EX-10.2






SKECHERS U.S.A., INC.




2008 EMPLOYEE STOCK PURCHASE PLAN




Skechers U.S.A., Inc., a Delaware corporation (the “Company”), hereby adopts the Skechers
U.S.A., Inc. 2008 Employee Stock Purchase Plan (the “Plan”), effective as of the Effective Date (as
defined herein).




	 	1.	 	Purpose. The purposes of the Plan are as follows:





(a) To assist employees of the Company and its Designated Subsidiaries (as defined below) in
acquiring a stock ownership interest in the Company pursuant to a plan which is intended to qualify
as an “employee stock purchase plan” within the meaning of Section 423(b) of the Internal Revenue
Code of 1986, as amended.



(b) To help employees provide for their future security and to encourage them to remain in the
employment of the Company and its Designated Subsidiaries.




	 	2.	 	Definitions.





(a) “Administrator” shall mean the administrator of the Plan, as determined pursuant to
Section 14 hereof.



(b) “Board” shall mean the Board of Directors of the Company.



(c) “Code” shall mean the Internal Revenue Code of 1986, as amended.



(d) “Committee” shall mean the committee appointed to administer the Plan pursuant to Section
14 hereof.



(e) “Common Stock” shall mean the Class A Common Stock of the Company, $0.001 par value per
share, and such other securities that may be substituted for Common Stock pursuant to Section 19
hereof.



(f) “Company” shall mean Skechers U.S.A., Inc., a Delaware corporation, or any successor
thereto.



(g) “Compensation” shall mean all base straight time gross earnings including commissions,
payments for overtime, incentive payments and performance bonuses.



(h) “Designated Subsidiary” shall mean any Subsidiary which has been designated by the
Administrator from time to time in its sole discretion as eligible to participate in the Plan. The
Administrator may designate, or terminate the designation of, a subsidiary as a Designated
Subsidiary without the approval of the stockholders of the Company.



(i) “Effective Date” shall have the meaning set forth in Section 23.



(j) “Eligible Employee” shall mean an Employee of the Company or a Designated Subsidiary: (i)
who does not, immediately after the option is granted, own stock possessing five percent (5%) or
more of the total combined voting power or value of all classes of stock of the Company, a Parent
or a Subsidiary (as determined under Section 423(b)(3) of the Code); and (ii) whose customary
employment is for more than five (5) months in any calendar year. For purposes of clause (i), the
rules of Section 424(d) of the Code with regard to the attribution of stock ownership shall apply
in determining the stock ownership of an individual, and stock which an Employee may purchase under
outstanding options shall be treated as stock owned by the Employee. For purposes of the Plan, the
employment relationship shall be treated as continuing intact while the individual is on sick leave
or other leave of absence approved by the Company or Designated Subsidiary and meeting the
requirements of Treasury Regulation Section 1.421-7(h)(2). Where the period of leave exceeds
ninety (90) days and the individual’s right to reemployment is not guaranteed either by statute or
by contract, the employment relationship shall be deemed to have terminated on the ninety-first
(91st) day of such leave.



(k) “Employee” shall mean any person who renders services to the Company or a Subsidiary in
the status of an employee within the meaning of Code Section 3401(c). “Employee” shall not include
any director of the Company or a Subsidiary who does not render services to the Company or a
Subsidiary in the status of an employee within the meaning of Code Section 3401(c).



(l) “Enrollment Date” shall mean the first Trading Day of each Offering Period.



(m) “Exercise Date” shall mean the last Trading Day of each Purchase Period.



(n) “Fair Market Value” shall mean, as of any date, the value of Common Stock determined as
follows:



(i) If the Common Stock is traded on an exchange, its Fair Market Value shall be the closing
sales price for a share of Common Stock as reported in The Wall Street Journal (or such other
source as the Administrator may deem reliable for such purposes) for such date, or if no sale
occurred on such date, the first trading date immediately prior to such date during which a sale
occurred;



(ii) If the Common Stock is not traded on an exchange but is quoted on a quotation system, its
Fair Market Value shall be the mean between the closing representative bid and asked prices for the
Common Stock on such date, or if no sale occurred on such date, the first date immediately prior to
such date on which sales prices or bid and asked prices, as applicable, are reported by such
quotation system; or



(iii) In the absence of an established market for the Common Stock, the Fair Market Value
thereof shall be determined in good faith by the Administrator.



