Document:

Ex-10.9 Amended and Restated 2004 Key Executive St

 

EXHIBIT 10.9

AMENDED AND RESTATED

FGX INTERNATIONAL HOLDINGS LIMITED

2004 KEY EXECUTIVE STOCK OPTION PLAN

1. ESTABLISHMENT, EFFECTIVE DATE AND TERM

     FGX International Holdings Limited, a British Virgin Islands international business company
(the “Company”), hereby establishes the “FGX International Holdings Limited 2004 Key Executive
Stock Option Plan” (f/k/a the Envision Worldwide Holdings Limited 2004 Key Executive Stock Option
Plan) (the “Plan”). The effective date of the Plan shall be September 29, 2004 (the “Effective
Date”), which is the date that the Plan was originally approved and adopted by the Board of
Directors (the “Board”) and shareholders of the Company. The Amended and Restated Plan was
approved and adopted by the Board and Shareholders of the Company on December 15, 2005. Unless
earlier terminated pursuant to Section 17 hereof, the Plan shall terminate on the tenth anniversary
of the Effective Date.

2. PURPOSE

     The purpose of the Plan is to advance the interests of the Company by providing Eligible
Individuals (as defined in Section 6 below) with an opportunity to acquire or increase a
proprietary interest in the Company, which will thereby create a stronger incentive to expend
maximum effort for the growth and success of the Company, and will encourage such individuals to
remain in the employ of or maintain their relationship with the Company.

3. TYPE OF OPTIONS

     Each stock option granted under the Plan (an “Option”) may be designated by the Board, in its
sole discretion, either as (i) an “incentive stock option” (“Incentive Stock Options”) within the
meaning of Section 422 of the Internal Revenue Code of 1986, as amended from time to time (the
“Code”), or (ii) as a non-qualified stock option (“Non-Qualified Stock Option”) which is not
intended to meet the requirements of Section 422 of the Code; provided, however, that Incentive
Stock Options may only be granted to employees of the Company, any “subsidiary corporation” as
defined in Section 424 of the Code (a “Subsidiary”) or any “parent corporation” as defined in
Section 424 of the Code (a “Parent”). In the absence of any designation, Options granted under the
Plan will be deemed to be Non-Qualified Stock Options. The Plan shall be administered and
interpreted so that all Incentive Stock Options granted under the Plan will qualify as incentive
stock options under Section 422 of the Code. Options designated as Incentive Stock Options that
fail to continue to meet the requirements of Section 422 of the Code (including, without
limitation, as a result of the acceleration of the vesting of any of any Options) shall be
redesignated as Non-Qualified Stock Options automatically on the date of such failure to continue
to meet such requirements without further action by the Board.

4. ADMINISTRATION

     (a) Board. The Plan shall be administered by the Board, which shall have the full
power and authority to take all actions, and to make all determinations required or provided for
under the Plan or any Option granted or Option Agreement (as defined in Section 9 below)

 

 

entered into under the Plan and all such other actions and determinations not inconsistent
with the specific terms and provisions of the Plan deemed by the Board to be necessary or
appropriate to the administration of the Plan or any Option granted or Option Agreement entered
into hereunder. The Board may correct any defect or supply any omission or reconcile any
inconsistency in the Plan or in any Option Agreement in the manner and to the extent it shall deem
expedient to carry the Plan into effect and shall be the sole and final judge of such expediency.
All such actions and determinations shall be by the affirmative vote of a majority of the members
of the Board present at a meeting at which any issue relating to the Plan is properly raised for
consideration or without a meeting by written consent of the Board executed in accordance with the
Company’s Memorandum of Association and Articles of Association and applicable law. The
interpretation and construction by the Board of any provision of the Plan or of any Option granted
or Option Agreement entered into hereunder shall be final and conclusive.

     (b) Committee. The Board may, in its discretion, from time to time appoint a
Compensation Committee and/or Stock Option Committee (each of which is referred to as the
“Committee”). In the event that the Company is a “publicly held corporation” as defined in Section
162(m)(2) of the Code, the Board shall appoint a Committee consisting of not less than two members
of the Board, none of whom shall be an officer or other salaried employee of the Company or any
Parent or Subsidiary, and each of whom shall qualify in all respects as a “non-employee director”
as defined in Rule 16b-3 promulgated under the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), and an “outside director” for purposes of Section 162(m) of the Code (the “Outside
Director Committee”). The Board, in its sole discretion, may provide that the role of the
Committee shall be limited to making recommendations to the Board concerning any determinations to
be made and actions to be taken by the Board pursuant to or with respect to the Plan, or the Board
may delegate to the Committee such powers and authorities related to the administration of the
Plan, as set forth in Section 4(a) above, as the Board shall determine, consistent with the
Memorandum of Association and Articles of Association of the Company and applicable law. The Board
may remove members, add members and fill vacancies on the Committee from time to time, all in
accordance with the Company’s Memorandum of Association and Articles of Association and applicable
law. The majority vote of the Committee, or acts reduced to or approved in writing by a majority
of the members of the Committee, shall be the valid acts of the Committee.

     (c) No Liability. No member of the Board or of the Committee shall be liable for any
action or determination made in good faith with respect to the Plan or any Option granted or Option
Agreement entered into hereunder.

     (d) Delegation to the Committee. In the event that the Plan or any Option granted or
Option Agreement entered into hereunder provides for any action to be taken by or determination to
be made by the Board, such action may be taken by or such determination may be made by the
Committee if the power and authority to do so has been delegated to the Committee by the Board as
provided for in Section 4(b) above. Unless otherwise expressly determined by the Board, any such
action or determination by the Committee shall be final and conclusive. If the Company is a
“publicly held corporation” as defined in Section 162(m)(2) of the Code, Options granted to a
“covered employee” as defined in Section 162(m)(3) of the Code (a “Covered Employee”) shall be made
by the Outside Director Committee and the maximum number of Ordinary Shares (as

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defined below) subject to Options that may be granted during any calendar year under the Plan
to any Covered Employee shall be 3.33, unless otherwise determined by the Board in writing.

