Document:

Prepared by MERRILL CORPORATION

Exhibit

10.2(d)

AMENDMENT

NO. 4

TO

AMENDED AND RESTATED SHAREHOLDERS’ AGREEMENT

 

THIS AMENDMENT NO. 4 TO THE AMENDED AND RESTATED SHAREHOLDERS’

AGREEMENT is effective as of July 25, 2001 and is entered into by and among

Nextel Partners, Inc., a Delaware corporation (the “Company”), and the

shareholders listed on the signature pages hereto (collectively, the

“Signatories”).

 

WHEREAS, the parties hereto are parties to that certain Shareholders’

Agreement, dated as of January 29, 1999 (the “Original Shareholders’

Agreement”), as amended and restated on February 18, 2000, by and among the

Company and the other parties specified therein, as further amended by

Amendment No. 1 thereto effective as of February 22, 2000, by and among

the Company and the other parties specified in such Amendment No. 1, as

further amended by Amendment No. 2 effective as of March 20, 2001, by and

among the Company and the other parties specified in such Amendment No. 2, and

as further amended by Amendment No. 3 effective as of April 18, 2001, by and

among the parties specified in such Amendment No. 3 (collectively, the

“Shareholders’ Agreement”);

 

WHEREAS, the parties have determined to amend the Shareholders’

Agreement in accordance with Section 8.04 thereof, as provided herein;

 

NOW, THEREFORE, each of the parties hereto agrees to amend the

Shareholders’ Agreement as follows:

 

1.             New Section 3.10. 

There is hereby inserted into the Shareholders’ Agreement a new Section

3.10, immediately after existing Section 3.09 and immediately prior to existing

Article 4, which shall read as follows:

 

“Section 3.10. 

Hedging

Transactions.  Notwithstanding anything in this Agreement to the

contrary, the Shareholders may transfer their Shares without complying with the

provisions set forth in Section 3.01(c), the second sentence of Section 3.04(c)

or Sections 3.05, 3.06 and 3.07 of the Shareholders’ Agreement in a transaction

that constitutes a bona fide “hedging transaction,” such as a variable pre-paid

forward hedge or similar transaction, for the sole purpose of offsetting such

Shareholder’s investment risk with respect to the Shareholders’ equity

investment in the Company; provided, however, that (a) in any such

transaction, a Shareholder may not subject to the hedging transaction more than

an aggregate of 20% of such Shareholder’s Initial Ownership, (b) a Shareholder

may not engage in more than one hedging transaction in any twelve-month period

and (c) the date that the Shareholder executes any documents or otherwise

commits to engage in any such hedging transaction must be at least twelve

months prior to the date on which the Shareholders’ ownership interest in any

of the Shares involved in such hedging transaction are transferred, assigned or

otherwise conveyed; provided, further, that all other provisions

of the Shareholders’ Agreement shall continue to apply to such hedging

transactions, including, without limitation, (x) the terms and conditions of

Section 3.04(d) and (y) each of Eagle River, Motorola and each Management

Shareholder and their respective Permitted Transferees shall nevertheless

remain subject to the terms and conditions of Section 3.04(a) of this

Agreement.”

 

2.             The parties hereto hereby acknowledge that

pursuant to Section 6.01(a) of the Shareholders’ Agreement, upon written

consent of all parties to that certain IPO Approval and Lockup Agreement dated

effective as of February 22, 2000, as amended as of April 18, 2001, a Demand

Registration may be made prior to August 22, 2001.

 

3.             Definitions.

 

Capitalized

terms used but not otherwise defined herein shall have the meanings ascribed to

them in the Shareholders’ Agreement.

 

SIGNATURE

PAGES FOLLOW

 

IN WITNESS WHEREOF, the parties hereto have caused this Amendment

No. 4 to Amended and Restated Shareholders’ Agreement to be duly executed

by their respective authorized officers.

