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Exhibit 10.1(c)  

 
 

AMENDMENT #2
  TO LEASE DATED JUNE 22, 2001 BY AND BETWEEN
  MJLB 1 LIMITED PARTNERSHIP, LLP, AS LANDLORD
  AND 2nd SWING, INC., AS TENANT    
  

        THIS AMENDMENT TO LEASE, is entered into and made as of the 10th day of October, 2001, by and between MJLB 1 Limited Partnership, LLP, as Landlord, and
2nd Swing, Inc., a Minnesota Corporation, as Tenant. 

WITNESSTH THAT:  

        WHEREAS, Landlord and Tenant have heretofore entered into a certain lease, dated June 22, 2001, and amended said Lease with Amendment #1 dated the 16th day
of August, 2001 (the "Lease"), of certain premises in SkyRidge Building III located at 5810 Baker Road, Suite 100, Minnetonka, Minnesota 55345-5903 (the "Premises"), upon terms and
conditions described in said Lease; and 

        WHEREAS,
Landlord and Tenant desire to amend said Lease as described below; 

        NOW
THEREFORE, in consideration of the rents reserved and of the covenants and agreements herein set forth, it is agreed that the lease be hereby amended from and after the date hereof
as follows: 

	1.
	Leased Premises—Landlord and Tenant hereby agree to increase Tenant's Leased Premises by 631 square feet ("Amendment #2
Space") to include that portion of the Building as shown on Exhibit 2-A.

	2.
	Rentable Area—Leasing the Amendment #2 Space will increase Tenant's total Leased Premises to approximately 12,791 square
feet.

	3.
	Tenant's Percentage—52.23% shall be the amended Tenant's Percentage.

	4.
	Term—The commencement date for the Amendment #2 Space shall be November 1, 2001. The term shall run coterminous with
the Tenant's Lease.

	5.
	Base Rent—Tenant agrees to pay Landlord Base Rent of $316.00 per month for the Amendment #2 Space. Tenant's obligation to
pay Base Rent for this space begins on the commencement date for Amendment #2. 

        Except
as in hereinabove set forth, all terms, provisions and covenants of the Lease shall remain unchanged and in full force and effect. 

 

        IN
WITNESS WHEREOF, the parties hereto have duly executed the Amendment as of the date and year first above written. 

	MJLB 1 LIMITED PARTNERSHIP, LLP,

A Minnesota limited liability partnership	 	2nd SWING, INC.,

A Minnesota corporation
	

By:	

/s/
	
 	

By::	

/s/

	Its:	General Partner	 	Its:	Chief Executive Officer
	Date:	October 10, 2001	 	Date:	October 16, 2001

2

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AMENDMENT #2 TO LEASE DATED JUNE 22, 2001 BY AND BETWEEN MJLB 1 LIMITED PARTNERSHIP, LLP, AS LANDLORD AND 2nd SWING, INC., AS TENANTQuickLinks
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Exhibit 10.2  

2ND SWING, INC.  

 2000 STOCK COMPENSATION PLAN  

Table of Contents  

	ITEM
 
	 	DESCRIPTION
 
	 	PAGE

	SECTION 1	 	Purpose; Definitions	 	1
	

SECTION 2	
 	

Administration	
 	

2
	

SECTION 3	
 	

Stock Subject to Plan	
 	

3
	

SECTION 4	
 	

Eligibility	
 	

3
	

SECTION 5	
 	

Stock Options	
 	

4
	

SECTION 6	
 	

Stock Appreciation Rights	
 	

7
	

SECTION 7	
 	

Other Stock-Based Awards	
 	

8
	

SECTION 8	
 	

Change in Control Provisions	
 	

8
	

SECTION 9	
 	

Amendments and Termination	
 	

9
	

SECTION 10	
 	

Unfunded Status of Plan	
 	

10
	

SECTION 11	
 	

General Provisions	
 	

10
	

SECTION 12	
 	

Effective Date of Plan	
 	

11
	

SECTION 13	
 	

Term of Plan	
 	

11

 
 

2ND SWING, INC.    
    
