2001 Stock Option Plan of Candie's, Inc.

Summary

Candie's, Inc. established this 2001 Stock Option Plan to attract and retain key personnel by granting nonqualified stock options to employees, consultants, and others who contribute to the company's success. The plan allows for up to 2,000,000 shares of common stock to be issued under options, with terms and conditions—including exercise price, vesting, and duration—set by the Board of Directors or a designated committee. The plan is effective from December 12, 2001, and expires on December 11, 2011, unless terminated earlier.

EX-10.29 7 cand_ex10-29to10k.txt 2001 STOCK OPTION PLAN 2001 STOCK OPTION PLAN OF CANDIE'S, INC. 1. Purpose Candie's, Inc. (the "Company") desires to attract and retain the best available talent and encourage the highest level of performance in order to continue to serve the best interests of the Company, and its stockholder(s). By affording key personnel the opportunity to acquire proprietary interests in the Company and by providing them incentives to put forth maximum efforts for the success of the business, the 2001 Stock Option Plan of Candie's, Inc. (the "2001 Plan") is expected to contribute to the attainment of those objectives. The word "Subsidiary" or "Subsidiaries" as used herein, shall mean any corporation, fifty percent or more of the voting stock of which is owned by the Company. 2. Scope and Duration Options under the 2001 Plan may only be granted in the form of nonqualified stock options. No incentive stock options as provided in Section 422 of the Internal Revenue Code of 1986, as amended (the "Code") may be granted under the 2001 Plan. The maximum aggregate number of shares as to which options may be granted from time to time under the 2001 Plan is 2,000,000 shares of the common stock of the Company ("Common Stock"), which shares may be, in whole or in part, authorized but unissued shares or shares reacquired by the Company. If an option shall expire, terminate or be surrendered for cancellation for any reason without having been exercised in full, the shares represented by the option or portion thereof not so exercised shall (unless the 2001 Plan shall have been terminated) become available for subsequent option grants under the 2001 Plan. As provided in Paragraph 12 hereof, the 2001 Plan shall become effective on December 12, 2001, and unless terminated sooner pursuant to Paragraph 13 hereof, the 2001 Plan shall terminate on December 11, 2011, and no option shall be granted hereunder after that date. 3. Administration The 2001 Plan shall be administered by the Board of Directors of the Company, or, at their discretion, by a committee which is appointed by the Board of Directors to perform such function (the "Committee"). The Committee shall consist solely of at least two members of the Board of Directors, each of whom shall serve at the pleasure of the Board of Directors and shall be a "Non-Employee Director" as defined in Rule l6b-3 pursuant to the Securities Exchange Act of 1934 (the "Exchange Act") or any successor rule. Vacancies occurring in the membership of the Committee shall be filled by appointment by the Board of Directors. The Board of Directors or the Committee, as the case may be, shall have plenary authority in its sole discretion, subject to and not inconsistent with the express provisions of the 2001 Plan, to grant options, to determine the purchase price of the Common Stock covered by each option, the term of each option, the persons to whom, and the time or times at which, options shall be granted and the number of shares to be covered by each option; to interpret the 2001 Plan; to prescribe, amend and rescind rules and regulations relating to the 2001 Plan; to determine the terms and provisions of the option agreements (which need not be identical) entered into in connection with options under the 2001 Plan; and to make all other determinations deemed necessary or advisable for the administration of the 2001 Plan. The Board of Directors or the Committee, as the case may be, may delegate to one or more of its members or to one or more agents such administrative duties as it may deem advisable, and the Board of Directors or the Committee, as the case may be, or any person to whom it has delegated duties as aforesaid may employ or engage one or more persons to render advice with respect to any responsibility the Board of Directors or the Committee, as the case may be, or such person may have under the 2001 Plan. 4. Eligibility; Factors to be Considered in Granting Options Except as provided below, an option may be granted under the 2001 Plan to any person, including, but not limited to, employees, independent agents, consultants and attorneys, who the Board of Directors or the Committee, as the case may be, believes has contributed, or will contribute, to the success of the Company. 5. Option Price The purchase price of the Common Stock covered by each option shall be determined by the Board of Directors or the Committee, as the case may be, and shall not be less than 100% of the Fair Market Value (as defined in Paragraph 14 hereof) of a share of the Common Stock on the date on which the option is granted. Such price shall be subject to adjustment as provided in Paragraph 11 hereof. The Board of Directors or the Committee, as the case may be, shall determine the date on which an option is granted; in the absence of such a determination, the date on which the Board of Directors or the Committee, as the case may be, adopts a resolution granting an option shall be considered the date on which such option is granted. 6. Term of Options The term of each option shall be not more than 10 years from the date of grant, as the Board of Directors or the Committee, as the case may be, shall determine, subject to earlier termination as provided in Paragraphs 9 and 10 hereof. 