Document:

Form of Indemnification Agreement

  
 Exhibit 10.3

  
 PERRY ELLIS INTERNATIONAL, INC. 
  
 INDEMNIFICATION AGREEMENT 
  
 THIS INDEMNIFICATION AGREEMENT (the “Agreement”) is dated as
of                      ,              by and between
Perry Ellis International, Inc., a corporation organized under the laws of the State of Florida (the “Corporation”), and
                                 (the “Indemnitee”). 

 
 W I T N E S S E
T H: 
  
 WHEREAS, the substantial
increase in corporate litigation subjects directors and officers of corporations and others to expensive litigation risks at the same time that the availability of competent and qualified directors, officers, employees, consultants, advisers and
agents has been greatly reduced, and the coverage offered by directors’ and officers’ liability insurance has been severely limited; 
  
 WHEREAS, the Articles of Incorporation of the Corporation (the “Articles of Incorporation”) requires the Corporation to indemnify and
advance expenses to its directors and officers to the fullest extent permitted by law, and the Indemnitee has been serving and continues to serve as a director or officer of the Corporation in part in reliance on such Articles of Incorporation;

  
 WHEREAS, in recognition of the Indemnitee’s need
for substantial protection against personal liability in connection with the Indemnitee’s continued service to the Corporation, and to provide Indemnitee with specific contractual assurance that the protection promised by the Articles of
Incorporation will be available to Indemnitee (regardless of, among other things, any amendment to or revocation of such or any change in the composition of the Corporation’s Board of Directors or acquisition transaction relating to the
Corporation), the Corporation wishes to provide in this Agreement for the indemnification of, and the advancing of expenses to, the Indemnitee to the fullest extent permitted by law and as set forth in this Agreement, and, to the extent insurance is
maintained, for the continued coverage of the Indemnitee under the Corporation’s directors’ and officers’ liability insurance policies; 
  
 WHEREAS, as a condition to the Indemnitee’s agreement to continue to serve as a director and/or officer of the Corporation, the Indemnitee
requires that the Indemnitee be indemnified from liability to the fullest extent permitted by law; and 
  
 WHEREAS, the Corporation is willing to indemnify the Indemnitee to the fullest extent permitted by law in order to retain the services of the
Indemnitee. 
  
 NOW, THEREFORE, for and in consideration of
the mutual promises and covenants contained herein, the Corporation and the Indemnitee agree as follows: 
  
 Section 1. Mandatory Indemnification In Proceedings Other Than Those By Or In The Right Of The Corporation. Subject to Section 4 hereof, the
Corporation shall indemnify and hold harmless the Indemnitee from and against any and all claims, damages, expenses (including attorneys’ fees), judgments, penalties, fines (including excise taxes assessed with respect to an employee benefit
plan), settlements, and all other liabilities incurred or paid by the Indemnitee (collectively, “Losses”) in connection with the investigation, defense, prosecution, settlement or appeal of any threatened, pending or completed action, suit
or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Corporation) and to which the Indemnitee was or is a party or is threatened to be made a party by reason of the fact that the
Indemnitee is or was an officer, director, shareholder, employee, consultant, adviser or agent of the Corporation, or is or was serving at the request of the Corporation as an officer, director, partner, trustee, employee, adviser or 

 
agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise (collectively, “Another Enterprise”), or
by reason of anything done or not done by the Indemnitee in any such capacity or capacities, provided, however, that the Indemnitee acted in good faith and in a manner the Indemnitee reasonably believed to be in or not opposed to the best interests
of the Corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe the Indemnitee’s conduct was unlawful. 
  
 Section 2. Mandatory Indemnification In Proceedings By Or In The Right Of The Corporation. Subject to Section 4 hereof, the Corporation shall
indemnify and hold harmless the Indemnitee from and against any and all expenses (including attorneys’ fees) and amounts paid in settlement not exceeding, in the judgment of the Board of Directors, the estimated expenses of litigating the
proceeding to conclusion, actually and reasonably incurred or paid by the Indemnities in connection with the investigation, defense, prosecution, settlement or appeal of any threatened, pending or completed action, suit or proceeding by or in the
right of the Corporation to procure a judgment in its favor, whether civil, criminal, administrative or investigative, and to which the Indemnitee was or is a party or is threatened to be made a party by reason of the fact that the Indemnitee is or
was an officer, director, shareholder, employee, consultant, adviser or agent of the Corporation, or is or was serving at the request of the Corporation as an officer, director, partner, trustee, employee, adviser or agent of Another Enterprise, or
by reason of anything done or not done by the Indemnitee in any such capacity or capacities, provided that (i) the Indemnitee acted in good faith and in a manner the Indemnitee reasonably believed to be in or not opposed to the best interests of the
Corporation and (ii) no indemnification shall be made under this Section 2 in respect of any claim, issue or matter as to which the Indemnitee shall have been adjudged to be liable unless, and only to the extent that, the court in which such
proceeding was brought (or any other court of competent jurisdiction) shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, the Indemnitee is fairly and reasonably entitled to
indemnity for such expenses which such court shall deem proper. 
  
 Section 3. Mandatory Indemnification Against Expenses Incurred While Testifying. Subject to Section 4 hereof, the Corporation shall indemnify the Indemnitee against expenses (including attorneys’ fees) incurred or paid by the
Indemnitee as a result of providing testimony in any proceeding, whether civil, criminal, administrative or investigative (including but not limited to any action or suit by or in the right of the Corporation to procure judgment in its favor), by
reason of the fact that the Indemnitee is or was an officer, director, shareholder, employee, consultant, adviser or agent of the Corporation, or is or was serving at the request of the Corporation as an officer, director, partner, trustee,
employee, adviser or agent of Another Enterprise. 
  
 Section 4.
Authorization of Indemnification. 
  

	 	4.1	Authorization of Indemnification and Reasonableness of Expenses. Any indemnification under Sections 1, 2 and 3 hereof (unless ordered by a court) shall be made by the
Corporation only as authorized in the specific case upon a determination (the “Determination”) that indemnification of the Indemnitee is proper in the circumstances because the Indemnitee has met the applicable requirements set forth in
Section 1, 2 and 3 hereof, as the case may be. Subject to Sections 5.5, 5.6 and 8 of this Agreement, the Determination and the evaluation and finding as to the reasonableness of expenses incurred by the Indemnitee shall be shall be made in the
following order of preference: 

  

	 	(a)	first, by the Corporation’s Board of Directors (the “Board”) by majority vote of a quorum consisting of directors (“Disinterested Directors”) who are not
named parties to such action, suit or proceeding; or 

  

	 	(b)	next, if such a quorum of Disinterested Directors cannot be obtained, by majority vote of a committee duly designated by the Board (in which all directors, whether or not
Disinterested Directors, may participate) consisting solely of two or more Disinterested Directors; or 

  

	 	(c)	next, if such a committee cannot be designated, by any independent legal counsel (who may be any outside counsel regularly employed by the Corporation) selected by the Board
prescribed in (a) above or by the committee of the Board prescribed in (b) above, in a written opinion; or if a quorum of the Board cannot be obtained for (a) above and the committee cannot be designated under (b) above, selected by majority vote of
the full Board (in which directors who are parties may participate); or 

  

	 	(d)	next, if such legal counsel determination cannot be obtained, by majority vote of a quorum consisting of shareholders who are not parties to such proceeding, or if no such quorum is
obtainable, by a majority vote of shareholders who are not parties to the proceeding. 

  
 If the Determination is made by independent legal counsel, the decision as to the reasonableness of expenses shall also be made by independent legal counsel. All expenses shall be considered reasonable for purposes of
this Agreement if the finding contemplated by this Section 4.1 is not made within the prescribed time. The finding required by this Section 4.1 may be made in advance of the payment (or incurring) of the expenses for which indemnification or
reimbursement is sought. 
  

	 	4.2	No Presumptions. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its
equivalent, shall not, of itself, create a presumption that the Indemnitee did not act in good faith and in a manner that the Indemnitee reasonably believed to be in or not opposed to the best interests of the Corporation, and with respect to any
criminal action or proceeding, had reasonable cause to believe that the Indemnitee’s conduct was unlawful. 

  

	 	4.3	Benefit Plan Conduct. The Indemnitee’s conduct with respect to an employee benefit plan for a purpose the Indemnitee reasonably believed to be in the interests of the
participants in and beneficiaries of the plan shall be deemed to be conduct that the Indemnitee reasonably believed to be not opposed to the best interests of the Corporation. 

