Document:

Form of Non-Qualified Stock Option Agreement

 
Exhibit 10.3

 
NON-QUALIFIED STOCK OPTION AGREEMENT

 
THIS AGREEMENT, dated
            , is made by and between Cherokee Inc., a Delaware corporation, hereinafter referred to as the “Company,” and
            , an Employee, Consultant or Independent Director of the Company, or a Subsidiary of the Company, hereinafter referred to as “Optionee.” 
 
WHEREAS, the Company wishes to afford the Optionee the
opportunity to purchase shares of its Common Stock, par value $0.02 per share; and 
 
WHEREAS, the Company wishes to carry out The 2003 Incentive Award Plan of Cherokee Inc. (the “Plan”) (the terms of which are hereby incorporated by reference and made a part of this
Agreement); 
 
WHEREAS, the Committee appointed to
administer the Plan has determined that it would be to the advantage and best interest of the Company and its stockholders to grant the Non-Qualified Stock Option (the “Option”) provided for herein to the Optionee as an inducement to enter
into or remain in the service of the Company or its Subsidiaries and as an incentive for increased efforts during such service, and has advised the Company thereof and instructed the undersigned officer to issue said Option; and 
 
WHEREAS, all capitalized terms used herein without definition
shall have the meanings ascribed to such terms in the Plan. 
 
NOW, THEREFORE, in consideration of the mutual covenants herein contained and other good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereto do hereby agree as follows: 
 
ARTICLE I. 
 
GRANT OF OPTION 
 
1.1 Grant of Option. For good and valuable
consideration, effective as of              (the “Date of Grant”), the Company irrevocably grants to the Optionee the option to purchase any part or all of an aggregate of
             shares of Common Stock, upon the terms and conditions set forth in this Agreement. 
 
1.2 Purchase Price. The purchase price of the shares of Common Stock covered by the Option shall be
             per share without commission or other charge; provided, however, that the price per share of the shares subject to the Option shall not be less than 100% of the
Fair Market Value of a share of Common Stock on the Date of Grant. 
 
1.3 Consideration to the Company. In consideration of the granting of the Option by the Company, the Optionee agrees to render faithful and efficient services to the Company or any Subsidiary, with such duties and
responsibilities as the Company shall from time to time prescribe, for a period of at least one (1) year from the Date of Grant. Nothing in the Plan or this Agreement shall confer upon the Optionee any right to continue in the service of 

 

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the Company or any Subsidiary, or as a Director of the Company, or shall interfere with or restrict in any way the rights of the Company and
its Subsidiaries, which are hereby expressly reserved, to discharge the Optionee at any time for any reason whatsoever, with or without cause. 
 
1.4 Adjustments in Option. The Committee (or the Board, in the case of Options granted to an Independent Director) may make
adjustments with respect to the Option in accordance with the provisions of Section 9.3 of the Plan. 
 
ARTICLE II. 
 
PERIOD OF EXERCISABILITY 
 
2.1 Commencement of Exercisability. 
 
(a) Subject to Sections 2.3 and 4.8, the Option shall vest and become exercisable as follows: [Insert vesting
schedule]. 
 
(b) No portion
of the Option which has not become vested and exercisable at Termination of Employment, Termination of Consultancy or Termination of Directorship, as applicable, shall thereafter become vested and exercisable, except as may be otherwise provided by
the Committee. 
 
2.2 Duration of
Exercisability. The installments provided for in Section 2.1(a) are cumulative. Each such installment which vests and becomes exercisable pursuant to Section 2.1 shall remain vested and exercisable until it becomes unexercisable under Section
2.3. 
 
2.3 Expiration of Option. The Option
may not be exercised to any extent by anyone after the first to occur of the following events: 
 
(a) The expiration of ten (10) years from the Date of Grant; or 
 
(b) The expiration of twelve (12) months
following the date of the Optionee’s Termination of Employment, Termination of Consultancy or Termination of Directorship, as applicable, by reason of the Optionee’s death or permanent and total disability; or 
 
(c) The expiration of three (3) months
following the date of the Optionee’s Termination of Employment, Termination of Consultancy or Termination of Directorship, as applicable, for any reason other than such Optionee’s death or permanent and total disability, unless such
Optionee dies within said three-month period. 
 
ARTICLE III. 
 
