ICONIX BRAND GROUP, INC.
2006 EQUITY INCENTIVE PLAN
(as last amended on July 31, 2008)

1. PURPOSE
 
The Plan has been established to advance the interests of the Company and its
stockholders by providing for the grant to Participants of Stock-based and other
incentive Awards to (i) enhance the Company’s ability to attract and retain
current or prospective Employees, directors and consultants who are in a
position to make contributions to the success of the Company and its Affiliates
and (ii) encourage Participants to take into account the long-term interests of
the Company and its stockholders through ownership of shares of Stock.
 
2. DEFINED TERMS
 
Exhibit A, which is incorporated by reference, defines the terms used in the
Plan and sets forth certain operational rules related to those terms.
 
3. ADMINISTRATION
 
The Administrator shall have the right to construe the Plan and the Awards
issued pursuant to it, to correct defects and omissions and to reconcile
inconsistencies to the extent that the Administrator deems it to be necessary or
desirable to effectuate the purposes of the Plan and the Awards issued pursuant
to it, and such action shall be final, binding and conclusive upon all parties
concerned. The Administrator has discretionary authority, subject only to the
express provisions of the Plan, to determine eligibility for and grant Awards;
determine, modify or waive the terms and conditions of any Award; prescribe
forms, rules and procedures; and otherwise do all things necessary to carry out
the purposes of the Plan. In the case of any Award intended to be eligible for
the performance-based compensation exception under Section 162(m), the
Administrator will exercise its discretion consistent with qualifying the Award
for that exception. No Administrator shall be liable for any act or omission
(whether or not negligent) taken or omitted in good faith, or for the exercise
of an authority or discretion granted in connection with the Plan, or for the
acts or omission of other members of the Committee or other individuals or
entities comprising the Administrator.
 
4. LIMITS ON AWARDS UNDER THE PLAN
 
(a) Number of Shares. The maximum number of shares of Stock that may be issued
under the Plan and under ISOs issued pursuant to the Plan shall not exceed, in
the aggregate, 2,000,000 shares of Stock and 500,000 shares of Stock,
respectively. If any Award expires or is terminated, surrendered, forfeited or
canceled without having been fully exercised or results in any Common Stock not
being issued, the shares of Common Stock covered by such Award shall again be
available for the grant of Awards under the Plan. With respect to the issuance
of SARs that may be settled in Stock, the number of shares available for Awards
under the Plan will be reduced by the total number of SARs granted. SARs that
may be settled in cash only will not reduce the number of shares available for
award under the Plan. The limit set forth in this Section 4(a) shall be
construed to comply with Section 422 of the Code and regulations thereunder. To
the extent consistent with the requirements of Section 422 of the Code and
regulations thereunder, and with other applicable legal requirements (including
applicable stock exchange requirements), Stock issued under awards of an
acquired company that are converted, replaced, or adjusted in connection with
the acquisition will not reduce the number of shares available for Awards under
the Plan.
 

 
 

--------------------------------------------------------------------------------

 

(b) Type of Shares. Stock delivered by the Company under the Plan may be
authorized but unissued Stock or previously issued Stock acquired by the
Company. Except as determined by the Administrator, no fractional shares of
Stock will be delivered under the Plan.
 
(c) Section 162(m) Limits. The maximum number of shares of Stock for which Stock
Options may be granted to any person in any fiscal year and the maximum number
of shares of Stock subject to SARs granted to any person in any fiscal year will
each be 100% of the aggregate number of Shares that may be issued under the
Plan. The maximum number of shares subject to any “performance-based
compensation” Awards (as defined for purposes of Section 162(m) and the
applicable Treasury Regulations thereunder) granted to any person in any fiscal
year shall be 1,500,000 shares of Stock. The foregoing provisions will be
construed in a manner consistent with Section 162(m).
 
(d) Stock Dividends, Stock Splits, etc. In the event of any change in the
outstanding shares of the Common Stock of the Company by reason of a stock
dividend, stock split, combination of shares, recapitalization, merger,
consolidation, transfer of assets, reorganization, conversion or what the
Administrator deems in its sole discretion to be similar circumstances, the
aggregate number and kind of shares which may be issued under this Plan
(including, but not limited to, the provisions of Section 4(a) and Section 4(c)
hereof) shall be appropriately adjusted in a manner determined in the sole
discretion of the Administrator.
 
(e) Par Value. Notwithstanding anything herein to the contrary, if a Participant
is required by applicable law to pay the par value of the Common Stock subject
to an Award, such payment may be made in any form permitted by applicable law,
including services performed or contracted to be performed, in the sole
discretion of the Administrator.
 
5. ELIGIBILITY AND PARTICIPATION
 
The Administrator will select Participants from among those current and
prospective Employees, directors and consultants to the Company or its
Affiliates and others who, in the opinion of the Administrator, are in a
position to make a significant contribution to the success of the Company and
its Affiliates. Eligibility for ISOs is limited to Employees of the Company or
of a “Parent Corporation” or “Subsidiary Corporation” of the Company on the date
of grant of the ISO.
 
6. RULES APPLICABLE TO AWARDS
 
(a) All Awards
 
(1) Award Provisions. The Administrator will determine the terms of all Awards,
subject to the limitations provided herein. By accepting any Award granted
hereunder, the Participant agrees to the terms of the Award and the Plan.
Notwithstanding any provision of this Plan to the contrary, awards of an
acquired company that are converted, replaced or adjusted in connection with the
acquisition may contain terms and conditions that are inconsistent with the
terms and conditions specified herein, as determined by the Administrator. No
Award shall be legally effective unless it is in writing and the document is
signed by the Administrator. The Administrator shall have the power to
accelerate the vesting of any Award granted under the Plan at any time following
the grant of the Award.
 
(2) Term of Plan. No Awards may be made under this Plan ten (10) years after
date of its adoption by the Board, but previously granted Awards may continue
beyond that date in accordance with their terms.
 
(3) Transferability. An ISO may not be transferred except to the extent
permitted by Section 422 of the Code. An Award other than an ISO may not be
transferred except to the extent set forth in the Award.
 

 
 

--------------------------------------------------------------------------------

 

(4) Dividend Equivalents, Etc.  The Administrator may provide for the payment of
amounts in lieu of cash dividends or other cash distributions with respect to an
Award; however, no dividends or other distributions may be paid in connection
with an Award of a Stock Option or SAR except to the extent such Stock Option or
SAR has been properly exercised.
 
(5) Rights Limited. Nothing in the Plan will be construed as giving any person
the right to continued employment or service with the Company or its Affiliates,
or any rights as a stockholder except as to shares of Stock actually issued
under the Plan. The loss of existing or potential profit in Awards will not
constitute an element of damages in the event of termination of Employment for
any reason, even if the termination is in violation of an obligation of the
Company or Affiliate to the Participant.
 
(6) Section 162(m). This Section 6(a)(6) applies to any Performance Award
intended to qualify as performance-based for the purposes of Section 162(m)
other than a Stock Option or SAR. In the case of any Performance Award to which
this Section 6(a)(6) applies, the Plan and such Award will be construed to the
maximum extent permitted by law in a manner consistent with qualifying the Award
for the performance-based compensation exception under Section 162(m). With
respect to such Performance Awards, the Administrator will preestablish, in
writing, one or more specific Performance Criteria no later than 90 days after
the commencement of the period of service to which the performance relates (or
at such earlier time as is required to qualify the Award as performance-based
under Section 162(m)). Prior to grant, vesting or payment of the Performance
Award, as the case may be, the Administrator will certify whether the applicable
Performance Criteria have been attained and such determination will be final and
conclusive. No Performance Award to which this Section 6(a)(6) applies may be
granted after the first meeting of the stockholders of the Company held five (5)
or more years after the date of approval of this Plan by the Stockholders of the
Company until the listed performance measures set forth in the definition of
“Performance Criteria” (as originally approved or as subsequently amended) have
been resubmitted to and reapproved by the stockholders of the Company in
accordance with the requirements of Section 162(m) of the Code, unless such
grant is made contingent upon such approval.
 
(7) Section 409A of the Code.
 
(i) Awards under the Plan are intended either to be exempt from the rules of
Section 409A of the Code or to satisfy those rules and shall be construed
accordingly. However, the Company shall not be liable to any Participant or
other holder of an Award with respect to any Award-related adverse tax
consequences arising under Section 409A or other provision of the Code.

(ii) If any provision of the Plan or an Award agreement contravenes any
regulations or Treasury guidance promulgated under Code Section 409A or could
cause an Award to be subject to the interest and penalties under Code Section
409A, such provision of the Plan or Award shall be deemed automatically modified
to maintain, to the maximum extent practicable, the original intent of the
applicable provision without violating the provisions of Code Section 409A.
Moreover, any discretionary authority that the Administrator may have pursuant
to the Plan shall not be applicable to an Award that is subject to Code Section
409A to the extent such discretionary authority will contravene Section 409A or
the regulations or guidance promulgated thereunder.

(iii) Notwithstanding any provisions of this Plan or any Award granted hereunder
to the contrary, no acceleration shall occur with respect to any Award to the
extent such acceleration would cause the Plan or an Award granted hereunder to
fail to comply with Code Section 409A.

 
 

--------------------------------------------------------------------------------

 

(iv) Notwithstanding any provisions of this Plan or any applicable Award
agreement to the contrary, no payment shall be made with respect to any Award
granted under this Plan to a “specified employee” (as such term is defined for
purposes of Code Section 409A) prior to the six-month anniversary of the
employee’s separation of service to the extent such six-month delay in payment
is required to comply with Code Section 409A.

(v) In the case of an Award providing for the payment of deferred compensation
subject to Section 409A of the Code, any payment of such deferred compensation
by reason of a Change in Control shall be made only if the Change in Control is
one described in subsection (a)(2)(A)(v) of Section 409A and the guidance
thereunder and shall be paid consistent with the requirements of Section 409A.
If any deferred compensation that would otherwise be payable by reason of a
Change in Control cannot be paid by reason of the immediately preceding
sentence, it shall be paid as soon as practicable thereafter consistent with the
requirements of Section 409A, as determined by the Administrator.

(8) For Cause Terminations. Notwithstanding anything to the contrary contained
in this Plan or in any Award, all Awards held by a Participant whose employment,
directorship, consulting, service or other relationship with the Company or any
Affiliate was terminated for “Cause” shall, subject to the discretion of the
Administrator to provide otherwise, terminate immediately as of the date of such
termination for “Cause. A termination of a Participant’s employment,
directorship, consulting, service or other relationship with the Company or any
Affiliate shall be for “Cause” if the Administrator determines that the
Participant: (i) was guilty of fraud, gross negligence or willful misconduct in
the performance of his or her duties for the Company or any Affiliate, (ii)
willfully and continually failed to perform substantially the Participant’s
duties with the Company or any Affiliate (other than any such failure resulting
from incapacity due to Disability) after delivery of written demand for
substantial performance to the Participant by the Board, the Administrator or
the Chief Executive Officer of the Company that specifically identified the
manner in which the Board, the Administrator or the Chief Executive Officer
believed the Participant did not substantially perform his or her duties, (iii)
breached or violated, in a material respect, any agreement between the
Participant and the Company or any Affiliate or any of the Company’s or its
Affiliates’ codes of conduct or corporate policies, including policy statements
regarding conflicts-of-interest, insider trading or confidentiality, (iv)
committed a material act of dishonesty or breach of trust, (v) acted in a manner
that was inimical or injurious, in a material respect, to the business or
interests of the Company or any of its Affiliates, or (vi) was convicted of, or
plead guilty or nolo contendere to, a felony or any other crime involving moral
turpitude which subjects, or if generally known, would subject, the Company or
any of its Affiliates to public ridicule or embarrassment.
 
