Helen of Troy Ltd Form DEF 14A

ANNEX A CORPORATION EMPLOYEE STOCK PURCHASE PLAN

1. Establishment of Plan. establishes this Plan for the purpose of granting options for purchase of the Company's common stock to Employees of the Company and of any Parent or Subsidiary corporation, which the Company's Board of Directors has designated as a Participating Employer in the Plan, pursuant to the Plan herein set forth.

2. Purpose. The Plan is intended to encourage stock ownership by Employees of Participating Employers, thereby stimulating their effort on behalf of Participating Employers and their desire to remain with Participating Employers, to provide incentive to Employees of those companies which may be acquired by the Company and to aid the Company in competing for services of desired personnel.

3. Definitions.

A. Account. The word "Account" means the funds accumulated with respect to an individual Employee as a result of deductions from his or her pay for the purpose of purchasing Stock under the Plan.

B. Board. The word "Board" means the Company's Board of Directors.

C. Code. The word "Code" means the Internal Revenue Code of 1986, as amended.

D. Committee. The word "Committee" means the Employee Stock Purchase Committee.

E. Company. The word "Company" means Corporation.

F. Effective Date. The term "Effective Date" means the effective date of the Plan on .

G. Employee. The word "Employee" means any person, including any officer or director, who has been employed by a Participating Employer for at least one (1) year and whose customary weekly employment is at least twenty (20) hours.

H. Fair Market Value. The term "Fair Market Value" means the value of Stock under the Plan, determined in accordance with Section 9.

I. Parent. The term "Parent" means, as defined in Code Section 424(e), any corporation, other than the Company, in an unbroken chain of corporations ending with the Company.

4. Administration. The Plan shall be interpreted and administered by the Committee on behalf of all Participating Employers. The Committee shall select its own chairman.

5. Duration and Phases of the Plan. The effective date of the Plan is , subject to ratification of the Plan by the holders of a majority of all the shares of Stock. The Plan shall be carried out in phases of consecutive six (6) month periods with the first beginning on .

6. Eligibility and Participation. All Employees of a Participating Employer are eligible to participate in the Plan. To become a Participant, an Employee must complete an authorization form for a payroll deduction and deliver it to the Committee prior to the beginning of a phase.

7. Payroll Deductions.

A. Percentage of Compensation. Each Employee electing to participate in the Plan shall indicate on the payroll deduction form the percentage of his regular compensation to be withheld. At no time can such percentage be greater than 10% or less than 3%.

B. Accounts. Payroll deductions from a Participant shall be credited to his Account under the Plan.

C. Changes to Payroll Deduction Authorization. The percentage of payroll deductions may be changed by a Participant once each phase.

8. Grant of Options.

A. Number of Shares Optioned. On the first business day in each phase, each Participant shall be granted an option to purchase a fixed number of full shares of the Stock determined as follows:

[1] Assumed deduction based on 10% of compensation;

[2] divided by 85% of the Fair Market Value of a share of the Stock.

B. Limitation on Amount of Grant. No Employee shall be granted an option to the extent that such option would permit rights to purchase stock to accrue at a rate which exceeds $25,000 of fair market value for each calendar year.

C. 5% Shareholders. No Employee shall be granted an option if such Employee would own, immediately after the grant, stock possessing five percent (5%) or more of the total combined voting power or value of all classes of stock.

D. Option Price. The option price per share shall be 85% of the lower of the Fair Market Value per share of the Stock on the first or last business day in such phase.

9. Fair Market Value of Stock.

A. Method of Determining Value.

[1] If the Stock is listed on any national securities exchange on such day, the mean between the highest and lowest reported sale prices per share.

[2] If not listed, but bid and asked prices are reported, the average of the bid and asked prices per share.

[3] If neither applies, then as determined by the Board.

10. Exercise of Options.

A. Date of Exercise. Unless a Participant gives written notice, his option for each phase is deemed exercised automatically at the close of the last business day in such phase.

B. Participant Notice to Change Amount of Exercise. By delivering written notice, a Participant may decide not to exercise his option for that phase or to exercise it for a lesser number of shares.

C. Disposition of Account. Funds in a Participant's Account will be used to pay the option price upon exercise, and any remaining amount may be carried forward or paid out upon request.

11. Termination of Participation.

A. Termination by Participant. A Participant may at any time terminate participation by giving written notice.

B. Change in Employee Status. If a Participant's status as an Employee terminates for any reason, participation and any outstanding options shall lapse in full.

C. Leaves of Absence. The employment relationship will be treated as continuing intact while on leave for a period not to exceed ninety (90) days.

D. Limitation on Withdrawals From Account. A Participant may not withdraw any amount in his Account except as provided.

E. Reinstatement of Participation. A Participant whose participation terminates may not elect to participate again until the next eligible period.

12. Stock Reserved for Plan.

A. Number and Type of Shares. A total of 400,000 shares of Stock are reserved for issuance upon the exercise of options to be granted under the Plan.

B. Proration of Available Shares. If the total number of shares which would otherwise have been acquired under the Plan exceeds available shares, shares issuable upon exercise shall be reduced accordingly.

C. Adjustment Provision. If there is any change in the number of outstanding shares of Stock, the number of shares available and subject to options shall be correspondingly changed.

D. Delivery of Shares. No person shall have any interest in any shares unless and until such option has been exercised and the shares have been issued.

E. Restrictive Legends.

[1] Failure to Satisfy Holding Period Requirements.

[2] Insiders.

[3] Other Legends.

13. Transferability. No option granted hereunder may be assigned, transferred, pledged, or otherwise disposed of in any way by a Participant except as provided in Section 14.

14. Designation of Beneficiaries. A Participant may deliver to the Committee a written designation of a beneficiary or beneficiaries who are to receive any Stock and cash payable to such Participant hereunder but not delivered to him because of his death prior to such delivery.

15. Amendment and Termination. The Plan may be amended by the Board, but no more frequently than once every six (6) months other than amendments made to comply with the Internal Revenue Code. The Plan may be terminated by the Board at any time.

16. Notices. Any notice or other communication by any person to the Committee shall be deemed to have been duly given when actually received by a member of the Committee, or when actually received by the Company addressed as follows:

17. Tax Withholding. The Participating Employer shall have the right to withhold from each Participant's compensation an amount equal to all federal, state and local taxes required by law.

18. Nonguarantee of Employment. No provision of the Plan shall be construed as giving any person any right to become or remain an Employee of a Participating Employer.

19. Governing Law. The Plan shall be governed by the laws of and any applicable federal laws.

Dated this day of .

ATTEST: