AGREEMENT REGARDING PLAN OF RECAPITALIZATION
This Agreement Regarding Plan of Recapitalization (this "Agreement") is
made this ____ day of __________, 1998, by and among Columbia Sportswear
Company, an Oregon corporation (the "Company"), and the shareholders of the
Company (collectively the "Shareholders" and each individually a "Shareholder")
listed on Schedule A attached hereto.
RECITALS
A. The Shareholders constitute the holders of all of the issued and
outstanding capital stock of the Company. The Shareholders own the shares of
Company voting common stock ("Voting Stock") and Company nonvoting common stock
("Nonvoting Stock") listed on Schedule A.
B. The Company has filed a registration statement on Form S-1 with the
Securities and Exchange Commission (the "SEC") and contemplates completion of
its initial public offering (the "IPO"). The managing underwriter of the IPO has
recommended, for marketing and pricing reasons, that the Company enter the
public market with a single class voting structure.
C. The Company has received an opinion from Corporate Valuations, Inc.
concluding that an equal dollar value of stock holdings of each Shareholder will
be maintained, both before and after an exchange of existing Nonvoting Stock for
newly issued Voting Stock, if (1) Xxxxxxxx Xxxxx receives in the exchange 1.0
share of Voting Stock for each 0.58643200 shares of Voting Stock held by her
immediately before the exchange, (2) each other holder of Voting Stock receives
in the exchange 1.0 share of Voting Stock for each 0.93500000 shares of Voting
Stock held by the shareholder immediately before the exchange, and (3) each
holder of the Company's Nonvoting Stock receives in the exchange 1.0 share of
Voting Stock for each 1.0 share of Nonvoting Stock held by the shareholder
immediately before the exchange.
D. Xxxxxxxx Xxxxx, who currently owns 1,528,000 shares of Voting Stock,
would receive 2,605,588 shares of Voting Stock upon an exchange in which she
receives 1.0 share of Voting Stock for each 0.58643200 shares of Voting Stock
held by her immediately before the exchange, which represents 1,077,588 shares
of Voting Stock more than she currently owns.
E. Xxxxxxx X. Xxxxx, who currently owns 830,800 shares of Voting Stock,
would receive 888,556 shares of Voting Stock upon an exchange in which he
receives 1.0 share of Voting Stock for each 0.93500000 shares of Voting Stock
held by him immediately before the exchange, which represents 57,756 shares of
Voting Stock more than he currently owns.
F. Xxxxx Xxxx, who currently owns 130,000 shares of Voting Stock, would
receive 139,037 shares of Voting Stock upon an exchange in which she receives
1.0 share of Voting Stock for each 0.93500000 shares of Voting Stock held by her
immediately before the exchange, which represents 9,037 shares of Voting Stock
more than she currently owns.
G. Don Xxxxxxx Xxxxxxxxx, who currently owns 275,948 shares of Voting
Stock, would receive 295,132 shares of Voting Stock upon an exchange in which he
receives 1.0 share of Voting Stock for each 0.93500000 shares of Voting Stock
held by him immediately before the exchange, which represents 19,184 shares of
Voting Stock more than he currently owns.
H. The board of directors of the Company (the "Board") has determined that
the plan of recapitalization provided for herein (the "Plan") is fair to, and in
the best interests of, the holders of the Company's capital stock. Resolutions
of the Board are attached hereto as Exhibit A.
I. The Board and the Shareholders intend that the holdings of each
Shareholder will revert to their respective holdings of Voting Stock and
Nonvoting Stock that existed prior to the Effective Time (as defined below) if
the registration statement for the IPO is not declared effective by the SEC on
or before April 30, 1998, or if the IPO does not close within 15 days of the
date the registration statement for the IPO is declared effective by the SEC.
NOW, THEREFORE, in consideration of the mutual promises contained herein,
the parties agree as follows:
1. Recapitalization. Subject to the terms and conditions of this Agreement,
and in accordance with the provisions of the Oregon Business Corporation Act
(the "OBCA"), at the Effective Time (as defined below) the capital stock of the
Company shall be recapitalized (the "Recapitalization") as follows:
(a) The Company shall issue to Xxxxxxxx Xxxxx, without any action on
her part, 1,077,588 shares of fully paid and nonassessable Voting Stock.
(b) The Company shall issue to Xxxxxxx X. Xxxxx, without any action on
his part, 57,756 shares of fully paid and nonassessable Voting Stock.
