EXHIBIT 3
1998 EQUITY INCENTIVE COMPENSATION PLAN
INCENTIVE STOCK OPTION CONTRACT
INCENTIVE STOCK OPTION CONTRACT dated as of November 6, 2001
by and between SWANK, INC., a Delaware corporation (the
"Company"), and Xxxx Xxxxx (the "Optionee"). Capitalized terms
used but not defined herein shall have the meanings assigned to
them in the Company's 1998 Equity Incentive Compensation Plan
(the "Plan").
W I T N E S S E T H:
The parties to this Agreement hereby agree as follows:
1. The Company, in accordance with the allotment made by the
Company's Board of Directors (the "Board") and subject to the
terms and conditions of the Plan, grants to the Optionee an
option to purchase an aggregate of 150,000 shares of the Common
Stock, $.10 par value per share, of the Company ("Common Stock")
at an exercise price of $0.17 per share, being at least equal to
100% of the Fair Market Value of such shares of Common Stock on
the date hereof. This option is intended to constitute an
incentive stock option within the meaning of Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code"), although
the Company makes no representation or warranty as to such
qualification.
2. The term of this option shall be 5 years from the date
hereof, subject to earlier termination as provided in this
Agreement and in the Plan. This option may be exercised in whole
or in part and from time to time commencing on the date hereof,
but prior to the end of the term of the option, by giving written
notice to the Company at its principal office, presently 0 Xxxxx
Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxxxx 00000, Attention: Chief
Financial Officer, stating that the Optionee is exercising this
incentive stock option, specifying the number of shares purchased
(provided that not less than one hundred (100) shares may be
purchased unless the number purchased is the total number of
shares purchasable hereunder) and accompanied by payment of the
aggregate purchase price therefor in accordance with Section 3
below. Notwithstanding the foregoing, in no event may a fraction
of a share of Common Stock be purchased under this option.
3. The purchase price of shares purchased hereunder may be
paid (a) in cash, (b) by certified check, (c) with previously
acquired shares of Common Stock owned by the Optionee which are
not subject to any pledge or other security interest, which have
been owned by the Optionee for at least six months prior to the
date of exercise, and which have an aggregate Fair Market Value
on the date of exercise equal to the aggregate exercise price of
all options being exercised, or (d) any combination thereof.
4. The Optionee may be required by the Company to pay, and
the Company shall have the right and is hereby authorized to
withhold shares of Common Stock to be issued upon exercise of
this option, from any other payment due or transfer made under
this option, or from any compensation or other amount owing to
the Optionee, the amount (in cash, shares of Common Stock, other
securities, other Awards under the Plan, or other property (as
determined by the Board in its sole discretion)) of any
applicable withholding taxes or other amounts payable in respect
of this option, its exercise, or any payment or transfer under
this option or under the Plan (including, without limitation, any
and all Federal, state and local income taxes or other amounts
incurred by reason of the grant, vesting, exercise or disposition
of this option or the disposition of the underlying shares of
Common Stock), and to take such other action as may be necessary
in the opinion of the Company to satisfy all obligations for the
payment of such taxes and amounts.
5. In the event of any disposition of the shares of Common
Stock acquired pursuant to the exercise of this option within two
years from the date hereof or one year from the date of transfer
of such shares to the Optionee, the Optionee shall notify the
Company thereof in writing no later than the close of business on
the day after such disposition. In addition, the Optionee shall
provide the Company on demand with such information as the
Company shall reasonably request in connection with determining
the amount and character of the Optionee's income, the Company's
deduction and its obligation to withhold taxes or other amounts
incurred by reason of such disqualifying disposition, including
the amount thereof. The Optionee shall pay the Company in cash
on demand the amount, if any, which the Company determines is
necessary to satisfy such withholding obligation.
6. Notwithstanding anything herein to the contrary, this
option shall not be exercisable by the Optionee unless (a) a
Registration Statement under the Securities Act of 1933, as
amended (the "Securities Act") with respect to the shares of
Common Stock to be received upon the exercise of this option
shall be effective and current at the time of exercise or (b)
there is an exemption from registration under the Securities Act
for the issuance of the shares of Common Stock upon such
exercise. The Optionee hereby represents and warrants to the
Company that, unless such a Registration Statement is effective
and current at the time of exercise of this option, the shares of
Common Stock to be issued upon the exercise of this option will
be acquired by the Optionee for his own account, for investment
only and not with a view to the resale or distribution thereof.
