HAMPSHIRE GROUP LTD
EXHIBIT 10-5
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>3
<FILENAME>exhbit105.txt
<DESCRIPTION>EXHIBIT 10-5
<TEXT>
                                                                    Exhibit 10.5
                            HAMPSHIRE GROUP, LIMITED
                             1992 STOCK OPTION PLAN
                  (Amended and Restated as of February 8, 2000)


                                   ARTICLE I.

                                     PURPOSE

     This 1992 Stock Option Plan, as amended and restated  effective February 8,
2000 (the  "Plan") is intended as an incentive  to improve the  performance  and
encourage the continued  employment  of eligible  employees of Hampshire  Group,
Limited (the "Company")  participating in the Plan, by means of increasing their
proprietary  interest in the Company's long-term success through stock ownership
and by affording them the opportunity for additional compensation related to the
value of the Company's stock.

     The word  "Company",  when used in the Plan with  reference to  employment,
shall include subsidiaries of the Company.  The word "subsidiary",  when used in
the Plan, shall mean any subsidiary of the Company within the meaning of Section
424(f) of the Internal  Revenue Code of 1986,  as it may be amended from time to
time (the "Code").

     It is intended that certain  options granted under the Plan will qualify as
"incentive stock options" under Section 422 of the Code.

                                  ARTICLE II.

                                 ADMINISTRATION

     The  Plan  shall  be  administered   by  a  Stock  Option   Committee  (the
"Committee")  appointed by the Board of  Directors of the Company (the  "Board")
from among its  members and shall  consist of not less than two members  thereof
who are  (and  shall  remain  Committee  members  only  so long as they  remain)
"non-employee  directors" as defined in Rule 16b-3 under the Securities Exchange
Act of 1934 (the  "Exchange  Act").  Subject to the  provisions of the Plan, the
Committee  shall  have  sole  authority,  in  its  absolute  discretion:  (a) to
determine  which of the eligible  employees of the Company and its  subsidiaries
shall be granted options;  (b) to authorize the granting of both incentive stock
options and non-qualified stock options; (c) to determine the times when options
shall be  granted  and the number of shares to be  subject  to  options;  (d) to
determine  the option price of the shares  subject to each  option,  which price
shall be not less than the minimum  specified in ARTICLE V; (e) to determine the
time or times when each option becomes exercisable, the duration of the exercise
period and any other  restrictions on the exercise of options issued  hereunder;
(f) to  prescribe  the form or forms of the  option  agreements  under  the Plan
(which  forms  shall be  consistent  with the  terms of the Plan but need not be
identical and may contain such terms as the Committee  may deem  appropriate  to
carry out the purposes of the Plan); (g) to adopt,  amend and rescind such rules
and regulations as, in its opinion,  may be advisable in the  administration  of
the Plan; and (h) to construe and interpret the Plan, the rules and  regulations
and the option  agreements  under the Plan and to make all other  determinations
<PAGE>
deemed necessary or advisable for the administration of the Plan. All decisions,
determinations  and  interpretations of the Committee shall be final and binding
on all optionees.

                                  ARTICLE III.

                                      STOCK

     The stock to be subject to options  granted  under the Plan shall be shares
of  authorized  but unissued  Common Stock of the Company or  previously  issued
shares of Common Stock  reacquired  by the Company and held in its treasury (the
"Stock").  Under the  Plan,  the  total  number of shares of Stock  which may be
purchased  pursuant  to  options  granted  hereunder  shall not  exceed,  in the
aggregate,  1,250,000 shares,  except as such number of shares shall be adjusted
in accordance with the provisions of ARTICLE X hereof.  Under the Plan,  Options
for no more  than  50,000  shares  of Stock  may be  granted  to any  individual
employee  during any  calendar  year that the Plan is in effect,  except as such
number shall be adjusted in accordance with the provisions of ARTICLE X hereof.

     The number of shares of Stock available for grant of options under the Plan
shall be  decreased  by the sum of the  number of shares  with  respect to which
options  have been  issued  and are then  outstanding  and the  number of shares
issued upon exercise of options.  In the event that any outstanding option under
the Plan for any reason expires, is terminated,  or is canceled prior to the end
of the period  during which  options may be granted,  the shares of Stock called
for by the unexercised  portion of such option may again be subject to an option
under the Plan.