    2000 STOCK COMPENSATION PLAN    
  

        1.    Purpose;
Definitions. 

        The
purpose of the 2nd Swing, Inc. 2000 Stock Compensation Plan (the "Plan") is to enable 2nd Swing, Inc. (the "Company"), and its Parents, Subsidiaries, and Affiliates, to
attract, retain, and reward employees and to strengthen the mutuality of interests between such employees and the Company's shareholders, by offering such employees stock options and/or other
equity-based incentives. 

        In
addition to definitions that may be contained elsewhere in this Plan, for purposes of the Plan, the following terms shall be defined as set forth below: 

        (a)  "Affiliate"
means any entity other than the Company and its Parents and Subsidiaries that is designated by the Board as a participating employer under the Plan, provided
that the Company directly or indirectly owns at least 20% of the combined voting power of all classes of stock of such entity or at least 20% of the ownership interests in such entity. 

        (b)  "Award"
means any Option, Stock Appreciation Right, or Other Stock-Based Award, or any other right, interest, or option relating to Stock or other securities of the
Company granted pursuant to the provisions of this Plan. 

        (c)  "Award
Agreement" means any written agreement, contract or other instrument or document evidencing any Award granted by the Committee hereunder and signed by both the
Company and the Participant. 

        (d)  "Board"
means the Board of Directors of the Company. 

        (e)  "Code"
means the Internal Revenue Code of 1986, as amended from time to time, and any successor thereto. 

        (f)    "Committee"
means the Committee referred to in Section 2 of the Plan. If at any time no Committee shall be in office, then the functions of the Committee
specified in the Plan shall be exercised by the Board. Where the Board has retained administrative authority with respect to the Plan, references herein to the "Committee" shall refer to the Board. 

        (g)  "Company"
means 2nd Swing, Inc., a corporation organized under the laws of the State of Minnesota, or any successor corporation. 

        (h)  "Disability"
means disability as determined under procedures established by the Committee for purposes of this Plan or, as applied to Incentive Stock Options, as defined
in Section 22(e)(3) of the Code. 

        (i)    "Exchange
Act" means the Securities Exchange Act of 1934, as amended from time to time. 

        (j)    "Fair
Market Value" means as of any given date, unless otherwise determined by the Committee in good faith, the closing bid price of the Stock as reported on The Nasdaq
Stock Market or, if the Stock is then traded on a national or regional securities exchange, the closing price of the Stock on such exchange. 

        (k)  "Incentive
Stock Option" means any Stock Option intended to be and designated as an "Incentive Stock Option" within the meaning of Section 422 of the Code. 

        (l)    "Nonqualified
Stock Option" means any Stock Option that is not an Incentive Stock Option. 

        (m)  "Other
Stock-Based Award" means an Award under Section 7 below that is valued in whole or in part by reference to, or is otherwise based on, Stock. 

        (n)  "Parent"
means any corporation (other than the Company) in an unbroken chain of corporations ending with the Company if, at the time of granting of an Award, each of the 

 

corporations other than the Company owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in the chain. 

        (o)  "Participant"
means any person who is selected by the Committee to receive an Award under the Plan. 

        (p)  "Plan"
means this 2nd Swing, Inc. 2000 Stock Compensation Plan, as hereafter amended from time to time. 

        (q)  "Stock"
means the Common Stock, $.01 par value per share, of the Company. 

        (r)  "Stock
Appreciation Right" or "SAR" means the right to receive a payment in cash or Stock as determined by the Committee. 

        (s)  "Stock
Option" or "Option" means any option to purchase shares of Stock granted pursuant to Section 5 below. 

        (t)    "Subsidiary"
means any corporation (other than the Company) in an unbroken chain of corporations beginning with the Company if, at the time of the granting of an Award,
each of the corporations other than the last corporation in the unbroken chain owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other
corporations in the chain. 

        In
addition, the term "Change in Control" shall have the meaning set forth in Section 8(b) below. 

        2.    Administration.

        The
Plan shall be administered by a Committee of not fewer than two members of the Board, who shall be appointed by the Board and serve at the pleasure of the Board. The functions of the
Committee specified in the Plan shall be exercised by the Board, if and to the extent that no Committee exists that has the authority to so administer the Plan, or to the extent that the Board retains
authority to administer the Plan under specified circumstances. As to the selection of and grants of Awards to persons who are not subject to Sections 16(a) and 16(b) of the Exchange Act, the
Committee may delegate any or all of its responsibilities to members of the Company's administration. The grants of Awards and determination of the terms thereof to persons who are subject to Sections
16(a) and 16(b) of the Exchange Act shall be made in a manner that satisfies the requirements of Rule 16b-3 under the Exchange Act, or any successor rule. 

