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SHOE CARNIVAL,
INC.
2000 STOCK OPTION AND INCENTIVE PLAN
(AS PROPOSED TO BE AMENDED)
1.
Plan Purpose . The purpose of the Plan is to promote
the long-term interests of the Company and its shareholders by
providing a means for attracting and retaining Directors and
officers and key employees of the Company and its Affiliates.
2.
Definitions . The following definitions are
applicable to the Plan:
"Affiliate" --
means any "parent corporation" or "subsidiary corporation" of the
Company as such terms are defined in Section 424(e) and (f),
respectively, of the Code.
"Annual
Return To Shareholders" -- means the Company's return to
shareholders as represented by share price appreciation plus
dividends paid on one share of stock during any Year during a
Restricted Period.
"Award" --
means the grant by the Committee of an Incentive Stock Option, a
Non-Qualified Stock Option, or Restricted Stock, or any combination
thereof, as provided in the Plan.
"Board" --
means the Board of Directors of the Company.
"Business
Criteria" -- means any one or any combination of Annual Return to
Shareholders, Total Net Sales, Net Earnings, Net Earnings before
Nonrecurring Items, Return on Equity, Return on Assets, EPS, EBITDA
or EBITDA before Nonrecurring Items, in each case during any Year
during a Restricted Period.
"Change in
Control" -- means each of the events specified in the following
clauses (i) through (iii): (i) any third person, including a
"group" as defined in Section 13(d)(3) of the Exchange Act
shall, after the date of the adoption of the Plan by the Board,
first become the beneficial owner of shares of the Company with
respect to which 25% or more of the total number of votes for the
election of the Board of Directors of the Company may be cast,
(ii) as a result of, or in connection with, any cash tender
offer, exchange offer, merger or other business combination, sale
of assets or contested election, or combination of the foregoing,
the persons who were directors of the Company shall cease to
constitute a majority of the Board of Directors of the Company or
(iii) the stockholders of the Company shall approve an
agreement providing either for a transaction in which the Company
will cease to be an independent publicly owned entity or for a sale
or other disposition of all or substantially all the assets of the
Company; provided, however, that the occurrence of any of such
events shall not be deemed a Change in Control if, prior to such
occurrence, a resolution specifically providing that such
occurrence shall not constitute a Change in Control under the Plan
shall have been adopted by at least a majority of the Board of
Directors of the Company.
"Code" --
means the Internal Revenue Code of 1986, as amended.
"Committee"
-- means the Committee referred to in Section 3 hereof.
"Company" --
means Shoe Carnival, Inc., an Indiana corporation.
"Continuous
Service" -- means the absence of any interruption or
termination of service as a Director or an employee of the Company
or an Affiliate. Service shall not be considered interrupted in the
case of sick leave, military leave or any other leave of absence
approved by the Company or in the case of any transfer between the
Company and an Affiliate or any successor to the Company.
"Director" --
means any person who serves as a member of the Board.
"EBITDA" for
any Year means -- the consolidated earnings before interest, taxes,
depreciation and amortization of the Company as reflected in the
Company's audited consolidated financial statements for the
Year.
"EBITDA
before Nonrecurring Items" means -- for any Year EBITDA of the
Company before any extraordinary or unusual one-time nonrecurring
expenses or other charges as reflected in the Company's audited
consolidated financial statements for the Year.
"Employee" --
means any person, including an officer or Director, who is employed
by the Company or any Affiliate.
"EPS" for
any Year means -- diluted earnings per share of the Company, as
reported in the Company's audited consolidated financial statements
for the Year.
"Exchange
Act" -- means the Securities Exchange Act of 1934, as
amended.
"Exercise
Price" -- means the price per Share at which the Shares
subject to an Option may be purchased upon exercise of such
Option.
"Incentive
Stock Option" -- means an option to purchase Shares granted by the
Committee pursuant to the terms of the Plan which is intended to
qualify under Section 422 of the Code.
