Exhibit 10.3

SHOE PAVILION, INC.

AMENDED AND RESTATED
NONEMPLOYEE DIRECTOR STOCK OPTION PLAN

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TABLE OF CONTENTS

 

 

Page

SECTION 1

ESTABLISHMENT, PURPOSE AND DURATION

1

    1.1

Establishment

1

    1.2

Purpose of the Plan

1

    1.3

Effective Date

1

    1.4

Duration of the Plan

1

SECTION 2

DEFINITIONS

1

    2.1

Board or Board of Directors

1

    2.2

Change in Control

1

    2.3

Code

2

    2.4

Company

2

    2.5

Director

2

    2.6

Exchange Act

2

    2.7

Exercise Price

2

    2.8

Fair Market Value

2

    2.9

Nonemployee Director

2

    2.10

Option

3

    2.11

Participant

3

    2.12

Plan

3

    2.13

Shares

3

    2.14

Subsidiary

3

    2.15

Termination of Service

3

SECTION 3

ADMINISTRATION OF THE PLAN

4

    3.1

The Board of Directors

4

    3.2

Authority of the Board of Directors

4

    3.3

Decisions Binding

4

    3.4

Administrative Expenses

4

    3.5

Indemnification

4

SECTION 4

SHARES SUBJECT TO THE PLAN

5

    4.1

Number of Shares

5

    4.2

Effect of Lapsed Options

5

    4.3

Adjustments in Authorized Shares

5

SECTION 5

ELIGIBILITY

5

    5.1

Eligibility

5

    5.2

Consideration for Grant of Option

5

SECTION 6

OPTIONS

5

    6.1

Grant of Options

5

    6.2

Terms of Options

6

SECTION 7

MISCELLANEOUS

7

    7.1

Amendment or Termination of the Plan

7

    7.2

Beneficiary Designation

7

    7.3

No Effect Upon Other Compensation Plans

7

    7.4

No Effect on Service

7

    7.5

Requirements of Law

7

    7.6

Successors

7

    7.7

Rule 16b-3 Compliance

7

    7.8

Captions

8

    7.9

Governing Law

8

    7.10

Applicable Law; Severability

8

    7.11

Change in Control

8

    7.12

Cash Out of Awards

8

    7.13

Accelerated Vesting

8

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SHOE PAVILION, INC.
AMENDED AND RESTATED
NONEMPLOYEE DIRECTOR STOCK OPTION PLAN

SECTION 1
ESTABLISHMENT, PURPOSE AND DURATION

1.1    Establishment. Shoe Pavilion, Inc., a Delaware corporation (the
"Company"), hereby establishes as of February 22, 1998 the "Shoe Pavilion, Inc.
Nonemployee Director Stock Option Plan" (the "Plan"), for the benefit of certain
nonemployee members of the Board of Directors of the Company ("Nonemployee
Directors"), in order to compensate such Nonemployee Directors for their past
services by awarding them stock options under the Plan ("Options").

1.2    Purpose of the Plan. The purpose of the Plan is to promote the success,
and enhance the value, of the Company, by attracting, retaining and motivating
Nonemployee Directors of outstanding competence. The Plan also is designed to
align the interests of Nonemployee Directors with the interests of the
stockholders of the Company.

1.3    Effective Date. The Plan is effective immediately preceding the date that
the Company's Registration Statement on Form S-1 covering the sale of its Common
Stock is declared effective by the Securities and Exchange Commission.

1.4    Duration of the Plan. The Plan shall commence on the date specified in
Section 1.3, and subject to the right of the Board of Directors of the Company
to terminate the Plan at any time and for any reason pursuant to Section 7,
shall remain in effect thereafter. Notwithstanding the preceding sentence, each
Option shall remain in effect until such Option has been satisfied by the
issuance of Shares or terminated in accordance with its terms and the terms of
the Plan. In the event that on any date of grant the number of Shares to be
subject to Options granted to all Nonemployee Directors exceeds the number of
Shares then available for grant under the Plan, each Nonemployee Director shall
share pro rata in the number of Shares that remain available for grant on such
date.

SECTION 2
DEFINITIONS