressed to the party to be notified.

          13. Construction. This Agreement and the option evidenced hereby are made and granted
pursuant to the Plan and are in all respects limited by and subject to the terms of the Plan. All
decisions of the Plan Administrator with respect to any question or issue arising under the Plan or
this Agreement shall be conclusive and binding on all persons having an interest in this option.

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          14. Governing Law. The interpretation, performance and enforcement of this Agreement
shall be governed by the laws of the State of California without resort to that State’s
conflict-of-laws rules.

          15. Excess Shares. If the Option Shares covered by this Agreement exceed, as of the
Grant Date, the number of shares of Common Stock which may without stockholder approval be issued
under the Plan, then this option shall be void with respect to those excess shares, unless
stockholder approval of an amendment sufficiently increasing the number of shares of Common Stock
issuable under the Plan is obtained in accordance with the provisions of the Plan.

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Exhibit A-1

NOTICE OF EXERCISE

          I hereby notify Quiksilver, Inc. (the “Corporation”) that I elect to purchase                     
shares of the Corporation’s Common Stock (the “Purchased Shares”) at the option exercise price of
$                     per share (the “Exercise Price”) pursuant to that certain option (the “Option”) granted
to me under the Corporation’s amended and restated 2000 Stock Incentive Plan on
                
            ,
        

          Concurrently with the delivery of this Exercise Notice to the Corporation, I shall hereby pay
to the Corporation the Exercise Price for the Purchased Shares in accordance with the provisions of
my agreement with the Corporation (or other documents) evidencing the Option and shall deliver
whatever additional documents may be required by such agreement as a condition for exercise.
Alternatively, I may utilize the special broker-dealer sale and remittance procedure specified in
my agreement to effect payment of the Exercise Price.

	 	 	 	 	 	 	 	 
	                                        ,                     
	 	 	 	 	 	 
	Date
	 	 	 	 	 	 
	 	 	 	 	 

	 

	 	 	 	Optionee	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	Address:  	 	 
	 

	 	 	 	 	 	 

	 

	 	 	 	 	 	 

	 

	 	 	 	 	 	 

	Print name in exact manner it is to
	 	 	 	 	 	 
	appear on the stock certificate:	 	 	 	 

	 
	 	 	 	 	 	 
	Address to which certificate is to	 	 	 	 

	be sent, if different from address	 	 	 	 

	above:	 	 	 	 

	 
	 	 	 	 	 	 
	Social Security Number:	 	 	 	 

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APPENDIX

          The following definitions shall be in effect under the Agreement:

          A. Agreement shall mean this Stock Option Agreement.

          B. Board shall mean the Corporation’s Board of Directors.

          C. Code shall mean the Internal Revenue Code of 1986, as amended.

          D. Common Stock shall mean shares of the Corporation’s common stock.

          E. Corporate Transaction shall mean either of the following stockholder-approved
transactions to which the Corporation is a party:

     (i) a merger or consolidation in which securities possessing
more than fifty percent (50%) of the total combined voting power of
the Corporation’s outstanding securities are transferred to a person
or persons different from the persons holding those securities
immediately prior to such transaction, or

     (ii) the sale, transfer or other disposition of all or
substantially all of the Corporation’s assets in complete
liquidation or dissolution of the Corporation.

          F. Corporation shall mean Quiksilver, Inc., a Delaware corporation, and any successor
corporation to all or substantially all of the assets or voting stock of Quiksilver, Inc. which
shall by appropriate action adopt the Plan.

          G. Employee shall mean an individual who is in the employ of the Corporation (or any
Parent or Subsidiary), subject to the control and direction of the employer entity as to both the
work to be performed and the manner and method of performance.

          H. Exercise Date shall mean the date on which the option shall have been exercised in
accordance with Paragraph 9 of the Agreement.

          I. Exercise Price shall mean the exercise price per Option Share as specified in the
Grant Notice.

          J. Expiration Date shall mean the date on which the option expires as specified in the
Grant Notice.

          K. Fair Market Value per share of Common Stock on any relevant date shall be
determined in accordance with the following provisions:

     (i) If the Common Stock is at the time traded on the Nasdaq
Global Select Market (or the Nasdaq Global Market), then the Fair
Market Value shall be the closing selling price per share of Common
Stock at the close of regular hours trading (i.e., before
after-hours trading begins) on the Nasdaq Global Stock Market (or

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the Nasdaq Global Market) on the date in question, as such
price is reported by The Wall Street Journal. If there is no
closing selling price for the Common Stock on the date in question,
then the Fair Market Value shall be the closing selling price on the
last preceding date for which such quotation exists.

     (ii) If the Common Stock is at the time listed on any other
Stock Exchange, then the Fair Market Value shall be the closing
selling price per share of Common Stock at the close of regular
hours trading (i.e., before after-hours trading begins) on the date
in question on the Stock Exchange determined by the Plan
Administrator to be the primary market for the Common Stock, as such
price is officially quoted in the composite tape of transactions on
such exchange. If there is no closing selling price for the Common
Stock on the date in question, then the Fair Market Value shall be
the closing selling price on the last preceding date for which such
quotation exists.

     (iii) If the Common Stock is at the time not listed on
any established stock exchange, the Fair Market Value shall be
determined by the Board in good faith.

          L. Family Member shall mean, with respect to the Optionee, any child, stepchild,
grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew,
mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law or sister-in-law.

          M. Grant Date shall mean the date of grant of the option as specified in the Grant
Notice.

          N. Grant Notice shall mean the Notice of Grant of Stock Option accompanying the
Agreement, pursuant to which Optionee has been informed of the basic terms of the option evidenced
hereby.

          O. Incentive Option shall mean an option which satisfies the requirements of Code
Section 422.

          P. Misconduct shall mean the commission of any act of fraud, embezzlement or
dishonesty by Optionee, any unauthorized use or disclosure by Optionee of confidential information
or trade secrets of the Corporation (or any Parent or Subsidiary), or any other intentional
misconduct by Optionee adversely affecting the business or affairs of the Corporation (or any
Parent or Subsidiary) in a material manner. The foregoing definition shall not be deemed to be
inclusive of all the acts or omissions which the Corporation (or any Parent or Subsidiary) may
consider as grounds for the dismissal or discharge of Optionee or any other individual in the
Service of the Corporation (or any Parent or Subsidiary).

          Q. Non-Statutory Option shall mean an option not intended to satisfy the requirements
of Code Section 422.

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          R. Notice of Exercise shall mean the notice of exercise in substantially the form
attached hereto as Exhibit A-1.

          S. Option Shares shall mean the number of shares of Common Stock subject to the option
as specified in the Grant Notice.

          T. Optionee shall mean the person to whom the option is granted as specified in the
Grant Notice.

          U. Parent shall mean any corporation (other than the Corporation) in an unbroken chain
of corporations ending with the Corporation, provided each corporation in the unbroken chain (other
than the Corporation) owns, at the time of the determination, stock possessing fifty percent (50%)
or more of the total combined voting power of all classes of stock in one of the other corporations
in such chain.

          V. Permanent Disability Or Permanently Disabled shall mean the inability of the
Optionee to engage in any substantial gainful activity by reason of any medically determinable
physical or mental impairment which is both (i) expected to result in death or determined to be
total and permanent by two (2) physicians selected by the Corporation or its insurers and
acceptable to the Optionee (or the Optionee’s legal representative), and (ii) to the extent the
Optionee is eligible to participate in the Corporation’s long-term disability plan, entitles the
Optionee to the payment of long-term disability benefits from the Corporation’s long-term
disability plan. The process for determining a Permanent Disability in accordance with the
foregoing shall be completed no later than the later of (i) the close of the calendar year in which
the Optionee’s Service terminates by reason of the physical or mental impairment triggering the
determination process or (ii) the fifteenth day of the third calendar month following such
termination of Service.

          W. Plan shall mean the Corporation’s amended and restated 2000 Stock Incentive Plan.

          X. Plan Administrator shall mean either the Board or a committee of the Board acting
in its capacity as administrator of the Plan.

          Y. Service shall mean the Optionee’s performance of services for the Corporation (or
any Parent or Subsidiary) in the capacity of an Employee, a non-employee member of the board of
directors or a consultant or independent advisor. An Optionee shall be deemed to cease Service
immediately upon the occurrence of either of the following events: (i) the Optionee no longer
performs services in any of the foregoing capacities for the Corporation or any Parent or
Subsidiary; or (ii) the entity for which the Optionee is performing such services ceases to remain
a Parent or Subsidiary of the Corporation, even though the Optionee may subsequently continue to
perform services for that entity.

          Z. Stock Exchange shall mean the American Stock Exchange, the Nasdaq Global Select
Market, the Nasdaq Global Market or the New York Stock Exchange.

          AA. Subsidiary shall mean any corporation (other than the Corporation) in an unbroken
chain of corporations beginning with the Corporation, provided each corporation (other than the
last corporation) in the unbroken chain owns, at the time of the determination, stock

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possessing fifty percent (50%) or more of the total combined voting power of all classes of
stock in one of the other corporations in such chain.

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QUIKSILVER, INC.