(o) “Offering Period” shall mean each period of approximately six (6) months commencing on any
January 1 or July 1 and terminating on the last Trading Day on or before the next occurring June 30
or December 31, as applicable. The first Offering Period under the Plan shall commence on January
1, 2008 and end on the last Trading Day on or before June 30, 2008. The duration and timing of
Offering Periods may be changed pursuant to Section 4 of this Plan, but in no event may an Offering
Period have a duration in excess of twenty-seven (27) months.



(p) “Parent” means any corporation, other than the Company, in an unbroken chain of
corporations ending with the Company if, at the time of the determination, each of the corporations
other than the Company owns stock possessing 50% or more of the total combined voting power of all
classes of stock in one of the other corporations in such chain.



(q) “Per Period Limit” shall have the meaning set forth in Section 7.



(r) “Plan” shall mean this Skechers U.S.A., Inc. 2008 Employee Stock Purchase Plan.



(s) “Purchase Period” shall mean the approximately six (6) month period commencing on each
Enrollment Date and ending with the next Exercise Date. Notwithstanding the foregoing, the first
Purchase Period with respect to the initial Offering Period under the Plan shall commence on
January 1, 2008 (or if such day is not a Trading Day, then on the first Trading Day thereafter) and
end on the last Trading Day on or before June 30, 2008. Unless and until changed by the
Administrator, each Purchase Period shall be for approximately the same six month interval as the
corresponding Offering Period.



(t) “Purchase Price” shall mean 85% of the Fair Market Value of a share of Common Stock on the
Enrollment Date or on the Exercise Date, whichever is lower; provided, however,
that the Purchase Price may be adjusted by the Administrator pursuant to Section 19 hereof;
provided, further, that the Purchase Price shall not be less than the par value of
a share of Common Stock.



(u) “Subsidiary” shall mean any corporation, other than the Company, in an unbroken chain of
corporations beginning with the Company if, at the time of the determination, each of the
corporations other than the last corporation in an unbroken chain owns stock possessing 50% or more
of the total combined voting power of all classes of stock in one of the other corporations in such
chain.



(v) “Trading Day” shall mean a day on which national stock exchanges are open for trading.




3. Eligibility.



(a) Any Eligible Employee who shall be employed by the Company or a Designated Subsidiary on a
given Enrollment Date for an Offering Period shall be eligible to participate in the Plan during
such Offering Period, subject to the requirements of Section 5 hereof and the limitations imposed
by Section 423(b) of the Code.



(b) Each person who, during the course of an Offering Period, first becomes an Eligible
Employee subsequent to the Enrollment Date will be eligible to become a participant in the Plan on
the first day of the first Purchase Period following the day on which such person becomes an
Eligible Employee, subject to the requirements of Section 5 hereof and the limitations imposed by
Section 423(b) of the Code.



(c) No Eligible Employee shall be granted an option under the Plan which permits his or her
rights to purchase Common Stock under the Plan, and to purchase stock under all other employee
stock purchase plans of the Company, any Parent or any Subsidiary subject to Section 423 of the
Code, to accrue at a rate which exceeds $25,000 of fair market value of such stock (determined at
the time the option is granted) for each calendar year in which the option is outstanding at any
time. For purposes of the limitation imposed by this subsection, the right to purchase stock under
an option accrues when the option (or any portion thereof) first becomes exercisable during the
calendar year, the right to purchase stock under an option accrues at the rate provided in the
option, but in no case may such rate exceed $25,000 of fair market value of such stock (determined
at the time such option is granted) for any one calendar year, and a right to purchase stock which
has accrued under an option may not be carried over to any option. This limitation shall be
applied in accordance with Section 423(b)(8) of the Code and the Treasury Regulations thereunder.



4. Offering Periods. The Plan shall be implemented by consecutive Offering Periods
which shall continue until the Plan expires or is terminated in accordance with Section 20 hereof.
The Administrator shall have the power to change the duration of Offering Periods (including the
commencement dates thereof) with respect to future offerings without stockholder approval if such
change is announced at least five (5) days prior to the scheduled beginning of the first Offering
Period to be affected thereafter.




