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EXHIBIT 10.4

 

CUTTER & BUCK

2000 TRANSITION STOCK INCENTIVE PLAN

FOR NON-OFFICERS

 

1.                                       Purposes of
the Plan.  The purposes of this 2000
Cutter & Buck Stock Incentive Plan for Non-Officers (the “Plan”) are
to attract and retain the best available personnel for positions of substantial
responsibility with Cutter & Buck Inc. (the “Company”), to provide
additional incentive in the form of stock options or shares of restricted
common stock of the Company (the “Benefits”) to employees of the Company or any
parent or subsidiary of the Company which now exists or hereafter is organized
or acquired by or acquires the Company, and to promote the success of the
business.

 

2.                                       Eligibility.  Any employee who is not also an officer or
director of the Company or any parent or subsidiary of the Company at the time
of the award may receive Benefits under the Plan.

 

3.                                       Administration.  The Plan shall be administered by the
Compensation Committee of the Board of Directors of the Company, or a
subcommittee thereof (the “Committee”).

 

4.                                       Effective
Date and Termination of Plan.  The
effective date of the Plan is June 30, 2000.  The Plan shall terminate when all shares of
stock subject to Benefits granted under the Plan shall have been acquired or on
June 30, 2005, whichever is earlier, or at such earlier time as the Board
of Directors may determine.  Termination
of the Plan will not affect the rights and obligations arising under Benefits
granted under the Plan and then in effect.

 

5.                                       Shares
Subject to the Plan.  The stock
subject to Benefits authorized to be granted under the Plan shall consist of
70,000 shares of the Company’s common stock, no par value, or the number and
kind of shares of stock or other securities which shall be substituted or
adjusted for such shares as provided in Section 8.  All or any shares of stock subject to
Benefits which for any reason terminate may again be made subject to Benefits
under the Plan.

 

6.                                       Grant, Terms
and Conditions of Options.  No
participant shall have any rights as a shareholder of the Company with respect
to any shares of stock underlying any option granted hereunder until those
shares have been issued.  Each option
shall be evidenced by a written stock option agreement which will expressly
identify the option as an incentive stock option or as a non-qualified stock
option.  Options granted pursuant to the
Plan need not be identical but each option is subject to the terms of the Plan
and is subject to the following terms and conditions:

 

6.1                                 Price.  The exercise price of each option granted under
the Plan shall be established by the Committee. 
The exercise price may be paid as determined by the Committee.

 

6.2                                 Duration
and Exercise or Termination of Option. 
Each option granted under the Plan shall be exercisable in such manner
and at such times as the Committee shall determine.  Each option granted must expire within a
period of ten (10) years from the grant date.

 

 

6.3                                 Transferability
of Options.  Each option shall be
transferable only by will or the laws of descent and distribution except and
unless the option provides for additional rights to transfer.

 

6.4                                 Other
Terms and Conditions.  Options may
also contain such other provisions, which shall not be inconsistent with any of
the foregoing terms, as the Committee shall deem appropriate.  No option, however, nor anything contained in
the Plan shall confer upon any participant any right to continue in the Company’s
employ or service nor limit in any way the Company’s right to terminate his or
her employment or service at any time.

 

7.                                       Grant, Terms
and Conditions of Restricted Stock. 
The Committee may grant shares of restricted common stock of the Company
with such terms and conditions as may be determined in the sole discretion of
the Committee.  Grants of shares of
restricted stock shall be made at such cost as the Committee shall determine
and may be issued for no monetary consideration, subject to applicable state
law.  Shares of restricted stock shall be
issued and delivered at the time of the grant or as otherwise determined by the
Committee, but may be subject to forfeiture until provided otherwise in the
applicable restricted stock agreement. 
Each certificate representing shares of restricted stock shall bear a
legend referring to the risk of forfeiture of the shares and stating that such
shares are nontransferable until all restrictions have been satisfied and the
legend has been removed.  At the
discretion of the Committee, the grantee may or may not be entitled to full
voting and dividend rights with respect to all shares of restricted stock from
the date of grant.

 

8.                                       Adjustment
Upon Changes in Capitalization/Change in Control.  The number and kind of shares of Company
stock subject to Benefits under the Plan shall be appropriately adjusted along
with a corresponding adjustment in the option exercise price, if applicable, to
reflect any stock dividend, stock split, split-up, a declaration of a
distribution payable in a form other than Common Stock in an amount that has a
material effect on the price of Common Stock or any combination or exchange of
shares, however accomplished.   An
appropriate adjustment shall also be made with respect to the aggregate number
and kind of shares available for grant under the Plan.  Adjustments, if any, and any determinations
or interpretations, including any determination of whether a distribution has a
material effect on the price of Common Stock, made by the Committee shall be
final, binding and conclusive.  If the
Company or the shareholders of the Company enter into an agreement to dispose
of all or substantially all of the assets or shares by means of a sale, a
reorganization, a liquidation, or otherwise, all options shall become
immediately exercisable with respect to the full number of shares subject to
those options and all restrictions on any shares of restricted stock granted
under the Plan shall be immediately removed.