(c) The Company shall issue to Xxxxx Xxxx, without any action on her
part, 9,037 shares of fully paid and nonassessable Voting Stock.
(d) The Company shall issue to Don Xxxxxxx Xxxxxxxxx, without any
action on his part, 19,184 shares of fully paid and nonassessable Voting Stock.
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(e) Pursuant to an amendment to the Company's Restated Articles of
Incorporation, each 1.0 share then outstanding of Nonvoting Stock shall, without
any action on the part of the holder thereof, be recapitalized as, and converted
into, 1.0 fully paid and nonassessable share of Voting Stock of the Company.
(f) All shares of Voting Stock issued and outstanding immediately
before the Effective Time shall be unaffected and shall remain issued and
outstanding at and after the Effective Time.
2. Effective Time. The Recapitalization shall become effective in
accordance with the Company's Second Amended and Restated Articles of
Incorporation substantially in the form of Exhibit B attached hereto with the
Secretary of State of the State of Oregon (the "Restated Articles"). The
Restated Articles shall be filed prior to the time the registration statement
registering the IPO (File No. 333-43199) (the "Registration Statement") is
declared effective by the SEC. The date and time when the Recapitalization shall
become effective is referred to herein as the Effective Time.
3. Exchange. Upon surrender of a certificate or certificates formerly
representing shares of Nonvoting Stock, the holder thereof shall be entitled to
receive in exchange a new certificate evidencing the shares of Voting Stock into
which such shares were recapitalized and converted.
4. Restricted Stock and Options.
(a) The Company shall take such actions as are necessary with respect
to any restricted stock agreement between the Company and any employee of the
Company to provide that the shares issued to any holder of restricted stock in
the Recapitalization shall be issued with regard to, and shall remain subject
to, the restrictions set forth in such restricted stock agreement.
(b) The Company shall take such actions as are necessary to cause each
option to purchase Nonvoting Stock to be adjusted so that, subject to the terms
and conditions of the Company's Stock Incentive Plan and the terms and
conditions of such options, upon exercise the holder will be entitled to acquire
1.0 share of Voting Stock for each former right to purchase 1.0 share of
Nonvoting Stock; provided, however, that options to acquire Nonvoting Stock
shall not be adjusted to entitle holders to acquire Voting Stock if the
Registration Statement is not declared effective by the SEC on or before April
30, 1998 or if the IPO does not close within 15 days of the date the
Registration Statement is declared effective by the SEC.
5. Conditions Precedent to Consummation of the Recapitalization. The
consummation of the Recapitalization is subject to the satisfaction or waiver at
or prior to the Effective Time of each of the following conditions:
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(a) Litigation. No action, proceeding, or investigation shall have
been instituted or threatened prior to the Effective Time before any court or
administrative body to restrain, enjoin, or otherwise prevent the consummation
of the Plan or this Agreement or the transactions contemplated hereby or to
recover any damages or obtain other relief as a result of the Plan or this
Agreement or the transactions contemplated hereby, and no restraining order or
injunction issued by any court of competent jurisdiction shall be in effect
prohibiting the consummation of the Plan or this Agreement or any of the
transactions contemplated hereby.
(b) Actions and Proceedings. All actions, proceedings, instruments,
and documents required to carry out the transactions contemplated by, or
incidental to, the Plan or this Agreement and all other related legal matters,
including the Consent of Shareholders attached hereto as Exhibit C, shall have
been completed to the reasonable satisfaction of the Company, and such counsel
shall have been furnished with certified copies of such corporate actions and
proceedings and such other instruments and documents as such counsel shall have
reasonably requested.
