[EMPLOYEE] [MANAGEMENT] [NON-QUALIFIED] [INCENTIVE] STOCK
OPTION AWARD AGREEMENT

 
              
Date
 

           

Re: Grant of [Non-Qualified] [Incentive] Stock Option
 
Dear [_____]:
 
NexCen Brands, Inc. (the “Company”) is pleased to advise you that, pursuant to
the Company's 2006 Long-Term Equity Incentive Plan (the “Plan”), the Committee
(as defined in the Plan) has granted to you an option (the “Option”) to acquire
shares of common stock, par value $0.01 per share, of the Company (“Common
Stock”), as set forth below, subject to the terms and conditions set forth
herein:
 
Number of Option Shares:
[_]
Date of Grant:
[_]
Exercise Price per Option Share:
$[_]
Vesting Date of Option Shares:
[_]
Expiration Date of All Option Shares:
[_]

[The Option is not intended to be an "incentive stock option" within the meaning
of Section 422 of the Code.] or [The Option is intended to be an “incentive
stock option” within the meaning of Section 422 of the Code. If the Option does
not qualify as such for any reason, then to the extent of such
non-qualification, the Option shall be regarded as a non-qualified stock
option.]
 
Any capitalized terms used herein and not defined herein have the meaning set
forth in the Plan.
 
1.  Option.
 
(a)  Term. Subject to the terms and conditions set forth herein, the Company
hereby grants to you (or such other persons as permitted by paragraph 5) an
Option to purchase the Option Shares at the exercise price per Option Share set
forth above in the introductory paragraph of this letter agreement (the
“Exercise Price”), payable upon exercise as set forth in paragraph 1(b) below.
The Option shall expire at the close of business on the date set forth above in
the introductory paragraph of this letter agreement (the “Expiration Date”),
which is the tenth anniversary of the date of grant set forth above in the
introductory paragraph of this letter agreement (the “Grant Date”), subject to
earlier expiration as provided under the Plan should your employment or service
with the Company or a Subsidiary terminate. The Exercise Price and the number
and kind of shares of Common Stock for which the Option may be exercised shall
be subject to adjustment as provided under the Plan. For purposes of this letter
agreement, “Option Shares” mean (i) all shares of Common Stock issued or
issuable upon the exercise of the Option and (ii) all shares of Common Stock
issued with respect to the Common Stock referred to in clause (i) above by way
of stock dividend or stock split or in connection with any conversion, merger,
consolidation or recapitalization or other reorganization affecting the Common
Stock.
 
 
 

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(b)  Payment of Option Price. Subject to paragraph 2 below, the Option may be
exercised in whole or in part, by written notice to the Company, upon payment of
an amount (the “Option Price”) equal to the product of (i) the Exercise Price
and (ii) the number of Option Shares to be acquired. Payment of the Option Price
shall be made as provided under the Plan.
 
2.  Exercisability/Vesting and Expiration.
 
(a)  Normal Vesting. The Option granted hereunder may be exercised only to the
extent it has become vested. The Option shall vest as indicated by the vesting
date of Option Shares set forth in the introductory paragraph of this letter
agreement.
 
(b)  Normal Expiration. In no event shall any part of the Option be exercisable
after the Expiration Date.
 
(c)  Effect on Vesting and Expiration of Employment/Termination. Notwithstanding
paragraphs 2(a) and (b) above, the rules set forth in the Plan with respect to
vesting, exercisability, and expiration remain applicable upon termination of
your employment with the Company or one of its Subsidiaries. Without limiting
the foregoing, the following expiration rules apply: (i) unexercisable portions
of the Option expire immediately when you cease to be employed by the Company
and (ii) exercisable portions of the Option remain exercisable until the first
to occur of the following (each as defined further in the Plan): (1) 90 days
after your employment ends, (2) immediately upon termination for Cause, (3) if
you cease to be employed due to Disability, on the earlier of the first
anniversary of your termination of employment or 60 days after you cease to have
a Disability, (4) the first anniversary of your death, and (5) immediately upon
violation of any covenant not to compete or other post employment restrictions.
Once your right to exercise vested Options lapses under the foregoing events,
you will no longer have the right to exercise your Options. (Note, standard
expiration rules can be modified for a particular grant.)
 
3.  Procedure for Exercise. You may exercise all or any portion of the Option,
to the extent it has vested and is outstanding, at any time and from time to
time prior to the Expiration Date, by delivering written notice to the Company
in the form attached hereto as Exhibit A, together with payment of the Option
Price in accordance with the provisions set forth in the Plan. The Option may
not be exercised for a fraction of an Option Share.
 
 
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4.  Withholding of Taxes.
 
(a)  Participant Election. Unless otherwise determined by the Committee, you may
elect to deliver shares of Common Stock (or have the Company withhold Option
Shares acquired upon exercise of the Option) to satisfy, in whole or in part,
the amount the Company is required to withhold for taxes in connection with the
exercise of the Option. Such election must be made on or before the date the
amount of tax to be withheld is determined. Once made, the election shall be
irrevocable. The fair market value of the shares to be withheld or delivered
will be the Fair Market Value as of the date the amount of tax to be withheld is
determined.
 
(b)  Company Requirement. The Company, to the extent permitted or required by
law, shall have the right to deduct from any payment of any kind (including
salary or bonus) otherwise due to you, an amount equal to any federal, state or
local taxes of any kind required by law to be withheld with respect to the
delivery of Option Shares under this letter agreement.
 