5. Participation.



(a) An Eligible Employee may become a participant in the Plan for any Offering Period by
completing a subscription agreement authorizing payroll deductions in a form acceptable to the
Administrator and filing it with the Company’s payroll office fifteen (15) days (or such shorter or
longer period as may be determined by the Administrator, in its sole discretion) prior to the
applicable Enrollment Date.



(c) Each person who, during the course of an Offering Period, first becomes an Eligible
Employee subsequent to the Enrollment Date may become a participant in the Plan for any subsequent
Offering Period by completing a subscription agreement authorizing payroll deductions in a form
acceptable to the Administrator and filing it with the Company’s payroll office fifteen (15) days
(or such shorter or longer period as may be determined by the Administrator, in its sole
discretion) prior to the Enrollment Date for the subsequent Offering Period with respect to which
such Eligible Employee’s participation is to commence. The rights granted to such participant
shall have the same characteristics as any rights originally granted during that Offering Period
except that the first day of the Purchase Period in which such person initially participates in the
Plan shall be the “Enrollment Date” for all purposes for such person, including determination of
the Purchase Price.



(d) Payroll deductions for a participant shall commence on the first payroll following the
Enrollment Date and shall end on the last payroll in the Offering Period to which such
authorization is applicable, unless sooner terminated by the participant as provided in Section 10
hereof.



(e) During a leave of absence approved by the Company or a Subsidiary and meeting the
requirements of Treasury Regulation Section 1.421-7(h)(2), a participant may continue to
participate in the Plan by making cash payments to the Company on each pay day equal to the amount
of the participant’s payroll deductions under the Plan for the pay day immediately preceding the
first day of such participant’s leave of absence. If a leave of absence is unapproved or fails to
meet the requirements of Treasury Regulation Section 1.421-7(h)(2), the participant will cease
automatically to participate in the Plan. In such event, the Company will automatically cease to
deduct the participant’s payroll under the Plan. The Company will pay to the participant his or
her total payroll deductions for the Purchase Period, in cash in one lump sum (without interest),
as soon as practicable after the participant ceases to participate in the Plan.



(f) A participant’s completion of a subscription agreement will enroll such participant in the
Plan for each successive Purchase Period and each subsequent Offering Period on the terms contained
therein until the participant either submits a new subscription agreement, withdraws from
participation under the Plan as provided in Section 10 hereof or otherwise becomes ineligible to
participate in the Plan.



(g) The subscription agreement(s) used in connection with the Plan shall be in a form
prescribed by the Administrator, and the Administrator may, in its sole discretion, determine
whether such agreement shall be submitted in written or electronic form.



6. Payroll Deductions.



(a) At the time a participant files his or her subscription agreement, he or she shall elect
to have payroll deductions made on each pay day during the Offering Period in an amount from one
percent (1%) to fifteen percent (15%) of the Compensation which he or she receives on each pay day
during the Offering Period.



(b) All payroll deductions made for a participant shall be credited to his or her account
under the Plan and shall be withheld in whole percentages only. A participant may not make any
additional payments into such account.



(c) A participant may discontinue his or her participation in the Plan as provided in Section
10 hereof, or may increase or decrease the rate of his or her payroll deductions during the
Offering Period by completing or filing with the Company a new subscription agreement authorizing a
change in payroll deduction rate. The Administrator may, in its discretion, limit the number of
participation rate changes during any Offering Period. The change in rate shall be effective with
the first full payroll period following five (5) business days after the Company’s receipt of the
new subscription agreement (or such shorter or longer period as may be determined by the
Administrator, in its sole discretion).



(d) Notwithstanding the foregoing, to the extent necessary to comply with Section 423(b)(8) of
the Code and Section 3(c) hereof, a participant’s payroll deductions may be decreased to zero
percent (0%) at any time during a Purchase Period.



(e) At the time the option is exercised, in whole or in part, or at the time some or all of
the Company’s Common Stock issued under the Plan is disposed of, the participant must make adequate
provision for the Company’s federal, state, or other tax withholding obligations, if any, which
arise upon the exercise of the option or the disposition of the Common Stock. At any time, the
Company may, but shall not be obligated to, withhold from the participant’s compensation the amount
necessary for the Company to meet applicable withholding obligations, including any withholding
required to make available to the Company any tax deductions or benefits attributable to the sale
or early disposition of Common Stock by the Employee.



