Document:

exv4w1

 

Exhibit 4.1

DICK’S SPORTING GOODS, INC.

2002 STOCK PLAN*

     1.          Purposes of this Plan. The purposes of this Plan are to attract and
retain the best available personnel for positions of substantial
responsibility, to provide additional incentive to Eligible Individuals, to
further align Eligible Individuals’ interests with those of the stockholders of
the Company and to promote the success of the Company’s business.

     2.          Certain Definitions. As used herein, the following definitions shall
apply:

                 (a)     “Administrator” means the Board and any Committee appointed by the
Board to administer the Plan; provided, however, that the Board, in its sole
discretion, may, notwithstanding the appointment of any Committee to administer
the Plan, exercise any authority under this Plan.

                 (b)     “Award” means any Incentive Bonus Award, Option, Performance Share
Award, Performance Unit Award, Restricted Stock Award, Restricted Unit Award,
SAR or Stock Unit Award granted under the Plan.

                 (c)     “Board” means the Board of Directors of the Company.

                 (d)     “Change in Control” means (i) any “person” (as such term is used in
Sections 13(d) and 14(d) of the Exchange Act) other than a Class B Permitted
Holder (as such term is defined in the Company’s Amended and Restated
Certificate of Incorporation) through a tender offer, open market purchases
and/or other purchases is or becomes a beneficial owner, directly or
indirectly, of securities of the Company representing more than fifty percent
(50%) of the combined voting power of the Company’s then outstanding securities
or (ii) a majority of the Board shall be comprised of persons who (x) were
elected in one or more contested elections for the Board and (y) had not been
nominated when they were first elected by the then existing Board.

                 (e)     “Common Stock” means the Common Stock, par value $.01 per share, of
the Company.

                 (f)     “Class B Common Stock” means the Class B Common Stock, par value $.01
per share, of the Company.

                 (g)     “Code” means the Internal Revenue Code of 1986, as amended.

                 (h)     “Committee” means a committee of the Board.

                 (i)     “Company Common Stock” means the Common Stock or the Class B Common
Stock of the Company, as the case may be.

		 	
	*	 	All share numbers presented
in the Plan reflect the 2.31-for-1 stock split which occurred
immediately prior to the completion of the Company’s initial
public offering in October of 2002.

 

 

                 (j)     “Company” means Dick’s Sporting Goods, Inc., a Delaware corporation.

                 (k)     “Consultant” means any person, including an advisor, who is engaged by
the Company or any Parent or Subsidiary to render services and is compensated
for such services, and any director of the Company whether compensated for such
services or not.

                 (l)     “Continuous Status as an Employee” means the absence of any
interruption or termination of the employment relationship by the Employee with
the Company or any Parent or Subsidiary. Continuous Status as an Employee
shall not be considered interrupted in the case of: (i) sick leave; (ii)
military leave; (iii) any other leave of absence approved by the Board,
provided that such leave is for a period of not more than ninety (90) days,
unless reemployment upon the expiration of such leave is guaranteed by contract
or statute, or unless provided otherwise pursuant to Company policy adopted
from time to time; or (iv) transfers between locations of the Company or
between the Company, its Parent, its Subsidiaries or its successor.

                 (m)     “Eligible Individual” means any Employee, Non-Employee Director or
Consultant.

                 (n)     “Employee” means any person, including officers and directors,
employed by the Company or any Parent or Subsidiary of the Company or any
prospective employee who shall have received an offer of employment. The
payment of a director’s fee by the Company shall not be sufficient to
constitute “employment” by the Company.

                 (o)     “Exchange Act” means the Securities Exchange Act of 1934, as amended.

                 (p)     “Fair Market Value” means, as of any date, the value of the applicable
class of Company Common Stock determined as follows:

		
	 	                 (i)     If such class of Company Common Stock is listed on any
established stock exchange or a national market system reporting last
sale transactions including, without limitation, the Nasdaq National
Market, its Fair Market Value shall be the closing sale price for such
stock (or the closing bid, if no sales were reported) as quoted on such
system or exchange for the last market trading day prior to the time of
determination as reported in the Wall Street Journal or such other source
as the Administrator deems reliable or;
	 
	 	                 (ii)     If such class of Company Common Stock is quoted on Nasdaq (but
not on a last reported sale basis) or regularly quoted by a recognized
securities dealer but selling prices are not reported, its Fair Market
Value shall be the mean between the high and low closing asked prices for
the Company Common Stock for the last market trading day prior to the
time of determination as reported in the Wall Street Journal or such
other source as the Administrator deems reliable or;
	 
	 	                 (iii)     In the absence of an established market for a class of Company
Common Stock, the Fair Market Value thereof shall be determined in good
faith by the Administrator. For purposes of this Plan, the Class B
Common Stock shall be deemed to

 

 

		
	 	have the same value per share of the Common Stock unless the value
of the Class B Common Stock is determinable in accordance with
subparagraphs (i) or (ii) above.

                 (q)     “Incentive Bonus Award” means the opportunity to earn a future cash
payment tied to the level of achievement with respect to one or more Qualifying
Performance Criteria for a performance period as established by the
Administrator.

                 (r)     “Incentive Stock Option” means an Option intended to qualify as an
incentive stock option within the meaning of Section 422 of the Code.

                 (s)     “Non-Employee Director” means a member of the Board who is not an
employee of the Company or any Parent or Subsidiary of the Company.

                 (t)     “Nonstatutory Stock Option” means an Option not intended to qualify as
an Incentive Stock Option.

                 (u)     “Option” means a right to purchase Shares granted pursuant to the
Plan.

                 (v)     “Optioned Stock” means the Shares subject to an Option.

                 (w)     “Optionee” means a Participant who holds an Option.

                 (x)     “Parent” means a “parent corporation,” whether now or hereafter
existing, as defined in Section 424(e) of the Code.

                 (y)     “Participant” means any person who has an Award under the Plan
including any person (including any estate) to whom an Award has been assigned
or transferred in accordance with the Plan.

                 (z)     “Performance Share Award” means a grant of a right to receive Shares
or Stock Units contingent on the achievement of performance or other objectives
during a specified period.

                 (aa)     “Performance Unit Award” means a grant of a right to receive a
designated dollar value amount of Shares or Stock Units contingent on the
achievement of performance or other objectives during a specified period.

                 (bb)     “Plan” means this 2002 Stock Plan.

                 (cc)     “Qualifying Performance Criteria” means any one or more of the
following performance criteria, either individually, alternatively or in any
combination, applied to either the Company as a whole or to a business unit or
subsidiary, either individually, alternatively or in any combination, and
measured over a period of time including any portion of a year, annually or
cumulatively over a period of years, on an absolute basis or relative to a
pre-established target, to previous years’ results or to a designated
comparison group, in each case as specified by the in the Award: (a) cash flow,
(b) earnings per share (including earnings before interest, taxes,
depreciation, and amortization or some variation thereof), (c) stock price, (d)
return on equity, (e) total stockholder return, (f) return on capital, (g)
return on assets or net

 

 

assets, (h) revenue, (i) income or net income, (j) operating income or net
operating income, (k) operating profit or net operating profit, (l) operating
margin or profit margin, (m) return on operating revenue, and (n) market share.
To the extent consistent with Section 162(m) of the Code, the Administrator
shall appropriately adjust any evaluation of performance under a Qualifying
Performance Criteria to exclude any of the following events that occurs during
a performance period: (i) asset write- downs, (ii) litigation or claim
judgments or settlements, (iii) the effect of changes in tax law, accounting
principles or other such laws or provisions affecting reported results, (iv)
accruals for reorganization and restructuring programs and (v) any
extraordinary non-recurring items as described in Accounting Principles Board
Opinion No. 30 and/or in management’s discussion and analysis of financial
condition and results of operations appearing in the Company’s annual report to
stockholders for the applicable year.