 

9.                                       Withholding.  To the extent required by applicable federal,
state, local or foreign law, a participant shall make arrangements satisfactory
to the Company for the satisfaction of any withholding tax obligations that
arise pursuant to Benefits granted under the Plan.  The Company shall not be required to issue
shares until such obligations are satisfied. 
The Committee may (but shall not be required to) permit these
obligations to be satisfied by having the Company withhold a portion of the
shares of stock that otherwise would be issued to the participant or by
delivering shares previously owned by the participant.

 

10.                                 Amendment and
Termination.  The Board of Directors
may amend or terminate the Plan as desired except to the extent required by
applicable law.

 

2EXHIBIT 10.5

 

TRIPLICATE ORIGINAL

November 15, 2002

 

 

NON-QUALIFIED
STOCK OPTION AGREEMENT

 

A NON-QUALIFIED STOCK
OPTION for a total of 30,000 shares of Common Stock (the “NSO”) of Cutter &
Buck Inc., a Washington corporation (the “Company”), is hereby granted to
Ernie R. Johnson (the “Optionee”) as described below.  For purposes of this Agreement, the term “shares”
shall be deemed to apply to shares of Common Stock of the Company as of the
date hereof.

 

1.                                       NSO.  The parties hereto understand and agree that
the option represented hereby is not intended to qualify and shall not be
treated as an “incentive stock option” within the meaning of Section 422
of the Internal Revenue Code of 1986, as amended from time to time (the “Code”).

 

2.                                       Option
Price.  The option price is $3.67 for
each share, being one hundred percent (100%) of the fair market value of the
Company’s Common Stock on November 15, 2002, the date of the grant.

 

3.                                       Vesting
and Exercise of Option.  The NSO
shall vest and be exercisable in accordance with the following provisions.

 

a.                                       Schedule of
Vesting and Rights to Exercise. 
Except as provided in Section 9, the NSO shall be vested and
exercisable as follows:  10,000 shares on
November 15, 2003, followed by 23 equal monthly installments of
833 shares ending on October 15, 2005 and 841 shares on November 15,
2005.

 

b.                                      Method
of Exercise.  The NSO shall be
exercisable by a written notice which shall:

 

i.                                          state
the election to exercise the NSO, the number of shares in respect of which it
is being exercised, the person in whose name the stock certificate or
certificates for such shares of Common Stock is to be registered, her address
and Social Security Number (or if more than one, the names, addresses and
Social Security Numbers of such person);

 

ii.                                       contain
such representations and agreements as to the holder’s investment intent with
respect to such shares of Common Stock, acquired by exercise of the NSO, as may
be satisfactory to the Company’s counsel;

 

iii.                                    be
signed by the person or persons entitled to the NSO and, if the NSO is being
exercised by any person or persons other than the Optionee, be accompanied by
proof, satisfactory to counsel for the Company, of the right of such person or
persons to exercise the NSO; and

 

iv.                                   be
in writing and delivered in person or by certified mail to the Board of
Directors of the Company.

 

 

Payment of the purchase
price of any shares with respect to which the NSO is being exercised shall be
by check, or may be by means of the surrender of shares of Common Stock previously
held by Optionee, having a fair market value equal to the exercise price.  The certificate or certificates for shares of
Common Stock as to which the NSO shall be exercised shall be registered in the
name of the person or persons exercising the NSO unless another person is
specified pursuant to (b)(i) above. 
The NSO hereunder may not at any time be exercised for a fractional
number of shares.

 

The exercise of the NSO
shall be in no event restricted by the fact that at the time of exercise some
portion of a previously granted incentive stock option remains outstanding.

 

c.                                       Restrictions
on Exercise.  The NSO may not be
exercised if the issuance of the shares upon such exercise would constitute a
violation of any applicable federal or state securities or other law or valid
regulation.  As a condition to the
exercise of the NSO the Company may require the person exercising the NSO to
make any representation and warranty to the Company as the Company’s counsel
believes may be required by any applicable law or regulations.

 

4.                                       Disposition.
The Optionee will notify the Company in writing within fifteen (15) days after
the date of any disposition of any of the shares of the Common Stock issued
upon exercise of the NSO that occurs within two (2) years after the date
of the NSO grant or within one (1) year after such shares of Common Stock
are transferred upon exercise of the NSO;

 

5.                                       Non-transferability
of the NSO.  Except as otherwise
provided herein, the NSO may not be sold, pledged, assigned or transferred in
any manner, other than by will or the laws of descent and distribution, and may
be exercised during the lifetime of the Optionee only by the Optionee or by the
guardian or legal representative of the Optionee.  The terms of the NSO shall be binding upon
the executors, administrators, heirs, successors, and assigns of the Optionee.

