NEW YORK – Blue Holdings will give Black Eyed Peas artist will.i.am more than a chance to reach his fashion destiny – it also will give him a substantial chunk of stock.
According to papers filed with the Securities and Exchange Commission on Thursday, Blue will compensate the former Fashion Institute of Design student, whose real name is William Adams, with 500,000 shares of its stock over the five-year period of the agreement. The first of these payments, consisting of 175,000 shares of stock, will be made within 30 days of the execution of the letter of intent between Blue and Adams, meaning on or before June 10.
Each of four subsequent payments of 81,250 shares of Blue stock would be made on the anniversary of the effective date of the agreement.
At Blue’s closing price of $1.66 on Thursday, the 500,000 shares would be worth about $830,000. However, at the stock’s 52-week high of $6.50, reached last May 22, they’d be worth $3.25 million.
The agreement calls for a co-branded denim and denim-related collection called i.am Antik to launch in August. It also includes a provision involving the design, development, marketing, manufacturing and distribution of apparel products under the I.Am trademark through a joint venture.
Adams also has a number of escape clauses in the agreement, including one if the joint venture fails to launch the I.Am collection within a year of the execution of the joint venture agreement. He can also terminate his deal if Blue is delisted by Nasdaq or if a court decides that Blue has failed to comply with SEC rules and regulations.
On Tuesday of this week, Blue announced the agreement with Adams as well as a drop in net income during the first quarter. Sales fell 29% to $8.4 million.
Blue’s brands include Antik Denim, Yanuk, Taverniti So Jeans and Faith. Last October, it terminated an agreement to acquire Long Rap, the owners of Up Against the Wall.