                 (dd)     “Restricted Stock Award” means a grant of Shares subject to a risk of
forfeiture or other restrictions that will lapse upon the achievement of one or
more goals relating to completion of service by the Participant, or achievement
of performance or other objectives, as determined by the Administrator.

                 (ee)     “Restricted Unit Award” means a grant of Stock Unit subject to a risk
of forfeiture or other restrictions that will lapse upon the achievement of one
or more goals relating to completion of service by the Participant, or
achievement of performance or other objectives, as determined by the
Administrator.

                 (ff)     “SAR” means a stock appreciation right, which is the right to receive
an amount equal to the appreciation, if any, in the Fair Market Value of a
Share from the date of the grant of the right to the date of its payment, as
adjusted in accordance with Section 10 of this Plan, payable in cash, Shares or
Stock Units.

                 (gg)     “Share” means a share of the Company Common Stock, as adjusted in
accordance with Section 10 of this Plan.

                 (hh)     “Stock Unit” means the right to receive a Share at a future point in time.

                 (ii)     “Stock Unit Award” means the grant of a Stock Unit.

                 (jj)     “Subsidiary” means a “subsidiary corporation,” whether now or
hereafter existing, as defined in Section 424(f) of the Code.

     3.          Shares Subject to the Plan. Subject to the provisions of Section 10 of
this Plan, the maximum aggregate number of Shares which may be issued under the
Plan is 9,933,000. The Shares may be authorized, but unissued Shares, issued
Shares that have been reacquired by the Company (otherwise known as treasury
Shares) or Shares acquired on the open market specifically for distribution
under this Plan, or any combination thereof. Notwithstanding any other
provision of this Plan, Awards for Class B Common Stock or Awards for
securities convertible or exchangeable into Class B Common Stock may only be
issued to a Class B Permitted Holder (as such term is defined in the Company’s
Certificate of Incorporation, as amended).

 

 

     If Shares under any Award are not issued for any reason, such Shares
shall, unless the Plan shall have been terminated, become available for future
grant under the Plan. In addition, any Shares delivered or deemed delivered,
by attestation or otherwise, to the Company in payment of any obligation,
including the exercise price of any option, the purchase price for any Shares,
or for any tax obligation shall be added back to the Shares available for
issuance under the Plan.

     The aggregate number of Shares issuable under all Awards granted under
this Plan during any calendar year to any one Eligible Individual shall not
exceed 1,500,000. Notwithstanding anything to the contrary in this Plan, the
foregoing limitations shall be subject to adjustment under Section 10, but only
to the extent that such adjustment will not affect the status of any Award
intended to qualify as “performance-based compensation” under Section 162(m) of
the Code. The foregoing limitations shall not apply to the extent that they
are no longer required in order for compensation in connection with grants
under this Plan to be treated as “performance-based compensation” under Section
162(m) of the Code.

     4.          Administration of this Plan.

                 (a)     Authority. Subject to the provisions of this Plan and, in the case of
a Committee, the specific duties delegated to or limitation imposed upon such
Committee by the Board, the Administrator shall have the authority, in its
discretion:

		
	 	                 (i)     to establish, amend and rescind rules and regulations relating
to the Plan;
	 
	 	                 (ii)     to select the Eligible Individuals to whom Awards may from time
to time be granted hereunder;
	 
	 	                 (iii)     to determine the amount and type of Awards, including any
combination thereof, to be granted to any Eligible Individual;
	 
	 	                 (iv)     to grant Awards to Eligible Individuals and, in connection
therewith, to determine the terms and conditions, not inconsistent with
the terms of this Plan, of any such Award including, but not limited to,
the number of Shares or Stock Units that may be issued or amount of cash
that may be paid pursuant to the Award, the exercise or purchase price of
any Share, the circumstances under which Awards or any Shares or Stock
Units relating thereto are issued, retained, become exercisable or
vested, are no longer subject to forfeiture or are terminated, forfeited
or expire, based in each case on such factors as the Administrator shall
determine, in its sole discretion;
	 
	 	                 (v)     to determine the Fair Market Value of the Company Common Stock,
in accordance with Section 2(p) of this Plan;
	 
	 	                 (vi)     to establish, verify the extent of satisfaction of, adjust,
reduce or waive any performance goals or other conditions applicable to
the grant, issuance, exercisability, vesting and/or ability to retain any
Award;
	 
	 	                 (vii)     to approve forms of agreement for use under the Plan;

 

 

		
	 	                 (viii)     to determine whether and under what circumstances an Award
may be settled in cash instead of Shares;
	 
	 	                 (ix)     to determine whether, to what extent and under what
circumstances Shares and other amounts payable with respect to an Award
under this Plan shall be deferred either automatically or at the election
of the participant (including providing for and determining the amount,
if any, of any deemed earnings on any deferred amount during any deferral
period);
	 
	 	                 (x)     to determine whether and to what extent an adjustment is
required under Section 10 of this Plan;
	 
	 	                 (xi)     in its discretion, upon a Change in Control, to vest and make
exercisable any Award granted hereunder which is not fully vested or
exercisable and to remove any restrictions effective upon the occurrence
of a Change in Control or the termination of an Eligible Individual’s
service to the Company.
	 
	 	                 (xii)     to interpret and construe this Plan, any rules and regulations
under this Plan and the terms and conditions of any Award granted
hereunder, and to make exceptions to any such provisions in good faith
and for the benefit of the Company; and
	 
	 	                 (xiii)     to make all other determinations deemed necessary or
advisable for the administration of this Plan.

                 (b)     Effect of Administrator’s Decision. All decisions, determinations and
interpretations of the Administrator shall be final and binding on all
Participants.

     5.          Term of Plan. The Plan shall become effective upon the earlier to
occur of its adoption by the Board of Directors or its approval by the
stockholders of the Company in accordance with applicable state law. It shall
continue in effect for a term of ten (10) years unless sooner terminated under
Section 11 of this Plan; provided, however, that the Plan shall remain in
effect so long as any Award remains outstanding and as long as necessary to
issue any Awards pursuant to commitments entered into prior to the expiration
of this Plan.

     6.          Options.

                 (a)     General Terms.

		
	 	                 (i)     Written Agreement. Each Option shall be set forth in a written
option document setting forth the number and kind of Shares that may be
issued upon exercise of the Option, the purchase price of each Share, the
term of the Option, such terms and conditions on the vesting and/or
exercisability of an Option as may be determined by the Administrator,
any restrictions on the transfer of the Option and forfeiture provisions
and such further terms and conditions, in each case not inconsistent with
this Plan, as may be determined from time to time by the Administrator.
The written option document need not be signed by the Optionee.