 

	

   

  	

  NEXTEL

  PARTNERS, INC., 

  a Delaware corporation

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

  /s/  JOHN CHAPPLE

  
	

   

  	

   

  	

  Name:

  John Chapple

  
	

   

  	

   

  	

  Title:

  CEO

  
	

   

  	

   

  	

  Date:

  6/22/01

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  NEXTEL

  WIP CORP., 

  a Delaware corporation

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

  /s/  TIMOTHY DONAHUE

  
	

   

  	

   

  	

  Name:  Timothy Donahue

  
	

   

  	

   

  	

  Title:  President

  
	

   

  	

   

  	

  Date:

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  DLJ

  MERCHANT BANKING PARTNERS II, L.P.,

  a Delaware Limited Partnership

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

  /s/  ANDY RUSH

  
	

   

  	

   

  	

  Name:  Andy Rush

  
	

   

  	

   

  	

  Title:  MD

  
	

   

  	

   

  	

  Date:  June 26, 2001

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  DLJ

  MERCHANT BANKING PARTNERS II–A, L.P.,

  a Delaware Limited Partnership

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

  DLJ

  Merchant Banking II, Inc., 

  as managing general partner

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

  /s/  ANDY RUSH

  
	

   

  	

   

  	

  Name:  Andy Rush

  
	

   

  	

   

  	

  Title:  MD

  
	

   

  	

   

  	

  Date:  June 26, 2001

  
	

   

  	

   

  	

   

  
	

   

  	

  DLJ

  OFFSHORE PARTNERS II, C.V.,

  a Netherlands
 Antilles Limited Partnership

  
	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

  DLJ Merchant Banking II,

  Inc., 

  as advisory general partner

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

  /s/  ANDY RUSH

  
	

   

  	

   

  	

  Name:  Andy Rush

  
	

   

  	

   

  	

  Title:  MD

  
	

   

  	

   

  	

  Date:  6/26/01

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  DLJ

  DIVERSIFIED PARTNERS, L.P., 

  a Delaware Limited Partnership

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

  DLJ

  Diversified Partners, Inc., 

  as managing general partner

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

  /s/  ANDY RUSH

  
	

   

  	

   

  	

  Name:  Andy Rush

  
	

   

  	

   

  	

  Title:  MD

  
	

   

  	

   

  	

  Date:  6/26/01

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  DLJ

  DIVERSIFIED PARTNERS-A, L.P., 

  a Delaware Limited Partnership

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

  DLJ

  Diversified Partners, Inc. 

  as managing general partner

  
	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

  /s/  ANDY RUSH

  
	

   

  	

   

  	

  Name:  Andy Rush

  
	

   

  	

   

  	

  Title:  MD

  
	

   

  	

   

  	

  Date:  6/26/01

  
	

   

  	

  DLJ

  MILLENNIUM PARTNERS, L.P.,

  a Delaware Limited Partnership

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

  DLJ Merchant Banking II,

  Inc. 

  as managing general partner

  
	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

  /s/  ANDY RUSH

  
	

   

  	

   

  	

  Name:  Andy Rush

  
	

   

  	

   

  	

  Title:  MD

  
	

   

  	

   

  	

  Date:  6/26/01

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  DLJ

  MILLENNIUM PARTNERS-A, L.P.

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

  DLJ

  Merchant Banking II, Inc. 

  as managing general partner

  
	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

  /s/  ANDY RUSH

  
	

   

  	

   

  	

  Name:  Andy Rush

  
	

   

  	

   

  	

  Title:  MD

  
	

   

  	

   

  	

  Date:  6/26/01

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  DLJMB

  FUNDING II, INC., 

  a Delaware corporation

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

  /s/  ANDY RUSH

  
	

   

  	

   

  	

  Name:  Andy Rush

  
	

   

  	

   

  	

  Title:  MD

  
	

   

  	

   

  	

  Date:  6/26/01

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  DLJ

  FIRST ESC, L.P

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

  DLJ

  LBO Plans Management Corporation,

  as manager

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

  /s/  ANDY RUSH

  
	

   

  	

   

  	

  Name:  Andy Rush

  
	

   

  	

   

  	

  Title:  MD

  
	

   

  	

   

  	

  Date:  6/26/01

  
	

   

  	

  DLJ

  EAB PARTNERS, L.P.

