Exhibit 4.1
2004 Long-Term Incentive
Plan
K2 Inc.
As Approved by Stockholders on May 13,
2004
K2 Inc.
2004 Long-Term Incentive
Plan
Section 1. Purpose;
Definitions
The purpose of the K2 Inc. 2004
Long-Term Incentive Plan (the “Plan”) is to enable K2
Inc. (the “Company”) to attract, retain, and reward
non-employee directors, officers, managers, and key employees of
the Company and its Subsidiaries, and motivate such persons to
exert their best efforts on behalf of the Company and its
Subsidiaries.
For purposes of the Plan, the
following terms shall be defined as set forth below
(a) “ Award
” means an award under the Plan of Stock Options, Incentive
Stock Options, Stock Appreciation Rights, Restricted Stock,
Restricted Stock Units, an Other Stock-Based Award and/or a
Performance Award.
(b) “ Board
” means the Board of Directors of the Company.
(c) “
BookValue ” means, as of any given date, on a per
share basis (a) the Stockholders’ Equity in the Company as of
the end of the immediately preceding fiscal year as reflected in
the Company’s consolidated balance sheet, subject to such
adjustments as the Committee shall specify at or after grant,
divided by (b) the number of then outstanding shares of Stock as of
such year-end date (as adjusted by the Committee for subsequent
events).
(d) “ Cause
” means, but is not limited to, any of the following actions:
theft, dishonesty or fraud, insubordination, persistent inattention
to duties or excessive absenteeism, violation of the
Company’s work rules, code of conduct or policies or state or
federal law, or any conduct which would disqualify the participant
from entitlement to unemployment benefits. The determination of
whether Cause exists shall be made in the Company’s sole
discretion.
(e) “ Code
” means the Internal Revenue Code of 1986, as amended from
time to time, and any successor thereto.
(f) “
Committee ” means the Committee referred to in Section
2 of the Plan. If at any time no Committee shall be in office, then
the functions of the Committee specified in the Plan shall be
exercised by the Board.
(g) “
Company ” means K2 Inc., a corporation organized under
the laws of the State of Delaware, or any successor
corporation.
(h) “
Disability ” means disability as determined under
procedures established by the Committee for purposes of this
Plan.
(i) “ Exchange
Act ” means the Securities Exchange Act of 1934, as
amended from time to time, and any successor thereto.
(j) “ Fair
Market Value ” means, as of any given date, unless
otherwise determined by the Committee in good faith, the mean
between the highest and lowest quoted selling price, regular way,
of the Stock on the New York Stock Exchange or, if no such sale of
Stock occurs on the New York Stock Exchange on such date, the fair
market value of the Stock as determined by the Committee in good
faith.
(k) “ Incentive
Stock Option ” means any Stock Option intended to be and
designated as an incentive Stock Option” within the meaning
of Section 422 of the Code.
(l) “
Nonqualified Stock Option ” means any Stock Option
that is not an Incentive Stock Option.
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(m) “ Other
Stock-Based Award ” means an award under Section 8 below
that is valued in whole or in part by reference to, or is otherwise
based on, Stock.
(n) “
Performance Award ” means an award under Section 9
below that is valued based on the level of attainment of
performance objectives related to the performance measures set
forth in Section 9.
(o) “ Person
” means “person” as defined in Section 3(a)(9) of
the Exchange Act and as used in Sections 13(d) and 14(d) thereof,
including a “group” as defined in Section 13(d) of the
Exchange Act but excluding the Company and Subsidiary and any
employee benefit plan sponsored or maintained by the Company or any
Subsidiary (including any trustee of such plan acting as
trustee).
(p) “ Plan
” means K2 Inc.’s 2004 Long-Term Incentive Plan, as
hereinafter amended from time to time.
(q) “ Restricted
Stock ” means an award of shares of Stock that is subject
to restrictions under Section 7 below.
(r) “ Restricted
Stock Unit ” means a fixed or variable right to acquire
Stock, which may or may not be subject to restriction, contingently
awarded under Section 7 of the Plan.
(s) “ Stock
” means the Common Stock, $1.00 par value per share, of the
Company.
(t) “ Stock
Appreciation Right ” means the right to participate in an
increase in the value of a share of Stock pursuant to an award
granted under Section 6.
(u) “ Stock
Option ” or “ Option ” means any
option to purchase shares of Stock (including Restricted Stock, if
the Committee so determines) granted pursuant to Section 5
below.
(v) “
Subsidiary ” means a corporation (other than the
Company) in an unbroken chain of corporations beginning with the
Company if each of the corporations (other than the last
corporation in the unbroken chain) owns stock possessing fifty
percent (50%) or more of the total combined voting power of all
classes of stock in one of the other corporations in the chain, or
otherwise controls one of the other corporations in the
chain.
