As filed with the Securities and Exchange Commission on January 23, 1998
Registration No.
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-----------------
MOVIE STAR, INC.
(Exact name of registrant as specified in its charter)
New York 13-5651322
State or Jurisdiction of (I.R.S. Employer
Incorporation or Organization Identification Number)
136 MADISON AVENUE
NEW YORK, NEW YORK 10016
(Address of principal executive offices)
1994 INCENTIVE STOCK OPTION PLAN,
1988 MANAGEMENT STOCK OPTION PLAN
(Full title of the Plans)
MARK M. DAVID, Chairman
Movie Star, Inc.
136 Madison Avenue
New York, New York 10016
(212) 684-3400
(Name, address and telephone number, including area code, of agent for service)
with a copy
to:
MICHAEL A. SALBERG, ESQ.
Graubard Mollen & Miller
600 Third Avenue
New York, New York 10016-2097
Telephone: (212) 818-8800
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed maximum Proposed maximum
Title of Securities Amount to be offering price aggregate Amount of
to be registered registered(1) per share offering price registration fee
======================================= ==================== ===================== ======================== =====================
<S> <C> <C> <C> <C>
Common Stock issuable upon exercise of
options which may be granted under the
1994 Incentive Stock Option Plan ("the
"1994 ISOP")........................... 335,000 Shares $0.625(2) $209,375.00 $ 61.76
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Common Stock issuable upon exercise of 1,595,000 Shares $0.6250(3) $996,875.00 $ 294.08
options granted and outstanding under
the 1994 ISOP ......................... 70,000 Shares $1.1250(4) $ 78,750.00 $ 23.23
- -----------------------------------------------------------------------------------------------------------------------------------
Common Stock issuable upon exercise of
options which may be granted under the
1988 Management Stock Option Plan
("1988 Management Plan")............... 400,000 Shares $0.625(2) $250,000.00 $ 73.75
- -----------------------------------------------------------------------------------------------------------------------------------
Common Stock issuable upon exercise of
options granted and outstanding under
the 1988 Management Plan............... 350,000 Shares $0.6250(5) $218,750.00 $ 64.53
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL...................................................................................................... $ 517.35
===================================================================================================================================
(footnotes on next page)
<PAGE>
<FN>
(1) The amount being registered represents the maximum aggregate number of
shares of Common Stock that may be issued by the Company upon exercise
of options granted or which may be granted under the 1994 ISOP and 1988
Management Plan. Pursuant to Rule 416, there are also being registered
such additional shares of Common Stock as may become issuable pursuant
to the anti-dilution provisions of each plan.
(2) Based on the last sale price of the Common Stock ($0.625 ) as reported
by American Stock Exchange on January 22, 1998, in accordance with
Rules 457(c) and 457(h) promulgated under the Securities Act of 1933,
as amended
("Securities Act").
(3) Represents the $0.6250 per share exercise price payable for 1,595,000
shares that may be acquired under outstanding options granted pursuant
to the 1994 ISOP in accordance with Rule 457(h) promulgated under the
Securities Act.
(4) Represents the $1.1250 per share exercise price payable for 70,000
shares that may be acquired under outstanding options granted pursuant
to the 1994 ISOP in accordance with Rule 457(h) promulgated under the
Securities Act.
(5) Represents the $0.6250 per share exercise price payable for 350,000
shares that may be acquired under outstanding options granted pursuant
to the 1988 Management Plan in accordance with Rule 457(h) promulgated
under the Securities Act.
</FN>
</TABLE>
------------------
In accordance with the provisions of Rule 462 promulgated under the
Securities Act of 1933, as amended, the Registration Statement will become
effective upon filing with the Securities and Exchange Commission.
The Registration Statement, including all exhibits and attachments,
contains 44 pages. The exhibit index may be found on page II-5 of the
consecutively numbered pages of the Registration Statement.
------------------
<PAGE>
THIS DOCUMENT CONSTITUTES A PART OF A PROSPECTUS COVERING SECURITIES THAT HAVE
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933.
PROSPECTUS
MOVIE STAR, INC.
1994 INCENTIVE STOCK OPTION PLAN
2,000,000 Shares of Common Stock
1988 MANAGEMENT STOCK OPTION PLAN
750,000 Shares of Common Stock
This Prospectus relates to (i) 2,000,000 shares of Common Stock, par
value $.01 per share ("Common Stock"), of Movie Star, Inc. ("Company") issuable
upon the exercise of stock options ("Options") which have been or which may be
granted under the Company's 1994 Incentive Stock Option Plan ("1994 Plan"), and
(ii) 750,000 shares of Common Stock issuable upon exercise of Options which may
be granted under the Company's 1988 Management Stock Option Plan ("Management
Plan") (the 1994 Plan and Management Plan are collectively referred to herein as
the "Plans"). The shares of Common Stock to which this Prospectus relates are
being offered to certain officers and employees of the Company and its
subsidiaries.
Persons who acquire shares of Common Stock under the Plans by the
exercise of the options granted thereunder will be free to resell such shares
without restriction unless they are "affiliates" of the Company, as defined in
Rule 405 promulgated under the Securities Act of 1933, as amended ("Securities
Act"). Affiliates may resell such shares only under an appropriate registration
statement with an appropriate prospectus, an appropriate exemption from the
registration requirements of the Securities Act, or pursuant to Rule 144
promulgated under the Securities Act.
The Common Stock is traded on the American Stock Exchange under the
symbol "MSI." The last sale price of a share of Common Stock as reported by the
American Stock Exchange on January 22, 1998 was $0.625 .
THE SECURITIES OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK.
SEE "INVESTMENT CONSIDERATIONS" ON PAGE 4.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION NOR HAS THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
The date of this Prospectus is January 23, 1998
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AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission
("Commission"), Washington, D.C., a Registration Statement on Form S-8
("Registration Statement") under the Securities Act with respect to the
securities offered hereby. This Prospectus does not contain all of the
information set forth in the Registration Statement and exhibits thereto. For
further information with respect to the Company and such securities, reference
is hereby made to the Registration Statement and exhibits. The statements
contained in this Prospectus as to the contents of any contract or other
document filed as an exhibit are not complete and the description of such
contract or document is qualified in its entirety by reference to such contract
or document. The Registration Statement, together with the exhibits, may be
inspected at the Commission's principal office in Washington, D.C. and copies
may be obtained upon payment of the fees prescribed by the Commission.
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended ("Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Commission. Copies of such information, reports, proxy statements and other
information filed by the Company under the Exchange Act may be examined without
charge at the public reference facilities of the Commission, Judiciary Plaza,
450 Fifth Street, N.W., Washington, D.C. 20549, as well as at the following
Regional Offices: 7 World Trade Center, Suite 1300, New York, New York 10048;
and 500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511. Copies
can also be obtained at prescribed rates from the Commission's Public Reference
Section, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549.