        The
Committee shall have full power and authority, consistent with the provisions of the Plan and subject to such orders or resolutions not inconsistent with the provisions of the Plan
as may be adopted by the Board: 

        (a)  to
select the employees of the Company and any Parent, Subsidiary, or Affiliate to whom Awards may from time to time be granted hereunder; 

        (b)  to
determine the type or types of Awards to be granted to employees hereunder; 

        (c)  to
determine the number of shares of Stock to be covered by each Award granted hereunder: 

        (d)  to
determine the terms and conditions, not inconsistent with the terms of the Plan, of any Award granted hereunder; 

        (e)  to
determine whether, to what extent, and under what circumstances an Award may be settled in cash, Stock or other property or canceled or suspended; 

        (f)    to
determine whether, to what extent, and under what circumstances cash, Stock, and other property and other amounts payable with respect to an Award shall be deferred
either automatically or at the election of the Participant; 

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        (g)  to
interpret and administer the Plan and any instrument or agreement entered into thereunder; 

        (h)  to
establish such rules and regulations and appoint such agents as it shall deem appropriate for proper administration of the Plan; and 

        (i)    to
make any other determination and take any other action that the Committee deems necessary or desirable for administration of the Plan. 

        Members
of the Board and of the Committee acting under the Plan shall be fully protected in relying in good faith upon the advice of counsel and shall incur no liability except for gross
negligence or willful misconduct in the performance of their duties. 

        Decisions
of the Committee shall be made in the Committee's sole discretion and shall be final, conclusive, and binding on all persons, including the Company, any Participant, any
shareholder, and any employee of the Company or any Parent, Subsidiary, or Affiliate. 

        3.    Stock
Subject to Plan. 

        The
total number of shares of Stock reserved and available for distribution under the Plan shall be 3,000,000 shares of Stock. Such shares may be either authorized and unissued shares or
previously issued shares acquired by the Company. 

        Subject
to the possible adjustments described in the last paragraph of this Section 3, the total number of shares of Stock reserved and authorized for issuance upon exercise of
Incentive Stock Options shall be 3,000,000. To the extent that such shares are not used for Incentive Stock Options, they shall be available for other Awards to be granted under the Plan. 

        If
any shares of Stock subject to an Award are not issued to a Participant because an Option or SAR is not exercised or an Award is otherwise forfeited or any such Award otherwise
terminates without a payment being made to the Participant in the form of Stock, such shares shall again be available for distribution in connection with future Awards under the Plan. 

        In
the event of any merger, reorganization, consolidation, recapitalization, Stock dividend, Stock split, or other change in corporate structure affecting the Stock, such substitution or
adjustment shall be made in the aggregate number of shares reserved for issuance under the Plan, in the number and option price of shares subject to outstanding Options granted under the Plan, and in
the number of shares subject to other outstanding Awards granted under the Plan as may be determined to be appropriate by the Board, in its sole discretion, provided that the number of shares subject
to any
Award shall always be a whole number. Any such adjusted option price shall also be used to determine the amount payable by the Company upon the exercise of any Stock Appreciation Right associated with
any Stock Option." 

        4.    Eligibility. 

        Officers,
management, and other key employees of the Company and any Subsidiary, Parent, or Affiliate, or consultants or advisers to the Company and any Subsidiary, Parent, or Affiliate,
are eligible to be granted Awards under the Plan. Consultants and advisers to the Company and/or any Subsidiary, Parent or Affiliate shall be eligible to be granted Awards under the Plan only if
(i) they provide bona fide services to the Company or any Subsidiary, Parent, or Affiliate and (ii) so long as the services provided by such consultants or advisers are not in connection
with the offer or sale of securities in a capital-raising transaction and do not directly or indirectly promote or maintain a market for the Company's securities." 

