EXHIBIT 4.2
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT, is made and entered into this
day of 1998, by and between JLM Couture, Inc.,
a Delaware corporation (the "Company"), and (the
"Optionee").
R E C I T A L S
WHEREAS, Optionee is a valued employee, officer, consultant,
advisor to the Board of Directors Company or a qualified director
of the Board; and
WHEREAS, the Company desires, by affording the Optionee an
opportunity to purchase shares of Common Stock of the Company
(hereinafter called "Common Stock") as hereinafter provided, to
carry out the purpose of the Company's 1996 Stock Option Plan (the
"Plan").
NOW THEREFORE, in consideration of the mutual covenants
hereinafter set forth, and for other good and valuable
consideration, the parties hereto have agreed, and do hereby agree,
as follows:
1. Grant of Option. The Company hereby irrevocably grants
to the Optionee the right and option (hereinafter called the
"Option") to purchase all or any part of an aggregate of
shares of Common Stock (such number being subject to adjustment as
provided in Article 6 hereof) on the terms and conditions herein
set forth. The Optionee acknowledges that the Option is an
"incentive option" within the meaning of an "incentive stock option
plan" and Section 422A of the Internal Revenue Code of 1986, as
amended, and that it is being granted pursuant to the Plan.
2. Purchase Price. The purchase price of the shares of
Common Stock covered by the Option shall be $ per share, as
determined pursuant to Article 7 of the Plan as of the date hereof.
3. Terms of Option. This Option shall be exercisable
commencing _______________________. The term of the Option shall
expire on , subject only that in any one year the
value of the options first exercisable by the Optionee shall not
exceed $100,000 based on the current fair market price for such
shares of Common Stock at the time and exercise, determined in
accordance with Article 7 of the Plan, and provided further, the
Optionee is an employee of the Company at the time of the exercise
of the Option in accordance with the provisions of Article 7
hereof.
3.1 Payment. The purchase price of the shares of Common
Stock as to which the Option shall be exercised shall be paid in
full at the time of exercise (i) in cash, by certified check by
bank draft or money order payable to the order of the Company;
(ii) subject to any legal restrictions on the acquisition or
purchase of such shares of Common Stock by the Company, by the
delivery of shares of Common Stock owned by the Optionee for a
period of not less than six months and for which the Optionee has
good title (free and clear of any liens and encumbrances) having a
fair market value equal to the purchase price; or (iii) by any
combination of (i) or (ii) above. The Optionee shall not have any
of the rights of a shareholder with respect to the shares of Common
Stock covered by the Option as to any shares of Common Stock not
actually issued and delivered to the Optionee.
4. Competition. In consideration for the grant of this
Option, the Optionee agrees that, during the term of this Option
agreement and for a period of one year thereafter, he shall not in
any manner, engage or become interested in as owner, stockholder,
partner, director, officer, employee, consultant or otherwise, any
business which competes with the business conducted by the Company
or any of its affiliates.
5. Termination of Option. Except as otherwise stated
herein, the Option to the extent not heretofore exercised shall
terminate upon the first of the following dates to occur:
(a) In the event of the Optionee's death, the Optionee's
executors or administrators may exercise, within twelve
(12) months following the date of the Optionee's death,
the Option as to all or part of such number of shares
which the Optionee was entitled to purchase immediately
prior to his death, as determined in accordance with
article 2, not theretofore exercised during the
Optionee's lifetime;
(b) Except if the optionee is a director, on the date
the Optionee voluntarily terminates his employment;
(c) Except if the optionee is a director, the expiration
of three months after the date on which the Optionee's
employment by the Company is terminated (except if such
termination be by reason of death; and
(d) , the ______ anniversary date of this
Agreement.
6. Adjustment. Each outstanding Option shall be adjusted
according to Article 8 of the Plan.
Except as hereinbefore expressly provided, the Optionee shall
have no rights by reason of any subdivision or consolidation of
shares of Common Stock of any class or the payment of any stock
dividend or any other increase or decrease in the number of shares
of Common Stock or stock of any class or by reason of dissolution,
liquidation, merger, or consolidation or spin-off of assets or
stock of another corporation, and any issue by the Company of
shares of Common Stock or stock of any class, or securities
convertible into shares of Common Stock or stock and no adjustment
by reason thereof shall be made with respect to, the number or
price of shares of Common Stock subject to the Option.
The grant of an Option pursuant to the Plan shall not affect
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 or to consolidate or to dissolve,
liquidate or sell, or transfer all or any part of its business
assets.
Shares of Common Stock not purchased under an Option granted
under the Plan which are no longer available for purchase
thereunder by virtue of the total or partial expiration or
termination of such Option and any issue by the Company of shares
of Common Stock or stock of any class, or securities convertible
into shares of Common Stock or stock of any class, shall not
affect, and no adjustment by reason thereof shall be made with
respect to, the number or price of shares of Common Stock subject
to the Option.
Shares of Common Stock not purchased under an Option granted
under the Plan which are no longer available for purchase
thereunder by virtue of the total or partial expiration,
termination, or voluntary surrender of the Option shall continue to
be otherwise available for the purposes of the Plan.