DOCUMENTS INCORPORATED BY REFERENCE
The following documents filed by the Company with the Commission are
incorporated by reference into this Prospectus:
(a) Annual Report on Form 10-K for the fiscal year ended June 30, 1997;
(b) Quarterly Report on Form 10-Q for the three-month period ended September
30, 1997;
(c) Proxy Statement dated October 24, 1997; and
(d) The description of the Registrant's Common Stock contained in the
Registration Statement on Form S-14 (Registration No. 2-70365) filed with
the Commission pursuant to Section 12(b) of the Exchange Act, including any
subsequent amendment(s) or report(s) filed for purpose of updating such
description; and
All documents subsequently filed by the Company pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing of a
post-effective amendment which indicates that all securities offered have been
sold or which deregisters all securities then remaining unsold, shall be deemed
to be incorporated by reference in this Registration Statement and to be a part
hereof from the respective date of filing of such documents. Any statement
contained in a document incorporated by reference herein is modified or
superseded for all purposes to the extent that a statement contained in this
Registration Statement or in any other subsequently filed document which is
incorporated by reference modifies or replaces such statement.
The Company will furnish without charge, upon oral or written request,
to each person to whom this Prospectus is delivered, a copy of any or all of the
documents incorporated by reference herein other than exhibits to such documents
not specifically incorporated by reference thereto. In addition, participants in
the Plans may obtain information about the plans or their administration from
the Company. Such
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<PAGE>
request should be directed to Movie Star, Inc., 136 Madison Avenue, New York,
New York 10016, telephone number (212) 684-3400, Attention: Corporate Secretary.
The delivery of this document at any time does not imply that
information herein is correct as of the time subsequent to the date hereof.
Statements in this document as to the respective provisions of the Plans are not
necessarily complete and in each instance reference is made to the copy of such
plan which appears as an exhibit to the Company's Registration Statement on Form
S-8 filed with the Commission on January 23, 1998 and each such statement in
this document is qualified in all respects by such reference.
THE COMPANY
The Company is principally engaged in the design, manufacture, import
and sale of ladies' sleepwear, robes, leisurewear, loungewear and daywear and
also operates retail outlet stores under the name Movie Star Factory Stores. The
Company's products consist of ladies' pajamas, nightgowns, baby dolls,
nightshirts, dusters, shifts, sundresses, rompers, short sets, beachwear,
peignoir ensembles, robes, leisurewear, panties, and daywear consisting of
bodysuits, soft bras, half-slips, teddies and camisoles. These products are
manufactured in various fabrics, designs, colors and styles depending on
seasonal requirements, changes in fashion and customer demand.
INVESTMENT CONSIDERATIONS
The Company's business is subject to numerous risks including, among
others, risks related to (i) a prior history of losses, (ii) fluctuations in the
costs of raw materials and the unavailability of reliable sources of supply for
the Company's products, (iii) the timing of orders placed by the Company's
customers, (iv) foreign government regulation, (v) fluctuations in foreign
currency exchange rates, (vi) the addition or loss of significant customers or
orders, (vii) the ability of the Company to retain current management, (viii)
the ability of current management to direct the affairs of the Company, (ix) the
intensely competitive nature of the intimate apparel industry, (x) business
conditions and growth in the Company's industry and the general retail climate
and (xi) the potential dilution of the Company's securities resulting from the
exercise of outstanding options.
The Company was incorporated in New York in 1935, and has its executive
offices at 136 Madison Avenue, New York, New York 10016. The Company's telephone
number is (212) 684-3400.
THE PURPOSE OF THE PLANS
The purpose of the Plans is to enable the Company to offer to its
employees an opportunity to acquire a proprietary interest in the Company. The
Plans are intended to provide an additional incentive to those persons whose
past, present and future contributions are important to the success of the
Company, and to allow the Company to attract and retain in its employ qualified
persons for the successful conduct of its operations.
SUMMARY OF THE 1994 PLAN
The 1994 Plan was adopted by the Board of Directors of the Company on
June 8, 1994 and by the stockholders of the Company at the Annual Meeting of
Stockholders on December 8, 1994 ("1994 Plan Effective Date").
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<PAGE>
Administration
The 1994 Plan is administered by the Compensation Committee of the
Board of Directors ("Committee"). The Committee has full authority, subject to
the provisions of the 1994 Plan, to award Options to the Company's employees
(the "Awards"). Subject to the provisions of the 1994 Plan, the Committee
determines, among other things, the persons to whom from time to time Awards may
be granted ("Holders" or "Participants"), the number of shares subject to each
Award, share prices, any restrictions or limitations on such Awards, and any
vesting, exchange, deferral, surrender, cancellation, acceleration, termination,
exercise or forfeiture provisions related to such Awards. The interpretation and
construction by the Committee of any provisions of, and the determination by the
Committee of any questions arising under, the 1994 Plan or any rule or
regulation established by the Committee pursuant to the 1994 Plan, shall be
final, conclusive and binding on all persons interested in the 1994 Plan. Awards
under the 1994 Plan are evidenced by agreements.
Shares Subject to the 1994 Plan
The 1994 Plan authorizes the granting of Awards whose exercise would
allow up to an aggregate of 2,000,000 shares of Common Stock to be acquired by
the Holders of such Awards. In order to prevent the dilution or enlargement of
the rights of Holders under the 1994 Plan, the number of shares of Common Stock
authorized by the 1994 Plan is subject to adjustment by the Board in the event
of any increase or decrease in the number of shares of outstanding Common Stock
resulting from a merger or consolidation, stock dividend, stock split or reverse
stock split or change in the par value of the Common Stock. The shares of Common
Stock acquirable pursuant to the Awards will be made available, in whole or in
part, from authorized and unissued shares of Common Stock. If any Award granted
under the 1994 Plan is forfeited or terminated, the shares of Common Stock that
were available pursuant to such Award shall again be available for distribution
in connection with Awards subsequently granted under the 1994 Plan. There are
currently outstanding Awards which entitle the Holders to acquire an aggregate
of up to 70,000 shares of Common Stock at an exercise price of $1.125 per share
and 1,595,000 shares at an exercise price of $0.625 per share.
Eligibility
Subject to the provisions of the 1994 Plan, Awards may be granted to
employees who are deemed to have rendered or to be able to render significant
services to the Company and are deemed to have contributed or to have the
potential to contribute to the success of the Company.
Types of Awards
Options
The 1994 Plan provides for "Incentive" stock options ("Incentive
Options") as defined in Section 422 of the Internal Revenue Code of 1986, as
amended ("Code"). The Committee determines the exercise price per share of
Common Stock purchasable under an Incentive Option . The exercise price of an
Incentive Option may not be less than 100% of the fair market value on the last
trading day before the date of grant (or, in the case of an Incentive Option
granted to a person possessing more than 10% of the total combined voting power
of all classes of stock of the Company, not less than 110% of such fair market
value). An Incentive Option may only be granted within a 10-year period from the
date the 1994 Plan was adopted and approved by the directors and may only be
exercised within 10 years of the date of the grant (or within 5 years in the
case of an Incentive Option granted to a person who, at the time of the grant,
owns stock possessing more than 10% of the total combined voting power of all
classes of stock of the Company). Subject to any limitations or conditions the
Committee may impose, 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 must be accompanied by payment in full of the purchase price, either in
cash or in securities of the Company, or in combination thereof.