(b) Stock Options and SARs
 
(1) Duration of Stock Options and SARs.  The latest date on which a Stock Option
or a SAR may be exercised will be the tenth anniversary of the date the Stock
Option (fifth anniversary in the case of an ISO granted to a ten percent
shareholder within the meaning of Section 422(b)(6) of the Code) or SAR was
granted, or such earlier date as may have been specified by the Administrator at
the time the Stock Option or SAR was granted. 
 
(2) Vesting. The Administrator shall fix the term during which each Stock Option
or SAR may be exercised, but no Stock Option or SAR shall be exercisable after
the tenth anniversary of its date of grant. A Stock Option and an SAR shall
become exercisable as provided in the Award. Notwithstanding any other provision
of the Plan, the Administrator may determine with respect to an Award that the
date on which any outstanding Stock Option or SAR or any portion thereof is
exercisable shall be advanced to an earlier date or dates designated by the
Administrator in accordance with such terms and subject to such conditions, if
any, as the Administrator shall specify.
 

 
 

--------------------------------------------------------------------------------

 

(3) Time and Manner of Exercise.  Unless the Administrator expressly provides
otherwise, an Award requiring exercise by the holder will not be deemed to have
been exercised until the Administrator receives a notice of exercise (in form
acceptable to the Administrator) signed by the appropriate person and
accompanied by any payment required under the Award. If the Award is exercised
by any person other than the Participant, the Administrator may require
satisfactory evidence that the person exercising the Award has the right to do
so. 
 
(4) Exercise Price. The exercise price (or in the case of a SAR, the base price
above which appreciation is to be measured) of each Award requiring exercise
shall be 100% (in the case of an ISO granted to a ten-percent shareholder within
the meaning of Section 422(b)(6) of the Code, 110%) of the fair market value of
the Stock subject to the Award, determined as of the date of grant, or such
higher amount as the Administrator may determine in connection with the grant.
Notwithstanding the foregoing, a Stock Option (whether or not an ISO) may be
issued or assumed with an exercise price determined according to the provisions
of Section 424(a) of the Code, if such issuance or assumption of such Option is
pursuant to a transaction described in Section 424(a) of the Code. If and to the
extent required by the corporation law of the state of incorporation of the
Company, the exercise price paid for each share of Stock shall not be less than
the par value per share of the Stock.
 
(5) Payment Of Exercise Price.  Where the exercise of an Award is to be
accompanied by payment, the Administrator shall state in the Award the required
or permitted forms of payment.
 
(6) Stock Option Forms. Unless otherwise determined by the Administrator and
subject to the authority of the Administrator set forth in Section 3 hereof, an
ISO granted pursuant to this Plan to an Employee shall be issued substantially
in the form set forth in Appendix I hereof, which form is hereby incorporated by
reference and made a part hereof, and shall contain substantially the terms and
conditions set forth therein. Subject to the authority of the Administrator set
forth in Section 3 hereof, a Stock Option which is not an ISO granted pursuant
to this Plan to an Employee shall be issued substantially in the form set forth
in Appendix II hereof, which form is hereby incorporated by reference and made a
part hereof, and shall contain substantially the terms and conditions set forth
therein. Subject to the authority of the Administrator set forth in Section 3
hereof, a Stock Option granted pursuant to this Plan to an individual or entity
which is not an Employee shall be issued substantially in the form set forth in
Appendix III hereof, which form is hereby incorporated by reference and made a
part hereof, and shall contain substantially the terms and conditions set forth
therein. At the time of the grant of a Stock Option, the Administrator may, in
the Administrator’s sole discretion, amend or supplement any of the option terms
contained in Appendix I, II or III hereof for any particular optionee, provided
that with respect to an ISO, the Stock Option satisfies the requirements for an
ISO set forth in the Code.
 
(7) Notification by Employees. Any Employee who disposes of shares acquired upon
the exercise of an ISO either (i) within two years from the date of grant of
such ISO or (ii) within one year after the transfer of such shares to the
Employee shall notify the Company of such disposition and of the amount realized
upon such disposition.
 
(c) Restricted Stock and Other Awards Not Requiring Exercise
 
(1) Consideration in General. In general, Awards that do not require exercise
may be made in exchange for such lawful consideration, including services, as
the Administrator determines. Any purchase price payable by a Participant to the
Company for Stock under an Award not requiring exercise shall be paid in cash or
check acceptable to the Administrator, through the delivery of shares of Stock
that have been outstanding for at least six months (unless the Administrator
approves a shorter period) and that have a fair market value equal to the
purchase price, if and to the extent permitted by the Administrator, by delivery
to the Company of a promissory note of the Participant, payable on such terms as
are specified by the Administrator, or by any combination of the foregoing
permissible forms of payment.
 

 
 

--------------------------------------------------------------------------------

 

(2) Vesting. Restricted Stock shall be granted subject to such restrictions on
the full enjoyment of the shares as the Administrator shall specify; which
restrictions may be based on the passage of time, satisfaction of Performance
Criteria, or the occurrence of one or more events; and shall lapse separately or
in combination upon such conditions and at such time or times, in installments
or otherwise, as the Administrator shall specify. No Award of Restricted Stock
made on or after July 31, 2008 which restrictions are based solely on the
passage of time will fully vest in less than three years from the date of grant
of the Award . No Award of Restricted Stock made on or after July 31, 2008 which
restrictions are based on the satisfaction of Performance Criteria will provide
for a performance period of less than one year. Notwithstanding the foregoing,
the Company may grant Awards of Restricted Stock on or after July 31, 2008
covering up to five percent (5%) of the Stock available for future Awards under
the Plan without complying with the provisions contained in the two prior
sentences of this paragraph.
 
(3) Restricted Stock Agreement Forms. Restricted Stock awarded pursuant to this
Plan to an Employee which is intended to be time vested and Restricted Stock
awarded to an individual or entity who or which is not an Employee which is
intended to be time vested shall contain such terms as determined by the
Administrator and shall be subject to the terms of an agreement executed by the
Company and the Participant receiving the Restricted Stock award containing such
terms as the Administrator shall determine.
 
7. AMENDMENT, SUPPLEMENT, WAIVER AND TERMINATION
 
The Board may at any time or times amend, supplement or waive the Plan (or any
of the provisions thereof) or any outstanding Award (or any of the provisions
thereof) for any purpose which may at the time be permitted by law, and may at
any time terminate the Plan as to any future grants of Awards; provided, that
except as otherwise expressly provided in the Plan the Board may not, without
the Participant’s consent, alter the terms of an Award so as to affect adversely
the Participant’s rights under the Award, unless the Administrator expressly
reserved the right to do so at the time of the Award. Any amendments,
supplement, waiver or termination to the Plan shall be conditioned upon
stockholder approval only to the extent, if any, such approval is required by
law (including the Code and applicable stock exchange or trading market
requirements), as determined by the Administrator. Moreover, with respect to any
Award granted on or after July 31, 2008, any restrictions placed on an Award
granted under the Plan shall not be waived by the Board or the Company, except
in the case of the death, disability or retirement of the recipient of the
Award, or in the event of a “Change of Control” as provided in the Plan.
 
8. OTHER COMPENSATION ARRANGEMENTS
 
The existence of the Plan or the grant of any Award will not in any way affect
the Company’s right to award a Participant bonuses or other compensation in
addition to Awards under the Plan.
 
9. WAIVER OF JURY TRIAL
 
By accepting an Award under the Plan, each Participant waives any right to a
trial by jury in any action, proceeding or counterclaim concerning any rights
under the Plan and any Award, or under any amendment, waiver, consent,
instrument, document or other agreement delivered or which in the future may be
delivered in connection therewith. By accepting an Award under the Plan, each
Participant certifies that no officer, representative, or attorney of the
Company has represented, expressly or otherwise, that the Company would not, in
the event of any action, proceeding or counterclaim, seek to enforce the
foregoing waiver.
 

 
 

--------------------------------------------------------------------------------

 

10. MISCELLANEOUS
 
(a) No Shareholder Rights. The holder of an Award shall have no rights as a
Company shareholder with respect thereto unless, and until the date as of which,
shares of Stock are in fact issued upon exercise or in payment with respect to
such Award.
 
(b) Securities Restrictions. No shares of Stock shall be issued, delivered or
transferred upon exercise or in payment of any Award granted hereunder unless
and until all legal requirements applicable to the issuance, delivery or
transfer of such shares have been complied with to the satisfaction of the
Administrator, and the Company, including, without limitation, compliance with
the provisions of the Securities Act of 1933, the Securities Exchange Act of
1934 and the applicable requirements of the exchanges or trading markets on
which the Company’s Stock may, at the time, be listed. The Administrator and the
Company shall have the right to condition any issuance of shares of Stock made
to any Participant hereunder on such Participant’s undertaking in writing to
comply with such restrictions on his or her subsequent disposition of such
shares as the Administrator and/or the Company shall deem necessary or advisable
as a result of any applicable law, regulation or official interpretation
thereof, and certificates representing such shares may be legended to reflect
any such restrictions.
 
(c) Taxes. The Company shall have the right to deduct from all Awards hereunder
paid in cash any federal, state, local or foreign taxes required by law to be
withheld with respect to such cash Awards. In the case of Awards to be
distributed in Stock, the Company shall have the right to require, as a
condition of such distribution, that the Participant or other person receiving
such Stock either (i) pay to the Company at the time of distribution thereof the
amount of any such taxes which the Company is required to withhold with respect
to such Stock or (ii) make such other arrangements as the Company may authorize
from time to time to provide for such withholding including without limitation
having the number of the units of the Award cancelled or the number of the
shares of Stock to be distributed reduced by an amount with a value equal to the
value of such taxes required to be withheld.
 
(d) No Employment Right. No Employee, director or consultant of the Company, or
of any Affiliate of the Company, shall have any claim or right to be granted an
Award under this Plan. Neither this Plan nor any action taken hereunder shall be
construed as giving any Employee any right to be retained in the employ of the
Company or any Affiliate or any director or consultant any right to continue as
a director or consultant of the Company or any Affiliate.
 
(e) Stock to be Used. Distributions of shares of Stock upon exercise, in payment
or in respect of Awards made under this Plan may be made either from shares of
authorized but unissued Stock reserved for such purpose by the Board or from
shares of authorized and issued Stock reacquired by the Company and held in its
treasury, as from time to time determined by the Administrator. The obligation
of the Company to make delivery of Awards in cash or Stock shall be subject to
currency or other restrictions imposed by any government.
 