 

 

		
	 	                 (ii)     Designation. Each Option shall be designated in the written
option document as either an Incentive Stock Option or a Nonstatutory
Stock Option. Notwithstanding such designations, to the extent that an
Option does not qualify as an Incentive Stock Option, it shall be treated
as a Nonstatutory Stock Option.

		
	 	                 (iii)     Eligibility. To the extent then required by the Code,
Incentive Stock Options may be granted only to Employees.

		
	 	                 (iv)     Term of Option. The term of each Option shall be the term
stated in the written agreement evidencing such Option; provided,
however, that, to the extent then required by the Code, in the case of an
Incentive Stock Option, the term shall be no more than ten (10) years
from the date of grant thereof or such shorter term as may be provided in
the Option Agreement and, in the case of an Incentive Stock Option
granted to an Optionee who, at the time the Option is granted, owns stock
representing more than ten percent (10%) of the voting power of all
classes of stock of the Company or any Parent or Subsidiary, the term of
the Option shall be five (5) years from the date of grant thereof or such
shorter term as may be provided in the written agreement evidencing such
Option.

		
	 	                 (v)     Exercise Price. The per share exercise price for the Shares to
be issued pursuant to exercise of an Option shall be such price as is
determined by the Board, but shall be subject to the following:

		
	 	                 (A)     To the extent then required by the Code, in the case of an
Incentive Stock Option:

		
	 	                 (1)     granted to an Employee who, at the time of the grant
of such Incentive Stock Option, owns stock representing more
than ten percent (10%) of the voting power of all classes of
stock of the Company or any Parent or Subsidiary, the per
Share exercise price shall be no less than 110% of the Fair
Market Value per Share on the date of grant, and
	 
	 	                 (2)     granted to any Employee, the per Share exercise
price shall be no less than 100% of the Fair Market Value per
Share on the date of grant.

		
	 	                 (B)     In the case of a Nonstatutory Stock Option granted to any
person, the per Share exercise price may not be less than the Fair
Market Value per Share on the date of grant, provided however, that
Nonstatutory Stock Options granted after the Company’s initial
public offering of its Common Stock may be made where the per share
exercise price is less than the Fair Market Value per Share on the
date of grant if (i) such grants are made to persons that are then
currently not executive officers (as the term is defined in Rule
3b-7 under the Securities Exchange Act of 1934, as amended) of the
Company and (ii) such grants in the aggregate that are made having
an exercise price that is less than the

 

 

		
	 	Fair Market Value per Share do not exceed (i.e., are
exercisable for) 50,000 shares of Common Stock.

		
	 	                 (vi)     Payment of Exercise Price. Unless otherwise provided by the
Administrator in the stock option document, the exercise price of an
Option may be paid in one or more of the following: (1) cash, (2) check,
(3) other Shares which (x) in the case of Shares acquired upon exercise
of an Option either have been owned by the Optionee for more than six
months on the date of surrender or were not acquired, directly or
indirectly, from the Company, and (y) have a Fair Market Value on the
date of surrender equal to the aggregate exercise price of the Shares as
to which said Option shall be exercised, (4) delivery of a properly
executed exercise notice together with irrevocable instructions to a
broker registered under the Exchange Act to promptly deliver to the
Company the amount of proceeds required to pay the exercise price, and
(5) any combination of the foregoing methods of payment.

                 (b)     Exercise of Options or SARs.

		
	 	                 (i)     Procedure for Exercise; Rights as a Stockholder. Any Option or
SAR granted hereunder shall be exercisable at such times and under such
conditions as determined by the Administrator, including performance
criteria with respect to the Company and/or the Participant, and as shall
be permissible under the terms of this Plan.

		
	 	                 An Option or SAR may not be exercised for a fraction of a Share.

		
	 	                 An Option or SAR shall be deemed to be exercised when written notice
of such exercise has been given to the Company in accordance with the
terms of the Option or SAR by the person entitled to exercise such Option
or SAR and, if an Option is to be exercised, full payment for the Shares
with respect to which the Option is exercised has been received by the
Company. Full payment may, as authorized by the Administrator, consist
of any consideration and method of payment allowable under Section
6(a)(vi) of this Plan. Until the issuance (as evidenced by the
appropriate entry on the books of the Company or of a duly authorized
transfer agent of the Company) of the stock certificate evidencing such
Shares, no right to vote or receive dividends or any other rights as a
stockholder shall exist with respect to the Optioned Stock,
notwithstanding the exercise of the Option. No adjustment will be made
for a dividend or other right for which the record date is prior to the
date the stock certificate is issued, except as provided in Section 10 of
this Plan.

		
	 	                 Exercise of an Option or SAR in any manner shall result in a
decrease in the number of Shares which thereafter may be available under
the Option or SAR by the number of Shares as to which the Option or SAR
is exercised.

		
	 	                 (ii)     Termination of Employment. In the event of termination of a
Participant’s Continuous Status as an Employee, status as a Non-Employee
Director or consulting relationship with the Company (as the case may
be), such Participant may, but only within ninety (90) days (or such
other period of time as is determined by the Administrator, with such
determination in the case of an Incentive Stock Option and to

 

 

		
	 	the extent then required by the Code, being made at the time of
grant of the Option and not exceeding ninety (90) days) after the date of
such termination (but in no event later than the expiration date of the
term of such Option or SAR as set forth in the written document
evidencing such Option or SAR), exercise such Option or SAR to the extent
that such Participant was entitled to exercise it at the date of such
termination. To the extent that such Participant was not entitled to
exercise the Option or SAR at the date of such termination, or if such
Participant does not exercise such Option or SAR to the extent so
entitled within the time specified herein, the Option or SAR shall
terminate.

		
	 	                 (iii)     Disability of Optionee. Notwithstanding the provisions of
Section 6(b) above, in the event of termination of a Participant’s
Continuous Status as an Employee, status as a Non-Employee Director or
consulting relationship with the Company (as the case may be) as a result
of total and permanent disability (as defined in Section 22(e)(3) of the
Code), such Participant may, but only within twelve (12) months (or such
other period of time as is determined by the Administrator, with such
determination in the case of an Incentive Stock Option and to the extent
then required by the Code, being made at the time of grant of the Options
and not exceeding twelve (12) months) from the date of such termination
(but in no event later than the expiration date of the term of such
Option or SAR as set forth in the written document evidencing such Option
or SAR), exercise the Option or SAR to the extent otherwise entitled to
exercise it at the date of such termination. To the extent that such
Participant was not entitled to exercise the Option or SAR at the date of
termination, or if such Participant does not exercise such Option or SAR
to the extent so entitled within the time specified herein, the Option or
SAR shall terminate.

		
	 	                 (iv)     Death of Optionee. In the event of the death of a Participant,
the Option or SAR may be exercised at any time within twelve (12) months
following the date of death (but in no event later than the expiration
date of the term of such Option or SAR as set forth in the written
document evidencing such Option or SAR) by the Participant’s estate or by
a person who acquired the right to exercise the Option or SAR by bequest
or inheritance, but only to the extent the Participant was entitled to
exercise the Option or SAR at the date of death or to the extent that the
Administrator accelerates the vesting of such Award upon the
Participant’s death. To the extent that such Participant was not
entitled to exercise the Option or SAR at the date of death, or if such
Participant’s estate or any person who acquired the right to exercise the
Option or SAR by bequest or inheritance does not exercise such Option or
SAR to the extent so entitled within the time specified herein, the
Option or SAR shall terminate.
	 