7. Exercise of Options (a) Subject to the provisions of the 2001 Plan and unless otherwise provided in the option agreement, options granted under the 2001 Plan shall become exercisable as determined by the Board of Directors or Committee. In its sole discretion, the Board of Directors or the Committee, as the case may be, may, in any case or cases, prescribe that options granted under the 2001 Plan become exercisable in installments or provide that an option may be exercisable in full immediately upon the date of its grant. The Board of Directors or the Committee, as the case may be, may, in its sole discretion, also provide that an option granted pursuant to the 2001 Plan shall immediately become exercisable in full upon the happening of any of the following events: (i) a "change in control" of the Company as hereafter defined; (ii) with respect to an employee, on his 65th birthday; or (iii) with respect to an employee, on the employee's involuntary termination from employment, except as provided in Paragraph 9 hereof. In the event of a question or controversy as to whether or not any of the events hereinabove described has taken place, a determination by the Board of Directors or the Committee, as the case may be, that such event has or has not occurred shall be conclusive and binding upon the Company and participants in the 2001 Plan. (b) For purposes of the 2001 Plan, a "change in control of the Company" shall be deemed to occur, unless previously consented to in writing by the optionee or any person entitled to act under Paragraph 10 hereof, upon (i) the actual acquisition or the execution of an agreement to acquire 15% or more of the voting securities of the Company by any person or entity not affiliated with the optionee, or any person entitled to act under Paragraph 10 hereof (other than pursuant to a bona fide underwriting agreement relating to a public distribution of securities of the Company), (ii) the commencement of a tender or exchange offer for more than 15% of the voting securities of the Company by any person or entity not affiliated with the optionee, or any persons entitled to act under Paragraph 10 hereof, (iii) the commencement of a proxy contest against the management for the election of a majority of the Board of Directors of the Company if the group conducting the proxy contest owns, has or gains the power to vote at least 15% of the voting securities of the Company, (iv) a vote by the Board of Directors to merge, consolidate, sell all or substantially all of the assets of the Company to any person or entity not affiliated with the optionee, or any persons entitled to act under Paragraph 10 hereof, or (v) the election of directors constituting a majority of the Board of Directors who have not been nominated or approved by the Company; provided, however, for purposes of the 2001 Plan, it shall not be deemed a change in control of the Company if such person or entity acquires 15% or more of the voting securities of the Company (A) as a result of a combination of the Company or a subsidiary of Company with another entity owned or controlled by such persons or entity (whether effected by a merger, sale of assets or exchange of stock or otherwise) (the "Combination") and (B) after completion of the Combination and for a continuous period of not less than twelve (12) months thereafter (I) executive officers of the Company (as designated in the Company's most recent Annual Report on Form 10-K or its most recent Proxy Statement filed with the Securities and Exchange Commission with respect to its Annual Meeting of Stockholders) immediately prior to the Combination constitute not less than 50% of the executive officers of the Company after the Combination or (II) the members of the Board of Directors of Company immediately prior to the Combination constitute not less than 50% of the membership of the Board of Directors of the Company after the Combination. For purposes of calculating the executive officers of the Company after the Combination, those executive officers who are terminated by the Company for cause or who terminate their employment without good reason, as determined by the Board of Directors or Committee shall be excluded from the calculation entirely. (c) Any option at any time granted under the 2001 Plan may contain a provision to the effect that the optionee (or any persons entitled to act under Paragraph 10 hereof) may, at any time at which Fair Market Value of a share of Common Stock is in excess of the exercise price and prior to exercising the option, in whole or in part, request that the Company purchase all or any portion of the option as shall then be exercisable at a price equal to the difference between (i) an amount equal to the option price multiplied by the number of shares subject to that portion of the option in respect of which such request shall be made and (ii) an amount equal to such number of shares multiplied by the Fair Market Value of the Common Stock on the date of purchase. The Company shall have no obligation to make any purchase pursuant to such request, but if it elects to do so, such portion of the option as to which the request is made shall be surrendered to the Company. The purchase price for the portion of the option to be so surrendered shall be paid by the Company, less any applicable withholding tax obligations imposed upon the Company by reason of the purchase, at the election of the Board of Directors or the Committee, as the case may be, either in cash or in shares of Common Stock (valued as of the date and in the manner provided in clause (ii) above), or in any combination of cash and Common Stock, which may consist, in whole or in part, of shares of authorized but unissued Common Stock or shares of Common Stock held in the Company's treasury. No fractional share of Common Stock shall be issued or transferred and any fractional share shall be disregarded. Shares covered by that portion of any option purchased by the Company pursuant hereto and surrendered to the Company shall not be available for the granting of further options under the 2001 Plan. All determinations to be made by the Company hereunder shall be made by the Board of Directors or the Committee, as the case may be. (d) An option may be exercised, at any time or from time to time, as to any or