Document:

EX-10.2 Terms and Conditions/Performance-Based

 

EXHIBIT 10.2

PERFORMANCE-BASED RESTRICTED STOCK RIGHTS

AND RELATED CASH AWARD

ISSUED UNDER

RYDER SYSTEM, INC. 2005 EQUITY COMPENSATION PLAN

TERMS AND CONDITIONS

The following terms and conditions apply to the performance-based restricted stock rights (the
“PBRSRs”) and related cash award (the “Related Cash Award”) granted by Ryder System, Inc. (the
“Company”) under the Ryder System, Inc. 2005 Equity Compensation Plan (the “Plan”), as specified in
the Performance-Based Restricted Stock Rights Award Notification (the “Notification”), to which
these terms and conditions are appended. Certain terms of the PBRSRs and the Related Cash Award
including the number of shares of Ryder common stock underlying the PBRSRs, are set forth in the
Notification. The Compensation Committee of the Company’s Board of Directors (the “Committee”)
shall administer the PBRSRs and Related Cash Award in accordance with the Plan. Capitalized terms
used herein and not defined shall have the meaning ascribed to such terms in the Plan or in the
Notification.

	 	1.	 	General. Each PBRSR represents the right to receive one Share (and the Related
Cash Award represents the right to receive a fixed dollar amount) on a future date
based upon the attainment of certain financial performance goals, on the terms and
conditions set forth herein, in the Notification and in the Plan, the applicable terms,
conditions and other provisions of which are incorporated by reference herein
(collectively, the “Award Documents”). A copy of the Plan and the documents that
constitute the “Prospectus” for the Plan under the Securities Act of 1933, have been
delivered to the Participant prior to or along with delivery of the Notification. In
the event there is an express conflict between the provisions of the Plan and those set
forth in any other Award Document, the terms and conditions of the Plan shall govern.
It is intended that the PBRSRs and Related Cash Award qualify as “performance-based
compensation” for purposes of Section 162(m) of the Internal Revenue Code of 1986, as
amended (the “Code”), including any successor provisions and regulations.
	 
	 	 	 	The terms and conditions contained herein may be amended by the Committee as permitted by
the Plan; none of the terms and conditions of the PBRSRs or Related Cash Award may be
amended or waived without the prior approval of the Committee. Any amendment or waiver
not approved by the Committee will be void and have no force or effect. Any employee or
officer of the Company who authorizes any such amendment or waiver without the prior
approval of the Committee will be subject to disciplinary action up to and including
forfeiture of his or her PBRSRs and Related Cash Award and/or termination of employment
(unless otherwise prohibited by law). All decisions and determination made by the
Committee relating to the PBRSRs and Related Cash Award shall be final and binding on the
Participant, his or her beneficiaries and any other person having or claiming an interest
under the Plan.
	 
	 	2.	 	Financial Performance Goals; Performance Period. The PBRSRs and Related Cash
Award will vest only if, for the three-year period specified in the Notification (the
“Performance Period”), the Company’s Total Shareholder Return meets or exceeds the
Total Shareholder Return for the S&P Composite Index for the Performance Period as
published by Standard & Poor’s as the “S&P 500 TR”, or, if no such publication is
available, based on a comparable publication selected by the Committee (the
“Performance Goal”). As used herein, the term “Total Shareholder Return” shall mean
the percentage change in the stock price or index, as applicable, assuming reinvestment
of dividends on the ex-dividend date.
	 
	 	3.	 	Delivery of Shares and Payment of Cash. Subject to this Section 3 and Section
4 below, if the Performance Goal is attained and the Committee otherwise approves the
issuance of the PBRSRs and the payment of the Related Cash Award, the PBRSRs will vest
and the Participant will be entitled to receive the Related Cash Award, provided the
Participant is, on the last day of the Performance Period,

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	 	 	 	and has been from the date
of grant of the PBRSRs and Related Cash Award to the last day of the Performance
Period, continuously employed by the Company or one of its Subsidiaries. For purposes
of
these terms and conditions, the Participant shall not be deemed to have terminated his or
her employment with the Company and its Subsidiaries if he or she is immediately
thereafter employed by the Company or another Subsidiary. For the avoidance of doubt, in
no event shall a Participant be entitled to receive any cash payment under the Related
Cash Award unless the PBRSRs have vested.
	 
