Exhibit 10.3
K-SWISS
INC.
NON-EMPLOYEE DIRECTOR STOCK
OPTION AGREEMENT
Pursuant to
the
2009 STOCK INCENTIVE
PLAN
This Non-Employee Director Stock
Option Agreement (this “Agreement”) is made and entered
into as of the Date of Grant indicated below by and between K-Swiss
Inc., a Delaware corporation (the “Company”), and the
person named below as Grantee.
WHEREAS, Grantee is a non-employee
director of the Company (a “Non-Employee Director”);
and
WHEREAS, pursuant to the
Company’s 2009 Stock Incentive Plan (the “Plan”),
an option to purchase shares of the Company’s Class A
Common Stock, par value $.01 per share (the “Common
Stock”) has been granted to Grantee, on the terms and
conditions set forth herein;
NOW, THEREFORE, in consideration of
the foregoing recitals and the covenants set forth herein, the
parties hereto hereby agree as follows:
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1.
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Grant of
Option; Certain Terms and Conditions .
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(a) The
Company hereby grants to Grantee, and Grantee hereby accepts, as of
the Date of Grant, an option to purchase the number of shares of
Common Stock indicated below (the “Option Shares”) at
the Exercise Price per share indicated below, which option shall
expire at midnight (prevailing local time at the Company’s
principal offices), on the Expiration Date indicated below and
shall be subject to all of the terms and conditions set forth in
this Agreement (the “Option”).
Grantee:
Date of Grant:
Number of Shares
Purchasable:
Exercise Price per share:
Expiration Date:
The Option is not intended to
qualify as an incentive stock option under Section 422 of the
Internal Revenue Code.
(b) Subject
to the provisions for termination and acceleration set forth
herein, the Option shall vest in three equal installments as
follows: one-third of the Option shall vest three years, four years
and five years, respectively, from the Date of Grant (e.g.
one-third of the Option granted hereunder shall vest on each of
,
,
,
and
,
).
(a)
Termination of Non-Employee Director Status
. If Grantee ceases to be a Non-Employee
Director for any reason, then, except as set forth in
Section 2(b) below, the Option shall terminate on the earlier
of the Expiration Date or the second anniversary of the date upon
which Grantee ceases to be a Non-Employee Director.
(b) Death
of Grantee . If Grantee dies while any
portion of this Option is exercisable by Grantee, Grantee’s
legal representative, or the person entitled to do so under
Grantee’s last will and testament or under applicable
intestate law, shall have the right to exercise the Option, but
only for the number of shares as to which Grantee was entitled to
exercise the Option as of the date of Grantee’s death, and
such right shall expire and the Option shall terminate on the
earlier to occur of (i) the expiration of 18 months from the
date of Grantee’s death and (ii) the Expiration
Date.
(c)
Acceleration of Option
. Notwithstanding anything to the contrary
in this Agreement, the Option shall become fully exercisable
immediately before the first to occur of the following:
(i) the
consummation of a reorganization, merger or consolidation of the
Company as a result of which the outstanding securities of any
class then subject to the Option are exchanged for or converted
into cash, property and/or securities not issued by the Company or
a company whose common equity holders immediately after such
transaction consist only of persons who are holders of the common
equity of the Company immediately before such
transaction;
(ii) the
first date upon which the directors of the Company who were
nominated by the Board of Directors for election as directors shall
cease to constitute a majority of the authorized number of
directors of the Company;
(iii) the
dissolution or liquidation of the Company; or
(iv) a sale
of all or substantially all of the property and assets of the
Company.
3.
Adjustments . In the event that the
outstanding securities of the class then subject to the Option are
increased, decreased or exchanged for or converted into cash,
property and/or a different number or kind of shares or securities,
or if cash, property or shares or securities are distributed in
respect of such outstanding securities, in either case as a result
of a reorganization, merger, consolidation, recapitalization,
restructuring, reclassification, dividend (other than a regular,
quarterly cash dividend) or other distribution, stock split,
reverse stock split, spin-off or the like, or if substantially all
of the property and assets of the Company are sold, then, unless
the terms of such transaction shall provide otherwise, the Board of
Directors or the Compensation and Stock Option Committee of the
Board of Directors administering the Plan (the
“Committee”) may make appropriate and proportionate
adjustments in the number and type of shares or other securities or
cash or other property that may be acquired upon the exercise of
the Option and the exercise price of such Option.
(a) Subject
to Section 8, the Option shall be exercisable during
Grantee’s lifetime only by Grantee. Subject to the provisions
of Section 4(b) below, the Option may only be exercised by the
delivery to the Company of a written notice of such exercise (the
“Exercise Notice”), which notice shall specify the
number of Option Shares to be purchased (the “Purchased
Shares”) and the aggregate Exercise Price for such shares;
provided , however , that payment of such aggregate
Exercise Price may be made, in whole or in part, by one or more of
the following means:
(i) in full
in cash or by check to the order of the Company, at or before the
time the Company delivers the Option Shares;
(ii) the
recipient of the Option irrevocably authorizing a broker approved
in writing by the Company to sell Option Shares to be acquired
through exercise of the Option and remitting to the Company a
sufficient portion of the sale proceeds to pay the entire exercise
price and any federal and state withholding resulting from such
exercise (a “Cashless Exercise”); provided ,
however , that, notwithstanding anything in this Agreement
to the contrary, (A) the Company shall only deliver such
Option Shares at or after the time the Company receives