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

  DLJ

  LBO Plans Management Corporation,

  as managing general partner

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

  /s/  ANDY RUSH

  
	

   

  	

   

  	

  Name:  Andy Rush

  
	

   

  	

   

  	

  Title:  MD

  
	

   

  	

   

  	

  Date:

   6/26/01

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  DLJ

  ESC II, L.P.

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

  DLJ

  LBO Plans Management Corporation,

  as manager

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

  /s/  ANDY RUSH

  
	

   

  	

   

  	

  Name:  Andy Rush

  
	

   

  	

   

  	

  Title:  MD

  
	

   

  	

   

  	

  Date:  6/26/01

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  UK

  INVESTMENT PLAN 1997 PARTNERS,

  a Delaware Limited Partnership

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

  UK

  Investment Plan 1997 Partners, Inc.,

  as general partner

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

  /s/  ANDY RUSH

  
	

   

  	

   

  	

  Name:  Andy Rush

  
	

   

  	

   

  	

  Title:  MD

  
	

   

  	

   

  	

  Date:  6/26/01

  
	

   

  	

  MADISON DEARBORN CAPITAL

  PARTNERS II, L.P.

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

  Madison Dearborn Partners

  II, L.P.,

  its General Partner

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

  Madison Dearborn Partners

  Inc.,

  its General Partner

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

  /s/  ANDREW SINWELL

  
	

   

  	

   

  	

  Name:  Andrew Sinwell

  
	

   

  	

   

  	

  Title:  Managing Director

  
	

   

  	

   

  	

  Date:

  
	

   

  	

   

  	

   

  
	

   

  	

  EAGLE

  RIVER INVESTMENTS, L.L.C. 

  a Washington limited liability company

  
	

   

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

  /s/  DENNIS WEIBLING

  
	

   

  	

   

  	

  Name:

  
	

   

  	

   

  	

  Title:

  
	

   

  	

   

  	

  Date:

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  MOTOROLA,

  INC., 

  a Delaware corporation

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

  /s/  KEVIN C. STONE

  
	

   

  	

   

  	

  Name:

  
	

   

  	

   

  	

  Title:

  
	

   

  	

   

  	

  Date:

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  /s/  JOHN CHAPPLE

  
	

   

  	

  JOHN

  CHAPPLE

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  /s/  PERRY SATTERLEE

  
	

   

  	

  PERRY

  SATTERLEE

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  /s/  MARK FANNING

  
	

   

  	

  MARK

  FANNING

  
				

 

	

   

  	

  /s/  JOHN THOMPSON

  
	

   

  	

  JOHN THOMPSON

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  /s/  DAVID THALER

  
	

   

  	

  DAVID

  THALER

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  /s/  DAVID AAS

  
	

   

  	

  DAVID

  AAS

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  JDT-JRT,

  L.L.C.

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

  /s/  JOHN D. THOMPSON

  
	

   

  	

   

  	

  Name:  John D. Thompson

  
	

   

  	

   

  	

  Title:  Manager

  
	

   

  	

   

  	

  Date:

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  JRC

  COHO, L.L.C.

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

  /s/  JOHN H. CHAPPLE

  
	

   

  	

   

  	

  Name:  John H. Chapple

  
	

   

  	

   

  	

  Title:  Manager

  
	

   

  	

   

  	

  Date:

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  PSS-MSS,

  LP

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

  /s/  PERRY SATTERLEE

  
	

   

  	

   

  	

  Perry

  Satterlee, General partnerPrepared by MERRILL CORPORATION

 

Exhibit

10.1

 

 

STAGE II APPAREL CORP.