	 	 	 	Upon vesting, (i) the Shares subject to the vested PBRSRs will be transferred to an
account held in the name of the Participant by the Company’s independent stock plan
administrator and the Participant will receive notice of such transfer together with all
relevant account details and (ii) the Participant will receive the cash payment (net of
any applicable taxes) by the March 15th immediately following the end of the
Performance Period, unless administratively impracticable to do so.
	 
	 	4.	 	Termination of PBRSRs; Forfeiture. The PBRSRs and Related Cash Award will
terminate upon or following the termination of the Participant’s employment with the
Company and its Subsidiaries as described below.

	 	(a)	 	Resignation by the Participant or Termination by the Company
or a Subsidiary: All outstanding PBRSRs will be forfeited, the Related Cash
Award will be cancelled and the Participant will not have any right to delivery
of Shares or cash in respect of PBRSRs or the Related Cash Award that did not
vest prior to such termination. If the Participant’s employment is terminated
by the Company or a Subsidiary for Cause (as defined in Section 12), then the
Company shall have the right to reclaim and receive (at the time and in the
manner set forth in Section 3) from the Participant any Shares or cash delivered
to the Participant upon the vesting of any PBRSRs or Related Cash Award within
the one year period before the date of the Participant’s termination of
employment, or to the extent the Participant has transferred such Shares, the
equivalent value thereof in cash.
	 
	 	(b)	 	Death, Disability or Retirement: If the death,
Disability (as defined in Section 12) or Retirement (as defined in Section 12)
occurs after the end of the Performance Period, the Participant (or his or her
Beneficiary, in the event of death) shall be entitled to receive the number of
Shares and cash amounts due to him or her under the Award. If the death,
Disability or Retirement occurs during the Performance Period and the
Participant would have received a payment under the Award but for his or her
death, Disability or Retirement, the Participant (or his or her Beneficiary, in
the event of death) will be entitled to receive a pro-rata number of Shares and
a pro-rata cash payment based on the number of days worked during the
Performance Period. On the date of death, Disability or Retirement, the Company
shall calculate the pro-rata number of Shares that the Participant would be
entitled to receive if the Performance Goals are achieved and shall cancel the
balance of the PBRSRs to which the Participant will no longer be entitled.
	 
	 	(c)	 	Proscribed Activity: If, during the Proscribed Period
(as defined in Section 12) but prior to a Change of Control (as defined in
Section 12 below), the Participant engages in a Proscribed Activity, then the
Company shall have the right to reclaim and receive from the Participant all
Shares and cash delivered to the Participant upon the vesting of any PBRSRs or
Related Cash Award during the one year period immediately prior to, or at any
time following, the date of the Participant’s termination of employment, or to
the extent the Participant has transferred such Shares, the equivalent value
thereof in cash.

	 	5.	 	Change of Control. Notwithstanding anything contained herein to the contrary,
unless otherwise determined by the Committee prior to a Change of Control, all
outstanding PBRSRs and the Related Cash Award will become fully vested immediately
prior to any such Change of Control, and all Shares subject to such PBRSRs and cash
payable under the Related Cash Award will be

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	 	 	 	delivered to the Participant at that time
in accordance with Section 3 above. To the extent (i) Participant’s
employment was terminated by the Company other than for Cause or Disability within
the 12 months prior to the date on which the Change of Control occurred, (ii) during
such 12 month period the Participant did not engage in a Proscribed Activity, and
(iii) the Committee determines, in its sole and absolute discretion, that the
decision related to such termination was made in contemplation of the Change of
Control, then the Participant shall be treated as if he or she had remained employed
with the Company until the date of the Change of Control.
	 
	 	6.	 	Rights as a Shareholder; Dividend Equivalents. The Participant will not have
the rights of a shareholder of the Company with respect to Shares subject to the PBRSRs
until such Shares are actually delivered to the Participant. However, the Company will
pay cash dividend equivalents with respect to each PBRSR at the same time and in the
same amount as cash dividends are paid on a Share.
	 