EXERCISE
OF OPTION 
 
3.1 Person Eligible to
Exercise. During the lifetime of the Optionee, only the Optionee may exercise the Option or any portion thereof. After the death of the Optionee, any exercisable portion of the Option may, prior to the time when the Option becomes unexercisable
under Section 2.3, be exercised by the Optionee’s personal representative or by any person 

 

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empowered to do so under the deceased Optionee’s will or under the then applicable laws of descent and distribution. 
 
3.2 Partial Exercise. Any exercisable portion of the
Option or the entire Option, if then wholly exercisable, may be exercised in whole or in part at any time prior to the time when the Option or portion thereof becomes unexercisable under Section 2.3; provided, however, that each
partial exercise shall be for whole shares only. 
 
3.3 Manner of Exercise. The Option, or any exercisable portion thereof, may be exercised solely by delivery to the Secretary or the Secretary’s office of all of the following prior to the time when the Option or such
portion thereof becomes unexercisable under Section 2.3: 
 
(a) A written notice complying with the applicable rules established by the Committee (or the Board, in the case of Options granted to an Independent Director) stating that the Option, or a portion thereof, is exercised. The
notice shall be signed by the Optionee or other person then entitled to exercise the Option or such portion of the Option; 
 
(b) Full cash payment to the Secretary of the Company for the shares with respect to which the Option, or portion thereof,
is exercised. However, the Committee (or the Board, in the case of Options granted to an Independent Director), may in its sole and absolute discretion (i) allow a delay in payment up to thirty (30) days from the date the Option, or portion thereof,
is exercised; (ii) allow payment, in whole or in part, through the delivery of shares of Common Stock which have been owned by the Optionee for at least six months, duly endorsed for transfer to the Company with a Fair Market Value on the date of
delivery equal to the aggregate exercise price of the Option or exercised portion thereof; (iii) allow payment, in whole or in part, through the surrender of shares of Common Stock then issuable upon exercise of the Option having a Fair Market Value
on the date of Option exercise equal to the aggregate exercise price of the Option or exercised portion thereof; (iv) allow payment, in whole or in part, through the delivery of a notice that the Optionee has placed a market sell order with a broker
with respect to shares of Common Stock then issuable upon exercise of the Option, and that the broker has been directed to pay a sufficient portion of the net proceeds of the sale to the Company in satisfaction of the Option exercise price,
provided that payment of such proceeds is then made to the Company upon settlement of such sale; or (v) allow payment through any combination of the consideration provided in the foregoing subparagraphs (ii), (iii) and (iv); 
 
(c) Such representations and documents as the
Committee (or the Board, in the case of Options granted to an Independent Director), in its absolute discretion, deems necessary or advisable to effect compliance with all applicable provisions of the Securities Act and any other federal or state
securities laws or regulations. The Committee (or the Board, in the case of Options granted to an Independent Director) may, in its absolute discretion, also take whatever additional actions it deems appropriate to effect such compliance including,
without limitation, placing legends on share certificates and issuing stop-transfer notices to agents and registrars; and 
 

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(d) In the event the Option or portion thereof shall be exercised pursuant to Section 3.1 by any person or persons other than the Optionee, appropriate proof of the right of such person or persons to exercise the Option.

 
3.4 Conditions to Issuance of Stock
Certificates. The shares of Common Stock deliverable upon the exercise of the Option, or any portion thereof, may be either previously authorized but unissued shares or issued shares which have then been reacquired by the Company. Such shares
shall be fully paid and nonassessable. The Company shall not be required to issue or deliver any certificate or certificates for shares of Common Stock purchased upon the exercise of the Option or portion thereof prior to fulfillment of all of the
following conditions: 
 
(a) The
admission of such shares to listing on all stock exchanges on which such 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
rulings or regulations of the Securities and Exchange Commission or of any other governmental regulatory body, which the Committee (or the Board, in the case of Options granted to an Independent Director) 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 Committee (or the Board, in the case of Options granted to an Independent Director) shall, in its absolute discretion, determine to be necessary
or advisable; and 
 
(d) The
receipt by the Company of full payment for such shares, including payment of all amounts which, under federal, state or local tax law, the Company (or other employer corporation) is required to withhold upon exercise of the Option; and 
 
(e) The lapse of such reasonable period of
time following the exercise of the Option as the Committee (or the Board, in the case of Options granted to an Independent Director) may from time to time establish for reasons of administrative convenience. 
 