5. ORDINARY SHARES

     The capital stock of the Company that may be issued pursuant to Options granted under the Plan
shall be ordinary shares, $1.00 par value per share, of the Company (the “Ordinary Shares”), which
shares may be treasury shares or authorized but unissued shares. The total number of Ordinary
Shares that may be issued pursuant to Options granted under the Plan shall be 6.8935875 shares,
subject to adjustment as provided in Section 19 below. If any Option expires, terminates or is
terminated or canceled for any reason prior to exercise in full, the Ordinary Shares that were
subject to the unexercised portion of such Option shall be available for future Options granted
under the Plan.

6. ELIGIBILITY

     Options may be granted under the Plan to senior executives of the Company (collectively,
“Eligible Individuals”). An individual may hold more than one Option, subject to such restrictions
as are provided herein.

7. GRANT OF OPTIONS

     Subject to the terms and conditions of the Plan, the Board may, at any time and from time to
time, prior to the date of termination of the Plan, grant to such Eligible Individuals as the Board
may determine (“Optionees”), Options to purchase such number of Ordinary Shares on such terms and
conditions as the Board may determine. The date on which the Board approves the grant of an Option
(or such later date as is specified by the Board) shall be considered the date on which such Option
is granted.

8. LIMITATION ON INCENTIVE STOCK OPTIONS

     (a) Ten Percent Shareholder. Notwithstanding any other provision of this Plan to the
contrary, no individual may receive an Incentive Stock Option under the Plan if such individual, at
the time the award is granted, owns (after application of the rules contained in Section 424(d) of
the Code) stock possessing more than ten percent (10%) of the total combined voting power of all
classes of stock of the Company, unless (i) the purchase price for each Ordinary Share subject to
such Incentive Stock Option is at least one hundred and ten percent (110%) of the fair market value
of an Ordinary Share on the date of grant (as determined in good faith by the Board) and (ii) such
Incentive Stock Option is not exercisable after the date which is five (5) years from the date of
grant.

     (b) Limitation on Grants. The aggregate fair market value (determined with respect to
each Incentive Stock Option at the time such Incentive Stock Option is granted) of the Ordinary
Shares with respect to which Incentive Stock Options are exercisable for the first time by an
individual during any calendar year (under this Plan or any other plan of the Company or a Parent
or Subsidiary) shall not exceed $100,000. If an Incentive Stock Option is granted pursuant to
which the aggregate fair market value of shares with respect to which it first becomes exercisable
in any calendar year by an individual exceeds such $100,000 limitation, the portion

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of such Option which is in excess of the $100,000 limitation, and any Options issued
subsequently in the same calendar year, shall be treated as a non-qualified stock option pursuant
to Section 422(d)(1) of the Code. In the event that an individual is eligible to participate in
any other stock option plan of the Company or any Parent or Subsidiary which is also intended to
comply with the provisions of Section 422 of the Code, such $100,000 limitation shall apply to the
aggregate number of shares for which Incentive Stock Options may be granted under this Plan and all
such other plans.

9. OPTION AGREEMENTS

     All Options granted pursuant to the Plan shall be evidenced by written agreements (“Option
Agreements”), with shall be executed by the Company and by the Optionee, in such form or forms and
containing such terms and conditions not inconsistent with the terms of the Plan as the Board shall
from time to time determine. Option Agreements covering Options granted from time to time or at
the same time need not contain similar provisions; provided, however, that all such Option
Agreements shall comply with all terms of the Plan.

10. OPTION PRICE

     The purchase price of each Ordinary Share subject to an Option (the “Option Price”) shall be
fixed by the Board and stated in each Option Agreement, and subject to the provisions of Section
8(a) above, shall be not less than one hundred percent (100%) of the fair market value of an
Ordinary Share on the date the Option is granted. If the Ordinary Shares are then listed on any
national securities exchange, the fair market value shall be the closing price of an Ordinary Share
on such exchange on the last trading day immediately prior to the date of grant; provided, however,
that when granting Incentive Stock Options, the Board shall determine fair market value in
accordance with the provisions of Section 422 of Code. If the Ordinary Shares are not listed on
any such exchange, the fair market value shall be determined in good faith by the Board.

11. TERM AND VESTING OF OPTIONS

     (a) Option Period. Subject to the provisions of Sections 8(a) and 14 hereof, each
Option granted under the Plan shall terminate and all rights to purchase shares thereunder shall
cease upon the expiration of ten (10) years from the date such Option is granted, or on such date
prior thereto as may be fixed by the Board and stated in the Option Agreement relating to such
Option. Notwithstanding the foregoing, the Board may in its discretion, at any time prior to the
expiration or termination of any Option, extend the term of any such Option for such additional
period as the Board in its discretion may determine; provided, however, that in no event shall the
aggregate option period with respect to any Option, including the initial term of such Option and
any extensions thereof, exceed ten (10) years.

     (b) Vesting. Subject to the provisions of Section 12(a) and Section 14 hereof, each
Option Agreement will specify the vesting schedule applicable to each Option. The Board may in its
discretion provide that any vesting requirement or other such limitation on the exercise of an
Option may be rescinded, modified or waived by the Board, in its sole discretion, at any time

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and from time to time after the date of grant of such Option, so as to accelerate the time at
which the Option maybe exercised.

     (c) Initial Public Offering. In the event of an Initial Public Offering of the
Company’s capital stock (as defined below), the Board may, in its sole and absolute discretion,
provide on a case by case basis that some or all outstanding Options pursuant to an Option
Agreement may become immediately exercisable, without regard to any limitation on exercise imposed
pursuant to this Plan. For purposes of this Plan, the Company shall be deemed to have completed an
“Initial Public Offering” if there is a closing of an underwritten public offering by the Company
pursuant to a registration statement filed and declared effective under the Securities Act of 1933,
as amended, covering the offer and sale of the Company’s capital stock for the account of the
Company.

12. MANNER OF EXERCISE AND PAYMENT

     (a) Manner of Exercise. An Option that is exercisable hereunder may be exercised by
delivery to the Company on any business day, at its principal office, addressed to the attention of
the President, of written notice of exercise, which notice shall specify the number of shares with
respect to which the Option is being exercised, and shall be accompanied by payment in full of the
Option Price of the shares for which the Option is being exercised, by one or more of the methods
provided below.