  

	 	4.4	Reliance as Safe Harbor. For purposes of any Determination hereunder, the Indemnitee shall be deemed to have acted in good faith and in a manner the Indemnitee reasonably
believed to be in or not opposed to the best interests of the Corporation, or, with respect to any criminal action or proceeding, to have had no reasonable cause to believe the Indemnitee’s conduct was unlawful, if the Indemnitee’s action
is based on (i) the records or books of account of the Corporation or Another Enterprise, including financial statements, (ii) information supplied to the Indemnitee by the officers or agents of the Corporation or Another Enterprise in the course of
their duties, (iii) the advice of legal counsel for the Corporation or Another Enterprise, or (iv) information or records given or reports made to the Corporation or Another Enterprise by an independent certified public accountant or by an appraiser
or other expert selected with reasonable care by the Corporation or another enterprise. The provisions of this Section 4.4 shall not be deemed to be exclusive or to limit in any way the other circumstances in which the Indemnitee may be deemed to
have met the applicable standard of conduct set forth in Sections 1, 2 or 3 hereof, as the case may be. 

  

	 	4.5	 Success on Merits or Otherwise. Notwithstanding any other provision of this Agreement, to the extent that the Indemnitee has been successful on the merits or
otherwise in defense of any action, suit or proceeding described in Sections 1 or 2 hereof, or in defense of any claim, issue or matter therein, the Indemnitee shall be indemnified against Losses in connection with the investigation, defense,
settlement or appeal thereof. For purposes of this Section 4.5, the term “successful on the merits or otherwise” shall include, but not be limited to, (i) any termination, withdrawal, or dismissal (with or without prejudice) of any claim,
action, suit or proceeding against the Indemnitee without any express finding of liability or guilt against the Indemnitee, (ii) the expiration of 120 days after the making of any claim or threat of an action, suit or proceeding 

  

	 	 
without the institution of the same and without any promise or payment made to induce a settlement, and (iii) the settlement of any action, suit or
proceeding under Sections 1 or 2 hereof pursuant to which the Indemnitee pays less than $100,000. 

  

	 	4.6	Partial Indemnification or Reimbursement. If the Indemnitee is entitled under any provision of this Agreement to indemnification and/or reimbursement by the Corporation for
some or a portion of the Losses in connection with the investigation of, defense of, settlement of, appeal of or testimony provided with respect to any action specified in Section 1, 2 or 3 hereof, but not, however, for the total amount thereof, the
Corporation shall nevertheless indemnify and/or reimburse the Indemnitee for the portion thereof to which the Indemnitee is entitled. The party or parties making the Determination shall determine the portion (if less than all) of such Losses for
which the Indemnitee is entitled to indemnification and/or reimbursement under this Agreement. 

  

	 	4.7	Limitations on Indemnification. Notwithstanding any other provision of this Agreement, an Indemnitee shall not be entitled to indemnification hereunder if a judgment or other
final adjudication from which no further appeal can be taken establishes that the Indemnitee’s actions or omissions to act were material to the cause of action so adjudicated and constitute: 

  

	 	(a)	a violation of the criminal law, unless the Indemnitee had reasonable cause to believe the Indemnitee’s conduct was lawful or had no reasonable cause to believe the
Indemnitee’s conduct was unlawful; 

  

	 	(b)	a transaction from which the Indemnitee derived an improper personal benefit; 

  

	 	(c)	in the case of an Indemnitee who is a director, a circumstance under which the liability provisions of Section 607.0834, Florida Statutes, is applicable; or

  

	 	(d)	willful misconduct or a conscious disregard for the best interests of the Corporation in a proceeding by or in the right of the Corporation to procure a judgment in its favor or in
a proceeding by or in the right of a shareholder. 

  
 Section 5. Procedures For Determination Of Whether Standards Have Been Satisfied. 
  

	 	5.1	Costs. All costs of making the Determination shall be borne solely by the Corporation, including, but not limited to, the costs of legal counsel, proxy solicitations and
judicial determinations. The Corporation shall also be solely responsible for paying (i) all reasonable expenses incurred by the Indemnitee to enforce this Agreement, including, but not limited to, the costs incurred by the Indemnitee to obtain
court-ordered indemnification pursuant to Section 8 hereof regardless of the outcome of any such application or proceeding, and (ii) all costs of defending any suits or proceedings challenging payments to the Indemnitee under this Agreement.

  

	 	5.2	Timing of the Determination. The Corporation shall use its best efforts to make the Determination contemplated by Section 4 hereof promptly. In addition, the Corporation
agrees: 

  

	 	(a)	if the Determination is to be made by the Board or a committee thereof, such Determination shall be made not later than 15 business days after a written request for a Determination
(a “Request”) is delivered to the Corporation by the Indemnitee; 

  

	 	(b)	if the Determination is to be made by independent legal counsel, such Determination shall be made not later than 30 days after a Request is delivered to the Corporation by the
Indemnitee; and 

  

	 	(c)	if the Determination is to be made by the shareholders of the Corporation, such Determination shall be made not later than 90 days after a Request is delivered to the Corporation by
the Indemnitee. 

  
 The failure to make a Determination within the
above-specified time period shall constitute a Determination approving full indemnification or reimbursement of the Indemnitee. Notwithstanding anything herein to the contrary, a Determination may be made in advance of (i) the Indemnitee’s
payment (or incurring) of expenses with respect to which indemnification or reimbursement is sought, and/or (ii) final disposition of the action, suit or proceeding with respect to which indemnification or reimbursement is sought. 
  

	 	5.3	Payment of Indemnified Amount. Immediately following a Determination that the Indemnitee has met the applicable requirements set forth in Section 1, 2 or 3 hereof, as the
case may be, and the finding of reasonableness of expenses contemplated by Section 4.1 hereof, or the passage of time prescribed for making such Determination(s), the Corporation shall pay to the Indemnitee in cash the amount to which the Indemnitee
is entitled to be indemnified and/or reimbursed, as the case may be, without further authorization or action by the Board; provided, however, that the expenses for which indemnification or reimbursement is sought have actually been incurred by the
Indemnitee. 

  

	 	5.4	Shareholder Vote on Determination. In connection with each meeting at which a shareholder Determination will be made, the Corporation shall solicit proxies that expressly
include a proposal to indemnify or reimburse the Indemnitee. The Corporation proxy statement relating to the proposal to indemnify or reimburse the Indemnitee shall not include a recommendation against indemnification or reimbursement unless the
failure to include such a recommendation would violate applicable laws in the reasonable determination of the Corporation’s counsel. 

  

	 	5.5	Fees of Independent Legal Counsel. The fees and expenses incurred by counsel in making any Determination (including Determinations pursuant to Section 5.7 hereof) shall be
borne solely by the Corporation regardless of the results of any Determination and, if requested by counsel, the Corporation shall give such counsel an appropriate written agreement with respect to the payment of their fees and expenses and such
other matters as may be reasonably requested by counsel. 

  

	 	5.6	Right of Indemnitee to Appeal an Adverse Determination by Board. If a Determination is made by the Board or a committee thereof that the Indemnitee did not meet the standard
of conduct set forth in Section 1, 2 or 3 hereof, upon the written request of the Indemnitee and the Indemnitee’s delivery of $500 to the Corporation, the Corporation shall cause a new Determination to be made by the Corporation’s
shareholders at the next regular or special meeting of shareholders. Subject to Section 8 hereof, such Determination by the Corporation’s shareholders shall be binding and conclusive for all purposes of this Agreement. 

 

	 	5.7	Change of Control Implications. If, at any time subsequent to the date of this Agreement, “Continuing Directors” do not constitute a majority of the members of the
Board, or there is otherwise a change in control of the Corporation (as contemplated by Item 403(c) of Regulation S-K or any successor regulation), then upon the request of the Indemnitee, the Corporation shall cause the Determination required by
Section 4 hereof to be made by independent legal counsel selected by the “Continuing Directors” of the Board (who are also Disinterested Directors). If none of the legal counsel are willing and/or able to make the Determination, then the
Corporation shall cause the Determination to be made by a majority vote of a Board committee consisting solely of Continuing Directors. For purposes of this Agreement, a “Continuing Director” means either a member of the Board at the date
of this Agreement or a person nominated to serve as a member of the Board by a majority of the then Continuing Directors. 

  

	 	5.8	 Access by Indemnitee to Determination. The Corporation shall afford to the Indemnitee and the Indemnitee’s representatives ample opportunity to present
evidence of the facts upon which the 

  

	 	 
Indemnitee relies for indemnification or reimbursement, together with other information relating to any requested Determination. The Corporation shall also
afford the Indemnitee the reasonable opportunity to include such evidence and information in any Corporation proxy statement relating to a shareholder Determination provided that the inclusion of such information does not violate applicable laws in
the reasonable determination of the Corporation’s counsel. 

  

	 	5.9	Judicial Determinations in Derivative Suits. In each action or suit described in Section 2 hereof, the Corporation shall cause its counsel to use its best efforts to obtain
from the court in which such action or suit was brought (i) an express adjudication whether the Indemnitee is liable for negligence or misconduct in the performance of the Indemnitee’s duty to the Corporation, and, if the Indemnitee is so
liable, (ii) a determination whether and to what extent, despite the adjudication of liability but in view of all the circumstances of the case (including this Agreement), the Indemnitee is fairly and reasonably entitled to indemnification.

  
 Section 6. Scope Of Indemnity. The
actions, suits and proceedings described in Sections 1 and 2 hereof shall include, for purposes of this Agreement, any actions that involve, directly or indirectly, activities of the Indemnitee both in the Indemnitee’s capacities as a
Corporation director, officer, adviser or agent, as applicable, and actions, suits or proceedings also taken in another capacity while serving as director, officer, adviser or agent, as applicable, including, but not limited to, actions, suits or
proceedings involving (i) compensation paid to the Indemnitee by the Corporation, (ii) activities by the Indemnitee on behalf of the Corporation, including actions in which the Indemnitee is plaintiff, (iii) actions alleging a misappropriation of a
“corporate opportunity,” (iv) responses to a takeover attempt or threatened takeover attempt of the Corporation, (v) transactions by the Indemnitee in Corporation securities, and (vi) the Indemnitee’s preparation for and appearance
(or potential appearance) as a witness in any proceeding relating, directly or indirectly, to the Corporation. In addition, the Corporation agrees that, for purposes of this Agreement, all services performed by the Indemnitee on behalf of, in
connection with or related to any subsidiary of the Corporation, any employee benefit plan established for the benefit of employees of the Corporation or any subsidiary, any corporation or partnership or other entity in which the Corporation or any
subsidiary has a 5% ownership interest, or any other affiliate, shall be deemed to be at the request of the Corporation. 
  
 Section 7. Advance For Expenses. 
  

	 	7.1	Mandatory Advance. Expenses (including attorneys’ fees, court costs, amounts paid in settlement, and in connection with proceedings under Section 1 hereof, judgments,
fines and other payments) incurred by the Indemnitee in investigating, defending, settling or appealing any action, suit or proceeding described in Sections 1 or 2 hereof shall be paid by the Corporation in advance of the final disposition of such
action, suit or proceeding. The Corporation shall promptly pay the amount of such expenses to the Indemnitee, but in no event later than 10 days following the Indemnitee’s delivery to the Corporation of a written request for an advance pursuant
to this Section 7, together with a reasonable accounting of such expenses. 

  

	 	7.2	Undertaking to Repay. The Indemnitee hereby undertakes and agrees to repay to the Corporation any advances made pursuant to this Section 7 if and to the extent that it shall
ultimately be found (in accordance with Section 4 hereof or by final judicial determination from which there is no further right to appeal, as applicable) that the Indemnitee is not entitled to be indemnified by the Corporation for such amounts.

  

	 	7.3	Miscellaneous. The Corporation shall make the advances contemplated by this Section 7 regardless of the Indemnitee’s financial ability to make repayment, and regardless
of whether indemnification of the Indemnitee by the Corporation will ultimately be required. Any advances and undertakings to repay pursuant to this Section 7 shall be unsecured and interest-free. 

  

 Section 8. Court-Ordered Indemnification. 
  

	 	8.1	Regardless of whether the Indemnitee has met the standards of conduct set forth in Sections 1, 2 or 3 hereof, as the case may be, and notwithstanding the presence or absence of any
Determination whether such standards have been satisfied, the Indemnitee may apply for indemnification or advancement of expenses or both to the court conducting any proceeding to which the Indemnitee is a party or to any other court of competent
jurisdiction. On receipt of an application, the court, after giving any notice the court considers necessary, may order indemnification (and/or advancement) if it determines the Indemnitee is fairly and reasonably entitled to indemnification (and/or
reimbursement) in view of all the relevant circumstances (including this Agreement). 

  

	 	8.2	The right to indemnification and advances as provided by this Agreement shall be enforceable by the Indemnitee in an action in any court of competent jurisdiction. In such an
action, the burden of proving that indemnification is not required hereunder shall be on the Corporation. Neither the failure of the Corporation (including its Board and independent legal counsel) to have made a Determination prior to the
commencement of such an action that indemnification is proper in the circumstances because the Indemnitee has met the applicable standard of conduct, nor an actual Determination by the Corporation (including its Board and independent legal counsel)
that the Indemnitee has not met such applicable standard of conduct, shall be a defense to such an action or create a presumption that Indemnitee has not met the applicable standard of conduct. The Indemnitee’s expenses reasonably incurred in
connection with establishing the Indemnitee’s right to indemnification, in whole or in part, in connection with any proceeding shall also be indemnified by the Corporation. 

  
 Section 9. Nondisclosure Of Payments. Except as expressly required by
Federal securities laws, neither party shall disclose any payments under this Agreement unless prior approval of the other party is obtained. Any payments to the Indemnitee that must be disclosed shall, unless otherwise required by law, be described
only in Corporation proxy or information statements relating to special and/or annual meetings of the Corporation’s shareholders, and the Corporation shall afford the Indemnitee the reasonable opportunity to review all such disclosures and, if
requested, to explain in such statement any mitigating circumstances regarding the events reported, provided that the inclusion of such information does not violate applicable laws in the reasonable determination of the Corporation’s counsel.

  
 Section 10. Covenant Not To Sue, Limitation of Actions and
Release of Claims. No legal action shall be brought and no cause of action shall be asserted by or on behalf of the Corporation (or any of its subsidiaries) against the Indemnitee, the Indemnitee’s spouse, heirs, executors, personal
representatives or administrators after the expiration of two years from the date the Indemnitee ceases (for any reason) to serve as either an officer, director, adviser or agent of the Corporation, and any claim or cause of action of the
Corporation (or any of its subsidiaries) shall be extinguished and deemed released unless asserted by filing of a legal action within such two-year period. 
  
 Section 11. Indemnification Of Indemnitee’s Estate. Notwithstanding any other provision of this Agreement, if the Indemnitee is deceased, and
indemnification of the Indemnitee would be permitted and/or required under this Agreement, the Corporation shall indemnify and hold harmless the Indemnitee’s estate, spouse, heirs, administrators, personal representatives and executors
(collectively, the “Indemnitee’s Estate”) against, and the Corporation shall assume, any and all claims, damages, expenses (including attorneys’ fees), penalties, judgments, fines and amounts paid in settlement actually incurred
by the Indemnitee or the Indemnitee’s Estate in connection with the investigation, defense, settlement or appeal of any action described in Sections 1 or 2 hereof. 
  
 Section 12. Miscellaneous. 
  

	 	12.1	 Notice Provision. Any notice, payment, demand or communication required or permitted to be delivered or given by the provisions of this Agreement shall be
deemed to have been effectively delivered or given and received on the date personally delivered to the respective party 

  

	 	 
to whom it is directed, or five business days after the date it is sent by registered or certified mail, with postage and charges prepaid, and addressed to
the parties at their addresses as set forth in the Corporation’s books and records. 

  

	 	12.2	Entire Agreement. Except for the Corporation’s Articles of Incorporation and By-Laws, this Agreement constitutes the entire understanding of the parties and supersedes
all prior understandings, whether written or oral, including any and all prior indemnification agreements, between the parties with respect to the subject matter of this Agreement. 

  

	 	12.3	Non-Exclusivity. The rights of indemnification and reimbursement provided in this Agreement shall be in addition to any rights to which the Indemnitee may otherwise be
entitled under the Corporation’s Articles of Incorporation or By-Laws or any statute, agreement, vote of shareholders, insurance policy or otherwise. 

  

	 	12.4	Severability of Provisions. If any provision of this Agreement is held to be illegal, invalid, or unenforceable under present or future laws effective during the term of this
Agreement, such provision shall be fully severable; this Agreement shall be construed and enforced as if such illegal, invalid, or unenforceable provision had never comprised a part of this Agreement; and the remaining provisions of this Agreement
shall remain in full force and effect and shall not be affected by the illegal, invalid, or unenforceable provision or by its severance from this Agreement. Furthermore, in lieu of each such illegal, invalid, or unenforceable provision there shall
be added automatically as a part of this Agreement a provision as similar in terms to such illegal, invalid, or unenforceable provision as may be possible and be legal, valid, and enforceable. 

  

	 	12.5	Saving Clause. If this Agreement or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, the Corporation shall nevertheless indemnify
Indemnitee as to Losses with respect to any proceeding to the full extent permitted by any applicable portion of Agreement that shall not have been invalidated or by any applicable law. 

  

	 	12.6	Cooperation and Intent. The Corporation shall cooperate in good faith with the Indemnitee and use its best efforts to ensure that the Indemnitee is indemnified and/or
reimbursed for liabilities described herein to the fullest extent permitted by law. 

