EXHIBIT 10.16
SWANK, INC.
1987 INCENTIVE STOCK OPTION PLAN
INCENTIVE STOCK OPTION CONTRACT
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THIS INCENTIVE STOCK OPTION CONTRACT entered into as of October 1, 1996
between SWANK, INC., a Delaware corporation (the "Company"), and XXXXXXXXXXX X.
XXXX (the "Optionee").
W I T N E S S E T H:
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1. The Company, in accordance with the allotment made by the Stock Option
Committee of the Company's Board of Directors (the "Committee") and subject to
the terms and conditions of the 1987 Incentive Stock Option Plan of the Company
(the "Plan"), grants to the Optionee an option to purchase an aggregate of
185,000 shares of the Common Stock, $.10 par value per share, of the Company
("Common Stock") at an exercise price of $.6875 per share, being at least equal
to 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 10 years from the date hereof, subject
to earlier termination as provided in the Plan. This option may be exercised
commencing on October 1, 1997 as to 61,666 shares of Common Stock subject
hereto, as to an additional 61,666 shares of Common Stock on October 1, 1998 and
as to the remaining 61,667 shares of Common Stock on October 1, 1999. The right
to purchase shares of Common Stock subject hereto shall be cumulative, so that
if the full number of shares purchasable in a period shall not be purchased, the
balance may be purchased any time and from time to time thereafter, but not
after the termination hereof. 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
financial office, presently 0 Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxxxx 00000,
Attention: Secretary, stating that the Optionee is exercising his 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 any of 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
or by certified check, (b) by transferring to the Company previously acquired
shares of Common Stock having an aggregate fair market value on the date this
option is exercised equal to the aggregate option purchase price of all options
being exercised, or (c) by any combination of (a) and (b).
4. The Company may withhold cash and/or shares of Common Stock to be issued
to the Optionee in the amount which the Company determines is necessary to
satisfy its obligation to withhold taxes or other amounts incurred by reason of
the grant or exercise of this option or the disposition of the underlying shares
of Common Stock. Alternatively, the Company may require the Optionee to pay the
Company such amount in cash promptly upon demand.
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 him, the Optionee shall
notify the Company thereof in writing within 30 days 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 the foregoing, 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.
7. Notwithstanding anything herein to the contrary, if at any time the
Committee shall determine, in its discretion, that the listing or qualification
of the shares of Common Stock subject to this option on any securities exchange
or under any applicable law, or the consent or approval of any governmental
regulatory body, is necessary or desirable as a condition to, or in connection
with, the granting of an option or the issuance of shares of Common Stock
hereunder, this
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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 Committee.
8. The Company may affix appropriate legends upon the certificates for
shares of Common Stock issued upon exercise of this option and may issue such
"stop transfer" instructions to its transfer agent in respect of such shares as
it determines, in its discretion, to be necessary or appropriate (a) (i) to
prevent a violation of, or to perfect an exemption from, the registration
requirements of the Securities Act, (ii) to implement the provisions of the Plan
or this Contract or any other agreement between the Company and the Optionee
with respect to such shares of Common Stock, or (iii) to permit the Company to
determine the occurrence of a "disqualifying disposition," as described in
Section 421(b) of the Code, of the shares of Common Stock transferred upon the
exercise of this option or (b) if applicable, with regard to any other
restriction, including, without limitation, on the assignment, pledge,
hypothecation or transfer of shares acquired upon the exercise of this option.
9. Nothing in the Plan or herein shall confer upon the Optionee any right
to continue in the employ of the Company, any parent or any of its subsidiaries,
or interfere in any way with any right of the Company, any parent or its
subsidiaries to terminate such employment at any time for any reason whatsoever
without liability to the Company, any parent or any of its subsidiaries.
10. The Company and the Optionee agree that they will both 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 (a) the employment of the
Optionee terminates, (b) of the disability of the Optionee, or (c) of the death
of the Optionee, his rights hereunder shall be governed by and be subject to the
provisions of the Plan. 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. 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 him for such shares. No adjustment shall
be made for dividends (ordinary or extraordinary, whether in cash, securities or
other property) or distributions or other rights for which the record date is
prior to the date such stock certificate is issued.
12. This option is not transferable by the Optionee otherwise than by will
or the laws of descent and distribution and may be exercised, during the
lifetime of the Optionee, only by the Optionee or the Optionee's legal
representatives.
13. This Contract shall be binding upon and inure to the benefit of any
successor or assign of the Company and to any heir, distributee, executor,
administrator or legal representative entitled to the Optionee's rights
hereunder.
14. This Contract shall be governed by, and construed and enforced in
accordance with, the laws of the State of Delaware, without regard to the
conflicts of law rules thereof.
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15. The invalidity, illegality or unenforceability of any provision herein
shall not affect the validity, legality or enforceability of any other
provision.
16. 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 Committee, 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/ Xxxx X. Xxxxx
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Title: Xxxx X. Xxxxx, President
/s/ Xxxxxxxxxxx X. Xxxx
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Xxxxxxxxxxx X. Xxxx, Optionee
000 Xxxx Xxxxxxx Xxxx
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Address
Lexington, Massachusetts 02173
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Tax Identification No.
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