 

2001 Replacement Option Plan

 

 

 

1.       Background and Purpose.  (a) 

Stage II Apparel Corp. (the “Company”) maintains four stock option plans

adopted since 1994 (the “Old Plans”). 

Three of the Old Plans are compensatory, designed to provide officers

and key employees with stock options (“Old Compensatory Options”) as a means to

supplement below market salaries.  Old

Compensatory Options to purchase a total of 2,006,000 shares of the Company’s

common stock (“Common Stock”) were outstanding at exercise prices ranging from

$.30 to $1.00 per share on August 23, 2001, the date the Company entered into a

Stock Purchase Agreement (the “SPA”) with Alpha Omega Group, Inc.  (“AOG”) for the issuance of 30 million

shares of Common Stock to AOG at $.05 per share (the “Control Shares”).

 

(b)     The fourth Old Plan (the

“Mirror Option Plan”) was adopted in May 1998 in connection with the purchase

of a controlling interest in the Company from its original founders by Richard

Siskind and his grant to the founders of options to reacquire from him up to

1.5 million shares of Common Stock at exercise prices ranging from $.50 to

$1.50 per share (the “Founders Options”). 

As part of the transaction, the Company issued to Mr. Siskind options to

purchase up to 1.5 million newly issued shares of Common Stock on the same

terms as the Founders Options, exercisable only to the extent the Founders

Options are exercised (the “Mirror Options”).

 

(c)     The SPA provides for each

employee of the Company to enter into a termination agreement with the Company

upon the closing of the SPA (the “Closing”) to provide for employee’s

termination of employment and for severance obligations comprised primarily of

new stock options (“Replacement Options”) in exchange for each option

outstanding under the Old Plans (“Old Options”), exercisable for three years

after the Closing (the “Exercise Period”) for the same number of shares covered

by the exchanged Old Option at an exercise price of $.50 per share or the

exercise of the exchanged Old Option, if less than $.50 per share (the

“Exercise Price”).  Because the issuance

of the Control Shares will constitute a change of control triggering the

immediate vesting of any unvested Old Options under the terms of the Old Plans,

all of the Replacement Options will vest immediately upon issuance.

 

2.       The Plan. 

The Company’s board of directors (the “Board”) has adopted this 2001

Replacement Option Plan (the “Plan”) in accordance with the requirements of the

SPA to provide for the issuance to the holder of each Old Option outstanding at

the Closing (each, a “Holder”) of a Replacement Option in exchange

therefor.  Replacement Options granted

under the Plan are intended to be treated as nonqualified stock options within

the meaning of section 422 of the Internal Revenue Code of 1986, as amended

(the “Code”).

 

3.       Administration.   The Plan shall be administered by the Compensation Committee of

the Board (the “Committee”), which shall have plenary authority in its

discretion, subject only to the express provisions of the Plan, to adopt, amend

and rescind rules and regulations for the administration of the Plan and for

its own acts and proceedings and decide all questions and settle all

controversies and disputes of general applicability that may arise in

connection with the Plan.

 

4.       Effectiveness and Termination of Plan.  The Plan shall become effective as of the

date of the Closing, provided it is approved by the shareholders of the Company

prior thereto.  The Plan and all

outstanding Replacement Options shall terminate on the earliest of (a) the end

of the Exercise Period on the third anniversary of the Closing or (b) the date

when all shares of Common Stock reserved for issuance under the Plan shall have

been acquired through exercise of Replacement Options granted under the Plan.

 

5.       The Stock. 

The aggregate number of shares of Common Stock issuable under the Plan

shall be (a) 3,482,000 shares or (b) the number and kinds of shares of capital

stock or other securities substituted therefor as provided in Section 8

(collectively, “Stock”).  The Stock may

be set aside out of the authorized but unissued shares of Common Stock not

reserved for any other purpose or out of shares of Common Stock held in or acquired

for the treasury of the Company.  Shares

of Stock subject to a Replacement Option that terminates unexercised for any

reason may not thereafter be subjected to a new Replacement Option.