3.5 Rights as Stockholder. The holder of the Option
shall not be, nor have any of the rights or privileges of, a stockholder of the Company in respect of any shares purchasable upon the exercise of any part of the Option unless and until certificates representing such shares shall have been issued by
the Company to such holder. 
 
ARTICLE IV.

 
OTHER PROVISIONS 
 
4.1 Administration. The Committee shall have the power
to interpret the Plan and this Agreement 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. All actions taken and all
interpretations and determinations made by the Committee in good faith shall be final and binding upon the Optionee, the Company and all other interested persons. 

 

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Notwithstanding the foregoing, the full Board acting by a majority of its members in office, shall conduct the general administration of the
Plan and this Agreement with respect to Options granted to Independent Directors. No member of the Committee or the Board shall be personally liable for any action, determination or interpretation made in good faith with respect to the Plan, this
Agreement or the Option. In its absolute discretion, the Board may at any time and from time to time exercise any and all rights and duties of the Committee under the Plan and this Agreement, except with respect to matters which under Rule 16b-3 or
Section 162(m) of the Code, or any regulations or rules issued thereunder, are required to be determined in the sole discretion of the Committee. 
 
4.2 Option Not Transferable. 
 
(a) Neither the Option nor any interest or right therein or part thereof shall be sold, pledged, assigned or transferred
in any manner other than by will or the laws of descent and distribution, unless and until the Option has been exercised, or the shares underlying such Option have been issued, and all restrictions applicable to such shares have lapsed. Neither the
Option nor any interest or right therein or part thereof shall be liable for the debts, contracts or engagements of the Optionee or his or her successors in interest or shall be subject to disposition by transfer, alienation, anticipation, pledge,
encumbrance, assignment or any other means whether such disposition be voluntary or involuntary or by operation of law by judgment, levy, attachment, garnishment or any other legal or equitable proceedings (including bankruptcy), and any attempted
disposition thereof shall be null and void and of no effect, except to the extent that such disposition is permitted by the preceding sentence. 
 
(b) During the lifetime of the Optionee, only the Optionee may exercise the Option (or any portion thereof). After the
death of the Optionee, any exercisable portion of an Option may, prior to the time when such portion becomes unexercisable under the Plan or the Option Agreement, be exercised by the Optionee’s personal representative or by any person empowered
to do so under the deceased Optionee’s will or under the then applicable laws of descent and distribution. 
 
(c) Notwithstanding the foregoing provisions of this Section 4.2, the Option may be transferred by the Optionee, in
writing and with prior written notice to the Committee, to any one or more Permitted Transferees (as defined below), subject to the following terms and conditions: (i) the Option, as transferred to a Permitted Transferee, shall not be assignable or
transferable by the Permitted Transferee other than by will or the laws of descent and distribution; (ii) the Option, as transferred to a Permitted Transferee, shall continue to be subject to all the terms and conditions of the Option as applicable
to the Optionee (other than the ability to further transfer the Option); and (iii) the Optionee and the Permitted Transferee shall execute any and all documents requested by the Committee, including, without limitation documents to (A) confirm the
status of the transferee as a Permitted Transferee, (B) satisfy any requirements for an exemption for the transfer under applicable federal and state securities laws and (C) evidence the transfer. For purposes of this subsection (c), “Permitted
Transferee” shall mean, with respect to the Optionee, any child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law,
or sister-in-law, including adoptive relationships, any person sharing the Optionee’s household (other than a tenant or employee), a trust in which these 

 

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persons (or the Optionee) control the management of assets, and any other entity in which these persons (or the Optionee) own more than fifty
percent (50%) of the voting interests, or any other transferee specifically approved by the Committee (or the Board, in the case of Options granted to an Independent Director) after taking into account any state or federal tax or securities laws
applicable to transferable Non-Qualified Stock Options. 
 
4.3 Shares to Be Reserved. The Company shall at all times during the term of the Option reserve and keep available such number of shares of Common Stock as will be sufficient to satisfy the requirements of this Agreement.