	 	7.	 	U.S. Withholding Taxes. The PBRSRs and Related Cash Award will not be taxable
until the Shares and cash are delivered, provided that cash dividend equivalents will
be taxable to the Participant as ordinary income, subject to wage-based withholding and
reporting. The Shares and cash when delivered will be taxable to the Participant at
their then fair market value as ordinary income, subject to wage-based withholding and
reporting. With respect to the Shares, the Company will satisfy this withholding
obligation by reducing the cash to be delivered in an amount sufficient to satisfy the
withholding obligations. If the amount of the cash to be delivered is insufficient to
pay the taxes, the Company will reduce the number of Shares to be delivered to the
Participant in an amount sufficient to satisfy the balance of its withholding
obligations (based on the Fair Market Value of the Shares on the vesting date for the
related PBRSRs). This Section 7 shall only apply with respect to the Company’s U.S.
withholding obligations. The Company may satisfy any tax obligations it may have in
any other jurisdiction in any manner it deems, in its sole and absolute discretion, to
be necessary or appropriate.
	 
	 	8.	 	Statute of Limitations and Conflicts of Laws. All rights of action by, or on
behalf of the Company or by any shareholder against any past, present, or future member
of the Board of Directors, officer, or employee of the Company arising out of or in
connection with the PBRSRs or Related Cash Award or the Award Documents, must be
brought within three years from the date of the act or omission in respect of which
such right of action arises. The PBRSRs and Related Cash Award, and the Award
Documents, shall be governed by the laws of the State of Florida, without giving effect
to principles of conflict of laws, and construed accordingly.
	 
	 	9.	 	No Employment Right. Neither the grant of the PBRSRs or Related Cash Award,
nor any action taken hereunder, shall be construed as giving any employee or any
Participant any right to be retained in the employ of the Company. The Company is under
no obligation to grant PBRSRs or a Related Cash Award hereunder. Nothing contained in
the Award Documents shall limit or affect in any manner or degree the normal and usual
powers of management, exercised by the officers and the Board of Directors or
committees thereof, to change the duties or the character of employment of any employee
of the Company or to remove the individual from the employment of the Company at any
time, all of which rights and powers are expressly reserved.
	 
	 	10.	 	No Assignment. A Participant’s rights and interest under the PBRSRs or Related
Cash Award may not be assigned or transferred, except as otherwise provided herein, and
any attempted assignment or transfer shall be null and void and shall extinguish, in
the Company’s sole discretion, the Company’s obligation under the PBRSRs or Related
Cash Award or the Award Documents.
	 
	 	11.	 	Unfunded Plan. Any amounts owed under the Related Cash Award shall be
unfunded. The Company shall not be required to establish any special or separate fund,
or to make any other

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	 	 	 	segregation of assets, to assure payment of any earned amounts.
	 
	 	12.	 	Definitions.

	 	(a)	 	“Cause” shall have the meaning set forth in any individual,
valid, written agreement between the Participant and the Company or any
Subsidiary, or, if none exists, shall mean a determination of “Cause” under any
applicable Severance Plan, as in effect on the date of grant of the PBRSRs and
Related Cash Award. Notwithstanding the foregoing, unless otherwise set forth
in any individual, valid, written agreement between the Participant and the
Company or any Subsidiary, during the one year period following a Change of
Control, in no event shall a failure to meet performance expectations constitute
Cause unless such failure was willful.
	 
	 	(b)	 	“Change of Control” occurs when:

	 	(i)	 	any individual, entity or group (within the meaning
of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934,
as amended (the “1934 Act”)) (a “Person”) becomes the beneficial owner,
directly or indirectly, of thirty percent (30%) or more of the combined
voting power of the Company’s outstanding voting securities ordinarily
having the right to vote for the election of directors of the Company;
provided, however, that for purposes of this subparagraph (i), the
following acquisitions shall not constitute a Change of Control: (A) any
acquisition by any employee benefit plan or plans (or related trust) of
the Company and its subsidiaries and affiliates or (B) any acquisition by
any corporation pursuant to a transaction which complies with clauses
(A), (B) and (C) of subparagraph (iii) below; or
	 
	 	(ii)	 	the individuals who, as of January 1, 2007,
constituted the Board of Directors of the Company (the “Board” generally
and as of January 1, 2007 the “Incumbent Board”) cease for any reason
to constitute at least a majority of the Board, provided that any person
becoming a director subsequent to January 1, 2007 whose election, or
nomination for election, was approved by a vote of the persons comprising
at least a majority of the Incumbent Board (other than an election or
nomination of an individual whose initial assumption of office is in
connection with an actual or threatened election contest, as such terms
are used in Rule 14a-11 of Regulation 14A promulgated under the 1934 Act)
shall be, for purposes of this Plan, considered as though such person
were a member of the Incumbent Board; or
	 