 

6.                                       Termination
of Employment.  Except as set forth
below, the NSO may only be exercised while the Optionee is an employee or
director of the Company.

 

a.                                       If
the Optionee’s employment or director status is terminated for any reason
(including, without limitation, due to death, disability or retirement) prior
to the full vesting of the NSO, the NSO shall be modified such that immediately
upon such termination the NSO shall be reduced to that number of shares of
Common Stock of the Company equal to the number of shares previously vested,
and that portion of the NSO covering all other shares shall be forfeited
and canceled.

 

b.                                      If
the Optionee’s employment or director status is terminated for any reason
(including, without limitation, due to death, disability or retirement), the
Optionee may exercise the NSO (to the extent that the Optionee was entitled to
exercise it at the date of termination) but only within such period of time ending
on the earlier of (i) ninety (90) days after such termination (or in the
event of death or disability, within six months of the date of death or
disability), or (ii) the expiration of the term of the NSO as set forth
below. If, after termination, the Optionee (or, in the event of death, the
Optionee’s estate) does not exercise the NSO within the time specified in the
NSO Agreement, the NSO shall terminate, and the shares covered by the NSO shall
revert to and again become available for issuance under the Plan.

 

2

 

7.                                       Term
of NSO.  The NSO may not be exercised
more than ten (10) years from the date of original grant of the NSO, and
may be exercised during such term only in accordance with the Plan and the
terms of the NSO.

 

8.                                       Adjustments
Upon Changes in Capitalization.  The
number and kind of shares of Company stock subject to the NSO shall be
appropriately adjusted along with a corresponding adjustment in the NSO price
to reflect any stock dividend, stock split, split-up, a declaration of a
distribution payable in a form other than Common Stock in an amount that has a
material effect on the price of Common Stock or any combination, exchange or
change of shares, however accomplished. 
Adjustments, if any, and any determinations or interpretations,
including any determination of whether a distribution has a material effect on
the price of Common Stock, made by the Compensation Committee shall be final,
binding and conclusive.

 

9.                                       Changes
in Control.

 

a.                                       In
the event of a Change in Control, as defined below, all or any portion of the
NSO not otherwise exercisable shall immediately vest and become fully
exercisable.

 

b.                                      For
the purposes of this Agreement, “Change in Control” shall mean:

 

(i)                                     The
consummation of a merger or consolidation of the Company with or into another
entity or any other corporate reorganization, if more than 50% of the combined
voting power of the continuing or surviving entity’s securities outstanding
immediately after such merger, consolidation or other reorganization is owned
by persons who were not shareholders of the Company immediately prior to such
merger, consolidation or other reorganization;

 

(ii)                                  The
sale, transfer or other disposition of all or substantially all of the Company’s
assets;

 

(iii)                               A
change in the composition of the Board, as a result of which fewer than 50% of
the incumbent directors are directors who either (i) had been directors of
the Company on the date 24 months prior to the date of the event that may
constitute a Change in Control (the “original directors”) or (ii) were
elected, or nominated for election, to the Board with the affirmative votes of
at least a majority of the aggregate of the original directors who were still
in office at the time of the election or nomination and the directors whose
election or nomination was previously so approved; or

 

(iv)                              Any
transaction as a result of which any person is the “beneficial owner” (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing at least 30% of the total voting power
represented by the Company’s then outstanding voting securities.  For purposes of this Paragraph (d), the term “person”
shall have the same meaning as when used in sections 13(d) and 14(d) of
the Exchange Act but shall exclude (i) a trustee or other fiduciary
holding securities under an employee benefit plan of the Company or of a Parent
or Subsidiary and (ii) a corporation owned directly or indirectly by the
shareholders of the Company in substantially the same proportions as their
ownership of the common stock of the Company.

 

10.                                 Counter
Originals.  The NSO may be executed
in triplicate counterpart originals.

 

3

 

	
  DATE OF GRANT: November 15,
  2002

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CUTTER &
  BUCK INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ FRANCES M. CONLEY

  	
   

  
	
   

  	
  Frances M. Conley

  
	
   

  	
  Chief Executive Officer

  

 

4

 

Optionee acknowledges and
represents that he is familiar
with the terms and provisions of this Agreement and hereby accepts the NSO
subject to all the terms hereof. 
Optionee hereby agrees to accept as binding, conclusive and final all
decisions or interpretations of the Compensation Committee of the Board of
Directors of Cutter & Buck upon any questions arising under this
Agreement.

 

	
  DATED: November 15,
  2002

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ ERNIE R. JOHNSON

  	
   

  
	
  Ernie R. Johnson,
  Optionee

  	
   

  

 

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