4
<PAGE>
Incentive Options granted under the 1994 Plan are exercisable only by
the Holder during his or her lifetime. The Options granted under the 1994 Plan
may not be transferred other than by will or by the laws of descent and
distribution.
Generally, the agreements evidencing Awards provide that no Incentive
Option, or any portion thereof, granted under the 1994 Plan may be exercised by
the Holder unless he or she has held the Award for a period of at least six
months following the date on which the Award was granted and is employed by the
Company or a subsidiary at the time of the exercise and has been so employed
continuously from the time the Incentive Option was granted. If the Holder's
employment is terminated for any reason, the portion of the Incentive Option not
yet exercisable on the date of termination shall immediately expire and the
portion of the Incentive Option which is exercisable on the date of termination
may be exercised by the Holder only during the ninety day period following the
date of termination. However, in the event the Holder's employment with the
Company is terminated due to permanent and total disability, the Holder may
still exercise his or her Incentive Option for a period of one year (or such
other lesser period as the Committee may specify at the time of grant) from the
date of such termination or until the expiration of the stated term of the
Incentive Option, whichever period is shorter. Should a Holder die while in the
employment of the Company or a subsidiary, his or her legal representative or
legatee under his or her will may exercise the decedent Holder's Incentive
Option for a period of one year from death (or such other greater or lesser
period as the Committee specifies at the time of grant) or until the expiration
of the stated term of the Incentive Option, whichever period is shorter.
Required Six-Month Holding Period
Each Incentive Option must be held for a period of six-months, measured
from the date of grant before it may be exercised by the Holder.
Withholding Taxes
Upon the exercise of any Award granted under the 1994 Plan, the Holder
may be required to remit to the Company an amount sufficient to satisfy all
federal, state and local withholding tax requirements prior to delivery of any
certificate or certificates for shares of Common Stock. If the agreement
evidencing an Award so provides, at the discretion of the Company, the Holder
may satisfy these requirements by electing to have the Company withhold a
portion of the shares to be received upon the exercise of the Award having a
value equal to the amount of the withholding tax due under applicable federal,
state and local laws.
Agreements; Transferability
Incentive Options granted under the 1994 Plan are evidenced by
agreements consistent with the 1994 Plan in such form and containing such
additional provisions not inconsistent with the 1994 Plan as the Committee may
prescribe. Neither the 1994 Plan nor agreements thereunder confer any right to
continued employment upon any Holder of an Incentive Option. Further, all
agreements will provide that the right to exercise Incentive Options cannot be
transferred except by will or the laws of descent and distribution.
Term and Amendments
Unless terminated by the Board, the 1994 Plan shall continue to remain
effective until such time as no further Awards may be granted and all Awards
granted under the 1996 Plan are no longer outstanding; provided that no further
Awards may be made under the 1994 Plan after the date which is ten years
following the Plan Effective Date.
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<PAGE>
SUMMARY OF THE MANAGEMENT PLAN
The Management Plan was adopted by the Board of Directors of the
Company on October 17, 1988 ("Management Plan Effective Date") and by the
stockholders of the Company at the Annual Meeting of Stockholders on December
13, 1988. Unless terminated by the Board, the Management Plan shall remain
effective until such time as no further Awards (as hereafter defined) may be
granted and all Awards granted under the Management Plan are no longer
outstanding.
Administration
The Management Plan is administered by the Committee. The Committee has
full authority, subject to the provisions of the Management Plan, to make
Awards. Subject to the provisions of the Management Plan, the Committee
determines, among other things, the Participants to whom from time to time
Awards may be granted, the number of shares subject to each Award, share prices,
any restrictions or limitations on such Awards and any vesting, exchange,
surrender, cancellation, acceleration, termination, exercise or forfeiture
provisions related to such Awards. The interpretation and construction by the
Committee of any provisions of, and the determination by the Committee of any
questions arising under, the Management Plan or any rule or regulation
established by the Committee pursuant to the Management Plan, are final,
conclusive and binding on all persons interested in the Management Plan.
Awards under the Management Plan are evidenced by agreements.
Shares Subject to the Management Plan
The Management Plan authorizes the granting of Awards whose exercise
would allow up to an aggregate of 750,000 shares of Common Stock to be acquired
by the Holders of such Awards. In order to prevent the dilution or enlargement
of the rights of Holders under the Management Plan, the number of shares of
Common Stock authorized by the Management Plan is subject to adjustment by the
Board in the event of any increase or decrease in the number of shares of
outstanding Common Stock resulting from a merger or consolidation, stock
dividend, stock split or reverse stock split or change in the par value of the
Common Stock. The shares of Common Stock acquirable pursuant to the Awards will
be made available, in whole or in part, from authorized and unissued shares of
Common Stock. If any Award granted under the Management Plan is forfeited or
terminated, the shares of Common Stock that were available pursuant to such
Award shall again be available for distribution in connection with Awards
subsequently granted under the Management Plan. There are currently outstanding
Awards which entitle the Holders to acquire an aggregate of up to 350,000 shares
of Common Stock at an exercise price of $.0625 per share.
Eligibility
Subject to the provisions of the Management Plan, Awards may be granted
to executive officers of the Company or its subsidiaries who are deemed to have
rendered or to be able to render significant services to the Company and are
deemed to have contributed or to have the potential to contribute to the success
of the Company. Incentive Options, as hereinafter defined, may be awarded only
to persons who, at the time of grant of such awards, are employees of the
Company or its subsidiaries.
Types of Awards
Options
The Management Plan provides for options not qualifying as Incentive
Options ("Nonqualified Options"). The Committee determines the exercise price
per share of Common Stock purchasable under a Nonqualified Option. The exercise
price of a Nonqualified Option may not be less than 100% of the fair market
value on the last trading day before the date of grant. Subject to any
limitations or conditions the Committee may impose, Nonqualified Options may be
exercised, in whole or in part, at any time during the term of the Nonqualified
Option by giving written notice of exercise to the Company specifying the
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number of shares of Common Stock to be purchased. Such notice must be
accompanied by payment in full of the purchase price, either in cash or in
securities of the Company, or in combination thereof.
Nonqualified Options granted under the Management Plan are exercisable
only by the Holder during his or her lifetime. The Nonqualified Options granted
under the Management Plan may not be transferred other than by will or by the
laws of descent and distribution, except that the Committee may in its sole
discretion allow a Nonqualified Option to be transferable, subject to compliance
with applicable securities laws.
