EXHIBIT 10.14
FORM OF NON-EMPLOYEE DIRECTOR
NON-QUALIFIED STOCK OPTION AGREEMENT
AGREEMENT made as of the 6th day of December 2004, by and between Movie
Star, Inc., a New York corporation (the "Company"), and __________________ (the
"Director").
WHEREAS, the Director is presently a director of the Company and the
Company is desirous of increasing the incentive of the Director to exert his
utmost efforts in improving the business of the Company;
WHEREAS, on December 6, 2004, pursuant to the terms and conditions of
the Company's 2000 Performance Equity Plan (the "Plan"), the Board of Directors
of the Company (the "Committee") authorized that each non-employee director be
granted an immediately exercisable option ("Option") to purchase 12,000 shares
of the authorized but unissued common stock of the Company, $.01 par value (the
"Common Stock"), conditioned upon the Director's acceptance thereof upon the
terms and conditions set forth in this Agreement and subject to the terms of the
Plan (capitalized terms used herein and not otherwise defined shall have the
meanings set forth in the Plan); and
WHEREAS, the Director desires to acquire the Option on the terms and
conditions set forth in this Agreement and subject to the terms of the Plan;
IT IS AGREED:
1. Grant of Stock Option. The Company hereby grants to the Director the
Option to purchase all or any part of an aggregate of 12,000 shares of Common
Stock (the "Option Shares") on the terms and conditions set forth herein and
subject to the provisions of the Plan.
2. Non-Qualified Stock Option. The Option represented hereby is not
intended to be an Option which qualifies as an "Incentive Stock Option" under
Section 422 of the Internal Revenue Code of 1986, as amended.
3. Exercise Price. The exercise price of the Option shall be $1.36 per
share, subject to adjustment as hereinafter provided.
4. Exercisability. Subject to the terms and conditions of the Plan,
this Option is exercisable immediately to the extent of all of the Option
Shares, and shall remain exercisable, except as otherwise provided herein, until
the close of business on December 5, 2014 (the "Exercise Period").
5. Effect of Termination of Directorship. If Director's status as a
Director of the Company terminates for any reason, the Option may thereafter be
exercised by the Director or by the legal representative of the estate or by the
legatee of the Director under the will of the Director until the expiration of
the Exercise Period.
6. Withholding Tax. Not later than the date as of which an amount first
becomes includible in the gross income of the Director for Federal income tax
purposes with respect to the Option, the Director shall pay to the Company, or
make arrangements satisfactory to the Committee regarding the payment of, any
Federal, state and local taxes of any kind required by law to be withheld or
paid with respect to such amount ("Withholding Tax"). The obligations of the
Company under the Plan and pursuant to this Agreement shall be conditional upon
such payment or arrangements with the Company and the Company shall, to the
extent permitted by law, have the right to deduct any Withholding Taxes from any
payment of any kind otherwise due to the Director from the Company.
7. Adjustments.
7.1 In the event of a stock split, stock dividend, combination of
shares, or any other similar change in the Common Stock of the Company as a
whole, the Board of Directors of the Company shall make equitable, proportionate
adjustments in the number and kind of shares covered by the Option and in the
option price hereunder.
7.2 In the event of any reclassification or reorganization of the
outstanding shares of Common Stock other than a change covered by Section 7.1 or
that solely affects the par value of such shares of Common Stock, or in the case
of any merger or consolidation of the Company with or into another corporation
(other than a consolidation or merger in which the Company is the continuing
corporation and that does not result in any reclassification or reorganization
of the outstanding shares of Common Stock), the Employee shall have the right
thereafter (until the expiration of the right of exercise of this Option) to
receive upon the exercise hereof after such event, for the same aggregate
Exercise Price payable hereunder immediately prior to such reclassification,
reorganization, merger or
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consolidation, the amount and kind of consideration receivable by a holder of
the number of shares of Common Stock of the Company obtainable upon exercise of
this Option immediately prior to such event. The provisions of this Section 7.2
shall similarly apply to successive reclassifications, reorganizations, mergers
or consolidations, sales or other transfers.