                                  ARTICLE IV.

                           ELIGIBILITY OF PARTICIPANTS

     Subject to ARTICLE VII,  officers and other key employees of the Company or
of its  subsidiaries  (excluding  any person  who is a member of the  Committee)
shall be eligible to participate in the Plan.

                                   ARTICLE V.

                                  OPTION PRICE

     Subject to ARTICLE VII, the option price of each option  granted  under the
Plan shall be determined by the Committee;  provided,  however, that in the case
of each incentive stock option granted under the Plan, the option price shall be
not less  than the fair  market  value of the Stock at the time the  option  was
granted.  In no event shall the option  price of any option be less than the par
value per share of Stock on the date an option is granted.

     If the  Company's  Common  Stock is quoted on the National  Association  of
Securities  Dealers Automated  Quotation System ("NASDAQ") the fair market value
shall be deemed to be the mean  between the last quoted bid and asked  prices on
NASDAQ  on the  date  immediately  preceding  the date on which  the  option  is
granted,  or if not quoted on that day, then on the last preceding date on which
such stock is quoted.  If the  Company's  Common  Stock is listed on one or more
national securities  exchanges,  the fair market value shall be deemed to be the
mean  between  the highest  and lowest  sale  prices  reported on the  principal
national  securities  exchange  on which  such stock is listed and traded on the

                                      -2-
<PAGE>
date immediately preceding the date on which the option is granted, or, if there
is no such sale on that date,  then on the last  preceding  date on which such a
sale was  reported.  If the  Company's  Common  Stock is not quoted on NASDAQ or
listed on an exchange, or representative quotes are not otherwise available, the
fair market value of the Stock shall mean the amount determined by the Committee
to be the fair market  value based upon a good faith  attempt to value the Stock
accurately  and  computed  in  accordance  with  applicable  regulations  of the
Internal Revenue Service.

                                  ARTICLE VI.

                          EXERCISE AND TERMS OF OPTIONS

     The  Committee  shall  determine  the  dates  after  which  options  may be
exercised,  in whole or in part. If an option is  exercisable  in  installments,
installments  or portions  thereof which are exercisable and not exercised shall
remain exercisable.

     Any other provision of the Plan notwithstanding and subject to ARTICLE VII,
(i) no option  which is not an incentive  stock option shall be exercised  after
the date ten years and one month from the date of grant of such  option,  and no
option  which is an incentive  stock  option  shall be exercised  after the date
which is ten  years  from the date of grant  of such  option  (in each  case,  a
"Termination  Date"),  and (ii) in the event the  Company  files a  registration
statement  under  the  Securities  Act of 1933  (the  "Securities  Act") for the
initial public  offering of its equity  securities,  no option granted under the
Plan shall be  exercisable  during the  180-day  period (or such  longer  period
required  by the  underwriter  of  such  initial  public  offering)  immediately
following the effective date of such registration statement.

     Stock options granted  hereunder to employees may provide that if, prior to
the Termination Date, an optionee shall cease to be employed by the Company or a
subsidiary  thereof  (otherwise than by reason of death or disability within the
meaning of Section 22(e)(3) of the Code), the option will remain exercisable for
a period not  extending  beyond  three  months  after the date of  cessation  of
employment  to the  extent  it was  exercisable  at the  time  of  cessation  of
employment.  If, prior to the  Termination  Date, an optionee  shall cease to be
employed  by the  Company or any  subsidiary  thereof by reason of a  disability
within the meaning of Section  22(e)(3) of the Code,  options granted  hereunder
may provide that they will remain  exercisable for a period not extending beyond
one year after the date of cessation of employment to the extent  exercisable at
the time of cessation of employment.  In no event,  however,  shall an option be
exercisable after the Termination Date. In the event of the death of an optionee
prior to the  Termination  Date while  employed by the  Company or a  subsidiary
thereof or while  entitled to exercise an option  pursuant to the  preceding two
sentences,   options  granted  hereunder  may  provide  that  they  will  remain
exercisable  at any time prior to the  Termination  Date,  but in no event later
than one year  from the date of death,  by the  person  or  persons  to whom the
optionee's  rights under the option would pass by will or the applicable laws of
descent  and  distribution  to the extent  that the  optionee  was  entitled  to
exercise it on the date of death.  Notwithstanding  the foregoing  provisions of
this  paragraph,  stock options  granted  hereunder shall provide that no option
shall be exercisable after the optionee's cessation of employment, unless at the

                                      -3-
<PAGE>
time of exercise the Certificate of  Incorporation or the By-laws of the Company
do not limit  ownership  of Common  Stock of the  Company to  selected  persons,
including employees of the Company.