Generally, no Nonqualified Option, or any portion thereof, granted
under the Management Plan may be exercised by the Holder unless he or she is
employed by the Company or a subsidiary at the time of the exercise and has been
so employed continuously from the time the Nonqualified Option was granted. If
the Holder's employment is terminated for any reason, the portion of the
Nonqualified Option not yet exercisable on the date of termination shall
immediately expire and the portion of the Nonqualified Option which is
exercisable on the date of termination may be exercised by the Holder only
during the thirty day period following the date of termination; provided that,
if such termination results from the Holder's deliberate, willful or gross
misconduct as determined by the Committee, all rights under the Award shall
terminate and expire upon the termination of employment. However, in the event
the Holder's employment with the Company is terminated due to disability, the
Holder may still exercise his or her Nonqualified Option for a period of one
hundred and eighty days from the date of such termination or until the
expiration of the stated term of the Incentive Option, whichever period is
shorter. Similarly, should a Holder die within thirty days after the date of
termination of employment or while in the employment of the Company or a
subsidiary, his or her legal representative or legatee under his or her will may
exercise the decedent Holder's Nonqualified Option for a period of one hundred
and eighty days from death or until the expiration of the stated term of the
Nonqualified Option, whichever period is shorter.
Required Six-Month Holding Period
All Nonqualified Options must be held for a period of six-months,
measured from the date of grant, before it may be exercised by the Holder.
Withholding Taxes
Upon the exercise of any Award granted under the Management Plan, the
Holder may be required to remit to the Company an amount sufficient to satisfy
all federal, state and local withholding tax requirements prior to delivery of
any certificate or certificates for shares of Common Stock. Subject to certain
limitations under the Management Plan and at the discretion of the Committee,
the Holder may satisfy these requirements by electing to have the Company
withhold a portion of the shares to be received upon the exercise of the Award
having a value equal to the amount of the withholding tax due under applicable
federal, state and local laws.
Agreements; Transferability
Nonqualified Options granted under the Management Plan will be
evidenced by agreements consistent with the Management Plan in such form and
containing such additional provisions not inconsistent with the Management Plan
as the Committee may prescribe. Neither the Management Plan nor agreements
thereunder confer any right to continued employment upon any Holder of an
Nonqualified Option. Further, all agreements will provide that the right to
exercise Nonqualified Options cannot be transferred except by will or the laws
of descent and distribution.
Term and Amendments
Unless terminated by the Board, the Management Plan shall continue to
remain effective until such time as no further Awards may be granted and all
Awards granted under the Management Plan are no longer outstanding. The Board
may at any time, and from time to time, amend the Management Plan,
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provided that the Board may not, without approval of the stockholders of the
Company (i)increase the maximum number of shares as to which Options may be
granted under the Management Plan, (ii) permit the granting of Nonqualified
Options at less than 100% of Fair Market Value at time of grant, or (iii) change
the class of employees eligible to receive Nonqualified Options under the
Management Plan; and provided further, no amendment shall be made which would
impair the rights of a Holder under any agreement entered into pursuant to the
Management Plan without the Holder's consent.
RESTRICTIONS ON RESALE OF SHARES ACQUIRED UNDER THE PLANS
Persons who, on or after the date of this Prospectus, purchase shares
of Common Stock upon the exercise of Options granted under any of the Plans,
will be free to resell those shares without restriction under the exemption from
registration provided by Section 4(1) of the Securities Act, except for those
persons who are "affiliates" of the Company. Such affiliates may resell such
shares pursuant to an appropriate effective registration statement under the
Securities Act or pursuant to an available exemption from registration.
"Affiliate" is defined under the Securities Act as a person who, directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, the Company. In general, persons with the power to
manage and direct the policies of the Company, and relatives of such persons,
among others, may be deemed to be affiliates of the Company.
If an affiliate wishes to resell or reoffer shares purchased under a
Plan, and if a registration statement is not in effect with respect to such
shares, the affiliate will be obliged as a precondition to any resale or reoffer
to comply with either (i) Rule 144 under the Securities Act or (ii) some other
applicable exemption under the Securities Act.
Each person who may be an affiliate should, prior to reselling or
reoffering any option shares, consult with counsel to determine whether he or
she may be subject to the foregoing restrictions.
Section 16(b) Limitations
Certain of the persons participating in the Plans are subject to
limitations imposed by Section 16(b) of the Exchange Act and, as such, may not
purchase and sell securities of the Company in any six-month period without
subjecting themselves to liability thereunder. Persons subject to the
limitations of Section 16(b) should consult with counsel before exercising,
purchasing, selling or otherwise transferring securities of the Company.
FEDERAL INCOME TAX CONSEQUENCES
The following discussion of the federal income tax consequences of
participation in the Plans is only a summary of the general rules applicable to
the grant and exercise of Options and other Awards and does not give specific
details or cover, among other things, state, local and foreign tax treatment of
participation in the Plans. The information contained in this section is based
on present law and regulations, which are subject to being changed prospectively
or retroactively. Each Holder should consult with his or her own personal tax
advisor with respect to the individual tax consequences resulting from
participation in the Plans.
Nonqualified Options
With respect to Nonqualified Options (i) upon grant of the Option, the
Holder will recognize no income, (ii) upon exercise of the Option (if the shares
of Common Stock are not subject to a substantial risk of forfeiture), the Holder
will recognize ordinary compensation income in an amount equal to the excess, if
any, of the fair market value of the shares on the date of exercise over the
exercise price, and the Company will qualify for a deduction in the same amount,
subject to the requirement that the compensation be reasonable, and (iii) the
Company will be required to comply with applicable federal
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<PAGE>
income tax withholding requirements with respect to the amount of ordinary
compensation income recognized by the Holder. On a disposition of the shares,
the Holder will recognize gain or loss equal to the difference between the
amount realized and the sum of the exercise price and the ordinary compensation
income recognized. Such gain or loss will be treated as capital gain or loss if
the shares are capital assets and as short-term or long-term capital gain or
loss, depending upon the length of time that the Holder held the shares.
If the shares acquired upon exercise of a Nonqualified Option are
subject to a substantial risk of forfeiture, the Holder will recognize ordinary
income at the time when the substantial risk of forfeiture is removed, unless
such Holder timely files under Code Section 83(b) to elect to be taxed on the
receipt of shares, and the Company will qualify for a corresponding deduction at
such time. The amount of ordinary income will be equal to the excess of the fair
market value of the shares at the time the income is recognized over the amount
(if any) paid for the shares.
Incentive Options
The Holder will recognize no taxable income upon the grant or exercise
of an Incentive Option. The Company will not qualify for any deduction in
connection with the grant or exercise of Incentive Options. Upon a disposition
of the shares after the later of two years from the date of grant or one year
after the transfer of the shares to the Holder, the Holder will recognize the
difference, if any, between the amount realized and the exercise price as
long-term capital gain or long-term capital loss (as the case may be) if the
shares are capital assets. The excess, if any, of the fair market value of the
shares on the date of exercise of an Incentive Option over the exercise price
will be treated as an item of adjustment for a Holder's taxable year in which
the exercise occurs and may result in an alternative minimum tax liability for
the Holder.