7. Method of Exercising Option. Subject to the terms and
conditions of this Option Agreement, this Option may be exercised
by written notice to the Company, at its principal office in the
State of New York, which presently is located at 000 Xxxx 00xx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000. Such notice shall state the
election to exercise the Option and the number of shares of Common
Stock in respect to which it is being exercised and shall be signed
by the person or persons exercising the Option. Such notice shall
be accompanied by payment in accordance with the terms hereof, and
the Company shall deliver a certificate or certificates
representing the shares of Common Stock subject to such exercise as
soon as practicable after the notice shall be received. The
certificate or certificates for the shares of Common Stock as to
which the Option shall have been so exercised shall be registered
in the name of the person or persons so exercising the Option and
shall be delivered as provided above to or upon written order of
the person or persons exercising the Option. In the event the
Option shall be exercised by any person or persons other than the
Optionee in accordance with the terms hereof, such notice shall be
accompanied by appropriate proof of the right of such persons to
exercise the Option. All shares of Common Stock that shall be
purchased upon the exercise of the Option as provided herein shall
be fully paid and nonassessable. The holder of this Option shall
not be entitled to the privileges of share ownership as to any
shares of Common Stock not actually issued and delivered to
Optionee.
8. No Agreement to Employ. Nothing in this Agreement shall
be construed to constitute or be evidence of any agreement or
understanding, express or implied, on the part of the Company to
employ or retain Optionee for any specific period of time.
9. Restrictions. The holder of this Option, by acceptance
hereof, represents and warrants as follows:
(a) This Option and the right to purchase Common Stock
hereunder is personal to the holder and shall not be
transferred to any other person, other than by will or the
laws of descent and distribution.
(b) The holder hereof has been advised and understands
that the Option has been issued in reliance upon exemptions
from registration under the Securities Act and applicable
state statutes; the exercise of the Option and resale of the
Option and the Common Stock have not been registered under the
Securities Act or applicable state statutes and must be held
and may not be sold, transferred, or otherwise disposed of for
value unless they are subsequently registered under the
Securities Act or an exemption from such registration is
available; except as set forth herein, the Company is under no
obligation to register the Option or the Common Stock under
the Securities Act or the applicable state statutes; in the
absence of such registration, the sale of the Option or the
Common Stock may be practicably impossible; the Company's
registrar and transfer agent will maintain stop-transfer
instructions against registration or transfer of the Option
and the Common Stock and any certificate issued upon exercise
of the Option representing the Common Stock will bear on its
face a legend in substantially the following form restricting
the sale of the Common Stock:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT") AND ARE
"RESTRICTED SECURITIES" WITHIN THE MEANING OF RULE
144 PROMULGATED UNDER THE SECURITIES ACT. THE
SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND
MAY NOT BE SOLD OR TRANSFERRED WITHOUT COMPLYING
WITH RULE 144 IN THE ABSENCE OF EFFECTIVE
REGISTRATION OR OTHER COMPLIANCE UNDER THE
SECURITIES ACT.
(c) Prior to two years from the date the Option has been
exercised and the Common Stock fully paid for, the Company may
refuse to transfer the Common Stock unless the holder thereof
provides an opinion of legal counsel reasonably satisfactory
to the Company or a "no action" letter or interpretive
response from the staff of the Securities and Exchange
Commission to the effect that the transfer is proper; further,
unless such opinion letter or response states that the Common
Stock are free of any restrictions under the Securities Act,
the Company may refuse to transfer the Common Stock to any
transferee who does not furnish in writing to the Company the
same representations and agree to the same conditions with
respect to such Common Stock as are set forth herein.
Notwithstanding any of the foregoing, the Company may refuse
to transfer the Common Stock if any circumstances are present
reasonably indicating that the transferee's representations
are not accurate.
(d) After two years but prior to three years from the
date the Option has been exercised and the Common Stock fully
paid for, the Company may refuse to transfer the Common Stock
unless the holder either (i) meets the requirements of
subparagraph (b) above; or (ii) sells such Common Stock in
accordance with Rule 144 and furnishes to the Company written
assurances of compliance therewith in the form of a copy of
the Notice of Form 144 and appropriate letters of compliance
from the holder of such Common Stock and the securities
broker-dealer to or through which such Common Stock are being
sold. No opinion of counsel for the holder of the Common
Stock shall be required respecting sales in reliance on Rule
144 pursuant to clause (ii) of this subparagraph (d).
(e) After three years from the date the Option has been
exercised and the Common Stock fully paid for, the Company
shall, upon the written request of any persons who have held
the Common Stock for three years (excluding any tolling period
provided for by Rule 144) and who is not, and has not been
during the preceding three months, an affiliate of the
Company, reissue to such holder in such names and
denominations as the holder shall request, one or more
certificates for the Common Stock without any restriction
whatsoever on their further transfer and cancel any and all
stop transfer instructions regarding such Common Stock on the
books and records of the Company.
10. General. The Company shall at all times during the term
of this Option reserve and keep available such number of shares of
Common Stock as will be sufficient to satisfy the requirements of
this Option Agreement, shall pay all original issue and transfer
taxes with respect to the issue and transfer of shares of Common
Stock pursuant thereto and all other fees and expenses necessarily
incurred by the Company in connection therewith, and will from time
to time use its best efforts to comply with all laws and
regulations, which in the opinion of counsel for the Company, shall
be applicable thereto.
11. Validity and Construction. The validity and construction
of this Option shall be governed by the laws of the State of New
York. Such construction is vested in the board and its
construction shall be final and conclusive.
IN WITNESS WHEREOF, the Company has caused this Option
Agreement to be duly executed by its proper corporate officers
thereunto duly authorized.
JLM COUTURE, INC.
By:
(Authorized Officer)
Optionee