Section
2. Administration
The Plan shall be administered by a
committee of not less than two members of the Board, who shall be
appointed by, and serve at the pleasure of, the Board. In selecting
the members of the Committee, the Board shall take into account the
requirements for the members of the Committee to be treated as
“Outside Directors” within the meaning of Section
162(m) of the Code and “Non-Employee Directors” for
purposes of Rule 16b-3, as promulgated under Section 16 of the
Exchange Act. The functions of the Committee specified in the Plan
shall be exercised by the Board, if and to the extent that no
Committee exists which has the authority to so administer the Plan
or to the extent that the Committee is not comprised solely of
Non-Employee Directors for purposes of Rule 16b-3, as promulgated
under Section 16 of the Exchange Act.
The Committee shall have full
authority to grant, pursuant to the terms of the Plan, to
non-employee directors, officers, managers, and key employees,
eligible under Section 4: (i) Stock Options and Incentive Stock
Options; (ii) Stock Appreciation Rights; (iii) Restricted Stock and
Restricted Stock Units; (iv) Other Stock-Based Awards; and/or (v)
Performance Awards.
In particular the Committee shall
have the authority:
(i) To select the
non-employee directors, officers, managers, and key employees of
the Company and its Subsidiaries to whom Stock Options, Incentive
Stock Options, Stock Appreciation Rights, Restricted
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Stock, Restricted Stock Units, Other
Stock-Based Awards, and/or Performance Awards may from time to time
be granted hereunder;
(ii) To establish
subplans or other arrangements not inconsistent with the Plan which
the Committee deems necessary or advisable to comply with laws or
requirements of foreign jurisdictions;
(iii) To determine
whether and to what extent Incentive Stock Options, Nonqualified
Stock Options, Stock Appreciation Rights, Restricted Stock,
Restricted Stock Units, Other Stock Based Awards, and/or
Performance Awards or any combination thereof, are to be granted
hereunder to one or more eligible employees and non-employee
directors;
(iv) Subject to the
provisions of Sections 3, 5 and 9, to determine the number of
shares to be covered by each such award granted
hereunder;
(v) To determine the
terms and conditions, not inconsistent with the terms of the Plan,
of any award granted hereunder (including, but not limited to, the
share price and any restriction or limitation, or, subject to the
minimum vesting requirements in the Plan, any vesting acceleration
or waiver of forfeiture restrictions regarding any Stock Option or
other award and/or the shares of Stock relating thereto, based in
each case on such factors as the Committee shall determine in its
sole discretion);
(vi) To determine whether
and under what circumstances an award of Restricted Stock or
Restricted Stock Units may be settled in cash;
(vii) To determine
whether, to what extent and under what circumstances Option grants
and/or other awards under the Plan made by the Company are to be
made, and operate, on a tandem basis vis-à-vis other awards
under the Plan and/or cash awards made outside of the Plan, or on
an additive basis;
(viii) To determine
whether, to what extent and under what circumstances Stock 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); and
(ix) To designate
officers or employees of the Company or competent professional
advisors to assist the Committee in the administration of the Plan,
and to grant authority to such persons to execute agreements or
other documents on its behalf.
The Committee shall have the
authority to adopt, alter, and repeal such rules, guidelines and
practices governing the Plan as it shall, from time to time, deem
advisable to interpret the terms and provisions of the Plan and any
award issued under the Plan (and any agreements relating thereto),
and to otherwise supervise the administration of the
Plan.
All decisions made by the Committee
pursuant to the provisions of the Plan shall be made in the
Committee’s sole discretion and shall be final, conclusive
and binding on all persons, including the Company and Plan
participants.
Section 3. Stock Subject
to Plan
The total number of shares of Stock
reserved and available for distribution under the Plan shall be
2,000,000 shares. Of this 2,000,000 no more than 500,000 shares of
Stock in the aggregate shall be granted in the form of Restricted
Stock, Restricted Stock Units, Other Stock-Based Awards or
Performance Awards. No individual may receive in any calendar year
Awards under the Plan relating, in the aggregate, to more
than
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500,000 shares of Stock. Non-employee directors
of the Company may receive Awards relating to up to 50,000 shares
of Stock in any calendar year.
Subject to Section 6(b)(iv) below,
if any shares of Stock that have been optioned cease to be subject
to a Stock Option or an Incentive Stock Option, or if any such
shares of Stock that are subject to any Restricted Stock or
Restricted Stock Units award or Other Stock-Based Award granted
hereunder are forfeited or any such award otherwise terminates
without a payment being made to the participant in the form of
Stock, such shares shall not be counted against the share limits
set forth in this Section 3 and shall again be available for
distribution in connection with future awards under the
Plan.