RESTRICTED STOCK AGREEMENT

(Non-Employee Director Automatic Grant — Annual Meeting and Initial Grant Form)

	 	 	 	 	 
	Director:

	 	 	 	 
	Grant Date:

	 	 
	 	 
	Number of Shares of
Restricted Stock Granted:

	 	5,000	 	 

          
THIS RESTRICTED STOCK AGREEMENT (this “Agreement”) dated as of
[_______________], 200___ (the
“Grant Date”) is entered into by and between Quiksilver, Inc., a Delaware corporation (the
“Corporation”), and the Director specified above, pursuant to the Director Automatic Grant Program
under the Quiksilver, Inc. amended and restated 2000 Stock Incentive Plan (the “Plan”).
Capitalized terms used herein and not otherwise defined in the attached Appendix or elsewhere
herein shall have the meaning assigned to such terms in the Plan.

          NOW, THEREFORE, in consideration of services rendered and to be rendered by the Director, and
the mutual promises made herein and the mutual benefits to be derived therefrom, the parties agree
as follows:

     1. Grant. Subject to the terms of this Agreement, the Corporation hereby grants to
the Director an aggregate of 5,000 restricted shares of Common Stock of the Corporation (the
“Restricted Stock”).

     2. Vesting.

          (a) Time Vesting. Subject to Section 7 below, the Restricted Stock shall vest, and
restrictions shall lapse, as follows:

               (i) 1,666 shares of Restricted Stock shall vest on the first anniversary of the Grant Date or,
if this grant is being made on the date of an annual meeting of stockholders of the Corporation, on
the day immediately preceding the date of the first annual meeting of stockholders of the
Corporation following the Grant Date, if earlier than such first anniversary;

               (ii) 1,666 shares of Restricted Stock shall vest on the second anniversary of the Grant Date
or, if this grant is being made on the date of an annual meeting of stockholders of the
Corporation, on the day immediately preceding the date of the second annual meeting of stockholders
of the Corporation following the Grant Date, if earlier than such second anniversary;

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               (iii) 1,667 shares of Restricted Stock shall vest on the third anniversary of the Grant Date
or, if this grant is being made on the date of an annual meeting of stockholders of the
Corporation, on the day immediately preceding the date of the third annual meeting of stockholders
of the Corporation following the Grant Date, if earlier than such third anniversary.

          (b) Acceleration of Vesting Upon Corporate Transaction/Change in Control. All of the
Restricted Stock shall accelerate and vest and all restrictions shall lapse, immediately prior to
the effective date of a Corporate Transaction or Change in Control.

          (c) Acceleration of Vesting Upon Death or Permanent Disability. In the event of the
death or Permanent Disability of Director, all of the Restricted Stock shall accelerate and vest
and all restrictions shall lapse immediately prior to such death or Permanent Disability.

     3. Continuance of Service. Vesting of the Restricted Stock requires continued Service
of the Director as a member of the Corporation’s Board of Directors from the Grant Date through
each applicable vesting date as a condition to the vesting of the applicable installment of the
Restricted Stock and the rights and benefits under this Agreement. Nothing contained in this
Agreement or the Plan constitutes a service commitment by the Corporation, confers upon the
Director any right to remain in service to the Corporation, interferes in any way with the right of
the Corporation at any time to terminate such services, or affects the right of the Corporation to
increase or decrease the Director’s other compensation or benefits. Nothing in this section,
however, is intended to adversely affect any independent contractual right of the Director without
his or her consent thereto.

     4. Dividend and Voting Rights. After the Grant Date, the Director shall be entitled
to voting rights and any regular cash dividends with respect to the shares of Restricted Stock even
though such shares are not vested, provided that such rights shall terminate immediately as to any
shares of Restricted Stock that are forfeited pursuant to Section 7 below.

     5. Restrictions on Transfer. Prior to the time that they have become vested, neither
shares of the Restricted Stock, nor any interest therein, amount payable in respect thereof, or
Restricted Property (as defined in Section 8 hereof) may be sold, assigned, transferred, pledged or
otherwise disposed of, alienated or encumbered (collectively, a “Transfer”), either voluntarily or
involuntarily. The Transfer restrictions in the preceding sentence shall not apply to (i)
transfers to the Corporation, or (ii) transfers by will or the laws of descent and distribution.
After any shares of Restricted Stock have vested, the Director shall be permitted to Transfer such
shares of Restricted Stock, subject to applicable securities law requirements, the Corporation’s
insider trading policies, and other applicable laws and regulations.

     6. Stock Certificates.

          (a) Book Entry Form. The Corporation shall issue the shares of Restricted Stock
either: (i) in certificate form as provided in Section 6(b) below; or (ii) in book entry form,
registered in the name of the Director with notations regarding the applicable restrictions on
transfer imposed under this Agreement.

          (b) Certificates to be Held by Corporation; Legend. Any certificates representing
shares of Restricted Stock that may be delivered to the Director by the Corporation

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(Non-Employee Director Automatic Grant — Annual Meeting and Initial Grant Form)

 

 

prior to vesting shall be redelivered to the Corporation to be held by the Corporation until
the restrictions on such shares shall have lapsed and the shares shall thereby have become vested
or the shares represented thereby have been forfeited hereunder. Such certificates shall bear the
following legend:

“The ownership of this certificate and the shares of stock evidenced
hereby and any interest therein are subject to substantial
restrictions on transfer under an Agreement entered into between the
registered owner and Quiksilver, Inc. A copy of such Agreement is
on file in the office of the Secretary of Quiksilver, Inc.”

          (c) Delivery of Certificates Upon Vesting. Promptly after shares of Restricted Stock
have vested, and all other conditions and restrictions applicable to such Restricted Stock have
been satisfied or lapse (including satisfaction of any applicable Withholding Taxes), the
Corporation shall, as applicable, either remove the notations on any shares of Restricted Stock
issued in book entry form which have vested or deliver to the Director a certificate or
certificates evidencing the number of shares of Restricted Stock which have vested (or, in either
case, such lesser number of shares as may be permitted pursuant to Section 9). The Director (or
the beneficiary or personal representative of the Director in the event of the Director’s death or
Permanent Disability, as the case may be) shall deliver to the Corporation any representations or
other documents or assurances as the Corporation may deem desirable to assure compliance with all
applicable legal and accounting requirements. The shares so delivered shall no longer be
Restricted Stock hereunder.

          (d) Stock Power; Power of Attorney. Concurrently with the execution and delivery of
this Agreement, the Director shall deliver to the Corporation an executed stock power in the form
attached hereto as Exhibit A, in blank, with respect to such shares. The Director, by
acceptance of the Restricted Stock, shall be deemed to appoint, and does so appoint by execution of
this Agreement, the Corporation and each of its authorized representatives as the Director’s
attorney(s)-in-fact to effect any transfer of unvested forfeited shares of Restricted Stock (or
shares otherwise reacquired by the Corporation hereunder) to the Corporation as may be required
pursuant to the Plan or this Agreement and to execute such documents as the Corporation or such
representatives deem necessary or advisable in connection with any such transfer.

     7. Effect of Termination of Service. Subject to earlier vesting as provided in
Section 2 hereof, if the Director ceases to provide Service to the Corporation as a member of the
Corporation’s Board of Directors, the Director’s shares of Restricted Stock (and related Restricted
Property as defined in Section 8 hereof) shall be forfeited to the Corporation to the extent such
shares have not become vested pursuant to Section 2 upon the date the Director’s Service as a
member of the Board of Directors terminates (the “Severance Date”), regardless of the reason for
such termination (whether with or without cause, voluntarily or involuntarily). Upon the
occurrence of any forfeiture of shares of Restricted Stock hereunder, such unvested, forfeited
shares and related Restricted Property shall be automatically transferred to the Corporation,
without any other action by the Director. No additional consideration shall be paid by the
Corporation with respect to such transfer. The Corporation may exercise its powers under Section
6(d) hereof and take any other action necessary or advisable to evidence such transfer.

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The Director shall deliver any additional documents of transfer that the Corporation may
request to confirm the transfer of such unvested, forfeited shares and related Restricted Property
to the Corporation.

     8. Adjustments Upon Specified Events. If any change is made to the Common Stock by
reason of any stock split, stock dividend, recapitalization, combination of shares, exchange of
shares or other change affecting the outstanding Common Stock as a class, appropriate adjustment
shall be made to the number and/or class of securities in effect under this Agreement. Such
adjustments to the outstanding Restricted Stock are to be effected in a manner which shall preclude
the enlargement or dilution of rights and benefits under this Agreement. The adjustments
determined by the Corporation shall be final, binding and conclusive. If any adjustment shall be
made pursuant to the foregoing or any dividend other than a regular cash dividend is declared and
the shares of Restricted Stock are not fully vested upon such event or prior thereto, the
restrictions applicable to such shares of Restricted Stock shall continue in effect with respect to
any consideration or other securities (the “Restricted Property” and, for the purposes of this
Agreement, “Restricted Stock” shall include “Restricted Property,” unless the context otherwise
requires) received in respect of such Restricted Stock. Such Restricted Property shall vest at
such times and in such proportion as the shares of Restricted Stock to which the Restricted
Property is attributable vest, or would have vested pursuant to the terms hereof if such shares of
Restricted Stock had remained outstanding.

