Document:

Exhibit 10.1

 

AXCELIS TECHNOLOGIES, INC.

 

EMPLOYEE STOCK PURCHASE PLAN

 

Adopted
by the Board of Directors and the sole stockholder on June 9, 2000, and

effective on July 10, 2000

As amended by the Board of Directors on 

January 27, 2005 and May 12, 2005 (stockholder approval not required)

to be effective January 1, 2006

 

1.                                      PURPOSE.

 

The
purpose of this Plan is to provide an opportunity for Employees of Axcelis
Technologies, Inc. (the “Corporation”) and its Designated Subsidiaries, to
purchase Common Stock of the Corporation and thereby to have an additional
incentive to contribute to the prosperity of the Corporation.  It is the intention of the Corporation that
the Plan qualifies as an “Employee Stock Purchase Plan” under Section 423
of the Internal Revenue Code of 1986, as amended.

 

2.                                      DEFINITIONS.

 

(a)                                  “Board”
shall mean the Board of Directors of the Corporation.

 

(b)                                 “Code”
shall mean the Internal Revenue Code of 1986, as amended.  Any reference to a section of the Code
herein shall be a reference to any successor or amended section of the
Code.

 

(c)                                  “Committee”
shall mean the committee appointed by the Board in accordance with Section 14
of the Plan.

 

(d)                                 “Common
Stock” shall mean the Common Stock of the Corporation, or any stock
into which such Common Stock may be converted.

 

(e)                                  “Compensation”
shall mean base pay, including pay under any system which measures earnings by
quantity and quality of production, variable pay, including without limitation,
bonuses and incentive payments (but excluding sign-on bonuses and bonuses paid
under the Axcelis Team Incentive Plan, and any successors to such plans and any
other similar management bonuses or incentive payments), shift premium and
overtime pay, but excluding severance pay in a single lump sum and not as salary
continuation, pay in lieu of vacation, cost-of-living allowance, retainers,
fees, and any other special remuneration, with any modifications determined by
the Committee.  The Committee shall have
the authority to determine and approve all forms of pay to be 

 

 

included in the
definition of Compensation and may change the definition on a prospective
basis.

 

(f)                                    “Corporation”
shall mean Axcelis Technologies, Inc., a Delaware corporation.

 

(g)                                 “Designated
Subsidiary” shall mean a Subsidiary that has been designated by the
Committee as eligible to participate in the Plan with respect to its Employees.

 

(h)                                 “Employee”
shall mean an individual classified as an employee (within the meaning of Code Section 3401(c) and
the regulations thereunder) by the Corporation or a Designated Subsidiary on
the Corporation’s or such Designated Subsidiary’s payroll records during the
relevant participation period.  Employees
shall not include individuals classified as independent contractors.

 

(i)                                     “Entry
Date” shall mean the first Trading Day of an Offering Period.

 

(j)                                     “Fair Market Value” shall be the closing sales price
for the Common Stock (or the closing bid, if no sales were reported) as quoted
on the NASDAQ National Market, or other principal securities market on which the
Common Stock is traded, on the date of determination if that date is a Trading
Day, or if the date of determination is not a Trading Day, the last market
Trading Day prior to the date of determination, as reported in The Wall Street Journal or such other source as the
Committee deems reliable.

 

(k)                                  “Offering Period” shall mean the period of six
(6)months commencing on the first Trading Day on or about July 1 of every
year and terminating on the last Trading Day in the period ending six (6) months
later.  Subsequent Offering Periods, if
any, shall run consecutively after the termination of the preceding Offering
Period.  The duration and timing of
Offering Periods may be changed or modified by the Committee.

 

(l)                                     “Participant” shall mean a participant in the Plan as
described in Section 5 of the Plan.

 

(m)                               “Plan” shall mean the Axcelis Technologies, Inc.
Employee Stock Purchase Plan.

 

(n)                                 “Purchase Date” shall mean the last Trading Day of
each Offering Period.

 

(o)                                 “Purchase Price” shall mean 85% of the Fair Market
Value of a share of Common Stock on the Entry Date or on the Purchase Date,
whichever is lower; provided

 

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however, that the
Purchase Price may be adjusted by the Committee pursuant to Section 7.4.

 

(q)                                 “Shareholder”
shall mean a record holder of shares entitled to vote shares of Common Stock
under the Corporation’s by-laws.

 

(r)                                    “Subsidiary”
shall mean any corporation (other than the Corporation) in an unbroken chain of
corporations beginning with the Corporation, as described in Code Section 424(f).

 

(s)                                  “Trading Day” shall mean a day on which U.S. national
stock exchanges and the NASDAQ System are open for trading.

 

3.                                      ELIGIBILITY.

 

3.1                                 Any
Employee regularly employed on a full-time or part-time basis by the
Corporation or by any Designated Subsidiary on an Entry Date shall be eligible
to participate in the Plan with respect to the Offering Period commencing on
such Entry Date, provided that the Committee may establish administrative rules requiring
that employment commence some minimum period (e.g., one pay period) prior to an
Entry Date to be eligible to participate with respect to the Offering Period
beginning on that Entry Date.