  

	 	12.7	Security. To the fullest extent permitted by applicable law, the Corporation may from time to time, but shall not be required to, provide such insurance, collateral, letters
of credit or other security devices as its Board may deem appropriate to support or secure the Corporation’s obligations under this Agreement. 

  

	 	12.8	Applicable Law. This Agreement shall be governed by and construed under the laws of the State of Florida. 

  

	 	12.9	Amendment. No amendment, modification or alteration of the terms of this Agreement shall be binding unless in writing, dated subsequent to the date of this Agreement, and
executed by the parties. 

  

	 	12.10 	Binding Effect. The obligations of the Corporation to the Indemnitee hereunder shall survive and continue as to the Indemnitee even if the Indemnitee ceases to be a director,
officer, employee, adviser and/or agent of the Corporation. Each and all of the covenants, terms and provisions of this Agreement shall be binding upon and inure to the benefit of the successors and assigns of the Corporation and, upon the death of
the Indemnitee, to the benefit of the estate, heirs, executors, administrators and personal representatives of the Indemnitee. The Company shall require any entity that may acquire the Company, whether by merger, purchase of its stock, or otherwise,
to agree to be bound by the terms of this Agreement. 

  

	 	12.11	 Execution in Counterparts. This Agreement and any amendment may be executed simultaneously or in counterparts, each of which together shall constitute one and the same
instrument. 

  

	 	12.12	 Effective Date. The provisions of this Agreement shall cover claims, actions, suits and proceedings whether now pending or hereafter commenced and shall be retroactive
to cover acts or omissions or alleged acts or omissions which heretofore have taken place. 

  

 IN WITNESS WHEREOF, the parties have executed and delivered this Agreement as of the date first
above written. 
  

			
	 PERRY ELLIS INTERNATIONAL, INC.

		
	 By:
	 	 
	 	 	 Name:

	 	 	 Title:

	
	 THE INDEMNITEE:

	
	 
	 Name:Rules of the Octel Corp Company Share option Plan

 Ex 4.1 
  
 

 
  
 OCTEL CORP. 
  

  
 RULES 
 of the 
 OCTEL CORP. COMPANY SHARE OPTION PLAN 
  

  
 CONTENTS 

 

							
	1.	  	DEFINITIONS FOR THE PURPOSE OF PART A	  	1
			
	2.	  	GRANT OF OPTIONS	  	5
	 	  	2.1.	  	Procedure for Grant of Options	  	5
	 	  	2.2.	  	Requirement to Issue Option Certificate	  	5
	 	  	2.3.	  	Right to Disclaim Option	  	5
	 	  	2.4.	  	Options may not be transferred	  	6
			
	3.	  	CONDITIONS RELATING TO THE GRANT OF OPTIONS	  	6
	 	  	3.1.	  	Statutory Limit	  	6
	 	  	3.2.	  	Interpretation of Individual Limits	  	6
	 	  	3.3.	  	Calendar Year Limitation	  	6
	 	  	3.4.	  	Maximum Aggregate Number of Shares	  	7
	 	  	3.5.	  	United States Securities Act of 1933	  	7
	 	  	3.6.	  	Additional Conditions	  	7
			
	4.	  	RIGHTS OF EXERCISE	  	7
	 	  	4.1.	  	Earliest Date of Exercise	  	7
	 	  	4.2.	  	Requirement to remain in Employment	  	8
	 	  	4.3.	  	Death of Option Holder	  	8
	 	  	4.4.	  	Right to Exercise Prematurely irrespective of Additional Conditions	  	8
	 	  	4.5.	  	Right to Exercise Prematurely if Additional Conditions Achieved	  	8
	 	  	4.6.	  	Extended Exercise Period	  	9
	 	  	4.7.	  	Transfer of Employment within Group	  	9
	 	  	4.8.	  	Transfer of Employment Overseas	  	9
	 	  	4.9.	  	Lapse of Options	  	10
	 	  	4.10.	  	Compliance with the United States Securities Law	  	10
	 	  	4.11.	  	Shares to be held for Investment Purposes	  	10
	 	  	4.12.	  	Shareholder Approval	  	11
	 	  	4.13.	  	Option Holder with Material Interest	  	11
			
	5.	  	TAKE-OVER, RECONSTRUCTION AND AMALGAMATION AND LIQUIDATION	  	11
	 	  	5.1.	  	Take-over pursuant to Tender Offer	  	11
	 	  	5.2.	  	Take-over pursuant to Scheme of Arrangement	  	11
	 	  	5.3.	  	Scheme of Arrangement without Change of Control	  	12
	 	  	5.4.	  	Compulsory Acquisition of Shares	  	12
	 	  	5.5.	  	Voluntary Winding Up of the Company	  	12
	 	  	5.6.	  	Meaning of Obtaining Control	  	12
	 	  	5.7.	  	Rollover of Options	  	12
	 	  	5.8.	  	Meaning of “appropriate period”	  	12
			
	6.	  	MANNER OF EXERCISE	  	13
	 	  	6.1.	  	Actions Required of the Option Holder	  	13
	 	  	6.2.	  	Actions Required of the Company	  	13
	 	  	6.3.	  	Partial Exercise	  	13
	 	  	6.4.	  	Liability to Taxation	  	13

  

 i 

							
			
	7.	  	ISSUE OF SHARES	  	13
	 	  	7.1.	  	Ranking of Shares	  	13
	 	  	7.2.	  	Admission to the New York Stock Exchange	  	14
			
	8.	  	ADJUSTMENTS	  	14
	 	  	8.1.	  	General Power of Adjustment	  	14
	 	  	8.2.	  	Requirement of Capitalise Reserves	  	14
	 	  	8.3.	  	Notification of Option Holder	  	14
			
	9.	  	ADMINISTRATION	  	15
	 	  	9.1.	  	Delivery of Notices or Documents	  	15
	 	  	9.2.	  	Copies of Shareholder Communications	  	15
	 	  	9.3.	  	Maintenance of Unissued Share Capital	  	15
	 	  	9.4.	  	Directors’ Power to Administer Plan	  	15
	 	  	9.5.	  	Directors’ Decisions are Final and Conclusive	  	15
	 	  	9.6.	  	Costs of Administering Plan	  	15
			
	10.	  	ALTERATIONS	  	15
	 	  	10.1.	  	Power to alter Rules prior to Inland Revenue approval	  	15
	 	  	10.2.	  	Power to alter Rules following Inland Revenue approval	  	15
	 	  	10.3.	  	Alterations which affect Share Price and subsisting rights of Option Holders	  	16
	 	  	10.4.	  	Notification to Option Holders	  	16
			
	11.	  	GENERAL	  	16
	 	  	11.1.	  	Termination of the Plan	  	16
	 	  	11.2.	  	No Compensation for loss of Option Rights	  	16
	 	  	11.3.	  	Governing Law	  	16
			
	12.	  	DEFINITIONS FOR PURPOSES OF PART B	  	16
	 	  	12.1.	  	Part B not Approved by Inland Revenue	  	16
	 	  	12.2.	  	Terms of Part A apply except as amended	  	16
			
	13.	  	GRANT OF UNAPPROVED OPTIONS	  	17
	 	  	13.1.	  	Specification of Unapproved Options	  	17
	 	  	13.2.	  	Modified Terms and Conditions	  	17
	 	  	13.3.	  	Additional Requirements	  	17
			
	14.	  	CONDITIONS RELATING TO THE GRANT OF UNAPPROVED GRANTS	  	17
	 	  	14.1.	  	No Statutory Limit	  	18
	 	  	14.2.	  	Plan Approval Required	  	18
			
	15.	  	EXERCISE OF UNAPPROVED OPTIONS	  	18
	 	  	15.1.	  	Extended Exercise Period	  	18
	 	  	15.2.	  	Shareholder Approval	  	18
	 	  	15.3.	  	Certain Adjustments Requiring Shareholder Approval	  	18
			
	16.	  	DISCRETION TO PAY CASH ON EXERCISE OF AN OPTION	  	18
			
	17.	  	EMPLOYMENT AND SOCIAL TAXES	  	18

  

 ii 

			
	 PART A
	  	APPROVED BY THE INLAND REVENUE UNDER THE INCOME TAX (EARNINGS AND PENSIONS) ACT 2003 ON [    ] UNDER REFERENCE [  ]

  

	1.	DEFINITIONS FOR THE PURPOSE OF PART A 

  
 In this Plan, the following words and expressions shall, where the context so permits, have the meanings set forth below: 
  

			
	 “Acquiring Company”
	 	the person mentioned in Rule 5.1, being a company within the meaning of Section 832 of the Act;
		
	 “Acquisition Price”
	 	in relation to an Option, the total amount payable on any exercise being an amount equal to the relevant Share Price multiplied by the number of Shares in respect of which the Option is
exercised;
		