(f) Expenses of the Plan. The costs and expenses of administering this Plan
shall be borne by the Company or its Affiliates and not charged to any Award or
to any Participant.
 
(g) Plan Unfunded. This Plan shall be unfunded. The Company shall not be
required to establish any special or separate fund or to make any other
segregation of assets to assure the payment of any Award under this Plan and
payment of awards shall be subordinate to the claims of the Company’s general
creditors.
 

 
 

--------------------------------------------------------------------------------

 

(h) Corporate Action. Corporate action with respect to an Award to a Participant
shall be deemed completed as of the date when the Administrator authorizes the
Award, regardless of when the written documentation for the Award is actually
delivered to, or acknowledged or agreed to by, the Participant.
 
(i) Governing Law. This Plan shall be governed by the laws of the state of
incorporation of the Company and shall be construed for all purposes in
accordance with the laws of such state.
 

 
 

--------------------------------------------------------------------------------

 

EXHIBIT A

Definition of Terms
 
The following terms, when used in the Plan, will have the meanings and be
subject to the provisions set forth below:
 
“Administrator”: The Committee, provided that so long as any class of the
Company’s common equity securities is required to be registered under Section 12
of the Securities Exchange Act of 1934 (the “1934 Act”), the Committee shall
consist of two or more directors, all of whom shall be “non-employee directors”
within the meaning of Rule 16b-3 promulgated under the 1934 Act, and further
provided that all of the Committee members shall be “independent directors” as
defined in the applicable rules of the principal exchange or quotation system on
which the Company’s common equity is listed for trading. In addition, if
practicable the Committee members shall be “outside directors” within the
meaning of Section 162(m); and provided further, that subject to any prohibition
under applicable law, including any applicable exchange or trading market
requirements, the Committee may delegate (i) to one or more of its members such
of its duties, powers and responsibilities as it may determine (other than the
allocation of Awards to the executive officers of the Company, persons who are
officers of the Company within the meaning of Section 16 of the Securities
Exchange Act of 1934 and the rules promulgated thereunder (“Section 16
officers”), or the directors of the Company); (ii) to one or more officers of
the Company the authority to allocate Awards among such persons (other than to
the executive officers of the Company or Section 16 officers or the directors of
the Company) eligible to receive Awards under the Plan as such delegated officer
or officers determine consistent with such delegation; provided, that with
respect to any delegation described in this clause (ii) the Committee (or a
properly delegated member or members of such Committee) shall (x) have
authorized the issuance of a specified number of shares of Stock under such
Awards and (y) shall have specified the consideration, if any, to be paid
therefor; and (iii) to such Employees or other persons as it determines such
ministerial tasks as it deems appropriate. In the event of any delegation
described in the preceding sentence, the term “Administrator” shall include the
person or persons so delegated to the extent of such delegation.
 
“Affiliate”: Any corporation or other entity owning, directly or indirectly, 50%
or more of the outstanding Stock of the Company, or in which the Company or any
such corporation or other entity owns, directly or indirectly, 50% or more of
the outstanding capital stock (determined by aggregate voting rights) or other
voting interests. Notwithstanding the foregoing, with respect to an ISO, the
term “Affiliate”, as used herein, shall refer only to the Company or a Parent
Corporation or a Subsidiary Corporation.
 
“Award”: The agreement or other document evidencing any or a combination of the
following:
 

 
(i)
Stock Options.

 

 
(ii)
SARs.

 

 
(iii)
Restricted Stock (also called “Restricted Shares”).

 

 
(iv)
Unrestricted Stock.

 

 
(v)
Stock Units, including Restricted Stock Units.

 

 
(vi)
Performance Awards.

 

 
A-1

--------------------------------------------------------------------------------

 

“Board”: The Board of Directors of the Company.
 
“Change in Control”: An event or events, in which:
 
(A) any “person” as such term is used in Sections 13(d) and 14(d) of the
1934 Act (other than (i) the Company, (ii) any subsidiary of the Company,
(iii) any trustee or other fiduciary holding securities under an employee
benefit plan of the Company or of any subsidiary of the Company, (iv) any
company owned, directly or indirectly, by the stockholders of the Company in
substantially the same proportions as their ownership of stock of the Company,
or (v) any individual or entity which on the date of adoption of this Plan by
the Board beneficially owned securities of the Company representing 10% or more
of the Company’s then outstanding securities), is or becomes the “beneficial
owner” (as defined in Section 13(d) of the 1934 Act), together with all
affiliates and Associates (as such terms are used in Rule 12b-2 of the General
Rules and Regulations under the 1934 Act) of such person, directly or
indirectly, of securities of the Company representing more than 15% of the
combined voting power of the Company’s then outstanding securities (other than
pursuant to a bona fide underwriting agreement relating to a public distribution
of the securities of the Company) or such person commences a tender or exchange
offer for more than 15% of the combined voting power of the Company’s then
outstanding securities;

(B) the stockholders of the Company approve a merger or consolidation of the
Company with any other company, other than (i) a merger or consolidation which
would result in the voting securities of the Company outstanding immediately
prior thereto continuing to represent (either by remaining outstanding or by
being converted into voting securities of the surviving entity), in combination
with the ownership of any trustee or other fiduciary holding securities under an
employee benefit plan of the Company or any subsidiary of the Company, more than
50% of the combined voting power of the voting securities of the Company or such
surviving entity outstanding immediately after such merger or consolidation or
(ii) a merger or consolidation effected to implement a recapitalization of the
Company (or similar transaction) after which no “person” (with the method of
determining “beneficial ownership” used in clause (A) of this definition) owns
more than 50% of the combined voting power of the securities of the Company or
the surviving entity of such merger or consolidation;

(C) during any period of two consecutive years (not including any period prior
to the execution of the Plan), individuals who at the beginning of such period
constitute the Board, and any new director (other than a director designated by
a person who has conducted or threatened a proxy contest, or has entered into an
agreement with the Company to effect a transaction described in clause (A), (B)
or (D) of this definition) whose election by the Board or nomination for
election by the Company’s stockholders was approved by a vote of at least a
majority of the directors then still in office, who either were directors at the
beginning of the period or whose election or nomination for election was
previously so approved cease for any reason to constitute at least a majority
thereof;
 
(D) the sale or other disposition by the Company of all or substantially all of
the Company’s assets; or

(E) the dissolution or complete liquidation of the Company.

“Code”: The U.S. Internal Revenue Code of 1986 as from time to time amended and
in effect, or any successor statute as from time to time in effect.
 
“Committee”: The Committee appointed by the Board to administer this Plan.
 

 
A-2

--------------------------------------------------------------------------------

 

“Common Stock”: See definition of “Stock”.
 
“Company”: Iconix Brand Group, Inc.
 
“Disability” shall mean permanent and total disability of an employee or
director participating in the Plan as determined by the Administrator in
accordance with uniform principles consistently applied, upon the basis of such
evidence as the Administrator deems necessary and desirable. Notwithstanding the
foregoing, with respect to an Award that is subject to Code Section 409A, no
condition shall constitute a “Disability” for purposes of the Plan unless such
condition also constitutes a disability as defined under Code Section 409A and,
in the case of an ISO, Code Section 22(e)(3).
 
“Employee”: Any person (including an officer) who is employed by the Company or
an Affiliate.
 
“Employment”: A Participant’s employment with the Company or its Affiliates.
Employment will be deemed to continue, unless the Administrator expressly
provides otherwise, so long as the Participant is employed by, or otherwise is
providing services in a capacity described in Section 5 to the Company or its
Affiliates. If a Participant’s employment or other service relationship is with
an Affiliate and that entity ceases to be an Affiliate, the Participant’s
Employment will be deemed to have terminated when the entity ceases to be an
Affiliate unless the Participant transfers Employment to the Company or its
remaining Affiliates or the Administrator expressly determines otherwise.
Notwithstanding the foregoing, with respect to an ISO, the term “Affiliate”, as
used herein, shall refer only to the Company or a Parent Corporation or a
Subsidiary Corporation.
 
“ISO”: A Stock Option intended to be an “incentive stock option” within the
meaning of Section 422 of the Code. Each option granted pursuant to the Plan
will be treated as providing by its terms that it is to be a non-incentive stock
option unless, as of the date of grant, it is expressly designated as an ISO.
 
“Parent Corporation”: The term “parent corporation” as used in any Stock Option
granted pursuant to this Plan, shall (except as otherwise provided in the Award)
have the meaning that is ascribed to that term when contained in Section 422(b)
of the Code and the regulations thereunder, and the Company shall be deemed to
be the grantor corporation for purposes of applying such meaning.
 
“Participant”: A person who is granted an Award under the Plan.
 
“Performance Award”: An Award subject to Performance Criteria. The Administrator
in its discretion may grant Performance Awards that are intended to qualify for
the performance-based compensation exception under Section 162(m) and
Performance Awards that are not intended so to qualify.
 
“Performance Criteria”: Specified criteria, other than the mere continuation of
Employment or the mere passage of time, the satisfaction of which is a condition
for the grant, exercisability, vesting or full enjoyment of an Award. For
purposes of Awards that are intended to qualify for the performance-based
compensation exception under Section 162(m), a Performance Criterion will mean
an objectively determinable measure of performance relating to any or any
combination of the following (measured either absolutely or by reference to an
index or indices and determined either on a consolidated basis or, as the
context permits, on a divisional, subsidiary, line of business, project or
geographical basis or in combinations thereof): sales; revenues; assets; costs;
earnings before or after deduction for all or any portion of interest, taxes,
depreciation, or amortization, whether or not on a continuing operations or an
aggregate or per share basis; return on equity, investment, capital or assets;
one or more operating ratios; borrowing levels, leverage ratios or credit
rating; market share; capital expenditures; cash flow; stock price; stockholder
return or stockholder value; sales of particular products or services; customer
acquisition or retention; safety, health or environmental affairs performance;
compliance; acquisitions and divestitures (in whole or in part); joint ventures
and strategic alliances; spin-offs, split-ups and the like; reorganizations; or
recapitalizations, restructurings, financings (issuance of debt or equity) or
refinancings. A Performance Criterion and any targets with respect thereto
determined by the Administrator need not be based upon an increase, a positive
or improved result or avoidance of loss. To the extent consistent with the
requirements for satisfying the performance-based compensation exception under
Section 162(m), the Administrator may provide in the case of any Award intended
to qualify for such exception that one or more of the Performance Criteria
applicable to such Award will be adjusted in an objectively determinable manner
to reflect events (for example, but without limitation, acquisitions or
dispositions) occurring during the performance period that affect the applicable
Performance Criterion or Criteria.
 

 
A-3

--------------------------------------------------------------------------------

 

“Plan”: Iconix Brand Group, Inc. 2006 Equity Incentive Plan as from time to time
amended and in effect.
 
“Restricted Stock”: Stock subject to restrictions requiring that it be
redelivered or offered for sale to the Company if specified conditions are not
satisfied.
 