 

3.2                                 The
Committee may also determine that a designated group of highly compensated
Employees are ineligible to participate in the Plan so long as the excluded
category fits within the definition of “highly compensated employee” in Code Section 414(q).  No Employee may participate in the Plan if
immediately after an option is granted the Employee owns or is considered to
own (within the meaning of Code Section 424(d)), shares of stock,
including stock which the Employee may purchase by conversion of convertible
securities or under outstanding options granted by the Corporation, possessing
five percent (5%) or more of the total combined voting power or value of all
classes of stock of the Corporation or of any of its Subsidiaries.

 

3.3                                 All
Employees who participate in the Plan shall have the same rights and privileges
under the Plan except for differences which may be mandated by local law and
which are consistent with Code Section 423(b)(5); provided, however, that
any affiliate of the Corporation whose Employees are not granted options under
this Plan may adopt a separate “sub-plan” in accordance with the provisions of Section 15
which is not designed to qualify under Code section 423 and the Employees
participating thereunder need not have the same rights and privileges as
Employees participating in the Code section 423 Plan.  The Board may impose restrictions on
eligibility and participation of Employees who are officers and directors to
facilitate compliance with federal or state securities laws or foreign laws.

 

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4.                                      OFFERING
PERIODS.

 

The Plan shall be
implemented by consecutive Offering Periods with a new Offering Period
commencing on the first Trading Day on or after the date six (6) months
from the first date of the immediately preceding Offering Period, or on such other
date as the Committee shall determine, and continuing thereafter for six (6) months
or until terminated pursuant to Section 13 hereof.  Unless otherwise determined by the Committee,
the Plan will operate with successive six (6) month Offering Periods commencing
at July 1 and January 1.  The
Committee shall have the power to change the duration of future Offering
Periods, without Shareholder approval, and without regard to the expectations
of any Participants.

 

4.1                                 The
Committee shall have the authority to change the duration of Offering Periods
(including the commencement dates thereof) with respect to future offerings
without Shareholder approval if such change is announced at least five (5) days
prior to the scheduled beginning of the first Offering Period to be affected
thereafter.

 

5.                                      PARTICIPATION.

 

5.1                                 An
Employee who is eligible to participate in the Plan in accordance with Section 3
may become a Participant by completing and submitting, on a date prescribed by
the Committee prior to an applicable Entry Date (unless a later date is set by
the Committee), a completed payroll deduction authorization and Plan enrollment
form provided by the Corporation or by following an electronic or other
enrollment process as prescribed by the Committee.  An eligible Employee may authorize payroll
deductions at the rate of any whole percentage of the Employee’s Compensation,
not to exceed ten percent (10%) of the Employee’s Compensation.  As determined by the Committee, payroll
deductions may begin at a date after the effective date of the Plan.  All payroll deductions may be held by the
Corporation and commingled with its other corporate funds where
administratively appropriate.  No interest
shall be paid or credited to the Participant with respect to such payroll deductions.  The Corporation shall maintain a separate
bookkeeping account for each Participant under the Plan and the amount of each
Participant’s payroll deductions shall be credited to such account.  A Participant may not make any additional
payments into such account.

 

5.2                                 Under
procedures established by the Committee, a Participant may withdraw from the
Plan during a Offering Period, by completing and filing a new payroll deduction
authorization and Plan enrollment form with the Corporation or by following
electronic or other procedures prescribed by the Committee, prior to a date set
by the Committee that precedes the Purchase Date.  If a Participant withdraws from the Plan
during an Offering Period, his or her accumulated payroll deductions will be

 

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refunded to the
Participant without interest.  The
Committee may establish rules limiting the frequency with which
Participants may withdraw and re-enroll in the Plan and may impose a waiting
period on Participants wishing to re-enroll following withdrawal.

 

5.3                                 A
Participant may change his or her rate of contribution through payroll
deductions during the periods specified by the Committee by filing a new
payroll deduction authorization and Plan enrollment form or by following
electronic or other procedures prescribed by the Committee.  If a Participant has not followed such
procedures to change the rate of contribution, the rate of contribution shall
continue at the originally elected rate throughout the Offering Period and
future Offering Periods.  In accordance
with Section 423(b)(8) of the Code, the Committee may reduce a
Participant’s payroll deductions to zero percent (0%) at any time during an
Offering Period.

 

6.                                      TERMINATION
OF EMPLOYMENT.

 

In the
event any Participant terminates employment with the Corporation or any of its
Designated Subsidiaries for any reason (including death) prior to the
expiration of a Offering Period, the Participant’s participation in the Plan
shall terminate and all amounts credited to the Participant’s account shall be
paid to the Participant or, in the case of death, to the Participant’s heirs or
estate, without interest.  Whether a
termination of employment has occurred shall be determined by the
Committee.  The Committee may also
establish rules regarding when leaves of absence or changes of employment
status will be considered to be a termination of employment, including rules regarding
transfer of employment among Designated Subsidiaries, Subsidiaries and the
Corporation, and the Committee may establish termination of employment
procedures for this Plan which are independent of similar rules established
under other benefit plans of the Corporation and its Subsidiaries.