7. Grant of Option. On the Enrollment Date of each Offering Period, each Eligible
Employee participating in such Offering Period shall be granted an option to purchase on each
Exercise Date during such Offering Period (at the applicable Purchase Price) up to a number of
shares of the Company’s Common Stock determined by dividing such participant’s payroll deductions
accumulated prior to or on such Exercise Date and retained in the participant’s account as of the
Exercise Date by the applicable Purchase Price; provided, however, that in no event
shall a participant be permitted to purchase during each Offering Period more than that number of
shares of Common Stock (subject to any adjustment pursuant to Section 19 hereof) determined by
dividing $25,000 by the Fair Market Value of a share of Common Stock on the Enrollment Date (the
“Per Period Limit”) and during each Purchase Period more than the Per Period Limit (for the
avoidance of doubt, in the event that the Offering Period and Purchase Period are approximately the
same length, the participant shall only be entitled to purchase an aggregate of the number of
shares of Common Stock equal to the Per Period Limit); and provided, further, that
such purchase shall be subject to the limitations set forth in Sections 3(c) and 13 hereof. The
Administrator may, for future Offering Periods, increase or decrease, in its absolute discretion,
the maximum number of shares of the Company’s Common Stock a participant may purchase during each
Purchase Period and Offering Period. Exercise of the option shall occur as provided in Section 8
hereof, unless the participant has withdrawn pursuant to Section 10 hereof or otherwise becomes
ineligible to participate in the Plan. The option shall expire on the last day of the Offering
Period.




8. Exercise of Option.



(a) Unless a participant withdraws from the Plan as provided in Section 10 hereof or otherwise
becomes ineligible to participate in the Plan, his or her option for the purchase of shares shall
be exercised automatically on the Exercise Date, and the maximum number of full shares subject to
the option shall be purchased for such participant at the applicable Purchase Price with the
accumulated payroll deductions in his or her account. No fractional shares shall be purchased.
Any payroll deductions accumulated in a participant’s account which exceed the amounts used to
purchase the number of shares equal to the Per Period Limit or which are not sufficient to purchase
a full share shall be retained in the participant’s account for the subsequent Purchase Period or
Offering Period. During a participant’s lifetime, a participant’s option to purchase shares
hereunder is exercisable only by him or her.



(b) If the Administrator determines that, on a given Exercise Date, the number of shares with
respect to which options are to be exercised may exceed (i) the number of shares of Common Stock
that were available for sale under the Plan on the Enrollment Date of the applicable Offering
Period, or (ii) the number of shares available for sale under the Plan on such Exercise Date, the
Administrator may in its sole discretion (x) provide that the Company shall make a pro rata
allocation of the shares of Common Stock available for purchase on such Enrollment Date or Exercise
Date, as applicable, in as uniform a manner as shall be practicable and as it shall determine in
its sole discretion to be equitable among all participants exercising options to purchase Common
Stock on such Exercise Date, and continue all Offering Periods then in effect, or (y) provide that
the Company shall make a pro rata allocation of the shares available for purchase on such
Enrollment Date or Exercise Date, as applicable, in as uniform a manner as shall be practicable and
as it shall determine in its sole discretion to be equitable among all participants exercising
options to purchase Common Stock on such Exercise Date, and terminate any or all Offering Periods
then in effect pursuant to Section 20 hereof. The Company may make a pro rata allocation of the
shares available on the Enrollment Date of any applicable Offering Period pursuant to the preceding
sentence, notwithstanding any authorization of additional shares for issuance under the Plan by the
Company’s stockholders subsequent to such Enrollment Date. The balance of the amount credited to
the account of each participant which has not been applied to the purchase of shares of Common
Stock shall be paid to such participant in one lump sum in cash as soon as reasonably practicable
after the Exercise Date, without any interest thereon.



9. Deposit of Shares. As promptly as practicable after each Exercise Date on which a
purchase of shares occurs, the Company may arrange for the deposit or recordation, into each
participant’s account with any broker designated by the Company to administer this Plan, of the
number of shares purchased upon exercise of his or her option.