     9. Taxes.

          (a) Tax Withholding. The Corporation shall be entitled to require a cash payment by
or on behalf of the Director and/or to deduct from other compensation payable to the Director any
sums required with respect to Withholding Taxes. Alternatively, the Director or other person in
whom the Restricted Stock vests may irrevocably elect, in such manner and at such time or times
prior to any applicable tax date as may be permitted or required under rules established by the
Corporation, to have the Corporation withhold and reacquire shares of Restricted Stock at their
Fair Market Value at the time of vesting to satisfy all or part of the minimum Withholding Taxes of
the Corporation with respect to such vesting. Any election to have shares so held back and
reacquired shall be subject to such rules and procedures, which may include prior approval of the
Corporation, as the Corporation may impose, and shall not be available if the Director makes or has
made an election pursuant to Section 83(b) of the Code with respect to such Restricted Stock.

          (b) Tax Consequences to Director. Director acknowledges that the issuance and the
vesting of the Restricted Stock may have significant and adverse tax consequences for Director and
that Director has been advised by the Corporation to review the Questions and Answers on Federal
Income Tax Consequences portion of the Corporation’s Stock Plan Summary and Prospectus and to
consult Director’s personal tax advisor regarding the consequences of the issuance and vesting of
the Restricted Stock to Director.

     10. Notices. Any notice to be given under the terms of this Agreement shall be in
writing and addressed to the Corporation at its principal office to the attention of the Secretary,
and to the Director at the Director’s last address reflected on the Corporation’s records. Any
notice shall be delivered in person or shall be enclosed in a properly sealed envelope, addressed

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(Non-Employee Director Automatic Grant — Annual Meeting and Initial Grant Form)

 

 

as aforesaid, registered or certified, and deposited (postage and registry or certification
fee prepaid) in a post office or branch office regularly maintained by the United States
Government. Any such notice shall be given only when received, but shall be deemed to have been
duly given five business days after the date mailed in accordance with the foregoing provisions of
this Section 10.

     11. Plan. The Restricted Stock and all rights of the Director under this Agreement
are subject to the terms and conditions of the provisions of the Plan, incorporated herein by
reference. The Director agrees to be bound by the terms of the Plan and this Agreement. The
Director acknowledges having read and understanding the Plan, the Plan Summary and Prospectus for
the Plan, and this Agreement.

     12. Entire Agreement. This Agreement and the Plan together constitute the entire
agreement and supersede all prior understandings and agreements, written or oral, of the parties
hereto with respect to the subject matter hereof. The Plan and this Agreement may be amended
pursuant to Section 6.3 of the Plan. Such amendment must be in writing and signed by the
Corporation. The Corporation may, however, unilaterally waive any provision hereof in writing to
the extent such waiver does not adversely affect the interests of the Director hereunder, but no
such waiver shall operate as or be construed to be a subsequent waiver of the same provision or a
waiver of any other provision hereof.

     13. Counterparts. This Agreement may be executed simultaneously in any number of
counterparts, each of which shall be deemed an original but all of which together shall constitute
one and the same instrument.

     14. Section Headings. The section headings of this Agreement are for convenience of
reference only and shall not be deemed to alter or affect any provision hereof.

     15. Governing Law. This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Delaware without regard to conflict of law principles
thereunder.

[Signature page follows]

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(Non-Employee Director Automatic Grant — Annual Meeting and Initial Grant Form)

 

 

          IN WITNESS WHEREOF, the Corporation has caused this Agreement to be executed on its behalf by
a duly authorized officer and the Director has hereunto set his or her hand as of the date and year
first above written.

	 	 	 	 	 
	 	QUIKSILVER, INC., a Delaware corporation

 	 
	 	By:  	 	 
	 	 	Print Name:  	  	 
	 	 	Its: 	 	 
	 
	 	DIRECTOR
 	 
	 	
 	 
	 	Signature 	 
	 	
 	 
	 	Print Name 	 
	 	 	 

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(Non-Employee Director Automatic Grant — Annual Meeting and Initial Grant Form)

 

 

	 	 	 	 	 

APPENDIX

          The following definitions shall be in effect under the Agreement:

          A. “Board” shall mean the Corporation’s Board of Directors.

          B. “Change in Control” shall mean a change in ownership or control of the Corporation effected
through either of the following transactions.

               (i) the acquisition, directly or indirectly, by any person or related group of persons (other
than the Corporation or a person that directly controls, is controlled by, or is under common
control with, the Corporation), of beneficial ownership (within the meaning of Rule 13d-3 of the
1934 Act) of securities possessing more than fifty percent (50%) of the total combined voting power
of the Corporation’s outstanding securities pursuant to a tender or exchange offer made directly to
the Corporation’s stockholders, or

               (ii) a change in the composition of the Board over a period of thirty-six (36) consecutive
months or less such that a majority of the Board members ceases, by reason of one or more contested
elections for Board membership, to be comprised of individuals who either (A) have been Board
members continuously since the beginning of such period or (b) have been elected or nominated for
election as Board members during such period by at least a majority of the Board members described
in clause (A) who were still in office at the time the Board approved such election or nomination.

          C. “Common Stock” shall mean the Corporation’s common stock.

          D. “Corporate Transaction” shall mean either of the following stockholder-approved
transactions to which the Corporation is a party:

               (i) a merger or consolidation in which securities possessing more than fifty percent (50%) of
the total combined voting power of the Corporation’s outstanding securities are transferred to a
person or persons different from the persons holding those securities immediately prior to such
transaction, or

               (ii) the sale, transfer or other disposition of all or substantially all of the Corporation’s
assets in complete liquidation or dissolution of the Corporation.

          E. “Fair Market Value” per share of Common Stock on any relevant date shall be determined in
accordance with the following provisions:

               (i) If the Common Stock is at the time traded on the Nasdaq Global Select Market (or the
Nasdaq Global Market), then the Fair Market Value shall be the closing selling price per share of
Common Stock at the close of regular hours trading (i.e., before after-hours trading begins) on the
Nasdaq Global Stock Market (or the Nasdaq Global Market) on the date in question, as such price is
reported by The Wall Street Journal. If there is no closing selling price for the Common Stock on
the date in question, then the Fair Market Value shall be the closing selling price on the last
preceding date for which such quotation exists.

 7

(Non-Employee Director Automatic Grant — Annual Meeting and Initial Grant Form)

 

 

               (ii) If the Common Stock is at the time listed on any other Stock Exchange, then the Fair
Market Value shall be the closing selling price per share of Common Stock at the close of regular
hours trading (i.e., before after-hours trading begins) on the date in question on the Stock
Exchange determined by the Plan Administrator to be the primary market for the Common Stock, as
such price is officially quoted in the composite tape of transactions on such exchange. If there
is no closing selling price for the Common Stock on the date in question, then the Fair Market
Value shall be the closing selling price on the last preceding date for which such quotation
exists.

               (iii) If the Common Stock is at the time not listed on any established stock exchange,
the Fair Market Value shall be determined by the Board in good faith.

          F. “Permanent Disability” or “Permanently Disabled” shall mean the inability of the Director
to perform his or her usual duties as a Board member by reason of any medically determinable
physical or mental impairment expected to result in death or to be of continuous duration of twelve
(12) months or more.

          G. “Service” shall mean the performance of services for the Corporation by a person in the
capacity of a member of the Corporation’s Board of Directors.

          H. “Stock Exchange” shall mean the American Stock Exchange, the Nasdaq Global Select Market,
the Nasdaq Global Market or the New York Stock Exchange.

          I. “Withholding Taxes” shall mean the federal, state and local income and employment
withholding taxes to which the Director may become subject in connection with the issuance or
vesting of shares of Restricted Stock or upon the disposition of shares acquired pursuant to this
Agreement.

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CONSENT OF SPOUSE

          In consideration of the execution of the foregoing Restricted Stock Agreement by Quiksilver,
Inc., I, __________________, the spouse of the Director therein named, do hereby join with
my spouse in executing the foregoing Restricted Stock Agreement and do hereby agree to be bound by
all of the terms and provisions thereof and of the Plan.

Dated: ________________, 200___

	 	 	 	 	 
	 	
 	 
	 	Signature of Spouse 	 
	 	 	 
	 	
 	 
	 	Print Name 	 
	 	 	 

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(Non-Employee Director Automatic Grant — Annual Meeting and Initial Grant Form)

 

 

	 	 	 	 	 

STOCK POWER

          FOR VALUE RECEIVED and pursuant to that certain Restricted Stock Agreement between Quiksilver,
Inc., a Delaware corporation (the “Corporation”), and the individual named below (the “Individual”)
dated as of _________, 200___, the Individual, hereby sells, assigns and transfers to the
Corporation, an aggregate _________ shares of Common Stock of the Corporation, standing in the
Individual’s name on the books of the Corporation and represented by stock certificate number(s)
_________ to which this instrument is attached, and hereby irrevocably constitutes and appoints
________________________ as his or her attorney in fact and agent to transfer such shares on the
books of the Corporation, with full power of substitution in the premises.

Dated ______________, _________

	 	 	 	 	 
	 	
 	 
	 	Signature 	 
	 	 	 
	 	
 	 
	 	Print Name 	 
	 	 	 
	 

     (Instruction: Please do not fill in any blanks other than the signature line. The purpose of
the assignment is to enable the Corporation to exercise its sale/purchase option set forth in the
Restricted Stock Agreement without requiring additional signatures on the part of the Individual.)