If Common Stock acquired upon the exercise of an Incentive Option is
disposed of prior to the expiration of the holding periods described above, (i)
the Holder will recognize ordinary compensation income in the taxable year of
disposition in an amount equal to the excess, if any, of the lesser of the fair
market value of the shares on the date of exercise or the amount realized on the
disposition of the shares, over the exercise price paid for such shares and (ii)
the Company will qualify for a deduction equal to any such amount recognized,
subject to the limitation that the compensation be reasonable. In the case of a
disposition of shares earlier than two years from the date of the grant or in
the same taxable year as the exercise, where the amount realized on the
disposition is less than the fair market value of the shares on the date of
exercise, there will be no adjustment since the amount treated as an item of
adjustment, for alternative minimum tax purposes, is limited to the excess of
the amount realized on such disposition over the exercise price, which is the
same amount included in regular taxable income.
9
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Item 1. Plan Information.*
Item 2. Registrant Information and Employee Plan Annual Information. *
* Information required by Part I to be contained in the Section
10(a) prospectus is omitted from this Registration Statement
in accordance with Rule 428 under the Securities Act of 1933
and the Note to Part I of Form S-8.
10
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents previously filed by the Registrant with the
Securities and Exchange Commission (the "Commission") are incorporated by
reference in this Registration Statement:
(a) Annual Report on Form 10-K for the fiscal year ended June 30, 1997
(b) Quarterly Report on Form 10-Q for the period ended September 30, 1997;
(c) Proxy Statement dated October 24, 1997; and
(d) The description of the Company's common stock, par value $.01 per share
(the "Common Stock"), contained in the Registration Statement on Form S-14
(Registration No. 2-70365) filed with the Commission pursuant to Section
12(b) of the Securities Exchange Act of 1934 (the "Exchange Act"),
including any subsequent amendment(s) or report(s) filed for purpose of
updating such description.
All documents subsequently filed by the Registrant pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing of a
post-effective amendment which indicates that all securities offered have been
sold or which deregisters all securities then remaining unsold, shall be deemed
to be incorporated by reference in this Registration Statement and to be a part
hereof from the respective date of filing of such documents. Any statement
contained in a document incorporated by reference herein is modified or
superseded for all purposes to the extent that a statement contained in this
Registration Statement or in any other subsequently filed document which is
incorporated by reference modifies or replaces such statement.
Item 4. Description of Securities.
The Common Stock of the Registrant is registered under Section 12 of
the Exchange Act.
Item 5. Interests of Named Experts and Counsel.
Not applicable.
Item 6. Indemnification of Directors and Officers.
Sections 721 through 726, inclusive, of the New York Business
Corporation Law ("BCL") authorizes New York corporations to indemnify their
officers and directors under certain circumstances against expenses and
liabilities incurred in legal proceedings involving such persons because of
their being or having been officers or directors and to purchase and maintain
insurance for indemnification of such officers and directors.
Section 402(b) of the BCL permits a corporation, by so providing in its
certificate of incorporation, to eliminate or limit directors' personal
liability to the corporation of its shareholders for damages arising out of
certain alleged breaches of their duties as directors. The BCL, however,
provides that no such limitation of liability may affect a director's liability
with respect to any of the following: (i) acts or omissions made in bad faith or
which involved intentional misconduct or a knowing violation of law; (ii) the
declaration of dividends or other distributions, repurchases or redemptions of
shares in violation of the BCL; (iii) the distribution of assets after
dissolution or making of loans to directors in violation of the BCL; or (iv) any
II-1
<PAGE>
transaction from which the director derived a financial profit or other
advantage to which he or she was not legally entitled.
The Company's Restated Certificate of Incorporation provides that the
personal liability of the directors of the Company is eliminated to the fullest
extent permitted by Section 402(b) of the BCL. In addition, the By-Laws of the
Company provide in substance that, to the fullest extent permitted by New York
law, each director and officer shall be indemnified by the Company against
reasonable expenses, including attorney's fees, and any liabilities which he or
she may incur in connection with any action to which he or she may be made a
party by reason of his or her being or having been a director or officer of the
Company. The indemnification provided by the Company's By-Laws is not deemed
exclusive of, or in any way to limit, any other rights to which any person
seeking indemnification may be entitled.
Item 7. Exemption from Registration Claimed.
Not Applicable.
Item 8. Exhibits.
Exhibit No. Description
4.1 1994 Incentive Stock Option Plan
4.2 1988 Management Stock Option Plan
4.3 Form of Stock Option Agreement for options granted under the
1994 ISOP
4.4 Form of Stock Option Agreement for options granted under
the 1988 Management Plan
5.1 Opinion of Graubard Mollen & Miller
23.1 Consent of Deloitte & Touche LLP, independent auditors for
Registrant
23.2 Consent of Graubard Mollen & Miller (Included in
Exhibit 5.1)
Item 9. Undertakings.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement;
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the Registration Statement (or the
most recent effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the Registration Statement;
(iii) To include any material information with
respect to the plan of distribution not previously disclosed in the
Registration Statement or any material change to such information in
the Registration Statement;
II-2
<PAGE>
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
Registration Statement is on Form S-3 or Form S-8, and the information required
to be included in a post-effective amendment by those paragraphs is contained in
periodic reports filed by the Registrant pursuant to Section 13(a) or Section
15(d) of the Securities Exchange Act of 1934 that are incorporated by reference
in the Registration Statement.
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing procedures, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of New York, State of New York, on this 23 day of
January , 1998.
MOVIE STAR, INC.