                                  ARTICLE VII.

          SPECIAL PROVISIONS APPLICABLE TO INCENTIVE STOCK OPTIONS ONLY

     Notwithstanding  anything  contained  in the Plan to the  contrary,  to the
extent the  aggregate  fair market value  (determined  at the time the option is
granted)  of the Stock with  respect to which  incentive  stock  options  may be
exercisable  for the first time by an optionee  during any calendar  year (under
this Plan and any other  stock  option  plan of the  Company  and any  parent or
subsidiary  thereof)  exceeds  $100,000,  such  options  shall not be treated as
incentive  stock  options.  No  incentive  stock  option  may be  granted  to an
individual who, at the time the option is granted,  owns directly, or indirectly
within  the  meaning  of  Sections  422(b)(6)  and  424(d)  of the  Code,  stock
possessing  more than 10  percent  of the  total  combined  voting  power of all
classes of stock of the Company or of any parent or subsidiary  thereof,  unless
such  option (i) has an option  price of at least 110 percent of the fair market
value of the Stock on the date of the grant of such option; and (ii) such option
cannot be exercised more than five years after the date it is granted.

     If Stock acquired by an employee through the exercise of an incentive stock
option granted under the Plan is disposed of within two years following the date
of grant or one year following the  acquisition of such Stock by the employee (a
"disqualifying disposition"),  the holder of such Stock shall, immediately prior
to such disqualifying disposition, notify the Company in writing of the date and
terms of such  disposition  and provide  such other  information  regarding  the
disposition as the Company may reasonably require.

                                 ARTICLE VIII.

                               PAYMENT FOR SHARES

     Payment  for  shares  of  Stock  acquired  pursuant  to an  option  granted
hereunder  shall be made in full,  upon exercise of the option,  by certified or
bank  cashier's  check payable to the order of the Company,  by the surrender to
the Company of shares of its Common  Stock or by any  combination  thereof.  The
form of payment  shall be at the  election of the  optionee.  The Company in its
discretion,  and subject to any reasonable procedures required by its registrars
and  transfer  agents,  may credit or apply  shares of Common  Stock held by the
optionee and identified to the Company  toward payment of the applicable  option
exercise price without actual  surrender of the  certificate  representing  such
shares  and may cause to be  issued  to the  optionee  certificates  for  shares
representing the balance of the shares to be issued upon exercise of the option.
The Company may, in its discretion, require that an optionee pay to the Company,
at the time of exercise,  such amount as the Company deems  necessary to satisfy
its  obligation  to  withhold  Federal,  state,  or local  income or other taxes
incurred by reason of the exercise or the transfer of shares thereupon.

                                      -4-
<PAGE>
                                  ARTICLE IX.

                        RESTRICTIONS ON OPTIONS AND STOCK
                            ACQUIRED THROUGH OPTIONS

     No option shall be transferable,  except by will or the laws of descent and
distribution.  During  the  lifetime  of  the  optionee,  the  option  shall  be
exercisable only by the optionee.

     No options shall be granted under the Plan, and no shares of Stock shall be
issued and delivered upon the exercise of options granted under the Plan, unless
and  until  any  applicable  Federal  or  state  registration,   listing  and/or
qualification  requirements  and  any  other  requirements  of  law  or  of  any
regulatory agencies having jurisdiction shall have been fully complied with.

     No share of Stock acquired by an employee through the exercise of an option
granted  under the Plan may be sold or  transferred  (other  than by will or the
laws of descent and  distribution)  by the employee  prior to an initial  public
offering of Stock by the Company.