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(Non-Employee Director Automatic Grant — Annual Meeting and Initial Grant Form)

 

 

FORM

QUIKSILVER, INC.

RESTRICTED STOCK AGREEMENT

(Employee Grant)

	 	 	 	 
	Participant:
	 	 	 
	Grant Date:
	 	 	 
	Number of Shares of

Restricted Stock Granted:
	 	 	 

          
THIS RESTRICTED STOCK AGREEMENT (this “Agreement”) dated as of [
                
                ],
200___ (the
“Grant Date”) is entered into by and between Quiksilver, Inc., a Delaware corporation (the
“Corporation”), and the Participant specified above, pursuant to the Restricted Stock Program under
the Quiksilver, Inc. amended and restated 2000 Stock Incentive Plan (the “Plan”). Capitalized
terms used herein and not otherwise defined in the attached Appendix or elsewhere herein shall have
the meaning assigned to such terms in the Plan.

          NOW, THEREFORE, in consideration of services rendered and to be rendered by the Participant,
and the mutual promises made herein and the mutual benefits to be derived therefrom, the parties
agree as follows:

     1. Grant. Subject to the terms of this Agreement, the Corporation hereby grants to
the Participant an aggregate of                      restricted shares of Common Stock of the Corporation
(the “Restricted Stock”).

     2. Vesting.

          (a) Time Vesting. Subject to Section 7 below, the Restricted Stock shall vest, and
restrictions shall lapse, as follows:

               [Insert Vesting Provisions]

          (b) Acceleration of Vesting Upon Corporate Transaction. No shares of the Restricted
Stock shall vest at the time of a Corporate Transaction on an accelerated basis if and to the
extent that (i) this Agreement is, in connection with the Corporate Transaction, continued or
assumed by the successor corporation (or parent thereof) or otherwise continued in full force and
effect pursuant to the express terms of the Corporate Transaction, or (ii) substitution of new
agreements of comparable value covering shares of the successor corporation (or parent thereof) in
exchange for such shares of Restricted Stock, with appropriate adjustments as to the number and
kind of shares and purchase price, is provided for pursuant to the express terms of the Corporation
Transaction. However, if none of the foregoing conditions are satisfied,

1

(Employee Grant Form)

 

 

immediately prior to the effective date of the Corporate Transaction, all of the Restricted
Stock shall accelerate and vest and all restrictions shall lapse, immediately prior to the
effective date of the Corporate Transaction. In addition, if this Agreement is continued or
assumed by a successor corporation (or parent thereof) or otherwise continued in full force and
effect pursuant to the express terms of the Corporate Transaction or new agreements of comparable
value covering shares of the successor corporation (or parent thereof) are substituted in exchange
for the shares of Restricted Stock, and the successor corporation (or parent thereof) terminates
Participant as an employee, other than for Misconduct, all of the Restricted Stock shall accelerate
and vest and all restrictions shall lapse immediately prior to such termination of Participant as
an employee of the successor corporation (or parent thereof).

          (c) Acceleration of Vesting Upon Change in Control. In the event that the Corporation
terminates Participant as an Employee, other than for Misconduct, following a Change in Control,
all of the Restricted Stock shall accelerate and vest and all restrictions shall lapse, immediately
prior to such termination of Participant as an Employee.

          (d) Acceleration of Vesting Upon Death or Permanent Disability. In the event of the
death or Permanent Disability of Participant, all of the Restricted Stock shall accelerate and vest
and all restrictions shall lapse immediately prior to such death or Permanent Disability.

     3. Continuance of Service. Vesting of the Restricted Stock requires continued Service
of the Participant from the Grant Date through each applicable vesting date as a condition to the
vesting of the applicable installment of the Restricted Stock and the rights and benefits under
this Agreement. Nothing contained in this Agreement or the Plan constitutes an employment or
service commitment by the Corporation, affects the Participant’s status as an employee at will who
is subject to termination without cause, confers upon the Participant any right to remain employed
by or in service to the Corporation (or any Parent or Subsidiary), interferes in any way with the
right of the Corporation (or any Parent or Subsidiary) at any time to terminate such employment or
services, or affects the right of the Corporation (or any Parent or Subsidiary) to increase or
decrease the Participant’s other compensation or benefits. Nothing in this section, however, is
intended to adversely affect any independent contractual right of the Participant without his or
her consent thereto.

     4. Dividend and Voting Rights. After the Grant Date, the Participant shall be
entitled to voting rights and any regular cash dividends with respect to the shares of Restricted
Stock even though such shares are not vested, provided that such rights shall terminate immediately
as to any shares of Restricted Stock that are forfeited pursuant to Section 7 below.

     5. Restrictions on Transfer. Prior to the time that they have become vested, neither
shares of the Restricted Stock, nor any interest therein, amount payable in respect thereof, or
Restricted Property (as defined in Section 8 hereof) may be sold, assigned, transferred, pledged or
otherwise disposed of, alienated or encumbered (collectively, a “Transfer”), either voluntarily or
involuntarily. The Transfer restrictions in the preceding sentence shall not apply to (i)
transfers to the Corporation, or (ii) transfers by will or the laws of descent and distribution.
After any shares of Restricted Stock have vested, the Participant shall be permitted to Transfer
such shares of Restricted Stock, subject to applicable securities law requirements, the
Corporation’s insider trading policies, and other applicable laws and regulations.

2

(Employee Grant Form)

 

 

     6. Stock Certificates.

          (a) Book Entry Form. The Corporation shall issue the shares of Restricted Stock
either: (i) in certificate form as provided in Section 6(b) below; or (ii) in book entry form,
registered in the name of the Participant with notations regarding the applicable restrictions on
transfer imposed under this Agreement.

          (b) Certificates to be Held by Corporation; Legend. Any certificates representing
shares of Restricted Stock that may be delivered to the Participant by the Corporation prior to
vesting shall be redelivered to the Corporation to be held by the Corporation until the
restrictions on such shares shall have lapsed and the shares shall thereby have become vested or
the shares represented thereby have been forfeited hereunder. Such certificates shall bear the
following legend:

“The ownership of this certificate and the shares of stock evidenced
hereby and any interest therein are subject to substantial
restrictions on transfer under an Agreement entered into between the
registered owner and Quiksilver, Inc. A copy of such Agreement is
on file in the office of the Secretary of Quiksilver, Inc.”

          (c) Delivery of Certificates Upon Vesting. Promptly after shares of Restricted Stock
have vested, and all other conditions and restrictions applicable to such Restricted Stock have
been satisfied or lapse (including satisfaction of any applicable Withholding Taxes), the
Corporation shall, as applicable, either remove the notations on any shares of Restricted Stock
issued in book entry form which have vested or deliver to the Participant a certificate or
certificates evidencing the number of shares of Restricted Stock which have vested (or, in either
case, such lesser number of shares as may be permitted pursuant to Section 9). The Participant (or
the beneficiary or personal representative of the Participant in the event of the Participant’s
death or Permanent Disability, as the case may be) shall deliver to the Corporation any
representations or other documents or assurances as the Corporation may deem desirable to assure
compliance with all applicable legal and accounting requirements. The shares so delivered shall no
longer be Restricted Stock hereunder.

          (d) Stock Power; Power of Attorney. Concurrently with the execution and delivery of
this Agreement, the Participant shall deliver to the Corporation an executed stock power in the
form attached hereto, in blank, with respect to such shares. The Participant, by acceptance of the
Restricted Stock, shall be deemed to appoint, and does so appoint by execution of this Agreement,
the Corporation and each of its authorized representatives as the Participant’s attorney(s)-in-fact
to effect any transfer of unvested forfeited shares of Restricted Stock (or shares otherwise
reacquired by the Corporation hereunder) to the Corporation as may be required pursuant to the Plan
or this Agreement and to execute such documents as the Corporation or such representatives deem
necessary or advisable in connection with any such transfer.

3

(Employee Grant Form)

 

 

     7. Effect of Termination of Service; Misconduct.

          (a) Termination of Service. Subject to earlier vesting as provided in Section 2
hereof, if the Participant ceases to provide Service to the Corporation (or a Parent or
Subsidiary), the Participant’s shares of Restricted Stock (and related Restricted Property as
defined in Section 8 hereof) shall be forfeited to the Corporation to the extent such shares have
not become vested pursuant to Section 2 upon the date the Participant’s Service terminates,
regardless of the reason for such termination (whether with or without cause, voluntarily or
involuntarily).

          (b) Misconduct. Subject to earlier vesting as provided in Section 2 hereof, if the
Participant engages in Misconduct, the Participant’s shares of Restricted Stock (and related
Restricted Property as defined in Section 8 hereof) shall be forfeited to the Corporation to the
extent such shares have not become vested pursuant to Section 2 immediately prior to the date the
Participant first engaged in Misconduct.

          (c) Forfeiture Procedures. Upon the occurrence of any forfeiture of shares of
Restricted Stock under this Section 7, such unvested, forfeited shares and related Restricted
Property shall be automatically transferred to the Corporation, without any other action by the
Participant. No additional consideration shall be paid by the Corporation with respect to such
transfer. The Corporation may exercise its powers under Section 6(d) hereof and take any other
action necessary or advisable to evidence such transfer. The Participant shall deliver any
additional documents of transfer that the Corporation may request to confirm the transfer of such
unvested, forfeited shares and related Restricted Property to the Corporation.