By: /s/ MARK M. DAVID
------------------------------------
Mark M. David, Chairman of the Board
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Mark M. David and Saul Pomerantz his true
and lawful attorneys-in-fact and agents, each acting alone, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any or all amendments to this Registration
Statement, including post-effective amendments, and to file the same, with all
exhibits thereto, and all documents in connection therewith, with the Securities
and Exchange Commission, granting unto said attorneys-in-fact and agents, and
each of them, full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the premises, as fully to
all intents and purposes as he might or could do in person, and hereby ratifies
and confirms all that said attorneys-in-fact and agents, each acting alone, or
their substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
/S/ MARK M. DAVID Chief Executive Officer, and Director January 23, 1998
- ------------------------------------------------ (Principal Executive Officer)
Mark M. David
/S/ MELVYN KNIGIN President, Chief Operating Officer, and January 23, 1998
----------------------------------------------- Director
Melvyn Knigin
/S/ SAUL POMERANTZ Chief Financial Officer, Executive Vice January 23, 1998
- ------------------------------------------------ President, Secretary and Director
Saul Pomerantz (Principal Financial Officer)
/S/ JOEL M. SIMON Director January 23, 1998
- ------------------------------------------------
Joel M. Simon
/S/ GARY W. KRAT Director January 23, 1998
- ------------------------------------------------
Gary W. Krat
</TABLE>
II-4
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
4.1 1994 Incentive Stock Option Plan
4.2 1988 Management Stock Option Plan
4.3 Form of Stock Option Agreement for options granted under the
1994 ISOP
5.1 Opinion of Graubard Mollen & Miller
23.1 Consent of Deloitte & Touche LLP, independent auditors for
Registrant
23.2 Consent of Graubard Mollen & Miller(Included in Exhibit 5.1)
II-5
<PAGE>
- -----------------------------------------------------
- -----------------------------------------------------
No dealer, salesperson or any other person is authorized to give any
information or make any representations in connection with this Offering other
than those contained in this Prospectus and, if given or made, such information
or representations must not be relied upon as having been authorized by the
Company. This Prospectus does not constitute an offer to sell or a solicitation
of an offer to buy any security other than the securities offered by this
Prospectus, or an offer to sell or a solicitation of an offer to buy any
securities by anyone in any jurisdiction in which such offer or solicitation is
not authorized or is unlawful. The delivery of this Prospectus shall not, under
any circumstances, create any implication that the information herein is correct
as of any time subsequent to the date of this Prospectus.
-------------------------
TABLE OF CONTENTS
Page
Available Information......................................................2
Documents Incorporated by Reference........................................2
The Company................................................................3
The Purpose of the Plans...................................................3
Summary of the 1994 Plan...................................................3
Summary of the Management Plan.............................................6
Restrictions on Resale of Shares
Acquired Under the Plans.................................................8
Federal Income Tax Consequences............................................8
-------------------------
- -----------------------------------------------------
- -----------------------------------------------------
----------------------------
1994 Incentive Stock Option Plan
2,000,000 Shares of Common Stock
----------------------------
1988 Management Stock Option Plan
750,000 Shares of Common Stock
----------------------------
MOVIE STAR, INC.
PROSPECTUS
January 23, 1998
<PAGE>
EXHIBIT 4.1
1994 INCENTIVE STOCK OPTION PLAN
<PAGE>
INCENTIVE STOCK OPTION PLAN
OF
MOVIE STAR, INC.
1. Purpose. The purposes of this Incentive Stock Option Plan (the "Plan") are to
enable Movie Star, Inc. (the "Company") to more closely align the interests of
its employees with the interests of the Company's shareholders, maintain
competitive compensation levels and provide an incentive for continuous
employment with the
Company.
2. Administration. The Plan shall be administered by the Compensation Committee
on Executive Compensation of the Company's Board of Directors (the "Committee").
The Committee shall have the authority, in its sole discretion and from time to
time to (i) designate the employees eligible to participate in the Plan; (ii)
grant awards provided in the Plan in such form and amount as the Committee shall
determine; (iii) impose such limitations, restrictions and conditions upon any
such award as the Committee shall deem appropriate; and (iv) interpret the Plan,
adopt, amend and rescind rules and regulations relating to the Plan, and make
all other determinations and take all other action necessary or advisable for
the implementation and administration of the Plan.
3. Available Shares. The maximum number of shares of Common Stock of the Company
which may be issued under the Plan shall be 2,000,000.
4. Qualification Under Section 422 of the Internal Revenue Code of 1986, as
amended. The options granted pursuant to the Plan are "incentive stock options"
intended to qualify as such under the provisions of Section 422 of the Internal
Revenue Code of 1986, as
amended ("Incentive Stock Options").
5. Incentive Stock Option Agreement. The grant of an Incentive Stock Option
shall be evidenced by a written agreement, executed by the Company and the
holder of an Incentive Stock Option in such form and containing such terms not
inconsistent with the Plan as the Committee may from time to time determine.
<PAGE>
6. Incentive Stock Option Price. The option price per share of Common Stock
deliverable upon the exercise of an Incentive Stock Option shall be 100% of the
fair market value of a share of Common Stock on the date the Incentive Stock
Option is granted; provided, however, that in the case of an Incentive Stock
Option granted to any person then owning more than 10% of the voting power of
all classes of the Company's stock, the purchase price per share of Common Stock
deliverable upon the exercise of an Incentive Stock Option shall be not less
than 110% of the fair market value of the Common Stock on the date the Incentive
Stock Option is granted.
7. Term and Exercise. Any Incentive Stock Option granted pursuant to this Plan
shall contain provisions, established by the Committee, setting forth the time
and manner of exercise of each such Incentive Stock Option. In no event,
however, shall any Incentive Stock Option granted to a person owning more than
10% of the voting power of all classes of the Company's stock, by attribution or
otherwise, be exercisable by its terms after the expiration of five years from
the date of the grant thereof, nor shall any other Incentive Stock Option
granted hereunder be exercisable by its terms after the expiration of ten years
from the date of the grant thereof.
8. Nontransferability. No award under the Plan shall be assignable or
transferable by the recipient thereof, except by will or by the laws of descent
and distribution. During the life of the recipient, such award shall be
exercisable only by such person.
9. Maximum Amount of Incentive Stock Option Grant. The aggregate fair market
value (determined on the date an Incentive Stock Option is granted) of Common
Stock subject to exercise by an employee in any calendar year shall not exceed
$100,000.
10. Effective Date; Stockholder Approval. The effective date of this Plan is
July 15, 1994. At the next regular meeting of the stockholders of the Company,
which will occur within 12 months following the date of the adoption of the Plan
by the Company's Board of Directors, the Plan will be presented for
consideration and approval by the Company's stockholders.
<PAGE>
EXHIBIT 4.2
1988 MANAGEMENT STOCK OPTION PLAN
<PAGE>
SANMARK-STARDUST INC.
1988 STOCK OPTION PLAN
1. PURPOSE. The purpose of the Sanmark-Stardust Inc. 1988 Stock Option
Plan is to provide a continuing, long-term incentive to selected eligible
officers and key employees of Sanmark-Stardust Inc. (the "Company") and of any
subsidiary corporation of the Company (a "Subsidiary"), as herein defined, to
provide a means of rewarding outstanding performance; and to enable the Company
to maintain a competitive position to attract and retain key personnel necessary
for continued growth and profitability.
2. DEFINITIONS. The following words and phrases as used herein shall
have the meanings set forth below:
2.1 "Board" shall mean the Board of Directors of the Company.
2.2 "Code" shall mean the Internal revenue Code of 1986, as amended.
2.3 "Committee" shall mean the Compensation Committee of the Board,
if any, or such other committee of the Board as may be designated by the Board,
from time to time, for the purpose of administering this plan as contemplated by
Article 4 hereof.
2.4 "Common Stock" shall mean the common stock $.01 par value,of the
Company.
2.5 "Company" shall mean Sanmark-Stardust Inc., a New York
corporation.