 
4.4 Notices. Any notice to be given under
the terms of this Agreement to the Company shall be addressed to the Company in care of the Secretary, and any notice to be given to the Optionee shall be addressed to the Optionee at the address given beneath the Optionee’s signature hereto.
By a notice given pursuant to this Section 4.4, either party may hereafter designate a different address for notices to be given to that party. Any notice which is required to be given to the Optionee shall, if the Optionee is then deceased, be
given to the Optionee’s personal representative if such representative has previously informed the Company of such representative’s status and address by written notice under this Section 4.4. Any notice shall be deemed duly given when
enclosed in a properly sealed envelope or wrapper addressed as aforesaid, deposited (with postage prepaid) in a post office or branch post office regularly maintained by the United States Postal Service. 
 
4.5 Titles. Titles are provided herein for convenience
only and are not to serve as a basis for interpretation or construction of this Agreement. 
 
4.6 Stockholder Approval. The Plan will be submitted for approval by the Company’s stockholders within twelve (12) months after the date the Plan was initially adopted by the Board. The
Option may not be exercised to any extent by anyone prior to the time when the Plan is approved by the stockholders, and if such approval has not been obtained by the end of said twelve-month period, the Option shall thereupon be canceled and become
null and void. 
 
4.7 Construction. This
Agreement shall be administered, interpreted and enforced under the laws of the State of California without regard to conflicts of laws thereof. 
 
4.8 Conformity to Securities Laws. The Optionee acknowledges that the Plan is intended to conform to the extent necessary with all
provisions of the Securities Act and the Exchange Act and any and all regulations and rules promulgated by the Securities and Exchange Commission thereunder, and state securities laws and regulations. Notwithstanding anything herein to the contrary,
the Plan shall be administered, and the Option is granted and may be exercised, only in such a manner as to conform to such laws, rules and regulations. To the extent permitted by applicable law, the Plan and this Agreement shall be deemed amended
to the extent necessary to conform to such laws, rules and regulations. 
 

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IN WITNESS
WHEREOF, this Agreement has been executed and delivered by the parties hereto. 
 

	 CHEROKEE INC.

	
	 By:
	 	  

	 	 	 [Name]
 President and Chief Executive Officer

 

	
	

	 Optionee

	
	

	
	

	 Address

	
	 Optionee’s Social Security Number:

	
	

 

7Form of Restricted Stock Agreement

 
Exhibit 10.4

 
RESTRICTED STOCK AGREEMENT

 
THIS AGREEMENT, dated
            , is made by and between Cherokee Inc., a Delaware corporation, hereinafter referred to as the “Company,” and
            , an Employee, Consultant or Independent Director of the Company, or a Subsidiary of the Company, hereinafter referred to as “Restricted Stockholder.”

 
WHEREAS, the Company has established The 2003
Incentive Award Plan of Cherokee Inc. (the “Plan”) (the terms of which are hereby incorporated by reference and made a part of this Agreement); 
 
WHEREAS, the Plan provides for the issuance of shares of the Company’s Common Stock, par value $0.02 per share; 
 
WHEREAS, the Committee, appointed to administer the Plan, has
determined that it would be to the advantage and best interest of the Company and its stockholders to issue the Restricted Stock provided for herein to the Restricted Stockholder as an inducement to enter into or remain in the service of the Company
or its Subsidiary, and as an incentive for increased efforts during such service, and has advised the Company thereof and instructed the undersigned officer to issue said Restricted Stock; and 
 
WHEREAS, all capitalized terms used herein without definition
shall have the meanings ascribed to such terms in the Plan. 
 
NOW, THEREFORE, in consideration of the mutual covenants herein contained and other good and valuable consideration, receipt of which is hereby acknowledged, the parties hereto do hereby agree as follows: 
 
ARTICLE I. 
 
AWARD OF RESTRICTED STOCK 
 
1.1 Award of Restricted Stock. For good and valuable
consideration, on the date hereof the Company hereby issues to the Restricted Stockholder              shares of Common Stock upon the terms and conditions set forth in this
Agreement (the “Restricted Stock”). The purchase price of the shares of Common Stock to be purchased by the Restricted Stockholder pursuant to this Agreement shall be
$             per share without commission or other charge. 
 
1.2 Consideration to Company. In consideration for the issuance of Restricted Stock by the Company, the Restricted Stockholder
agrees to render faithful and efficient services to the Company or any Subsidiary, with such duties and responsibilities as the Company or any Subsidiary shall from time to time prescribe, for a period of at least one year from the date the
Restricted Stock is issued. Nothing in this Agreement or in the Plan shall confer upon the Restricted Stockholder any right to continue in the service of the Company or any Subsidiary, or as a Director of the Company, or shall interfere with or
restrict in any way the rights of the Company or any Subsidiary, which are hereby expressly reserved, to discharge the Restricted Stockholder at any time for any reason whatsoever, with or without cause. 