     (b) Payment. Payment of the Option Price for the Ordinary Shares purchased pursuant
to the exercise of an Option shall be made (i) in cash or in cash equivalents; (ii) to the extent
permitted by applicable law and agreed to by the Board in its sole and absolute discretion, through
the tender to the Company of Ordinary Shares, which shares shall be valued, for purposes of
determining the extent to which the Option Price has been paid thereby, at their fair market value
(determined in the manner described in Section 10 above) on the date of exercise; (iii) to the
extent permitted by applicable law and agreed to by the Board in its sole and absolute discretion,
by delivering a written direction to the Company that the Option be exercised pursuant to a
“cashless” exercise/sale procedure (pursuant to which funds to pay for exercise of the Option are
delivered to the Company by a broker upon receipt of stock certificates from the Company) or a
cashless exercise/loan procedure (pursuant to which the Optionees would obtain a margin loan from a
broker to fund the exercise) through a licensed broker acceptable to the Company whereby the stock
certificate or certificates for the Ordinary Shares for which the Option is exercised will be
delivered to such broker as the agent for the individual exercising the Option and the broker will
deliver to the Company cash (or cash equivalents acceptable to the Company) equal to the Option
Price for the Ordinary Shares purchased pursuant to the exercise of the Option plus the amount (if
any) of federal and other taxes that the Company, may, in its judgment, be required to withhold
with respect to the exercise of the Option; (iv) to the extent permitted by applicable law and
agreed to by the Board in its sole and absolute discretion, by the delivery of a promissory note of
the Optionee to the Company on such terms as the Board shall specify in its sole and absolute
discretion; or (v) by a combination of the methods described in clauses (i), (ii), (iii) and (iv).
Payment in full of the Option Price need not accompany the written notice of exercise if the Option
is exercised pursuant to the cashless exercise/sale procedure described above. An attempt to
exercise any Option granted hereunder other than as set forth above shall be invalid and of no
force and effect.

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     (c) Execution of Shareholders’ Agreement as Condition to Exercise of Option. In the event that
the Optionee shall desire to exercise all or any portion of an Option prior to the date on
which the Company shall have completed an Initial Public Offering, the Optionee shall, as a
condition precedent to such Optionee’s right to exercise an Option, execute and deliver a copy
of a shareholders’ agreement containing such terms and conditions as may be specified by the
Board from time to time in its sole and absolute discretion, which may provide, among other
things, for restrictions on transfer and voting the Ordinary Shares or other securities
issuable upon exercise of an Option and provisions governing the management and control of the
Company.Issuance of Certificates. Promptly after the exercise of an Option, the
individual exercising the Option shall be entitled to the issuance of a certificate or
certificates evidencing his ownership of such Ordinary Shares. An individual holding or
exercising an Option shall have none of the rights of a shareholder until the Ordinary Shares
covered thereby are fully paid and issued to him and, except as provided in Section 19 below,
no adjustment shall be made for dividends or other rights for which the record date is prior
to the date of such issuance.

13. TRANSFERABILITY OF OPTIONS

     (a) Incentive Stock Options. No Incentive Stock Option shall be assignable or
transferable by the Optionee to whom it is granted, other than by will or the laws of descent and
distribution.

     (b) Non-Qualified Stock Options. Unless otherwise permitted by the Board in
its sole and absolute discretion, no Non-Qualified Stock Option shall be assignable or transferable
by the Optionee to whom it is granted, other than by will or the laws of descent and distribution.

14. TERMINATION OF EMPLOYMENT

     The Board may provide, in its sole and absolute discretion, in an Option Agreement or
otherwise, that following termination of employment of an Optionee with the Company, an Optionee
may exercise an Option, in whole or in part, at any time subsequent to such termination of
employment and prior to termination of the Option pursuant to Section 11(a) above, either subject
to or without regard to any vesting or other limitation on exercise imposed pursuant to Section
11(b) above. Unless otherwise determined by the Board, temporary absence from employment because
of illness, vacation, approved leaves of absence, military service and transfer of employment shall
not constitute a termination of employment with the Company.

15. USE OF PROCEEDS

     The proceeds received by the Company from the sale of Ordinary Shares upon exercise of Options
granted under the Plan shall constitute general funds of the Company.

16. REQUIREMENTS OF LAW

     (a) Violations of Law. The Company shall not be required to sell or issue any Ordinary
Shares upon exercise of any Option if the sale or issuance of such shares would constitute a
violation by the individual exercising the Option or the Company of any provisions of any law or
regulation of any governmental authority, including without limitation, any federal or state
securities laws or regulations. Any determination in this connection by the Board shall be final,
binding and conclusive. The Company shall not be obligated to take any affirmative action in order
to cause the exercise of an Option or the issuance of shares pursuant thereto to

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comply with any law or regulation of any governmental authority.

     (b) Registration. At the
time of any exercise of any Option, the Company may, if it shall determine it necessary or
desirable for any reason, require the Optionee (or his or her heirs, legatees or legal
representative, as the case may be), as a condition to the exercise thereof, to deliver to the
Company a written representation of present intention to purchase the shares for his or her own
account as an investment and not with a view to, or for sale in connection with, the distribution
of such shares, except in compliance with applicable federal and state securities laws with respect
thereto. In the event such representation is required to be delivered, an appropriate legend may
be placed upon each certificate delivered to the Optionee (or his or her heirs, legatees or legal
representative, as the case may be) upon his or her exercise of all or any portion of the Option
and a stop transfer order may be placed with the transfer agent. Each Option shall also be subject
to the requirement that, if at any time the Company reasonably determines, in the reasonable
discretion of the Board, that the listing, registration or qualification of the shares subject to
the Option upon any securities exchange or under any state or federal law, or the consent or
approval of any governmental regulatory body is necessary or deemed by counsel to the Company to be
desirable under any federal or state security laws or regulations or the listing requirements or
regulations of any exchange on which securities of the Company may be listed or is proposed to be
listed as a condition of or in connection with, the issuance or purchase of the shares thereunder,
the Option may not be exercised in whole or in part unless such listing, registration,
qualification, consent or approval shall have been effected or obtained free of any conditions not
acceptable to the Company in its sole discretion. The Company shall not be obligated to take any
affirmative action in order to cause the exercisability or vesting of an Option or to cause the
exercise of an Option or the issuance of shares pursuant thereto to comply with any law or
regulation of any governmental authority.

