Exhibit 10.2
CANDIE'S, INC.
NON-QUALIFIED STOCK OPTION AGREEMENT
CANDIE'S, INC., a Delaware corporation (the "Company"), pursuant to the
Company's 2002 Stock Option Plan (the "Plan") hereby grants to Robert D'Loren, a
member of the Board of Directors (the "Board") of the Company (the "Optionee"),
as of August 25, 2004 (the "Grant Date"), a non-qualified stock option to
purchase a total of 100,000 shares of the Company's common stock, par value
$.001 per share ("Common Stock"), at the price of $2.67 per share on the terms
and conditions set forth herein and in the Plan. This option (the "Option") is
intended to be a non-qualified stock option, i.e., this option is not intended
to be, nor is it, an incentive stock option as defined in Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code").
1. Duration.
(a) This Option was granted as of the Grant Date.
(b) This option shall expire at the close of business on August 25, 2014, (the
"Termination Date"), but shall be subject to earlier termination as
provided herein or in the Plan.
(c) If the Optionee ceases to be a member of the Board for any reason other
than death, disability, termination for cause, or voluntary termination by
resignation, the Option may be exercised within three (3) months after the
date the Optionee ceases to be a member, or otherwise employed by the
Company, within ten (10) years from the Grant Date of the Option, whichever
is earlier, but may not be exercised thereafter. In such event, the Option
shall be exercisable only to the extent that the right to purchase shares
of Common Stock under the Plan has accrued and is in effect at the date of
such cessation of employment.
In the event the Optionee's relationship with the Company is terminated by
the Company for "cause" (as defined in the Plan), or by voluntary resignation by
the Optionee, the Optionee's right to exercise any unexercised portion of this
Option shall cease forthwith, and this Option shall thereupon terminate.
In the event of disability of the Optionee (as determined by the other
members of the Board of Directors of the Company (the "Board") or an appropriate
committee of the Board, as the case may be, and as to the fact and date of which
the Optionee is notified by the Board or that Committee, as the case may be, in
writing), the Option shall be exercisable within one (1) year after the date of
such disability or, if earlier, the term originally prescribed by this
Agreement. In such event, the Option shall be exercisable to the extent that the
right to purchase the shares of Common Stock hereunder has accrued on the date
the Optionee becomes disabled and is in effect as of such determination date.
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In the event of the death of the Optionee while a member of the Board or
employee of the Company or within three (3) months after the termination of such
relationship (other than termination for cause or voluntary termination by the
Optionee), the Option shall be exercisable to the extent exercisable but not
exercised as of the date of death and in such event, the Option must be
exercised, if at all, within one (1) year after the date of death of the
Optionee or, if earlier, within the originally prescribed term of the Option.
2. Price.
The purchase price for each share of Common Stock upon exercise of this
option is $2.67.
3. Non-Qualified Stock Option.
These options are non-qualified stock options, the exercise of which is
subject to Section 83 of the Code.
4. Written Notice of Exercise.
This option, to the extent it is exercisable as provided in Section 10
herein, may be exercised only by delivering to the Company, at its principal
office within the time specified in Paragraph 1 or such shorter time as is
otherwise provided for herein or in the Plan, a written notice of exercise
substantially in the form described in Section 10. The Optionee hereby
acknowledges receipt of a copy of the Plan.
5. Anti-Dilution Provisions.
(a) If there is any stock dividend or recapitalization resulting in a stock
split, or combination or exchange of shares of Common Stock of the Company,
the number of shares of Common Stock then subject to this option may be
proportionately and appropriately adjusted by the Board of Directors;
provided, however, that any fractional shares resulting from any such
adjustment shall be eliminated.
(b) If there is any other change in the Common Stock of the Company, including
capitalization, reorganization, sale or exchange of assets, exchange of
shares, offering of subscription rights, or a merger or consolidation in
which the Company is the surviving corporation, an adjustment, if any,
shall be made in the shares then subject to this option as the s Board in
its sole discretion may deem appropriate. Failure of the Board to provide
for an adjustment pursuant to this subparagraph prior to the effective date
of any Company action referred to herein shall be conclusive evidence that
no adjustment has been approved by the Board in consequence of such action
and that no such adjustment will be made in consequence of such action.
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6. Investment Representation .
The Optionee agrees that until such time as a registration statement under
the Securities Act of 1933, as amended (the "Act"), becomes effective with
respect to this option and/or the shares of Common Stock underlying this option,
the Optionee is taking this option and shall take the shares of Common Stock
underlying this option, for the Optionees own account, for investment, or not
for resale or distribution.