	 	                 (v)     Buyout Provisions. The Administrator may at any time offer to
buy out for a payment in cash or Shares, an Option or SAR previously
granted, based on such terms and conditions as the Administrator shall
establish and communicate to the Participant at the time that such offer
is made.
	 
	 	                 (vi)     Payout Provisions. At the discretion of the Company, the
payment to a Participant upon exercise of a SAR, may be in cash, in
Shares or Stock Units of equivalent value as determined by the
Administrator, or in some combination thereof, subject to the
availability of Shares under the Plan.

 

 

                 (c)     Non-Transferability of Options or SARs. Unless otherwise provided by
the Administrator, no Option or SAR may be sold, pledged, assigned,
hypothecated, transferred, or disposed of in any manner other than by will or
by the laws of descent or distribution and may be exercised, during the
lifetime of the Participant, only by the Participant. The terms of the Option
or SAR shall be binding upon the executors, administrators, heirs, successors
and assigns of the Participant.

     7.          Performance Share Awards, Performance Unit Awards, Restricted Stock
Awards, Restricted Unit Awards and Stock Unit Awards.

                 (a)     Awards. Performance Share Awards, Performance Unit Awards, Restricted
Stock Awards, Restricted Unit Awards, or Stock Unit Awards may be issued by the
Administrator to Eligible Individuals, either alone, in addition to, or in
tandem with other Awards granted under the Plan and/or cash awards made outside
of this Plan. Such Awards shall be evidenced by a written document containing
any provisions regarding (i) the number of Shares or Stock Units subject to
such Award or a formula for determining such, (ii) the purchase price of the
Shares or Stock Units, if any, and the means of payment for the Shares or Stock
Units, (iii) the performance criteria, if any, and level of achievement versus
these criteria that shall determine the number of Shares or Stock Units
granted, issued, retainable and/or vested, (d) such terms and conditions on the
grant, issuance, vesting and/or forfeiture of the Shares or Stock Units as may
be determined from time to time by the Administrator, (e) restrictions on the
transferability of the Shares and Stock Units and (f) such further terms and
conditions in each case not inconsistent with this Plan as may be determined
from time to time by the Administrator.

                 (b)     Vesting. The grant, issuance, retention and/or vesting of Shares or
Stock Units pursuant to any Performance Share Awards, Performance Unit Awards,
Restricted Stock Awards, Restricted Unit Awards, or Stock Unit Awards of
Incentive Stock shall occur at such time and in such installments as determined
by the Administrator or under criteria established by the Administrator. The
Administrator shall have the right to make the timing of the grant and/or the
issuance, ability to retain and/or vesting of Shares or Stock Units subject to
continued employment, passage of time and/or such performance criteria as
deemed appropriate by the Administrator. Notwithstanding anything to the
contrary herein, the performance criteria for any Award that is intended to
satisfy the requirements for “performance-based compensation” under Code
Section 162(m) shall be a measure based on one or more Qualifying Performance
Criteria selected by the Administrator and specified at the time the Award is
granted.

                 (c)     Discretionary Adjustments. Notwithstanding satisfaction of any
performance goals, the number of Shares or Stock Units granted, issued,
retainable and/or vested under a Performance Share Award, Performance Unit
Award, Restricted Stock Award, Restricted Unit Award, or Stock Unit Award on
account of either financial performance or personal performance evaluations may
be reduced by the Administrator on the basis of such further considerations as
the Administrator shall determine.

     8.          Incentive Bonus Awards. Each Incentive Bonus Award will confer upon
the Employee the opportunity to earn a future payment tied to the level of
achievement with respect

 

 

to one or more performance criteria established for a performance period
established by the Committee.

                 (a)     Incentive Bonus Document. Each Incentive Bonus Award shall be
evidenced by a document containing provisions regarding (a) the target and
maximum amount payable to the Employee, (b) the performance criteria and level
of achievement versus these criteria that shall determine the amount of such
payment, (c) the term of the performance period as to which performance shall
be measured for determining the amount of any payment, (d) the timing of any
payment earned by virtue of performance, (e) restrictions on the alienation or
transfer of the bonus prior to actual payment, (f) forfeiture provisions and
(g) such further terms and conditions, in each case not inconsistent with this
Plan as may be determined from time to time by the Administrator. The maximum
amount payable as an bonus may be a multiple of the target amount payable, but
the maximum amount payable pursuant to that portion of an Incentive Bonus Award
granted under this Plan for any fiscal year to any Employee that is intended to
satisfy the requirements for “performance-based compensation” under Section
162(m) of the Code shall not exceed $5,000,000.

                 (b)     Performance Criteria. The Administrator shall establish the
performance criteria and level of achievement versus these criteria that shall
determine the target and maximum amount payable under an Incentive Bonus Award,
which criteria may be based on financial performance and/or personal
performance evaluations. The Administrator may specify the percentage of the
target incentive bonus that is intended to satisfy the requirements for
“performance-based compensation” under Section 162(m) of the Code.
Notwithstanding anything to the contrary herein, the performance criteria for
any portion of an Incentive Bonus Award that is intended by the Administrator
to satisfy the requirements for “performance-based compensation” under Section
162(m) of the Code shall be a measure based on one or more Qualifying
Performance Criteria selected by the Administrator and specified at the time
the Incentive Bonus Award is granted. The Administrator shall certify the
extent to which any Qualifying Performance Criteria has been satisfied, and the
amount payable as a result thereof, prior to payment of any incentive bonus
that is intended to satisfy the requirements for “performance- based
compensation” under Section 162(m) of the Code.

                 (c)     Timing and Form of Payment. The Administrator shall determine the
timing of payment of any incentive bonus. The Administrator may provide for
or, subject to such terms and conditions as the Administrator may specify, may
permit an election for the payment of any incentive bonus to be deferred to a
specified date or event. An incentive bonus may be payable in Shares, Stock
Units or in cash or other property, including any Award permitted under this
Plan. Any incentive bonus that is paid in cash or other property shall not
affect the number of Shares otherwise available for issuance under this Plan.

                 (d)     Discretionary Adjustments. Notwithstanding satisfaction of any
performance goals, the amount paid under an Incentive Bonus Award on account of
either financial performance or personal performance evaluations may be reduced
by the Administrator on the basis of such further considerations as the
Administrator shall determine.

     9.          Stock Withholding to Satisfy Withholding Tax Obligations. At the
discretion of the Administrator, Participants may satisfy withholding
obligations as provided in this

 

 

paragraph. When a Participant incurs tax liability in connection with an
Award, which tax liability is subject to tax withholding under applicable tax
laws, and the Participant is obligated to pay the Company an amount required to
be withheld under applicable tax laws, the Participant may satisfy the
withholding tax obligation by electing to have the Company withhold from the
Shares to be issued, if any, that number of Shares having a Fair Market Value
equal to the amount required to be withheld. The Fair Market Value of the
Shares to be withheld shall be determined on the date that the amount of tax to
be withheld is to be determined (the “Tax Date”).