 

7.                                      OFFERING.

 

7.1                                 Subject
to adjustment as set forth in Section 10, the maximum number of shares of
Common Stock which may be issued pursuant to the Plan shall be 2.5 million
shares, plus an annual increase to be added on the last day of each fiscal year
of the Corporation beginning in 2001, equal to one percent (1%) of the
outstanding shares of the Corporation on such date or a lesser amount
determined by the Committee, provided that the maximum number of shares of
Common Stock that may be issued pursuant to the Plan shall be 7.5 million
shares.  If, on a given Purchase Date,
the number of shares with respect to which options are to be exercised exceeds
the number of shares then available under the Plan, the Corporation shall make
a pro rata allocation of the shares

 

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remaining available for
purchase in as uniform a manner as shall be practicable and as it shall
determine to be equitable.

 

7.3                                 With
respect to any Offering Period, each eligible Employee who has elected to
participate as provided in Section 5.1 shall be granted, as of such
Employee’s Entry Date, an option for each Offering Period to purchase that
number of whole shares of Common Stock (not to exceed 1,500 shares) which may
be purchased with the payroll deductions accumulated on behalf of such Employee
during each such Offering Period at the purchase price specified in Section 7.4
below, subject to the additional limitation that no Employee participating in
the Section 423 Plan shall be granted an option to purchase Common Stock
under the Plan at a rate which exceeds U.S. twenty-five thousand dollars (U.S.
$25,000) of the Fair Market Value of such Common Stock (determined at the time
such option is granted) for each calendar year in which such option is
outstanding at any time.  The foregoing
sentence shall be interpreted so as to comply with Code Section 423(b)(8).

 

7.4                                 The
purchase price under each option shall a percentage (not less than eighty-five
percent (85%)) established by the Committee (“Designated Percentage”) of the
Fair Market Value of the Common Stock on the Purchase Date on which the Common
Stock is purchased.  The Committee may
change the Designated Percentage with respect to any future Offering Period,
but not below eighty-five percent (85%), and the Committee may determine with
respect to any prospective Offering Period that the option price shall be the
Designated Percentage of the Fair Market Value of the Common Stock on the
Purchase Date.

 

8.                                      PURCHASE
OF STOCK.

 

Upon
the expiration of each Offering Period, a Participant’s option shall be
exercised automatically for the purchase of that number of whole and fractional
shares of Common Stock which the accumulated payroll deductions credited to the
Participant’s account at that time shall purchase at the applicable price
specified in Section 7.4. 
Notwithstanding the foregoing, the Corporation or its designee may make
such provisions and take such action as it deems necessary or appropriate for
the withholding of taxes and/or social insurance which the Corporation or its
Designated Subsidiary is required by law or regulation of any governmental
authority to withhold.  Each Participant,
however, shall be responsible for payment of all individual tax liabilities
arising under the Plan.

 

9.                                      PAYMENT
AND DELIVERY.

 

As
soon as practicable after the exercise of an option, the Corporation shall
deliver to the Participant a record of the Common Stock purchased and the
balance of any amount of payroll deductions credited to the Participant’s
account not used for the

 

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purchase, except as
specified below.  The Committee may
permit or require that shares be deposited directly with a broker designated by
the Committee or to a designated agent of the Corporation, and the Committee
may utilize electronic or automated methods of share transfer.  The Committee may require that shares be
retained with such broker or agent for a designated period of time and/or may
establish other procedures to permit tracking of disqualifying dispositions of
such shares.  The Corporation shall
retain the amount of payroll deductions used to purchase Common Stock as full
payment for the Common Stock and the Common Stock shall then be fully paid and
non-assessable.  No Participant shall
have any voting, dividend, or other Shareholder rights with respect to shares
subject to any option granted under the Plan until the shares subject to the
option have been purchased and delivered to the Participant as provided in this
Section 9.

 

10.                               RECAPITALIZATION.

 

If
after the grant of an option, but prior to the purchase of Common Stock under
the option, there is any increase or decrease in the number of outstanding
shares of Common Stock because of a stock split, stock dividend, combination or
recapitalization of shares subject to options, the number of shares to be
purchased pursuant to an option, the price per share of Common Stock covered by
an option and the maximum number of shares specified in Section 7.1 may be
appropriately adjusted by the Board, and the Board shall take any further actions
which, in the exercise of its discretion, may be necessary or appropriate under
the circumstances.

 

The
Board’s determinations under this Section 10 shall be conclusive and
binding on all parties.

 

11.                               MERGER,
LIQUIDATION, OTHER CORPORATION TRANSACTIONS.

 

In the
event of shareholder approval of a liquidation or dissolution of the
Corporation, the Offering Period will terminate immediately, unless otherwise
provided by the Board in its sole discretion, and all outstanding options shall
automatically terminate and the amounts of all payroll deductions will be
refunded without interest to the Participants.

 

In the
event of a sale of all or substantially all of the assets of the Corporation,
the acquisition by a person (including any entity or group) of beneficial
ownership of a majority of the Corporation’s outstanding capital stock (based
on voting power, but excluding any acquisition by the Corporation, its
affiliate, employee benefit plans of the Corporation or its affiliate, and any
underwriter holding securities temporarily pursuant to an offering), or the
merger or consolidation of the Corporation with or into another corporation,
then in the sole discretion of the Board, (1) each option shall be assumed
or an equivalent option shall be substituted by the successor corporation or
parent or subsidiary of such successor corporation, (2) a date established
by the Board on or

 

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before the date of
consummation of such merger, consolidation or sale shall be treated as a
Purchase Date, and all outstanding options shall be exercised on such date, or (3) all
outstanding options shall terminate and the accumulated payroll deductions will
be refunded without interest to the Participants.

