EXHIBIT 10.22
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
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THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT dated as of
October 13, 2006 ("Commencement Date") between SAUL POMERANTZ,
residing at
_______________________ ("Executive"), and MOVIE STAR, INC., a New
York
corporation having its principal office at 1115 Broadway, New York,
New York
10010 ("Company").
WHEREAS, the Company and Executive entered into an agreement
dated as of December 10, 2004 governing the terms and conditions of
Executive's
employment by the Company for a term ending on November 30, 2006
("Prior
Agreement"); and
WHEREAS, the Company and Executive have agreed to extend the
term of the Prior Agreement and to add other terms governing the
terms and
conditions of Executive's employment by the Company.
IT IS AGREED:
1.
Employment, Duties and Acceptance.
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1.1. Prior Agreements. The Prior Agreement is hereby terminated and
is
hereby superseded in its entirety by the terms, conditions and
agreements set
forth in this Agreement.
1.2. General. During the Term (as defined herein), the Company
shall
employ Executive as its Executive Vice President and Chief
Operating Officer
("COO"). All of Executive's powers and authority in any capacity
shall at all
times be subject to the direction and control of the Company's
Board of
Directors and its Chief Executive Officer. Executive shall report
directly to
the Chief Executive Officer of the Company. The Board or the Chief
Executive
Officer may assign to Executive such general management and
supervisory
responsibilities and executive duties for the Company or any
subsidiary of the
Company, including serving as a director, as are consistent with
Executive's
status as Executive Vice President and COO. The Company and
Executive
acknowledge that Executive's primary functions and duties as
Executive Vice
President and COO shall be to manage and supervise the day-to-day
administration
of the Company's business. Notwithstanding the foregoing,
Executive's title and
duties may be modified if the Company acquires another entity,
another entity
acquires the Company or the Company merges with and into another
entity in a
transaction which results in at least 35% of the issued and
outstanding shares
of capital stock of the combined entity being owned by the
shareholders of the
other entity ("Significant Acquisition"), provided that at no time
during the
Term shall Executive's title and duties be inconsistent in any way
with those
associated with the Executive Vice President and COO of the
subsidiary or
division of the Company that continues to be engaged in designing,
manufacturing
(through independent contractors), importing and wholesaling
women's intimate
apparel (i.e., Executive Vice President and COO of the Movie Star
division).
1.3. Full-Time Position. Executive accepts such employment and
agrees
to devote substantially all of his business time, energies and
attention to the
performance of his duties hereunder. Nothing herein shall be
construed as
preventing Executive from making and supervising personal
investments, provided
they will not interfere with the performance of Executive's duties
hereunder or
violate the provisions of Section 6.4 hereof.
1.4. Location. Executive shall be located in the New York City
metropolitan area. Executive shall undertake such travel, within or
outside the
United States, as is reasonably necessary in the interests of the
Company.
2.
Term. The Term will commence on the Commencement Date and shall
continue until June 30, 2009, unless terminated earlier as
hereinafter provided
in this Agreement, or unless extended by mutual written agreement
of the Company
and Executive. Unless the Company and Executive have otherwise
agreed in
writing, if Executive continues to work for the Company after the
expiration of
the Term, his employment thereafter shall be under the same terms
and conditions
provided for in this Agreement, except that his employment will be
on an "at
will" basis and the provisions of Sections 4.4 and 4.6(d) shall no
longer be in
effect.
3.
Compensation and Benefits.
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3.1. Salary. The Company shall pay to Executive a salary ("Base
Salary") at the annual rate of $250,000 from the Commencement Date
until
November 30, 2006 and at the annual rate of $280,000 from December
1, 2006 until
June 30, 2009. Executive's compensation shall be paid in equal,
periodic
installments in accordance with the Company's normal payroll
procedures.
3.2. Bonus. In addition to Base Salary, for each of the fiscal
years
ending June 30, 2007, 2008 and 2009, Executive shall be paid a
bonus ("Bonus")
in accordance with the terms of the Company's senior executive
incentive
compensation pool as adopted by the Compensation Committee of the
Board of
Directors in September 1998 ("1998 Incentive Plan"), in an amount
equal to 1.25
percent (1.25%) of the Company's net income before taxes and before
calculation
of all bonuses under the 1998 Incentive Plan for such fiscal year
("Net Income")
in excess of $1,200,000 and up to $3,200,000, and equal to 1.75
percent (1.75%)
of Net Income in excess of $3,200,000 ("Bonus Calculation"). Any
amounts due
under this Section 3.2 shall be payable to the Executive within 90
days of the
end of the applicable fiscal year in a cash lump-sum payment.
Notwithstanding
the foregoing, in the event of a Significant Acquisition, the Bonus
Calculation
shall be (i) based on the Net Income of only that portion of the
Company's
operations that are comparable to the Company's operations
immediately prior to
a Significant Acquisition and (ii) calculated in a manner so as not
to be
diminished by the expenses that the Company records for accounting
purposes as
transaction expenses associated with a Significant Acquisition in
accordance
with Generally Accepted Accounting Principles. By way of example,
and not of
limitation, the operations of the Company as of the date of this
Agreement are
designing, manufacturing (through independent contractors),
importing and
wholesaling women's intimate apparel.
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3.3.
Options.