2.6 "Fair Market Value" of any security on any given date shall be
determined by the Committee as follows: (a) if the security is listed for
trading on one or more national securities exchange (including the NASDAQ
National Market System), the reported last price on the date in question, or if
such security shall not have been traded on such exchange on such date, the
reported last price on such exchange on the first day prior thereto on which the
security was traded; or (b) if the security is not listed for trading on a
national securities exchange (including the NASDAQ National Market System) but
is traded in the over-the-counter market, the mean of the highest and lowest bid
prices for such security on the date in question, or if there are no such bid
prices for such security on such date, the mean of the highest and lowest bid
prices on the first day prior thereto on which such prices existed; or (c) if
neither (a) nor (b) is applicable, by any means deemed fair and reasonable by
the Committee, which determination shall be final and binding on all parties.
2.7 "Option" shall mean any option granted pursuant to the Plan
which does not qualify as an incentive stock option under Section 422A of the
Code.
2.8 "Optionee" shall mean any person who is the holder of an Option
granted pursuant to this Plan.
2.9 "Plan" shall mean this 1988 Stock Option Plan of the Company.
2.10 "Subsidiary" shall mean any corporation which at the time
qualifies as a subsidiary of the Company under Section 425(f) of the Code.
3. SHARES AVAILABLE UNDER PLAN. The number of shares which may be
issued pursuant to options granted under the Plan shall not exceed 750,000
shares of the Common Stock of the Company; provided, however, that shares which
become available as a result of cancelled, unexercised, lapsed or terminated
options granted under this Plan shall be available for issuance pursuant to
options subsequently granted under this Plan. The shares issued upon exercise of
options granted under this Plan may be authorized and unissued shares or
previously acquired shares of the Company.
4. ADMINISTRATION.
<PAGE>
4.1 The Plan will be administered by the Compensation Committee
("Committee") of the Board. No Committee member may vote upon any option granted
to him during his tenure on the Committee.
4.2 The Committee will have plenary authority, subject to provisions
of the Plan, to determine when and to whom Options will be granted, the term of
each Option, the number of shares covered by it, the participation of the
Optionee in other plans, and any other terms or conditions of each Option. The
number of shares, the term and the other terms and conditions of a particular
kind of Option need not be the same, even as to Options granted at the same
time. The Committee's recommendations regarding Option grants and terms and
conditions thereof will be conclusive.
4.3 The Committee will have the sole responsibility for construing
and interpreting the Plan, for establishing and amending any rules and
regulations as it deems necessary or desirable for the proper administration of
the Plan, and for resolving all questions arising under the Plan. Any decision
or action taken by the Committee arising out of or about the construction,
administration, interpretation and effect of the Plan and of its rules and
regulations will, to the extent permitted by law, be within its absolute
discretion, except as otherwise specifically provided herein, and will be
conclusive and binding on all Optionees, all successors, and any other person,
whether that person is claiming under or through any Optionee or otherwise.
4.4 No member of the Committee will be liable, in the absence of bad
faith, for any act or omission with respect to his service on the Committee.
Service on the Committee constitutes service as a member of the Board, so that
the members of the Committee will be entitled to indemnification and
reimbursement as Board members pursuant to its Bylaws.
4.5 The Committee will regularly inform the Board as to its actions
with respect to all Options granted under the Plan and the terms and conditions
of any such Options in a manner, at any times, and in any form as the Board may
reasonably request.
5. PARTICIPANTS.
5.1 Participation in this Plan shall be limited to key management
personnel of the Company or of a Subsidiary, who are salaried employees of the
Company or of a Subsidiary.
5.2 Subject to other provisions of this Plan, Options may be granted
to the same participants on more than one occasion.
5.3 The Committee's determination under the Plan including, without
limitation, determination of the persons to receive Options, the form and amount
of such Options, and the terms and provisions of Options need not be uniform and
may be made selectively among otherwise eligible participants, whether or not
the participants are similarly situated.
6. TERMS AND CONDITIONS.
6.1 Each Option granted under the Plan shall be evidenced by a
written agreement, which shall be subject to the provisions of this Plan and to
such other terms and conditions as the Company may deem appropriate.
6.2 Each Option agreement shall specify the period for which the
Option thereunder is granted, which in no event shall exceed ten years from the
date of the grant, and shall provide that the Option shall expire at the end of
such period.
6.3 The exercise price per share shall be determined by the
Committee at the time any Option is granted.
6.4 An Option shall be exercisable at such time or times, and with
respect to such minimum number of shares, as may be determine by the Committee
at the time of the grant; provided, however, that the Committee may, in its
discretion, accelerate the exercise date for any unexercised Options when the
Committee deems such action to be appropriate under the circumstances. The
Option
<PAGE>
agreement may require, if so determined by the Committee, that no part of the
Option may be exercised until the Optionee shall have remained in the employ of
the Company or of a Subsidiary for such period after the date of the Option as
the Committee may specify.
6.5 The Company may prescribe the form of legend which shall be
affixed to the stock certificate representing shares to be issued and the shares
shall be subject to the provisions of any repurchase agreement or other
agreement restricting the sale of transfer thereof. Such agreements or
restrictions shall be noted on the certificate representing the shares to be
issued.
7. EXERCISE OF OPTION.
7.1 Each exercise of an Option granted hereunder, whether in whole
or in part, shall be by written notice thereof, delivered to the Secretary of
the Company (or such other person as he may designate). The notice shall state
the number of shares with respect to which the Option is being exercised and
shall be accompanied by payment in full for the number of shares so designated.
Shares shall be registered in the name of the Optionee unless the Optionee
otherwise directs in his or her notice of election.
7.2 Payment shall be made to the Company either (i) in cash,
including check, bank draft or money order as authorized by the Company, or (ii)
at the discretion of the Company, by delivering Company Common Stock already
owned by the participant or a combination of Common Stock and cash. With respect
to (ii), the Fair Market Value of stock so delivered shall be determined as of
the date immediately preceding the date of exercise.
7.3 Upon notification of the amount due and prior to, or
concurrently with, the delivery to the Optionee of a certificate representing
any shares purchased pursuant to the exercise of an Option, the Optionee shall
promptly pay to the Company any amount necessary to satisfy applicable federal,
state or local withholding tax requirements.
7.4 If the terms of an Option so permit, an Optionee may, subject to
the approval of the Committee, elect by written notice to the Secretary of the
Company (or such other person as he may designate) to satisfy the withholding
tax requirements associated with the exercise of an Option by (i) authorizing
the Company to retain from the number of shares of Common Stock that would
otherwise be deliverable to the Optionee, or (ii) delivering to the Company from
shares of Common Stock already owned by the Optionee, that number of shares
having an aggregate Fair Market Value equal to the tax payable by the Optionee
under Section 7.3. Any such election shall be in accordance with, and subject
to, applicable tax and securities laws regulations and rulings.