3

 

        5.    Stock
Options. 

        Stock
Options may be granted alone, in addition to, or in tandem with other Awards granted under the Plan. Any Stock Option granted under the Plan shall be in such form as the Committee
may from time to time approve. 

        Stock
Options granted under the Plan may be of two types: (i) Incentive Stock Options and (ii) Nonqualified Stock Options. Options may be issued with or without Stock
Appreciation Rights. 

        Options
granted under the Plan shall be subject to the following terms and conditions and shall contain such additional terms and conditions, not inconsistent with the terms of the Plan,
as the Committee shall deem desirable: 

        (a)    Exercise Price.    Except as provided in Section 5(i), the exercise price per share of Stock purchasable
under a Stock Option shall be determined by the Committee at the time of grant but shall be not less than 85% of the Fair Market Value of the Stock on the date of grant. 

        (b)    Option Term.    Except as provided in Section 5(i) hereof, the term of each Stock Option shall be
fixed by the Committee. 

        (c)    Exercisability.    Stock Options shall be exercisable at such time or times and subject to such terms and
conditions as shall be determined by the Committee at or after grant; provided, however, that, except as provided in Sections 5(f), (g), and (h) and Section 8, unless otherwise
determined by the Committee at or after grant, no Stock Option shall be exercisable prior to the first anniversary date of the granting of the Option. If the Committee provides, in its sole
discretion, that any Stock Option is exercisable only in installments, the Committee may waive such installment exercise provisions at any time at or after grant in whole or in part, based on such
factors as the Committee shall determine, in its sole discretion. 

        (d)    Method of Exercise.    Subject to whatever installment exercise provisions apply under Section 5(c),
Stock Options may be exercised in whole or in part at any time during the option period. 

        Payment
of the exercise price may be made by check, note (if approved by the Board), or such other instrument or method as the Committee may accept. If so provided in the related Award
Agreement, payment in full or in part may also be made by delivery of Stock owned by the optionee for at least six months prior to the exercise of the Option (based on the Fair Market Value of the
Stock on the date the Option is exercised, as determined by the Committee). Payment of the exercise price may be made through exercise of either Tandem SARs or Freestanding SARs held by the optionee. 

        No
shares of Stock shall be issued until full payment therefor has been made. An optionee shall generally have the rights to dividends or other rights of a shareholder with respect to
shares subject to the Option after the optionee has given written notice of exercise, has paid in full for such Stock, and, if requested, has given the representation described in
Section 11(a). 

        (e)    Nontransferability of Options.    Subject to Section 5(i) hereof, unless otherwise provided in
the related Award Agreement, no Stock Option shall be transferable by the optionee otherwise than by will or by the laws of descent and distribution or pursuant to a qualified domestic relations order
as defined by the Code or Title I of the Employee Retirement Income Security Act, or the rules and regulations thereunder, and all Stock Options shall be exercisable during the optionee's lifetime
only by the optionee. 

        (f)    Termination by Death.    Subject to Section 5(i), if an optionee's employment by the Company or any
Subsidiary, Parent, or Affiliate terminates by reason of death, any Stock Option held by such optionee may thereafter be exercised, to the extent such Option was exercisable at 

4

 

the time of death or on such accelerated basis as the Committee may determine at or after grant (or as may be determined in accordance with procedures established by the Committee), by the legal
representative of the optionee's estate or by any person who acquired the Option by will or the laws of descent and distribution, for a period of one year (or such other period as the Committee may
specify
at grant) from the date of such death or until the expiration of the stated term of such Stock Option, whichever period is the shorter. 

        (g)    Termination by Reason of Disability.    Subject to Section 5(i), if an optionee's employment by the
Company or any Subsidiary, Parent, or Affiliate terminates by reason of Disability, any Stock Option held by such optionee may thereafter be exercised by the optionee, to the extent it was exercisable
at the time of termination or on such accelerated basis as the Committee may determine at or after grant (or as may be determined in accordance with procedures established by the Committee), until the
expiration of the stated term of such Stock Option (unless otherwise specified by the Committee at the time of grant); provided, however, that, if the optionee dies prior to such expiration (or within
such other period as the Committee shall specify at grant), any unexercised Stock Option held by such optionee shall thereafter be exercisable to the extent to which it was exercisable at the time of
death for a period of one year from the date of such death or until the expiration of the stated term of such Stock Option, whichever period is the shorter. 