	 “the Act”
	 	the Income and Corporation Taxes Act 1988;
		
	 “Associated Company”
	 	the meaning ascribed by Section 416 of the Act;
		
	 “the Auditors”
	 	the auditors for the time being of the Company acting as experts and not as arbitrators;
		
	 “the Code”
	 	the United States Federal Internal Revenue Code of 1986 (as amended);
		
	 “the Company”
	 	save as provided in Rule 5.7, Octel Corp., a Delaware corporation;
		
	 “Control”
	 	the meaning ascribed by Section 840 of the Act;
		
	 “Date of Grant”
	 	the date on which the Directors resolve to grant an Option under the Plan pursuant to Rule 2;
		
	 “Dealing Day”
	 	a day on which the New York Stock Exchange is open for business;
		
	 “the Directors”
	 	the board of directors of the Company, or a duly authorised committee thereof;
		
	 “Eligible Employee”
	 	any person who as of the Date of Grant:
	 	 	 (1)    (a) is a director of a Participating Company required to work for not less than 25 hours a week (exclusive of meal
breaks); or

  

 1 

			
	 	 	 (b)    if not a director, is employed by a Participating Company on terms which require him to work for not less than 20
hours a week (exclusive of meal breaks); and

		
	 	 	 (2)    is not ineligible to participate in the Plan by virtue of paragraph 9 of Schedule 4 to ITEPA (material
interest in a close company); and

		
	 	 	 (3)    does not own, within the meaning of Section 422(b)(6) of the Code, Shares possessing more than ten per cent
of the total combined voting power of all classes of share of the Company (or its Parent or any of its subsidiaries);

		
	 “Grant Period”
	 	a period of 20 days commencing on the Dealing Day following any of:
		
	 	 	 (1)    a day on which the Plan is approved by the Inland Revenue; or

		
	 	 	 (2)    a day on which the Company makes an announcement of its results for any year, half year or other period or
issues any prospectus, listing particulars or other document containing equivalent information relation to Shares; or

		
	 	 	 (3)    a day on which the Directors resolve that exceptional circumstances have arisen which justify the grant of
Options; or

		
	 	 	 (4)    a day on which any announcement is made of modifications to be made to the Act or ITEPA or a day on which
any such modifications come into force;

		
	 “Group”
	 	the Company and its Subsidiaries;
		
	 “Holding Company”
	 	in relation to the Acquiring Company, a company falling within the definition in Section 736 of the Companies Act 1985;
		
	 “Incentive Stock Option”
	 	an option which qualifies for relief under Section 422 of the Code;

  

 2 

					
	 “ITEPA”
	 	the Income Tax (Earnings and Pensions) Act 2003;
		
	 “Key Feature”
	 	any provision of the Plan which is necessary to meet the requirements of Schedule 4 to ITEPA;
		
	 “Listing”
	 	the meaning ascribed in Article 4.4.1(b)(ii) of the Articles of Association of the Company;
		
	 “Market Value”
	 	in relation to a Share on any day:
		
	 	 	 (1)    if and so long as the Shares are listed on the New York Stock Exchange, the reported closing
price of Octel Corp. common stock on the New York Stock Exchange for that day, or the last Dealing Day prior to that day if that day is not a Dealing Day;

		
	 	 	 (2)    save as mentioned in (1) above, its market value as determined in accordance with Part VIII of
the Taxation of Chargeable Gains Act 1992 and agreed in advance with the Shares Valuation Division of the Inland Revenue;

		
	 “Option”
	 	a right to acquire Shares pursuant to the Plan;
		
	 “Option Certificate”
	 	a certificate issued under Rule 2.2;
		
	 “Option Holder”
	 	a person to whom an Option has been granted (or, as the context requires, his personal representatives);
		
	 “Parent”
	 	any company which is a parent corporation of the Company within the meaning of Section 424(e) of the Code;
		
	 “Participating Company”
	 	the Company and any other company for the time being designated by the Directors as a Participating Company being a company which is both a Subsidiary of the Company and under the
Control of the Company;
		
	 “the Plan”
	 	the Octel Corp. Company Share Option Plan in its present form, or as from time to time altered in accordance with the Rules;
		
	 “Relevant Share Option Scheme”
	 	any other share option scheme (except a Savings Related Share Option Scheme) established by the Company or any Associated Company;

  

 3 

					
	 “Rules”
	 	the Rules of the Plan and “Rule” shall be construed accordingly;
		
	 “Savings Related Share Option Scheme”
	 	a savings related share option scheme approved by the Inland Revenue;
		
	 “Securities Act”
	 	the United States Securities Act of 1933 as amended;
		
	 “Share”
	 	save as provided in Rule 5.7, a share in the Company satisfying paragraphs 15 to 20 inclusive of Schedule 4 to ITEPA;
		
	 “Share Price”
	 	the price per Share, as determined by the Directors, at which an Eligible Employee may acquire Shares in respect of which an Option has been granted to him, being not less
than:
		
	 	 	 (1)    the Market Value of a Share on the Date of Grant (or where in accordance with Rule 2.1, the
Directors issue invitations to apply for Options the Dealing Day by reference to which the Market Value is calculated); or

		
	 	 	 (2)    if greater and Shares are to be subscribed, the nominal value of a Share;

		
	 	 	subject to any adjustment pursuant to Rule 8.1;
		
	 “Statutory Limit”
	 	£30,000 or any other limit from time to time specified under paragraph 6 of Schedule 4 to ITEPA;
		
	 “Subsidiary”
	 	any company which is both a subsidiary within the meaning ascribed by Section 736 of the Companies Act 1985 and a subsidiary corporation within the meaning of Section 424(f) of the
Code;

  
 References to any statutory provision
are to that provision as amended or re-enacted from time to time, and, unless the context otherwise requires, words in the singular shall include the plural (and vice versa) and words importing the masculine the feminine (and vice
versa). 
  

 4 

	2.	GRANT OF OPTIONS 

  

	2.1.	Procedure for Grant of Options 

  

	 	(a)	Within a Grant Period, the Directors may, at their absolute discretion, grant Options under the Plan to Eligible Employees. 

  

	 	(b)	The Directors may adopt such procedure as they think fit for granting Options, whether by invitation to Eligible Employees to apply for Options or by granting Options without
issuing invitations, PROVIDED THAT any documentation used in such procedure is approved in advance by the Inland Revenue in accordance with Rule 10.2. 

  

	 	(c)	Where any Option is to be granted pursuant to an invitation and the Share Price is determined at the date of the invitation, the Option must be granted no later than the
twenty-ninth day in the period commencing with the Dealing Day by reference to which the Share Price was calculated. 

  
 2.2. Requirement to Issue Option Certificate 
  
 The Company shall issue to each Option Holder an Option Certificate which shall be executed in such manner as shall take effect as a binding contractual
obligation of the Company and which shall be in such a form as the Directors from time to time determine (subject to the approval of the Inland Revenue). The Option Certificate shall include details of: 
  

	 	(a)	the Date of Grant of the Option; 

  

	 	(b)	the term of the Option which shall not exceed ten years from the Date of Grant; 

  

	 	(c)	the Share Price; 

  

	 	(d)	the number of Shares subject to the Option; 

  

	 	(e)	any date or dates determined by the Directors in accordance with Rule 3.6 upon which the Option is first exercisable in whole and/or part and, where on any date only part is first
exercisable, the number of Shares over which such partial exercise may be made; and 

  

	 	(f)	the performance targets or conditions to be satisfied as a condition of the exercise of the Option in accordance with Rule 3.6 and any other restrictions on the exercise of the
Option. 

  
 The Option Certificate shall include a
statement of the limitations provided in section 2.4 of this Plan. 
  

	2.3.	Right to Disclaim Option 

  
 Each Eligible Employee to whom an Option is granted may by notice in writing within 30 days of the Date of Grant disclaim in whole or in part his rights
under 

  

 5 

 
the Option in which case the Option shall for all purposes be deemed never to have been granted. 
  

	2.4.	Options may not be transferred 

  
 Subject to the rights of an Option Holder’s personal representatives to exercise an Option as provided in Rule 4.3, every Option shall be personal to
the Eligible Employee to whom it is granted and shall not be capable of being transferred, assigned or charged. Each Option Certificate shall carry a statement to this effect. 
  

	3.	CONDITIONS RELATING TO THE GRANT OF OPTIONS 

  

	3.1.	Statutory Limit 

  
 Any Option granted to an Eligible Employee shall be limited and take effect so that immediately following such grant, the aggregate Market Value of all
the Shares which he may acquire on the exercise of all options which he then holds and which are or may become capable of being exercised and which were granted under: 
  

	 	(a)	Part A of the Plan; and 

  

	 	(b)	any Relevant Share Option Scheme approved by the Inland Revenue under the Act. 

  
 shall not exceed the Statutory Limit. 
  

