K-Swiss Inc. 2009 Stock Incentive Plan

On March 3, 2009, the Board of Directors of K-Swiss Inc. (the "Company") unanimously adopted and approved the K-Swiss Inc. 2009 Stock Incentive Plan (the "Plan"), which became effective April 12, 2009, subject to stockholder approval. The Company's stockholders approved the Plan at the Company's 2009 Annual Meeting of Stockholders held on May 19, 2009 (the "2009 Annual Meeting").

The Plan will be administered by the Compensation and Stock Option Committee of the Board of Directors (the "Committee"). Any current or prospective officer or employee of the Company or any of its subsidiaries as well as any non-employee director and service provider who has been retained to provide consulting, advisory or other services to the Company or any of its subsidiaries are eligible to participate in the Plan. The Plan provides the Committee with the authority to award incentive and nonqualified stock options, stock appreciation rights, restricted stock, restricted stock units and incentive bonuses (which may be paid in cash or stock, or a combination thereof), any of which may be performance-based.

The aggregate number of shares of Class A Common Stock, par value $0.01 per share ("Class A Common Stock") subject to awards granted under the Plan during any calendar year to any one participant may not exceed 1,200,000, subject to possible adjustment upon a change in the Company's capitalization. The aggregate number of shares issued pursuant to the exercise of incentive stock options granted under the Plan may not exceed 3,000,000, subject to possible adjustment upon a change in the Company's capitalization. The maximum cash amount payable pursuant to that portion of an incentive bonus granted in any calendar year to any participant under the Plan that is intended to satisfy the requirements for "performance-based" compensation under Section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code"), may not exceed $2,000,000.

The Plan prohibits granting stock options or stock appreciation rights with exercise prices lower than the closing price of the underlying shares on the grant date if such options or stock appreciation rights are intended to qualify as "performance-based" compensation for purposes of Section 162(m) of the Code. The Plan prohibits, other than in connection with a change in the Company's capitalization, the repricing of incentive and nonqualified stock options without the approval of the Company's stockholders, including by cancelling the previously awarded option in exchange for other awards with an exercise price that is less than the exercise price of the original award. The term of stock options and stock appreciation rights granted pursuant to the Plan may not exceed ten (10) years. Notwithstanding the foregoing, each option granted to a nonemployee director shall expire upon the first to occur of the following:
(i) twenty-four (24) months after the date upon which the nonemployee director shall cease to be a director of the Company; or (ii) the tenth anniversary of the grant date of such option.

The Plan will terminate with respect to the grant of new awards on April 12, 2019.

The foregoing description of the terms of the Plan is qualified in its entirety by reference to the actual terms of the Plan, which is incorporated herein by this reference.

Form of Employee Stock Option Agreement (Officers)

On May 19, 2009, the Committee approved the Form of Employee Stock Option Agreement (Officers) (the "Agreement") to be used to set forth the terms of grants of stock option awards to certain participants in the Plan, including the Company's named executive officers.

The Agreement further contemplates that the award will terminate upon certain "Terminating Events" (as defined in the Agreement); provided, however, that the award will become exercisable in full to the extent not theretofore exercised immediately before the consummation of certain specified Terminating Events (as specified in the Agreement).

The foregoing description of the terms of the Agreement is qualified in its entirety by reference to the actual terms of the Agreement, which are attached hereto as Exhibit 10.2 and incorporated herein by reference. The Form of Non-Employee Director Stock Option Agreement to be used to set forth the terms of grants of stock option awards to the Company's non-employee directors under the Plan is also attached hereto as Exhibit 10.3.

The Company is announcing the following results from its 2009 Annual Meeting. At the meeting, the following directors were elected to serve until the 2010 Annual Meeting of Stockholders or until their successors have been duly elected and qualified:

                      Class A Directors   Class B Directors
                      Stephen Fine        Steven Nichols
                      Mark Louie          George Powlick
                                          Lawrence Feldman

Of the 26,800,908 shares of Class A Common Stock represented at the 2009 Annual Meeting, the Class A Directors named above were elected with the following votes:

--------------------------------------------------------------------------------
                                     Number of Votes Received
                    Name                For          Withheld
                    Stephen Fine      26,130,125        488,067
                    Mark Louie        26,314,085        304,107

Of the 8,059,524 shares of Class B Common Stock represented at the 2009 Annual Meeting, the Class B Directors named above were elected with the following votes:

                                       Number of Votes Received
                  Name                    For          Withheld
                  Steven Nichols        80,575,240             -
                  George Powlick        80,575,240             -
                  Lawrence Feldman      80,575,240             -

Also, as discussed above, at the 2009 Annual Meeting, the Company's stockholders approved the K-Swiss Inc. 2009 Stock Incentive Plan.

Of the 26,800,908 shares of Class A Common Stock and 8,059,524 shares of Class B Common Stock represented at the 2009 Annual Meeting the approval of the Plan received the following votes (with each share of Class A Common Stock entitled to one vote and each share of B Common Stock entitled to 10 votes):

                                      Number of Votes Received
                   For                              92,826,103
                   Against                          11,892,749
                   Abstain                               9,341
                   Broker Non-Votes                  2,574,938

Also at the 2009 Annual Meeting, the Company's stockholders ratified the appointment of Grant Thornton LLP as the Company's independent auditor for fiscal year 2009.

Of the 26,800,908 shares of Class A Common Stock and 8,059,524 shares of Class B Common Stock represented at the 2009 Annual Meeting the ratification of the appointment of Grant Thornton LLP as the Company's independent auditor for fiscal year 2009 received the following votes (with each share of Class A Common Stock entitled to one vote and each share of B Common Stock entitled to 10 votes):

                                  Number of Votes Received
                        For                    107,152,781
                        Against                     34,531
                        Abstain                      6,120

No other matters came before the 2009 Annual Meeting.

(d) Exhibits

Exhibit
Number       Description of Exhibit
10.1         K-Swiss Inc. 2009 Stock Incentive Plan, filed as Exhibit 99.1 to the
             Company's Registration Statement on Form S-8, filed with the
             Securities and Exchange Commission on May 22, 2009 and incorporated
             herein by reference.

10.2         K-Swiss Inc. 2009 Stock Incentive Plan Form of Employee Stock Option
             Agreement (Officers).

10.3         K-Swiss Inc. 2009 Stock Incentive Plan Form of Non-Employee Director
             Stock Option Agreement.