10. Withdrawal.



(a) A participant may withdraw all but not less than all of the payroll deductions credited to
his or her account and not yet used to exercise his or her option under the Plan at any time by
giving written notice to the Company in a form acceptable to the Administrator. All of the
participant’s payroll deductions credited to his or her account during the Offering Period shall be
paid to such participant as soon as reasonably practicable after receipt of notice of withdrawal
and such participant’s option for the Offering Period shall be automatically terminated, and no
further payroll deductions for the purchase of shares shall be made for such Offering Period. If a
participant withdraws from an Offering Period, payroll deductions shall not resume at the beginning
of the succeeding Offering Period unless the participant delivers to the Company a new subscription
agreement.



(b) A participant’s withdrawal from an Offering Period shall not have any effect upon his or
her eligibility to participate in any similar plan which may hereafter be adopted by the Company or
in succeeding Offering Periods which commence after the termination of the Offering Period from
which the participant withdraws.



11. Termination of Employment. Upon a participant’s ceasing to be an Eligible
Employee, for any reason, he or she shall be deemed to have elected to withdraw from the Plan and
the payroll deductions credited to such participant’s account during the Offering Period shall be
paid to such participant or, in the case of his or her death, to the person or persons entitled
thereto under Section 15 hereof, as soon as reasonably practicable and such participant’s option
for the Offering Period shall be automatically terminated.



12. Interest. No interest shall accrue on the payroll deductions or lump sum
contributions of a participant in the Plan.



13. Shares Subject to Plan.



(a) Subject to adjustment upon changes in capitalization of the Company as provided in Section
19 hereof, the maximum number of shares of the Company’s Common Stock which shall be made available
for sale under the Plan shall be 3,000,000 shares. In addition to the foregoing, subject to
Section 19 hereof, commencing on January 1, 2009 and on the first day of each fiscal year of the
Company thereafter during the term of the Plan, the number of shares of the Company’s Common Stock
which shall be made available for sale under the Plan shall be increased by that number of shares
of the Company’s Common Stock equal to the least of (i) one percent (1%) of the outstanding shares
of the Company’s capital stock on such date, (ii) 500,000 shares, or (iii) a lesser amount
determined by the Board. The Company’s fiscal year currently begins on January 1 and ends on
December 31 of each year and, accordingly, the number of shares of the Company’s Common Stock which
shall be available for sale under the Plan shall be subject to automatic increase under the
preceding sentence only on January 1, 2009 and on each subsequent January 1 through and including
January 1, 2017 (provided that the Company’s fiscal year remains the same). If any right granted
under the Plan shall for any reason terminate without having been exercised, the Common Stock not
purchased under such right shall again become available for issuance under the Plan. The Common
Stock subject to the Plan may be unissued shares or reacquired shares, bought on the market or
otherwise.



(b) With respect to shares of Common Stock subject to an option granted under the Plan, a
participant shall not be deemed to be a stockholder of the Company, and the participant shall not
have any of the rights or privileges of a stockholder, until such shares have been issued to the
participant or his or her nominee following exercise of the participant’s option. No adjustments
shall be made for dividends (ordinary or extraordinary, whether in cash securities, or other
property) or distribution or other rights for which the record date occurs prior to the date of
such issuance, except as otherwise expressly provided herein.




14. Administration.



(a) The Plan shall be administered by the Board unless and until the Board delegates
administration to a Committee as set forth below. The Board may delegate administration of the
Plan to a Committee comprised of two or more members of the Board, each of whom is a “non-employee
director” within the meaning of Rule 16b-3 which has been adopted by the Securities and Exchange
Commission under the Securities Exchange Act of 1934, as amended, and which is otherwise
constituted to comply with applicable law, and the term “Committee” shall apply to any persons to
whom such authority has been delegated, provided that any action taken by the Committee shall be
valid and effective, whether or not members of the Committee at the time of such action are later
determined not to have satisfied the requirements for membership set forth in this Section 14(a) or
otherwise provided in the charter of the Committee. If administration is delegated to a Committee,
the Committee shall have, in connection with the administration of the Plan, the powers theretofore
possessed by the Board, including the power to delegate to a subcommittee any of the administrative
powers the Committee is authorized to exercise, subject, however, to such resolutions, not
inconsistent with the provisions of the Plan, as may be adopted from time to time by the Board.
The governance of the Committee shall be subject to the charter of the Committee as approved by the
Board. References in this Plan to the “Administrator” shall mean the Board unless administration
is delegated to a Committee or subcommittee, in which case references in this Plan to the
Administrator shall thereafter be to the Committee or subcommittee.