     In the event that the Company elects to make a payment to the Participant
in cash upon the exercise of a SAR, the Participant may satisfy the withholding
tax obligation by electing to have the Company withhold from such payment the
amount required to satisfy such withholding tax obligation.

     All elections by a Participant to have Shares or cash withheld for this
purpose, as the case may be, shall be made in writing in a form acceptable to
the Administrator and shall be subject to the following restrictions:

                 (a)     the election must be made on or prior to the applicable Tax Date;

                 (b)     once made, the election shall be irrevocable as to the particular
Shares of the Option, stock purchase right or SAR, as to which the election is
made; and

                 (c)     all elections shall be subject to the consent or disapproval of the
Administrator.

     In the event the election to have Shares or cash withheld is made by a
Participant and the Tax Date is deferred under Section 83 of the Code because
no election is filed under Section 83(b) of the Code, the Participant shall
receive the full number of Shares or full amount of cash, as the case may be,
with respect to which the Award is exercised but such Participant shall be
unconditionally obligated to tender back to the Company the proper number of
Shares, or the proper amount of cash, as the case may be, on the Tax Date.

     10.          Adjustments Upon Changes in Capitalization or Merger. Subject to any
required action by the stockholders of the Company, the number of Shares or
Stock Units covered by each outstanding Award and the number of Shares which
have not yet been issued under this Plan, as well as the purchase price, if
any, of each such outstanding Award, shall be proportionately adjusted for any
increase or decrease in the number of issued Shares resulting from a stock
split, reverse stock split, stock dividend, combination or reclassification or
similar transaction involving the Company Common Stock, or any other increase
or decrease in the number of issued Shares effected without receipt of
consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been
“effected without receipt of consideration.” Such adjustment shall be made by
the Board, whose determination in that respect shall be final, binding and
conclusive. Except as expressly provided herein, no issuance by the Company of
shares of stock of any class, or securities convertible into shares of stock of
any class, shall affect, and no adjustment by reason thereof

 

 

shall be made with respect to, the number or price of shares of Company
Common Stock subject to an Option or SAR.

     In the event of the proposed dissolution or liquidation of the Company,
the Board shall notify the Participant at least fifteen (15) days prior to such
proposed action. To the extent it has not been previously exercised, any
Option or SAR will terminate immediately prior to the consummation of such
proposed action and any restrictions on Awards shall expire immediately and
that such Awards shall fully vest prior to the consummation of such proposed
action. In the event of a merger or consolidation of the Company with or into
another corporation or the sale of all or substantially all of the Company’s
assets (hereinafter, a “merger”), the Board may authorize outstanding Options
or SARs to be assumed or an equivalent option or stock appreciation right to be
substituted by such successor corporation or a parent or subsidiary of such
successor corporation and may assign any Awards to the successor corporation.
In the event that such successor corporation does not agree to assume the
Option or SAR, or to substitute an equivalent option or stock appreciation
right, the Board shall, in lieu of such assumption or substitution, provide for
the Participant to have the right to exercise all Options or SARs previously
granted to such Participant, including Options or SARs which would not
otherwise be exercisable. If the Board makes an Option or SAR fully
exercisable in lieu of assumption or substitution in the event of a merger, the
Board shall notify the Participant that the Option or SAR shall be fully
exercisable for a period of fifteen (15) days from the date of such notice, and
the Option or SAR will terminate upon the expiration of such period. For the
purposes of this paragraph, the Option or SAR shall be considered assumed if,
following the merger, the Option or SAR, confers the right to purchase, or
receive the appreciation in Fair Market Value, as the case may be, for each
Share of stock subject to the Option or SAR immediately prior to the merger,
the consideration (whether stock, cash, or other securities or property)
received in the merger by holders of Company Common Stock for each Share held
on the effective date of the transaction (and if holders were offered a choice
of consideration, the type of consideration chosen by the holders of a majority
of the outstanding Shares); provided, however, that if such consideration
received in the merger was not solely common stock of the successor corporation
or its Parent, the Board may, with the consent of the successor corporation and
the participant, provide for the consideration to be received upon the exercise
of the Option or SAR, for each Share of stock subject to the Option or SAR, to
be solely common stock of the successor corporation or its Parent equal in Fair
Market Value to the per share consideration received by holders of Company
Common Stock in the merger or sale of assets.

     11.          Amendment and Termination of this Plan.

                 (a)     Amendment and Termination. The Board may at any time amend, alter,
suspend or discontinue the Plan, but no amendment, alteration, suspension or
discontinuation shall be made which would impair the rights of any Participant
under any grant theretofore made, without his or her consent. In addition, to
the extent necessary and desirable to comply with Rule 16b-3 under the Exchange
Act or with Section 422 of the Code (or any other applicable law or regulation,
including the requirements of Nasdaq or an established stock exchange), the
Company shall obtain stockholder approval of any Plan amendment in such a
manner and to such a degree as required.

 

 

                 (b)     Effect of Amendment or Termination. Any such amendment or termination
of this Plan shall not affect Awards already granted and such Awards shall
remain in full force and effect as if this Plan had not been amended or
terminated, unless mutually agreed otherwise between the Participant and the
Board, which agreement must be in writing and signed by the Participant and the
Company.

     12.          Conditions Upon Issuance of Shares. Shares shall not be issued
pursuant to the Plan unless the issuance and delivery of such Shares shall
comply with all relevant provisions of law including, without limitation, the
Securities Act of 1933, as amended, the Exchange Act, the rules and regulations
promulgated thereunder, and the requirements of Nasdaq or of any stock exchange
upon which the Shares may then be listed.

     13.          Reservation of Shares. The Company, during the term of this Plan,
will at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of this Plan.

     The inability of the Company to obtain authority from any regulatory body
having jurisdiction, which authority is deemed by the Company’s counsel to be
necessary to the lawful issuance and sale of any Shares hereunder, shall
relieve the Company of any liability in respect of the failure to issue or sell
such Shares as to which such requisite authority shall not have been obtained.

     14.          Information to Participants. The Company shall provide to each
Participant, during the period for which such Participant has one or more
Awards outstanding, copies of all annual reports and other information which
are provided to all stockholders of the Company.

     15.          No Right to Employment. The Plan shall not confer upon any
Participant any right with respect to continuation of employment or consulting
relationship with the Company, nor shall it interfere in any way with his right
or the Company’s right to terminate his employment or consulting relationship
at any time, with or without cause.

     16.          Governing Law. The validity, constrictions and effect of this Plan,
agreements entered into pursuant to the Plan, and of any rules, regulations,
determinations or decisions made by the Administrator relating to the Plan or
such agreements, and the rights of any and all persons having or claiming to
have any interest therein or thereunder, shall be determined exclusively in
accordance with applicable federal laws and the laws of the state of Delaware,
without regard to its conflict of laws principles.exv4w1

 

Exhibit 4.1

DICK’S CLOTHING & SPORTING GOODS, INC.