	3.2.	Interpretation of Individual Limits 

  

	 	(a)	For the purposes of Rule 3.1, the Market Value of an Option shall be taken as at its Date of Grant and in relation to options granted under any Relevant Share Option Scheme the
Market Value of an option shall be taken as being the fair market value of the Shares subject to that option at its date of grant determined in accordance with the Rules of such other scheme. 

  

	 	(b)	For the purposes of determining the application of the Statutory Limit in Rule 3.1, the rate of exchange for US dollars into sterling shall be the noon fixed rate of the US dollars
in the Wall Street Journal on the Date of Grant of the Option. 

  

	3.3.	Calendar Year Limitation 

  
 The aggregate Market Value (determined at the Date of Grant) of Shares with respect to which Incentive Stock Options become exercisable for the first time
by an individual Option Holder in any calendar year shall not exceed $100,000. 
  

 6 

	3.4.	Maximum Aggregate Number of Shares 

  
 The present maximum aggregate number of Shares which may be issued under the Plan is 1,258,730 subject to any future increase in this limit which may be
substituted at the discretion of the Directors upon approval by the shareholders of the Company, to the extent such approval is required by applicable law. 
  

	3.5.	United States Securities Act of 1933 

  
 The grant of any Option under the Plan to any person subject to United States securities laws shall be subject to fulfilling the requirements (including
obtaining any required approval or consent) of the provision of the Securities Act or of any applicable regulation or enactment. The Options have not been, and will not be, registered under the Securities Act, or under any other securities laws in
any other jurisdiction in the United States. Shares issued pursuant to the exercise of an Option will be registered on Form S-8. Until so registered, any transfer of such Shares may be restricted. 
  

	3.6.	Additional Conditions 

  
 The Directors when granting any Option may in their absolute discretion impose any conditions and limitations (additional to any conditions and
limitations contained in any other of these Rules) upon the exercise of any Option provided that such additional conditions and limitations shall: 
  

	 	(i)	be objective, specified at the Date of Grant and set out in full, or details given with, the Option Certificate; and 

  

	 	(ii)	be such that the right to exercise any Option after the fulfilment or attainment of the conditions and limitations so specified shall not be dependent upon the further discretion of
any person; and 

  

	 	(iii)	not be capable of amendment, variation or waiver unless an event occurs which causes the Directors to consider that a waived, varied or amended condition would be a fairer measure
of performance and would be no more difficult to satisfy. When such conditions or limitations have been imposed and have ceased to be capable of being satisfied or being satisfied in full except as a result of an event to which Rules: 4.7, 4.8 or 5
apply that Option shall lapse in whole or in part as the case may be. 

  

	4.	RIGHTS OF EXERCISE 

  

	4.1.	Earliest Date of Exercise 

  
 Save as provided in Rules 4.3, 4.4, 4.5 and 5 an Option may not be exercised before whichever is the latest of: 
  

	 	(a)	Listing; and 

  

	 	(b)	the third anniversary of the Date of Grant; and 

  

 7 

	 	(c)	any date or dates which may have been specified in accordance with Rule 2.2 in the relevant Option Certificate; and 

  

	 	(d)	when any additional conditions and limitations imposed on the Option (and which have not be waived) in accordance with Rule 3.6 have been fulfilled; 

  
 but in any event may not be exercised later than the day preceding the tenth
anniversary of the Date of Grant. 
  

	4.2.	Requirement to remain in Employment 

  
 Save as provided in Rules 4.3, 4.4, 4.5 and 5, an Option may only be exercised by an Option Holder while he is a director or employee of a Participating
Company or an Associated Company of a Participating Company. 
  

	4.3.	Death of Option Holder 

  
 An Option may be exercised by the personal representatives of a deceased Option Holder during the period of one year following the date of death.

  

	4.4.	Right to Exercise Prematurely irrespective of Additional Conditions 

  
 An Option may be exercised by an Option Holder within the period of one year following the date on which he ceases to hold any office or employment with a
Participating Company or an Associated Company of a Participating Company on account of: 
  

	 	(a)	injury, ill-health or disability; or 

  

	 	(b)	redundancy (within the meaning of the Employment Rights Act 1996); or 

  

	 	(c)	the transfer of the undertaking or part-undertaking in which the Option Holder is employed to a person other than a Participating Company or an Associated Company of a Participating
Company; or 

  

	 	(d)	the Company by which the Option Holder is employed ceasing to be under the Control of the Company. 

  

	4.5.	Right to Exercise Prematurely if Additional Conditions Achieved 

  
 If any additional conditions and limitations imposed on the Option (and which have not been waived) in accordance with Rule 3.6 have been fulfilled an
Option may be exercised by an Option Holder within the period of one year following the date on which he ceases to hold any office or employment with a Participating Company or an Associated Company of a Participating Company on account of:

  

	 	(a)	retirement at contractual retirement age including late retirement; or 

  

	 	(b)	early retirement by agreement with his employer; or 

  

 8 

	 	(c)	any other reason in the absolute discretion of the Directors. 

  

	4.6.	Extended Exercise Period 

  
 Where an Option Holder ceases employment on account of any of the reasons set out in Rules 4.4 or 4.5 prior to the date which is three years and six
months after the relevant Date of Grant, or the date on which he last exercised an option under a Relevant Share Option Scheme (whichever is later), he may in addition (at the discretion of the Directors) exercise the Option at any time within
whichever of the following periods is applicable: 
  

	 	(a)	in relation to Rule 4.4, the period which starts on the date his employment ceases and ends six months after the earliest date on which he could exercise the Option without
incurring any liability to income tax in consequence thereof; or 

  

	 	(b)	in relation to Rule 4.5, the period which begins on the first date by reference to which it may be established (if relevant) that the condition specified in Rule 3.6 has been
satisfied and ends six months after the earliest date on which he could exercise the Option without incurring any liability to income tax in consequence thereof; 

  
 but in no case may an Option be exercised more than 42 months after the date the Option Holder’s employment ceased.

  

	4.7.	Transfer of Employment within Group 

  
 An Option Holder shall not be treated for the purposes of Rules 4.4, 4.5 and 4.8, as ceasing to hold an office or employment with a Participating Company
until such time as he is no longer a director or employee of any Participating Company or an Associated Company of a Participating Company and an Option Holder (being a woman) who ceases to be such a director or employee by reason of pregnancy or
confinement and who exercises her right to return to work under section 79 of the Employment Rights Act 1996 before exercising an Option, shall be treated for those purposes as not having ceased to hold such an office or employment. 
  

	4.8.	Transfer of Employment Overseas 

  
 Subject to the satisfaction of any additional conditions and limitations imposed pursuant to Rule 3.6 if an Option Holder, whilst remaining a director or
employee of a Participating Company or an Associated Company of a Participating Company, is transferred to work in another country and as a result of that transfer will either: 
  

	 	(a)	become subject to tax on his remuneration in the country to which he is transferred and the Directors are satisfied that as a result he will suffer a tax disadvantage upon
exercising an Option; or 

  

	 	(b)	 become subject to restrictions on his ability to exercise his Option or to hold or deal in the shares or the proceeds of the sale of the shares he may 

  

 9 

	 	 
acquire on exercise of that Option by reason of or in consequence of the securities laws or exchange control laws of the country to which he is transferred;

  
 the Option Holder may exercise that Option
in the period commencing three months before and ending three months after the transfer takes place. If he chooses not to exercise his Option at that time, it will not thereby lapse. 
  

	4.9.	Lapse of Options 

  
 An Option shall lapse on the occurrence of the earliest of the following: 
  

	 	(a)	the tenth anniversary of the Date of Grant; or 

  

	 	(b)	the expiry of the period (if any) allowed for the satisfaction of any condition of exercise specified in the Option Certificate pursuant to Rule 3.3 without such condition having
been satisfied or the date on which it becomes apparent that any such condition has become incapable of being satisfied; or 

  

	 	(c)	subject to Rule 5.7, the expiry of any of the applicable periods specified in Rules 4.3, 4.5, 4.6, 5.1, 5.2, 5.3, 5.4 and 5.5, but where an Option Holder dies while time is running
under Rules 4.5 or 4.6, the Option shall not lapse until the expiry of the period in Rule 4.3; or 

  

	 	(d)	the date on which an Option Holder ceases to be a director or employee of any Participating Company or any Associated Company of a Participating Company for any reason other than
his death or those specified in Rules 4.5 and 4.6; or 

  

	 	(e)	the date on which a resolution is passed, or an order is made by the Court, for the compulsory winding up of the Company; or 

  

	 	(f)	the date on which the Option Holder becomes bankrupt or does or attempts or omits to do anything as a result of which he is derived of the legal or beneficial ownership of the
Option. 

