EXHIBIT 10.5
Stage II Apparel Corp.
1998 NONQUALIFIED STOCK OPTION PLAN-B
OPTION AGREEMENT
OPTION AGREEMENT dated as of May 11, 1998 (the "Effective Date") between
Stage II Apparel Corp., a New York corporation (the "Company"), and the
undersigned option holder (the "Participant").
In consideration for the services rendered to the Company by the
Participant and to provide the Participant with a greater interest as a
shareholder in the success of the Company, the Compensation Committee (the
"Committee") of the Board of Directors of the Company (the "Board") has
granted to the Participant an option to purchase shares of the Company's
common stock, $.01 par value ("SA Common"), in accordance with the provisions
of the Company's 1998 Nonqualified Stock Option Plan B (the "Plan"). The
Options are exercisable only to the extent that options granted by the
Participant (the "RS Options") to Xxxx Xxxxx ("JC"), Xxxxxx Xxxxxxx ("RP"),
and Xxxxxx Xxxxx ("SC") to purchase up to 1,500,000 shares of SA Common are
exercised by them. Accordingly, the parties hereto agree as follows.
1 Grant of Option. The Company, by action of the Committee, has granted to
the Participant in three series (each an "Option Series") the right and
option (the "Option") to purchase the number of shares of SA Common (the
"Option Shares") in three series (each an "Option Series") at the exercise
prices and during the periods set forth below:
Vesting Date-- Expiration Date--
Option Shares Subject Years After Exercise Years After
Series To Option Effective Date Price Effective Date
------ -------------- -------------- -------- -----------------
A 500,000 One $ .50 Five
B 500,000 Two 1.00 Six
C 500,000 Three 1.50 Seven
2 Exercise of Option.
(1) At any time after a vesting date set forth in Section 1, the vested
portion of the Option shall be exercisable in whole or in part until the
expiration date for that Option Series set forth in Section 1, but only to
the extent that RS Options are exercised by JC, RP or SC. Each Option Series
shall be subject to accelerated vesting pursuant to Section 7 of the Plan.
(2) To the extent vested, the Option may be exercised by the
Participant delivering to the Company a written notice (an "Exercise Notice")
signed by the Participant stating the number of RS Options that have been
exercised by JC, RP or SC, and the number of Option
Shares that the Participant has elected to purchase and accompanied by
payment in the form prescribed by Section 9 of the Plan of an amount equal to
the full purchase price for the Option Shares to be purchased. Following
receipt by the Company of the Exercise Notice and full payment of the
purchase price for the Option Shares covered thereby, the Company shall
instruct its transfer agent to issue, as soon as practicable, a certificate
representing the Option Shares so purchased in the name of the Participant or
any nominee designated in the Exercise Notice and to deliver the certificate
to the Participant or any designated nominee.
3 Non-Transferability of Option. The Option is not be transferable other
than by will or by the laws of descent and distribution and may be exercised
during the Participant's lifetime only by the Participant.
4 Incorporation of Plan. The Option is subject to, and governed by, the
terms and conditions of the Plan, which are hereby incorporated by reference.
This Agreement, including the Plan incorporated by reference herein, is the
entire agreement among the parties with respect to the subject matter and
supersedes all prior agreements and understandings.
5 Governing Law. This Agreement, as well as the grant of the Option and
issuance of the Shares, shall be governed by and construed in accordance with
the laws of the State of New York.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
STAGE II APPAREL CORP.
By:____________S/___________________
Xxxx Xxxxx, Chairman
PARTICIPANT:
_______________S/___________________
Xxxxxxx Xxxxxxx