6. Condition Subsequent to Consummation of the Recapitalization. If the
Registration Statement is not declared effective by the SEC on or before April
30, 1998, or if the closing of the IPO does not occur within 15 days of the
Registration Statement being declared effective by the SEC, then (1) Xxxxxxxx
Xxxxx will surrender for cancellation 1,077,588 shares of Voting Stock issued to
her pursuant to this Agreement and will exchange shares of Voting Stock received
by her pursuant to the Conversion set forth in the Restated Articles for an
equal number of shares of Nonvoting Stock, (2) Xxxxxxx Xxxxx will surrender for
cancellation 57,756 shares of Voting Stock issued to him pursuant to this
Agreement and will exchange shares of Voting Stock received by him pursuant to
the Conversion set forth in the Restated Articles for an equal number of shares
of Nonvoting Stock, (3) Xxxxx Xxxx will surrender for cancellation 9,037 shares
of Voting Stock issued to her pursuant to this Agreement and will exchange
shares of Voting Stock received by her pursuant to the Conversion set forth in
the Restated Articles for an equal number of shares of Nonvoting Stock, (4) Don
Xxxxxxx Xxxxxxxxx will surrender for cancellation 19,184 shares of Voting Stock
issued to him pursuant to this Agreement and will exchange shares of Voting
Stock received by him pursuant to the Conversion set forth in the Restated
Articles for an equal number of shares of Nonvoting Stock and (5) all other
parties to this Agreement will exchange shares of Voting Stock received by them
pursuant to the Conversion set forth in the Restated Articles for an equal
number of shares of Nonvoting Stock (the "Reversion"). All share numbers set
forth in the foregoing sentence shall be appropriately adjusted to reflect the
reverse stock split set forth in the Restated Articles. The parties to this
Agreement agree to take any and all actions necessary or appropriate to cause
the Reversion if the IPO does not close or become effective by the time
specified above.
7. Termination and Abandonment. This Plan and Agreement may be terminated
and the transactions contemplated hereby may be abandoned by the Board at
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any time prior to the effectiveness of the Restated Articles in accordance with
Section 2 hereof.
8. Successors and Assigns. The terms and conditions of this Agreement shall
inure to the benefit of and be binding upon the respective successors and
assigns of the parties.
9. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
Company: COLUMBIA SPORTSWEAR COMPANY
By:
-------------------------------------
Xxxxxxx X. Xxxxx, President
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SHAREHOLDERS:
-----------------------------------------
Xxxxxxxx Xxxxx
-----------------------------------------
Xxxxxxxx Xxxxx, Trustee, Xxxxxxxx Xxxxx
Trust #1 u/a dtd 12/15/97
-----------------------------------------
Xxxxxxxx Xxxxx, Trustee, Xxxxxxxx Xxxxx
Trust #2 u/a dtd 12/15/97
-----------------------------------------
Xxxxxxx X. Xxxxx
-----------------------------------------
Xxxx X. Xxxxx, Trustee u/a/d September
18, 1997 f/b/o Xxxxx X. Xxxxx
-----------------------------------------
Xxxx X. Xxxxx, Trustee u/a/d September
18, 1997 f/b/o Xxxxxx X. Xxxxx
-----------------------------------------
Xxxxx X. Xxxx
-----------------------------------------
Xxxxx X. Xxxx, Trustee of the Bany Family
Trust u/a/d July 31, 1997
-----------------------------------------
Xxxxx X. Xxxx, Trustee, Xxxxx X. Xxxx
Trust #1 u/a dtd 12/15/97
6
-----------------------------------------
Xxxxx X. Xxxx, Trustee, Xxxxx X. Xxxx
Trust #2 u/a dtd 12/15/97
-----------------------------------------
Don Xxxxxxx Xxxxxxxxx
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Schedule A
----------
Company Shareholders
Voting Non-Voting Total
--------- ---------- ----------
Xxxxxxxx Xxxxx 1,528,000 2,749,104 4,277,104
Xxx Xxxxx 830,800 5,487,050 16,317,850
Xxxxx Xxxx 130,000 3,923,911 4,053,911
Xxx Xxxxxxxxx 275,948 2,756,452 3,032,400
Xxxxx X. Xxxx, -- 200,000 200,000
Trustee Bany
Family Trust
Xxxx X. Xxxxx, -- 105,000 105,000
Trustee fbo
Xxxxxx Xxxxx
Xxxx X. Xxxxx, -- 105,000 105,000
Trustee fbo
Xxxxx Xxxxx
Xxxxx X. Xxxx, -- 557,414 557,414
Trustee Xxxxx X.
Xxxx Trust #1 u/a
dtd 12/15/97
Xxxxx X. Xxxx, -- 557,414 557,414
Trustee Xxxxx X.
Xxxx Trust #2 u/a
dtd 12/15/97
Xxxxxxxx Xxxxx, -- 740,740 740,740
Trustee Xxxxxxxx Xxxxx
Trust #1 u/a dtd
12/15/97
Xxxxxxxx Xxxxx, -- 740,740 740,740
Trustee Xxxxxxxx Xxxxx
Trust #2 u/a dtd
12/15/97
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