     (c) Withholding. The Board may make such provisions
and take such steps as it may deem necessary or appropriate for the withholding of any taxes that
the Company is required by any law or regulation of any governmental authority, whether federal,
state or local, domestic or foreign, to withhold in connection with the exercise of any Option,
including, but not limited to: (i) the withholding of delivery of Ordinary Shares upon exercise of
Options until the holder reimburses the Company for the amount the Company is required to withhold
with respect to such taxes, (ii) after giving the holder ten (10) days prior written notice during
which time holder may reimburse the Company the amount required to be withheld by the Company, the
canceling of any number of Ordinary Shares issuable upon exercise of such Options in an amount
sufficient to reimburse the Company for the amount it is required to so withhold (and for which the
holder has not reimbursed the Company during such ten (10) day notice period), or (iii) withholding
the amount due from any such person’s wages, compensation, fees or other amounts due such
person.

     (d) Governing Law. This Plan shall be governed by, and construed and enforced in
accordance with, the laws of the State of Rhode Island.

17. AMENDMENT AND TERMINATION OF THE PLAN

     Except as set forth in Section 18 below, the Board may, at any time and from time to time,
amend, suspend or terminate the Plan as to any Ordinary Shares as to which Options have not been
granted; provided, however, that the approval by a majority of the votes present and entitled to
vote at a duly held meeting of the shareholders of the Company at which a quorum representing a
majority of all outstanding voting stock is, either in person or by proxy, present and voting on
the amendment, or by written consent in accordance with applicable state law and the Memorandum of
Association and Articles of Association of the Company shall be required

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for any amendment (i) that changes the requirements as to Eligible Individuals to receive
Options under the Plan, (ii) that increases the maximum number of Ordinary Shares in the aggregate
that maybe sold pursuant to Options that are granted under the Plan (except as permitted under
Section 19 hereof), or (iii) if approval of such amendment is necessary to comply with federal or
state law (including without limitation Rule 162(m) of the Code and Rule 16b-3 under the Exchange
Act) or with the rules of any stock exchange or automated quotation system on which the Ordinary
Shares may be listed or traded. Except as permitted under Section 19 hereof, no amendment,
suspension or termination of the Plan shall, without the consent of the holder of the Option, alter
or impair rights or obligations under any Option theretofore granted under the Plan.

18. EFFECT OF INITIAL PUBLIC OFFERING

     (a) Amendments. Notwithstanding Section 17 above, after the Company has become a
“publicly held corporation” as defined in Section 162(m) of the Code, the Plan shall not be amended
after the date on which the Company becomes a publicly held corporation if such amendment would
constitute a “material modification” as defined in Regulation Section 1.162-27(h)(1)(iii) of the
Code, unless the Company satisfies the shareholder approval requirement as set forth in Regulation
Section l.162-27(e)(4)(i) of the Code prior to such amendment of the Plan.

     (b) Shareholder Approval. If the Company should become a “publicly held corporation”
as defined in Section 162(m) of the Code, no Options shall be granted after the first meeting of
shareholders at which directors are elected that occurs after the close of the third calendar year
following the calendar year in which the Initial Public Offering occurs, or if the Company becomes
a publicly held corporation without an Initial Public Offering, the first calendar year in which
the Company becomes publicly held, unless the Company satisfies the shareholder approval
requirement as set forth in Regulation Section 1.l62-27(e)(4)(i) of the Code prior to any such
grant of Options.

19. EFFECT OF CHANGES IN CAPITALIZATION

     (a) Recapitalization. If the outstanding Ordinary Shares are increased or decreased
or changed into or exchanged for a different number or kind of shares or other securities of the
Company by reason of any recapitalization, reclassification, reorganization (other than as
described in Section 19(c) below), stock split, reverse split, combination of shares, exchange of
shares, stock dividend or other distribution payable in capital stock of the Company, or other
increase or decrease in such shares effected without receipt of consideration by the Company,
occurring after the Effective Date, an appropriate and proportionate adjustment shall be made by
the Board (i) in the aggregate number and kind of Ordinary Shares available under the Plan, (ii) in
the number and kind of Ordinary Shares issuable upon exercise of outstanding Options granted under
the Plan, and (iii) in the Option Price per share of outstanding Options granted under the Plan.

     (b) Reorganization. Subject to the provisions of any applicable Option Agreement or
any other agreement between the Company and any holder of Options granted hereunder, in connection
with a merger, consolidation, reorganization or other business combination of the Company with one
or more other entities in which the Company is not the surviving entity, each

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then outstanding Option shall upon exercise thereafter entitle the holder thereof to such
number of Ordinary Shares or other securities or property to which a holder of Ordinary Shares
would have been entitled to upon such merger, consolidation, reorganization or other business
combination and, except in the case of any merger, consolidation, reorganization or other business
combination undertaken in connection with any bankruptcy or similar proceeding, such outstanding
Option shall survive and be binding on the surviving entity until it terminates or is exercised in
accordance with its terms.

     (c) Dissolution or Liquidation. Upon the dissolution or liquidation of the Company, the
Plan and all Options outstanding hereunder shall terminate. In the event of any termination of the
Plan under this Section 19(d), each individual holding an Option shall have the right, immediately
prior to the occurrence of such termination and during such reasonable period as the Board in its
reasonable discretion shall determine and designate (but in no event less than seven (7) days), to
exercise such Option in whole or in part, whether or not such Option was otherwise exercisable at
the time such termination occurs and without regard to any vesting or other limitation on exercise
imposed pursuant to Section 11(b) above.

     (d) Adjustments. Adjustments under this Section 19
related to stock or securities of the Company shall be made by the Board, whose determination in
that respect shall be final, binding and conclusive.