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(a) As additional compensation for Executive entering into this
Agreement and agreeing to be bound by its terms and for the
services to be
rendered by Executive hereunder, the Company hereby grants to
Executive a
ten-year option ("Option") to purchase 50,000 shares of Common
Stock under the
Company's Amended and Restated 1988 Stock Option Plan ("Plan").
(b) The Option shall be evidenced by a Stock Option Agreement,
dated
the date of this Agreement, in the form attached hereto as EXHIBIT
A. The Option
shall not be an incentive option and shall have an exercise price
equal to the
greater of (x) the Fair Market Value (as defined in the Plan) of a
share of
Common Stock on the date of grant of the Option and (y) $1.00.
Except as
otherwise provided in the Stock Option Agreement, the Option will
vest in five
equal annual installments commencing on the first anniversary of
the date of
grant of such Option and shall expire on the day immediately
preceding the tenth
anniversary of the date of grant of such Option.
3.4. Benefits. The Company will, at its own cost and expense,
maintain
(i) a life insurance policy on the life of the Executive which will
provide a
death benefit to the Executive's beneficiary in the amount of
$1,200,000 and
which will be owned by Executive; (ii) a disability insurance
policy which will
provide a non-taxable benefit of at least $4,500 per month payable
to Executive
until Executive attains the age of 64 and which will be owned by
Executive;
provided, however, that Executive hereby acknowledges that the cost
of premiums
for such disability insurance policy will be considered taxable
income for
Executive in the year paid by the Company and will be reported by
the Company to
the Internal Revenue Service as taxable income and (iii) such group
medical
insurance covering Executive and Executive's dependent family
members and such
other benefits as are generally afforded to other senior executives
of the
Company, subject to applicable waiting periods and other
conditions. Provided
that (a) Executive is still employed by the Company on the date he
attains age
62 and Executive thereafter retires from such employment and (b)
the Company's
Retired Senior Executive Medical Plan is in effect at the time of
Executive's
retirement, Executive shall be entitled to participate in the
Company's Retired
Senior Executive Medical Plan in accordance with all of the terms
and conditions
thereof and contained in the letter from David M. Hogan to Thomas
Rende dated
August 2, 1999 (copies of which are annexed hereto as EXHIBIT B),
except that no
further approval of the Compensation Committee of the Board of
Directors shall
be necessary for such participation. The provisions contained in
the foregoing
sentence shall survive termination of this Agreement.
3.5. Vacation. Executive shall be entitled to four weeks of paid
vacation during each calendar year and to a reasonable number of
other days off
for religious and personal reasons.
3.6. Automobile. The Company shall provide Executive with a
suitable
automobile for business use and shall pay for all other costs
associated with
the use of the vehicle, including insurance costs, repairs and
maintenance. The
Company shall not be required to expend more than $800 per month
during the Term
for the costs of leasing or purchasing such automobile (or, since
Executive
resides in the State of New York where leasing is not available,
the comparable
quasi-lease arrangement (e.g., "smart-buy")). The costs associated
with
Executive's automobile
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shall be considered taxable income to Executive, except to the
extent that it is
documented to have been used by him for business purposes.
3.7. Expenses. The Company will pay or reimburse Executive for all
transportation, hotel and other expenses reasonably incurred by
Executive on
business trips and for all other ordinary and reasonable
out-of-pocket expenses
actually incurred by him in the conduct of the business of the
Company against
itemized vouchers submitted with respect to any such expenses and
approved in
accordance with customary procedures.
4.
Termination.
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4.1. Death. If Executive dies during the term of this Agreement,
Executive's employment hereunder shall terminate and the Company
shall pay to
Executive's estate the amount set forth in Section 4.6(a).
4.2. Disability. The Company, by written notice to Executive, may
terminate Executive's employment hereunder if Executive shall fail
because of
illness or incapacity to render services of the character
contemplated by this
Agreement for one hundred and eighty (180) consecutive calendar
days in any
consecutive twelve calendar month period. Upon such termination,
the Company
shall pay to Executive the amount set forth in Section 4.6(b).
4.3. By Company for "Cause". The Company, by written notice to
Executive, may terminate Executive's employment hereunder for
"Cause." As used
herein, "Cause" shall mean: (a) the refusal, or failure resulting
from the lack
of good faith efforts, by Executive to carry out specific
directions of the
Board or the Chief Executive Officer which are of a material nature
and
consistent with his then current status with the Company (i.e., as
Executive
Vice President and COO if no Significant Acquisition has occurred
during the
Term or if a Significant Acquisition has occurred, his then
modified status with
the Company), or the refusal, or failure resulting from the lack of
good faith
efforts, by Executive to perform a material part of Executive's
duties
hereunder; (b) the commission by Executive of a material breach of
any of the
provisions of this Agreement; (c) fraud or dishonest action by
Executive in his
relations with the Company or any of its subsidiaries or
affiliates, or with any
customer or business contact of the Company or any of its
subsidiaries or
affiliates ("dishonest" for these purposes shall mean Executive
knowingly making
a material misstatement or omission, or knowingly committing a
material improper
act, for his personal benefit); or (d) the conviction of Executive
of any crime
involving an act of moral turpitude. Notwithstanding the foregoing,
no "Cause"
for termination shall be deemed to exist with respect to
Executive's
