Document:

EXHIBIT 10.6

 

TRIPLICATE
ORIGINAL

June 16, 2003

 

 

NON-QUALIFIED
STOCK OPTION AGREEMENT

 

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

 

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

 

2.                                       Option
Price.  The option price is $4.55 for
each share, being one hundred percent (100%) of the fair market value of the
Company’s Common Stock on June 16, 2003, the date of the grant.

 

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

 

a.                                       Schedule of
Vesting and Rights to Exercise. 
Except as provided in Section 9, the NSO shall be vested and
exercisable as follows:  50% on December 16,
2004 and the remaining 50% in equal monthly installments on the 16th
day of each of the six months thereafter.

 

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

 

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

 

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

 

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

 

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

 

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

9.                                       Changes
in Control.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

3

 

	
  DATE OF GRANT:  June 16, 2003

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CUTTER &
  BUCK INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ FRANCES M. CONLEY

  	
   

  
	
   

  	
  Frances M. Conley

  
	
   

  	
  Chief Executive Officer

  

 

4

 

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

 

	
  DATED: June 16,
  2003

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ WILLIAM B. SWINT

  	
   

  
	
  William B. Swint,
  Optionee

  	
   

  

 

5EXHIBIT 10.7

 

FIRST AMENDMENT TO RIGHTS AGREEMENT

 

FIRST AMENDMENT, dated as of October 19, 2005, to the Rights
Agreement dated as of November 20, 1998 (the “Rights Agreement”), by and
between Cutter & Buck Inc., a Washington corporation (the “Company”),
and Mellon Investor Services LLC, a New Jersey limited liability company (as
successor to ChaseMellon Shareholder Services, L.L.C., a New Jersey limited
liability company), as rights agent (the “Rights Agent”).  Capitalized terms used in this Amendment that
are not otherwise defined have the meaning ascribed to such terms in the Rights
Agreement.

 

WITNESSETH:

 

WHEREAS, under the Rights Agreement, the Company
intended to retain the right to amend that Agreement, in its sole discretion,
at any time as the Rights are then redeemable even as to the Redemption Price
and the Final Expiration Date so long as such latter amendment is approved by a
majority of the Continuing Directors; and

 

WHEREAS, the Company also retained the right and
ability to amend the Rights Agreement as to Section 27 thereof; and

 

WHEREAS, the Company’s Board of Directors has
unanimously approved this Amendment and all actions necessary to effectuate
this Amendment, and

 

WHEREAS, the Board of Directors is not presently aware
of any pending or threatened event which would cause the Rights not to be
redeemable in accordance with the terms of the Rights Agreement; and

 

WHEREAS, the Company has determined that the best
interests of the Company’s shareholders are served by terminating the Rights
Agreement on November 18, 2005, which is prior to its original expiration
date of December 7, 2008; and

 

WHEREAS, the execution and delivery of this Amendment
by the Company has been in all respects duly authorized by the Company.

 

NOW, THEREFORE, in consideration of the foregoing
premises and the mutual agreements set forth in the Rights Agreement and this
Amendment, the parties hereby agree as follows:

 

1.                                       Section 7(a) of
the Rights Agreement is hereby amended and restated in its entirety to read as
follows:

 

The Rights shall not be
exercisable until, and shall become exercisable on, the Distribution Date
(unless otherwise provided herein, including, without limitation, the
restrictions on exercisability set forth in Sections 7(e) and 23(a) hereof).  Except as otherwise provided herein, the
Rights may be exercised, in whole or in part, at any time commencing with the
Distribution Date upon 

 

 

surrender of the Right Certificate, with the form of
election to purchase and certificate on the reverse side thereof duly executed
(with signatures duly guaranteed), to the Rights Agent at the principal office
of the Rights Agent or the office or offices designated for such purpose,
together with payment of the Exercise Price for each Right exercised, subject
to adjustment as hereinafter provided, at or prior to the Close of Business on
the earlier of (i) November 18, 2005 (the “Final Expiration Date”),
or (ii) the date on which the Rights are redeemed as provided in Section 23
hereof (such earlier date being herein referred to as the “Expiration Date”).

 

2.                                       Exhibit A
is hereby amended to replace all references to “December 7, 2008” with “November 18,
2005” in all places where such date appears.

 

3.                                       Exhibit B
is hereby amended to replace all references to “December 7, 2008” with “November 18,
2005” in all places where such date appears.

 

4.                                       To
the extent any amendment of Section 27 of the Rights Agreement would be
required in order to effectuate the intent and purpose of this Amendment, Section 27
of the Rights Agreement shall be deemed to be so modified by virtue of this
Amendment.

 

5.                                       This
Amendment shall be deemed to be a contract made under the laws of the State of
Washington and for all purposes shall be governed by and construed in
accordance with the laws of such State applicable to contracts to be made and
performed entirely within such State; provided, however, that all provisions
regarding the rights, duties and obligations of the Rights Agent shall be
governed by and construed in accordance with the laws of the State of New York
applicable to contracts made and to be performed entirely within such State.

 

6.                                       This
Amendment may be executed in any number of counterparts and each of such
counterparts shall for all purposes be deemed to be an original, and all such
counterparts shall together constitute one and the same instrument.

 

7.                                       Except
as expressly set forth herein, this Amendment shall not by implication or
otherwise alter, modify or amend any of the other terms, conditions,
obligations, covenants or agreements contained in the Rights Agreement.

 

8.                                       If
any term, provision, covenant or restriction of this Amendment is held by a
court of competent jurisdiction or other authority to be invalid, void or
unenforceable, the remainder of the term, provisions, covenants and
restrictions of this Amendment and of the Rights Agreement shall remain in full
force and effect and shall in no way be affected, impaired or invalidated.

 

2

 

IN WITNESS WHEREOF, the parties hereto have caused
this Amendment to be duly executed as of the date first written above.

 

	
  CUTTER & BUCK INC.

  
	
   

  
	
   

  
	
  /s/ ERNEST R. JOHNSON

  	
   

  
	
  Ernest R. Johnson

  
	
  Chief Financial Officer and Senior Vice President

  
	
   

  
	
   

  
	
  MELLON INVESTOR SERVICES, LLC

  
	
   

  
	
   

  
	
  /s/ LISA PORTER

  	
   

  
	
  By: Lisa Porter

  
	
  Its: Client Relationship Executive

  
			

 

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