     (e) No Limitations. The grant of an Option pursuant to the Plan shall not affect or
limit in any way the right or power of the Company to make adjustments, reclassifications,
reorganizations or changes of its capital or business structure or to merge, consolidate, dissolve
or liquidate, or to sell or transfer all or any part of its business or assets.

9Ex-10.10 Time-Based Stock Option Agreement

 

EXHIBIT 10.10

TIME-BASED VESTING INCENTIVE STOCK OPTION AGREEMENT

     This Stock Option Agreement (this “Agreement”) is entered into and effective as of December
15, 2005 (the “Grant Date”) between FGX International Holdings Limited, a British Virgin Islands
company (the “Company”) and Alec Taylor (the “Optionee”).

RECITALS

     The Company is desirous of increasing the incentive of the Optionee whose contributions are
important to the continued success of the Company and its subsidiaries by means of the grant to the
Optionee of options to purchase the Company’s ordinary shares, $1.00 par value per share (“Ordinary
Shares”), under the FGX International Holdings Limited 2004 Key Executive Stock Option Plan (f/k/a
the Envision Worldwide Holdings Limited 2004 Key Executive Stock Option Plan) (the “Plan”), a copy
of which is attached hereto as Exhibit A.

TERMS OF AGREEMENT

     NOW, THEREFORE, in consideration of the foregoing, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby
agree as follows:

1. GRANT OF OPTION

     Subject to the terms and conditions of this Agreement and the Plan, the Company hereby grants
to the Optionee an option (the “Option”) to purchase an aggregate of 1.979991 Ordinary Shares (the
“Option Shares”). This Option is intended to be treated as an option which qualifies as an
“incentive stock option” within the meaning of Section 422 of the Internal Revenue Code of 1986, as
amended (the “Code”). The number of Option Shares shall be subject to adjustment in the event of
changes in the capitalization of the Company as set forth in Section 19 of the Plan.

2. EXERCISE PRICE

     Subject to the terms and conditions of the Plan, the exercise price (the “Option Price”) of
this Option shall be $2,453,728 per Option Share (prorated for any partial Option Share), which is
not less than the fair market value of the Ordinary Shares on the date of grant. The Option Price
of this Option shall be subject to adjustment in the event of changes in the capitalization of the
Company, as set forth in Section 19 of the Plan.

3. TERM AND VESTING OF OPTION

     (a) Option Period. Subject to the terms and conditions of the Plan, this Option shall
terminate and all rights to purchase shares hereunder shall cease on the tenth anniversary of the
Grant Date.

     (b) Vesting and Exercisability. (i) Subject to the terms and conditions of the Plan and
subject to Section 3(b)(ii) below, this Option shall become exercisable upon the

 

 

dates described in the following schedule and shall be exercisable as to not more than the
vested percentage of the shares subject to this Option as follows:

	 	 	 	 	 	 	 	 	 
	 	 	Incremental	 	Cumulative
	 	 	Percentage of	 	Percentage of
	Date	 	Option Exercisable	 	Option Exercisable
	October 19, 2006

	 	 	33.33	%	 	 	33.33	%
	October 19, 2007

	 	 	33.33	%	 	 	66.66	%
	October 19, 2008

	 	 	33.34	%	 	 	100	%

     (ii) Subject to the terms and conditions of the Plan and notwithstanding Section 3(b)(i)
above, this Option shall become exercisable, if the Company successfully completes an Initial
Public Offering (as defined in the Plan) prior to October 19, 2006, as to not more than the vested
percentage of the shares subject to this Option as follows:

	 	 	 	 	 	 	 	 	 
	 	 	Incremental	 	Cumulative
	 	 	Percentage of	 	Percentage of
	Date	 	Option Exercisable	 	Option Exercisable
	Date of Initial Public Offering
	 	 	33.33	%	 	 	33.33	%
	First Anniversary of Initial
Public Offering
	 	 	33.33	%	 	 	66.66	%
	Second Anniversary of Initial
Public Offering
	 	 	33.34	%	 	 	100	%

     (iii) Notwithstanding the foregoing, the Board of Directors of the Company (the “Board”) may
in its sole discretion provide that any vesting requirement or other such limitation on the
exercise of this Option may be rescinded, modified or waived by the Board, in its sole discretion,
at any time and from time to time after the Grant Date, so as to accelerate the time at which this
Option may be exercised; provided that the Optionee’s written consent be obtained prior to any such
rescission or modification which would adversely effect the Optionee’s rights hereunder.

     (c) Acceleration Upon Change in Control. Notwithstanding the foregoing provisions of
Section 3(b), this Option shall become fully vested and exercisable in full as of the Change in
Control Date upon a Change in Control if the Optionee continues to be employed by the Company or
any of its subsidiaries on the Change in Control Date or his employment was terminated by the
Company or its subsidiaries, as applicable, “without Cause” within six (6) months before and in
anticipation of, or twelve (12) months after, the Change in Control Date.

     (d) For purposes of this Agreement, the following terms shall be defined as follows:

2

 

	 	(i)	 	“Cause” has the meaning set forth in the Employment
Agreement between FGX International Inc. and the Optionee dated as of October
19, 2005, and as the same may be further amended from time to time by the
parties in accordance with the terms therein (the “Employment Agreement”).
	 
	 	(ii)	 	“Change in Control” will be deemed to have occurred
if (i) a Takeover Transaction occurs, or (ii) any election of the Board takes
place (whether by the directors then in office or by the stockholders at a
meeting or by written consent) and a majority of the directors in office
following such election are individuals who were not nominated by a vote of
two-thirds of the members of the Board immediately preceding such election, or
(iii) the Company effectuates a complete liquidation of the Company or a sale
or disposition of all or substantially all of its assets. A “Change in
Control” shall not be deemed to include, the recapitalization of the Company
or any transactions related thereto, consummated on or prior to the date
hereof.
	 
	 	(iii)	 	“Change in Control Date” means the date on which a
Change in Control occurs.
	 