	 	(iii)	 	there is a reorganization, merger or consolidation of the Company (a “Business
Combination”), in each case, unless, following such Business Combination, (A) all or
substantially all of the individuals and entities who were the beneficial owners,
respectively, of the Company’s outstanding Shares and outstanding voting securities ordinarily

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	 	 	 	having the right to vote for the election of directors of the Company immediately prior to
such Business Combination beneficially own, directly or indirectly, more than fifty percent
(50%) of, respectively, the then outstanding shares of common stock and the combined voting
power of the then outstanding voting securities ordinarily having the right to vote for the
election of directors, as the case may be, of the corporation resulting from such Business
Combination (including, without limitation, a corporation which as a result of such
transaction owns the Company or all or substantially all of the Company’s assets either
directly or through one or more subsidiaries) in substantially the same proportions as their
ownership, immediately prior to such Business Combination, of the Company’s outstanding Shares
and outstanding voting securities ordinarily having the right to vote for the election of
directors of the Company, as the case
may be, (B) no Person (excluding any corporation resulting from such
Business Combination or any employee benefit plan or plans (or related
trust) of the Company or such corporation resulting from such Business
Combination and their subsidiaries and affiliates) beneficially owns,
directly or indirectly, 30% or more of the combined voting power of the
then outstanding voting securities of the corporation resulting from
such Business Combination and (C) at least a majority of the members
of the board of directors of the corporation resulting from such
Business Combination were members of the Incumbent Board at the time of
the execution of the initial agreement, or of the action of the Board,
providing for such Business Combination; or
	 
	 	(iv)	 	there is a liquidation or dissolution of the
Company approved by the shareholders; or
	 
	 	(v)	 	there is a sale of all or substantially all of the assets of the Company.

	 	 	 	Notwithstanding anything in this Section 12 to the contrary, for purposes of
the acceleration of the payment pursuant to Section 5, a Change of Control
shall only be deemed to occur if such transactions or events would give rise
to a “change in ownership or effective control” under Section 409A of the
Code, and the rulings and regulations issued thereunder.
	 
	 	(c)	 	“Disability” means an illness or injury that entitles the
Participant to long-term disability payments under the Company’s Long Term
Disability Plan or any successor plan, as in effect from time to time.
	 
	 	(d)	 	“Proscribed Activity” means any of the following:

	 	(i)	 	the Participant’s breach of any written agreement
between the Participant and the Company or any of its Subsidiaries,
including any agreement relating to nondisclosure, noncompetition,
nonsoliciation and/or nondisparagement;
	 
	 	(ii)	 	the Participant’s direct or indirect unauthorzied
use or disclosure of confidential information or trade secrets of the
Company or any Subsidiary, including, but not limited to, such matters as
costs, profits, markets, sales, products, product lines, key personnel,
pricing policies, operational methods, customers, customer requirements,
suppliers, plans for future developments, and other business affairs and
methods and other information not readily available to the public;
	 
	 	(iii)	 	the Participant’s direct or indirect engaging or
becoming a partner, director, officer, principal, employee, consultant,
investor, creditor or stockholder in/for any business, proprietorship,
association, firm or corporation not owned or controlled by the Company
or its Subsidiaries which is engaged or proposes to engage in a business
competitive directly or indirectly with the business conducted by the
Company or its Subsidiaries in any geographic area where such business of
the Company or its Subsidiaries is conducted, provided that the
Participant’s investment in one percent (1%) or less of the outstanding
capital stock of any corporation whose stock is listed on a national
securities exchange shall not be treated as a Proscribed Activity;
	 
	 	(iv)	 	the Participant’s direct or indirect, either on the
Participant’s own account or for any person, firm or company, soliciting,
interfering with or inducing, or attempting

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	 	 	 	to induce, any employee of
the Company or any of its Subsidiaries to leave his or her
employment or to breach his or her employment agreement;
	 
	 	(v)	 	the Participant’s direct or indirect taking away,
interfering with relations with, diverting or attempting to divert from
the Company or any Subsidiary any business with any customer of the
Company or any Subsidiary, including (A) any customer that has been
solicited or serviced by the Company within one (1) year prior to the
date of termination of Participant’s employment with the Company and (B)
any customer with which the Participant has had contact or association,
or which was under the supervision of Participant, or the identity of
which was learned by the Participant as a result of Participant’s
employment with the Company;
	 
	 	(vi)	 	the Participant’s making of any remarks disparaging
the conduct or character of the Company or any of its Subsidiaries, or
their current or former agents, employees, officers, directors,
successors or assigns; or
	 
	 	(vii)	 	the Participant’s failure to cooperate with the
Company or any Subsidiary, for no additional compensation (other than
reimbursement of expenses), in any litigation or administrative
proceedings involving any matters with which the Participant was involved
during the Participant’s employment with the Company or any Subsidiary.