"Market
Value" -- means the last reported sale price on the date in
question (or, if there is no reported sale on such date, on the
last preceding date on which any reported sale occurred) of one
Share on the principal exchange on which the Shares are listed for
trading, or if the Shares are not listed for trading on any
exchange, on the NASDAQ National Market System or any similar
system then in use, or, if the Shares are not listed on the NASDAQ
National Market System, the mean between the closing high bid and
low asked quotations of one Share on the date in question as
reported by NASDAQ or any similar system then in use, or, if no
such quotations are available, the fair market value on such date
of one Share as the Committee shall determine.
"Net
Earnings" for any Year means -- the consolidated net earnings of
the Company, as reported in the Company's audited consolidated
financial statements for the Year.
"Net
Earnings before Nonrecurring Items" means -- for any Year the Net
Earnings of the Company before any extraordinary or unusual
one-time nonrecurring expenses or other charges as reflected in the
Company's audited consolidated financial statements for the
Year.
"Non-Qualified
Stock Option" -- means an option to purchase Shares granted by the
Committee pursuant to the terms of the Plan, which option is not
intended to qualify under Section 422 of the Code.
"Option" --
means an Incentive Stock Option or a Non-Qualified Stock
Option.
"Participant"
-- means any Director or any officer or key employee of the Company
or any Affiliate who is selected by the Committee to receive an
Award.
"Performance
Target(s)" -- means the specific objective goal or goals (which may
be cumulative and/or alternative) that are timely set forth in
writing by the Committee for each Employee for the Restricted
Period in respect of any one or more of the Business Criteria.
"Plan" --
means this 2000 Stock Option and Incentive Plan of the Company.
"Reorganization" --
means the liquidation or dissolution of the Company or any merger,
consolidation or combination of the Company (other than a merger,
consolidation or combination in which the Company is the continuing
entity and which does not result in the outstanding Shares being
converted into or exchanged for different securities, cash or other
property or any combination thereof).
"Restricted
Period" -- means the period of time selected by the Committee for
the purpose of determining when restrictions are in effect under
Section 9 hereof with respect to Restricted Stock awarded under the
Plan.
"Restricted
Stock" -- means Shares which have been contingently awarded to a
Participant by the Committee subject to the restrictions referred
to in Section 9 hereof, so long as such restrictions are in
effect.
"Return on
Assets" for any Year means -- Net Earnings (as reported in the
Company's audited consolidated financial statements for the Year)
divided by the average of the total assets of the Company at the
end of the fiscal quarters of the Year.
"Return on
Equity" for any Year means -- the Net Earnings (as reported in the
Company's audited consolidated financial statements for the Year)
divided by the shareholders equity of the Company at the beginning
of each Year.
"Securities
Act" -- means the Securities Act of 1933, as amended.
"Shares" --
means the Common Stock, $.01 par value, of the Company.
"Total Net
Sales" for any Year -- means the Company's total net sales as
reported in the Company's consolidated audited financial statements
for the Year.
"Year" --
means any one or more fiscal years of the Company commencing on or
after January 30, 2000 that represent(s) the applicable
Restricted Period.
3.
Administration . The Plan shall be administered by
the Committee, which shall consist of two or more members of the
Board, each of whom shall be a "non-employee director" as provided
under Rule 16b-3 of the Exchange Act, and an "outside director" as
provided under Code Section 162(m). The members of the Committee
shall be appointed by the Board. Except as limited by the express
provisions of the Plan, the Committee shall have sole and complete
authority and discretion to (a) select Participants and grant
Awards; (b) determine the number of Shares to be subject to types
of Awards generally, as well as to individual Awards granted under
the Plan; (c) determine the terms and conditions upon which
Awards shall be granted under the Plan; (d) prescribe the form
and terms of instruments evidencing such grants; (e) establish
procedures and regulations for the administration of the Plan; (f)
interpret the Plan; and (g) make all determinations deemed
necessary or advisable for the administration of the Plan.
A majority
of the Committee shall constitute a quorum, and the acts of a
majority of the members present at any meeting at which a quorum is
present, or acts approved in writing by all members of the
Committee without a meeting, shall be acts of the Committee. All
determinations and decisions made by the Committee pursuant to the
provisions of the Plan shall be final, conclusive and binding on
all persons, and shall be given the maximum deference permitted by
law.