“Restricted Stock Unit”: A Stock Unit that is, or as to which the delivery of
Stock or cash in lieu of Stock is, subject to the satisfaction of specified
performance or other vesting conditions.
 
“Section 162(m)”: Section 162(m) of the Code.
 
“SAR”: A right entitling the holder upon exercise to receive an amount (payable
in shares of Stock of equivalent value or cash) equal to the excess of the fair
market value of the shares of Stock subject to the right over the fair market
value of such shares at the date of grant.
 
“Stock”: Common Stock of the Company, par value $.001 per share.
 
“Stock Option”: An option entitling the holder to acquire shares of Stock upon
payment of the exercise price.
 
“Stock Unit”: An unfunded and unsecured promise, denominated in shares of Stock,
to deliver Stock or cash measured by the value of Stock in the future.
 
“Subsidiary Corporation”: The term "subsidiary corporation" as used in any Stock
Option granted pursuant to this Plan, shall (except as otherwise provided in the
Award) have the meaning that is ascribed to that term when contained in Section
422(b) of the Code and the regulations thereunder, and the Company shall be
deemed to be the grantor corporation for purposes of applying such meaning.
 
“Unrestricted Stock”: Stock that is not subject to any restrictions under the
terms of the Award.
 

 
A-4

--------------------------------------------------------------------------------

 

APPENDIX I

INCENTIVE STOCK OPTION

To: ____________________________
Name
 
____________________________
Address
 
Date of Grant: _____________________

You are hereby granted an option, effective as of the date hereof, to purchase
__________ shares of common stock, $.001 par value ("Common Stock"), of Iconix
Brand Group, Inc., a Delaware corporation (the "Company"), at a price of $   per
share pursuant to the Company's 2006 Equity Incentive Plan (the "Plan").
 
This option shall terminate and is not exercisable after ten years from the date
of its grant (the "Scheduled Termination Date"), except if terminated earlier as
hereafter provided.
 
Your option may first be exercised on and after one year from the date of grant,
but not before that time. On and after one year and prior to two years from the
date of grant, your option may be exercised for up to 20% of the total number of
shares subject to the option minus the number of shares previously purchased by
exercise of the option (as adjusted for any change in the outstanding shares of
the Common Stock of the Company by reason of a stock dividend, stock split,
combination of shares, recapitalization, merger, consolidation, transfer of
assets, reorganization, conversion or what the Administrator deems in its sole
discretion to be similar circumstances). Each succeeding year thereafter your
option may be exercised for up to an additional 20% of the total number of
shares subject to the option minus the number of shares previously purchased by
exercise of the option (as adjusted for any change in the outstanding shares of
the Common Stock of the Company by reason of a stock dividend, stock split,
combination of shares, recapitalization, merger, consolidation, transfer of
assets, reorganization, conversion or what the Administrator deems in its sole
discretion to be similar circumstances). Thus, this option is fully exercisable
on and after five years after the date of grant, except if terminated earlier as
provided herein.
 
You may exercise your option by giving written notice to the Secretary of the
Company on forms supplied by the Company at its then principal executive office,
accompanied by payment of the option price for the total number of shares you
specify that you wish to purchase. The payment may be in any of the following
forms: (a) cash, which may be evidenced by a check and includes cash received
from a stock brokerage firm in a so-called "cashless exercise"; (b) (unless
prohibited by the Administrator) certificates representing shares of Common
Stock of the Company, which will be valued by the Secretary of the Company at
the fair market value per share of the Company's Common Stock (as determined in
accordance with the Plan) on the date of delivery of such certificates to the
Company, accompanied by an assignment of the stock to the Company; or
(c) (unless prohibited by the Administrator) any combination of cash and Common
Stock of the Company valued as provided in clause (b). The use of the so-called
"attestation procedure") to exercise a stock option may be permitted by the
Administrator. Any assignment of stock shall be in a form and substance
satisfactory to the Secretary of the Company, including guarantees of
signature(s) and payment of all transfer taxes if the Secretary deems such
guarantees necessary or desirable.
 

 
I-1

--------------------------------------------------------------------------------

 

Your option will, to the extent not previously exercised by you, terminate three
months after the date on which your employment by the Company or a Company
subsidiary corporation is terminated other than: (i) by reason of Disability (as
defined in the Plan) or death, in which case your option will terminate one year
from the date of termination of employment due to Disability or death (but in no
event later than the Scheduled Termination Date) or (ii) for cause (as defined
in the Plan) or your resignation, in which case your option will terminate
immediately and you will forfeit any right to exercise the option. After the
date your employment is terminated, as aforesaid (other than for the reasons
stated in clause ii), you may exercise this option only for the number of shares
which you had a right to purchase and did not purchase on the date your
employment terminated. If you are employed by a Company subsidiary corporation,
your employment shall be deemed to have terminated on the date your employer
ceases to be a Company subsidiary corporation, unless you are on that date
transferred to the Company or another Company subsidiary corporation. Your
employment shall not be deemed to have terminated if you are transferred from
the Company to a Company subsidiary corpora-tion, or vice versa, or from one
Company subsidiary corporation to another Company subsidiary corporation.
 
If you die while employed by the Company or a Company subsidiary corporation,
your executor or administrator, as the case may be, may, at any time within one
year after the date of your death (but in no event later than the Scheduled
Termination Date), exercise the option as to any shares which you had a right to
purchase and did not purchase during your lifetime. If your employment with the
Company or a Company parent or subsidiary corporation is terminated by reason of
your Disability, you or your legal guardian or custodian may at any time within
one year after the date of such termination (but in no event later than the
Scheduled Termination Date), exercise the option as to any shares which you had
a right to purchase and did not purchase prior to such termination. Your
executor, administrator, guardian or custodian must present proof of his
authority satisfactory to the Company prior to being allowed to exercise this
option.
 
In the event of any change in the outstanding shares of the Common Stock of the
Company by reason of a stock dividend, stock split, combination of shares,
recapitalization, merger, consolidation, transfer of assets, reorganization,
conversion or what the Administrator deems in its sole discretion to be similar
circumstances, the number and kind of shares subject to this option and the
option price of such shares shall be appropriately adjusted in a manner to be
determined in the sole discretion of the Administrator, whose decision shall be
final, binding and conclusive in the absence of clear and convincing evidence of
bad faith.
 
In the event of a liquidation or proposed liquidation of the Company, including
(but not limited to) a transfer of assets followed by a liquidation of the
Company, or in the event of a Change in Control (as defined in the Plan) or
proposed Change in Control, the Administrator shall have the right to accelerate
this option and/or require you to exercise this option upon thirty (30) days
prior written notice to you. If at the time such written notice is given this
option is not otherwise exercisable, the written notice will set forth your
right to exercise this option to the extent accelerated by the Administrator. In
the event this option is not exercised by you within the thirty (30) day period
set forth in such written notice, this option shall terminate on the last day of
such thirty (30) day period, notwithstanding anything to the contrary contained
in this option.
 
This option is not transferable otherwise than by will or the laws of descent
and distribution, and is exercisable during your lifetime only by you,
including, for this purpose, your legal guardian or custodian in the event of
Disability. Until the option price has been paid in full pursuant to due
exercise of this option and the purchased shares are delivered to you, you do
not have any rights as a shareholder of the Company. The Company reserves the
right not to deliver to you the shares purchased by virtue of the exercise of
this option during any period of time in which the Company deems, in its sole
discretion, that such delivery would violate a federal, state, local or
securities exchange rule, regulation or law.
 

 
I-2

--------------------------------------------------------------------------------

 

Notwithstanding anything to the contrary contained herein, this option is not
exercisable until all the following events occur and during the following
periods of time:
 
(a) Until the Plan pursuant to which this option is granted is approved by the
shareholders of the Company in the manner required by any applicable provision
of the Code (as defined in the Plan) and the regulations thereunder and any
applicable securities exchange or listing rule or agreement;
 
(b) Until this option and the optioned shares are approved, registered and
listed with such federal, state, local and foreign regulatory bodies or agencies
and securities exchanges as the Company may deem necessary or desirable, or the
Company deems such option or optioned shares to be exempted therefrom;
 
(c) During any period of time in which the Company deems that the exercisability
of this option, the offer to sell the shares optioned hereunder, or the sale
thereof, may violate a federal, state, local or foreign law, rule or regulation,
or any applicable securities exchange or listing rule or agreement, or may cause
the Company to be legally obligated to issue or sell more shares than the
Company is legally entitled to issue or sell; or
 
(d) Until you have paid or made suitable arrangements to pay (which may include
payment through the surrender of Common Stock, unless prohibited by the
Administrator) (i) all federal, state, local and foreign tax withholding
required by the Company in connection with the option exercise and (ii) the
employee's portion of other federal, state, local and foreign payroll and other
taxes due in connection with the option exercise.
 
The following two paragraphs shall be applicable if, on the date of exercise of
this option, no registration statement and current prospectus under the
Securities Act of 1933 covers the Common Stock to be purchased pursuant to such
exercise, and shall continue to be applicable for so long as such registration
has not occurred and such current prospectus is not available:
 
(a) You hereby agree, warrant and represent that you will acquire the Common
Stock to be issued hereunder for your own account for investment purposes only,
and not with a view to, or in connection with, any resale or other distribution
of any of such shares, except as hereafter permitted. You further agree that you
will not at any time make any offer, sale, transfer, pledge or other disposition
of such Common Stock to be issued hereunder without an effective registration
statement under the Securities Act of 1933, as amended, and under any applicable
state securities laws or an opinion of counsel acceptable to the Company to the
effect that the proposed transaction will be exempt from such registration. You
agree to execute such instruments, representations, acknowledgments and
agreements as the Company may, in its sole discretion, deem advisable to avoid
any violation of federal, state, local or foreign law, rule or regulation, or
any securities exchange rule or listing agreement.
 
(b) The certificates for the Common Stock to be issued to you hereunder shall
bear the following legend:
 

 
I-3

--------------------------------------------------------------------------------

 

"The shares represented by this certificate have not been registered under the
Securities Act of 1933, as amended, or under applicable state securities laws.
The shares have been acquired for investment and may not be offered, sold,
transferred, pledged or otherwise disposed of without an effective registration
statement under the Securities Act of 1933, as amended, and under any applicable
state securities laws or an opinion of counsel acceptable to the Company that
the proposed transaction will be exempt from such registration."
 
The foregoing legend shall be removed upon registration of the legended shares
under the Securities Act of 1933, as amended, and under any applicable state
laws, and the availability of a current prospectus, or upon receipt of any
opinion of counsel acceptable to the Company that such registration and current
prospectus are no longer required.
 
The sole purpose of the agreements, warranties, representations and legend set
forth in the two immediately preceding paragraphs is to prevent violations of
the Securities Act of 1933, as amended, and any applicable state securities
laws.
 