(b) It shall be the duty of the Administrator to conduct the general administration of the
Plan in accordance with the provisions of the Plan. The Administrator shall have the power to
interpret the Plan and the terms of the options and to adopt such rules for the administration,
interpretation, and application of the Plan as are consistent therewith and to interpret, amend or
revoke any such rules. The Administrator at its option may utilize the services of an agent to
assist in the administration of the Plan including establishing and maintaining an individual
securities account under the Plan for each participant. In its absolute discretion, the Board may
at any time and from time to time exercise any and all rights and duties of the Administrator under
the Plan.



(c) All expenses and liabilities incurred by the Administrator in connection with the
administration of the Plan shall be borne by the Company. The Administrator may, with the approval
of the Board, employ attorneys, consultants, accountants, appraisers, brokers or other persons.
The Administrator, the Company and its officers and directors shall be entitled to rely upon the
advice, opinions or valuations of any such persons. All actions taken and all interpretations and
determinations made by the Administrator in good faith shall be final and binding upon all
participants, the Company and all other interested persons. No member of the Board shall be
personally liable for any action, determination or interpretation made in good faith with respect
to the Plan or the options, and all members of the Board shall be fully protected by the Company in
respect to any such action, determination, or interpretation.




15. Designation of Beneficiary.



(a) A participant may file a written designation of a beneficiary who is to receive any shares
and cash, if any, from the participant’s account under the Plan in the event of such participant’s
death subsequent to an Exercise Date on which the option is exercised but prior to delivery to such
participant of such shares and cash. In addition, a participant may file a written designation of
a beneficiary who is to receive any cash from the participant’s account under the Plan in the event
of such participant’s death prior to exercise of the option. If a participant is married and the
designated beneficiary is not the spouse, spousal consent shall be required for such designation to
be effective.



(b) Such designation of a beneficiary may be changed by the participant at any time by written
notice to the Company. In the event of the death of a participant and in the absence of a
beneficiary validly designated under the Plan who is living at the time of such participant’s
death, the Company shall deliver such shares and/or cash to the executor or administrator of the
estate of the participant, or if no such executor or administrator has been appointed (to the
knowledge of the Company), the Company, in its discretion, may deliver such shares and/or cash to
the spouse or to any one or more dependents or relatives of the participant, or if no spouse,
dependent or relative is known to the Company, then to such other person as the Company may
designate.



16. Transferability. Neither payroll deductions credited to a participant’s account
nor any rights with regard to the exercise of an option or to receive shares under the Plan may be
assigned, transferred, pledged or otherwise disposed of in any way (other than by will, the laws of
descent and distribution or as provided in Section 15 hereof) by the participant. Any such attempt
at assignment, transfer, pledge or other disposition shall be without effect, except that the
Company may treat such act as an election to withdraw funds from an Offering Period in accordance
with Section 10 hereof.



17. Use of Funds. All payroll deductions received or held by the Company under the
Plan may be used by the Company for any corporate purpose, and the Company shall not be obligated
to segregate such payroll deductions.



18. Reports. Individual accounts shall be maintained for each participant in the
Plan. Statements of account shall be given to participating Employees at least annually, which
statements shall set forth the amounts of payroll deductions, the Purchase Price, the number of
shares purchased and the remaining cash balance, if any.



19. Adjustments Upon Changes in Capitalization, Dissolution, Liquidation, Merger or Asset
Sale.



(a) Changes in Capitalization. Subject to any required action by the stockholders of
the Company, the number of shares of Common Stock which have been authorized for issuance under the
Plan but not yet placed under option, the maximum number of shares each participant may purchase
each Purchase Period (pursuant to Section 7 hereof), as well as the price per share and the number
of shares of Common Stock covered by each option under the Plan which has not yet been exercised
shall be proportionately adjusted for any increase or decrease in the number of issued shares of
Common Stock resulting from a stock split, reverse stock split, stock dividend, combination or
reclassification of the Common Stock, or any other increase or decrease in the number of shares of
Common Stock effected without receipt of consideration by the Company; provided,
however, that conversion of any convertible securities of the Company shall not be deemed
to have been “effected without receipt of consideration.” Such adjustment shall be made by the
Administrator, whose determination in that respect shall be final, binding and conclusive. Except
as expressly provided herein, no issuance by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, shall affect, and no adjustment by reason
thereof shall be made with respect to, the number or price of shares of Common Stock subject to an
option.