	 	(iv)	 	“Takeover Transaction” means (i) a merger or
consolidation of the Company with, or an acquisition of the Company or all or
substantially all of its assets by, any other corporation, other than a
merger, consolidation or acquisition in which the individuals who were members
of the Board immediately prior to such transaction continue to constitute a
majority of the Board of the surviving corporation (or, in the case of an
acquisition involving a holding company, constitute a majority of the Board of
Directors of the holding company) for a period of not less than twelve (12)
months following the closing of such transaction, or (ii) when any person,
including any “group” as such term is defined in Rule 13d-3 under the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), becomes
after the date hereof the “beneficial owner” (as defined in Rule 13d-3 under
the Exchange Act) of securities of the Company representing more than fifty
percent (50%) of the total number of votes that may be cast for the election
of the Board, excluding (i) any person that is excluded from the definition of
“beneficial owner” under Rule 16(a)-1(a)(1) under the Exchange Act and (ii)
any person (including any such group) that consists of or is controlled by
(within the meaning of the definition of “affiliate” in Rule 144 under the
Securities Act of 1933, as amended (an “Affiliate”)) any person that is a
shareholder of the Company on the date hereof or any Affiliate of such person.

3

 

4. PROVISIONS OF PLAN

     The provisions of the Plan shall govern if and to the extent that there are inconsistencies
between those provisions and the provisions hereof. By execution of this Agreement, the Optionee
acknowledges receipt of a copy of the Plan and represents that he or she (a) is familiar with the
terms and provisions thereof, (b) accepts this Option granted hereby subject to all of the terms
and provisions of this Agreement and the Plan, and (c) after reviewing the Plan and this Agreement
in their entirety, has had the opportunity to obtain the advice of counsel and fully understands
all of the terms and provisions of this Agreement and the Plan prior to the execution hereof.

5. MANNER OF EXERCISE AND PAYMENT

     (a) Exercise. This Option may be exercised to the extent vested as provided in Section 3
hereof by delivery to the Company on any business day, at its principal office, addressed to the
attention of the President of written notice of exercise, which notice shall specify the number of
shares with respect to which this Option is being exercised, and shall be accompanied by payment in
full of the Option Price of the shares for which this Option is being exercised, by one or more of
the methods provided below.

     (b) Payment. Payment of the Option Price for the Ordinary Shares purchased pursuant to
the exercise of this Option shall be made (i) in cash or in cash equivalents; (ii) through the
tender to the Company of the Ordinary Shares, which shares shall be valued, for purposes of
determining the extent to which the Option Price has been paid thereby, at their fair market value
(determined in good faith by the Board) on the date of exercise; (iii) by delivering a written
direction to the Company that this Option be exercised pursuant to a “cashless” exercise/sale
procedure (pursuant to which funds to pay for exercise of this Option are delivered to the Company
by a broker upon receipt of stock certificates from the Company) or a cashless exercise/loan
procedure (pursuant to which the Optionee would obtain a margin loan from a broker to fund the
exercise) through a licensed broker acceptable to the Company whereby the stock certificate or
certificates for the Ordinary Shares for which this Option is exercised will be delivered to such
broker as the agent for the individual exercising this Option and the broker will deliver to the
Company cash (or cash equivalents acceptable to the Company) equal to the Option Price for the
Ordinary Shares purchased pursuant to the exercise of this Option plus the amount (if any) of
federal and other taxes that the Company, may, in its judgment, be required to withhold with
respect to the exercise of this Option; (iv) to the extent permitted by applicable law and agreed
to by the Board in its sole and absolute discretion, by the delivery of a promissory note of the
Optionee to the Company on such terms as the Board shall specify in its sole and absolute
discretion; or (v) by a combination of the methods described in clauses (i), (ii), (iii) and (iv).
Payment in full of the Option Price need not accompany the written notice of exercise if this
Option is exercised pursuant to the cashless exercise/sale procedure described above. An attempt
to exercise any Option granted hereunder other than as set forth above shall be invalid and of no
force and effect.

     (c) Issuance of Certificates. Promptly after the exercise of this Option, Optionee shall
be entitled to the issuance of a certificate or certificates evidencing his

4

 

ownership of such Ordinary Shares. The Company shall use reasonable efforts to deliver the
certificate within seven (7) days following such exercise. An individual holding or exercising an
Option shall have none of the rights of a shareholder until the Ordinary Shares covered thereby are
fully paid and issued to him and, except as provided in Section 19 of the Plan, no adjustment shall
be made for dividends or other rights for which the record date is prior to the date of such
issuance.

     (d) Execution of Shareholders’ Agreement as Condition to Exercise of Option. In the event
that the Optionee shall desire to exercise all or any portion of this Option prior to the date on
which the Company shall have completed an Initial Public Offering, the Optionee shall, as a
condition precedent to such Optionee’s exercise of this Option, execute and deliver (to the extent
the Optionee is not already a party thereto) a copy of that certain Shareholders’ Agreement in the
form attached hereto as Exhibit B, with such amendments, modifications and changes thereto as shall
have been made by the parties thereto prior to the execution thereof by the Optionee.

     (e) Lock-Up of Option Shares. During the period commencing on the date hereof and ending
one hundred eighty (180) days after the date of the final prospectus relating to each of the
Initial Public Offering and any subsequent public offering of any of the Company’s securities (or
such longer period as may be required by the lead underwriter(s) in connection with such Initial
Public Offering or any such subsequent public offering), Optionee agrees not to (i) offer, pledge,
sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to
sell, grant any option, right or warrant to purchase, or otherwise transfer or dispose of, directly
or indirectly, any Option Shares or (ii) enter into any swap or other arrangement that transfers
all or a portion of the economic consequences associated with the ownership of any Option Shares,
without the prior written consent of the Board.

     (f) Change of Control. In the event of a Change of Control, the Optionee shall be
entitled to receive upon exercise and payment in accordance with the terms of this Agreement the
same shares, securities or property as he would have been entitled to receive upon the occurrence
of such event if he had been, immediately prior to such event, the holder of the number of shares
of Ordinary Shares purchasable under this Option.

