APPROVED BY BOARD OF DIRECTORS ON FEBRUARY 22, 2000
APPROVED BY STOCKHOLDERS ON NOVEMBER 28, 2000
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MOVIE STAR, INC.
2000 PERFORMANCE EQUITY PLAN
SECTION 1. PURPOSE; DEFINITIONS.
1.1 Purpose. The purpose of the Movie Star, Inc. 2000 Performance
Equity
Plan is to enable the Company to offer to its employees, officers,
directors and
consultants whose past, present and/or potential contributions to
the Company
and its Subsidiaries have been, are or will be important to the
success of the
Company, an opportunity to acquire a proprietary interest in the
Company. The
various types of long-term incentive awards that may be provided
under the Plan
will enable the Company to respond to changes in compensation
practices, tax
laws, accounting regulations and the size and diversity of its
businesses.
1.2 Definitions. For purposes of the Plan, the following terms
shall be
defined as set forth below:
(a) "Agreement" means the agreement between the Company and the
Holder
setting forth the terms and conditions of an award under the Plan
and any other
agreement between the Company and the Holder governing the terms
and conditions
of the Holder's employment by the Company.
(b) "Board" means the Board of Directors of the Company.
(c) "Code" means the Internal Revenue Code of 1986, as amended from
time to time.
(d) "Committee" means the Compensation Committee of the Board or
any
other committee of the Board that the Board may designate to
administer the Plan
or any portion thereof. If no Committee is so designated, then all
references in
this Plan to "Committee" shall mean the Board.
(e) "Common Stock" means the Common Stock of the Company, $0.01 par
value per share.
(f) "Company" means Movie Star, Inc., a corporation organized under
the laws of the State of New York.
(g) "Deferred Stock" means Common Stock to be received, under an
award
made pursuant to Section 8, below, at the end of a specified
deferral period.
(h) "Disability" means physical or mental impairment as determined
under procedures established by the Committee for purposes of the
Plan.
(i) "Effective Date" means the date set forth in Section 11.1,
below.
(j) "Fair Market Value", unless otherwise required by any
applicable
provision of the Code or any regulations issued thereunder, means,
as of any
given date: (i) if the Common Stock is listed on a national
securities exchange
or quoted on the Nasdaq National Market or Nasdaq SmallCap Market,
the last sale
price of the Common Stock in the principal trading market for the
Common Stock
on such date, as reported by the exchange or Nasdaq, as the case
may be; (ii) if
the Common Stock is not listed on a national securities exchange or
quoted on
the Nasdaq National Market or Nasdaq SmallCap Market, but is traded
in the
over-the-counter market, the closing bid price for the Common Stock
on such
date, as reported by the OTC Bulletin Board or the National
Quotation Bureau,
Incorporated or similar publisher of such quotations; and (iii) if
the fair
market value of the Common Stock cannot be determined pursuant to
clause (i) or
(ii) above, such price as the Committee shall determine, in good
faith.
(k) "Holder" means a person who has received an award under the
Plan.
(l) "Incentive Stock Option" means any Stock Option intended to be
and
designated as an "incentive stock option" within the meaning of
Section 422 of
the Code.
(m) "Nonqualified Stock Option" means any Stock Option that is not
an
Incentive Stock Option.
(n) "Normal Retirement" means retirement from active employment
with
the Company or any Subsidiary on or after age 65.
(o) "Other Stock-Based Award" means an award under Section 8,
below,
that is valued in whole or in part by reference to, or is otherwise
based upon,
Common Stock.
(p) "Parent" means any present or future "parent corporation" of
the
Company, as such term is defined in Section 424(e) of the Code.
(q) "Plan" means the Movie Star, Inc. 2000 Performance Equity Plan,
as
hereinafter amended from time to time.
(r) "Repurchase Value" shall mean the Fair Market Value in the
event
the award to be repurchased under Section 9.1 is comprised of
shares of Common
Stock and the difference between Fair Market Value and the Exercise
Price (if
lower than Fair Market Value) in the event the award is a Stock
Option or Stock
Appreciation Right; in each case, multiplied by the number of
shares subject to
the award.
(s) "Restricted Stock" means Common Stock, received under an award
made pursuant to Section 6, below, that is subject to restrictions
under said
Section 6.
(t) "Stock Option" or "Option" means any option to purchase shares
of
Common Stock which is granted pursuant to the Plan.
(u) "Stock Reload Option" means any option granted under Section
5.3
of the Plan.
(v) "Subsidiary" means any present or future "subsidiary
corporation"
of the Company, as such term is defined in Section 424(f) of the
Code.
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SECTION 2. ADMINISTRATION.