 
1.3
Adjustments in Award. The Committee (or the Board, in the case of Restricted Stock granted to an Independent Director) may make adjustments with respect to the Restricted Stock in accordance with the provisions of Section 9.3 of the Plan.

 
ARTICLE II. 
 
RESTRICTIONS 
 
2.1 Repurchase of Restricted Stock. Immediately upon a
Termination of Employment, Termination of Directorship or Termination of Consultancy (as applicable) for any reason, the Company shall have the right to repurchase from the Restricted Stockholder all shares of Restricted Stock then subject to
Restrictions at a cash price per share equal to the price paid by the Restricted Stockholder for such Restricted Stock; provided, however, that provision may be made by the Committee (or the Board, in the case of Restricted Stock
granted to Independent Directors) in its sole and absolute discretion that no such right of repurchase shall exist in the event of a Termination of Employment, Termination of Directorship or Termination of Consultancy without cause or because of the
Restricted Stockholder’s death, disability or retirement. 
 
2.2 Forfeiture of Restricted Stock. If no consideration was paid by the Restricted Stockholder upon issuance of the Restricted Stock, immediately upon a Termination of Employment, Termination of Directorship or Termination of
Consultancy, the Restricted Stockholder shall forfeit any and all shares of Restricted Stock then subject to Restrictions and the Restricted Stockholder’s rights in any Restricted Stock then subject to Restrictions shall lapse; provided,
however, that provision may be made by the Committee in its sole and absolute discretion that no such forfeiture shall exist in the event of a Termination of Employment, Termination of Directorship or Termination of Consultancy without cause
or because of the Restricted Stockholder’s death, disability or retirement. 
 
For purposes of this Agreement, the term “Restrictions” shall mean the exposure to repurchase set forth in Section 2.1 hereof and to forfeiture set forth in this Section 2.2 and the
restrictions on sale or other transfer set forth in Sections 2.5 and 2.6. 
 
2.3 Legend. Certificates representing shares of Restricted Stock issued pursuant to this Agreement shall, until all Restrictions lapse and new certificates are issued pursuant to Section 2.4(b) hereof, bear the
following legend: 
 
“THE SECURITIES
REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO FORFEITURE, REACQUISITION AND CERTAIN RESTRICTIONS ON TRANSFERABILITY UNDER THE TERMS OF THAT CERTAIN RESTRICTED STOCK AGREEMENT BY AND BETWEEN CHEROKEE INC. AND THE REGISTERED OWNER OF SUCH SECURITIES,
AND SUCH SECURITIES MAY NOT BE, DIRECTLY OR INDIRECTLY, OFFERED, TRANSFERRED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF UNDER ANY CIRCUMSTANCES, EXCEPT PURSUANT TO THE PROVISIONS OF SUCH AGREEMENT.” 
 
2.4 Lapse of Restrictions. 
 

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(a) Subject to Sections 2.1 and 2.2 hereof, the Restrictions shall lapse as follows: [Insert vesting schedule]. 
 
(b) Upon the lapse of the Restrictions, the Company shall cause new certificates to be issued with respect to such shares
and delivered to the Restricted Stockholder or his or her legal representative, free from the legend provided for in Section 2.3 hereof and any of the other Restrictions. Notwithstanding the foregoing, no such new certificate shall be delivered to
the Restricted Stockholder or his or her legal representative unless and until the Restricted Stockholder or his or her legal representative shall have paid to the Company in cash the full amount of all federal and state withholding or other
employment taxes applicable to the taxable income of the Restricted Stockholder resulting from the grant of Restricted Stock or the lapse of the Restrictions. 
 
2.5 Restricted Stock Not Transferable. Until the Restrictions hereunder lapse or expire pursuant to this Agreement, neither the
Restricted Stock (including any shares received by holders thereof with respect to shares of Restricted Stock as a result of stock dividends, stock splits or any other form of recapitalization) nor any interest or right therein or part thereof shall
be sold, pledged, assigned or transferred in any manner other than by will or the laws of descent and distribution. Neither the Restricted Stock nor any interest or right therein or part thereof shall be liable for the debts, contracts, or
engagements of the Restricted Stockholder or his or her successors in interest or shall be subject to disposition by transfer, alienation, anticipation, pledge, encumbrance, assignment or any other means whether such disposition be voluntary or
involuntary or by operation of law by judgment, levy, attachment, garnishment or any other legal or equitable proceedings (including bankruptcy) and any attempted disposition thereof shall be null and void and of no effect; except to the extent that
such disposition is permitted by the preceding sentence. 
 