6. TRANSFERABILITY OF OPTION

     This Option shall not be assignable or transferable by the Optionee, other than by will or the
laws of descent and distribution.

7. TERMINATION OF EMPLOYMENT

     (a) Voluntary Termination by Optionee. If the Optionee voluntarily terminates his
employment with the Company or its subsidiaries, as applicable, (i) the portion, if any, of this
Option that has vested as of the date of such termination shall be exercisable for a period not to
exceed thirty (30) days after the date of such termination, at which time, the vested and
unexercised portion of this Option shall terminate, and the

5

 

Optionee shall have no further right to purchase Ordinary Shares pursuant to the vested but
unexercised portion of this Option, and (ii) the portion, if any, of this Option that has not
vested as of the date of such termination shall terminate immediately, and the Optionee shall have
no further right to purchase Ordinary Shares pursuant to the unvested portion of this Option.

     (b) Termination for Cause. If the Company or any of its subsidiaries, as applicable,
terminates the Optionee’s employment with the Company or such subsidiary for Cause, this Option
(including that portion of the Option that has vested and that portion of the Option that has not
vested as of the date of such termination) shall terminate immediately, and the Optionee shall have
no further right to purchase Ordinary Shares pursuant to this Option. The Board shall determine
whether Cause exists for purposes of this Agreement and such determination shall be final, binding
and conclusive.

     (c) Termination Without Cause. If the Company or any of its subsidiaries, as applicable,
terminates the Optionee’s employment with the Company or such subsidiary without Cause, then (i)
the vesting of the portion, if any, of this Option that has not vested as of the date of such
termination but would have vested on or prior to December 31 of the year in which such termination
occurs under Section 3(b) (the “Accelerated Portion”) shall be accelerated, and the Accelerated
Portion shall become immediately exercisable as of the date of such termination, (ii) the
Accelerated Portion, together with the portion of this Option, if any, that has vested as of the
date of such termination shall be exercisable by the Optionee for a period of time not to exceed
thirty (30) days after the date of such termination, at which time, the vested and unexercised
portion of this Option (including any part of the Accelerated Portion that remains unexercised)
shall terminate, and the Optionee shall have no further right to purchase Ordinary Shares pursuant
thereto, and (iii) the portion, if any, of this Option that has not vested as of the date of such
termination (after taking into account the Accelerated Portion) shall terminate immediately, and
the Optionee shall have no further right to purchase Ordinary Shares pursuant to the unvested
portion of this Option; provided, however, that should a Change in Control to occur within six (6)
months after the date of such termination and such termination occurred in anticipation of such
Change in Control, then the portion of this Option that shall have terminated under this Section
7(c) shall be deemed to have been reinstated and shall become fully vested and exercisable in full
as of the Change in Control Date in accordance with Section 3(c) above. For avoidance of doubt, if
there should be a Change of Control and the Optionee continues to be employed by the Company or any
of its subsidiaries, as applicable, on the Change of Control Date, this Option shall become fully
vested and exercisable in full pursuant to Section 3(c).

     (d) Death. If the Optionee dies while serving as an employee of the Company or any of its
subsidiaries, as applicable, then (i) the vesting of the portion, if any, of this Option that has
not vested as of the date of the Optionee’s death but would have vested on or prior to December 31
of the year in which he dies (the “Death Accelerated Portion”) shall be accelerated, and the Death
Accelerated Portion shall become immediately exercisable as of the date of the Optionee’s death,
(ii) the Death Accelerated Portion, together with the portion of this Option, if any, that has
vested as of the date of his death

6

 

shall be exercisable by the executors or administrators or legatees or distributees of the
Optionee’s estate for a period of time not to exceed ninety (90) days after the date of the
Optionee’s death, at which time, the vested and unexercised portion of this Option shall expire,
and such persons shall have no further right to purchase Ordinary Shares pursuant to the vested but
unexercised portion of this Option and (iii) the portion, if any, of this Option that has not
vested as of the date of the Optionee’s death (after taking into account the Death Accelerated
Portion) shall terminate immediately, and the executors, administrators, legatees and/or
distributees of the Optionee’s estate shall have no further right to purchase Ordinary Shares
pursuant to the unvested portion of this Option.

     (e) Disability. If the Optionee’s employment with the Company or any of its subsidiaries,
as applicable, is terminated by reason of the “permanent and total disability” (within the meaning
of Section 22(e)(3) of the Code) of such Optionee, then (i) the vesting of the portion, if any, of
this Option that has not vested as of the date of such termination but would have vested on or
prior to December 31 of the year in which such termination occurs (the “Disability Accelerated
Portion”) shall be accelerated, and the Disability Accelerated Portion shall become immediately
exercisable as of the date of such termination, (ii) the Disability Accelerated Portion, together
with the portion of this Option, if any, that has vested as of the date of such termination, shall
be exercisable by the Optionee for a period of time not to exceed ninety (90) days after the date
of such termination, at which time, the vested and unexercised portion of this Option shall
terminate, and the Optionee shall have no further right to purchase Ordinary Shares pursuant to
the vested but unexercised portion of this Option, and (iii) the portion, if any, of this Option
that has not vested as of the date of such termination (after taking into account the Disability
Accelerated Portion) shall terminate immediately, and the Optionee shall have no further right to
purchase Ordinary Shares pursuant to the unvested portion of this Option. Whether a termination of
employment is to be considered by reason of “permanent and total disability” for purposes of this
Agreement shall be determined by the Board, which determination shall be final, conclusive and
binding on the Optionee.

     (f) General. Notwithstanding the foregoing, the Board may provide, in its sole and
absolute discretion, that following termination of employment of the Optionee with the Company or
any of its subsidiaries, as applicable, the Optionee may exercise an Option, in whole or in part,
at any time subsequent to such termination of employment and prior to termination of the Option,
either subject to or without regard to any vesting or other limitation on exercise imposed
hereunder. Unless otherwise determined by the Board, temporary absence from employment because of
illness, vacation, approved leaves of absence, military service and transfer of employment shall
not constitute a termination of employment with the Company or any of its subsidiaries, as
applicable.