4.
Participants . The Committee may select from time to
time Participants in the Plan from those Directors and officers and
key employees of the Company or its Affiliates who, in the opinion
of the Committee, have the capacity for contributing in a
substantial measure to the successful performance of the Company or
its Affiliates.
5.
Shares Subject to Plan . Subject to adjustment by the
operation of Section 10 hereof, the maximum number of Shares
with respect to which Awards may be made under the Plan is
2,000,000 Shares. The number of Shares which may be granted under
the Plan to any Participant during any calendar year of the Plan
under all forms of Awards shall not exceed 300,000 Shares. The
Shares with respect to which Awards may be made under the Plan may
either be authorized and unissued shares or issued shares
heretofore or hereafter reacquired and held as treasury shares.
With respect to any Option which terminates or is surrendered for
cancellation or with respect to Restricted Stock which is
forfeited, new Awards may be granted under the Plan with respect to
the number of Shares as to which such termination or forfeiture has
occurred.
6.
General Terms and Conditions of Options . The
Committee shall have full and complete authority and discretion,
except as expressly limited by the Plan, to grant Options and to
provide the terms and conditions (which need not be identical among
Participants) thereof. In particular, the Committee shall prescribe
the following terms and conditions: (i) the Exercise Price (which
shall not be less than the Market Value per Share on the date the
Option is granted), (ii) the number of Shares subject to, and
the expiration date of, any Option, (iii) the manner, time and
rate (cumulative or otherwise) of exercise of such Option, and
(iv) the restrictions, if any, to be placed upon such Option
or upon Shares which may be issued upon exercise of such
Option.
7.
Exercise of Options .
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(a) Except as provided in
Section 13, an Option granted under the Plan shall be
exercisable during the lifetime of the Participant to whom such
Option was granted only by such Participant, and except as provided
in paragraphs (c), (d) and (e) of this Section 7, no such
Option may be exercised unless at the time such Participant
exercises such Option, such Participant has maintained Continuous
Service since the date of the grant of such Option.
(b) To exercise an Option
under the Plan, the Participant must give written notice to the
Company specifying the number of Shares with respect to which such
Participant elects to exercise such Option together with full
payment of the Exercise Price. The date of exercise shall be the
date on which such notice is received by the Company. Payment may
be made either (i) in cash (including check, bank draft or
money order), (ii) by tendering Shares already owned by the
Participant and having a Market Value on the date of exercise equal
to the Exercise Price, or (iii) by any other means determined
by the Committee in its sole discretion, including permitting a
Participant to elect to pay the Exercise Price upon the exercise of
an Option by authorizing a third party to sell the Shares (or a
sufficient portion of the Shares) acquired upon exercise of the
Option and remit to the Company a sufficient portion of the sale
proceeds to pay the Exercise Price and any tax withholding
resulting from such exercise.
(c) If the Continuous
Service of a Participant is terminated for cause, or voluntarily by
the Participant for any reason other than death, disability or
retirement, all rights under any Options granted to such
Participant shall terminate immediately upon such Participant's
cessation of Continuous Service, and the Participant shall (unless
the Committee in its sole discretion waives this requirement) repay
to the Company within 10 days the amount of any gain realized by
the Participant upon any exercise within the 90-day period prior to
the cessation of Continuous Service of any Options granted to such
Participant under the Plan. If the Continuous Service of a
Participant is terminated by reason of death, disability or
retirement, such Participant may exercise such Option, but only to
the extent such Participant was entitled to exercise such Option at
the date of such cessation, at any time during the remaining term
of such Option, or, in the case of Incentive Stock Options, during
such shorter period as the Committee may determine and so provide
in the applicable instrument or instruments evidencing the grant of
such Option. If a Participant shall cease to maintain Continuous
Service for any reason other than those set forth above in this
paragraph (c) of this Section 7, such Participant may
exercise such Option to the extent that such Participant was
entitled to exercise such Opt
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