     The Committee in its discretion  may, as a condition to the exercise of any
option  granted  under the Plan,  require an employee to whom  options have been
granted  under the Plan (i) to  represent  in  writing  that the shares of Stock
received upon exercise of an option are being  acquired for  investment  and not
with a view to  distribution  and (ii) to make such  other  representations  and
warranties as are deemed necessary by counsel to the Company Stock  certificates
representing  unregistered shares of Stock acquired upon the exercise of options
shall bear the following legend:

     "THE SHARES  REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE  SECURITIES  ACT OF 1933,  AS  AMENDED.  THE SHARES HAVE BEEN  ACQUIRED  FOR
INVESTMENT  AND MAY NOT BE PLEDGED,  HYPOTHECATED,  SOLD OR  TRANSFERRED  IN THE
ABSENCE  OF AN  EFFECTIVE  REGISTRATION  STATEMENT  FOR  THE  SHARES  UNDER  THE
SECURITIES ACT OF 1933, AS AMENDED, OR AN OPINION OF COUNSEL TO THE COMPANY THAT
REGISTRATION  IS NOT REQUIRED.  ADDITIONALLY,  PURSUANT TO THE PROVISIONS OF THE
HAMPSHIRE  GROUP,  LTD. 1992 STOCK OPTION PLAN,  THE SHARES  REPRESENTED BY THIS
CERTIFICATE  MAY NOT BE SOLD OR TRANSFERRED  PRIOR TO AN INITIAL PUBLIC OFFERING
OF THE COMMON STOCK OF HAMPSHIRE GROUP, LTD."

                                   ARTICLE X.

                  ADJUSTMENT FOR RECAPITALIZATION, MERGER, ETC.

     The aggregate  number of shares of Stock which may be purchased or acquired
pursuant to options granted hereunder, the maximum number of shares of Stock for
which  options may be granted to any  individual  employee  during any  calendar
year, the number of shares of Stock covered by each  outstanding  option and the
price per share thereof in each such option shall be appropriately  adjusted for
any increase or decrease in the number of outstanding  shares of Stock resulting
from a stock split or other  subdivision or  consolidation of shares of Stock or

                                      -5-
<PAGE>
for other capital adjustments or payments of stock dividends or distributions or
other increases or decreases in the outstanding shares of Stock effected without
receipt of  consideration  by the Company.  Any adjustment shall be conclusively
determined by the Committee.

     If the  Company  shall  be the  surviving  corporation  in  any  merger  or
reorganization or other business combination, any option granted hereunder shall
cover the securities or other property to which a holder of the number of shares
of Stock  covered  by the  unexercised  portion  of the  option  would have been
entitled pursuant to the terms of the merger.  Upon any merger or reorganization
or other  business  combination  in which the Company shall not be the surviving
corporation, or a dissolution or liquidation of the Company, or a sale of all or
substantially all of its assets, the Company shall pay to each optionee in cash,
in exchange  for the  cancellation  of any  outstanding  options of the optionee
hereunder,  an amount equal to the difference  between the fair market value (on
the date of the applicable  corporate  transaction)  of the Stock subject to the
unexercised  portion of the option and the exercise price of such portion of the
option.  Notwithstanding  the  foregoing,  in the event of such  merger or other
business  combination  or a sale of all or  substantially  all of the  Company's
assets,  the  surviving  or  resulting  corporation,  as the case may be, or any
parent or acquiring corporation thereof may grant substitute options to purchase
its  shares on such  terms and  conditions,  both as to the number of shares and
otherwise, which shall substantially preserve, in the good faith judgment of the
Committee, the rights and benefits of any option then outstanding hereunder.

     Stock option  agreements  under the Plan may provide that upon  stockholder
approval of a merger,  reorganization or other business combination,  whether or
not the Company is the surviving corporation, or a dissolution or liquidation of
the Company or a sale of all or substantially  all of its assets,  all unmatured
installments of the stock option shall vest and become  immediately  exercisable
in full.

     The foregoing  adjustments  and the manner of  application of the foregoing
provisions including the issuance of any substitute options, shall be determined
by the Committee in its sole discretion. Any such adjustment may provide for the
elimination of any fractional  share which might otherwise  become subject to an
option.

                                  ARTICLE XI.

                        NO OBLIGATION TO EXERCISE OPTION

     Granting  of an option  shall  impose no  obligation  on the  recipient  to
exercise such option.

                                  ARTICLE XII.

                                 USE OF PROCEEDS

     The proceeds received front the sale of Stock pursuant to the Plan shall be
used for general corporate purposes.