        (h)    Other Termination.    Subject to Section 5(i), unless otherwise determined by the Committee (or pursuant
to procedures established by the Committee) at or after grant, if an optionee's employment by the Company or any Subsidiary, Parent, or Affiliate terminates for any reason other than death or
Disability, the Stock Option shall be exercisable, to the extent otherwise then exercisable, for the lesser of three months from the date of termination of employment or the balance of such Stock
Option's term. 

        (i)    Incentive Stock Options.    Anything in the Plan to the contrary notwithstanding, no term of this Plan relating
to Incentive Stock Options shall be interpreted, amended, or altered, nor shall any discretion or authority granted under the Plan be exercised, so as to disqualify the Plan under Section 422
of the Code or, without the consent of the optionee(s) affected, to disqualify any Incentive Stock Option under such Section 422. 

        To
the extent required for "incentive stock option" status under Section 422 of the Code (taking into account applicable Internal Revenue Service regulations and pronouncements
and court decisions), the Plan shall be deemed to provide: 

          (i)  that
Incentive Stock Options may be granted only to employees of the Company or any Parent or Subsidiary of the Company; 

        (ii)  that
the exercise price of any Incentive Stock Option shall not be less than 100% of the Fair Market Value of the Stock as of the date of grant (110% for an optionee
who owns stock possessing more than 10% of the voting power of all classes of stock of the Company or of a Parent or Subsidiary); 

        (iii)  that
the maximum term of exercise for any Incentive Stock Option shall not exceed ten years (five years in the case of an optionee who owns stock possessing more than
10% of the voting power of all classes of stock of the Company or of a Parent or Subsidiary); and 

        (iv)  that
Incentive Stock Options shall not be transferable by the optionee otherwise than by will or the laws of descent and distribution and shall be exercisable, during
the optionee's lifetime, only by the optionee. 

5

 

        To
the extent permitted under Section 422 of the Code or applicable regulations thereunder or any applicable Internal Revenue Service pronouncements: 

          (i)  if
a Participant's employment is terminated by reason of death or Disability and the portion of any Incentive Stock Option that becomes exercisable during the
post-termination period specified in Section 5(f) or (g) hereof exceeds the $100,000 limitation contained in Section 422(d) of the Code, such excess shall be treated
as a Nonqualified Stock Option; and 

        (ii)  if
the exercise of an Incentive Stock Option is accelerated by reason of a Change in Control, any portion of such Option that exceeds the $100,000 limitation contained
in Section 422(d) of the Code shall be treated as a Nonqualified Stock Option. 

        (j)    No Tandem Options.    Options consisting of both an Incentive Stock Option and a Nonqualified Stock Option
shall not be granted under the Plan. 

6

   
        6.    Stock Appreciation Rights. 

        (a)    Grant and Exercise.    Stock Appreciation Rights may be granted either alone ("Freestanding SAR") or in
addition to other Awards granted under the Plan and may, but need not, relate to all or part of any Stock Option granted under the Plan ("Tandem SAR"). In the case of a Nonqualified Stock Option, a
Tandem SAR may be granted either at or after the time of the grant of such Stock Option. In the case of an Incentive Stock Option, a Tandem SAR may be granted only at the time of the grant of such
Stock Option. 

        A
Tandem SAR shall terminate and no longer be exercisable upon the termination or exercise of the related Stock Option, subject to such provisions as the Committee may specify at grant
where a Tandem SAR is granted with respect to less than the full number of shares covered by a related Stock Option. Stock Options relating to exercised Tandem SARs shall no longer be exercisable to
the extent that the related Tandem SARs have been exercised. 

        A
Stock Appreciation Right may be exercised, subject to Section 6(b), in accordance with the procedures established by the Committee for such purpose and as set forth in the
related Award Agreement. Upon such exercise, the optionee shall be entitled to receive an amount determined in the manner prescribed in Section 6(b). 