(b) Dissolution or Liquidation. In the event of the proposed dissolution or
liquidation of the Company, the Offering Period then in progress shall be shortened by setting a
new Exercise Date (the “New Exercise Date”), and shall terminate immediately prior to the
consummation of such proposed dissolution or liquidation, unless provided otherwise by the
Administrator. The New Exercise Date shall be before the effective date of the Company’s proposed
dissolution or liquidation. The Administrator shall notify each participant in writing, at least
ten (10) business days prior to the New Exercise Date, that the Exercise Date for the participant’s
option has been changed to the New Exercise Date and that the participant’s option shall be
exercised automatically on the New Exercise Date, unless prior to such date the participant has
withdrawn from the Offering Period as provided in Section 10 hereof.



(c) Merger or Asset Sale. In the event of a proposed sale of all or substantially all
of the assets of the Company, or the merger of the Company with or into another corporation, each
outstanding option shall be assumed or an equivalent option substituted by the successor
corporation or a Parent or Subsidiary of the successor corporation. In the event that the
successor corporation refuses to assume or substitute for the option, any Purchase Periods then in
progress shall be shortened by setting a New Exercise Date and any Offering Periods then in
progress shall end on the New Exercise Date. The New Exercise Date shall be before the effective
date of the Company’s proposed sale or merger. The Administrator shall notify each participant in
writing, at least ten (10) business days prior to the New Exercise Date, that the Exercise Date for
the participant’s option has been changed to the New Exercise Date and that the participant’s
option shall be exercised automatically on the New Exercise Date, unless prior to such date the
participant has withdrawn from the Offering Period as provided in Section 10 hereof.




20. Amendment or Termination.



(a) The Board may at any time and for any reason terminate or amend the Plan. Except as
provided in Section 19 hereof, no such termination shall affect options previously granted,
provided that an Offering Period may be terminated by the Board if the Board determines that the
termination of the Offering Period or the Plan is in the best interests of the Company and its
stockholders. Except as provided in Section 19 hereof and this Section 20, no amendment may make
any change in any option theretofore granted which adversely affects the rights of any participant
without the consent of such participant. To the extent necessary to comply with Section 423 of the
Code (or any successor rule or provision or any other applicable law, regulation or stock exchange
rule), the Company shall obtain stockholder approval of any amendment in such a manner and to such
a degree as required.



(b) Without stockholder consent and without regard to whether any participant rights may be
considered to have been “adversely affected,” the Administrator shall be entitled to change the
Offering Periods, limit the frequency and/or number of changes in the amount withheld during an
Offering Period, establish the exchange ratio applicable to amounts withheld in a currency other
than U.S. dollars, permit payroll withholding in excess of the amount designated by a participant
in order to adjust for delays or mistakes in the Company’s processing of properly completed
withholding elections, establish reasonable waiting and adjustment periods and/or accounting and
crediting procedures to ensure that amounts applied toward the purchase of Common Stock for each
participant properly correspond with amounts withheld from the participant’s Compensation, and
establish such other limitations or procedures as the Administrator determines in its sole
discretion advisable which are consistent with the Plan.



(c) In the event the Board determines that the ongoing operation of the Plan may result in
unfavorable financial accounting consequences, the Board may, in its discretion and, to the extent
necessary or desirable, modify or amend the Plan to reduce or eliminate such accounting
consequences including, but not limited to:



(i) Altering the Purchase Price for any Offering Period including an Offering Period underway
at the time of the change in Purchase Price;



(ii) Shortening any Offering Period so that the Offering Period ends on a new Exercise Date,
including an Offering Period underway at the time of the Administrator action; and



(iii) Allocating shares.



Such modifications or amendments shall not require stockholder approval or the consent of any
Plan participants.



21. Notices. All notices or other communications by a participant to the Company
under or in connection with the Plan shall be deemed to have been duly given when received in the
form specified by the Company at the location, or by the person, designated by the Company for the
receipt thereof.



