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EXECUTION COPY EXHIBIT 10.25
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT dated as of
November
28, 2006 ("Commencement Date") between THOMAS RENDE, 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.
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hereby superseded in its entirety by the terms, conditions and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 Senior Vice President of Finance and Chief
Financial Officer
("CFO"). 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 Senior Vice President of Finance and CFO. The Company
and Executive
acknowledge that Executive's primary functions and duties as
Senior Vice
President of Finance and CFO shall be to manage and supervise
the Company's
financial operations. 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 Senior Vice President of Finance and CFO 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., Senior Vice President of Finance
and CFO 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 December 31, 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 Section 4.4 and Section
4.6(d)(i), (ii) and
(vi) shall no longer be in effect.
3. Compensation and Benefits.
3.1. Salary. The Company shall pay to Executive a salary ("Base
Salary") at
the annual rate of $220,000 from the Commencement Date until
November 30, 2006,
at the annual rate of $240,000 from December 1, 2006 until
December 31, 2008 and
at the annual rate of $260,000 from January 1, 2009 until
December 31, 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, 2009 and 2010, 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 one
percent (1.0%) of the Company's net income before taxes and
before calculation
of all bonuses under the 1998 Incentive Plan for such fiscal
year, and excluding
the expenses that the Company records for accounting purposes as
transaction
expenses associated with a Significant Acquisition or
prospective Significant
Acquisition in accordance with Generally Accepted Accounting
Principles ("Net
Income") in excess of $1,200,000 and up to $3,200,000, and equal
to 1.25 percent
(1.25%) of Net Income in excess of $3,200,000 ("Bonus
Calculation"). The Bonus
payable to Executive, if any, for the fiscal year ending June
30, 2010 shall be
prorated by multiplying the full amount of the Bonus by 0.50 to
compensate
Executive for the period from July 1, 2009 to December 31, 2009.
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, if a Significant Acquisition is completed, the
Bonus Calculation
shall be 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. By way of example, and not of
limitation, the
operations of the Company as of the
2
date of this Agreement are designing, manufacturing (through
independent
contractors), importing and wholesaling women's intimate
apparel.
3.3. Options. [INTENTIONALLY OMITTED]
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
$1,000,000 and which
will be owned by Executive; (ii) a disability insurance policy
which will
provide a non-taxable benefit of at least $7,500 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
A), 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 $600 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 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
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business of the Company against itemized vouchers submitted with
respect to any
such expenses and approved in accordance with customary
procedures.
4. Termination.
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 Senior Vice
President of Finance
and CFO 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 acts
described in clauses (a) or (b) above, unless the Company shall
have given
written notice to Executive specifying the "Cause" with
reasonable particularity
and, within thirty (30) calendar days after such notice,
Executive shall not
have cured or eliminated the problem or thing giving rise to
such "Cause;"
provided, however, that a repeated breach after notice and cure
of any provision
of clauses (a) or (b) above involving the same or
substantially
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