EXHIBIT 10.29
NON-QUALIFIED STOCK
OPTION AGREEMENT
AGREEMENT made as of the
day of
,
2007, by and between Movie Star, Inc., a New York corporation (the
‘‘Company’’), and Performance Enhancement
Partners, LLC (the
‘‘Consultant’’).
WHEREAS, effective on
,
2007 (the ‘‘Grant Date’’), 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 the grant to the Consultant of an option (the
‘‘Option’’) to purchase an aggregate of
275,000 shares of the authorized but unissued Common Stock of the
Company, $.01 par value (the ‘‘Common
Stock’’), conditioned upon the Consultant’s
acceptance thereof upon the terms and conditions set forth in this
Agreement and subject to the terms of the Plan; and
WHEREAS, the Consultant
desires to acquire the Option on the terms and conditions set forth
in this Agreement.
IT IS AGREED:
1. Grant
of Stock Option . The Company hereby
grants the Consultant the Option to purchase all or any part of an
aggregate of 275,000 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
$
per share [insert Fair Market Value (as defined in plan) on
closing date of merger] , subject to adjustment as hereinafter
provided.
4.
Exercisability . This Option is
exercisable, subject to the terms and conditions of the Plan, as
follows: the right to purchase 75,000 of the Option Shares shall be
exercisable on and after the Grant Date, and the right to purchase
100,000 of the Option Shares shall be exercisable on and after each
of January 3, 2008 and July 26, 2008. After a
portion of the Option becomes exercisable, it shall remain
exercisable except as otherwise provided herein, until the close of
business on the day immediately preceding the fifth anniversary of
the Grant Date (the ‘‘Exercise
Period’’).
5. Effect
of Termination of Engagement . Except as
otherwise provided below, if the Consultant’s engagement with
the Company terminates for any reason, the portion of the Option
not yet exercisable on the date of termination of employment shall
immediately expire. The portion of the Option which is exercisable
on the date of termination of the Consultant’s engagement
with the Company shall be exercisable by the Consultant at any time
during the ninety (90) day period following the termination of the
engagement; provided, however, that (i) if the Consultant’s
engagement is terminated as a result of the
‘‘disability’’ (as defined in the
Consulting Agreement, dated as of April 9, 2007, between
the Company and Consultant (‘‘Consulting
Agreement’’)) of Peter G. Cole
(‘‘Cole’’), then the Consultant’s
right to exercise the Option shall terminate on the day preceding
the first anniversary of the date of termination by reason of such
disability; (ii) if the Consultant’s engagement with the
Company is terminated because of Cole’s death (or if
Cole’s death occurs within ninety (90) days after termination
of the Consultant’s engagement for reasons other than those
set forth in clause (i) above), then the Option shall be
exercisable by the Consultant’s personal representative or
heirs, as the case may be, within one year after the date of
Cole’s death if and to the extent that it was exercisable at
the date of the termination of the engagement; (iii) if
Consultant’s engagement with the Company is terminated by the
Company without ‘‘Cause’’ as defined in the
Consulting Agreement or is terminated by Consultant for
‘‘Good Reason’’ as defined in the
Consulting Agreement, then the portion of the Option which is
exercisable on the date of termination and any additional portion
of the Option which would have become exercisable if the engagement
had
continued shall become
immediately exercisable and shall continue to be exercisable
thereafter, absent the death of Cole (in which case the Option
shall be exercisable by the Consultant’s personal
representative or heirs, as the case may be, within one year after
the date of Cole’s death), until the close of business on the
day immediately preceding the fifth anniversary of the Grant Date;
and (iv) if Consultant’s engagement with the Company is
terminated for ‘‘Cause’’ as defined in the
Consulting Agreement, then the portion of the Option that was
exercisable on the date of termination shall also immediately
expire.
6.
Withholding Tax . Not later than the
date as of which an amount first becomes includible in the gross
income of the Consultant for Federal income tax purposes with
respect to the Option, the Consultant 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 Consultant 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 Consultant 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
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 Sha