 

12.                               TRANSFERABILITY.

 

Options
granted to Participants may not be voluntarily or involuntarily assigned,
transferred, pledged, or otherwise disposed of in any way, and any attempted
assignment, transfer, pledge, or other disposition shall be null and void and
without effect.  If a Participant in any
manner attempts to transfer, assign or otherwise encumber his or her rights or
interests under the Plan, other than as permitted by the Code, such act shall
be treated as an election by the Participant to discontinue participation in
the Plan pursuant to Section 5.2.

 

13.                               AMENDMENT
OR TERMINATION OF THE PLAN.

 

13.1                           The
Plan shall continue until June 30, 2020 unless otherwise terminated in
accordance with Section 13.2.

 

13.2                           The
Board may, in its sole discretion, insofar as permitted by law, terminate or
suspend the Plan, or revise or amend it in any respect whatsoever, except that,
without approval of the Shareholders, no such revision or amendment shall
materially increase the number of shares subject to the Plan, other than an
adjustment under Section 10 of the Plan.

 

14.                               ADMINISTRATION.

 

The
Board shall appoint a Committee consisting of at least two members who will
serve for such period of time as the Board may specify and whom the Board may
remove at any time.  The Committee will
have the authority and responsibility for the day-to-day administration of the
Plan, the authority and responsibility specifically provided in this Plan and
any additional duty, responsibility and authority delegated to the Committee by
the Board, which may include any of the functions assigned to the Board in this
Plan.  The Committee may delegate to one
or more individuals the day-to-day administration of the Plan.  The Committee shall have full power and
authority to promulgate any rules and regulations which it deems necessary
for the proper administration of the Plan, to interpret the provisions and
supervise the administration of the Plan, to make factual determinations
relevant to Plan entitlements and to take all action in connection with
administration of the Plan as it deems necessary or advisable, consistent with
the delegation from the Board.  Decisions
of the Board and the Committee shall be final and binding upon all
participants.  Any decision reduced to
writing and signed by a majority of the members of the Committee shall be fully
effective as if it had been made at a meeting of the Committee duly held.  The

 

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Corporation shall pay all
expenses incurred in the administration of the Plan.  No Board or Committee member shall be liable
for any action or determination made in good faith with respect to the Plan or
any option granted hereunder.

 

15.                               COMMITTEE
RULES FOR FOREIGN JURISDICTIONS.

 

The
Committee may adopt rules or procedures relating to the operation and
administration of the Plan to accommodate the specific requirements of local
laws and procedures.  Without limiting
the generality of the foregoing, the Committee is specifically authorized to
adopt rules and procedures regarding handling of payroll deductions,
payment of interest, conversion of local currency, payroll tax, withholding
procedures and handling of stock certificates which vary with local
requirements.

 

The
Committee may also adopt “sub-plans” separate from this Plan for purposes of
Code Section 423 applicable to particular affiliates of the Corporation,
which sub-plans may be designed to be outside the scope of Code section 423.  Notwithstanding the foregoing, the shares of
Common Stock issued under any sub-plan shall be aggregated with the shares of
Common Stock issued under this Plan and such aggregate number of shares shall
be subject to the maximum number set forth under Section 7.1 hereof.  The rules of such sub-plans may take
precedence over other provisions of this Plan, with the exception of Section 7.1,
but unless otherwise superseded by the terms of such sub-plan, the provisions
of this Plan shall govern the operation of such sub-plan.

 

16.                               SECURITIES
LAWS REQUIREMENTS.

 

The
Corporation shall not be under any obligation to issue Common Stock upon the
exercise of any option unless and until the Corporation has determined that: (i) it
and the Participant have taken all actions required to register the Common
Stock under the Securities Act of 1933, or to perfect an exemption from the
registration requirements thereof; (ii) any applicable listing requirement
of any stock exchange on which the Common Stock is listed has been satisfied;
and (iii) all other applicable provisions of state, federal and applicable
foreign law have been satisfied.

 

17.                               GOVERNMENTAL
REGULATIONS.

 

This
Plan and the Corporation’s obligation to sell and deliver shares of its stock
under the Plan shall be subject to the approval of any governmental authority
required in connection with the Plan or the authorization, issuance, sale, or
delivery of stock hereunder.

 

18.                               NO
ENLARGEMENT OF EMPLOYEE RIGHTS.

 

Nothing
contained in this Plan shall be deemed to give any Employee the right to be
retained in the employ of the Corporation or any Designated Subsidiary or to

 

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interfere with the right
of the Corporation or Designated Subsidiary to discharge any Employee at any
time.

 

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19.                               GOVERNING
LAW.

 

This
Plan shall be governed by Delaware law, without regard to that State’s choice
of law rules.

 

20.                               EFFECTIVE
DATE.

 

This
Plan was adopted by the Corporation’s Board of Directors on June 9, 2000,
was approved by the sole shareholder of the Corporation on June 9, 2000,
and became effective on July 10, 2000. 
The amendments to the Plan adopted by the Board of Directors on January 27,
2005 shall become effective for Offering Periods commencing on or after January 1,
2006.