8. Method of Exercise.
8.1 Notice to the Company. The Option shall be exercised in whole or
in part by written notice in substantially the form attached hereto as Exhibit A
directed to the Company at its principal place of business accompanied by full
payment as hereinafter provided of the exercise price for the number of Option
Shares specified in the notice and of the Withholding Taxes, if any.
8.2 Delivery of Option Shares. The Company shall deliver a
certificate for the Option Shares to the Director as soon as practicable after
payment therefor.
8.3 Payment of Purchase Price. The Director shall make cash payments
by certified or bank check, in each case payable to the order of the Company;
the Company shall not be required to deliver certificates for Option Shares
until the Company has confirmed the receipt of good and available funds in
payment of the purchase price thereof and of the Withholding Taxes, if any.
9. Nonassignability. The Option shall not be assignable or transferable
except by will or by the laws of descent and distribution in the event of the
death of the Director. No transfer of the Option by the Director by will or by
the laws of descent and distribution shall be effective to bind the Company
unless the Company shall have been furnished with written notice thereof and a
copy of the will and such other evidence as the Company may deem necessary to
establish the validity of the transfer and the acceptance by the transferee or
transferees of the terms and conditions of the Option.
10. Company Representations. The Company hereby represents and warrants
to the Director that:
(i) the Company, by appropriate and all required action, is duly
authorized to enter into this Agreement and consummate all of the transactions
contemplated hereunder; and
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(ii) the Option Shares, when issued and delivered by the Company to
the Director in accordance with the terms and conditions hereof, will be duly
and validly issued and fully paid and non-assessable.
11. Director Representations. The Director hereby represents and
warrants to the Company that:
(i) he is acquiring the Option and shall acquire the Option Shares
for his own account and not with a view towards the distribution thereof;
(ii) he has received a copy of all reports and documents required to
be filed by the Company with the Commission pursuant to the Exchange Act within
the last 24 months and all reports issued by the Company to its stockholders;
(iii) he understands that he must bear the economic risk of the
investment in the Option Shares, which cannot be sold by him unless they are
registered under the Securities Act of 1933 (the "1933 Act") or an exemption
therefrom is available thereunder and that the Company is under no obligation to
register the Option Shares for sale under the 1933 Act;
(iv) in his position with the Company, he has had both the
opportunity to ask questions and receive answers from the officers and directors
of the Company and all persons acting on its behalf concerning the terms and
conditions of the offer made hereunder and to obtain any additional information
to the extent the Company possesses or may possess such information or can
acquire it without unreasonable effort or expense necessary to verify the
accuracy of the information obtained pursuant to clause (ii) above;
(v) he is aware that the Company shall place stop transfer orders
with its transfer agent against the transfer of the Option Shares in the absence
of registration under the 1933 Act or an exemption therefrom as provided herein;
and
(vi) in the absence of an effective registration statement under the
1933 Act, the certificates evidencing the Option Shares shall bear the following
legend:
"The shares represented by this certificate have been acquired
for investment and have not been registered under the Securities Act
of 1933. The shares may not be sold
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or transferred in the absence of such registration or an exemption
therefrom under said Act."
12. Restriction on Transfer of Option Shares. Anything in this
Agreement to the contrary notwithstanding, the Director hereby agrees that he
shall not sell, transfer by any means or otherwise dispose of the Option Shares
acquired by him without registration under the 1933 Act, or in the event that
they are not so registered, unless (i) an exemption from the 1933 Act
registration requirements is available thereunder, and (ii) the Director has
furnished the Company with notice of such proposed transfer and the Company's
legal counsel, in its reasonable opinion, shall deem such proposed transfer to
be so exempt.
13. Miscellaneous.
13.1 Notices. All notices, requests, deliveries, payments, demands
and other communications which are required or permitted to be given under this
Agreement shall be in writing and shall be either delivered personally or sent
by registered or certified mail, or by private courier, return receipt
requested, postage prepaid to the parties at their respective addresses set
forth herein, or to such other address as either shall have specified by notice
in writing to the other. Notice shall be deemed duly given hereunder when
delivered or mailed as provided herein.