STOCK OPTION PLAN

AS AMENDED THROUGH NOVEMBER 20, 2002*

ARTICLE I

THE PLAN

     1.1 NAME. This plan shall be known as the “Dick’s Clothing & Sporting
Goods, Inc. Stock Option Plan” and is referred to herein as the “Plan.” It is
provided by Dick’s Clothing & Sporting Goods, Inc. (the “Corporation”).

     1.2 COMPONENTS. This plan shall have two components, Incentive Stock
Options (the “Incentive Options”) and Non-Qualified Stock Options (the
“Non-Qualified Options”). The Incentive Options and the Non-Qualified Options
are sometimes referred to together as the “Options.” A participant who has been
granted an Incentive or a Non-Qualified Option may be granted an additional
Option or Options under this Plan if the Compensation Committee or Incentive
Committee so determines.

     1.3 EFFECTIVENESS; SHAREHOLDER APPROVAL. The Plan was adopted by the
Board of Directors on October 30, 1992 subject to the approval of the
Corporation’s shareholders. The Plan was adopted by the Corporation’s
shareholders by unanimous written consent on November 11, 1992. The Plan was
amended to increase the number of shares available for the grant of options to
(a) 4,158,000 by the Board of Directors and shareholders on November 17, 1993;
and (b) 6,468,000 by the Board of Directors on August 29, 1996 and by the
shareholders effective September 10, 1996; and (c) to 9,933,000 by the Board of
Directors on January 28, 1999 and by the shareholders effective April 20, 1999.

     1.4 PURPOSE OF PLAN. The purpose of the Dick’s Clothing & Sporting Goods,
Inc. Stock Option Plan (the “Plan”) is to encourage ownership of stock of the
Corporation and to attract, motivate, and retain key management employees and
members of the Board of Directors by providing an incentive to improve
operations, increase profitability, and acquire stock ownership interests in
the Corporation.

     1.5 TERMINATION OF PLAN. The Plan shall terminate ten years from its date
of adoption by the Board of Directors (October 30, 1992), and no options shall
be granted under the Plan after that date. Any Options outstanding at the time
of termination of the Plan shall continue in full force and effect according to
the terms and conditions of the Option and the Plan.

ARTICLE II

INCENTIVE OPTIONS

	*	 	All share numbers presented in the Plan reflect the 2.31-for-1 stock split
which occurred immediately prior to the completion of the
Company’s initial
public offering in October of 2002.

 

 

     2.1 SHARES AVAILABLE FOR INCENTIVE OPTIONS. Subject to adjustment as
provided in Section 4.6, there will be reserved for use, upon the exercise of
Incentive Options to be granted from time to time under the Plan, an aggregate
of 693,000 shares (or such higher number as approved by the Board of Directors
and shareholders) of the Common Stock of the Corporation (“Common Stock”) which
shares may be in whole or in part, as the Board of Directors of the Corporation
(the “Board of Directors”) shall from time to time determine, authorized but
unissued shares of the Common Stock, or issued shares of the Common Stock which
shall have been reacquired by the Corporation. If an Incentive Option shall
expire or terminate for any reason without having been exercised in full, the
shares subject to purchase under any such Incentive Option shall (unless the
Plan shall then be terminated) be added to the shares otherwise available under
the Plan.

     2.2 ADMINISTRATION OF THE PLAN. All provisions of the Plan relating to
Incentive Options shall be administered by a committee (the “Incentive
Committee”), consisting of not fewer than two Directors of the
Corporation who shall be disinterested within the meaning of Rule 16b-3 of the
General Rules and regulations under the Securities Exchange Act of 1934, and
who shall serve at the pleasure of the Board of Directors. Subject to the
provisions of the Plan, the Incentive Committee shall have full authority to
interpret the Plan with respect to Incentive Options, to establish and amend
rules and regulations relating to Incentive Options, to determine the terms and
provisions of the Incentive Option agreements (which need not be identical),
and make all other determinations necessary or advisable for the administration
Incentive Options granted under the Plan.

     Notwithstanding the foregoing or anything else contained in the 1992 Plan,
“Incentive Committee” and “Compensation Committee” shall also mean (i) any
committee of the Board of Directors designated by the Board of Directors to
serve as the Company’s Compensation Committee (or designated in a similar
capacity), where such committee meets the applicable requirements of the
Securities Exchange Act of 1934, as amended and any exchange or quotation
system where the Company’s Common Stock is traded or quoted, or (ii) the Board
of Directors.

     2.3 EMPLOYEES TO WHOM INCENTIVE OPTIONS MAY BE GRANTED. Incentive Options
may be granted in each calendar year or portion thereof while the Plan is in
effect to such of the Employees as the Incentive Committee, in its discretion,
shall determine.

     Whenever the term “officers” is used in the Plan, such term shall be
deemed to include assistant officers of the Corporation and officers of
subsidiaries of the Corporation. The term “subsidiary” shall mean any domestic
or foreign corporation of which the Corporation owns, directly or indirectly,
at least 50% of the total combined voting power of all classes of stock of such
corporation. In determining the employees to whom Incentive Options shall be
granted and the number of shares to be subject to purchase under such Incentive
Options, the Incentive Committee shall take into account the duties of the
respective employees, their present and potential contributions to the success
of the Corporation, and such other factors as the Incentive Committee shall
deem relevant in connection with accomplishing the purposes of the Incentive
Plan. Membership on the Board of Directors shall not disqualify a person from
receiving an Incentive Option grant hereunder, although Directors who are
members of the Incentive Committee or who are not officers or managerial
officers of the Corporation or a subsidiary are not eligible to receive
Incentive Options under the Plan.

 

 

     2.4 EXERCISE PRICE AND DATE OF GRANT.

          (a)  Incentive Option Price. The exercise price of any Incentive Option
granted to an employee who at the time such Incentive Option is granted, owns,
as defined in Section 425 of the Internal Revenue Code of 1954, as amended (the
“Code”) stock possessing not more than 10% of the total combined voting power
of all classes of stock of:

               (i)  the Corporation; or

               (ii)  if applicable, any subsidiary of the Corporation qualifying as a
“Subsidiary Corporation” as defined in Section 425 of the Code (any such
corporation being hereinafter referred to as a “Subsidiary”); or

               (iii)  If applicable, any parent of the Corporation qualifying as a “Parent
Corporation” as defined in Section 425 of the Code (any such corporation being
hereinafter referred to as the “Parent”),

shall be at least equal to the fair market value of the Common Stock at the
time of granting of the Incentive Option.

     The exercise price of any Incentive Option granted to an employee who, at
the time such Incentive Option is granted, owns, as defined in Section 425 of
the Code, stock possessing more than 10% of the total combined voting power of
all classes of stock of:

               (i)  the Corporation; or

               (ii)  if applicable, a Subsidiary; or

               (iii)  if applicable, the Parent,

shall be at least equal to 110% of the fair market value of the Common Stock at
the time of granting of the Incentive Option.