 

6.       Replacement Option Agreement.  Each Holder shall enter into a written

agreement with the Company setting forth the terms and conditions of the

Replacement Option issued to the Holder, consistent with the Plan.  The form of agreement to evidence

Replacement Options is annexed hereto as Annex A.

 

7.       Issuance and Terms of Replacement Options.  (a)  Issuance at Closing.  Replacement Options shall be issued at the

Closing to the Holders in the amounts set forth below, exercisable throughout

the Exercise Period at the Exercise Prices indicated below.

 

Issuance of Replacement Options

 

	

   

  	

   

  	

  Old Options

  	

   

  	

  Replacement Options

  	

   

  
	

   

  	

   

  	

  Number

  	

   

  	

   

  	

   

  	

  Number

  	

   

  	

   

  	

   

  
	

  Name of

  	

   

  	

  of Shares

  	

   

  	

  Exercise

  	

   

  	

  of Shares

  	

   

  	

  Exercise

  	

   

  
	

  Holder

  	

   

  	

  Covered

  	

   

  	

  Price

  	

   

  	

  Covered

  	

   

  	

  Price

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Richard Siskind

  	

   

  	

  900,000

  	

   

  	

  $

  	

  .7500

  	

   

  	

  900,000

  	

   

  	

  $

  	

  .5000

  	

   

  
	

   

  	

   

  	

  400,000

  	

   

  	

  .8125

  	

   

  	

  400,000

  	

   

  	

  .5000

  	

   

  
	

   

  	

   

  	

  500,000

  	

  (1)

  	

  1.5000

  	

   

  	

  500,000

  	

   

  	

  .5000

  	

   

  
	

   

  	

   

  	

  500,000

  	

  (1)

  	

  1.0000

  	

   

  	

  500,000

  	

   

  	

  .5000

  	

   

  
	

   

  	

   

  	

  476,000

  	

  (1)

  	

  .5000

  	

   

  	

  476,000

  	

   

  	

  .5000

  	

   

  
	

  Beverly Roseman

  	

   

  	

  75,000

  	

   

  	

  .8125

  	

   

  	

  75,000

  	

   

  	

  .5000

  	

   

  
	

   

  	

   

  	

  150,000

  	

   

  	

  .6250

  	

   

  	

  150,000

  	

   

  	

  .5000

  	

   

  
	

  Jon Siskind

  	

   

  	

  75,000

  	

   

  	

  .8125

  	

   

  	

  75,000

  	

   

  	

  .5000

  	

   

  
	

   

  	

   

  	

  150,000

  	

   

  	

  .6250

  	

   

  	

  150,000

  	

   

  	

  .5000

  	

   

  
	

  Neil Siskind

  	

   

  	

  15,000

  	

   

  	

  .4376

  	

   

  	

  15,000

  	

   

  	

  .4375

  	

   

  
	

   

  	

   

  	

  100,000

  	

   

  	

  .3000

  	

   

  	

  100,000

  	

   

  	

  .3000

  	

   

  
	

  Alan Kanis

  	

   

  	

  15,000

  	

   

  	

  .4375

  	

   

  	

  15,000

  	

   

  	

  .4375

  	

   

  
	

   

  	

   

  	

  15,000

  	

   

  	

  .3000

  	

   

  	

  15,000

  	

   

  	

  .3000

  	

   

  
	

  Ivan Burg

  	

   

  	

  4,000

  	

   

  	

  .8125

  	

   

  	

  4,000

  	

   

  	

  .5000

  	

   

  
	

  Jeffrey Greenblatt

  	

   

  	

  4,000

  	

   

  	

  .8125

  	

   

  	

  4,000

  	

   

  	

  .5000

  	

   

  
	

  Stacey Kasin

  	

   

  	

  4,000

  	

   

  	

  .8125

  	

   

  	

  4,000

  	

   

  	

  .5000

  	

   

  
												

(1)   Represents Mirror Options,

which are exercisable only to the extent of any exercise of the corresponding

Founders Options.