	 	(e)	 	“Proscribed Period” means the period beginning on the date of
termination of Participant’s employment and ending on the later of (A) the one
year anniversary of such termination date or (B) if the Participant is entitled
to severance benefits in the form of salary continuation, the date on which
salary continuation is no longer payable to the Participant.
	 
	 	(f)	 	“Retirement” means retirement under the provisions of the Ryder
System, Inc. Retirement Plan, or any successor pension plan maintained by the
Company, in each case as in effect from time to time.

	 	13.	 	Other Benefits. No amount accrued or paid under the PBRSRs or Related Cash
Award shall be deemed compensation for purposes of computing a Participant’s benefits
under any retirement plan of the Company or its Subsidiaries, nor affect any benefits
under any other benefit plan now or subsequently in effect under which the availability
or amount of benefits is related to the Participant’s level of compensation.

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Exhibit 4.1

GOLF GALAXY, INC.

AMENDED AND RESTATED

1996 STOCK OPTION AND INCENTIVE PLAN*

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

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

     2. Administration.

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

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

     3. Eligibility; Participants.

     a. Any persons who provides services to the Company or any of its Affiliates as an
employee, consultant or other service provider shall be eligible to receive awards under the
Plan. Eligible persons may be selected to receive awards individually or by

____________

*  All share amounts as represented by common stock of
Dick’s Sporting Goods, Inc. have been adjusted in accordance
with the Agreement and Plan of Merger dated November 13, 2006. This Plan
will be administered by the Board of Directors of Dick’s
Sporting Goods, Inc. or its compensation committee and the daily
administration of the Plan will be conducted in accordance with
Dick’s Sporting Goods normal practices related to routine
administration.

 

 

group or category (for example, by pay grade) as the Board or Committee may determine.
The selection of officers of the Company to receive awards under the Plan and the terms of
any award granted to such officers shall be approved by the Board or Committee. The Board
or Committee, in its sole discretion, may delegate to one or more officers of the Company
the authority to select persons who are not officers to receive awards under the Plan and to
establish the terms of awards granted to such persons.

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

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

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

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

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

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

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

     d. Options Not Transferable. Options shall not be transferable except to the extent
permitted by the agreement evidencing such option; provided, that in no event shall
any option be transferable by the optionee, other than by will or the laws of descent and
distribution. Options shall be exercised during an optionee’s lifetime only by such
optionee. If, pursuant to the agreement evidencing any option, such option remains

2

 

exercisable after the optionee’s death, it may be exercised, to the extent permitted by
such agreement, by the personal representative of the optionee’s estate or by any person who
acquired the right to exercise such option by bequest, inheritance, or otherwise by reason
of the optionee’s death.

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

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

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

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

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

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

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

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

     a. Restricted Period. The Board or Committee shall establish a period (the “Restricted
Period”) at the time an award is granted during which the holder will not be permitted to
sell, transfer, pledge, encumber, or assign the Shares subject to the award. The Board or
Committee may provide for the lapse of restrictions in installments, or upon

3

 

the occurrence of certain events, where deemed appropriate. Any attempt by a holder to
dispose of restricted Shares in a manner contrary to the applicable restrictions shall be
void, and of no force and effect.

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

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

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

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

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

     f. Gifts, Etc. Notwithstanding any other provision of this paragraph 6, the Board or
Committee may permit a gift of restricted stock to the holder’s spouse, child, stepchild,
grandchild, or legal dependent, or to a trust whose sole beneficiary or

4

 

beneficiaries shall be the holder and/or any one or more of such persons;
provided, that the donee shall have entered into an agreement with the Company
pursuant to which it agrees that the restricted stock shall be subject to the same
restrictions in the hands of such donee as it was in the hands of the donor.

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

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

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

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

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

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

5

 

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

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

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

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

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

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

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

     d. shall be made without the affirmative vote of shareholders holding at least a
majority of the voting stock of the Company represented in person or by proxy at a duly held
shareholders’ meeting.

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

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

6

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