EX-10.5



 




Exhibit 10.5



NS GROUP, INC. EQUITY PLAN

INCENTIVE STOCK OPTION AGREEMENT




     This Agreement (the “Agreement”) is made as of , 2___(the “Date of
Grant”) by and between NS Group, Inc., a Kentucky corporation (the “Company”)
and ___(the “Optionee”).



     1. Grant of Option Right. Subject to and upon the terms, conditions and
restrictions set forth in this Agreement and in the NS Group, Inc. Equity Plan
(the “Plan”), the Company hereby grants to the Optionee as of the Date of Grant
an option (the “Option Right”) to purchase ___Common Shares, at the price
of ___per share (the “Option Price”). This Option Right is intended to be
an “incentive stock option” within the meaning of that term under Section 422
of the Code, and this Agreement shall be construed in a manner that will enable
the Option Right to be so qualified.



     2. Exercise of Option Right.



        (a) Unless and until terminated as hereinafter provided, the Option Right
will become exercisable to the extent of one-third of the Common Shares
specified in Section 1 on each of the first three anniversaries of the Date of
Grant for so long as the Optionee remains in the continuous employ of the
Company and its Subsidiaries. See Section 12 of this Agreement.



        (b) Notwithstanding the provisions of Section 2(a), the Option Right will
become immediately exercisable in full if, prior to the date the Option Right
becomes fully exercisable pursuant to Section 2(a), the Optionee dies while in
the employ of the Company and its Subsidiaries.



        (c) To the extent that the Option Right becomes exercisable in accordance
with this Section 2, it may be exercised in whole or in part from time to time
by written notice to the Company stating the number of Common Shares for which
the Option Right is being exercised and the intended manner of payment.



     3. Forfeiture of Option Right. The Option Right shall be forfeited (to
the extent it has not become exercisable pursuant to Section 2) if the Optionee
ceases to be continuously employed by the Company and its Subsidiaries. See
Section 12 of this Agreement.



     4. Payment of Option Price. The Option Price is payable in cash or by
certified or cashier’s check or other cash equivalent acceptable to the Company
payable to the order of the Company.



     5. Term of Option Right. The Option Right will terminate on the earliest
of the following dates:



        (a) One year after the Optionee ceases to be an employee of the Company or
any Subsidiary as a result of his death;



        (b) Ninety days after the Optionee ceases to be an employee of the Company
or any Subsidiary for any reason other than as described in Section 5(a); or



        (c) Ten years from the Date of Grant.



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Exhibit 10.5




NS GROUP, INC. EQUITY PLAN

INCENTIVE STOCK OPTION AGREEMENT




     6. Issuance of Common Shares. Subject to the terms and conditions of this
Agreement, Common Shares shall be issuable to the Optionee as soon as
administratively practicable following the date the Optionee exercises the
Option Right in accordance with Section 2 hereof and makes full payment to the
Company of the Option Price. The Optionee shall not possess any incidents of
ownership (including, without limitation, dividend and voting rights) in the
Common Shares until such Common Shares have been issued to the Optionee in
accordance with this Section 6.



     7. Mandatory Notice of Disqualifying Disposition. Without limiting any
other provisions hereof, the Optionee hereby agrees that if the Optionee
disposes (whether by sale, exchange, gift or otherwise) of any of the Common
Shares issued upon exercise of the Option Right within two years of the Date of
Grant or within one year after the transfer of such share or shares to the
Optionee, the Optionee shall notify the Company of such disposition in writing
within thirty days from the date of such disposition. Such written notice
shall state the principal terms of such disposition and the type and amount of
the consideration received for such share or shares by the Optionee in
connection therewith.



     8. Transferability. The Option Right may not be sold, exchanged,
assigned, transferred, pledged, encumbered or otherwise disposed of by the
Optionee; provided, however, that the Optionee’s rights with respect to such
Option Right may be transferred by will or pursuant to the laws of descent and
distribution. Any purported transfer or encumbrance in violation of the
provisions of this Section 8 shall be void, and the other party to any such
purported transaction shall not obtain any rights to or interest in such Option
Right. The Option Right may be exercised, during the lifetime of the Optionee,
only by the Optionee, or in the event of his legal incapacity, by his guardian
or legal representative acting on behalf of the Optionee in a fiduciary
capacity under state law and court supervision.



     9. No Employment Contract. Nothing contained in this Agreement shall
confer upon the Optionee any right with respect to continuance of employment by
the Company and its Subsidiaries, nor limit or affect in any manner the right
of the Company and its Subsidiaries to terminate the employment or adjust the
compensation of the Optionee.



     10. Taxes and Withholding. To the extent that the Company shall be
required to withhold any federal, state, local or other taxes in connection
with Common Shares obtained upon the exercise of the Option Right, it shall be
a condition to the issuance of such Common Shares that the Optionee shall pay
such taxes or make provisions that are satisfactory to the Company for the
payment thereof.



     11. Compliance with Law. The Company shall make reasonable efforts to
comply with all applicable federal and state securities laws and listing
requirements of the New York Stock Exchange or any national securities
exchange; provided, however, notwithstanding any other provision of this
Agreement, the Company will not be obligated to issue any Common Shares
pursuant to this Agreement if the issuance thereof would result in a violation
of any such law or listing requirement.