        (b)    Terms and Conditions.    Stock Appreciation Rights shall be subject to such terms and conditions, not
inconsistent with the provisions of the Plan, as shall be determined from time to time by the Committee, including the following: 

        (i)    The
exercise price of a Tandem SAR shall be the exercise price of the related Option. The exercise price of a Freestanding SAR shall be not less than 100% of the Fair
Market Value of the Stock on the date of grant of the Freestanding SAR. Notwithstanding the foregoing, the Committee may unilaterally limit the appreciation in value of Stock attributable to an SAR at
any time prior to its exercise. 

        (ii)  Stock
Appreciation Rights shall be exercisable only at such time or times and to the extent provided in the related Award Agreement; provided, however, that the
exercise provisions of an SAR granted in tandem with an Incentive Stock Option shall be the same as the related Option. 

        (iii)  Upon
the exercise of a Stock Appreciation Right, the holder shall be entitled to receive an amount in cash or shares of Stock equal in value to the excess of the Fair
Market Value of one share of Stock on the date of exercise, or such other date as the Committee shall specify in the Award Agreement, over the exercise price per share specified in the related Award
Agreement multiplied by the number of shares in respect of which the Stock Appreciation Right shall have been exercised, with the Committee having the right to determine the form of payment. When
payment is to be made in Stock, the number of shares to be paid shall be calculated on the basis of the Fair Market Value of the Stock on the date of exercise. 

        (iv)  Unless
otherwise provided in the related Award Agreement, Stock Appreciation Rights shall not be transferable except under the laws of descent and distribution or
pursuant to a qualified domestic relations order as defined by the Code or Title I of the Employee Retirement Income Security Act, or the rules thereunder, and shall be exercisable during the lifetime
of the Participant only by the Participant. 

        (v)  Upon
the exercise of a Stock Appreciation Right, any related Stock Option or part thereof to which such Stock Appreciation Right is related shall be deemed to have been
exercised for the purpose of the limitation set forth in Section 3 of the Plan on the number of shares of Stock to be issued under the Plan. 

7

 

        7.    Other
Stock-Based Awards. 

        (a)    Administration.    Other Awards of Stock or that are valued in whole or in part by reference to, or are
otherwise based on, Stock ("Other Stock-Based Awards"), including, without limitation, performance shares, convertible preferred stock, convertible debentures, or exchangeable securities, may be
granted either alone or in addition to or in tandem with Stock Options or Stock Appreciation Rights granted under the Plan. 

        Subject
to the provisions of the Plan, the Committee shall have authority to determine the persons to whom and the time or times at which such Awards shall be made, the number of shares
of Stock to be awarded pursuant to such Awards, and all other conditions of the Awards. The Committee may also provide for the grant of Stock upon the completion of a specified performance period. 

        The
provisions of Other Stock-Based Awards need not be the same with respect to each recipient. 

        (b)    Terms and Conditions.    Unless otherwise provided in the related Award Agreement, Stock subject to Awards made
under this Section 7 may not be sold, assigned, transferred, pledged, or otherwise encumbered prior to the date on which the Stock is issued or, if later, the date on which any applicable
restriction, performance, or deferral period lapses. 

        The
Participant shall be entitled to receive, currently or on a deferred basis, interest or dividends or interest or dividend equivalents with respect to the Stock covered by the Award,
as determined at the time of the Award by the Committee, in its sole discretion, and the Committee may provide that such amounts (if any) shall be deemed to have been reinvested in additional Stock or
otherwise reinvested. 

        Any
Award under Section 7 and any Stock covered by any such Award shall vest or be forfeited to the extent so provided in the Award Agreement, as determined by the Committee, in
its sole discretion. 

        In
the event of the Participant's retirement, Disability, or death, or in cases of special circumstances, the Committee may, in its sole discretion, waive in whole or in part any or all
of the remaining limitations imposed with respect to any or all of an Award under this Section 7. 

        Each
Award under this Section 7 shall be confirmed by, and subject to the terms of, an Award Agreement or other instrument entered into by the Company and the Participant. 

        Stock
(including securities convertible into Stock) issued on a bonus basis under this Section 7 may be issued for no cash consideration. The purchase price of any Stock
(including securities convertible into Stock) subject to a purchase right awarded under this Section 7 shall be at least 85% of the Fair Market Value of the Stock on the date of grant. 

        8.    Change
in Control Provisions. 

        (a)    Impact of Event.    In the event of a "Change in Control" as defined in Section 8(b), all Awards granted
hereunder shall become fully exercisable and vested. 