     For all purposes of the Plan, the fair market value of the Common Stock at
the time of granting an Option shall be deemed to be the mean between the high
and the low prices of the Common Stock on the national securities exchange on
the day on which the Option is granted, if the Common Stock is then being
traded on a national securities exchange, and if the Common Stock is then being
traded on such an exchange but there are no sales on such day, the fair market
value shall be deemed to be the mean between the high and low prices of the
Common Stock on the national securities exchange on the day on which the most
recent sales occurred prior to the date of grant, and if the Common Stock is
not then traded on such an exchange, then the fair market value shall be deemed
to be the mean between the high and low bid and asked prices for the Common
Stock on the over-the-counter market on the day on which the option is granted.
If the Common Stock is not publicly traded at the time of the grant, the fair
market value shall be determined in good faith at the time of the grant of any
Incentive Option by decision of the Incentive Committee.

 

 

          (b)  Date of Grant. The date of grant of an Incentive Option granted
hereunder shall be the date on which the Incentive Committee acts in granting
the Incentive Option.

     2.5 TERMS OF INCENTIVE OPTIONS. Incentive Options granted hereunder shall
be exercisable for a term of not more than ten (10) years from the date of
grant thereof, but shall be subject to Section 4.1 and to earlier termination
as hereinafter provided. Each Incentive Option agreement issued hereunder shall
specify the term of the Incentive Option, which term shall be determined by the
Incentive Committee in accordance with its discretionary authority hereunder.

     Notwithstanding anything herein to the contrary, in the event an Incentive
Option is granted to an employee who, at the time such option is granted, owns,
as defined in Section 425 of the Code, stock possessing more than 10% of the
total combined voting power of all classes of stock of:

               (i)  the Corporation; or

               (ii)  if applicable, a Subsidiary; or

               (iii)  if applicable, the Parent,

then such Incentive Option shall not be exercisable more than five (5) years
from the date of grant thereof, but shall be subject to earlier termination as
hereinafter provided.

     2.6 LIMIT ON FAIR MARKET VALUE. No Option will be treated as an
“incentive stock option” (as defined in Section 422A(b) of the code) to the
extent that the aggregate fair market value (determined at the time the Option
is granted) of the stock with respect to which the Option is exercisable for
the first time by any individual during any calendar year (under all plans of
the Corporation and any subsidiary) exceeds $100,000.

ARTICLE III

NON-QUALIFIED OPTIONS

     3.1 SHARES AVAILABLE FOR NON-QUALIFIED OPTIONS. Subject to adjustment as
provided in Section 4.6, the aggregate number of shares which may be issued
pursuant to Non-Qualified Options granted by the Option Committee under this
Plan shall not exceed 3,242,854 shares (or such higher number as approved by
the Board of Directors and shareholders) of Common Stock of the Corporation.
These shares may include treasury shares reacquired by the Corporation, or
authorized and unissued shares, or a combination of both. Any shares, subject
to a Non-Qualified Option under this Plan, which expire or are terminated for
any reason shall be available for the granting of other Non-Qualified Options
during the term of this Plan.

     3.2 ADMINISTRATION OF PLAN. All provisions of the Plan relating to
Non-Qualified Options shall be administered by the Compensation Committee (the
“Compensation

 

 

Committee”) appointed by the Board of Directors of the
Corporation. The Compensation Committee shall consist of not less than two
members of the Board of Directors of the Corporation (the “Board”). The
determinations of the Compensation Committee shall be made in accordance with
their judgment as to the best interests of the Corporation and its stockholders
and in accordance with the purposes of the Plan. No member of the Compensation
Committee shall be liable for any action taken or determination made in good
faith with respect to this Plan or any Non-Qualified Option granted hereunder.

     The Compensation Committee shall have full authority and discretion to:
(a) determine the eligible participants to be granted Non-Qualified Options,
the times at which Non-Qualified Options shall be granted, the number of shares
subject to each Non-Qualified Option, the period during which each
Non-Qualified Option becomes exercisable (subject to Section 4.1), and the
terms contained in each Non-Qualified Option agreement; and (b) adopt all
rules, regulations, and provisions of this Plan relating to Non-Qualified
Options. The Compensation Committee’s interpretation, construction and adoption
of any provisions of this Plan relating to Non-Qualified Options or any
Non-Qualified Option granted hereunder shall be binding and conclusive, unless
otherwise determined by the Board. Any power that may be exercised or action
that may be taken by the Compensation Committee under this Plan may also be
exercised or taken by the Board.

     The Compensation Committee and the Incentive Committee may be combined
into one committee of the Board so long as the membership requirements set
forth herein for both committees are met by the members of the combined
Committee.

     Notwithstanding the foregoing or anything else contained in the 1992 Plan,
“Incentive Committee” and “Compensation Committee” shall also mean (i) any
committee of the Board of Directors designated by the Board of Directors to
serve as the Company’s Compensation Committee (or designated in a similar
capacity), where such committee meets the applicable requirements of the
Securities Exchange Act of 1934, as amended and any exchange or quotation
system where the Company’s Common Stock is traded or quoted, or (ii) the Board
of Directors.

     3.3 ELIGIBILITY. Eligible recipients of Non-Qualified Options under this
Plan shall be Directors, officers, and selected key management employees of the
Corporation and its subsidiaries. Key management employees will be nominated
for participation by the President of the Corporation and will be approved by
the Compensation Committee. The granting of a Non-Qualified Option under this
Plan shall not affect any outstanding stock option previously granted to an
optionee under this Plan or any other plan of the Corporation.

     3.4 EXERCISE PRICE. On the date a Non-Qualified Option is granted, the
exercise price per share shall be such price that the Committee deems
appropriate.

ARTICLE IV

PROVISIONS APPLICABLE TO ALL OPTIONS

     4.1 TERM OF OPTION. Options granted under the Plan shall become
exercisable at such intervals and periods of time (“Exercise Period”) and for
such number of shares which may be purchased at any one time as determined by
the Incentive Committee or the

 

 

Compensation Committee (collectively “Option
Terms”). These Option Terms shall be set forth by the relevant Committee in
stock option agreements between individual optionees and the Corporation, but,
in no event shall the Exercise Period reflected in these option agreements be
less than four or more than ten years after the date of grant, and in no event
shall the vesting schedule be shorter than the following:

	
	          (1) Commencing one year after the date of grant of an Option to an
optionee, such optionee may exercise the Option as to not more than 25% of the
shares originally subject to Option thereunder.
	 
	          (2) Commencing two years after the date of grant of an Option to an
optionee, such optionee may exercise the Option as to not more than 50% of the
shares originally subject to Option thereunder.
	 
	          (3) Commencing three years after the date of grant of an Option to an
optionee, such optionee may exercise the Option as to not more than 75% of the
shares originally subject to Option thereunder.
	 
	          (4) Commencing four years after the date of grant of an Option to an
optionee, such optionee may exercise the Option as to any part or all of the
shares subject to Option thereunder.

Options which are not exercised by the tenth anniversary of the date on which
the option was granted shall expire. Notwithstanding the foregoing, the
Incentive Committee, the Compensation Committee and/or the Board of Directors
may, in its or their discretion, provide in the stock option agreements between
individual optionees and the Corporation, in amendments to such agreements or
in other instruments, for accelerated vesting of options granted under the Plan
in the event of extraordinary corporate transactions, including without
limitation transactions involving a change of control of the Corporation, a
sale of substantially all of its assets, or a merger of the Corporation with or
into another entity.

