**Exhibit 10.49**

 

**RAFAELLAAPPAREL GROUP, INC.EQUITY INCENTIVE PLANAWARD AGREEMENT**

 

**RAFAELLA APPAREL GROUP, INC.** (the “**Company**”)hereby grants to Richard Metzger (the “**Participant**”)the following option (the “**Option**”) topurchase shares of the common stock of the Company (the “**Shares**”),subject to the following terms and conditions and pursuant to the RafaellaApparel Group, Inc. Equity Incentive Plan (the “**Plan**”).

 

GrantDate:            October 13, 2010(“**Grant Date**”)

 

OptionPrice:         $5.33****per Share (“**Option Price**”)

 

Numberof Shares:               111,111

 

ExpirationDate:    Tenth anniversary of theGrant Date (the “**Option Period**”)

 

Relationshipto the Plan:     ThisOption is granted pursuant to the Plan and is in all respects subject to theterms, conditions and definitions of the Plan (including, but not limited to,provisions concerning exercise, restrictions on Options, termination,nontransferability and adjustment of the number of Shares).  The Participant hereby accepts this Optionsubject to all the terms and provisions of the Plan.  The Participant further agrees that alldecisions under and interpretations of the Plan by the Administrator shall befinal, binding and conclusive upon the Participant and his or her heirs.  All capitalized terms used herein and nototherwise defined herein shall have the same meanings ascribed to them in thePlan.  If there is any inconsistencybetween the terms of this Award Agreement and the terms of the Plan, the Plan’sterms shall completely supersede and replace the conflicting terms of this AwardAgreement.

 

TheParticipant hereby acknowledges receipt of a copy of the Plan attached heretoas Annex A as presently in effect, but as may be amended from time totime.  This Award Agreement and the Planconstitute the entire agreement of the parties with respect to the subjectmatter hereof, and supersede any prior written or oral agreement.

 

VestingSchedule.  One quarterof the Shares subject to the Option shall vest on each of the first, second,third and fourth anniversaries of the Grant Date (each, a “**Vesting Date**”),provided that the Participant remains employed by the Company on eachapplicable Vesting Date on an active and full-time basis.

 

Vestingupon a Liquidity Event.  Inthe event of a Liquidity Event, Section 8 of the Plan shall apply to theOption.

 

Exercisabilityof Option.  During theOption Period, unless otherwise provided in this Award Agreement or the Plan,this Option shall entitle the Participant to purchase, in whole or at any timeor in part from time to time, to the extent the Option is vested in accordancewith the vesting schedule herein, the Shares subject to this Option, and eachsuch right of purchase shall be cumulative and shall continue, unless soonerexercised or terminated as herein provided. Any fractional number of Shares resulting from the application of theforegoing percentages shall be 

 

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roundedto the next higher whole number of Shares, but shall not exceed the totalnumber of Shares covered by this Option.

 

Mannerof Exercise and Payment. Subject to the terms and conditions of this Award Agreement and thePlan, this Option may be exercised by delivery of written notice to theSecretary of the Company, at the Company’s principal executive office in theform of Annex B.  Such noticeshall state (i) that the person exercising this Option is entitled toexercise this Option, (ii) that such person is electing to exercise thisOption and (iii) the number of Shares in respect of which this Option isbeing exercised.  Such person or personsshall (i) deliver this Award Agreement to the Secretary of the Company whoshall endorse thereon a notation of such exercise and (ii) providesatisfactory proof as to the right of such person or persons to exercise theOption.

 

TheParticipant shall not be deemed to be the holder of, or to have any of therights of a holder with respect to, any Shares subject to this Option untilthis Option shall have been exercised pursuant to the terms of this AwardAgreement and the Participant shall have paid the full Option Price for the numberof Shares in respect of which this Option was exercised.

 

Theoption exercise price of the Shares as to which an Option shall be exercisedshall be paid to the Company at the time of exercise in cash, by certifiedcheck or by such other method permitted by the Administrator, in its solediscretion, as may be allowed under applicable law.

 

Withholdingof Taxes.  The Companyshall have the right to deduct from any distribution of cash to the Participantan amount equal t the federal, state and local income taxes and other amountsas may be required by law to be withheld (the “**WithholdingTaxes**”) with respect to this Option. If the Participant is entitled to receive Shares upon exercise of thisOption, the Participant shall pay the Withholding Taxes to the Company in cashprior to the issuance of such Shares.

 

RepurchaseRight.  The Option and any Shares heldby a Participant shall be subject to the repurchase right set forth underSection 10 of the Plan.

 

Transferability.  The Option shall be subject to the transferrestrictions contained in Section 6(h) of the Plan and the Sharesshall be subject to the transfer restrictions contained in Section 9 ofthe Plan.

 

NoEmployment or Service Contract.  Nothing in this Award Agreement or in thePlan shall confer upon the Participant any right to continue such Participant’srelationship with the Company or a Subsidiary (as defined below) or Affiliatethereof, nor shall it give any Participant the right to be retained in theemploy of the Company or a Subsidiary or Affiliate or interfere with orotherwise restrict in any way the rights of the Company or a Subsidiary orAffiliate, which rights are hereby expressly reserved, to terminate anyParticipant’s employment or relationship at any time for any reason, except asmay be set forth in an employment or other agreement between the Participantand the Company or a Subsidiary or Affiliate of the Company.

 

“**Subsidiary**” shall mean any corporation, partnership, limitedliability company, joint venture or other legal entity of which the Companyowns, directly or indirectly, 50% or more of 

 

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thestock or other equity interests the holders of which are generally entitled tovote for the election of the board of directors or other governing body of suchcorporation or other legal entity.