2.1 Committee Membership. The Plan shall be administered by the
Board or
the Committee. Committee members shall serve for such term as the
Board may in
each case determine, and shall be subject to removal at any time by
the Board.
The Committee members, to the extent possible and deemed to be
appropriate by
the Board, shall be "non-employee directors" as defined in Rule
16b-3
promulgated under the Securities Exchange Act of 1934, as amended
("Exchange
Act"), and "outside directors" within the meaning of Section 162(m)
of the Code.
2.2 Powers of Committee. The Committee shall have full authority to
award,
pursuant to the terms of the Plan: (i) Stock Options, (ii)
Restricted Stock,
(iii) Deferred Stock, (iv) Stock Reload Options and/or (v) Other
Stock-Based
Awards. For purposes of illustration and not of limitation, the
Committee shall
have the authority (subject to the express provisions of this
Plan):
(a) to select the officers, employees, directors and consultants of
the Company or any Subsidiary to whom Stock Options, Restricted
Stock, Deferred
Stock, Reload Stock Options and/or Other Stock-Based Awards may
from time to
time be awarded hereunder.
(b) to determine the terms and conditions, not inconsistent with
the
terms of the Plan, of any award granted hereunder (including, but
not limited
to, number of shares, share exercise price or types of
consideration paid upon
exercise of such options, such as other securities of the Company
or other
property, any restrictions or limitations, and any vesting,
exchange, surrender,
cancellation, acceleration, termination, exercise or forfeiture
provisions, as
the Committee shall determine);
(c) to determine any specified performance goals or such other
factors
or criteria which need to be attained for the vesting of an award
granted
hereunder;
(d) to determine the terms and conditions under which awards
granted
hereunder are to operate on a tandem basis and/or in conjunction
with or apart
from other equity awarded under this Plan and cash awards made by
the Company or
any Subsidiary outside of this Plan;
(e) to permit a Holder to elect to defer a payment under the Plan
under such rules and procedures as the Committee may establish,
including the
crediting of interest on deferred amounts denominated in cash and
of dividend
equivalents on deferred amounts denominated in Common Stock;
(f) to determine the extent and circumstances under which Common
Stock
and other amounts payable with respect to an award hereunder shall
be deferred
that may be either automatic or at the election of the Holder; and
(g) to substitute (i) new Stock Options for previously granted
Stock
Options, which previously granted Stock Options have higher option
exercise
prices and/or contain other less favorable terms, and (ii) new
awards of any
other type for previously granted awards of the same type, which
previously
granted awards are upon less favorable terms.
2.3 Interpretation of Plan.
(a) Committee Authority. Subject to Section 11, below, the
Committee
shall have the authority to adopt, alter and repeal such
administrative rules,
guidelines and practices governing the Plan as it shall, from time
to time, deem
advisable, to interpret the terms and provisions of the Plan and
any award
issued under the Plan (and to determine the form and substance of
all Agreements
relating thereto), and to
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otherwise supervise the administration of the Plan. Subject to
Section 11,
below, all decisions made by the Committee pursuant to the
provisions of the
Plan shall be made in the Committee's sole discretion and shall be
final and
binding upon all persons, including the Company, its Subsidiaries
and Holders.
(b) Incentive Stock Options. Anything in the Plan to the contrary
notwithstanding, no term or provision of the Plan relating to
Incentive Stock
Options (including but limited to Stock Reload Options or Stock
Appreciation
rights granted in conjunction with an Incentive Stock Option) or
any Agreement
providing for Incentive Stock Options shall be interpreted, amended
or altered,
nor shall any discretion or authority granted under the Plan be so
exercised, so
as to disqualify the Plan under Section 422 of the Code, or,
without the consent
of the Holder(s) affected, to disqualify any Incentive Stock Option
under such
Section 422.
SECTION 3. STOCK SUBJECT TO PLAN.
3.1 Number of Shares. The total number of shares of Common Stock
reserved
and available for issuance under the Plan shall be 750,000 shares.
Shares of
Common Stock under the Plan may consist, in whole or in part, of
authorized and
unissued shares or treasury shares. If any shares of Common Stock
that have been
granted pursuant to a Stock Option cease to be subject to a Stock
Option, or if
any shares of Common Stock that are subject to any Stock
Appreciation Right,
Restricted Stock, Deferred Stock award, Reload Stock Option or
Other Stock-Based
Award granted hereunder are forfeited or any such award otherwise
terminates
without a payment being made to the Holder in the form of Common
Stock, such
shares shall again be available for distribution in connection with
future
grants and awards under the Plan. If a Holder pays the exercise
price of a Stock
Option by surrendering any previously owned shares and/or arranges
to have the
appropriate number of shares otherwise issuable upon exercise
withheld to cover
the withholding tax liability associated with the Stock Option
exercise, then
the number of shares available under the Plan shall be increased by
the lesser
of (i) the number of such surrendered shares and shares used to pay
taxes; and
(ii) the number of shares purchased under such Stock Option.