        (b)    Definition of "Change in Control."    For purposes of Section 8(a), a "Change in Control" means the
happening of any of the following: 

        (i)    Any
"person" as defined in Section 3(a)(9) of the Exchange Act and as used in Sections 13(d) and 14(d) thereof, including a "group" as defined in
Section 13(d) of the Exchange Act, but excluding the
Company or any Subsidiary or Parent or any employee benefit plan sponsored or maintained by the Company or any Subsidiary or Parent (including any trustee of such plan acting as trustee), directly or
indirectly, becomes the "beneficial 

8

 

owner" (as defined in Rule 13d-3 under the Exchange Act, as amended from time to time), of securities of the Company representing 20 percent or more of the combined voting
power of the Company's then outstanding securities; provided, however, that the current ownership by David R. Pomije of 20 percent or more of the
combined voting power of the Company's outstanding securities shall not be deemed a Change in Control; provided further, however, that if
Mr. Pomije's ownership is at any time less than 20 percent of the combined voting power of the Company's then outstanding securities, an increase of his ownership to more than
20 percent of the combined voting power of the Company's then outstanding securities shall be deemed a Change in Control; 

        (ii)  During
any period of 24 consecutive months during the existence of the Plan, the individuals who, at the beginning of such period, constitute the Board (the "Incumbent
Directors") cease for any reason other than death to constitute at least a majority thereof; provided, however, that a director who was not a director
at the beginning of such 24-month period shall be deemed to have satisfied such 24-month requirement (and be an Incumbent Director) if such director was elected by, or on the
recommendation of, or with the approval of, at least 60% of the directors who then qualified as Incumbent Directors either actually (because they were directors at the beginning of such
24-month period) or by prior operation of this Section 8(b)(ii); or 

        (iii)  The
approval by the shareholders of an acquisition of the Company by an entity other than the Company or a Subsidiary or Parent through purchase of assets, or by
merger, or otherwise. 

        9.    Amendments
and Termination. 

        The
Board may amend, alter, discontinue, or terminate the Plan, or any portion thereof, but no amendment, alteration, or discontinuation shall be made which would impair the vested
rights of a Participant under any Award theretofore granted without the Participant's consent or which, without the approval of the Company's shareholders, would: 

        (a)  except
as expressly provided in this Plan, increase the total number of shares reserved for the purpose of the Plan; 

        (b)  authorize
an increase in the total number of shares reserved for issuance upon exercise of Incentive Stock Options; 

        (c)  decrease
the option price of any Incentive Stock Option to less than 100% of the Fair Market Value on the date of grant; 

        (d)  permit
the issuance of Stock prior to payment in full therefor; 

        (e)  change
the employees or class of employees eligible to participate in the Plan; or 

        (f)    extend
the maximum option period under Section 5(i) of the Plan. 

        The
Committee may amend the terms of any Award theretofore granted, prospectively or retroactively, but, subject to Section 3 above, no such amendment shall impair the vested
rights of any holder without the holder's consent. The Committee may also substitute new Stock Options for previously granted Stock Options (on a one-for-one or other basis),
including previously granted Stock Options having higher option exercise prices. 

        Subject
to the above provisions, the Board shall have broad authority to amend the Plan to take into account changes in applicable securities and tax laws and accounting rules, as well
as other developments. 

9

 

        10.  Unfunded
Status of Plan. 

        The
Plan is intended to constitute an "unfunded" plan for incentive and deferred compensation. With respect to any payments not yet made to a Participant by the Company, nothing
contained herein shall give any such Participant any rights that are greater than those of a general creditor of the Company. In its sole discretion, the Committee may authorize the creation of trusts
or other arrangements to meet the obligations created under the Plan to deliver Stock or payments in lieu of or with respect to Awards hereunder; provided, however, that, unless the Committee
otherwise determines with the consent of the affected Participant, the existence of such trusts or other arrangements is consistent with the "unfunded" status of the Plan. 

        11.  General
Provisions. 

        (a)  The
Committee may require each person purchasing shares pursuant to a Stock Option or receiving shares pursuant to any other Award under the Plan to represent to and
agree with the Company in writing that the Participant is acquiring the shares without a view to distribution thereof. The certificates for such shares may include any legend which the Committee deems
appropriate to reflect any restrictions on transfer. 