 

Modificationof Award Agreement.  ThisAgreement may be modified, amended, suspended or terminated, and any terms orconditions may be waived, but only by a written instrument executed by the partieshereto.

 

Severability.  Should any provision of this Agreement beheld by a court of competent jurisdiction to be unenforceable or invalid forany reason, the remaining provisions of this Agreement shall not be affected bysuch holding and shall continue in full force in accordance with their terms.

 

GoverningLaw.  The validity, interpretation,construction and performance of this Award Agreement shall be governed by thelaws of the State of New York without giving effect to the conflicts of laws principlesthereof.

 

 

Acceptedand Agreed:

 
| **PARTICIPANT**      | ** **                              | **RAFAELLA APPAREL GROUP, INC.** |
|----------------------|-----------------------------------------|---------------------------------------|
| ** **           | ** **                              | ** **                            |
|                 |                                    |                                  |
| /s/  Richard Metzger |                                    | By:                                   | /s/  Christa Michalaros |
| Richard  Metzger     |                                    |                                  | Name: | Christa  Michalaros |
|                 |                                    |                                  | Title: | Chief  Executive Officer |
|                 |                                    |                                  |
|                 |                                    |                                  |
| Attachments:         | Annex  A (The Plan)                     |                                  |   |
|                 | Annex  B (Form of Exercise Notice) |                                  |   |
|                      |                                         |                                       |  |  |  |

 

 

Dated:October 13, 2010

 

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**ANNEX A**

 

**RAFAELLAAPPAREL GROUP, INC.EQUITY INCENTIVE PLAN**

 

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**ANNEX B**

 

**RAFAELLAAPPAREL GROUP, INC.EQUITYI NCENTIVE PLAN**

 

**Notice ofExercise of Option**

 

1.             Exercise ofOption. Pursuant to the Rafaella Apparel Group, Inc. Equity IncentivePlan (the “**Plan**”) and my Award Agreementthereunder, dated October 13, 2010 (the “**Agreement**”), Ihereby elect to exercise my option (the “**Option**”) to theextent of                    Shares.

 

2.             Delivery ofPayment. I hereby deliver to the Company a cashier’s check in the amount ofUS Dollars$                        in full payment of the purchase price of the Shares determined by multiplying (a) theexercise price per Share as set forth in my Agreement, by (b) the numberof Shares as to which 1 am exercising the Option and in satisfaction of myobligation to remit to the Company an amount sufficient to satisfy anywithholding tax obligations of the Company that arise in connection with thisexercise, or through such other payment method agreed to by the Company andpermitted under the terms of the Plan.

 

3.             Representations.In connection with my exercise of the Option, I hereby represent to the Companyas follows:

 

(a)           I am acquiring theShares solely for investment purposes, with no present intention ofdistributing or reselling any of the Shares or any interest therein. Iacknowledge that the Shares have not been registered under the Securities Actof 1933, as amended.

 

(b)           I am aware of theCompany’s and its Subsidiaries’ business affairs and financial condition andhave acquired sufficient information about the Company and its Subsidiaries toreach an informed and knowledgeable decision to acquire the Shares.

 

(c)           I understand thatthe Shares are “restricted securities” under applicable U.S. federal and statesecurities laws and that, pursuant to these laws, I must hold the Sharesindefinitely unless they are registered with the Securities and ExchangeCommission and qualified by state authorities, or unless an exemption from suchregistration and qualification requirements is available. I acknowledge thatthe Company has no obligation to register or qualify the Shares for resale. Ifurther acknowledge that if an exemption from registration or qualification isavailable, it may be conditioned on various requirements including, but notlimited to, the time and manner of sale, the holding period for the Shares, andrequirements relating to the Company which are outside of my control, and whichthe Company is under no obligation to and may not be able to satisfy.

 

(d)           I understand thatthere is no public market for the Shares, that no market may ever develop forthem, and that the Shares have not been approved or disapproved by theSecurities and Exchange Commission or any other federal, state or othergovernmental agency.

 

(e)           I understand thatthe Shares are subject to certain restrictions on transfer set forth in thePlan. Both the Plan and the Agreement are incorporated herein by reference.

 

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(f)            I have consulted myown tax advisors in connection with my exercise of this Option and I am notrelying upon the Company for any tax advice.

 

 
|   |   | Submitted  by the Optionholder:        |
|--------|--------|----------------------------------------|
|   |   |                                   |
|   |   |                                   |
| Date:  |   |                                   | By: |   |
|   |   |                                   |   |
|   |   | Print  Name:                           |   |
|   |   |                                   |   |
|   |   | Address:                               |   |
|   |   |                                   |   |
|   |   |                                   |   |
|   |   |                                   |   |
|   |   | Social  Security No.                   |   |
|   |   |                                   |
|   |   |                                   |
|   |   | Received  and Accepted by the Company: |
|   |   |                                   |
|   |   | RAFAELLE  APPAREL GROUP, INC.     |
|   |   |                                   |
|   |   |                                   |
|   |   | By:                                    |   |
|   |   |                                   |   |
|   |   | Print  Name:                           |   |
|   |   |                                   |   |
|   |   | Title:                                 |   |
|        |        |                                        |  |  |  |  |

 

Note:  If Options are being exercised on behalf of adeceased Plan Participant, then this Notice must be signed by such Participant’spersonal representative and must be accompanied by a certificate issued by anappropriate authority evidencing that the individual signing this Notice hasbeen duly appointed and is currently serving as the Participant’s personalrepresentative under applicable local law governing decedents’ estates.

 

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