7. Transferability.
This Option may be transferable by the Optionee.
8. Certain Rights Not Conferred by Option.
The Optionee shall not, by virtue of holding this option, be entitled to
any rights of a stockholder in the Company.
9. Transfer Taxes.
The Company shall pay all original issue and transfer taxes with respect to
the issuance and transfer of shares of Common Stock of the Company pursuant
hereto provided that the shares are issued in the name of the Optionee.
10. Vesting Options.
(a) The amount of shares of Common Stock to this option shall become
exercisable as follows: 40,000 on the date hereof, 30,000 on the one year
anniversary hereof, and 30,000 on the second anniversary thereof, subject
to the provisions of Section 11 hereof.
(b) An Option shall be exercisable by written notice of such exercise, in the
form prescribed by the Board to the Company, at its principal executive
office. The notice shall specify the number of shares for which the option
is being exercised, be signed by the Optionee and shall be accompanied by
payment in cash or by check of the amount of the full purchase price of
such shares or in such manner as the Board shall deem acceptable consistent
with the provisions of the Plan.
(c) No shares shall be delivered upon exercise of any option until all laws,
rules and regulations which the Board may deem applicable have been
complied with. If a registration statement under the Act is not then in
effect with respect to the shares issuable upon such exercise, the Company
may require as a condition precedent., among other things (i) that the
person exercising the option give to the Company a written representation
and undertaking, satisfactory in form and substance to the Company, that
such person is acquiring the shares for his own account for investment and
not with a view to the distribution thereof and/or (ii) an opinion of
counsel satisfactory to the Company with respect to the existence of an
exemption from the registration requirements of the Act, in which event the
person(s) acquiring the Common Stock shall be bound by the provisions of
the following legend which shall be endorsed upon the certificate(s)
evidencing his option shares issued pursuant to such exercise:
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"The shares represented by this certificate have not been
registered under the Securities Act of 1933, as amended (the
"Act"). Such shares may not be sold, transferred or otherwise
disposed of unless they have first been registered under the Act
or, unless, in the opinion of counsel satisfactory to the
Company's counsel, such registration is not required."
(d) Without limiting the generality of the foregoing, the Company may delay
issuance of the shares of Common Stock underlying this option until
completion of any action or obtaining of any consent, which the Company
deems necessary under any applicable law (including without limitation
state securities or "blue sky" laws).
(e) The person exercising an option shall not be considered a record holder of
the stock so purchased for any purpose until the date on which such person
is actually recorded as the holder of such stock in the records of the
Company.
11. No Continued Relationship.
Nothing herein shall be deemed to create any guaranty of continued service
or limit in any way any right that the Company's may have to terminate
Optionee's status at any time.
12. Notices.
Any notice required or permitted by the terms of this option agreement or
the Plan shall be given by registered or certified mail, return receipt
requested, addressed as follows:
To the Company:
Candies, Inc.
215 W. 40th Street, 6th floor
New York, N.Y. 10018
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To the Optionee:
Robert D'Loren
c/o UCC Capital Corp
1330 Avenue of the Americas
40th Floor
New York, NY 10019
or to such other address or addresses of which notice in the same manner has
previously been given when mailed in accordance with the foregoing provisions.
Either party hereto may change the address to which such notices shall be given
by providing the other party hereto with written notice of such change.
13. Tax Withholding.
Not later than the date as of which an amount first becomes includable in
the gross income of the Optionee or other holder for federal income tax purposes
with respect to this option, the Optionee or other holder shall pay to the
Company, or make arrangements satisfactory to the Company regarding the payment
of, any federal, state and local taxes of any kind required by law to be
withheld or paid with respect to such amount. The obligations of the Company
under this Agreement shall be conditional upon such payment or arrangements and
the Company shall, to the extent permitted by law, have the right to deduct any
such taxes from any payment of any kind otherwise due to the holder of the
option from the Company or any of its subsidiaries.
14. Benefit of Agreement.
This Agreement shall be for the benefit of and shall be binding upon the
heirs, executors, administrators and successors of the parties hereto.
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15. Governing Law.
This option agreement shall be construed and enforced in accordance with
the law of the State of New York, except to the extent that the laws of the
State of Delaware may be applicable.
CANDIE'S, INC.
By: /s/ Deborah Sorell Stehr
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Name: Deborah Sorell Stehr
Title: Senior Vice President, General Conselor
Accepted as of the date first set above.
/s/ Robert D'Loren
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Signature required with return
of document to the Company to
formalize issuance of agreement.