 

21.                               REPORTS.

 

Individual accounts shall be maintained for each
Participant in the Plan.  Statements of
account shall be given to Participants at least annually, which statements
shall set forth the amounts of payroll deductions, the Purchase Price, the
number of shares purchased and the remaining cash balance, if any.

 

11Exhibit 10.8

 

OSHKOSH B’GOSH, INC.

1994 INCENTIVE STOCK PLAN

(as amended through 5/10/05)

 

I.                                         INTRODUCTION

 

1.01                           Purpose.  This plan
shall be known as the Oshkosh B’Gosh, Inc. 1994 Incentive Stock Plan (the “Plan”).  The purpose of the Plan is to provide an
incentive for key employees of Oshkosh B’Gosh, Inc. and its Subsidiaries to
improve corporate performance on a long-term basis, and to attract and retain
key employees.  It is intended that the
Plan and its operation comply with the provisions of Rule 16b-3 under the
Securities Exchange Act of 1934 (or any successor rule).

 

1.02                           Effective Date. 
The effective date of the Plan shall be August 8, 1994, subject to
approval of the Plan by shareholders of the Company.  Any Award granted prior to such shareholder
approval shall be expressly conditioned upon shareholder approval of the Plan.

 

II.                                     PLAN DEFINITIONS

 

2.01                           Definitions. 
For Plan purposes, except where the context clearly indicates otherwise,
the following terms shall have the meanings set forth below:

 

(a)                                  “Award” shall mean the grant of
any form of stock option or restricted stock.

 

(b)                                 “Board” shall mean the Board of
Directors of the Company.

 

(c)                                  “Code” shall mean the Internal
Revenue Code of 1986, as amended from time to time.

 

(d)                                 “Committee” shall mean the
Committee described in Section 4.01 or the person or persons to whom the committee has delegated its power and responsibilities under
Section 4.03.

 

(e)                                  “Company” shall mean Oshkosh B’Gosh,
Inc., a Wisconsin corporation.

 

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(f)                                    “Company Stock” shall mean the
Company’s Class A Common Stock and such other stock
and securities as may be substituted therefor pursuant to Section 3.02.

 

(g)                                 “Eligible Employee” shall mean any
regular salaried employee of the Company or a Subsidiary who satisfies the
requirements of Section 5.01.

 

(h)                                 “Fair Market Value” on any date
shall mean, with respect to Company Stock, if the stock is then listed and
traded on a registered national securities exchange, or is quoted in the NASDAQ
National Market System, the mean of the high and low sale prices recorded in
composite transactions as reported by a reliable source for such date.  In the absence of reported sales or if the
stock is not so listed or quoted, but is traded in the over-the-counter market,
Fair Market Value shall be the mean of the closing bid and asked prices for
such shares on the relevant date.

 

(i)                                     “Grantee” shall mean any person
who has been granted an Award under the Plan.

 

(j)                                     “Option Period” shall mean the
period of time provided pursuant to Section 6.04 within which a stock option
may be exercised.

 

(k)                                  “Subsidiary” shall mean any
corporation, partnership, limited liability company, joint venture or other
entity now or hereafter in existence in which at least a 50% voting or profits
interest is owned, directly or indirectly, by the Company, and any other
business venture designated by the Committee in which the Company has a
significant interest, as determined in the discretion of the Committee.

 

III.                                 SHARES SUBJECT TO AWARD

 

3.01                           Available Shares. 
The total number of shares of Company Stock that may be issued under the
Plan shall not exceed two million eight hundred thousand (2,800,000)
shares.  Shares subject to and not issued
under an option which expires, terminates, is canceled or forfeited for any
reason under the Plan and shares of restricted Company Stock which have been
forfeited before the Grantee has received any benefits of ownership, such as
dividends from the forfeited shares, shall again become available for the
granting of Awards.

 

3.02                           Changes in Common Stock. 
If any stock dividend is declared upon the Company Stock, or if there is
any stock split, stock distribution, or other recapitalization of the Company
with respect to the Company Stock, resulting in a split or combination or

 

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exchange of shares, the aggregate number and kind of
shares which may thereafter be granted under the Plan shall be proportionately
and appropriately adjusted and the number and kind of shares then subject to
options granted to employees under the Plan and the per share option price
therefor shall be proportionately and appropriately adjusted, without any
change in the aggregate purchase prices to be paid therefor.

 

IV.                                ADMINISTRATION

 

4.01                           Administration by the Committee. 
The Plan shall be administered by a committee designated by the Board to
administer the Plan and shall initially be the Compensation Committee of the
Board.  The Committee shall be
constituted to permit the Plan to comply with the provisions of Rule 16b-3
under the Securities Exchange Act of 1934 (or any successor rule).  A majority of the members of the Committee
shall constitute a quorum.  The approval
of such a quorum, expressed by a vote at a meeting held either in person or by
conference telephone call, or the unanimous consent of all members in writing
without a meeting, shall constitute the action of the Committee and shall be
valid and effective for all purposes of the Plan.