     8. Adjustments Upon Specified Events. If any change is made to the Common Stock by
reason of any stock split, stock dividend, recapitalization, combination of shares, exchange of
shares, Corporate Transaction (not resulting in acceleration of vesting pursuant to Section 2(b))
or other change affecting the outstanding Common Stock as a class, appropriate adjustment shall be
made to the number and/or class of securities in effect under this Agreement. Such adjustments to
the outstanding Restricted Stock are to be effected in a manner which shall preclude the
enlargement or dilution of rights and benefits under this Agreement. The adjustments determined by
the Corporation shall be final, binding and conclusive. If any adjustment shall be made pursuant
to the foregoing or any dividend other than a regular cash dividend is declared and the shares of
Restricted Stock are not fully vested upon such event or prior thereto, the restrictions applicable
to such shares of Restricted Stock shall continue in effect with respect to any consideration or
other securities (the “Restricted Property” and, for the purposes of this Agreement, “Restricted
Stock” shall include “Restricted Property,” unless the context otherwise requires) received in
respect of such Restricted Stock. Such Restricted Property shall vest at such times and in such
proportion as the shares of Restricted Stock to which the Restricted Property is attributable vest,
or would have vested pursuant to the terms hereof if such shares of Restricted Stock had remained
outstanding.

     9. Taxes.

          (a) Tax Withholding. The Corporation (or any Parent or Subsidiary last employing the
Participant) shall be entitled to require a cash payment by or on behalf of the Participant and/or
to deduct from other compensation payable to the Participant any sums

4

(Employee Grant Form)

 

 

required with respect to Withholding Taxes. Alternatively, the Participant or other person in
whom the Restricted Stock vests may irrevocably elect, in such manner and at such time or times
prior to any applicable tax date as may be permitted or required under rules established by the
Corporation, to have the Corporation withhold and reacquire shares of Restricted Stock at their
Fair Market Value at the time of vesting to satisfy all or part of the minimum Withholding Taxes of
the Corporation (or any Parent or Subsidiary) with respect to such vesting. Any election to have
shares so held back and reacquired shall be subject to such rules and procedures, which may include
prior approval of the Corporation, as the Corporation may impose, and shall not be available if the
Participant makes or has made an election pursuant to Section 83(b) of the Code with respect to
such Restricted Stock.

          (b) Tax Consequences to Participant. Participant acknowledges that the issuance and
the vesting of the Restricted Stock may have significant and adverse tax consequences for
Participant and that Participant has been advised by the Corporation to review the Questions and
Answers on Federal Income Tax Consequences portion of the Corporation’s Stock Plan Summary and
Prospectus and to consult Participant’s personal tax advisor regarding the consequences of the
issuance and vesting of the Restricted Stock to Participant.

     10. Notices. Any notice to be given under the terms of this Agreement shall be in
writing and addressed to the Corporation at its principal office to the attention of the Secretary,
and to the Participant at the Participant’s last address reflected on the Corporation’s payroll
records. Any notice shall be delivered in person or shall be enclosed in a properly sealed
envelope, addressed as aforesaid, registered or certified, and deposited (postage and registry or
certification fee prepaid) in a post office or branch office regularly maintained by the United
States Government. Any such notice shall be given only when received, but if the Participant is no
longer an Employee shall be deemed to have been duly given five business days after the date mailed
in accordance with the foregoing provisions of this Section 10.

     11. Plan. The Restricted Stock and all rights of the Participant under this Agreement
are subject to the terms and conditions of the provisions of the Plan, incorporated herein by
reference. The Participant agrees to be bound by the terms of the Plan and this Agreement. The
Participant acknowledges having read and understanding the Plan, the Plan Summary and Prospectus
for the Plan, and this Agreement. Unless otherwise expressly provided in other sections of this
Agreement, provisions of the Plan that confer discretionary authority on the Board or the Committee
do not (and shall not be deemed to) create any rights in the Participant unless such rights are
expressly set forth herein or otherwise in the sole discretion of the Board or the Committee so
conferred by appropriate action of the Board or the Committee under the Plan after the date hereof.

     12. Entire Agreement. This Agreement and the Plan together constitute the entire
agreement and supersede all prior understandings and agreements, written or oral, of the parties
hereto with respect to the subject matter hereof. The Plan and this Agreement may be amended
pursuant to Section 6.3 of the Plan. Such amendment must be in writing and signed by the
Corporation. The Corporation may, however, unilaterally waive any provision hereof in writing to
the extent such waiver does not adversely affect the interests of the Participant hereunder, but no
such waiver shall operate as or be construed to be a subsequent waiver of the same provision or a
waiver of any other provision hereof.

5

(Employee Grant Form)

 

 

     13. Counterparts. This Agreement may be executed simultaneously in any number of
counterparts, each of which shall be deemed an original but all of which together shall constitute
one and the same instrument.

     14. Section Headings. The section headings of this Agreement are for convenience of
reference only and shall not be deemed to alter or affect any provision hereof.

     15. Governing Law. This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Delaware without regard to conflict of law principles
thereunder.

          IN WITNESS WHEREOF, the Corporation has caused this Agreement to be executed on its behalf by
a duly authorized officer and the Participant has hereunto set his or her hand as of the date and
year first above written.

	 	 	 	 	 
	 	QUIKSILVER, INC., a Delaware corporation

 	 
	 	By:  	 	 
	 	 	Print Name:  	 	 
	 	 	Its: 	 	 
	 
	 	PARTICIPANT

 	 
	 	 	 
	 	Signature
 	 
	 	 	 
	 	Print Name 	 
	 

6

(Employee Grant Form)

 

 

APPENDIX

          The following definitions shall be in effect under the Agreement:

          A. “Board” shall mean the Corporation’s Board of Directors.

          B. “Change in Control” shall mean a change in ownership or control of the Corporation effected
through either of the following transactions.

               (i) the acquisition, directly or indirectly, by any person or related group of persons (other
than the Corporation or a person that directly controls, is controlled by, or is under common
control with, the Corporation), of beneficial ownership (within the meaning of Rule 13d-3 of the
1934 Act) of securities possessing more than fifty percent (50%) of the total combined voting power
of the Corporation’s outstanding securities pursuant to a tender or exchange offer made directly to
the Corporation’s stockholders, or

               (ii) a change in the composition of the Board over a period of thirty-six (36) consecutive
months or less such that a majority of the Board members ceases, by reason of one or more contested
elections for Board membership, to be comprised of individuals who either (A) have been Board
members continuously since the beginning of such period or (b) have been elected or nominated for
election as Board members during such period by at least a majority of the Board members described
in clause (A) who were still in office at the time the Board approved such election or nomination.

          C. “Committee” shall mean the Compensation Committee of the Board of Directors.

          D. “Common Stock” shall mean the Corporation’s common stock.

          E. “Corporate Transaction” shall mean either of the following stockholder-approved
transactions to which the Corporation is a party:

               (i) a merger or consolidation in which securities possessing more than fifty percent (50%) of
the total combined voting power of the Corporation’s outstanding securities are transferred to a
person or persons different from the persons holding those securities immediately prior to such
transaction, or

               (ii) the sale, transfer or other disposition of all or substantially all of the Corporation’s
assets in complete liquidation or dissolution of the Corporation.

          F. “Employee” shall mean any individual who is in the employ of the Corporation (or any Parent
or Subsidiary), subject to the control and direction of the employer entity as to both the work to
be performed and the manner and method of performance.

          G. Fair Market Value per share of Common Stock on any relevant date shall be
determined in accordance with the following provisions:

7

(Employee Grant Form)

 

 

               (i) If the Common Stock is at the time traded on the Nasdaq Global Select Market (or the
Nasdaq Global Market), then the Fair Market Value shall be the closing selling price per share of
Common Stock at the close of regular hours trading (i.e., before after-hours trading begins) on the
Nasdaq Global Stock Market (or the Nasdaq Global Market) on the date in question, as such price is
reported by The Wall Street Journal. If there is no closing selling price for the Common Stock on
the date in question, then the Fair Market Value shall be the closing selling price on the last
preceding date for which such quotation exists.

               (ii) If the Common Stock is at the time listed on any other Stock Exchange, then the Fair
Market Value shall be the closing selling price per share of Common Stock at the close of regular
hours trading (i.e., before after-hours trading begins) on the date in question on the Stock
Exchange determined by the Plan Administrator to be the primary market for the Common Stock, as
such price is officially quoted in the composite tape of transactions on such exchange. If there
is no closing selling price for the Common Stock on the date in question, then the Fair Market
Value shall be the closing selling price on the last preceding date for which such quotation
exists.

               (iii) If the Common Stock is at the time not listed on any established stock exchange,
the Fair Market Value shall be determined by the Board in good faith.