  

	4.10. 	Compliance with the United States Securities Law 

  
 Shares shall not be issued pursuant to the exercise of an Option unless the exercise of such Option and the issuance and delivery of such Shares pursuant
thereto shall comply with all relevant provisions of law, including, without limitation, the Securities Act, the United States Securities Exchange Act of 1934, the rules and regulations promulgated thereunder, and the requirements of any stock
exchange upon which the Shares may then be listed, and shall be further subject to the approval of Counsel for the Company with respect to such compliance. 
  

	4.11. 	Shares to be held for Investment Purposes 

  
 As a condition to the exercise of an Option, the Company may require the person exercising such Option to represent and warrant at the time of any such

  

 10 

 
exercise that the shares are being purchased only for investment and without any present intention to sell or distribute such shares if, in the opinion of
Counsel for the Company, such a representation is required in order to comply with any of the aforementioned relevant provisions of law. 
  

	4.12. 	Shareholder Approval 

  
 If any amendment requiring the approval of the Company’s Shareholders is made subsequent to the first registration of any class of equity security by
the Company under Section 12 of the Securities Exchange Act of 1934, such shareholder approval shall be: 
  

	 	(a)	solicited substantially in accordance with Section 14(a) of that act and the rules and regulations promulgated thereunder; or 

  

	 	(b)	solicited after the Company has furnished in writing to the holders entitled to vote substantially the same information concerning the Plan as that which would be required by the
rules and regulations in effect under Section 14(a) of that act at the time such information is furnished. 

  

	4.13.	  Option Holder with Material Interest 

  
 An Option may not be exercised by an Option Holder at any time when he is prohibited from such exercise by virtue of the provisions of paragraph 9 of
Schedule 4 to the ITEPA (material interest in a close company). 
  

	5.	TAKE-OVER, RECONSTRUCTION AND AMALGAMATION AND LIQUIDATION 

  

	5.1.	Take-over pursuant to Tender Offer 

  
 If any person obtains Control of the Company as a result of making either a tender offer to acquire the whole of the Company’s issued share capital
(other than any shares already owned by the Holding Company or any Subsidiary of the Holding Company) and which is made on a condition that if it is satisfied the offeror will have such Control, or a tender offer to acquire all the Shares in the
Company which are of the same class as the Shares then an Option may be exercised within the period of six months of the date on which Control is so obtained and any condition subject to which the offer is made is satisfied (or until the expiry of
the period mentioned in Rule 5.4, if earlier). 
  

	5.2.	Take-over pursuant to Scheme of Arrangement 

  
 If any person obtains Control of the Company in pursuance of a compromise or scheme of arrangement sanctioned by the Court under legislation which the
Inland Revenue has agreed is equivalent to Section 425 of the Companies Act 1985 then an Option may be exercised during the period which starts on the date the Court sanctions such scheme of arrangement and ends six months later or, if earlier, on
the day immediately preceding the date upon which the scheme shall become effective. 
  

 11 

	5.3.	Scheme of Arrangement without Change of Control 

  
 If, without any person obtaining Control of the Company, the Court sanctions a scheme of arrangement affecting the Shares under legislation which the
Inland Revenue has agreed is equivalent to Section 425 of the Companies Act 1985 then an Option may be exercised during the period which starts on the date the Court sanctions such scheme of arrangement and ends six months later or, if earlier, on
the day immediately preceding the date upon which the scheme shall become effective. 
  

	5.4.	Compulsory Acquisition of Shares 

  
 If any person becomes bound or entitled to acquire Shares in the Company under legislation which the Inland Revenue has agreed is equivalent to Sections
428 to 430 of the Companies Act 1985 then an Option may be exercised during any period such person remains so bound or entitled. 
  

	5.5.	Voluntary Winding Up of the Company 

  
 If a resolution is passed for the voluntary winding-up of the Company, an Option may be exercised during the period of six months starting on commencement
of such winding-up provided that any issue of shares pursuant to such exercise is authorised by the liquidator or the Court (if appropriate) upon the application of and at the sole cost and expense of the Option Holder. 
  

	5.6.	Meaning of Obtaining Control 

  
 For the purpose of this Rule 5, a person shall be deemed to have obtained Control of the Company if he and other acting in concert with him have together
obtained Control. 
  

	5.7.	Rollover of Options 

  
 Notwithstanding anything to the contrary in these Rules, where any person mentioned in Rule 5.1 is a company an Option Holder may, by agreement with the
Acquiring Company and within the appropriate period release his Option under the Plan (“the Old Option”) in consideration of the grant to him of a new (“the New Option”) which, within the meaning ascribed by
paragraph 27(2) of Schedule 4 of ITEPA, is equivalent to the Old Option but relates to shares in a different company (whether the Acquiring Company or some other company falling within sub-paragraph (b) or (c) of paragraph 16 of Schedule 4 to ITEPA.
With effect from the date of release references in Rules 4, 5, 6, 7, 8, 9, 10 and 11 (and, in relation to expressions used in those Rules, in Rule 1) to “the Company” and “Shares” shall, in relation to the New
Option, be construed as references to the Acquiring Company and Shares in the Acquiring Company or that other company as the case may be, but references to Participating Company shall continue to be construed as if references to the Company were
references to Octel Corp. 
  

	5.8.	Meaning of “appropriate period” 

  
 For the purpose of Rule 5.7, the “appropriate period” is: 
  

	 	(a)	where Rule 5.1 and 5.4 apply, the periods mentioned in those Rules respectively; or 

  

 12 

	 	(b)	where Rule 5.2 applies, the period of six months beginning with the time when the Court sanctions the scheme of arrangement. 

  

	6.	MANNER OF EXERCISE 

  

	6.1.	Actions Required of the Option Holder 

  
 An Option may be exercised, in whole or in part, by the delivery to the secretary of the Company, or his duly appointed agent, of an Option Certificate
covering not less than all the Shares over which the Option is then to be exercised, with the notice of exercise in the prescribed form duly completed and signed by the Option Holder together with a remittance of the Acquisition Price payable in
respect of the Shares over which the Option is to be exercised. 
  

	6.2.	Actions Required of the Company 

  
 The relevant Shares shall be allotted or transferred (as the case may be) within 28 days following such delivery and, accordingly in cases where Shares
are to be transferred, the Company shall use its best endeavours to ensure due transfer thereof. At the request of the Option Holder, the Shares may be allotted or transferred (as the case may be) to a nominee provided the Option Holder has
beneficial ownership of the Shares at the time of such allotment and transfer. 
  

	6.3.	Partial Exercise 

  
 Where an Option is exercised in part the minimum number of Shares which may be exercised is 100 Shares and the Company shall issue a balancing Option
Certificate to the Option Holder. 
  

	6.4.	Liability to Taxation 

  
 If a company within the Group is obliged in any jurisdiction to account for tax and national insurance contributions, for which an Option Holder is liable
by virtue of the exercise of an Option and the company has not received from the Option Holder the necessary amount, then the company shall be entitled to discharge such liability by selling sufficient Shares in respect of which the Option has been
validly exercised and allotting or procuring the transfer of the balance of the Shares to the Option Holder. 
  

	7.	ISSUE OF SHARES 

  

	7.1.	Ranking of Shares 

  
 All Shares issued pursuant to the exercise of Options under the Plan shall as to voting, dividend, transfer and other rights (including those arising on a
liquidation) rank pari passu in all respects with the Shares then in issue, except that 

  

 13 

 
they shall not rank for any dividend or other rights declared by reference to a record date preceding the date of such exercise. 
  

	7.2.	Admission to the New York Stock Exchange 

  
 If and so long as the Shares are listed on the New York Stock Exchange the Company shall use its best endeavours to procure that as soon as practicable
after the allotment of any Shares pursuant to the Plan application shall be made to the New York Stock Exchange for permission to deal in those shares unless such application has already been made. 
  

	8.	ADJUSTMENTS 

  

	8.1.	General Power of Adjustment 

  
 The number of Shares over which an Option has been granted and the Share Price thereof may, subject to the prior approval of the Inland Revenue, be
adjusted in such manner as the Directors shall determine following any capitalisation issue, sub-division, consolidation or reduction of share capital and in respect of any discount element in any rights issue or other variation of share capital to
the intent that (as nearly as may be possible without involving fractions of a Share or a Share Price calculated to more than two places of decimals) the Acquisition Price payable in respect of an Option shall remain unchanged PROVIDED that,
save as provided in Rule 8.2, no adjustment made pursuant to this Rule 8.1 shall have the effect of reducing the Share Price below the par value of a Share. 
  