Except as provided in Section 10, in
the event of any merger, reorganization, consolidation,
recapitalization, Stock dividend, large non-recurring cash dividend
(as determined by the Committee), Stock split or other change in
corporate structure affecting the Stock, such substitution or
adjustment shall be made in the aggregate number of shares subject
to, and reserved for issuance under, the Plan (including any
sub-limits in this Section 3), in the number and option price of
shares subject to outstanding Options granted under the Plan, and
in the number of shares subject to other outstanding Awards granted
under the Plan as may be determined to be appropriate by the
Committee, in its sole discretion, provided that the number of
shares as so adjusted shall always be a whole number. Such adjusted
option price shall also be used to determine the amount payable by
the Company upon the exercise of any Stock Appreciation
Right.
Section
4. Eligibility
Non-employee directors, officers,
managers, and other key employees of the Company and its
Subsidiaries who are responsible for or contribute to the
management, growth and/or profitability of the business of the
Company and/or its Subsidiaries are eligible to be granted awards
under the Plan.
Section 5. Stock
Options
Stock Options may be granted alone,
in addition to or in tandem with other Awards granted under the
Plan. Any Stock Option granted under the Plan shall be in such form
as the Committee may from time to time approve.
Stock Options granted under the Plan
may be of two types: (i) Incentive Stock Options and (ii)
Nonqualified Stock Options.
The Committee shall have the
authority to grant to any optionee Incentive Stock Options,
Nonqualified Stock Options, or both types of Stock Options (in each
case with or without Stock Appreciation Rights).
Options granted under the Plan shall
be subject to the following terms and conditions and shall contain
such additional terms and conditions, not inconsistent with the
terms of the Plan, as the Committee shall deem
desirable:
(a) Exercise
Price. The exercise price per share
of Stock purchasable under a Stock Option shall be determined by
the Committee at the time of grant but shall be not less than one
hundred percent (100%) of the Fair Market Value of the Stock at
grant, provided however, that the exercise price per share of Stock
purchasable under a Stock Option that is granted in connection with
a merger, stock exchange, or other
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acquisition as a substitute or replacement award
for options held by optionees of the acquired entity may be less
than one hundred percent (100%) of the Fair Market Value of the
Stock at the time of grant.
(b) Option
Term. The term of each Stock Option
shall be fixed by the Committee, but no Stock Option shall be
exercisable more than ten (10) years after the date the Option is
granted.
(c)
Exercisability. Stock Options
shall be exercisable at such time or times and subject to such
terms and conditions as shall be determined by the Committee at or
after grant; provided, that Stock Options shall not be exercisable
prior to the first anniversary of grant. If the Committee provides,
in its sole discretion, that any Stock Option is exercisable only
in installments, the Committee may waive such installment exercise
provisions at any time at or after grant in whole or in part, based
on such factors as the Committee shall determine, in its sole
discretion.
(d) Method of
Exercise. Subject to whatever
installment exercise provisions apply under Section 5(c), Stock
Options may be exercised upon vesting in whole or in part at any
time during the option period, by giving written notice of exercise
to the Company, or its designated representative, specifying the
number of shares to be purchased.
Such notice shall be accompanied by
payment in full of the purchase price, either by check, note or
such other instrument as the Committee may accept. As determined by
the Committee, in its sole discretion, at or after grant, payment
in full or in part may also be made in the form of unrestricted
Stock already owned by the optionee or in any other manner approved
by the Committee.
No shares of Stock shall be issued
until full payment therefore has been made. An optionee shall
generally have the rights to dividends or other rights of a
shareholder with respect to the shares subject to the Option when
the optionee has given written notice of exercise, has paid in full
for such shares, and, if requested, has given the representation
described in Section 15(a).
(e)
Transferability of Options.
Unless the Committee shall permit (on such
terms and conditions as it shall establish) an Option to be
transferred to a member of the participant’s immediate family
or to a trust or similar vehicle for the benefit of such immediate
family members, no Option shall be assignable or transferable
except by will or the laws of descent and distribution, and except
to the extent required by law, no right or interest of any
participants shall be subject to any lien, obligation or liability
of the participant.
(f) Termination by
Death. Subject to Section 5(j), if
an optionee’s employment by or service with the Company and
any Subsidiary terminates by reason of death, any Stock Option held
by such optionee may thereafter be exercised in accordance with the
terms and conditions established by the Committee. In the event of
termination of employment or service by reason of death, if an
Incentive Stock Option is exercised after the expiration of the
exercise periods that apply for purposes of Section 422 of the
Code, such Stock Option will thereafter be treated as a
Nonqualified Stock Option.
(g) Termination by
Reason of Disability. Subject to
Section 5(j), if an optionee’s employment by or service with
the Company and any Subsidiary terminates by reason of Disability,
any Stock Option held by such optionee may thereafter be exercised
by the optionee in accordance with the terms and conditions
established by the Committee. In the event of termination of
employment or service by reason of Disability, if an Incentive
Stock Option is exercised after the expiration of the exercise
periods that apply for pu