all full shares as to which the option has become exercisable until the expiration of the period set forth in Paragraph 6 hereof, by the delivery to the Company, at its principal place of business, of (i) written notice of exercise in the form specified by the Board of Directors or the Committee, as the case may be, specifying the number of shares of Common Stock with respect to which the option is being exercised and signed by the person exercising the option as provided herein, (ii) payment of the purchase price; and (iii) payment in cash of all withholding tax obligations imposed on the Company by reason of the exercise of the option. Upon acceptance of such notice, receipt of payment in full, and receipt of payment of all withholding tax obligations, the Company shall cause to be issued a certificate representing the shares of Common Stock purchased. In the event the person exercising the option delivers the items specified in (i) and (ii) of this Subsection (d), but not the item specified in (iii) hereof, if applicable, the option shall still be considered exercised upon acceptance by the Company for the full number of shares of Common Stock specified in the notice of exercise but the actual number of shares issued shall be reduced by the smallest number of whole shares of Common Stock which, when multiplied by the Fair Market Value of the Common Stock as of the date the option is exercised, is sufficient to satisfy the required amount of withholding tax. (e) Any option granted under the 2001 Plan may also contain a provision to the effect that the payment of the exercise price may be made by delivery to the Company by the optionee of an executed exercise form together with irrevocable instructions to a broker-dealer to sell or margin a sufficient portion of the shares sold or margined and deliver the sale or margin loan proceeds directly to the Company to pay for the exercise price. (f) The purchase price of the shares as to which an option is exercised shall be paid in full at the time of exercise. Payment shall be made in cash, which may be paid by check or other instrument acceptable to the Company; in addition, subject to compliance with applicable laws and regulations and such conditions as the Board of Directors or the Committee, as the case may be, may impose, the Board of Directors or the Committee, as the case may be, in its sole discretion, may on a case-by-case basis elect to accept payment in shares of Common Stock of the Company which are already owned by the option holder, valued at the Fair Market Value thereof (as defined in Paragraph 14 hereof) on the date of exercise; provided, however, that no such discretion may be exercised unless the option agreement permits the payment of the purchase price in that manner and no discretion may be exercised if it would result in an adverse effect on the Company's earnings under then applicable accounting rules. (g) Except as provided in Paragraphs 9 and 10 hereof, or except as otherwise provided in writing by the Board or Committee, as the case may be, no option granted to an employee may be exercised at any time by such employee unless such employee is then an employee of the Company or a Subsidiary. 8. Non-Transferability of Options Except as may be otherwise provided in writing by the Board or Committee, as the case may be, or in the option agreements with respect to an option granted under the 2001 Plan, options granted under the 2001 Plan shall not be transferable otherwise than by will or the laws of descent and distribution, and options may be exercised during the lifetime of the optionee only by the optionee. No transfer of an otherwise non-transferable option by the optionee by will or by the laws of descent and distribution shall be effective to bind the Company unless the Company shall have been furnished with written notice thereof and a copy of the will and such other evidence as the Company may deem necessary to establish the validity of the transfer and the acceptance by the transferor or transferees of the terms and conditions of such option. 9. Termination of Employment In the event that the employment of an employee to whom an option has been granted under the 2001 Plan shall be terminated (except as set forth in Paragraph 10 hereof), such option may be, subject to the provisions of the 2001 Plan, exercised (to the extent that the employee was entitled to do so at the termination of his employment) at any time within three (3) months after such termination, but not later than the date on which the option terminates; provided, however, that any option which is held by an employee whose employment is terminated for cause or due to the resignation of the employee or the retirement of the employee prior to the age of 65 shall, to the extent not theretofore exercised, automatically terminate as of the date of termination of employment. As used herein, "cause" shall mean conduct amounting to fraud, dishonesty, negligence, the employee's failure to perform his or her duties and responsibilities required by the Company or engaging in competition or solicitations in competition with the Company and breaches of any applicable employment agreement between the Company and the optionee. Options granted to employees under the 2001 Plan shall not be affected by any change of duties or position so long as the holder continues to be a regular employee of the Company or any of its current or future Subsidiaries. Any option agreement or any rules and regulations relating to the 2001 Plan may contain such provisions as the Board of Directors or the Committee, as the case may be, shall approve with reference to the determination of the date employment terminates and the effect of leaves of absence. 