It is the intention of the Company and you that this option shall, if possible,
be an "Incentive Stock Option" as that term is used in Section 422(b) of the
Code and the regulations thereunder. In the event this option is in any way
inconsistent with the legal requirements of the Code or the regulations
thereunder for an "Incentive Stock Option," this option shall be deemed
automatically amended as of the date hereof to conform to such legal
requirements, if such conformity may be achieved by amendment. To the extent
that the number of shares subject to this option which are exercisable for the
first time exceed the $100,000 limitation contained in Section 422(d) of the
Code, this option will not be considered an Incentive Stock Option.
 
If shares of Common Stock acquired by exercise of this option are disposed of
within two (2) years following the date of grant or one (1) year following the
issuance of the shares to you (or any situation in which the option will be
taxed as a non-qualified option), you shall, immediately prior to such
disposition, notify the Company in writing of the date and terms of such
disposition and provide such other information regarding the disposition as the
Company may reasonably require.
 
Nothing herein shall modify your status as an at-will employee of the Company or
any of its Affiliates (as defined in the Plan). Further, nothing herein
guarantees you employment for any specified period of time. This means that
either you or the Company or any of its Affiliates may terminate your employment
at any time for any reason, with or without cause, or for no reason. You
recognize that, for instance, you may terminate your employment or the Company
or any of its Affiliates may terminate your employment prior to the date on
which your option becomes vested or exercisable.
 
You understand and agree that the existence of this option will not affect in
any way the right or power of the Company or its shareholders to make or
authorize any or all adjustments, recapitalizations, reorganizations, or other
changes in the Company’s capital structure or its business, or any merger or
consolidation of the Company, or any issuance of bonds, debentures, preferred or
other stocks with preference ahead of or convertible into, or otherwise
affecting the common shares or the rights thereof, or the dissolution or
liquidation of the Company, or any sale or transfer of all or any part of its
assets or business, or any other corporate act or proceeding, whether of a
similar character or otherwise.
 

 
I-4

--------------------------------------------------------------------------------

 

Any notice you give to the Company must be in writing and either hand-delivered
or mailed to the office of the General Counsel of the Company. If mailed, it
should be addressed to the General Counsel of the Company at its then main
headquarters. Any notice given to you will be addressed to you at your address
as reflected on the personnel records of the Company. You and the Company may
change the address for notice by like notice to the other. Notice will be deemed
to have been duly delivered when hand-delivered or, if mailed, on the day such
notice is postmarked.
 
Any dispute or disagreement between you and the Company with respect to any
portion of this option (excluding Attachment A hereto) or its validity,
construction, meaning, performance or your rights hereunder shall, unless the
Company in its sole discretion determines otherwise, be settled by arbitration,
at a location designated by the Company, in accordance with the Commercial
Arbitration Rules of the American Arbitration Association or its successor, as
amended from time to time. However, prior to submission to arbitration you will
attempt to resolve any disputes or disagreements with the Company over this
option amicably and informally, in good faith, for a period not to exceed two
weeks. Thereafter, the dispute or disagreement will be submitted to arbitration.
At any time prior to a decision from the arbitrator(s) being rendered, you and
the Company may resolve the dispute by settlement. You and the Company shall
equally share the costs charged by the American Arbitration Association or its
successor, but you and the Company shall otherwise be solely responsible for
your own respective counsel fees and expenses. The decision of the arbitrator(s)
shall be made in writing, setting forth the award, the reasons for the decision
and award and shall be binding and conclusive on you and the Company. Further,
neither you nor the Company shall appeal any such award. Judgment of a court of
competent jurisdiction may be entered upon the award and may be enforced as such
in accordance with the provisions of the award.
 
This option shall be subject to the terms of the Plan in effect on the date this
option is granted, which terms are hereby incorporated herein by reference and
made a part hereof. In the event of any conflict between the terms of this
option and the terms of the Plan in effect on the date of this option, the terms
of the Plan shall govern. This option constitutes the entire understanding
between the Company and you with respect to the subject matter hereof and no
amendment, supplement or waiver of this option, in whole or in part, shall be
binding upon the Company unless in writing and signed by the President of the
Company. This option and the performances of the parties hereunder shall be
construed in accordance with and governed by the laws of the State of Delaware.
 
In consideration of the grant to you of this option, you hereby agree to the
confidentiality and non-interference provisions set forth in Attachment A
hereto.
 
Please sign the copy of this option and return it to the Company's Secretary,
thereby indicating your understanding of and agreement with its terms and
conditions, including Attachment A hereto.
 

ICONIX BRAND GROUP, INC.
 
 
By: _________________________________
 
 

 
I-5

--------------------------------------------------------------------------------

 

ACKNOWLEDGMENT

I hereby acknowledge receipt of a copy of the Plan. I hereby represent that I
have read and understood the terms and conditions of the Plan and of this
option, including Attachment A, hereto. I hereby signify my understanding of,
and my agreement with, the terms and conditions of the Plan and of this option,
including Attachment A, hereto. I agree to accept as binding, conclusive, and
final all decisions or interpretations of the Administrator concerning any
questions arising under the Plan with respect to this option. I accept this
option in full satisfaction of any previous written or verbal promise made to me
by the Company or any of its Affiliates with respect to option or stock grants.
 
 

Date: _____________
_____________________________
Signature of Optionee
 
_____________________________
Print Name

 

 
I-6

--------------------------------------------------------------------------------

 

Attachment A to Stock Option

Confidentiality and Non-Interference.

(a) You covenant and agree that, in consideration of the grant to you of this
stock option, you will not, during your employment with the Company or at any
time thereafter, except with the express prior written consent of the Company or
pursuant to the lawful order of any judicial or administrative agency of
government, directly or indirectly, disclose, communicate or divulge to any
individual or entity, or use for the benefit of any individual or entity, any
knowledge or information with respect to the conduct or details of the Company's
business which you, acting reasonably, believe or should believe to be of a
confidential nature and the disclosure of which not to be in the Company's
interest.
 
(b) You covenant and agree that, in consideration of the grant to you of this
stock option, you will not, during your employment with the Company, except with
the express prior written consent of the Company, directly or indirectly,
whether as employee, owner, partner, member, consultant, agent, director,
officer, shareholder or in any other capacity, engage in or assist any
individual or entity to engage in any act or action which you, acting
reasonably, believe or should believe would be harmful or inimical to the
interests of the Company.
 
(c) You covenant and agree that, in consideration of the grant to you of this
stock option, you will not, for a period of two years after your employment with
the Company ceases for any reason whatsoever (whether voluntary or not), except
with the express prior written consent of the Company, directly or indirectly,
whether as employee, owner, partner, member, consultant, agent, director,
officer, shareholder or in any other capacity, for your own account or for the
benefit of any individual or entity, (i) solicit any customer of the Company for
business which would result in such customer terminating their relationship with
the Company; or (ii) solicit or induce any individual or entity which is an
employee of the Company to leave the Company or to otherwise terminate their
relationship with the Company.
 
(d) The parties agree that any breach by you of any of the covenants or
agreements contained in this Attachment A will result in irreparable injury to
the Company for which money damages could not adequately compensate the Company
and therefore, in the event of any such breach, the Company shall be entitled
(in addition to any other rights and remedies which it may have at law or in
equity) to have an injunction issued by any competent court enjoining and
restraining you and/or any other individual or entity involved therein from
continuing such breach. The existence of any claim or cause of action which you
may have against the Company or any other individual or entity shall not
constitute a defense or bar to the enforcement of such covenants. If the Company
is obliged to resort to the courts for the enforcement of any of the covenants
or agreements contained in this Attachment A, or if such covenants or agreements
are otherwise the subject of litigation between the parties, and the Company
prevails in such enforcement or litigation, then the term of such covenants and
agreements shall be extended for a period of time equal to the period of such
breach, which extension shall commence on the later of (a) the date on which the
original (unextended) term of such covenants and agreements is scheduled to
terminate or (b) the date of the final court order (without further right of
appeal) enforcing such covenant or agreement.
 
(e) If any portion of the covenants or agreements contained in this Attachment
A, or the application hereof, is construed to be invalid or unenforceable, the
other portions of such covenant(s) or agreement(s) or the application thereof
shall not be affected and shall be given full force and effect without regard to
the invalid or enforceable portions to the fullest extent possible. If any
covenant or agreement in this Attachment A is held unenforceable because of the
area covered, the duration thereof, or the scope thereof, then the court making
such determination shall have the power to reduce the area and/or duration
and/or limit the scope thereof, and the covenant or agreement shall then be
enforceable in its reduced form.
 

 
I-7

--------------------------------------------------------------------------------

 

(f) For purposes of this Attachment A, the term "the Company" shall include the
Company, any successor to the Company and all present and future direct and
indirect subsidiaries and affiliates of the Company.
 

 
I-8

--------------------------------------------------------------------------------

 

APPENDIX II

NON-QUALIFIED STOCK OPTION FOR OFFICERS AND OTHER
EMPLOYEES

To: ____________________________
Name
 
____________________________
Address
 
Date of Grant: _____________________

You are hereby granted an option, effective as of the date hereof, to purchase
__________ shares of common stock, $.001 par value ("Common Stock"), of Iconix
Brand Group, Inc. , a Delaware corporation (the "Company"), at a price of $  
per share pursuant to the Company's 2006 Equity Incentive Plan (the "Plan").
 
This option shall terminate and is not exercisable after ten years from the date
of its grant (the "Scheduled Termination Date"), except if terminated earlier as
hereafter provided.
 
Your option may first be exercised on and after one year from the date of grant,
but not before that time. On and after one year and prior to two years from the
date of grant, your option may be exercised for up to 20% of the total number of
shares subject to the option minus the number of shares previously purchased by
exercise of the option (as adjusted for any change in the outstanding shares of
the Common Stock of the Company by reason of a stock dividend, stock split,
combination of shares, recapitalization, merger, consolidation, transfer of
assets, reorganization, conversion or what the Administrator deems in its sole
discretion to be similar circumstances). Each succeeding year thereafter your
option may be exercised for up to an additional 20% of the total number of
shares subject to the option minus the number of shares previously purchased by
exercise of the option (as adjusted for any change in the outstanding shares of
the Common Stock of the Company by reason of a stock dividend, stock split,
combination of shares, recapitalization, merger, consolidation, transfer of
assets, reorganization, conversion or what the Administrator deems in its sole
discretion to be similar circumstances). Thus, this option is fully exercisable
on and after five years after the date of grant, except if terminated earlier as
provided herein.
 
You may exercise your option by giving written notice to the Secretary of the
Company on forms supplied by the Company at its then principal executive office,
accompanied by payment of the option price for the total number of shares you
specify that you wish to purchase. The payment may be in any of the following
forms: (a) cash, which may be evidenced by a check and includes cash received
from a stock brokerage firm in a so-called "cashless exercise"; (b) (unless
prohibited by the Administrator) certificates representing shares of Common
Stock of the Company, which will be valued by the Secretary of the Company at
the fair market value per share of the Company's Common Stock (as determined in
accordance with the Plan) on the date of delivery of such certificates to the
Company, accompanied by an assignment of the stock to the Company; or
(c) (unless prohibited by the Administrator) any combination of cash and Common
Stock of the Company valued as provided in clause (b). The use of the so-called
"attestation procedure" to exercise a stock option may be permitted by the
Administrator. Any assignment of stock shall be in a form and substance
satisfactory to the Secretary of the Company, including guarantees of
signature(s) and payment of all transfer taxes if the Secretary deems such
guarantees necessary or desirable.
 