                                      -6-
<PAGE>
                                 ARTICLE XIII.

                             RIGHTS AS A STOCKHOLDER

     An  optionee  or a  transferee  of an  option  shall  have no  rights  as a
stockholder  with  respect to any share  covered by his option until such person
shall have become the holder of record of such share,  and such person shall not
be entitled to any dividends or distributions or other rights in respect of such
share for which the record date is prior to the date on which such person  shall
have  become the  holder of record  thereof,  except as  otherwise  provided  in
ARTICLE X.

                                  ARTICLE XIV.

                                EMPLOYMENT RIGHTS

     Nothing in the Plan or in any option granted  hereunder shall confer on any
optionee  any  right to  continue  in the  employ of the  Company  or any of its
subsidiaries, or to interfere in any way with the right of the Company or any of
its subsidiaries to terminate the optionee's employment at any time.

                                  ARTICLE XV.

                             COMPLIANCE WITH THE LAW

     The  Company  is  relieved  from  any  liability  for the  non-issuance  or
non-transfer  or any delay in the  issuance  or  transfer of any shares of Stock
subject  to options  under the Plan  which  results  from the  inability  of the
Company to obtain,  or any delay in obtaining,  from any regulatory  body having
jurisdiction  all  requisite  authority  to issue or transfer any such shares if
counsel for the Company deems such  authority  necessary for lawful  issuance or
transfer thereof.  Appropriate  legends in addition to that described in ARTICLE
IX may be  placed  on the  stock  certificates  evidencing  shares  issued  upon
exercise of options to reflect any transfer restrictions.

                                  ARTICLE XVI.

                             CANCELLATION OF OPTIONS

     The Committee,  in its  discretion,  may, with the consent of any optionee,
cancel any outstanding option hereunder.

                                 ARTICLE XVII.

                     EFFECTIVE DATE; EXPIRATION DATE OF PLAN

     The Plan shall become  effective  upon adoption by the  Company's  Board of
Directors  and  approval by the  stockholders  of the Company in a manner  which
complies  with both Rule 16b-3 under the Exchange  Act and Section  422(b)(1) of
the Code and the Treasury  Regulations  thereunder.  The expiration  date of the
Plan,  after  which no  option  may be  granted  hereunder,  shall be the  tenth
anniversary  of the later of (i)  adoption of the Plan by the Board of Directors
or (ii) the approval of the Plan by the  stockholders of the Company pursuant to
the previous sentence.

                                      -7-
<PAGE>
                                 ARTICLE XVIII.

                       AMENDMENT OR DISCONTINUANCE OF PLAN

     The Board may,  without the consent of the optionees under the Plan, at any
time  terminate  the Plan in its  entirety  and at any time or from time to time
amend or modify the Plan,  provided that no such action shall  adversely  affect
options   theretofore   granted  hereunder   without  the  optionee's   consent.
Notwithstanding  the above, the approval of the stockholders of the Company will
be required for any amendment which (i) materially  changes the  requirements as
to eligibility for participation in the Plan, as specified in ARTICLE IV or (ii)
materially increases (unless pursuant to ARTICLE X) the maximum number of shares
subject to Options granted under the Plan, as specified in ARTICLE III.

                                  ARTICLE XIX.

                                CHANGE IN CONTROL

     In the event of a Change  in  Control,  all  outstanding  unvested  options
granted under the Plan shall immediately become fully vested and exercisable.

     For the purpose of this Article XIX, a "Change in Control"  shall be deemed
to have taken place if and when:

(a)  individuals  who, on October 1, 1999,  constitute the Board (the "Incumbent
     Directors")  cease for any reason to  constitute at least a majority of the
     Board,  provided that any person becoming a director subsequent to the date
     hereof, whose election or nomination for election was approved by a vote of
     at leasttwo-thirds of the Incumbent  Directors then on the Board (either by
     a specific  vote or by  approval of the proxy  statement  of the Company in
     which  such  person is named as a nominee  for  director,  without  written
     objection to such  nomination)  shall be an Incumbent  Director;  provided,
     however, that no individual initially elected or nominated as a director of
     the Company as a result of an actual or  threatened  election  contest with
     respect  to  directors  or as a result  of any other  actual or  threatened
     solicitation  of proxies or  consents  by or on behalf of any person  other
     than the Board shall be deemed to be an Incumbent Director;