2.6 Restrictions on New Shares. In the event that the outstanding shares of Common Stock are changed into or exchanged for a different number or kind of capital stock or other securities of the Company or of another
corporation by reason of merger, consolidation, recapitalization, reclassification, stock split, stock dividend or combination of shares, such new or additional or different shares or securities which are issued upon conversion of or in exchange or
substitution for shares of Restricted Stock which are then subject to Restrictions shall be considered to be Restricted Stock and shall be subject to all of the Restrictions, unless the Committee provides for the expiration of the Restrictions on
the shares of Restricted Stock underlying the distribution of the new or additional or different shares or securities. 
 
ARTICLE III. 
 
MISCELLANEOUS 
 
3.1 Holding Period. Notwithstanding any provision of this Agreement to the contrary, if the Restricted Stockholder is subject to Section 16 of the Exchange Act on the date on which the Restricted Stock is granted, the
Restricted Stock may not be sold, assigned or otherwise transferred or exchanged until at least six months and one day have elapsed from the date on which the Restricted Stock was granted. 
 
3.2 Conditions to Issuance of Stock Certificates. Shares of Restricted Stock may 

 

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be either previously authorized but unissued shares or issued shares which have then been reacquired by the Company. Such shares shall be
fully paid and nonassessable. The Company shall not be required to issue or deliver any certificate or certificates for shares of stock pursuant to this Agreement prior to fulfillment of all of the following conditions: 
 
(a) The admission of such shares to listing
on all stock exchanges on which such class of stock is then listed; 
 
(b) The completion of any registration or other qualification of such shares under any state or federal law or under rulings or regulations of the Securities and Exchange Commission or of any other
governmental regulatory body, which the Committee shall, in its absolute discretion, deem necessary or advisable; 
 
(c) The obtaining of any approval or other clearance from any state or federal governmental agency which the Committee
shall, in its absolute discretion, determine to be necessary or advisable; 
 
(d) The lapse of such reasonable period of time as the Committee may from time to time establish for reasons of administrative convenience; and 
 
(e) The receipt by the Company of full
payment for such shares, including payment of any applicable withholding tax. 
 
3.3 Escrow. 
 
(a) The Restricted Stockholder hereby authorizes and directs the Secretary of the Company, or such other person designated by the Company, to transfer the shares of Restricted Stock which are subject
to the Restrictions from the Restricted Stockholder to the Company in the event of repurchase of such shares by the Company pursuant to Section 2.1 or forfeiture of such shares pursuant to Section 2.2. 
 
(b) To insure the availability for delivery
of the Restricted Stock upon repurchase pursuant to Section 2.1 or forfeiture pursuant to Section 2.2, the Restricted Stockholder hereby appoints the Secretary, or any other person designated by the Company as escrow agent, as its attorney-in-fact
to sell, assign and transfer unto the Company, such shares, if any, repurchased or forfeited pursuant to this Agreement and shall, upon execution of this Agreement, deliver and deposit with the Secretary of the Company, or such other person
designated by the Company, the share certificates representing the Restricted Stock, together with the stock assignment duly endorsed in blank, attached hereto as Exhibit A. The Restricted Stock and stock assignment shall be held by the
Secretary in escrow, pursuant to the Joint Escrow Instructions of the Company and the Restricted Stockholder attached hereto as Exhibit B, until all of the Restrictions expire or shall have been removed. As a further condition to the
Company’s obligations under this Agreement, the spouse of the Restricted Stockholder, if any, shall execute and deliver to the Company the Consent of Spouse attached hereto as Exhibit C. Upon the lapse of the Restrictions on the
Restricted Stock, the escrow agent shall promptly deliver to the Restricted Stockholder the certificate or certificates representing such shares in the escrow agent’s possession belonging to the Restricted Stockholder, and the escrow agent
shall be discharged of all further obligations hereunder; provided, however, 

 

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that the escrow agent shall nevertheless retain such certificate or certificates as escrow agent if so required pursuant to other
restrictions imposed pursuant to this Agreement. 
 