In any event, the Optionee shall notify the Company of any
proposed resale of the shares of Common Stock issued to him upon
exercise of this option. Any subsequent resale or distribution
of shares of Common Stock by the Optionee shall be made only
pursuant to (x) a Registration Statement under the Securities Act
which is effective and current with respect to the sale of shares
of Common Stock being sold, or (y) a specific exemption from the
registration requirements of the Securities Act, but in claiming
such exemption, the Optionee shall, prior to any offer of sale or
sale of such shares of Common Stock, provide the Company (unless
waived by the Company) with a favorable written opinion of
counsel, in form and substance satisfactory to the Company, as to
the applicability of such exemption to the proposed sale or
distribution. Such representations and warranties shall also be
deemed to be made by the Optionee upon each exercise of this
option. Nothing herein shall be construed as requiring the
Company to register the shares subject to this option under the
Securities Act or to keep any Registration Statement current or
effective.
7. Notwithstanding anything herein to the contrary, if at
any time the Board shall determine, in its discretion, that the
listing or qualification of the shares of Common Stock subject to
this option on any securities exchange, The Nasdaq Stock Market,
Inc., or under any applicable law, or the consent or approval of
any governmental regulatory body or any other Person, is
necessary or desirable as a condition to, or in connection with,
the issuance of shares of Common Stock hereunder, this option may
not be exercised in whole or in part unless such listing,
qualification, consent or approval shall have been effected or
obtained free of any conditions not acceptable to the Board.
8. All certificates for shares of Common Stock or other
securities issued upon exercise of this option shall be subject
to such stop transfer orders and other restrictions as the Board
may deem advisable under the Plan or the rules, regulations, and
other requirements of the Securities and Exchange Commission, any
stock exchange upon which the shares of Common Stock or other
securities are then listed, any applicable Federal or state laws
and/or this Agreement, and the Board may cause a legend or legend
to be put on any such certificates to make appropriate reference
to such restrictions.
9. Nothing in the Plan or herein shall confer upon the
Optionee any right to be retained in the employ of the Company or
any Affiliate, or interfere in any way with any right of the Com
pany or any Affiliate to terminate such employment at any time
for any reason whatsoever without liability to the Company or any
such Affiliate.
10. The Optionee agrees that the Optionee will be subject
to and bound by all of the terms and conditions of the Plan, a
copy of which is attached hereto and made a part hereof. In the
event the employment of the Optionee terminates for any reason
other than death or without cause, this option shall terminate
contemporaneously therewith. If the Optionee dies while employed
by the Company, or the Company shall terminate the employment of
the Optionee without cause, this Option may be exercised, in the
case of the death of the Optionee, by his legal representatives,
and in the case of termination of employment by the Company, by
the Optionee, within 30 days after death or such termination, as
the case may be, but not thereafter, and in no event after the
date this option would otherwise have expired. In the event of a
conflict between the terms of this Contract and the terms of the
Plan, the terms of the Plan shall govern.
11. (a) For a period of thirty (30) days after the termination,
for any reason, of the Optionee's employment with the Company,
the Company shall have the right to purchase (the "Right to
Purchase") from the Optionee all, but not less than all, of the
shares of Common Stock then owned by the Optionee and that shall
have been issued hereunder (the "Terminated Employee Shares") at
a purchase price equal to the Fair Market Value of such shares on
the date of termination of the Optionee's employment (the
"Purchase Price").
(b) The Company shall exercise its Right to Purchase
by giving to the Optionee written notice of such exercise in
accordance with the provisions of paragraph 11(e) below.
(c) The closing of any purchase by the Company of
Terminated Employee Shares shall take place, unless otherwise
agreed by the Company and the Optionee (or, if applicable, the
Optionee's legal representatives), at the New York City office of
the Company (presently 00 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000)
at 10:00 A.M. on the fifth business day after the exercise by the
Company of its Right to Purchase. At the closing, the Optionee
(or, if applicable, the Optionee's legal representatives) shall
deliver to the Company certificates representing the shares of
Common Stock to be transferred, duly endorsed in blank or
accompanied by stock powers duly signed in blank and such other
documents and instruments relating to the purchase by the Company
of the Terminated Employee Shares as the Company shall reasonably
requests (including, without limitation, in respect of the
matters referred to in Section 11(d) below). Upon delivery to
the Transferee of such certificates and, if applicable, such
stock powers, the Transferee shall pay to the Transferor, by
check (subject to collection), the Purchase Price.