13.2 Plan Paramount; Conflicts with Plan. This Agreement and the
Option shall, in all respects, be subject to the terms and conditions of the
Plan, whether or not stated herein. In the event of a conflict between the
provisions of the Plan and the provisions of this Agreement, the provisions of
the Plan shall in all respects be controlling.
13.3 Stockholder Rights. The Director shall not have any of the
rights of a stockholder with respect to the Option Shares until such shares have
been issued after the due exercise of the Option.
13.4 Waiver. The waiver by any party hereto of a breach of any
provision of this Agreement shall not operate or be construed as a waiver of any
other or subsequent breach.
13.5 Entire Agreement. This Agreement constitutes the entire
agreement between the parties with respect to the subject matter hereof. This
Agreement may not be amended except by writing executed by the Director and the
Company.
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13.6 Binding Effect; Successors. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and, to the extent not
prohibited herein, their respective heirs, successors, assigns and
representatives. Nothing in this Agreement, expressed or implied, is intended to
confer on any person other than the parties hereto and as provided above, their
respective heirs, successors, assigns and representatives any rights, remedies,
obligations or liabilities.
13.7 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York (without regard
to choice of law provisions).
13.8 Headings. The headings contained herein are for the sole
purpose of convenience of reference, and shall not in any way limit or affect
the meaning or interpretation of any of the terms or provisions of this
Agreement.
IN WITNESS WHEREOF, the parties hereto have signed this Agreement as of
the day and year first above written.
DIRECTOR: MOVIE STAR, INC.
By:
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Name: Xxxxxx Xxxxxx
President and Chief Executive Officer
Address:
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EXHIBIT A
FORM OF NOTICE OF EXERCISE OF OPTION
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DATE
Movie Star, Inc.
0000 Xxxxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: The Board of Directors
Re: Purchase of Option Shares
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Gentlemen:
In accordance with my Stock Option Agreement dated as of December 6,
2004 ("Agreement") with Movie Star, Inc. (the "Company"), I hereby irrevocably
elect to exercise the right to purchase _________ shares of the Company's common
stock, par value $.01 per share ("Common Stock"), which are being purchased for
investment and not for resale.
As payment for my shares, enclosed is a certified or bank check payable
to Movie Star, Inc. in the sum of $_____________.
I hereby represent, warrant to, and agree with, the Company that
(i) I acquired the Option and shall acquire the Option Shares for my
own account and not with a view towards the distribution thereof;
(ii) I have received a copy of all reports and documents required to
be filed by the Company with the Commission pursuant to the Exchange Act
within the last 24 months and all reports issued by the Company to its
stockholders;
(iii) I understand that I must bear the economic risk of the
investment in the Option Shares, which cannot be sold by me unless they are
registered under the Securities Act of 1933 (the "1933 Act") or an
exemption therefrom is available thereunder and that the Company is under
no obligation to register the Option Shares for sale under the 1933 Act;
(iv) in my position with the Company, I have had both the opportunity
to ask questions and receive answers from the officers and directors of the
Company and all persons acting on its behalf concerning the terms and
conditions of the offer made hereunder and to obtain any additional
information to the extent the Company possesses or may possess such
information or can acquire it without unreasonable effort or expense
necessary to verify the accuracy of the information obtained pursuant to
clause (ii) above;
(v) I am aware that the Company shall place stop transfer orders with
its transfer agent against the transfer of the Option Shares in the absence
of registration under the
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1933 Act or an exemption therefrom as provided herein;
(vi) my rights with respect to the Option Shares shall, in all
respects, be subject to the terms and conditions of this Company's 2000
Performance Equity Plan and this Agreement; and
(vii) in the absence of an effective registration statement under the
1933 Act, the certificates evidencing the Option Shares shall bear the
following legend:
"The shares represented by this certificate have been acquired for
investment and have not been registered under the Securities Act of
1933. The shares may not be sold or transferred in the absence of such
registration or an exemption therefrom under said Act."
Kindly forward to me my certificate at your earliest convenience.
Very truly yours,
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(Signature) (Address)
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(Print Name) (Address)
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(Social Security Number)
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