          H. “Misconduct” shall mean the commission of any act of fraud, embezzlement or dishonesty by
the Participant, any unauthorized use or disclosure by such person of confidential information or
trade secrets of the Corporation (or any Parent or Subsidiary), or any other intentional misconduct
by such person adversely affecting the business or affairs of the Corporation (or any Parent or
Subsidiary) in a material manner. The foregoing definitions shall not be deemed to be inclusive of
all the acts or omissions which the Corporation (or any Parent or Subsidiary) may consider as
grounds for the dismissal or discharge of any Participant or other person in the Service of the
Corporation (or any Parent or Subsidiary).

          I. “Parent” shall mean any corporation (other than the Corporation) in an unbroken chain of
corporations ending with the Corporation, provided each corporation in the unbroken chain (other
than the Corporation) owns, at the time of the determination, stock possessing fifty percent (50%)
or more of the total combined voting power of all classes of stock in one of the other corporations
in such chain.

          J. “Permanent Disability” or “Permanently Disabled” shall mean the inability of the
Participant to engage in any substantial gainful activity by reason of any medically determinable
physical or mental impairment which is both (i) expected to result in death or determined to be
total and permanent by two (2) physicians selected by the Corporation or its insurers and
acceptable to the Participant (or the Participant’s legal representative), and (ii) to the extent
the Participant is eligible to participate in the Corporation’s long-term disability plan, entitles
the Participant to the payment of long-term disability benefits from the Corporation’s long-term
disability plan. The process for determining a Permanent Disability in accordance with the
foregoing shall be completed no later than the later of (i) the close of the calendar year in which
the Participant’s Service terminates by reason of the physical or mental impairment triggering the
determination process or (ii) the fifteenth day of the third calendar month following such
termination of Service.

8

(Employee Grant Form)

 

 

          K. “Service” shall mean the performance of services for the Corporation (or any Parent or
Subsidiary) by a person in the capacity of an Employee. Participant shall be deemed to cease
Service immediately upon the occurrence of either of the following events: (i) the Participant no
longer performs services in the capacity of an Employee for the Corporation or any Parent or
Subsidiary; or (ii) the entity for which the Participant is performing such services ceases to
remain a Parent or Subsidiary of the Corporation, even though the Participant may subsequently
continue to perform services for that entity.

          L. “Stock Exchange” shall mean the American Stock Exchange, the Nasdaq Global Select Market,
the Nasdaq Global Market or the New York Stock Exchange.

          M. “Subsidiary” shall mean any corporation (other than the Corporation) in the unbroken chain
of corporations beginning with the Corporation, provided each corporation (other than the last
corporation) in the unbroken chain owns, at the time of the determination, stock possessing fifty
percent (50%) or more of the total combined voting power of all classes of stock in one of the
other corporations in such chain.

          N. “Withholding Taxes” shall mean the federal, state and local income and employment
withholding taxes to which the Participant may become subject in connection with the issuance or
vesting of shares of Restricted Stock or upon the disposition of shares acquired pursuant to this
Agreement.

9

(Employee Grant Form)

 

 

CONSENT OF SPOUSE

          In consideration of the execution of the foregoing Restricted Stock Agreement by Quiksilver,
Inc., I,                                         , the spouse of the Participant therein named, do hereby join
with my spouse in executing the foregoing Restricted Stock Agreement and do hereby agree to be
bound by all of the terms and provisions thereof and of the Plan.

Dated: ________________, 200___

	 	 	 	 	 
	 	 	 
	 	 	 
	 	Signature of Spouse
 	 
	 	 	 
	 	Print Name 	 
	 

10

(Employee Grant Form)

 

 

STOCK POWER

          FOR VALUE RECEIVED and pursuant to that certain Restricted Stock Agreement between Quiksilver,
Inc., a Delaware corporation (the “Corporation”), and the individual named below (the “Individual”)
dated as of               
      , 200___, the Individual, hereby sells, assigns and transfers to the
Corporation, an aggregate       
               shares of Common Stock of the Corporation, standing in the
Individual’s name on the books of the Corporation and represented by stock certificate number(s)
                     to which this instrument is attached, and hereby irrevocably constitutes and appoints
                                         as his or her attorney in fact and agent to transfer such shares on the
books of the Corporation, with full power of substitution in the premises.

Dated ______________, _________

	 	 	 	 	 
	 	 	 
	 	 	 
	 	Signature
 	 
	 	 	 
	 	Print Name 	 
	 

(Instruction: Please do not fill in any blanks other than the signature line. The purpose of the
assignment is to enable the Corporation to exercise its sale/purchase option set forth in the
Restricted Stock Agreement without requiring additional signatures on the part of the Individual.)

11

(Employee Grant Form)exv10w4

Exhibit 10.4

QUIKSILVER, INC.

EMPLOYEE STOCK PURCHASE PLAN1

(As amended and restated February 5, 2009)

     1. PURPOSE OF THE PLAN

     This Employee Stock Purchase Plan is intended to promote the interests of Quiksilver, Inc., a
Delaware corporation, by providing eligible employees with the opportunity to acquire a proprietary
interest in the Corporation through participation in a payroll-deduction based employee stock
purchase plan designed to qualify under Section 423 of the Code.

     Capitalized terms herein shall have the meanings assigned to such terms in the attached
Appendix.

     This February 5, 2009 amendment and restatement shall become effective upon approval of such
amendment and restatement by the Corporation’s stockholders at the 2009 Annual Meeting of
Stockholders. In the event such stockholder approval is not obtained, then the revisions to the
Plan effected by this amendment and restatement shall have no force and effect; however, the
Employee Stock Purchase Plan shall continue in effect in accordance with the terms and provisions
of the plan in effect on the date prior to this amendment and restatement.

     2. ADMINISTRATION OF THE PLAN

     The Plan Administrator shall have full authority to interpret and construe any provision of
the Plan and to adopt such rules and regulations for administering the Plan as it may deem
necessary to comply with the requirements of Code Section 423. Decisions of the Plan Administrator
shall be final and binding on all parties having an interest in the Plan.

     3. STOCK SUBJECT TO PLAN

          A. The stock purchasable under the Plan shall be shares of authorized but unissued or
reacquired Common Stock, including shares of Common Stock purchased on the open market. The number
of shares of Common Stock reserved for issuance over the term of the Plan shall be limited to
3,700,000 shares. Such share reserve consists of (i) 800,000 shares approved by the Corporation’s
stockholders in connection with the initial adoption of the Plan, (ii) an increase of 900,000
shares approved by the Corporation’s stockholders on March 16, 2007 and (iii) an increase of
2,000,000 shares for which approval by the Corporation’s stockholders will be sought at the 2009
Annual Meeting of Stockholders.

          B. Should any change be made to the Common Stock by reason of any stock split, stock dividend,
recapitalization, combination of shares, exchange of shares or other change

 

			
	1	 	All share amounts in this document have been revised to
reflect a 2 for 1 stock split effected through a stock dividend on April 30,
2003 and a 2 for 1 stock split effected through a stock dividend on April 27,
2005.

 

 

affecting the outstanding Common Stock as a class without the Corporation’s receipt of
consideration, appropriate adjustments shall be made to (i) the maximum number and class of
securities issuable under the Plan, (ii) the maximum number and class of securities purchasable per
Participant on any one Purchase Date, (iii) the maximum number and class of securities purchasable
by all Participants in the aggregate on any one Purchase Date, and (iv) the number and class of
securities and the price per share in effect under each outstanding purchase right. The
adjustments shall be made in such manner as the Plan Administrator deems appropriate to prevent the
dilution or enlargement of benefits under the Plan and the outstanding purchase rights, and such
adjustments shall be final, binding and conclusive.

     4. PURCHASE PERIODS

     Shares of Common Stock shall be offered for purchase under the Plan through a series of
successive Purchase Periods until such time as (i) the maximum number of shares of Common Stock
available for issuance under the Plan shall have been purchased or (ii) the Plan shall have been
sooner terminated.

     5. ELIGIBILITY

          A. Each individual who is an Eligible Employee on the start date of any Purchase Period under
the Plan may enter that Purchase Period on such start date.

          B. To participate in the Plan for a particular Purchase Period, the Eligible Employee must
complete the enrollment forms prescribed by the Plan Administrator (including a stock purchase
agreement and a payroll deduction authorization) and file such forms with the Plan Administrator
(or its designate) in advance of that Purchase Period and in accordance with such terms and
conditions as the Plan Administrator may impose.

     6. PAYROLL DEDUCTIONS

          A. The payroll deduction authorized by the Participant for purposes of acquiring shares of
Common Stock during a Purchase Period may be any multiple of one percent (1%) of the Base Salary
paid to the Participant during the Purchase Period, up to a maximum of fifteen percent (15%). The
deduction rate so authorized shall continue in effect, except to the extent such rate is changed in
accordance with the following guidelines:

               (i) The Participant may, at any time during the Purchase Period, reduce his or her rate of
payroll deduction to become effective as soon as possible after filing the appropriate form with
the Plan Administrator. The Participant may not, however, effect more than one (1) such reduction
per Purchase Period.

               (ii) The Participant may, prior to the commencement of any new Purchase Period, increase the
rate of his or her payroll deduction by filing the appropriate form with the Plan Administrator.
The new rate (which may not exceed the fifteen percent (15%) maximum) shall become effective on the
start date of the first Purchase Period following the filing of such form.

