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JENNA LANE, INC.
1407 BROADWAY, SUITE 1801
NEW YORK, NY 10018
April 1, 1996
Lawrence Kaplan
150 Vanderbilt Motor Parkway, Suite 311
Hauppauge, NY 11788
Dear Larry:
On behalf of the Board of Directors of Jenna Lane, Inc. (the
"Corporation"), I am pleased that you have joined the Corporation's Board of
Directors. As an inducement for you to remain on the Board, the Corporation
hereby offers shares of Common Stock, par value $.01 per share, of the
Corporation to you, subject to the restrictions set forth below.
Upon your acceptance of the Board seat by your signature below, the
Corporation shall issue and deliver to you an aggregate of 30,000 shares (the
"Performance Shares") of Common Stock, par value $.01 per share, of the
Corporation (the "Common Stock"). The Performance Shares, upon issuance, shall
be validly issued and fully paid shares of Common Stock of the Corporation,
provided, however, that (i) two-thirds of the Performance Shares shall be
repurchased by the Corporation for the par value thereof in the event that the
Corporation does not achieve net income before taxes of at least $2.2 million
during the period of April 1, 1996 through March 31, 1997, and (ii) one-third of
the Performance Shares shall be repurchased by the Corporation for the par value
thereof in the event that the Corporation does not achieve net income before
taxes of at least $3 million during the period of April 1, 1997 through March
31, 1998. Net income before taxes, for purposes of the foregoing calculations,
will exclude any tax deduction obtained by the Corporation solely on account of
the issuance of the Performance Shares and all similar Performance Shares issued
to directors and members of management of the Company. This provision shall
survive your term on the Board of Directors. The certificates representing the
Performance Shares shall include appropriate legends restricting the
transferability thereof and reflecting the foregoing restrictions.
Please let me know if you have any questions or comments concerning the
foregoing. By signing below, you confirm your acceptance to the provisions
hereof.
With best regards.
Very truly yours,
Mitchell A. Dobies, President and Director
ACCEPTED AND AGREED AS OF THE
1ST DAY OF APRIL, 1996:
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Exhibit 10.5
JENNA LANE, INC.
1407 BROADWAY, SUITE 1801
NEW YORK, NY 10018
February 1, 1997
Lawrence Kaplan
150 Vanderbilt Motor Parkway, Suite 311
Hauppauge, NY 11788
Dear Larry:
This letter modifies the terms of that letter agreement (the "Letter"),
dated April 2, 1996, by and between you and Jenna Lane, Inc. (the "Company"), as
to which the parties agree that the agreements herein are for good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged. The
terms of your Performance Shares (as defined in the Letter), are hereby modified
to state as follows:
The Performance Shares, upon issuance, shall be validly issued
and fully paid shares of Common Stock of the Corporation, provided,
however, that (i) one-half of the Performance Shares ("One Half") shall
be repurchased by the Company for the par value thereof in the event
that the Company does not achieve net income before taxes ("Net
Income") of at least $2.0 million during the period of April 1, 1997
through March 31, 1998 ("1998 Fiscal Year"), provided that (x) only
one-half of such One Half shall be repurchased by the Company in the
event that the Company achieves Net Income for the 1998 Fiscal Year of
at least $1.5 million but less than $1.75 million and (y) only
one-quarter of such One Half shall be repurchased by the Company in the
event that the Company achieves Net Income for the 1998 Fiscal Year of
at least $1.75 million but less than $2.0 million, (ii) One Half shall
be repurchased by the Company for the par value thereof in the event
that the Company does not achieve Net Income of at least $2.5 million
during the period of April 1, 1998 through March 31, 1999 ("1999 Fiscal
Year"), provided that (z) only one-half of such One Half shall be
repurchased by the Company in the event that the Company achieves Net
Income for the 1999 Fiscal Year of at least $2 million but less than
$2.25 million and (zz) only one-quarter of such One Half shall be
repurchased by the Company in the event that the Company achieves Net
Income for the 1999 Fiscal Year of at least $2.25 million but less than
$2.5 million. Net income before taxes, for purposes of the foregoing
calculations, will exclude any tax deduction obtained by the Company
solely on account of the issuance of the Performance Shares and all
similar Performance Shares issued to directors and members of
management of the Company. This provision shall survive any termination
of this Agreement or of your service on the Board of Directors.
Please let me know if you have any questions or comments concerning the
foregoing. By signing below, you confirm your acceptance to the provisions
hereof.
With best regards.
Very truly yours,
/s/ Mitchell A. Dobies
Mitchell A. Dobies, President
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ACCEPTED AND AGREED AS OF THE
1st DAY OF FEBRUARY, 1997:
/s/ Lawrence Kaplan
LAWRENCE KAPLAN