(d) The Optionee hereby represents, warrants and
covenants in favor of the Company that (i) at the time of
consummation of the transactions contemplated by this paragraph
11, the Optionee will own, and the Company will purchase, all
right, title and interest in and to all of the Terminated
Employee Shares to be sold to the Company by the Optionee
pursuant to the Right to Purchase, free and clear of all liens,
claims and encumbrances of any kind or nature whatsoever and (ii)
no authorization, consent or approval of, or registration or
filing with, any governmental authority or any other Person will
be required to be obtained or made by the Optionee in connection
with the performance by the Optionee of its obligations under
this paragraph 11. At the closing of any purchase by the Company
of Terminated Employee Shares, the Optionee (or, if applicable,
the Optionee's legal representatives) shall execute and deliver
to the Company a representation and warranty to the foregoing
effects and as to such other matters as the Company shall
request, in each case, among other things, as an inducement to
the Company to purchase the Terminated Employee Shares being
purchased by the Company.
(e) Any and all notices or other communications
required or permitted to be given under this Section 11 shall be
in writing and shall be deemed to have been duly given if given
by personal delivery, by certified or registered mail, postage
prepaid, return receipt requested, or by facsimile with verified
answer back, or by a recognized major overnight delivery service.
Any such notice shall be deemed given when personally delivered
against written receipt therefor, three (3) Business Days after
posting, postage prepaid, in the mails of the United States of
America, upon receipt of verified answer back with respect to
transmission by facsimile with verified answer back, or upon
sending with respect to delivery by facsimile with verified
receipt (in each case with the original sent postage prepaid by
first class mail), or, with respect to delivery by major
overnight delivery service, upon its receipt against written
receipt therefor, at the addresses of the Optionee, on the one
hand, and the Company, on the other hand, set forth on the
signature pages of this Agreement.
12. The Optionee shall have no rights as a stockholder with
respect to any shares issuable or transferable upon exercise of
this option until the date of the issuance of a stock certificate
to the Optionee for such shares. This option may not be assigned,
alienated, pledged, attached, sold, or otherwise transferred or
encumbered other than by will or by the laws of descent and
distribution (subject to the other provisions herein), and any
such purported assignment, alienation, pledge, attachment, sale,
transfer or encumbrance shall be void and unenforceable against
the Company and its Affiliates. This option may be exercised,
during the lifetime of the Optionee, only by the Optionee, or, if
permissible under applicable law, by the Optionee's legal
guardian or representative.
13. This Contract shall be binding upon and inure to the
benefit of any successor or assign of the Company and to the
legal representative of the Optionee's estate.
14. The Optionee shall have no rights as a stockholder with
respect to any shares issuable or transferable upon exercise of
this option until the date of the issuance of a stock certificate
to the Optionee for such shares. This option may not be assigned,
alienated, pledged, attached, sold, or otherwise transferred or
encumbered other than by will or by the laws of descent and
distribution (subject to the other provisions herein), and any
such purported assignment, alienation, pledge, attachment, sale,
transfer or encumbrance shall be void and unenforceable against
the Company and its Affiliates. This option may be exercised,
during the lifetime of the Optionee, only by the Optionee, or, if
permissible under applicable law, by the Optionee's legal
representatives.
15. This Contract shall be binding upon and inure to the
benefit of any successor or assign of the Company and to the
legal representative of the Optionee's estate.
16. The validity, construction and the effect of the Plan,
any rules and regulations relating to the Plan, and this
Agreement, shall be determined in accordance with the laws of the
State of Delaware, without regard to the conflicts of law rules
thereof, or any other law that would defer to the substantive
laws of another jurisdiction.
17. If any provision of this Agreement is or becomes
invalid, illegal, or unenforceable in any jurisdiction of as to
any Person, or would disqualify the Plan or this Agreement under
any law deemed applicable by the Board, such provision shall be
construed or deemed amended to conform to the applicable laws,
or, if it cannot be construed or amended without, in the
determination of the Board, materially affecting the intent of
the Plan or this Agreement, such provision shall be stricken from
this Agreement, or as to such jurisdiction or Person and the
remainder of the Plan and this Agreement shall remain in full
force and effect.
18. The Optionee agrees that the Company may amend the Plan
and the options granted to the Optionee under the Plan, subject
to the limitations contained in the Plan. Without limiting the
foregoing, the Board, in its sole discretion, may at any time
make or provide for such adjustments to the Plan, to the number
and class of shares available thereunder and to this option as it
shall deem appropriate, all in accordance with the provisions of
the Plan.
IN WITNESS WHEREOF, the parties hereto have executed this
Contract as of the day and year first above written.
SWANK, INC.
By: /s/ Xxxxxx X. Xxxxxxx
Print Name: Xxxxxx X. Xxxxxxx
Print Title: Chief Financial Officer
Address for Notices: 0 Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: Chief Financial Officer
/s/ Xxxx Xxxxx
Xxxx Xxxxx
0000 Xxxxxx Xx.
Address of Optionee
Hewlett, L.I., NY 11557
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Optionee's Social Security Number