(b)  any "Person" (as such term is defined in Section  3(a)(9) of the Securities
     Exchange Act of 1934 (the "Exchange Act") and as used in Sections  13(d)(3)
     and 14(d)(2) of the Exchange  Act) is or becomes a  "beneficial  owner" (as
     defined in Rule 13d-3 under the Exchange Act),  directly or indirectly,  of
     securities of the Company  representing  50% or more of the combined voting
     power of the Company's then outstanding securities eligible to vote for the
     election of the Board (the "Voting  Securities");  provided,  however, that
     the  event  described  in this  paragraph  (b)  shall not be deemed to be a
     Change in Control by virtue of any of the  following  acquisitions:  (i) by
     the Company or any subsidiary of the Company in which the Company owns more

                                      -8-
<PAGE>
     than 50% of the combined voting power of such entity (a "Subsidiary"), (ii)
     by any employee  benefit plan (or related trust) sponsored or maintained by
     the Company or any Subsidiary, (iii) by any underwriter temporarily holding
     the  Company's  Voting  Securities  pursuant  to an offering of such Voting
     Securities or (iv) pursuant to a Non-Qualifying  Transaction (as defined in
     paragraph (c));

(c)  the  consummation of a merger,  consolidation,  statutory share exchange or
     similar  form  of  corporate  transaction  involving  the  Company  or  any
     Subsidiary  that  requires  the  approval  of the  Company's  stockholders,
     whether  for  such  transaction  or  the  issuance  of  securities  in  the
     transaction (a "Business  Combination"),  unless immediately following such
     Business  Combination:  (i) more than 50% of the total  voting power of (A)
     the corporation  resulting from such Business  Combination  (the "Surviving
     Corporation"),  or (B) if applicable,  the ultimate parent corporation that
     directly  or  indirectly  has  beneficial  ownership  of 100% of the voting
     securities  eligible to elect directors of the Surviving  Corporation  (the
     "Parent  Corporation"),  is represented by the Company's Voting  Securities
     that were outstanding  immediately prior to such Business  Combination (or,
     if applicable,  is  represented  by shares into which the Company's  Voting
     Securities were converted pursuant to such Business Combination),  and such
     voting  power  among  the  holders  thereof  is in  substantially  the same
     proportion as the voting power of the Company's Voting Securities among the
     holders  thereof  immediately  prior to the Business  Combination,  (ii) no
     Person (other than any employee  benefit plan (or related trust)  sponsored
     or maintained by the Surviving  Corporation or the Parent Corporation),  is
     or becomes the beneficial owner, directly or indirectly,  of 30% or more of
     the total voting power of the  outstanding  voting  securities  eligible to
     elect  directors  of the  Parent  Corporation  (or,  if there is no  Parent
     Corporation,  the Surviving  Corporation)  and (iii) at least a majority of
     the members of the board of  directors  of the Parent  Corporation  (or, if
     there is no Parent Corporation,  the Surviving  Corporation)  following the
     consummation of the Business  Combination  were Incumbent  Directors at the
     time of the Board's  approval  of the  execution  of the initial  agreement
     providing for such Business  Combination  (any Business  Combination  which
     satisfies all of the criteria  specified in (i), (ii) and (iii) above shall
     be deemed to be a "Non-Qualifying Transaction");

(d)  a sale of all or substantially all of the Company's assets;

(e)  the  stockholders of the Company approve a plan of complete  liquidation or
     dissolution of the Company; or

(f)  such other events as the Board may designate.

     Notwithstanding the foregoing, a Change in Control of the Company shall not
be deemed to occur solely because any person  acquires  beneficial  ownership of
more than 50% of the Company's Voting  Securities as a result of the acquisition
of the  Company's  Voting  Securities by the Company which reduces the number of
the  Company's  Voting  Securities  outstanding;  provided,  that if after  such

                                      -9-
<PAGE>
acquisition  by  the  Company  such  person  becomes  the  beneficial  owner  of
additional   Company  Voting   Securities   that  increases  the  percentage  of
outstanding  Company  Voting  Securities  beneficially  owned by such person,  a
Change in Control of the Company shall then occur.


















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</DOCUMENT>