        All
certificates for shares of Stock or other securities delivered under the Plan shall be subject to such stop transfer orders and other restrictions as the Committee may deem advisable
under the rules, regulations, and other requirements of the Securities and Exchange Commission, any over-the-counter market on which the Stock is quoted, any stock exchange
upon which the Stock is then listed, and any applicable federal or state securities law, and the Committee may cause a legend or legends to be put on any such certificates to make appropriate
reference to such restrictions. 

        (b)  The
Committee may at any time offer to buy out for a payment in cash or Stock an Award previously granted, based on such terms and conditions as the Committee shall
establish and communicate to the Participant at the time that such offer is made. 

        (c)  Nothing
contained in this Plan shall prevent the Board from adopting other or additional compensation arrangements, subject to shareholder approval if such approval is
required; and such arrangements may be either generally applicable or applicable only in specific cases. 

        (d)  Neither
the adoption of this Plan nor the grant of any Award hereunder shall confer upon any employee of the Company or any Subsidiary, Parent, or Affiliate any right to
continued employment with the Company or a Subsidiary, Parent, or Affiliate, as the case may be, or interfere in any way with the right of the Company or a Subsidiary, Parent, or Affiliate to
terminate the employment of any of its employees at any time. 

        (e)  No
later than the date as of which an amount first becomes includable in the gross income of the Participant for federal income tax purposes with respect to any Award
under the Plan, the Participant shall pay to the Company, or make arrangements satisfactory to the Committee regarding the payment of, any federal, state, or local taxes of any kind required by law to
be withheld with respect to such amount. The obligations of the Company under the Plan shall be conditional on such payment or arrangements, and the Company and any Subsidiary, Parent, or Affiliate
shall, to the extent permitted by law, have the right to deduct any such taxes from any payment of any kind otherwise due to the Participant. If so provided in the related Award Agreement, a
Participant may authorize the withholding of shares of Stock otherwise deliverable upon exercise of an Option or the grant or vesting of an Award to satisfy any tax obligations arising from such
exercise, grant, or vesting. 

        (f)    The
actual or deemed reinvestment of dividends or dividend equivalents in additional Stock at the time of any dividend payment shall only be permissible if sufficient
shares of Stock 

10

 

are available under Section 3 for such reinvestment (taking into account then outstanding Stock Options and other Plan Awards). 

        (g)  To
the extent that federal laws (such as the Code, the Exchange Act, or the Employee Retirement Income Security Act of 1974) do not otherwise control, this Plan and all
Awards made and actions taken hereunder shall be governed by and construed in accordance with the laws of the State of Minnesota. 

        (h)  Unless
otherwise provided in the related Award Agreement, no rights granted hereunder may be assigned, transferred, pledged, or hypothecated (whether by operation of law
or otherwise) or be subject to execution, attachment, or similar process, and any attempted assignment, transfer, pledge, hypothecation, or other disposition or levy of attachment or similar process
upon any such right will be null and void and without effect. 

        (i)    If
any term, provision, or portion of this Plan or any Award granted hereunder shall be deemed unenforceable or in violation of applicable law, such term, provision, or
portion of the Plan or the Award shall be deemed severable from all other terms, provisions, or portions of this Plan or the Award or any other Awards granted hereunder, which shall otherwise continue
in full force and effect. 

        12.  Effective
Date of Plan. 

        The
Plan shall be effective as August 1, 2000, subject to the approval of the Plan by the holders of the Company's Common Stock within twelve months following adoption of the
Plan. Any grants made under the Plan prior to such approval shall be effective when made (unless otherwise specified by the Committee at the time of grant), but shall be conditioned on, and subject
to, such approval of the Plan by such shareholders. 

        13.  Term
of Plan. 

        No
Incentive Stock Option shall be granted pursuant to the Plan on or after the tenth anniversary of the date of adoption of the Plan, but Incentive Stock Options granted prior to such
tenth anniversary may extend beyond that date. All other Awards may be granted at any time and for any period unless otherwise provided by the Plan. 

11

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2ND SWING, INC. 2000 STOCK COMPENSATION PLAN

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