 

4.02                           Committee Powers. 
The Committee is empowered to adopt such rules, regulations and
procedures and take such other action as it shall deem necessary or proper for
the administration of the Plan and, in its discretion, may modify, extend or
renew any Award theretofore granted.  The
Committee shall also have authority to interpret the Plan, and the decision of
the Committee on any questions concerning the interpretation of the Plan shall
be final and conclusive.  The Committee
may consult with counsel, who may be counsel for the Company, and shall not
incur any liability for any action taken in good faith in reliance upon the
advice of counsel.

 

Subject to the
provisions of the Plan, the Committee shall have full and final authority to:

 

(a)                                  designate the persons to whom Awards shall be
granted;

 

(b)                                 grant Awards in such form and amount as the
Committee shall determine;

 

(c)                                  impose such limitations, restrictions and
conditions upon any such Award as the Committee shall deem appropriate, and

 

(d)                                 waive in whole or in part any limitations,
restrictions or conditions imposed upon any such Award as the Committee shall
deem appropriate.

 

4.03                           Delegation by Committee. 
The committee designated by the Board under Section 4.01 may delegate
all or any part of its responsibilities and powers to any

 

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executive officer or officers of the Company selected
by it, provided that no such delegation shall be made with respect to the grant
of any Award to the President or any Vice President of the Company, and any
such delegation shall comply in all respects with the requirements and
conditions of Section 157 of the Delaware General Corporation Law.  Any such delegation may be revoked by the
Board or by the committee at any time.

 

V.                                    PARTICIPATION

 

5.01                           Eligibility. 
Key employees of the Company and its Subsidiaries (including officers
and employees who may be members of the Board) who, in the sole opinion of the
Committee, contribute significantly to the growth and success of the Company or
a Subsidiary shall be eligible for Awards under the Plan.  From among all such Eligible Employees, the
Committee shall determine from time to time those Eligible Employees to whom
Awards shall be granted.  No eligible
employees shall be granted an Award or Awards covering more than 50,000 shares
of Company Stock in any calendar year. 
No Eligible Employee shall have any right whatsoever to receive an Award
unless so determined by the Committee.

 

5.02                           No Employment Rights. 
The Plan shall not be construed as conferring any rights upon any person
for a continuation of employment, nor shall it interfere with the rights of the
Company or any Subsidiary to terminate the employment of any person or to take
any other action affecting such person.

 

VI.                                STOCK OPTIONS

 

6.01                           General.  Stock options
granted under the Plan may be in the form of incentive stock options (within
the meaning of Code Section 422) or non-qualified stock options; provided,
however, that incentive stock options shall only be granted to Eligible Employees
who are employed by the Company or a parent or subsidiary corporation of the
Company.  Each option granted under the
Plan shall be evidenced by a stock option agreement between the Company and the
Grantee which shall contain the terms and conditions required by this Article
VI, and such other terms and conditions, not inconsistent herewith, as the
Committee may deem appropriate in each case. 
The holder of an option shall not have any rights as a stockholder with
respect to the shares covered by an option until such shares have been
delivered to him or her.

 

6.02                           Option Price. 
The price at which each share of Company Stock covered by an option may
be purchased shall be determined in each case by the Committee and set forth in
each stock option agreement.  In no event
shall such price be less than one hundred percent (100%) of the Fair Market
Value of the Company Stock when the option is granted.  Employees who own, directly or indirectly,
within the meaning of Code Section 425(d), more than 10% of the voting power of
all classes of stock of the

 

4

 

Company or any parent or subsidiary corporation shall
not be eligible to receive an incentive stock option hereunder unless the
purchase price per share under such option is at least 110% of the Fair Market
Value of the stock subject to the option and such option by its terms is not
exercisable after the expiration of 5 years from the date such option is
granted.

 

6.03                           Date Option Granted. 
For purposes of the Plan, a stock option shall be considered as having
been granted on the date on which the Committee authorized the grant of the
option, except where the Committee has designated a later date, in which event
the later date shall constitute the date of grant of the option; provided,
however, that in either case notice of the grant of the option shall be given
to the employee within a reasonable time.

 

6.04                           Period for Exercise of Options. 
Each stock option agreement shall state the period or periods of time within
which the option may be exercised by the Grantee, in whole or in part, which
shall be the period or periods of time as may be determined by the Committee,
provided that:  (a) No option granted
under this Plan may be exercised until at least six months from the later of
(i) the date of grant or (ii) shareholder approval of the Plan, (b) No Option
Period for an incentive stock option may exceed ten (10) years from the date
the option is granted, and (c) No option may be treated as an incentive stock
option unless the Grantee exercises the option while employed by the Company or
a Subsidiary or within three months after termination of employment, or if
termination is caused by death or disability, within one year after such
termination.

 

6.05                           Special Rule for Incentive Stock Options. 
For so long as Section 422 (or any successor provision) of the Code so
provides, the aggregate Fair Market Value (determined as of the date the
incentive stock option is granted) of the number of shares with respect to
which incentive stock options are exercisable for the first time by a Grantee
during any calendar year shall not exceed One Hundred Thousand Dollars
($100,000) or such other limit as may be required by the Code.