 

(b)   Payment for Stock.  The Exercise Price of an Replacement Option

shall be paid in full at the time of exercise (i) in cash by check, (ii) with

securities of the Company already owned by, and in the possession of, the

Holder or (iii) any combination of cash and securities of the Company.  Securities of the Company used to satisfy

the exercise price of an Replacement Option shall be valued at their fair

market value determined in accordance with the rules set forth in Section

7(b).  The Exercise Price shall not be

subject to adjustment, except as provided in Section 8.

 

(c)   Transferability of Replacement

Option.  No Replacement

Option shall be transferable except by will or the laws of descent and

distribution.  A Replacement Option

shall be exercisable during the Holder’s lifetime only by the Holder.

 

(d)   Modification of Replacement Options.  Subject to the terms and conditions and

within the limitations of the Plan, the Committee may modify, extend or renew

outstanding Replacement Options granted under the Plan, or accept the surrender

of outstanding Replacement Options (to the extent not theretofore exercised)

and authorize the granting of new Replacement Options in substitution

therefor.  Notwithstanding the

foregoing, however, no modification of an Replacement Option shall, without the

consent of the Holder, alter or impair any rights or obligations under any

Replacement Option theretofore granted under the Plan.

 

8.     Adjustment for Changes in the Stock.  In the event the shares of Stock, as presently constituted, shall

be changed into or exchanged for a different number or kind of shares of

capital stock or other securities of the Company or of another Company (whether

by reason of merger, consolidation, recapitalization, reclassification, split,

reverse split, combination of shares or otherwise), then there shall be

substituted for or added to each share of Stock theretofore or thereafter

subject to an Replacement Option the number and kind of shares of capital stock

or other securities into which each outstanding share of Stock shall be so

changed, or for which each such share shall be exchanged, or to which each such

share shall be entitled, as the case may be. 

The price and other terms of outstanding Replacement Options shall also

be appropriately amended to reflect the foregoing events.  In the event there shall be any other change

in the number or kind of outstanding shares of the Stock, or of any capital

stock or other securities into which the Stock shall have been changed or for

which it shall have been exchanged, if the Committee shall, in its sole

discretion, determine that the change equitably requires an adjustment in any

Replacement Option theretofore granted or which may be granted under the Plan,

then adjustments shall be made in accordance with its determination.  In addition, the Committee shall have the

power, in the event of the disposition of all or substantially all of the

assets of the Company, or the dissolution of the Company, or the merger or

consolidation of the Company with or into any other Company, or the merger or

consolidation of any other Company into the Company, or the making of a tender

offer to purchase all or a substantial portion of outstanding Stock of the

Company, to amend all outstanding Replacement Options (upon such conditions as

it shall deem appropriate) to (a) permit the exercise of Replacement Options

prior to the effective date of the transaction and to terminate all unexercised

Replacement Options as of that date or (b) require the forfeiture of all

Replacement Options, provided the Company pays to each Holder the excess of the

fair market value of the Stock subject to the Replacement Option over its

Exercise Price.

 

9.     Amendment of the Plan. 

The Committee may not amend the Plan in any way that could impair the

rights of any Hold under an outstanding Replacement Option.

 

10.   Application of Funds. 

The proceeds received by the Company from the sale of Stock pursuant to

this Plan shall be used for general corporate purposes.

 

11.   No Obligation to Exercise Replacement Option.  The granting of a Replacement Option shall

impose no obligation upon the Holder to exercise the Replacement Option.

 

12.   Expenses of the Plan. 

All of the expenses of administering the Plan shall be paid by the

Company.