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Exhibit 10.5




NS GROUP, INC. EQUITY PLAN

INCENTIVE STOCK OPTION AGREEMENT




     12. Continuous Employment. For purposes of this Agreement, the continuous
employment of the Optionee with the Company and its Subsidiaries shall not be
deemed to have been interrupted, and the Optionee shall not be deemed to have
ceased to be an employee of the Company and its Subsidiaries, by reason of the
transfer of his employment among the Company and its Subsidiaries or a leave of
absence or layoff approved by the Company. Notwithstanding the preceding
sentence, and unless the Committee provides otherwise, vesting of the Option
Right under Section 2(a) shall be suspended (i.e., tolled) during any approved
leave of absence or layoff (to the extent permitted by Applicable Laws).



     13. Adjustments. The Committee may make or provide for such adjustments
in the Option Price and in the number and kind of shares of stock covered by
this Agreement, as the Committee, in its sole discretion, exercised in good
faith, may determine is equitably required to prevent dilution or enlargement
of the Optionee’s rights that otherwise would result from (a) any stock
dividend, stock split, combination of shares, recapitalization, or other change
in the capital structure of the Company, (b) any merger, consolidation,
spin-off, split-off, spin-out, split-up, reorganization, partial or complete
liquidation, or other distribution of assets (including, without limitation, a
special or large non-recurring dividend) or issuance of rights or warrants to
purchase securities, or (c) any other corporate transaction or event having an
effect similar to any of the foregoing. In the event of any such transaction
or event, the Committee, in its discretion, may provide in substitution for the
Common Shares such alternative consideration as it may determine to be
equitable in the circumstances and may require in connection therewith the
surrender of the Common Shares.



     14. Availability of Common Shares. The Company shall at all times until
the expiration or forfeiture of the Option Right reserve and keep available,
either in its treasury or out of its authorized but unissued Common Shares, the
full number of Common Shares deliverable upon the exercise of the Option Right
awarded under this Agreement.



     15. Amendments. Subject to the terms of the Plan, the Committee may
modify this Agreement upon written notice to the Optionee. Any amendment to
the Plan shall be deemed to be an amendment to this Agreement to the extent
that the amendment is applicable hereto. Notwithstanding the foregoing, no
amendment of the Plan or this Agreement shall adversely affect the rights of
the Optionee under this Agreement without the Optionee’s consent.



     16. Severability. In the event that one or more of the provisions of this
Agreement shall be invalidated for any reason by a court of competent
jurisdiction, any provision so invalidated shall be deemed to be separable from
the other provisions hereof, and the remaining provisions hereof shall continue
to be valid and fully enforceable.



     17. Relation to Plan. The Option Right granted under this
Agreement and all the terms and conditions hereof are subject to the
terms and conditions of the Plan. This Agreement and the Plan
contain the entire agreement and understanding of the parties with
respect to the subject matter contained in this Agreement, and
supersede all prior written or oral communications, representations
and negotiations in respect thereto. In the event of any
inconsistency between the provisions of this Agreement and the Plan,
the Plan shall govern. Capitalized terms used herein without
definition shall have the meanings assigned to them in the



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Exhibit 10.5




NS GROUP, INC. EQUITY PLAN

INCENTIVE STOCK OPTION AGREEMENT



Plan. The Committee acting pursuant to the Plan, as constituted from
time to time, shall, except as expressly provided otherwise herein, have
the right to determine any questions which arise in connection with the
grant or exercise of the Option Right.




     18. Successors and Assigns. Without limiting Section 8 hereof, the
provisions of this Agreement shall inure to the benefit of, and be binding
upon, the successors, administrators, heirs, legal representatives and assigns
of the Optionee, and the successors and assigns of the Company.



     19. Governing Law. The interpretation, performance, and enforcement of
this Agreement shall be governed by the laws of the Commonwealth of Kentucky,
without giving effect to the principles of conflict of laws thereof.



     20. Notices. Any notice to the Company provided for herein shall be in
writing to the Company and any notice to the Optionee shall be addressed to the
Optionee at his or her address on file with the Company. Except as otherwise
provided herein, any written notice shall be deemed to be duly given if and
when delivered personally or deposited in the United States mail, first class
certified or registered mail, postage and fees prepaid, return receipt
requested, and addressed as aforesaid. Any party may change the address to
which notices are to be given hereunder by written notice to the other party as
herein specified (provided that for this purpose any mailed notice shall be
deemed given on the third business day following deposit of the same in the
United States mail).



     IN WITNESS WHEREOF, the Company has caused this Agreement to be executed
on its behalf by its duly authorized officer and the Optionee has also executed
this Agreement in duplicate, as of the day and year first above written.




	 	 	 
	

	 	NS GROUP, INC.
	

	 	 
	

	 	By:__________________
	

	 	Name:
	

	 	Title:







     The undersigned hereby acknowledges receipt of an executed original of
this Agreement and accepts the award of the Option Right granted thereunder on
the terms and conditions set forth herein and in the Plan.




	 	 	 
	

	 	____________________
	

	 	Optionee
	

	 	 
	

	 	Date:________________






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