2

 

          B. Payroll deductions shall begin on the first pay day administratively feasible following the
beginning of the Purchase Period and shall (unless sooner terminated by the Participant) continue
through the pay day ending with or immediately prior to the last day of that Purchase Period. The
amounts so collected shall be credited to the Participant’s book account under the Plan, but no
interest shall be paid on the balance from time to time outstanding in such account. The amounts
collected from the Participant shall not be required to be held in any segregated account or trust
fund and may be commingled with the general assets of the Corporation and used for general
corporate purposes.

          C. Payroll deductions shall automatically cease upon the termination of the Participant’s
purchase right in accordance with the provisions of the Plan.

          D. The Participant’s acquisition of Common Stock under the Plan on any Purchase Date shall
neither limit nor require the Participant’s acquisition of Common Stock on any subsequent Purchase
Date.

     7. PURCHASE RIGHTS

          A. GRANT OF PURCHASE RIGHT. A Participant shall be granted a separate purchase right for each
Purchase Period in which he or she participates. The purchase right shall be granted on the first
business day of the Purchase Period and shall provide the Participant with the right to purchase
shares of Common Stock upon the terms set forth below. The Participant shall execute a stock
purchase agreement embodying such terms and such other provisions (not inconsistent with the Plan)
as the Plan Administrator may deem advisable.

     Under no circumstances shall purchase rights be granted under the Plan to any Eligible
Employee if such individual would, immediately after the grant, own (within the meaning of Code
Section 424(d)) or hold outstanding options or other rights to purchase, stock possessing five
percent (5%) or more of the total combined voting power or value of all classes of stock of the
Corporation or any Corporate Affiliate.

          B. EXERCISE OF THE PURCHASE RIGHT. Each purchase right shall be automatically exercised on
each successive Purchase Date, and shares of Common Stock shall accordingly be purchased on behalf
of each Participant on each such Purchase Date. The purchase shall be effected by applying the
Participant’s payroll deductions for the Purchase Period ending on such Purchase Date to the
purchase of whole shares of Common Stock at the purchase price in effect for the Participant for
that Purchase Date.

          C. PURCHASE PRICE. The purchase price per share at which Common Stock will be purchased on the
Participant’s behalf on each Purchase Date shall be equal to eighty-five percent (85%) of the lower
of (i) the Fair Market Value per share of Common Stock on the first business day of the Purchase
Period or (ii) the Fair Market Value per share of Common Stock on that Purchase Date.

          D. NUMBER OF PURCHASABLE SHARES. The number of shares of Common Stock purchasable by a
Participant on each Purchase Date shall be the number of whole shares obtained by dividing the
amount collected from the Participant through payroll deductions during the Purchase Period ending
with that Purchase Date by the purchase price in

3

 

effect for the Participant for that Purchase Date. However, the maximum number of shares of
Common Stock purchasable per Participant on any one Purchase Date shall not exceed 4,000 shares,
subject to periodic adjustments in the event of certain changes in the Corporation’s
capitalization. In addition, the maximum number of shares of Common Stock purchasable in the
aggregate by all Participants on any one Purchase Date shall not exceed 400,000 shares, subject to
periodic adjustments in the event of certain changes in the Corporation’s capitalization. However,
the Plan Administrator shall have the discretionary authority, exercisable prior to the start of
any Purchase Period under the Plan, to increase or decrease the limitations to be in effect for the
number of shares purchasable per Participant and in the aggregate by all Participants on each
Purchase Date.

          E. EXCESS PAYROLL DEDUCTIONS. Any payroll deductions not applied to the purchase of shares of
Common Stock on any Purchase Date because they are not sufficient to purchase a whole share of
Common Stock shall be held for the purchase of Common Stock on the next Purchase Date. However, any
payroll deductions not applied to the purchase of Common Stock by reason of the limitation on the
maximum number of shares purchasable per Participant or in the aggregate on the Purchase Date shall
be promptly refunded.

          F. TERMINATION OF PURCHASE RIGHT. The following provisions shall govern the termination of
outstanding purchase rights:

          (A) A Participant may, at any time prior to the next scheduled Purchase Date,
terminate his or her outstanding purchase right by filing the appropriate form with
the Plan Administrator (or its designate), and no further payroll deductions shall
be collected from the Participant with respect to the terminated purchase right. Any
payroll deductions collected during the Purchase Period in which such termination
occurs shall, at the Participant’s election, be immediately refunded or held for the
purchase of shares on the next Purchase Date. If no such election is made at the
time such purchase right is terminated, then the payroll deductions collected with
respect to the terminated right shall be refunded as soon as possible.

          (B) The termination of such purchase right shall be irrevocable, and the
Participant may not subsequently rejoin the Purchase Period for which the terminated
purchase right was granted. In order to resume participation in any subsequent
Purchase Period, such individual must re-enroll in the Plan (by making a timely
filing of the prescribed enrollment forms).

          (C) Should the Participant cease to remain an Eligible Employee for any reason
(including death, disability or change in status) while his or her purchase right
remains outstanding, then that purchase right shall immediately terminate, and all
of the Participant’s payroll deductions for the Purchase Period in which the
purchase right so terminates shall be immediately refunded. However, should the
Participant cease to remain in active service by reason of an approved unpaid leave
of absence, then the Participant shall have the right, exercisable up until the last
business day of the Purchase Period in which such leave commences, to (a) withdraw
all the payroll deductions collected to

4

 

date on his or her behalf for that Purchase Period or (b) have such funds held
for the purchase of shares on his or her behalf on the next scheduled Purchase Date.
In no event, however, shall any further payroll deductions be collected on the
Participant’s behalf during such leave. Upon the Participant’s return to active
service (x) within ninety (90) days following the commencement of such leave or (y)
prior to the expiration of any longer period for which such Participant’s right to
reemployment with the Corporation is guaranteed by statute or contract, his or her
payroll deductions under the Plan shall automatically resume at the rate in effect
at the time the leave began, unless the Participant withdraws from the Plan prior to
his or her return. An individual who returns to active employment following a leave
of absence which exceeds in duration the applicable (x) or (y) time period will be
treated as anew Employee for purposes of subsequent participation in the Plan and
must accordingly re- enroll in the Plan (by making a timely filing of the prescribed
enrollment forms).

          G. CHANGE IN CONTROL. Each outstanding purchase right shall automatically be exercised,
immediately prior to the effective date of any Change in Control, by applying the payroll
deductions of each Participant for the Purchase Period in which such Change in Control occurs to
the purchase of whole shares of Common Stock at a purchase price per share equal to eighty-five
percent (85%) of the lower of (i) the Fair Market Value per share of Common Stock on the first
business day of the Purchase Period in which such Change in Control occurs or (ii) the Fair Market
Value per share of Common Stock immediately prior to the effective date of such Change in Control.
However, the applicable limitation on the number of shares of Common Stock purchasable per
Participant shall continue to apply to any such purchase, but not the limitation applicable to the
maximum number of shares of Common Stock purchasable in the aggregate by all participants.

     The Corporation shall use its best efforts to provide at least ten (10)-days prior written
notice of the occurrence of any Change in Control, and Participants shall, following the receipt of
such notice, have the right to terminate their outstanding purchase rights prior to the effective
date of the Change in Control.

          H. PRORATION OF PURCHASE RIGHTS. Should the total number of shares of Common Stock to be
purchased pursuant to outstanding purchase rights on any particular date exceed the number of
shares then available for issuance under the Plan, the Plan Administrator shall make a pro-rata
allocation of the available shares on a uniform and nondiscriminatory basis, and the payroll
deductions of each Participant, to the extent in excess of the aggregate purchase price payable for
the Common Stock pro-rated to such individual, shall be refunded.

          I. ASSIGNABILITY. The purchase right shall be exercisable only by the Participant and shall
not be assignable or transferable by the Participant.

          J. STOCKHOLDER RIGHTS. A Participant shall have no stockholder rights with respect to the
shares subject to his or her outstanding purchase right until the shares are purchased on the
Participant’s behalf in accordance with the provisions of the Plan and the Participant has become a
holder of record of the purchased shares.

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     8. ACCRUAL LIMITATIONS

          A. No Participant shall be entitled to accrue rights to acquire Common Stock pursuant to any
purchase right outstanding under this Plan if and to the extent such accrual, when aggregated with
(i) rights to purchase Common Stock accrued under any other purchase right granted under this Plan
and (ii) similar rights accrued under other employee stock purchase plans (within the meaning of
Code Section 423) of the Corporation or any Corporate Affiliate, would otherwise permit such
Participant to purchase more than Twenty-Five Thousand Dollars ($25,000.00) worth of stock of the
Corporation or any Corporate Affiliate (determined on the basis of the Fair Market Value per share
on the date or dates such rights are granted) for each calendar year such rights are at any time
outstanding.

          B. For purposes of applying such accrual limitations to the purchase rights granted under the
Plan, the following provisions shall be in effect:

               (i) The right to acquire Common Stock under each outstanding purchase right shall accrue on
each successive Purchase Date on which such right remains outstanding.

               (ii) No right to acquire Common Stock under any outstanding purchase right shall accrue to the
extent the Participant has already accrued in the same calendar year the right to acquire Common
Stock under one or more other purchase rights at a rate equal to Twenty-Five Thousand Dollars
($25,000.00) worth of Common Stock (determined on the basis of the Fair Market Value per share on
the date or dates of grant) for each calendar year such rights were at any time outstanding.