(c) The Company, or its designee, shall not be liable for any act it may do or omit to do with respect to holding the Restricted Stock in escrow and while acting in good faith and in the exercise of its judgment.

 
3.4 Notices. Any notice to be given by
the Restricted Stockholder under the terms of this Agreement shall be addressed to the Secretary of the Company. Any notice to be given to the Restricted Stockholder shall be addressed to him or her at the address given beneath his or her signature
hereto. By a notice given pursuant to this Section 3.4, either party may hereafter designate a different address for notices to be given to him. Any notice which is required to be given to the Restricted Stockholder shall, if Restricted Stockholder
is then deceased, be given to the Restricted Stockholder’s personal representative if such representative has previously informed the Company of his or her status and address by written notice under this Section 3.4. Any notice required or
permitted hereunder shall be given in writing and shall be deemed effectively given upon personal delivery or upon deposit in the United States mail by certified mail, with postage and fees prepaid, addressed as set forth above. 
 
3.5 Rights as Stockholder. Except as otherwise provided
herein, upon the delivery of Restricted Stock to the escrow holder pursuant to Section 3.3 hereof, the holder of the Restricted Stock shall have all the rights of a stockholder with respect to the Restricted Stock, including the right to vote the
Restricted Stock and the right to receive all dividends or other distributions paid or made with respect to the Restricted Stock; provided, however, that in the discretion of the Committee, any extraordinary distributions with respect
to the Restricted Stock that is subject to the Restrictions shall also be subject to the Restrictions. 
 
3.6 Conformity to Securities Laws. The Restricted Stockholder acknowledges that the Plan is intended to conform to the extent
necessary with all provisions of the Securities Act and the Exchange Act and any and all regulations and rules promulgated by the Securities and Exchange Commission thereunder, and state securities laws and regulations. Notwithstanding anything
herein to the contrary, the Plan shall be administered, and the Restricted Stock is granted, only in such a manner as to conform to such laws, rules and regulations. To the extent permitted by applicable law, the Plan and this Agreement shall be
deemed amended to the extent necessary to conform to such laws, rules and regulations. 
 
3.7 Tax Withholding. The Company shall be entitled to require payment in cash or deduction from other compensation payable to the Restricted Stockholder of any sums required by federal, state or
local tax law to be withheld with respect to the issuance, vesting, exercise or payment of the Restricted Stock. The Committee may, in its discretion and in satisfaction of the foregoing requirement, allow such Restricted Stockholder to elect to
have the Company withhold shares of Common Stock otherwise issuable under such Restricted Stock (or allow the return of shares of Common Stock) having a Fair Market Value equal to the sums required to be withheld. Notwithstanding any other provision
of the Plan or this Agreement, the number of shares of Common Stock which may be withheld with respect to the issuance, vesting or payment of the Restricted Stock (or which may be repurchased from the Restricted Stockholder within six months 

 

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after such shares of Common Stock were acquired by the Restricted Stockholder from the Company) in order to satisfy the Restricted
Stockholder’s federal and state income and payroll tax liabilities with respect to the issuance, vesting or payment of the Restricted Stock shall be limited to the number of shares which have a Fair Market Value on the date of withholding or
repurchase equal to the aggregate amount of such liabilities based on the minimum statutory withholding rates for federal and state tax income and payroll tax purposes that are applicable to such supplemental taxable income. 
 
3.8 Governing Law. This Agreement shall be
administered, interpreted and enforced under the internal laws of the State of California without regard to conflicts of laws thereof. 
 
3.9 Stop Transfer Instructions. To ensure compliance with the Restrictions, the Company may issue appropriate “stop
transfer” instructions to its transfer agent with respect to the Restricted Stock. 
 
[SIGNATURE PAGE FOLLOWS] 
 
 

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IN WITNESS
WHEREOF, this Agreement has been executed and delivered by the parties hereto. 
 

	 CHEROKEE INC.,

	
	 By:
	 	  

	 	 	 [Name]

	 	 	 President and Chief Executive Officer

 

	
	 RESTRICTED STOCKHOLDER

	
	

	 Restricted Stockholder

	
	

	
	

	 Address

	
	 Restricted Stockholder’s Social Security Number:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00052-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00052-of-00352.parquet"}]]