 
II-1

--------------------------------------------------------------------------------

 

Your option will, to the extent not previously exercised by you, terminate three
months after the date on which your employment by the Company or a Company
subsidiary corporation is terminated other than: (i) by reason of Disability (as
defined in the Plan) or death, in which case your option will terminate one year
from the date of termination of employment due to Disability or death (but in no
event later than the Scheduled Termination Date) or (ii) for cause (as defined
in the Plan) or your resignation, in which case your option will terminate
immediately and you will forfeit any right to exercise the option. After the
date your employment is terminated, as aforesaid (other than for the reasons
stated in clause ii), you may exercise this option only for the number of shares
which you had a right to purchase and did not purchase on the date your
employment terminated. If you are employed by a Company subsidiary corporation,
your employment shall be deemed to have terminated on the date your employer
ceases to be a Company subsidiary corporation, unless you are on that date
transferred to the Company or another Company subsidiary corporation. Your
employment shall not be deemed to have terminated if you are transferred from
the Company to a Company subsidiary corpora-tion, or vice versa, or from one
Company subsidiary corporation to another Company subsidiary corporation.
 
If you die while employed by the Company or a Company subsidiary corporation,
your executor or administrator, as the case may be, may, at any time within one
year after the date of your death (but in no event later than the Scheduled
Termination Date), exercise the option as to any shares which you had a right to
purchase and did not purchase during your lifetime. If your employment with the
Company or a Company parent or subsidiary corporation is terminated by reason of
your Disability, you or your legal guardian or custodian may at any time within
one year after the date of such termination (but in no event later than the
Scheduled Termination Date), exercise the option as to any shares which you had
a right to purchase and did not purchase prior to such termination. Your
executor, administrator, guardian or custodian must present proof of his
authority satisfactory to the Company prior to being allowed to exercise this
option.
 
In the event of any change in the outstanding shares of the Common Stock of the
Company by reason of a stock dividend, stock split, combination of shares,
recapitalization, merger, consolidation, transfer of assets, reorganization,
conversion or what the Administrator deems in its sole discretion to be similar
circumstances, the number and kind of shares subject to this option and the
option price of such shares shall be appropriately adjusted in a manner to be
determined in the sole discretion of the Administrator, whose decision shall be
final, binding and conclusive in the absence of clear and convincing evidence of
bad faith.
 
In the event of a liquidation or proposed liquidation of the Company, including
(but not limited to) a transfer of assets followed by a liquidation of the
Company, or in the event of a Change in Control (as defined in the Plan) or
proposed Change in Control, the Administrator shall have the right to accelerate
this option and/or require you to exercise this option upon thirty (30) days
prior written notice to you. If at the time such written notice is given this
option is not otherwise exercisable, the written notice will set forth your
right to exercise this option to the extent accelerated by the Administrator. In
the event this option is not exercised by you within the thirty (30) day period
set forth in such written notice, this option shall terminate on the last day of
such thirty (30) day period, notwithstanding anything to the contrary contained
in this option.
 
This option is not transferable otherwise than by will or the laws of descent
and distribution, and is exercisable during your lifetime only by you,
including, for this purpose, your legal guardian or custodian in the event of
Disability. Until the option price has been paid in full pursuant to due
exercise of this option and the purchased shares are delivered to you, you do
not have any rights as a shareholder of the Company. The Company reserves the
right not to deliver to you the shares purchased by virtue of the exercise of
this option during any period of time in which the Company deems, in its sole
discretion, that such delivery would violate a federal, state, local or
securities exchange rule, regulation or law.
 

 
II-2

--------------------------------------------------------------------------------

 

Notwithstanding anything to the contrary contained herein, this option is not
exercisable until all the following events occur and during the following
periods of time:
 
(a) Until the Plan pursuant to which this option is granted is approved by the
shareholders of the Company in the manner required by any applicable provision
of the Code (as defined in the Plan) and the regulations thereunder and any
applicable securities exchange or listing rule or agreement;
 
(b) Until this option and the optioned shares are approved, registered and
listed with such federal, state, local and foreign regulatory bodies or agencies
and securities exchanges as the Company may deem necessary or desirable, or the
Company deems such option or optioned shares to be exempted therefrom;
 
(c) During any period of time in which the Company deems that the exercisability
of this option, the offer to sell the shares optioned hereunder, or the sale
thereof, may violate a federal, state, local or foreign law, rule or regulation,
or any applicable securities exchange or listing rule or agreement, or may cause
the Company to be legally obligated to issue or sell more shares than the
Company is legally entitled to issue or sell; or
 
(d) Until you have paid or made suitable arrangements to pay (which may include
payment through the surrender of Common Stock, unless prohibited by the
Administrator) (i) all federal, state, local and foreign tax withholding
required by the Company in connection with the option exercise and (ii) the
employee's portion of other federal, state, local and foreign payroll and other
taxes due in connection with the option exercise.
 
The following two paragraphs shall be applicable if, on the date of exercise of
this option, no registration statement and current prospectus under the
Securities Act of 1933 covers the Common Stock to be purchased pursuant to such
exercise, and shall continue to be applicable for so long as such registration
has not occurred and such current prospectus is not available:
 
(a) You hereby agree, warrant and represent that you will acquire the Common
Stock to be issued hereunder for your own account for investment purposes only,
and not with a view to, or in connection with, any resale or other distribution
of any of such shares, except as hereafter permitted. You further agree that you
will not at any time make any offer, sale, transfer, pledge or other disposition
of such Common Stock to be issued hereunder without an effective registration
statement under the Securities Act of 1933, as amended, and under any applicable
state securities laws or an opinion of counsel acceptable to the Company to the
effect that the proposed transaction will be exempt from such registration. You
agree to execute such instruments, representations, acknowledgments and
agreements as the Company may, in its sole discretion, deem advisable to avoid
any violation of federal, state, local or foreign law, rule or regulation, or
any securities exchange rule or listing agreement.
 
(b) The certificates for the Common Stock to be issued to you hereunder shall
bear the following legend:
 

 
II-3

--------------------------------------------------------------------------------

 

"The shares represented by this certificate have not been registered under the
Securities Act of 1933, as amended, or under applicable state securities laws.
The shares have been acquired for investment and may not be offered, sold,
transferred, pledged or otherwise disposed of without an effective registration
statement under the Securities Act of 1933, as amended, and under any applicable
state securities laws or an opinion of counsel acceptable to the Company that
the proposed transaction will be exempt from such registration."
 
The foregoing legend shall be removed upon registration of the legended shares
under the Securities Act of 1933, as amended, and under any applicable state
laws or upon receipt of any opinion of counsel acceptable to the Company that
said registration is no longer required.
 
The sole purpose of the agreements, warranties, representations and legend set
forth in the two immediately preceding paragraphs is to prevent violations of
the Securities Act of 1933, as amended, and any applicable state securities
laws.
 
It is the intention of the Company and you that this option shall not be an
“Incentive Stock Option” as that term is used in Section 422(b) of the Code and
the regulations thereunder.
 
Nothing herein shall modify your status as an at-will employee of the Company or
any of its Affiliates (as defined in the Plan). Further, nothing herein
guarantees you employment for any specified period of time. This means that
either you or the Company or any of its Affiliates may terminate your employment
at any time for any reason, with or without cause, or for no reason. You
recognize that, for instance, you may terminate your employment or the Company
or any of its Affiliates may terminate your employment prior to the date on
which your option becomes vested or exercisable.
 
You understand and agree that the existence of this option will not affect in
any way the right or power of the Company or its shareholders to make or
authorize any or all adjustments, recapitalizations, reorganizations, or other
changes in the Company’s capital structure or its business, or any merger or
consolidation of the Company, or any issuance of bonds, debentures, preferred or
other stocks with preference ahead of or convertible into, or otherwise
affecting the common shares or the rights thereof, or the dissolution or
liquidation of the Company, or any sale or transfer of all or any part of its
assets or business, or any other corporate act or proceeding, whether of a
similar character or otherwise.
 
Any notice you give to the Company must be in writing and either hand-delivered
or mailed to the office of the General Counsel of the Company. If mailed, it
should be addressed to the General Counsel of the Company at its then main
headquarters. Any notice given to you will be addressed to you at your address
as reflected on the personnel records of the Company. You and the Company may
change the address for notice by like notice to the other. Notice will be deemed
to have been duly delivered when hand-delivered or, if mailed, on the day such
notice is postmarked.
 
Any dispute or disagreement between you and the Company with respect to any
portion of this option (excluding Attachment A hereto) or its validity,
construction, meaning, performance or your rights hereunder shall, unless the
Company in its sole discretion determines otherwise, be settled by arbitration,
at a location designated by the Company, in accordance with the Commercial
Arbitration Rules of the American Arbitration Association or its successor, as
amended from time to time. However, prior to submission to arbitration you will
attempt to resolve any disputes or disagreements with the Company over this
option amicably and informally, in good faith, for a period not to exceed two
weeks. Thereafter, the dispute or disagreement will be submitted to arbitration.
At any time prior to a decision from the arbitrator(s) being rendered, you and
the Company may resolve the dispute by settlement. You and the Company shall
equally share the costs charged by the American Arbitration Association or its
successor, but you and the Company shall otherwise be solely responsible for
your own respective counsel fees and expenses. The decision of the arbitrator(s)
shall be made in writing, setting forth the award, the reasons for the decision
and award and shall be binding and conclusive on you and the Company. Further,
neither you nor the Company shall appeal any such award. Judgment of a court of
competent jurisdiction may be entered upon the award and may be enforced as such
in accordance with the provisions of the award.
 

 
II-4

--------------------------------------------------------------------------------

 

This option shall be subject to the terms of the Plan in effect on the date this
option is granted, which terms are hereby incorporated herein by reference and
made a part hereof. In the event of any conflict between the terms of this
option and the terms of the Plan in effect on the date of this option, the terms
of the Plan shall govern. This option constitutes the entire understanding
between the Company and you with respect to the subject matter hereof and no
amendment, supplement or waiver of this option, in whole or in part, shall be
binding upon the Company unless in writing and signed by the President of the
Company. This option and the performances of the parties hereunder shall be
construed in accordance with and governed by the laws of the State of Delaware.
 
In consideration of the grant to you of this option, you hereby agree to the
confidentiality and non-interference provisions set forth in Attachment A
hereto.
 
Please sign the copy of this option and return it to the Company's Secretary,
thereby indicating your understanding of and agreement with its terms and
conditions, including Attachment A hereto.
 
ICONIX BRAND GROUP INC.
 