 

13.   Governing Law.  Except

to the extent preempted by federal law, this Plan shall be construed and

enforced in accordance with, and governed by, the laws of the State of New

York.

 

Adopted as of August 23, 2001

 

ANNEX A

 

STAGE II APPAREL CORP.

 

Form of Replacement Option

Agreement

 

 

 

This Option Agreement is entered into as of _____________ 2001 between Stage II Apparel Corp., a New York

corporation (the “Company”), and _______________

(the “Holder”).

 

In exchange for an outstanding stock option issued by the Company to

the Holder for the purchase of certain shares of common stock, $.01 par value,

of the Company (the “Common Stock”), the Company has issued the Holder a new

option under its 2001 Replacement Option Plan (the “Plan”) on the following

terms and conditions.

 

1.     Grant of Option.  By Company hereby grants to the Holder the

right and option (the “Option”) to purchase the aggregate number of shares of

Common Stock listed on the signature page hereto (the “Shares”) at an exercise

price of $.50 per share (the “Exercise Price”).

 

2.     Exercise Period.  The Option shall expire on the third

anniversary of the date hereof (the “Exercise 

Period”).

 

3.     Exercise of Option.  During the Exercise Period, the Holder may

exercise the Option to purchase all or any portion of the Shares by delivering

to the Company’s offices a written notice (an “Exercise Notice”) signed by the

Holder stating the number of Shares that the Holder has elected to purchase and

accompanied by payment (in the form prescribed by Section 4 hereof) of an

amount equal to the full Exercise Price for the Shares to be purchased.  The Exercise Notice must also contain a

statement (in a form acceptable to the Company) that the Holder is acquiring

the Shares for investment.  Following

receipt of the foregoing by the Company, it shall instruct its stock transfer

agent to issue, as soon as practicable, a certificate representing the Shares

so purchased in the name of the Holder and to deliver the certificate to the

Holder, free of any restrictive legend.

 

4.     Payment Upon Exercise.  The Exercise Price for Shares purchased under

the Option shall be payable either (a) by personal check or official bank

check, (b) with shares of Common Stock already owned by, and in the possession

of, the Holder or (c) any combination of the forms of payment referred to in

clauses (a) and (b) above.  Any shares

of Common Stock used to satisfy the Exercise Price of Shares purchased under

the Option shall be valued at their fair market value on the date of the

Exercise Notice. If the Holder elects to pay any portion of the Exercise Price

for Shares in accordance with clause (b) above, the Exercise Notice shall state

the number of shares of Common Stock to be applied toward the Exercise Price

and shall be accompanied by the certificate(s) representing those shares of the

Common Stock, together with stock powers therefor duly executed by the Holder.

 

5.     Non-Transferability of Option.  The Option shall not be transferable other

than by will or by the laws of descent and distribution and may be exercised

only by the Holder.

 

6.     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 Option Agreement,

including the Plan incorporated by reference herein, is the entire agreement

among the parties hereto with respect to the subject matter and supersedes all

prior agreements and understandings.

 

7.     Adjustments Upon Changes in Common

Stock.  The number of

Shares covered by the Option and the exercise price of each Share shall be

adjusted as provided in the Plan if the shares of Common Stock, as presently

constituted, are changed into or exchanged for a different number or kind of

shares of stock or other securities of the Company or of another corporation.

 

8.     Notices.  Any notice to be given by the Holder hereunder

shall be sent to the Company at its principal offices, and any notice from the

Company to the Holder shall be sent to the Holder at the address provided to

the Company.  All notices shall be in

writing and shall be delivered in person or by registered or certified

mail.  Either party may change the

address to which notices are to be sent by notice in writing given to the other

in accordance with the terms hereof.

 

9.     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:

  	

   

  
	

   

  	

   

  	

  Name:

  
	

   

  	

   

  	

  Title:

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  Employee:

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  Print Name:

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  Number of Shares:

  	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  Exercise Price (if lower

  than $.50):

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