7

 

8. DISCLAIMER OF RIGHTS

     No provision of this Agreement shall be construed to confer upon the Optionee, the right to
remain in the employ of the Company or any of its subsidiaries or to interfere in any way with the
right and authority of the Company or any of its subsidiaries either to increase or decrease the
compensation of the Optionee, at any time, or to terminate any employment relationship between the
Optionee and the Company or any of its subsidiaries.

9. MISCELLANEOUS

     (a) Waivers, Etc. Neither the failure nor any delay on the part of either party to
exercise any right, remedy, power or privilege under this Agreement shall operate as a waiver
thereof, nor shall any single or partial exercise of any right, remedy, power or privilege preclude
any other or further exercise of the same or of any other right, remedy, power or privilege, nor
shall any waiver of any right, remedy, power or privilege with respect to any occurrence be
construed as a waiver of such right, remedy, power or privilege with respect to any other
occurrence. No waiver shall be effective unless it is in writing and is signed by the party
asserted to have granted such waiver.

     (b) Governing Law and Jurisdiction. This Agreement shall be construed in accordance with
and governed by the laws of the State of Rhode Island applicable to contracts executed and to be
wholly performed within such State (without regard to the choice of law provisions thereof). Each
party hereby irrevocably and unconditionally consents and submits to the exclusive jurisdiction of
the courts of the State of Rhode Island sitting in Providence County, Rhode Island and of the
United States District Court for the District of Rhode Island for any actions, suits or proceedings
arising out of or relating to this Agreement and the transactions contemplated hereby and each
party agrees not to commence any action, suit or proceeding relating thereto except in such courts.
Each party further agrees that any service of process, summons, notice or document sent by U.S.
registered mail to its address set forth herein shall be effective service of process for any
action, suit or proceeding brought against it in any such court. Each party irrevocably and
unconditionally waives any objection to the laying of venue of any action, suit or proceeding
arising out of this Agreement or the transactions contemplated hereby in such courts, and
irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any
action, suit or proceeding brought in any such court has been brought in an inconvenient forum.

     (c) Notices. All notices, requests, demands and other communications required or
permitted under this Agreement shall be in writing and shall be deemed to have been duly given,
made and received only when personally delivered, one business day following the day when deposited
with an overnight courier service for overnight priority service, such as Federal Express, for
delivery to the intended addressee or three days following the day when deposited in the United
States mails, first class postage prepaid, certified or registered mail, and addressed, in the case
of the Company at its principal place of business and to the attention of its Stock Option
Administrator and, in the case of Optionee, as set forth below Optionee’s signature on the last
page hereof. Any

8

 

person may alter the address to which communications or copies are to be sent by giving notice
of such change of address in conformity with the provisions of this Section for the giving of
notice.

     (d) Binding Nature of Agreement; Transferability. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective heirs, personal
representatives, successors and permitted assigns. This Agreement shall not be assignable or
transferable by the Optionee other than by will or the laws of descent and distribution.

     (e) Severability. The provisions of this Agreement are independent of and separable from
each other, and no provision shall be affected or rendered invalid or unenforceable by virtue of
the fact that for any reason any other or others of them may be invalid or unenforceable in whole
or in part.

     (f) Section Headings. The section headings in this Agreement are for convenience only;
they form no part of this Agreement and shall not affect its interpretation.

     (g) Number of Days. In computing the number of days for purposes of this Agreement, all
days shall be counted, including Saturdays, Sundays and holidays; provided, however, that if the
final day of any time period falls on a Saturday, Sunday or holiday on which national banks are or
may elect to be closed, then the final day shall be deemed to be the next day which is not a
Saturday, Sunday or such holiday.

     (h) No Third-Party Beneficiaries. This Agreement shall not confer any rights or remedies
upon any person other than the parties and their respective heirs, personal representatives,
successors and assigns.

     (i) Entire Agreement. This Agreement (including the Plan and the other documents and
exhibits referred to herein) constitutes the entire agreement among the parties with respect to the
subject matter hereof and supersedes any prior understandings, agreements, or representations by or
among the parties, written or oral, that may have related in any way to the subject matter hereof.

     (j) Amendments. This Agreement may not be amended, supplemented or modified in whole or
in part except by an instrument in writing signed by the party or parties against whom enforcement
of any such amendment, supplement or modification is sought.

     (k) Construction. The language used in this Agreement will be deemed to be the language
chosen by the parties to express their mutual intent, and therefore strict construction shall be
applied against any party. Any reference to any federal, state, local or foreign statute or law
shall be deemed also to refer to the rules and regulations promulgated thereunder, unless the
context requires otherwise. The parties intend that each representation, warranty, and covenant
contained herein shall have independent significance. If any party has breached any
representation, warranty, or covenant contained herein in any respect, the fact that there exists
another representation, warranty

9

 

or covenant relating to the same subject matter (regardless of the relative levels of
specificity) which the party has not breached shall not detract from or mitigate the fact that the
party is in breach of the first representation, warranty or covenant.

     (l) Counterparts. This Agreement may be executed in one or more counterparts, each of
which will be deemed an original and all of which together will constitute one and the same
instrument.

     (m) Pronouns. The use of any gender in this Agreement shall be deemed to include all
genders, and the use of the singular shall be deemed to include the plural and vice versa, wherever
it appears appropriate from the context.

[Signatures Appear on Following Page]

10

 

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

	 	 	 	 	 
	 	FGX INTERNATIONAL HOLDINGS LIMITED

 	 
	 	By:  	/s/ Brian J. Lagarto
 	 
	 	 	Name:  	Brian Lagarto 	 
	 	 	Title:  	Chief Financial Officer 	 
	 
	 	OPTIONEE

 	 
	 	/s/ Alec Taylor
 	 
	 	Alec Taylor 	 
	 	 	 

11

 

	 	 	 	 	 

EXHIBIT A

FGX
INTERNATIONAL HOLDINGS 2004 KEY EXECUTIVE STOCK OPTION PLAN

(f/k/a Envision Worldwide Holdings Limited 2004 Key Executive Stock Option Plan)

 

 

EXHIBIT B

SHAREHOLDERS’ AGREEMENT

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