 

6.06                           Method of Exercise. 
Subject to Section 6.04, each option may be exercised in whole or in
part from time to time as specified in the stock option agreement.  Each Grantee may exercise an option by giving
written notice of the exercise to the Company, specifying the number of shares
to be purchased, accompanied by payment in full of the purchase price therefor.
The purchase price may be paid in cash, by check, or, with the approval of the
Committee, by delivering shares of Company Stock which have been beneficially
owned by the Grantee, the Grantee’s spouse, or both of them for a period of at
least six months prior to the time of exercise (“Delivered Stock) or a
combination of cash and Delivered Stock. 
Delivered Stock shall be valued at its Fair Market Value determined as
of the date of exercise of the option. 
No Grantee shall be under any obligation to exercise any option
hereunder.

 

5

 

6.07                           Merger, Consolidation or Reorganization. 
In the event of a merger, consolidation or reorganization with another corporation
in which the Company is not the surviving corporation, the Committee shall,
subject to the approval of the Board of Directors of the Company, or the board
of directors of any corporation assuming the obligations of the Company
hereunder, take action regarding each outstanding and unexercised option
pursuant to either clause (a) or (b) below:

 

(a)                                  Appropriate provision may be made for the
protection of such option by the substitution on an equitable basis of
appropriate shares of the surviving corporation, provided that the excess of
the aggregate Fair Market Value of the shares subject to such option
immediately before such substitution over the exercise price thereof is not
more than the excess of the aggregate fair market value of the substituted
shares made subject to option immediately after such substitution over the
exercise price thereof; or

 

(b)                                 The Committee may cancel such
option.  In such event, the Company, or
the corporation assuming the obligations of the Company hereunder, shall pay the
employee an amount of cash (less normal withholding taxes) equal to the excess
of the highest Fair Market Value per share of the Company Stock during the
60-day period immediately preceding the merger, consolidation or reorganization
over the option exercise price, multiplied by the number of shares subject to
such option.

 

6.07A                 Merger,
Consolidation or Reorganization in which Company is Surviving Corporation.  In the event of a merger, consolidation or
reorganization with another corporation in which the Company is the surviving
corporation but the Company Stock ceases to be publicly traded, the Committee
shall, subject to the approval of the Board of Directors of the Company, or the
board of directors of any corporation assuming the obligations of the Company
hereunder, take action regarding each outstanding and unexercised option
pursuant to either clause (a) or (b) below:

 

(a)                                  Appropriate provision may be made for the
protection of such option by the substitution on an equitable basis of
appropriate shares of a related corporation, provided that the excess of the
aggregate Fair Market Value of the shares subject to such option immediately
before such substitution over the exercise price thereof is not more than the
excess of the aggregate fair market value of the substituted shares made
subject to option immediately after such substitution over the exercise price
thereof; or

 

(b)                                 The Committee may cancel such
option.  In such event, the Company, or
the corporation assuming the obligations of the Company hereunder,

 

6

 

shall
pay the employee an amount of cash (less normal withholding taxes) equal to the
excess of (i) the value, as determined by the Committee, of the property
(including cash) received by the holder of a share of Company Stock as a result
of such event over (ii) the exercise price of such option, multiplied by the
number of shares subject to such option.

 

6.08                           Dissolution or Liquidation. 
Anything contained herein to the contrary notwithstanding, on the
effective date of any dissolution or liquidation of the Company, the holder of
each then outstanding and unexercised option shall receive the cash amount
described in 6.07(b) hereof and such option shall be cancelled.

 

6.09                           Conditional Cashless Exercise. 
In connection with the Company’s tender offer to purchase shares of
Company stock to be dated on or about October 4, 1999 (the “Offer”), a Grantee
may elect a conditional cashless exercise of the Grantee’s options which are
then exercisable.  The conditional
cashless exercise will permit a Grantee to exercise the option only if, and to
the extent, the Company will actually purchase the option shares in the
Offer.  If after taking into account any
proration, the Company purchases less than all of the option shares which the
Grantee has tendered in the Offer, the options will be exercised, and the
option shares purchased, in the order designated by the Grantee in an option
election form.  If any of the tendered
option shares are not purchased, the related options will not be considered to
have been exercised and will remain outstanding.  The Grantee will not be required to pay cash
for the exercise price, and the consideration received by the Grantee whose
option shares are purchased in a conditional cashless exercise will be the
difference between the purchase price per share in the Offer and the exercise
price per share relating to the option shares so purchased (less applicable tax
withholding).

 

VII.                            RESTRICTED STOCK.

 

7.01                           Administration. 
Shares of restricted stock may be issued either alone or in addition to
other Awards granted under the Plan.  The
Committee shall determine the Eligible Employees to whom and the time or times
at which grants of restricted stock will be made, the number of shares to be
awarded, the time or times within which such Awards may be subject to
forfeiture and any other terms and conditions of the Awards.  The Committee may condition the grant of
restricted stock upon the attainment of specified performance goals so that the
grant would qualify as “performance-based compensation” within the meaning of
Section 162(m) of the Code.  In such
case, the performance goals that may be used by the Committee shall be based on
any one or more of the following, as determined by the Committee: the amount of
consolidated operating income expressed as a percentage of net sales and the
return on net assets of the Company and any subsidiary.  The Committee may also condition the grant of
restricted stock upon such other conditions, restrictions and contingencies as
the Committee may

 

7

 

determine. 
The provisions of restricted stock Awards need not be the same with
respect to each recipient.