5.  Transferability of Option. You may transfer the Option granted hereunder
only by will or the laws of descent and distribution or to any of your Family
Members (as defined in the Plan) by gift or a qualified domestic relations order
as defined by the Code. Unless the context requires otherwise, references herein
to you are deemed to include any permitted transferee under this paragraph 5.
The Option may be exercised only by you; by your Family Member if such person
has acquired the Option by gift or qualified domestic relations order; by the
executor or administrator of the estate of any of the foregoing or any person to
whom the Option is transferred by will or the laws of descent and distribution;
or by the guardian or representative of any of the foregoing; provided that
Incentive Stock Options may be exercised by any guardian or legal representative
only if permitted by the Code and any regulations thereunder.
 
6.  Conformity with Plan. The Option is intended to conform in all respects
with, and is subject to all applicable provisions of the Plan (which is
incorporated herein by reference). Inconsistencies between this letter agreement
and the Plan shall be resolved in accordance with the terms of the Plan. By
executing and returning the enclosed copy of this letter agreement, you
acknowledge your receipt of this letter agreement and the Plan and agree to be
bound by all of the terms of this letter agreement and the Plan.
 
7.  Rights of Participants. Nothing in this letter agreement shall interfere
with or limit in any way the right of the Company to terminate your employment
or other performance of services at any time (with or without Cause), nor confer
upon you any right to continue in the employ or as a director or officer of, or
in the performance of other services for, the Company or a Subsidiary for any
period of time, or to continue your present (or any other) rate of compensation
or level of responsibility. Nothing in this letter agreement shall confer upon
you any right to be selected again as a Plan participant.
 
8.  Amendment or Substitution of Option. The terms of the Option may be amended
from time to time by the Committee in its discretion in any manner that it deems
appropriate (including, but not limited to, acceleration of the date of exercise
of the Option); provided that no such amendment shall adversely affect in a
material manner any of your rights under the award without your written consent.
 
 
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9.  Successors and Assigns. Except as otherwise expressly provided herein, all
covenants and agreements contained in this letter agreement by or on behalf of
any of the parties hereto shall bind and inure to the benefit of the respective
successors and permitted assigns of the parties hereto whether so expressed or
not.
 
10.  Severability. Whenever possible, each provision of this letter agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this letter agreement is held to be
prohibited by or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of this letter agreement.
 
11.  Counterparts. This letter agreement may be executed simultaneously in two
or more counterparts, each of which shall constitute an original, but all of
which taken together shall constitute one and the same letter agreement.
 
12.  Descriptive Headings. The descriptive headings of this Agreement are
inserted for convenience only and do not constitute a part of this Agreement.
 
13.  Governing Law. THE VALIDITY, CONSTRUCTION, INTERPRETATION, ADMINISTRATION
AND EFFECT OF THE PLAN, AND OF ITS RULES AND REGULATIONS, AND RIGHTS RELATING TO
THE PLAN AND TO THIS LETTER AGREEMENT, SHALL BE GOVERNED BY THE SUBSTANTIVE
LAWS, BUT NOT THE CHOICE OF LAW RULES, OF THE STATE OF DELAWARE.
 
14.  Notices. All notices, demands or other communications to be given or
delivered under or by reason of the provisions of this letter agreement shall be
in writing and shall be deemed to have been given when (i) delivered personally,
(ii) mailed by certified or registered mail, return receipt requested and
postage prepaid, (iii) sent by facsimile or (iv) sent by reputable overnight
courier, to the recipient. Such notices, demands and other communications shall
be sent to you at the address specified in this letter agreement and to the
Company at 1330 Avenue of the Americas, 40th Floor, New York, NY 10019, Attn:
Chief Financial Officer, or to such other address or to the attention of such
other person as the recipient party has specified by prior written notice to the
sending party.
 
15.  Entire Agreement. This letter agreement and the terms of the Plan
constitute the entire understanding between you and the Company, and supersede
all other agreements, whether written or oral, with respect to your acquisition
of the Option Shares.
 
*****

 
 
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Signature Page to Stock Option Award Agreement
 
Please execute the extra copy of this letter agreement in the space below and
return it to the Company to confirm your understanding and acceptance of the
agreements contained in this letter agreement.
 
Very truly yours,
 
NEXCEN BRANDS, INC.
 
By:_____________________________

 
Name:__________________________

 
Title:___________________________
 
By your signature and the signature of the Company’s representative above, you
and the Company agree that this Option is granted under and governed by the
terms and conditions of the Plan and this letter agreement, both of which are
attached and made a part of this document.
 
 
OPTIONEE
 
_________________________________
 

 
Dated as of: ___________________
 
 
Enclosures:   Extra copy of this letter agreement
Copy of the Plan
 

 
 

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EXHIBIT A
 
Form of Letter to be Used to Exercise Stock Option
 
 
              
Date
 

        

Attention:                        
 
I wish to exercise the stock option granted on              and evidenced by a
Stock Option Award Agreement dated as of             , to acquire             
shares of Common Stock of             , at an option price of $_______ per
share. In accordance with the provisions of paragraph 1 of the Stock Option
Award Agreement, I wish to make payment of the exercise price (please check all
that apply):
 
o
in cash
o
by delivery of shares of Common Stock held by me
o
by simultaneous sale through a broker

I request these shares be issued by:
 
o
certificate
o
electronic delivery to a brokerage account

Please issue a certificate for these shares in the following name or
registration:
 

 
Name/Registration
 
Address
 
Social Security Number

 
 
 
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Please issue these shares by electronic delivery to the following brokerage
account:

 
Name/Registration
 
Address
 
Social Security Number
 
Brokerage Company
 
Brokerage Account Number
 
Brokerage Point of Contact
 
Brokerage Telephone Number

Very truly yours,
   
 
Signature
 
   
Typed or Printed Name

 
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