By: _______________________________
 

 
II-5

--------------------------------------------------------------------------------

 

ACKNOWLEDGMENT

I hereby acknowledge receipt of a copy of the Plan. I hereby represent that I
have read and understood the terms and conditions of the Plan and of this
option, including Attachment A, hereto. I hereby signify my understanding of,
and my agreement with, the terms and conditions of the Plan and of this option,
including Attachment A, hereto. I agree to accept as binding, conclusive, and
final all decisions or interpretations of the Administrator concerning any
questions arising under the Plan with respect to this option. I accept this
option in full satisfaction of any previous written or verbal promise made to me
by the Company or any of its Affiliates with respect to option or stock grants.
 
 

Date: _____________
_____________________________
Signature of Optionee
 
_____________________________
Print Name

 

 
II-6

--------------------------------------------------------------------------------

 

Attachment A to Stock Option

Confidentiality and Non-Interference.

(a) You covenant and agree that, in consideration of the grant to you of this
stock option, you will not, during your employment with the Company or at any
time thereafter, except with the express prior written consent of the Company or
pursuant to the lawful order of any judicial or administrative agency of
government, directly or indirectly, disclose, communicate or divulge to any
individual or entity, or use for the benefit of any individual or entity, any
knowledge or information with respect to the conduct or details of the Company's
business which you, acting reasonably, believe or should believe to be of a
confidential nature and the disclosure of which not to be in the Company's
interest.
 
(b) You covenant and agree that, in consideration of the grant to you of this
stock option, you will not, during your employment with the Company, except with
the express prior written consent of the Company, directly or indirectly,
whether as employee, owner, partner, member, consultant, agent, director,
officer, shareholder or in any other capacity, engage in or assist any
individual or entity to engage in any act or action which you, acting
reasonably, believe or should believe would be harmful or inimical to the
interests of the Company.
 
(c) You covenant and agree that, in consideration of the grant to you of this
stock option, you will not, for a period of two years after your employment with
the Company ceases for any reason whatsoever (whether voluntary or not), except
with the express prior written consent of the Company, directly or indirectly,
whether as employee, owner, partner, member, consultant, agent, director,
officer, shareholder or in any other capacity, for your own account or for the
benefit of any individual or entity, (i) solicit any customer of the Company for
business which would result in such customer terminating their relationship with
the Company; or (ii) solicit or induce any individual or entity which is an
employee of the Company to leave the Company or to otherwise terminate their
relationship with the Company.
 
(d) The parties agree that any breach by you of any of the covenants or
agreements contained in this Attachment A will result in irreparable injury to
the Company for which money damages could not adequately compensate the Company
and therefore, in the event of any such breach, the Company shall be entitled
(in addition to any other rights and remedies which it may have at law or in
equity) to have an injunction issued by any competent court enjoining and
restraining you and/or any other individual or entity involved therein from
continuing such breach. The existence of any claim or cause of action which you
may have against the Company or any other individual or entity shall not
constitute a defense or bar to the enforcement of such covenants. If the Company
is obliged to resort to the courts for the enforcement of any of the covenants
or agreements contained in this Attachment A, or if such covenants or agreements
are otherwise the subject of litigation between the parties, and the Company
prevails in such enforcement or litigation, then the term of such covenants and
agreements shall be extended for a period of time equal to the period of such
breach, which extension shall commence on the later of (a) the date on which the
original (unextended) term of such covenants and agreements is scheduled to
terminate or (b) the date of the final court order (without further right of
appeal) enforcing such covenant or agreement.
 
(e) If any portion of the covenants or agreements contained in this Attachment
A, or the application hereof, is construed to be invalid or unenforceable, the
other portions of such covenant(s) or agreement(s) or the application thereof
shall not be affected and shall be given full force and effect without regard to
the invalid or enforceable portions to the fullest extent possible. If any
covenant or agreement in this Attachment A is held unenforceable because of the
area covered, the duration thereof, or the scope thereof, then the court making
such determination shall have the power to reduce the area and/or duration
and/or limit the scope thereof, and the covenant or agreement shall then be
enforceable in its reduced form.
 

 

--------------------------------------------------------------------------------

 

(f) For purposes of this Attachment A, the term "the Company" shall include the
Company, any successor to the Company and all present and future direct and
indirect subsidiaries and affiliates of the Company.
 

 

--------------------------------------------------------------------------------

 

APPENDIX III

NON-QUALIFIED STOCK OPTION FOR DIRECTORS
AND CONSULTANTS
To: ____________________________
Name
 
____________________________
Address
 
Date of Grant: _____________________

You are hereby granted an option, effective as of the date hereof, to purchase
__________ shares of common stock, $.001 par value ("Common Stock"), of Iconix
Brand Group, Inc., a Delaware corporation (the "Company"), at a price of $   per
share pursuant to the Company's 2006 Equity Incentive Plan (the "Plan").
 
This option shall terminate and is not exercisable after ten years from the date
of its grant (the "Scheduled Termination Date"), except if terminated earlier as
hereafter provided.
 
Your option may first be exercised on and after one year from the date of grant,
but not before that time. On and after one year and prior to two years from the
date of grant, your option may be exercised for up to 20% of the total number of
shares subject to the option minus the number of shares previously purchased by
exercise of the option (as adjusted for any change in the outstanding shares of
the Common Stock of the Company by reason of a stock dividend, stock split,
combination of shares, recapitalization, merger, consolidation, transfer of
assets, reorganization, conversion or what the Administrator deems in its sole
discretion to be similar circumstances). Each succeeding year thereafter your
option may be exercised for up to an additional 20% of the total number of
shares subject to the option minus the number of shares previously purchased by
exercise of the option (as adjusted for any change in the outstanding shares of
the Common Stock of the Company by reason of a stock dividend, stock split,
combination of shares, recapitalization, merger, consolidation, transfer of
assets, reorganization, conversion or what the Administrator deems in its sole
discretion to be similar circumstances). Thus, this option is fully exercisable
on and after five years after the date of grant, except if terminated earlier as
provided herein.
 
You may exercise your option by giving written notice to the Secretary of the
Company on forms supplied by the Company at its then principal executive office,
accompanied by payment of the option price for the total number of shares you
specify that you wish to purchase. The payment may be in any of the following
forms: (a) cash, which may be evidenced by a check and includes cash received
from a stock brokerage firm in a so-called "cashless exercise"; (b) (unless
prohibited by the Administrator) certificates representing shares of Common
Stock of the Company, which will be valued by the Secretary of the Company at
the fair market value per share of the Company's Common Stock (as determined in
accordance with the Plan) on the date of delivery of such certificates to the
Company, accompanied by an assignment of the stock to the Company; or
(c) (unless prohibited by the Administrator) any combination of cash and Common
Stock of the Company valued as provided in clause (b). The use of the so-called
"attestation procedure" to exercise a stock option may be permitted by the
Administrator. Any assignment of stock shall be in a form and substance
satisfactory to the Secretary of the Company, including guarantees of
signature(s) and payment of all transfer taxes if the Secretary deems such
guarantees necessary or desirable.
 

 

--------------------------------------------------------------------------------

 

Your option will, to the extent not previously exercised by you, terminate three
months after the date on which your directorship or consultancy by the Company
or a Company subsidiary corporation is terminated other than by reason of (i)
Disability (as defined in the Plan) or death, in which case your option will
terminate one year from the date of termination of directorship or consultancy
due to Disability or death (but in no event later than the Scheduled Termination
Date) or (ii) for cause (as defined in the Plan) or your resignation, in which
case your option will terminate immediately and you will forfeit any right to
exercise the option. After the date your directorship or consultancy is
terminated, as aforesaid (other than for the reasons stated in clause (ii), you
may exercise this option only for the number of shares which you had a right to
purchase and did not purchase on the date your directorship or consultancy
terminated. Provided you are willing to continue your directorship or
consultancy for the Company or a successor after a Change in Control at the same
compensation you enjoyed immediately prior to such Change in Control, if your
directorship or consultancy is involuntarily terminated without cause after a
Change in Control, you may exercise this option for the number of shares you
would have had a right to purchase on the date of an Acceleration Event. If you
are employed by a Company subsidiary corporation, your directorship or
consultancy shall be deemed to have terminated on the date your employer ceases
to be a Company subsidiary corporation, unless you are on that date transferred
to the Company or another Company subsidiary corporation. Your directorship or
consultancy shall not be deemed to have terminated if you are transferred from
the Company to a Company subsidiary corpora-tion, or vice versa, or from one
Company subsidiary corporation to another Company subsidiary corporation.
 
If you die while employed by the Company or a Company subsidiary corporation,
your executor or administrator, as the case may be, may, at any time within one
year after the date of your death (but in no event later than the Scheduled
Termination Date), exercise the option as to any shares which you had a right to
purchase and did not purchase during your lifetime. If your directorship or
consultancy with the Company or a Company parent or subsidiary corporation is
terminated by reason of your Disability, you or your legal guardian or custodian
may at any time within one year after the date of such termination (but in no
event later than the Scheduled Termination Date), exercise the option as to any
shares which you had a right to purchase and did not purchase prior to such
termination. Your executor, administrator, guardian or custodian must present
proof of his authority satisfactory to the Company prior to being allowed to
exercise this option.
 
In the event of any change in the outstanding shares of the Common Stock of the
Company by reason of a stock dividend, stock split, combination of shares,
recapitalization, merger, consolidation, transfer of assets, reorganization,
conversion or what the Administrator deems in its sole discretion to be similar
circumstances, the number and kind of shares subject to this option and the
option price of such shares shall be appropriately adjusted in a manner to be
determined in the sole discretion of the Administrator, whose decision shall be
final, binding and conclusive in the absence of clear and convincing evidence of
bad faith.
 
In the event of a liquidation or proposed liquidation of the Company, including
(but not limited to) a transfer of assets followed by a liquidation of the
Company, or in the event of a Change in Control (as defined in the Plan) or
proposed Change in Control, the Administrator shall have the right to accelerate
this option and/or require you to exercise this option upon thirty (30) days
prior written notice to you. If at the time such written notice is given this
option is not otherwise exercisable, the written notice will set forth your
right to exercise this option to the extent accelerated by the Administrator. In
the event this option is not exercised by you within the thirty (30) day period
set forth in such written notice, this option shall terminate on the last day of
such thirty (30) day period, notwithstanding anything to the contrary contained
in this option.
 

 

--------------------------------------------------------------------------------

 

This option is not transferable otherwise than by will or the laws of descent
and distribution, and is exercisable during your lifetime only by you,
including, for this purpose, your legal guardian or custodian in the event of
Disability. Until the option price has been paid in full pursuant to due
exercise of this option and the purchased shares are delivered to you, you do
not have any rights as a shareholder of the Company. The Company reserves the
right not to deliver to you the shares purchased by virtue of the exercise of
this option during any period of time in which the Company deems, in its sole
discretion, that such delivery would violate a federal, state, local or
securities exchange rule, regulation or law.
 