     4.2 EXERCISE OF OPTIONS.

		
	 	          (a) Each Option granted under the Plan shall be exercisable on the dates
and for the number of shares as shall be provided in a stock option agreement
between the Corporation and optionee evidencing the Option granted by the
Committee and the terms thereof. Shares shall be issued to the optionee
pursuant to the exercise of an Option only upon receipt by the Corporation from
the optionee of payment in full either in cash or, subject to the relevant
Committee’s approval, by an exchange of shares of Common Stock of the
Corporation previously owned by the optionee for at least six months prior to
the date of exercise or a combination of cash and such shares, in an amount or
having a combined value equal to the aggregate purchase price for the shares
subject to the Option or portion thereof being exercised.
	 
	 	          (b) The Corporation shall be entitled to withhold the amount of any tax
attributable to any amounts payable or shares deliverable under the Plan after
giving the person entitled to receive the payment or delivery notice as far in
advance as practicable, and the 

 

 

Corporation may defer making payment or
delivery of any benefits under the Plan if any tax is payable until indemnified
to its satisfaction.

     4.3 NONTRANSFERABILITY OF OPTION. No Options granted under this Plan
shall be transferable except by will or the laws of descent. Such Options shall
be exercisable during the optionee’s lifetime only by the optionee.

     4.4 TERMINATION OF EMPLOYMENT AND DEATH OF OPTIONEE.

	
	          (a) In the event that during the term of an unexercised Option, an
optionee’s employment with the Corporation or any of its subsidiaries is
terminated without cause as determined by the relevant Committee, the Option
may be exercised within the thirty-day period following the date of termination
of employment, but only to the extent that the optionee was entitled to
exercise such Option at the date of termination of employment and in no event
later than ten years from the date of the grant of such Option.
	 
	          (b) In the event that during the term of an unexercised Option, an
optionee’s employment with the Corporation or any of its subsidiaries is
terminated for cause as determined by the relevant Committee, the Option shall
be forfeited.
	 
	          (c) In the event that during the term of an unexercised Option, the
optionee dies or terminates employment with the Corporation or any of its
subsidiaries by reason of retirement or permanent disability within the
Corporation’s standard guidelines, the Option may be exercised within a
ninety-day period following the date of death or termination of employment, but
only to the extent that the optionee was entitled to exercise such Option at
the date of termination of employment and in no event later than ten years from
the date of the grant of the Option. In the event of an optionee’s death or
disability, the legal representative of the optionee or the optionee’s estate
shall be entitled to exercise the Option.
	 
	          (d) The unexercised portion of any Option subject to this Section which is
not exercised within the thirty or ninety-day period, as the case may be, shall
lapse, and shares subject to such Option shall become available for the
granting of other Options under the Plan.
	 
	          (e) For purposes of this provision, “cause” shall mean (i) fraud or
felonious conduct; (ii) embezzlement or misappropriation of funds or property;
(iii) consistent refusal to perform, or willful misconduct in or disregard of
the performance of duties and obligations; (iv) gross negligence, or (v) breach
of employment agreement, if applicable.

     4.5 CONTINUED EMPLOYMENT. Nothing contained in this Plan shall be
construed as a promise of future employment by the Corporation, its
subsidiaries or affiliates, or the relevant Committee. Further, the receipt of
a stock option grant in any one year shall not in any way be construed as a
right to receive a stock option grant in any subsequent year.

     4.6 ADJUSTMENT PROVISIONS. If the Corporation shall at any time change
the number of shares of its Common Stock without new consideration to the
Corporation (such as by stock dividends or stock splits), the aggregate number
of shares which may be issued pursuant to Options granted under this Plan and
the total number of shares then remaining subject to

 

 

purchase under an outstanding Option shall be changed in proportion to such change in issued
shares. The Option price per share also shall be adjusted so that the total
consideration payable to the Corporation upon the purchase of all shares not
theretofore purchased shall not be changed.

     If, during the term of any outstanding Option, the Corporation shall issue
other securities of the Corporation or distribute other property (other than
cash) as a distribution or dividend on or in exchange for Common Stock of the
Corporation, the Corporation shall take such steps as the Committee and the
Board deems appropriate to: (a) equitably adjust the kind and amount of
securities then remaining subject to purchase thereunder and the exercise price
per share; or (b), to equitably adjust the rights of the optionee thereunder in
order to reflect such issuance or distribution of securities or other property.

     If, during the term of an outstanding Option, the Common Stock of the
Corporation shall be changed into another kind of security of the Corporation
or into cash, securities, or evidences of indebtedness of another corporation,
other property or any combination thereof, as a result of a reorganization,
sale, merger, consolidation, or other similar transaction, the optionee shall
be entitled to receive, at the election of the optionee (a) upon the due
exercise of the Option or (b) upon the effective date of the reorganization,
sale, merger, consolidation or similar transaction, the cash, securities,
evidences of indebtedness, other property or any combination thereof the
optionee would have been entitled to receive for Common Stock acquired through
exercise of the Option (net of the exercise price) immediately prior to the
effective date of such reorganization, sale, merger, consolidation or other
similar transaction. If appropriate, the exercise price of the shares or
securities remaining subject to purchase following such reorganization, sale,
merger, consolidation or other similar transaction may be adjusted in each case
in such equitable manner as the relevant Committee and the Board may determine.

     4.7 AMENDMENTS. The Board of Directors may amend the Plan from time to
time or terminate the Plan at any time. However, no action authorized by this
Section shall reduce the amount of any then existing benefit or change the
terms and conditions thereof without the optionee’s consent. No amendment of
the Plan shall, without approval of the shareholders of the Corporation: (a)
materially increase the total number of shares which may be issued under the
Plan; (b) materially reduce the minimum purchase price of shares of Common
Stock which may be made subject to Options under the Plan; or (c) materially
modify the requirements as to eligibility for Options under the Plan.

     4.8 RIGHTS OF OPTION HOLDER. The holder of an Option shall not have any
of the rights of a shareholder with respect to the shares subject to purchase
under his Option, except to the extent that one or more certificates for such
shares shall be delivered to him upon the due exercise of the Option.

     4.9 OPTION REGULATIONS. If any law or regulation requires the Corporation
to take any action with respect to the shares to be issued upon exercise of an
Option such as, but not limited to, registration with any federal or state
securities regulating organization or agency or similar body, then, and in such
event, the issuance of such shares shall be deferred until the completion of
such action as is required under any such law or regulation and the Board of
Directors shall have been advised by counsel for the Corporation that all
applicable legal requirements have been complied with. The Corporation, in its
sole discretion, may require any

 

 

person exercising an Option, as a condition to
the effectiveness thereof, to represent in writing to the Corporation, in form
satisfactory to the Corporation, that the stock purchased shall be purchased
for investment and not with a view to resale or other distribution.

     4.10 LISTING REQUIREMENTS. The Corporation shall not be required to issue
or deliver any certificate for shares of its stock purchased upon the exercise
of any Option issued under this Plan prior to the admission of such shares to
listing on any stock exchange on which the stock may at that time be listed;
provided, however, that the Corporation shall take all necessary steps to
secure the admission of such stock to listing on any such stock exchange and
shall secure admission of such shares at the earliest practicable date.

*********

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