Exhibit 10.16
MODIFICATION & EXTENSION AGREEMENT
AGREEMENT dated as of April , 2001 between XXXXXX XXXXXX,
residing at 000 00xx Xxxxxx, Xxxxxxx, Xxx Xxxxxx 00000 ("Executive") and MOVIE
STAR, INC., a New York corporation having its principal office at 000 Xxxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 ("Company").
WHEREAS, the Company and Executive entered into an agreement
dated as of February 22, 2000 governing the terms and conditions of Executive's
employment by the Company for a term ending on June 30, 2001 (the "Agreement");
and
WHEREAS, the Company and Executive desire to modify the
Agreement in certain respects and to extend the term of the Agreement all as
more fully set forth below.
IT IS AGREED:
1. Unless otherwise expressly set forth to the contrary
herein, all capitalized terms used herein shall have the meanings ascribed to
them in the Agreement.
2. Section 3.1 of the Agreement is hereby amended by adding
the following sentence after the first sentence in Section 3.1:
"The term of this Agreement shall continue until June 30,
2004, unless sooner terminated as provided herein, and the
period from July 1, 2001 through June 30, 2004 shall be
referred to as the Extended Term."
3. Effective for the period from July 1, 2001 through June 30,
2004, Section 2.1 of the Agreement shall read as follows:
"2.1 The Company shall pay to Executive a base salary
during the term hereof as follows:
(a) For the period July 1, 2001 through June 30,
2002, at the annual rate of $450,000.00. The sum of $25,000.00 shall be payable
on each of July 1, 2001 and January 2, 2002 and the balance of $400,000.00 shall
be paid in equal periodic installments in accordance with the Company's normal
payroll procedures;
(b) For the period July 1, 2002 through June 30,
2003, at the annual rate of $475,000.00. The sum of $37,500.00 shall be payable
on each of July 1, 2002 and January 2, 2003 and the balance of $400,000.00 shall
be paid in equal periodic installments in accordance with the Company's normal
payroll procedures; and
(c) For the period July 1, 2003 through June 30,
2004, at the annual rate of $500,000.00. The sum of $50,000.00 shall be payable
on each of July 1, 2003 and January 2, 2004 and the balance of $400, 000.00
shall be paid in equal periodic installments in accordance with the Company's
normal payroll procedures."
4. With respect to the period from July 1, 2001 through June
30, 2004, Section 2.3(A) of the Agreement shall read as follows:
"2.3 As additional compensation for services to be rendered
by Executive hereunder:
(A) (i) On or about July 1, 2001, the Company shall
issue to Executive options to purchase 100,000 shares of Common Stock at a price
per share equal to the closing market price of the Company's shares on the
American Stock Exchange on June 30, 2001 (the "2001 Extension Options");
(ii) On or about July 1, 2002, the Company shall
issue to Executive options to purchase 100,000 shares of Common Stock at a price
per share equal to the closing market price of the Company's shares on the
American Stock Exchange on June 30, 2002 (the "2002 Extension Options"); and
(iii) On or about July 1, 2003, the Company shall
issue to Executive options to purchase 100,000 shares of Common Stock at a price
per share equal to the closing market price of the Company's shares on the
American Stock Exchange on June 30, 2003 (the "2003 Extension Options"). The
2001 Extension Options, the 2002 Extension Options and the 2003 Extension
Options are hereinafter collectively referred to as the "Extension Options."
(iv) It is the express intention of the parties
that all of the Extension Options be granted as qualified Incentive Stock
Options under the Company's 2000 Performance Equity Plan (the "2000 Plan"). In
the event there are not sufficient shares available under the 2000 Plan to
enable the Company to grant any portion of the Extension Options, the Company
agrees to submit an amendment to the 2000 Plan providing for an appropriate
increase in the number of shares available under the 2000 Plan for approval by
the Company's shareholders at the next annual meeting of the Company's
shareholders following the date upon which there are no longer sufficient shares
available under the 2000 Plan. In the event the shareholders of the Company fail
to approve an amendment to the 2000 Plan providing for an appropriate increase
in the number of shares available under the 2000 Plan, any unissued Extension
Options will be issued pursuant to the Company's 1988 Stock Option Plan and will
not constitute "qualified" options.
(v) The Company agrees to include the
Extension Options, and all Agreement Options issued under the Agreement as it
read prior to July 1, 2001 that are not yet included in a previously filed Form
S-8, in a registration statement on Form S-8 to be filed with the Securities and
Exchange Commission as soon as practicable following the date hereof."
5. Executive hereby unconditionally and irrevocably waives the
provisions of Section 3.8 of the Agreement with respect to the requirement that
the Company offer Executive continued employment not less than six months prior
to the expiration of the initial term of the Agreement; provided all of the
provisions of Section 3.8 of the Agreement shall apply to the Extended Term.
6. Except as expressly modified in this Modification and
Extension Agreement, all of the terms, covenants and condition of the Agreement
are hereby ratified and confirmed and shall remain in full force and effect in
accordance with their terms.
IN WITNESS WHEREOF, the parties have executed this
Modification & Extension Agreement as of the date first above written.
/s/ Xxxxxx Xxxxxx
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Xxxxxx Xxxxxx
MOVIE STAR, INC.
By: /s/ Xxxx X. Xxxxx
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Xxxx X. Xxxxx
Chairman