3.2 Adjustment Upon Changes in Capitalization, Etc. In the event of
any
merger, reorganization, consolidation, dividend (other than a cash
dividend)
payable on shares of Common Stock, stock split, reverse stock
split, combination
or exchange of shares, or other extraordinary or unusual event
occurring after
the grant of an award which results in a change in the shares of
Common Stock of
the Company as a whole, the Committee shall determine, in its sole
discretion,
whether such change equitably requires an adjustment in the terms
of any award
or the aggregate number of shares reserved for issuance under the
Plan. Any such
adjustments will be made by the Committee, whose determination will
be final,
binding and conclusive.
SECTION 4. ELIGIBILITY.
Awards may be made or granted to employees, officers, directors and
consultants who are deemed to have rendered or to be able to render
significant
services to the Company or its Subsidiaries and who are deemed to
have
contributed or to have the potential to contribute to the success
of the
Company. No Incentive Stock Option shall be granted to any person
who is not an
employee of the Company or a Subsidiary at the time of grant.
SECTION 5. STOCK OPTIONS.
5.1 Grant and Exercise. Stock Options granted under the Plan may be
of two
types: (i) Incentive Stock Options and (ii) Nonqualified Stock
Options. Any
Stock Option granted under the Plan shall contain such terms, not
inconsistent
with this Plan, or with respect to Incentive Stock Options, not
inconsistent
with the Plan and the Code, as the Committee may from time to time
approve. The
Committee shall have the
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authority to grant Incentive Stock Options or Non-Qualified Stock
Options, or
both types of Stock Options which may be granted alone or in
addition to other
awards granted under the Plan. To the extent that any Stock Option
intended to
qualify as an Incentive Stock Option does not so qualify, it shall
constitute a
separate Nonqualified Stock Option.
5.2 Terms and Conditions. Stock Options granted under the Plan
shall be
subject to the following terms and conditions:
(a) Option Term. The term of each Stock Option shall be fixed by
the
Committee; provided, however, that an Incentive Stock Option may be
granted only
within the ten-year period commencing from the Effective Date and
may only be
exercised within ten years of the date of grant (or five years in
the case of an
Incentive Stock Option granted to an optionee who, at the time of
grant, owns
Common Stock possessing more than 10% of the total combined voting
power of all
classes of stock of the Company ("10% Stockholder").
(b) Exercise Price. The exercise price per share of Common Stock
purchasable under a Stock Option shall be determined by the
Committee at the
time of grant and may not be less than 100% of the Fair Market
Value on the day
of grant; provided, however, that the exercise price of an
Incentive Stock
Option granted to a 10% Stockholder shall not be less than 110% of
the Fair
Market Value on the date of grant.
(c) Exercisability. Stock Options shall be exercisable at such time
or
times and subject to such terms and conditions as shall be
determined by the
Committee and as set forth in Section 10, below. If the Committee
provides, in
its discretion, that any Stock Option is exercisable only in
installments, i.e.,
that it vests over time, the Committee may waive such installment
exercise
provisions at any time at or after the time of grant in whole or in
part, based
upon such factors as the Committee shall determine.
(d) Method of Exercise. Subject to whatever installment, exercise
and
waiting period provisions are applicable in a particular case and
as provided in
the Agreement, Stock Options may be exercised in whole or in part
at any time
during the term of the Option, by giving written notice of exercise
to the
Company specifying the number of shares of Common Stock to be
purchased. Such
notice shall be accompanied by payment in full of the purchase
price, which
shall be in cash or, if provided in the Agreement, either in shares
of Common
Stock (including Restricted Stock and other contingent awards under
this Plan)
or partly in cash and partly in such Common Stock, or such other
means which the
Committee determines are consistent with the Plan's purpose and
applicable law.
Cash payments shall be made by wire transfer, certified or bank
check or
personal check, in each case payable to the order of the Company;
provided,
however, that the Company shall not be required to deliver
certificates for
shares of Common Stock with respect to which an Option is exercised
until the
Company has confirmed the receipt of good and available funds in
payment of the
purchase price thereof. Payments in the form of Common Stock shall
be valued at
the Fair Market Value on the date prior to the date of exercise.
Such payments
shall be made by delivery of stock certificates in