          C. If by reason of such accrual limitations, any purchase right of a Participant does not
accrue for a particular Purchase Period, then the payroll deductions which the Participant made
during that Purchase Period with respect to such purchase right shall be promptly refunded.

          D. In the event there is any conflict between the provisions of this Article and one or more
provisions of the Plan or any instrument issued thereunder, the provisions of this Article shall be
controlling.

     9. EFFECTIVE DATE AND TERM OF THE PLAN

          A. The Plan was originally adopted by the Board on February 15, 2000 and became effective at
the Effective Time. This amendment and restatement was adopted by the Board on February 5, 2009
and shall become effective upon approval thereof by the Corporation’s stockholders at the 2009
Annual Meeting of Stockholders. In no event, however, shall any payroll deductions be collected or
purchase rights be exercised, and no shares of Common Stock shall be issued, pursuant to this
February 5, 2009 amendment and restatement unless the Corporation is at the time in compliance with
all applicable requirements of the 1933 Act (including the registration of the shares of Common
Stock issuable under the Plan on an appropriate form filed with the Securities and Exchange
Commission), all applicable listing requirements of any stock exchange on which the Common Stock is
listed for trading and all other applicable requirements established by law or regulation.

6

 

          B. Unless sooner terminated by the Board, the Plan shall terminate upon the earliest of (i)
February 5, 2019, (ii) the date on which all shares available for issuance under the Plan shall
have been sold pursuant to purchase rights exercised under the Plan or (iii) the date on which all
purchase rights are exercised in connection with a Change in Control. No further purchase rights
shall be granted or exercised, and no further payroll deductions shall be collected, under the Plan
following such termination.

     10. AMENDMENT/TERMINATION OF THE PLAN

          A. The Board may alter, amend, suspend or terminate the Plan at any time to become effective
immediately following the close of any Purchase Period.

          B. In no event may the Board effect any of the following amendments or revisions to the Plan
without the approval of the Corporation’s stockholders: (i) increase the number of shares of Common
Stock issuable under the Plan, except for permissible adjustments in the event of certain changes
in the Corporation’s capitalization, (ii) alter the purchase price formula so as to reduce the
purchase price payable for the shares of Common Stock purchasable under the Plan or (iii) modify
the eligibility requirements for participation in the Plan.

     11. GENERAL PROVISIONS

          A. All costs and expenses incurred in the administration of the Plan shall be paid by the
Corporation; however, each Plan Participant shall bear all costs and expenses incurred by such
individual in the sale or other disposition of any shares purchased under the Plan.

          B. Nothing in the Plan shall confer upon the Participant any right to continue in the employ
of the Corporation or any Corporate Affiliate for any period of specific duration or interfere with
or otherwise restrict in any way the rights of the Corporation (or any Corporate Affiliate
employing such person) or of the Participant, which rights are hereby expressly reserved by each,
to terminate such person’s employment at any time for any reason, with or without cause.

          C. The provisions of the Plan shall be governed by the laws of the State of California without
resort to that State’s conflict-of-laws rules.

          D. The Corporation shall have the right to take whatever steps the Plan Administrator deems
necessary or appropriate to comply with all applicable federal, state, local and employment tax
withholding requirements, and the Corporation’s obligations to deliver shares under this Plan shall
be conditioned upon compliance with all such withholding tax requirements. Without limiting the
generality of the foregoing, the Corporation shall have the right to withhold taxes from any other
compensation or other amounts that it may owe to the Participant, or to require the Participant to
pay to the Corporation the amount of any taxes that the Corporation may be required to withhold
with respect to such shares. The Plan Administrator may require the Participant to notify the Plan
Administrator or the Corporation before the Participant sells or otherwise disposes of any shares
acquired under the Plan.

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APPENDIX

     The following definitions shall be in effect under the Plan:

     A. BASE SALARY shall mean the regular base salary paid to a Participant by one or more
Participating Companies during such individual’s period of participation in one or more Purchase
Periods under the Plan. Base Salary shall be calculated before deduction of (A) any income or
employment tax withholdings or (B) any and all contributions made by the Participant to any Code
Section 401(k) salary deferral plan or Code Section 125 cafeteria benefit program now or hereafter
established by the Corporation or any Corporate Affiliate. Base Salary shall NOT include (i) any
overtime payments, bonuses, commissions, profit-sharing distributions and other incentive- type
payments received during the period of participation in the Plan and (ii) any contributions made on
the Participant’s behalf by the Corporation or any Corporate Affiliate to any employee benefit or
welfare plan now or hereafter established (other than Code Section 401(k) or Code Section 125
contributions deducted from Base Salary).

     B. BOARD shall mean the Corporation’s Board of Directors.

     C. CHANGE IN CONTROL shall mean a change in ownership or control of the Corporation effected
through any of the following transactions:

          (i) a stockholder-approved merger or consolidation in which securities possessing more than
fifty percent (50%) of the total combined voting power of the Corporation’s outstanding securities
are transferred to a person or persons different from the persons holding those securities
immediately prior to such transaction, or

          (ii) a stockholder-approved sale, transfer or other disposition of all or substantially all of
the assets of the Corporation in complete liquidation or dissolution of the Corporation, or

          (iii) the acquisition, directly or indirectly by any person or related group of persons (other
than the Corporation or a person that directly or indirectly controls, is controlled by or is under
common control with the Corporation) of beneficial ownership (within the meaning of Rule 13d-3 of
the Securities Exchange Act of 1934) of securities possessing more than fifty percent (50%) of the
total combined voting power of the Corporation’s outstanding securities pursuant to a tender or
exchange offer made directly to the Corporation’s stockholders or pursuant to a private transaction
or series of related transactions with one or more of the Corporation’s stockholders.

     D. CODE shall mean the Internal Revenue Code of 1986, as amended.

     E. COMMON STOCK shall mean the Corporation’s common stock.

     F. CORPORATE AFFILIATE shall mean any parent or subsidiary corporation of the Corporation (as
determined in accordance with Code Section 424), whether now existing or subsequently established.

 

 

     G. CORPORATION shall mean Quiksilver, Inc., a Delaware corporation, and any corporate
successor to all or substantially all of the assets or voting stock of Quiksilver, Inc. which shall
by appropriate action adopt the Plan.

     H. EFFECTIVE TIME shall mean July 1, 2000. Any Corporate Affiliate which becomes a
Participating Corporation after such Effective Time shall designate a subsequent Effective Time
with respect to its employee-Participants.

     I. ELIGIBLE EMPLOYEE shall mean any person who is employed by a Participating Corporation on a
basis under which he or she is regularly expected to render more than twenty (20) hours of service
per week for more than five (5) months per calendar year for earnings considered wages under Code
Section 3401(a).

     J. FAIR MARKET VALUE per share of Common Stock on any relevant date shall be determined in
accordance with the following provisions:

          (i) If the Common Stock is at the time traded on the Nasdaq Global Select Market (or the
Nasdaq Global Market), then the Fair Market Value shall be the closing selling price per share of
Common Stock at the close of regular trading hours (i.e., before after-hours trading begins) on the
Nasdaq Global Select Market (or the Nasdaq Global Market) on the date in question, as such price is
reported by The Wall Street Journal. If there is no closing selling price for the Common Stock on
the date in question, then the Fair Market Value shall be the closing selling price on the last
preceding date for which such quotation exists.

          (ii) If the Common Stock is at the time listed on any other Stock Exchange, then the Fair
Market Value shall be the closing selling price per share of Common Stock at the close of regular
trading hours (i.e., before after-hours trading begins) on the date in question on the Stock
Exchange determined by the Plan Administrator to be the primary market for the Common Stock, as
such price is officially quoted in the composite tape of transactions on such exchange. If there is
no closing selling price for the Common Stock on the date in question, then the Fair Market Value
shall be the closing selling price on the last preceding date for which such quotation exists.

     K. 1933 ACT shall mean the Securities Act of 1933, as amended.

     L. PARTICIPANT shall mean any Eligible Employee of a Participating Corporation who is actively
participating in the Plan.

     M. PARTICIPATING CORPORATION shall mean the Corporation and such Corporate Affiliate or
Affiliates as may be authorized from time to time by the Board to extend the benefits of the Plan
to their Eligible Employees. The Participating Corporations in the Plan as of February 5, 2009 are
listed in attached Schedule A.

     N. PLAN shall mean the Corporation’s amended and restated Employee Stock Purchase Plan, as set
forth in this document.

     O. PLAN ADMINISTRATOR shall mean the committee of two (2) or more Board members appointed by
the Board to administer the Plan.

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     P. PURCHASE DATE shall mean the last business day of each Purchase Period. The initial
Purchase Date shall be December 29, 2000.

     Q. PURCHASE PERIOD shall mean each successive approximate six (6)-month period, beginning on
the first business day in each of July and January and ending on the last business day in each of
June and December of each year, at the end of which there shall be purchased shares of Common Stock
on behalf of each Participant.

     R. STOCK EXCHANGE shall mean the American Stock Exchange, the Nasdaq Global Select Market, the
Nasdaq Global Market or the New York Stock Exchange.

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Schedule A

Corporations Participating in

Employee Stock Purchase Plan

As of the Effective Time

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