Notwithstanding anything to the contrary contained herein, this option is not
exercisable until all the following events occur and during the following
periods of time:
 
(a) Until the Plan pursuant to which this option is granted is approved by the
shareholders of the Company in the manner required by any applicable provision
of the Code (as defined in the Plan) and the regulations thereunder and any
applicable securities exchange or listing rule or agreement;
 
(b) Until this option and the optioned shares are approved, registered and
listed with such federal, state, local and foreign regulatory bodies or agencies
and securities exchanges as the Company may deem necessary or desirable, or the
Company deems such option or optioned shares to be exempted therefrom;
 
(c) During any period of time in which the Company deems that the exercisability
of this option, the offer to sell the shares optioned hereunder, or the sale
thereof, may violate a federal, state, local or foreign law, rule or regulation,
or any applicable securities exchange or listing rule or agreement, or may cause
the Company to be legally obligated to issue or sell more shares than the
Company is legally entitled to issue or sell; or
 
(d) Until you have paid or made suitable arrangements to pay (which may include
payment through the surrender of Common Stock, unless prohibited by the
Administrator) (i) all federal, state, local and foreign tax withholding
required by the Company in connection with the option exercise and (ii) the
employee's portion of other federal, state, local and foreign payroll and other
taxes due in connection with the option exercise.
 
The following two paragraphs shall be applicable if, on the date of exercise of
this option, no registration statement and current prospectus under the
Securities Act of 1933 covers the Common Stock to be purchased pursuant to such
exercise, and shall continue to be applicable for so long as such registration
has not occurred and such current prospectus is not available:
 
(a) You hereby agree, warrant and represent that you will acquire the Common
Stock to be issued hereunder for your own account for investment purposes only,
and not with a view to, or in connection with, any resale or other distribution
of any of such shares, except as hereafter permitted. You further agree that you
will not at any time make any offer, sale, transfer, pledge or other disposition
of such Common Stock to be issued hereunder without an effective registration
statement under the Securities Act of 1933, as amended, and under any applicable
state securities laws or an opinion of counsel acceptable to the Company to the
effect that the proposed transaction will be exempt from such registration. You
agree to execute such instruments, representations, acknowledgments and
agreements as the Company may, in its sole discretion, deem advisable to avoid
any violation of federal, state, local or foreign law, rule or regulation, or
any securities exchange rule or listing agreement.
 
 
 

 

--------------------------------------------------------------------------------

 

(b) The certificates for the Common Stock to be issued to you hereunder shall
bear the following legend:
 
"The shares represented by this certificate have not been registered under the
Securities Act of 1933, as amended, or under applicable state securities laws.
The shares have been acquired for investment and may not be offered, sold,
transferred, pledged or otherwise disposed of without an effective registration
statement under the Securities Act of 1933, as amended, and under any applicable
state securities laws or an opinion of counsel acceptable to the Company that
the proposed transaction will be exempt from such registration."
 
The foregoing legend shall be removed upon registration of the legended shares
under the Securities Act of 1933, as amended, and under any applicable state
laws or upon receipt of any opinion of counsel acceptable to the Company that
said registration is no longer required.
 
The sole purpose of the agreements, warranties, representations and legend set
forth in the two immediately preceding paragraphs is to prevent violations of
the Securities Act of 1933, as amended, and any applicable state securities
laws.
 
It is the intention of the Company and you that this option shall not be an
"Incentive Stock Option" as that term is used in Section 422(b) of the Code and
the regulations thereunder.
 
Nothing herein guarantees your term as a director of, or consultant to, the
Company or any of its Affiliates (as defined in the Plan) for any specified
period of time. This means that either you or the Company or any of its
Affiliates may terminate your directorship or consultancy at any time for any
reason, with or without cause, or for no reason. You recognize that, for
instance, the Company or any of its Affiliates may terminate your directorship
or consultancy with the Company or any of its Affiliates prior to the date on
which your option becomes vested or exercisable.
 
You understand and agree that the existence of this option will not affect in
any way the right or power of the Company or its shareholders to make or
authorize any or all adjustments, recapitalizations, reorganizations, or other
changes in the Company’s capital structure or its business, or any merger or
consolidation of the Company, or any issuance of bonds, debentures, preferred or
other stocks with preference ahead of or convertible into, or otherwise
affecting the common shares or the rights thereof, or the dissolution or
liquidation of the Company, or any sale or transfer of all or any part of its
assets or business, or any other corporate act or proceeding, whether of a
similar character or otherwise.
 
Any notice you give to the Company must be in writing and either hand-delivered
or mailed to the office of the General Counsel of the Company. If mailed, it
should be addressed to the General Counsel of the Company at its then main
headquarters. Any notice given to you will be addressed to you at your address
as reflected on the records of the Company. You and the Company may change the
address for notice by like notice to the other. Notice will be deemed to have
been duly delivered when hand-delivered or, if mailed, on the day such notice is
postmarked.
 
Any dispute or disagreement between you and the Company with respect to any
portion of this option (excluding Attachment A hereto) or its validity,
construction, meaning, performance or your rights hereunder shall, unless the
Company in its sole discretion determines otherwise, be settled by arbitration,
at a location designated by the Company, in accordance with the Commercial
Arbitration Rules of the American Arbitration Association or its successor, as
amended from time to time. However, prior to submission to arbitration you will
attempt to resolve any disputes or disagreements with the Company over this
option amicably and informally, in good faith, for a period not to exceed two
weeks. Thereafter, the dispute or disagreement will be submitted to arbitration.
At any time prior to a decision from the arbitrator(s) being rendered, you and
the Company may resolve the dispute by settlement. You and the Company shall
equally share the costs charged by the American Arbitration Association or its
successor, but you and the Company shall otherwise be solely responsible for
your own respective counsel fees and expenses. The decision of the arbitrator(s)
shall be made in writing, setting forth the award, the reasons for the decision
and award and shall be binding and conclusive on you and the Company. Further,
neither you nor the Company shall appeal any such award. Judgment of a court of
competent jurisdiction may be entered upon the award and may be enforced as such
in accordance with the provisions of the award.
 

 

--------------------------------------------------------------------------------

 

This option shall be subject to the terms of the Plan in effect on the date this
option is granted, which terms are hereby incorporated herein by reference and
made a part hereof. In the event of any conflict between the terms of this
option and the terms of the Plan in effect on the date of this option, the terms
of the Plan shall govern. This option constitutes the entire understanding
between the Company and you with respect to the subject matter hereof and no
amendment, supplement or waiver of this option, in whole or in part, shall be
binding upon the Company unless in writing and signed by the President of the
Company. This option and the performances of the parties hereunder shall be
construed in accordance with and governed by the laws of the State of Delaware.
 
In consideration of the grant to you of this option, you hereby agree to the
confidentiality and non-interference provisions set forth in Attachment A
hereto.
 
Please sign the copy of this option and return it to the Company's Secretary,
thereby indicating your understanding of and agreement with its terms and
conditions, including Attachment A hereto.
 
ICONIX BRAND GROUP, INC.
 
By: _____________________________

 

--------------------------------------------------------------------------------

 

ACKNOWLEDGMENT

I hereby acknowledge receipt of a copy of the Plan. I hereby represent that I
have read and understood the terms and conditions of the Plan and of this
option, including Attachment A, hereto. I hereby signify my understanding of,
and my agreement with, the terms and conditions of the Plan and of this option,
including Attachment A, hereto. I agree to accept as binding, conclusive, and
final all decisions or interpretations of the Administrator concerning any
questions arising under the Plan with respect to this option. I accept this
option in full satisfaction of any previous written or verbal promise made to me
by the Company or any of its Affiliates with respect to option or Stock grants.
 
 

Date: _____________
_____________________________
Signature of Optionee
 
_____________________________
Print Name

 

--------------------------------------------------------------------------------

 

Attachment A to Stock Option

Confidentiality and Non-Interference.

(a) You covenant and agree that, in consideration of the grant to you of this
stock option, you will not, during your term as a director of, or a consultant
to, the Company or at any time thereafter, except with the express prior written
consent of the Company or pursuant to the lawful order of any judicial or
administrative agency of government, directly or indirectly, disclose,
communicate or divulge to any individual or entity, or use for the benefit of
any individual or entity, any knowledge or information with respect to the
conduct or details of the Company's business which you, acting reasonably,
believe or should believe to be of a confidential nature and the disclosure of
which not to be in the Company's interest.
 
(b You covenant and agree that, in consideration of the grant to you of this
stock option, you will not, during your term as a director of, or a consultant
to, the Company, except with the express prior written consent of the Company,
directly or indirectly, whether as employee, owner, partner, member, consultant,
agent, director, officer, shareholder or in any other capacity, engage in or
assist any individual or entity to engage in any act or action which you, acting
reasonably, believe or should believe would be harmful or inimical to the
interests of the Company.
 
(c) You covenant and agree that, in consideration of the grant to you of this
stock option, you will not, for a period of two years after your term as a
director of, or a consultant to, the Company ceases for any reason whatsoever
(whether voluntary or not), except with the express prior written consent of the
Company, directly or indirectly, whether as employee, owner, partner, member,
consultant, agent, director, officer, shareholder or in any other capacity, for
your own account or for the benefit of any individual or entity, (i) solicit any
customer of the Company for business which would result in such customer
terminating their relationship with the Company; or (ii) solicit or induce any
individual or entity which is an employee of the Company to leave the Company or
to otherwise terminate their relationship with the Company.
 
(d) The parties agree that any breach by you of any of the covenants or
agreements contained in this Attachment A will result in irreparable injury to
the Company for which money damages could not adequately compensate the Company
and therefore, in the event of any such breach, the Company shall be entitled
(in addition to any other rights and remedies which it may have at law or in
equity) to have an injunction issued by any competent court enjoining and
restraining you and/or any other individual or entity involved therein from
continuing such breach. The existence of any claim or cause of action which you
may have against the Company or any other individual or entity shall not
constitute a defense or bar to the enforcement of such covenants. If the Company
is obliged to resort to the courts for the enforcement of any of the covenants
or agreements contained in this Attachment A, or if such covenants or agreements
are otherwise the subject of litigation between the parties, and the Company
prevails in such enforcement or litigation, then the term of such covenants and
agreements shall be extended for a period of time equal to the period of such
breach, which extension shall commence on the later of (a) the date on which the
original (unextended) term of such covenants and agreements is scheduled to
terminate or (b) the date of the final court order (without further right of
appeal) enforcing such covenant or agreement.
 
(e) If any portion of the covenants or agreements contained in this Attachment
A, or the application hereof, is construed to be invalid or unenforceable, the
other portions of such covenant(s) or agreement(s) or the application thereof
shall not be affected and shall be given full force and effect without regard to
the invalid or enforceable portions to the fullest extent possible. If any
covenant or agreement in this Attachment A is held unenforceable because of the
area covered, the duration thereof, or the scope thereof, then the court making
such determination shall have the power to reduce the area and/or duration
and/or limit the scope thereof, and the covenant or agreement shall then be
enforceable in its reduced form.
 
(f) For purposes of this Attachment A, the term "the Company" shall include the
Company, any successor to the Company and all present and future direct and
indirect subsidiaries and affiliates of the Company.
 
 

--------------------------------------------------------------------------------