 

7.02                           Awards.  Restricted
stock Awards shall take the form of a registration of the shares of restricted
stock in book-entry form with the Company’s transfer agent.  Such book-entry registration shall include an
appropriate notation referring to the terms, conditions, and restrictions
applicable to such Award, substantially in the following form:

 

“The
transferability of the shares of stock evidenced by this book-entry
registration are subject to the terms and conditions
(including forfeiture) of the OshKosh B’Gosh, Inc. 1994 Incentive Stock Plan
and a Restricted Stock Agreement.  Copies
of such Plan and Agreement are on file at the offices of OshKosh
B’Gosh, Inc.”

 

7.03                           Terms and Conditions. 
Shares of restricted stock shall be subject to the following terms and
conditions:

 

(a)                                  Until the applicable restrictions lapse,
the Grantee shall not be permitted to sell, assign, transfer, pledge or
otherwise encumber shares of restricted stock.

 

(b)                                 The Grantee shall have, with respect to
the shares of restricted stock, all of the rights of a stockholder of the
Company, including the right to vote the shares and the right to receive any
cash dividends.  Unless otherwise
determined by the Committee, cash dividends shall be automatically paid in cash
and dividends payable in Company Stock shall be paid in the form of additional
restricted stock.

 

(c)                                  Except to the extent otherwise provided
in the applicable Restricted Stock Agreement and (d) below, all shares still
subject to restriction shall be forfeited by the Grantee upon termination of a
Grantee’s employment for any reason.

 

(d)                                 In the event of hardship or other special
circumstances of a Grantee whose employment is involuntarily terminated (other
than for cause), the Committee may waive in whole or in part any or all
remaining restrictions with respect to such Grantee’s shares of restricted
stock.

 

(e)                                  If and when the applicable restrictions
lapse, unlegended certificates for such shares shall be delivered to the
Grantee or an appropriate unrestricted book-entry registration of the shares in
the Grantee’s name shall be made in the records of the Company’s transfer
agent.

 

8

 

(f)                                    Each Award shall be confirmed by, and be
subject to the terms of, a Restricted Stock Agreement.

 

VIII.                        WITHHOLDING TAXES.

 

8.01                           General Rule. 
Pursuant to applicable federal and state laws, the Company is or may be
required to collect withholding taxes upon the exercise of an option or the
lapse of stock restrictions.  The Company
may require, as a condition to the exercise of an option or the issuance of a
stock certificate, that the Grantee concurrently pay to the Company (either in
cash or, at the request of Grantee but in the discretion of the Committee and
subject to such rules and regulations as the Committee may adopt from time to
time, in shares of Delivered Stock) the entire amount or a portion of any taxes
which the Company is required to withhold by reason of such exercise or lapse
of restrictions, in such amount as the Committee or the Company in its
discretion may determine.

 

8.02                           Withholding from Shares to be Issued.  In lieu of part or all of any
such payment, the Grantee may elect, subject to such rules and regulations as
the Committee may adopt from time to time, or the Company may require that the
Company withhold from the shares to be issued that number of shares having a
Fair Market Value equal to the amount which the Company is required to
withhold.

 

8.03                           Special Rule for Insiders. 
Any such request or election (to satisfy a withholding obligation using
shares) by an individual who is subject to the provisions of Section 16 of the
Securities Exchange Act of 1934 shall be made in accordance with the rules and
regulations of the Securities and Exchange Commission promulgated thereunder.

 

IX.                                IX. 
GENERAL

 

9.01                           Nontransferability. 
Unless otherwise specified by the Committee, no Award granted under the
Plan shall be transferable or assignable except by last will and testament or
the laws of descent and distribution. 
During the Grantee’s lifetime, options shall be exercisable only by the
Grantee or by the Grantee’s guardian or legal representative.

 

9.02                           General Restriction. 
Each Award shall be subject to the requirement that if at any time the
Board or the Committee shall determine, in its discretion, that the listing,
registration, or qualification of securities upon any securities exchange or
under any state or federal law, or the consent or approval of any government
regulatory body, is necessary or desirable as a condition of, or in connection
with, the granting of such option or the issue or purchase of securities
thereunder, such option may not be exercised in whole or in part unless such
listing, registration, qualification, consent or approval

 

9

 

shall have been effected or obtained free of
any conditions not acceptable to the Board or the Committee.

 

9.03                           Expiration and Termination of the Plan. 
Awards may be granted under the Plan at any time and from time to time,
prior to August 8, 2004, the date on which the Plan will expire, except as to
Awards then outstanding under the Plan, which shall remain in effect until they
have been exercised, the restrictions have lapsed or the Awards have expired or
been forfeited.  The Plan may be
abandoned or terminated at any time by the Board of Directors of the Company,
except with respect to any Awards then outstanding under the Plan.

 

9.04                           Amendments.  The Board may
from time to time amend, modify, suspend or terminate the Plan; provided,
however, that no such action shall (a) impair without the Grantee’s consent any
Award theretofore granted under the Plan or deprive any Grantee of any shares
of Company Stock which he or she may have acquired through or as a result of
the Plan or (b) be made without shareholder approval where such approval would
be required as a condition of compliance with Rule 16b-3.

 

9.05                           Construction. 
Except as otherwise required by applicable federal laws, the Plan shall
be governed by, and construed in accordance with, the laws of the State of
Wisconsin.

 

10

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