	8.2.	Requirement of Capitalise Reserves 

  
 Any adjustment made to the Share Price of unissued Shares which would have the effect of reducing the Share Price to less than the par value of the Share
shall only be made if and to the extent that the Directors are authorised to capitalise from the reserves of the Company a sum equal to the amount by which the par value of the Shares in respect of which the Option is exercisable exceeds the
adjusted Share Price. The Directors may apply such sum in paying up such amount on such Shares so that on the exercise of any Option in respect of which such a reduction shall have been made, the Directors shall capitalise such sum (if any) and
apply the same in paying up such amount as aforesaid. 
  

	8.3.	Notification of Option Holder 

  
 The Directors may take such steps as they may consider necessary to notify Option Holders of any adjustments made under Rule 8.1 and to call in, cancel,
endorse, issue or re-issue any Option Certificate consequent upon such adjustment. 
  

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	9.	ADMINISTRATION 

  

	9.1.	Delivery of Notices or Documents 

  
 Notice or documents required to be given to an Eligible Employee or to an Option Holder shall either be delivered to him by hand or sent to him by post at
his last known home or business address according to the information provided by him. Notices sent by post shall be deemed to have been given on the day following the date of posting. 
  

	9.2.	Copies of Shareholder Communications 

  
 The Company may distribute to Option Holders copies of any notices or document sent by the Company to its shareholders generally. 
  

	9.3.	Maintenance of Unissued Share Capital 

  
 The Company shall at all times either keep available sufficient unissued Shares to satisfy the exercise of all Options which have neither lapsed nor been
exercised (taking account of any other obligations of the Company to allot unissued Shares) or shall ensure that sufficient issued Shares will be available to satisfy the exercise of such Options. 
  

	9.4.	Directors’ Power to Administer Plan 

  
 The Directors may make such regulations for the administration of the Plan as they deem fit, provided that no regulation shall be valid to the extent it
is inconsistent with the Rules. 
  

	9.5.	Directors’ Decisions are Final and Conclusive 

  
 The decision of the Directors in any dispute relating to an Option, or the due exercise thereof, or any other matter in respect of the Plan, shall be
final and conclusive. 
  

	9.6.	Costs of Administering Plan 

  
 The costs of introducing and administering the Plan shall be borne by the Company. 
  

	10.	ALTERATIONS 

  

	10.1. 	Power to alter Rules prior to Inland Revenue approval 

  
 The Directors may, prior to approval of Part A of the Plan by the Inland Revenue, alter the Rules of the Plan as may be necessary in order to obtain such
approval. 
  

	10.2. 	Power to alter Rules following Inland Revenue approval 

  
 Subject to Rule 10.3, after the date on which Part A of the Plan is approved by the Inland Revenue, the Directors may in their discretion alter the Rules

  

 15 

 
provided that no such alteration to a Key Feature of Part A shall be effective until it has been approved by the Inland Revenue. 
  

	10.3. 	Alterations which affect Share Price and subsisting rights of Option Holders 

  
 Subject to Rule 8.1, no adjustment may be made to the Share Price or the Acquisition Price and no alteration may be made
which would abrogate or adversely affect the subsisting rights of Option Holders. 
  

	10.4. 	Notification to Option Holders 

  
 Written notice of any amendment made in accordance with this Rule 10 shall be given to all Option Holders. 
  

	11.	GENERAL 

  

	11.1. 	Termination of the Plan 

  
 The Plan shall terminate on the tenth anniversary of the earlier of the date on which it is approved by the Company’s shareholders in general meeting
or the date on which the Plan is adopted, or at any earlier time by the passing of a resolution by the Directors. Termination of the Plan shall be without prejudice to the subsisting rights of Option Holders. 
  

	11.2. 	No Compensation for loss of Option Rights 

  
 If an Option Holder shall cease for any reason to be in the employment of a Participating Company or an Associated Company of a Participating Company, he
shall not be entitled, by way of compensation for loss of office or otherwise howsoever, to any sum or any benefit to compensate him for the loss of any right or benefit accrued or in prospect under the Plan. 
  

	11.3. 	Governing Law 

  
 This Plan and all Options shall be governed by and construed in accordance with English Law. 
  
 PART B 
  

	12.	DEFINITIONS FOR PURPOSES OF PART B 

  

	12.1. 	Part B not Approved by Inland Revenue 

  
 This Part B of the Rules of the Plan is not approved by the Inland Revenue under the provisions of the Act or ITEPA. 
  

	12.2. 	Terms of Part A apply except as amended 

  
 The Rules as contained in Part A of the Plan shall apply to Options granted under this Part B unless amended in accordance with the provisions hereof.

  

 16 

 For the purposes of Part B, “Eligible Employee” shall mean any person who as of the Date of
Grant: 
  

	 	(1)	(a) is a director of a Participating Company required to work for not less than 25 hours a week (exclusive of meal breaks) and who would be considered an employee of the
Participating Company for purposes of the Code; or 

  

	 	(b)	if not a director, is employed by a Participating Company on terms which require him to work for not less than 20 hours a week (exclusive of meal breaks); and

  

	 	(2)	does not own, within the meaning of Section 422(b)(6) of the Code, Shares possessing more than ten per cent of the total combined voting power of all classes of share of the Company
(or its Parent or any of its subsidiaries). 

  

	13.	GRANT OF UNAPPROVED OPTIONS 

  

	13.1.	Specification of Unapproved Options 

  
 The Directors shall specify when an Option is granted under this Part B of the Rules of the Plan and the relevant Option Certificate shall be written
accordingly. 
  

	13.2.	Modified Terms and Conditions 

  
 The Directors may determine that any Option granted under this Part B of the Rules shall be subject to additional and/or modified terms and conditions
relating to the grant and terms of exercise as may be necessary to comply with or take account of any securities, exchange control or taxation laws, regulations or practice of any territory which may have application to the relevant Eligible
Employee, Option Holder or Participating Company. 
  

	13.3.	Additional Requirements 

  
 In exercising their discretion under Rule 13.2, the Directors may: 
  

	 	(a)	require an Option Holder to make such declarations to take such other action (if any) as may be required for the purpose of any securities, taxes or other laws of any territory
which may be applicable to him at the Date of Grant or on exercise; and 

  

	 	(b)	adopt any supplemental rules or procedures governing the grant or exercise of Options as may be required for the purpose of any securities, tax or other laws of any territory which
may be applicable to an Eligible Employee or Option Holder. 

  

 17 

	14.	CONDITIONS RELATING TO THE GRANT OF UNAPPROVED GRANTS 

  

	14.1.	No Statutory Limit 

  
 Rule 3.1 of Part A shall not apply to this Part B of the Plan. 
  

	14.2.	Plan Approval Required 

  
 Part B of the Plan shall not take effect and no options or rights will be granted hereunder unless the Plan is approved by the shareholders of the Company
within 12 months before or after the date the Plan is adopted. 
  

	15.	EXERCISE OF UNAPPROVED OPTIONS 

  

	15.1.	Extended Exercise Period 

  
 Rule 4.6 of Part A shall not apply to Part B of the Plan. 
  

	15.2.	Shareholder Approval 

  
 Rule 4.12 of Part A shall not apply to Part B of the Plan. 
  

	15.3.	Certain Adjustments Requiring Shareholder Approval 

  
 Any adjustment to (i) the maximum aggregate number of shares issuable under the Plan, (ii) the definition of Eligible Employees, (iii) the company
granting options or (iv) the shares available under the Plan, shall require shareholder approval within 12 months before or after such adjustment is adopted. 
  

	16.	DISCRETION TO PAY CASH ON EXERCISE OF AN OPTION 

  
 If an Option Holder exercises an Option the Directors may in lieu of allotting or procuring the transfer of Shares in accordance with Rule 6.2 of Part A
pay to such Option Holder a cash sum equal to the amount by which the value of the Shares in respect of which the notice of exercise was given (calculated as the average of the middle market quotations on the New York Stock Exchange for the three
Dealing Days prior to the date of exercise) exceeds the Acquisition Price of those Shares. 
  
 If payment is made pursuant to this Rule to an Option Holder, he shall have no further rights in respect of the Shares for which the notice of exercise was given. The Company may make any deductions in respect of such
payment which it is required to make under the laws of any territory which laws are applicable to the Option Holder and/or his employing Participating Company. 
  

No Option granted under Part B of the Plan will be paralleled with an Option granted under Part A of the Plan. 
  

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	17.	EMPLOYMENT AND SOCIAL TAXES 

  
 The Option Holder shall indemnify the company (and, where relevant, any Participating Company) against any tax arising in respect of the exercise of the
Option which is a liability of the Option Holder but for which such company is required to account under the laws of any relevant territory. Such company may recover the tax from the Option Holder in such manner as the Directors think fit including
(but without prejudice to the generality of the foregoing): 
  

	 	(a)	withholding shares when the Option is exercised and selling the same; 

  

	 	(b)	deducting the necessary amount from the Option Holder’s remuneration; or 

  

	 	(c)	requiring the Option Holder to account directly to such company for such tax. 

  

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