22. Conditions to Issuance of Shares. The Company shall not be required to issue or
deliver any certificate or certificates for shares of Common Stock purchased upon the exercise of
options prior to fulfillment of all the following conditions:



(a) The admission of such shares to listing on all stock exchanges, if any, on which the
Common Stock is then listed; and



(b) The completion of any registration or other qualification of such shares under any state
or federal law or under the rulings or regulations of the Securities and Exchange Commission or any
other governmental regulatory body, which the Administrator shall, in its absolute discretion, deem
necessary or advisable; and



(c) The obtaining of any approval or other clearance from any state or federal governmental
agency which the Administrator shall, in its absolute discretion, determine to be necessary or
advisable; and



(d) The payment to the Company of all amounts which it is required to withhold under federal,
state or local law upon exercise of the option; and



(e) The lapse of such reasonable period of time following the exercise of the option as the
Administrator may from time to time establish for reasons of administrative convenience.



23. Term of Plan. Subject to approval by the Company’s stockholders, the Plan shall
become effective as of January 1, 2008 (the “Effective Date”). The Plan shall be deemed to be
approved by the stockholders if it is approved either:



(a) By a majority of the votes cast at a duly held stockholders meeting at which a quorum
representing a majority of outstanding voting stock is, either in person or by proxy, present and
voting on the Plan; or



(b) By a method and in a degree that would be treated as adequate under Delaware law in the
case of an action requiring stockholder approval.



Subject to approval by the stockholders of the Company in accordance with this Section 23, the Plan
shall be in effect until the tenth (10th) anniversary of the Effective Date, unless
sooner terminated under Section 20 hereof.



24. Equal Rights and Privileges. All Eligible Employees will have equal rights and
privileges under this Plan so that this Plan qualifies as an “employee stock purchase plan” within
the meaning of Section 423 of the Code or applicable Treasury Regulations thereunder. Any
provision of this Plan that is inconsistent with Section 423 of the Code or applicable Treasury
Regulations will, without further act or amendment by the Company, the Board or the Administrator,
be reformed to comply with the equal rights and privileges requirement of Section 423 of the Code
or applicable Treasury Regulations.



25. Section 409A. The options to purchase shares of Common Stock under the Plan are
not intended to constitute “nonqualified deferred compensation” within the meaning of Section 409A
of the Code. However, if at any time the Administrator determines that the options may be subject
to Section 409A of the Code, the Administrator shall have the right, in its sole discretion, to
amend the Plan and any outstanding options as it may determine is necessary or desirable either to
(a) exempt the options from Section 409A of the Code and/or preserve the intended tax treatment of
the benefits provided with respect to the options, or (b) comply with the requirements of Section
409A of the Code and related Department of Treasury guidance and thereby avoid the application of
any penalty taxes under such Section.



(1) 26. No Employment Rights. Nothing in the Plan shall be construed to give any
person (including any Eligible Employee or participant) the right to remain in the employ of the
Company, a Parent or a Subsidiary or to affect the right of the Company, any Parent or any
Subsidiary to terminate the employment of any person (including any Eligible Employee or
participant) at any time, with or without cause.



27. Notice of Disposition of Shares. Each participant shall give prompt notice to the
Company of any disposition or other transfer of any shares of Common Stock purchased upon exercise
of an option if such disposition or transfer is made: (a) within two (2) years from the Enrollment
Date of the Offering Period in which the shares were purchased or (b) within one (1) year after the
Exercise Date on which such shares were purchased. Such notice shall specify the date of such
disposition or other transfer and the amount realized, in cash, other property, assumption of
indebtedness or other consideration, by the participant in such disposition or other transfer.



28. Governing Law. The validity and enforceability of this Plan shall be governed by
and construed in accordance with the laws of the State of Delaware without regard to otherwise
governing principles of conflicts of law.



* * * * *




I hereby certify that the foregoing Plan was duly adopted by the Board of Directors of Skechers
U.S.A., Inc. on April 16, 2007.



* * * * *




I hereby certify that the foregoing Plan was approved by the stockholders of Skechers U.S.A., Inc.
on May 24, 2007.



Executed on this 24th day of May, 2007.




/s/ Philip Paccione

Corporate Secretary