10. Death or Disability of Employee If an employee to whom an option has been granted under the 2001 Plan shall die while employed by the Company or a Subsidiary or within three (3) months after the termination of such employment (other than termination for cause, resignation, or retirement prior to the age of 65), such option may be exercised, to the extent exercisable by the employee on the date of death, by a legatee or legatees of the employee under the employee's last will, or by the employee's personal representative or distributees, at any time within one year after the date of the employee's death, but not later than the date on which the option terminates. In the event that the employment of an employee to whom an option has been granted under the 2001 Plan shall be terminated as the result of a disability, such option may be exercised, to the extent exercisable by the employee on the date of such termination, at any time within one year after the date of such termination, but not later than the date on which the option terminates. 11. Adjustments Upon Changes in Capitalization, Etc. Notwithstanding any other provision of the 2001 Plan, the Board of Directors or the Committee, as the case may be, may, at any time, make or provide for such adjustments to the 2001 Plan, to the number and class of shares issuable thereunder or to any outstanding options as it shall deem appropriate to prevent dilution or enlargement of rights, including adjustments in the event of changes in the outstanding Common Stock by reason of stock dividends, split-ups, recapitalizations, mergers, consolidations, combinations or exchanges of shares, separations, reorganizations, liquidations and the like. In the event of any offer to holders of Common Stock generally relating to the acquisition of their shares, the Board of Directors or the Committee, as the case may be, may make such adjustment as it deems equitable in respect of outstanding options and rights, including in its sole discretion revision of outstanding options and rights so that they may be exercisable for the consideration payable in the acquisition transaction. Any such determination by the Board of Directors or the Committee, as the case may be, shall be conclusive and binding upon the Company and the participants in the 2001 Plan. Any fractional shares resulting from such adjustments shall be eliminated. 12. Effective Date The 2001 Plan shall become effective on December 12, 2001, the date of adoption by the Board of Directors of the Company. 13. Termination and Amendment The Board of Directors of the Company may suspend, terminate, modify or amend the 2001 Plan. No suspension, termination, modification or amendment of the 2001 Plan may, without the consent of the person to whom an option shall theretofore have been granted, adversely affect the rights of such person under such option. 14. Miscellaneous As said term is used in the 2001 Plan, the "Fair Market Value" of a share of Common Stock on any day means: (a) if the principal market for the Common Stock is a national securities exchange or the National Association of Securities Dealers Automated Quotations System ("NASDAQ), the closing sales price of the Common Stock on such day as reported by such exchange or market system, or on a consolidated tape reflecting transactions on such exchange or market system, or (b) if the principal market for the Common Stock is not a national securities exchange and the Common Stock is not quoted on NASDAQ, the mean between the highest bid and lowest asked prices for the Common Stock on such day as reported by the National Quotation Bureau, Inc.; provided that if clauses (a) and (b) of this paragraph are both inapplicable, or if no trades have been made or no quotes are available for such day, the Fair Market Value of the Common Stock shall be determined by the Board of Directors or the Committee, as the case may be, and shall be conclusive as to the Fair Market Value of the Common Stock. The Board of Directors or the Committee, as the case may be, may require, as a condition to the exercise of any options granted under the 2001 Plan, that to the extent required at the time of exercise, (i) the shares of Common Stock reserved for purposes of the 2001 Plan shall be duly listed, upon official notice of issuance, upon stock exchange(s) on which the Common Stock is listed, (ii) a Registration Statement under the Securities Act of 1933, as amended, with respect to such shares shall be effective, and/or (iii) the person exercising such option deliver to the Company such documents, agreements and investment and other representations as the Board of Directors or the Committee, as the case may be, shall determine to be in the best interests of the Company. During the term of the 2001 Plan, the Board of Directors or the Committee, as the case may be, in its sole discretion, may offer one or more option holders the opportunity to surrender any or all unexpired options for cancellation or replacement. If any options are so surrendered, the Board of Directors or the Committee, as the case may be, may then grant new Non-Qualified or Incentive Options to such holders for the same or different numbers of shares at higher or lower exercise prices than the surrendered options. Such new options may have a different term and shall be subject to the provisions of the 2001 Plan the same as any other option. Anything herein to the contrary notwithstanding, the Board of Directors or the Committee, as the case may be, may, in its sole discretion, impose more restrictive conditions on the exercise of an option granted pursuant to the 2001 Plan; however, any and all such conditions shall be specified in the option agreement limiting and defining such option. Nothing in the 2001 Plan or in any option granted pursuant to the 2001 Plan shall confer upon any employee any right to continue in the employ of the Company or any of its Subsidiaries or parent or affiliated companies or interfere in any way with the right of the Company or any such Subsidiary or parent or affiliated companies to terminate such employment at any time. 15. Compliance with SEC Regulations. It is the Company's intent that the 2001 Plan comply in all respects with Rule 16b-3 of the Exchange Act and any regulations promulgated thereunder. If any provision of the 2001 Plan is later found not to be in compliance with said Rule, the provisions shall be deemed null and void.