8. EXTRAORDINARY CORPORATE TRANSACTION. New Options may be substituted
for the Options granted under the Plan or the Company's duties as to Options
outstanding under the Plan may be assumed, by a corporation other than the
Company, or by a parent or subsidiary of the Company or such corporation, in
connection with any merger, consolidation, acquisition, separation,
reorganization, liquidation or like occurrence in which the Company is involved.
Notwithstanding the foregoing or the provisions of Section 9 hereof, in the
event such corporation, or parent or subsidiary of the Company or such
corporation, does not substitute new Options for, and substantially equivalent
to, the Options granted hereunder, or assume the Options granted hereunder, the
Options granted hereunder shall terminate and thereupon become null and void (i)
upon dissolution or liquidation of the Company, or similar occurrence, (ii) upon
any merger, consolidation, acquisition, separation, reorganization, or similar
occurrence, where the Company will not be a surviving entity or (iii) upon a
transfer of substantially all of the assets of the Company or more than 80% of
the outstanding Common Stock; provided, however, that each Optionee shall have
the right within a 60-day period prior to or concurrently with such dissolution,
liquidation, merger, consolidation, acquisition, separation, reorganization or
similar occurrence, to exercise any unexpired Option granted hereunder without
regard to any installment exercise restrictions contained in the Option
agreement.
9. CHANGES IN COMPANY'S CAPITAL STRUCTURE. The existence of outstanding
Options shall not affect in any way the right or power of the Company or its
<PAGE>
stockholders to make or authorize any or all adjustments, recapitalizations,
reorganizations or other changes in the Company's capital structure or its
business, or any merger or consolidation of the Company, or any issuance of
Common Stock or subscription rights thereto, or any merger or consolidation of
the Company, or any issuance of bonds, debentures, preferred or prior preference
stock ahead of or affecting the Common Stock or the rights thereof, or the
dissolution or liquidation of the Company, or any sale of transfer of all or any
part of its assets or business, or any other corporate act or proceeding,
whether of a similar character or otherwise; provided, however, that if the
outstanding shares of Common Stock of the Company shall at any time be changed
or exchanged by declaration of a stock dividend, stock split, combination of
shares or recapitalization, the number and kind of shares subject to the Plan or
subject to any Options theretofore granted, and the option exercise prices,
shall be appropriately and equitably adjusted so as to maintain the
proportionate number of shares without changing the aggregate option exercise
price.
10. ASSIGNMENTS. Any option granted under this Plan shall be
exercisable only by the Optionee to whom granted during his or her lifetime and
shall not be assignable or transferable otherwise than by will or by the laws of
descent and distribution.
11. SEVERANCE; DEATH; DISABILITY. An Option shall terminate, and no
rights thereunder any be exercised, if the person to whom it is granted ceases
to be employed by the Company or by a Subsidiary except that:
11.1 If the employment of the Optionee is terminated by any reason
other than his or her death or permanent disability, the Optionee may at any
time within not more than thirty (30) days after termination of his or her
employment, exercise his or her Option rights but only to the extent they were
exercisable by the Optionee on the date of termination of his or her employment;
provided, however, that if the employment is terminated as a result of the
Optionee's deliberate, willful or gross misconduct as determined by the
Committee, all rights under the Option shall terminate and expire upon such
termination.
11.2 If the Optionee dies while in the employ of the Company or a
Subsidiary, or within not more than thirty (30) days after termination of his or
her employment, the Optionee's rights under the Option may be exercised at any
time within one hundred-eighty (180) days following such death by his or her
personal representative or by the person or persons to whom such rights under
the Option shall pass by will or by the laws of descent and distribution, but
only to the extent they were exercisable by the Optionee on the date of death.
11.3 If the employment of the Optionee is terminated because of
permanent disability, the Optionee, or his or her legal representative, may at
any time within not more than one hundred and eighty (180) days after
termination of his or her employment.
11.4 Notwithstanding anything contained in Sections 11.1, 11.2 and
11.3 to the contrary, no Option rights shall be exercised by anyone after the
expiration of the term of the Option.
11.5 Transfers of employment between the Company and a Subsidiary,
or between Subsidiaries, will not constitute termination of employment for
purposes of any Option granted under this Plan. The Committee may specify in the
terms and conditions of an Option whether any authorized leave of absence or
absence for military or government service or for any other reasons will
constitute a termination of employment for purposes of the Option and the Plan.
12. RIGHTS OF PARTICIPANTS. Neither the participants nor their personal
representatives, heirs, or legatees of any such participant shall be or have any
of the rights or privileges of a shareholder of the Company in respect of any of
the shares issuable upon the exercise of an Option granted under this Plan
unless and until certificates representing such shares shall have been issued
and delivered to the participant or to such personal representatives, heirs or
legatees.
13. SECURITIES REGISTRATION. If any law or regulation of the Securities
and Exchange Commission or of any other body having jurisdiction shall require
the Company or the participant to take any action in connection with the
exercise of
<PAGE>
an Option, then notwithstanding any contrary provision of an Option agreement or
this Plan, the date of exercise of such Option and the delivery of the shares
purchased thereunder shall be deferred until the completion of the necessary
action. In the event that the Company shall deem it necessary, the Company may
condition the grant or exercise of an Option granted under this Plan upon the
receipt of a satisfactory certificate that the Optionee is acquiring the Option
or the shares obtained by exercise of the Option for investment purposes and not
with the view or intent to resell or otherwise distribute such Option or shares.
In such event, the stock certificate evidencing such shares shall bear a legend
referring to applicable laws restricting transfer of such shares. In the event
that the Company shall deem it necessary to register under the Securities Act of
1933, as amended, or any other applicable statute, any Options or any shares
with respect to which an Option shall have been granted or exercised, then the
participant shall cooperate with the Company and take such action as is
necessary to permit registration or qualification of such Options or shares.
14. DURATION AND AMENDMENT. The Board may terminate or may amend the
Plan at any time, provided, however, that the Board may not, without approval of
the shareholders of the Company, (i) increase the maximum number of shares as to
which Options may be granted under the Plan, (ii) permit the granting of Options
at less than 100% of Fair Market Value at time of grant, or (iii) change the
class of employees eligible to receive Options under the Plan.
15. CONDITIONS OF EMPLOYMENT. The granting of an Option to a
participant under this Plan who is an employee shall impose no obligation on the
Company to continue the employment of any participant and shall not lessen or
affect the right of the Company to terminate the employment of the participant.
Adopted by the Board of Directors on October 17, 1988.
<PAGE>
EXHIBIT 4.3
FORM OF STOCK OPTION AGREEMENT
FOR OPTIONS GRANTED UNDER THE 1994 ISOP
<PAGE>
INCENTIVE STOCK OPTION AGREEMENT
AGREEMENT made as of the 15th day of July, 1994, by and
between MOVIE STAR, INC., a New York corporation (the "Company"), and (the
"Employee").
WHEREAS, on July 15, 1994 (the "Grant Date"), pursuant to the
terms and conditions of the Company's 1994 Incentive Stock Option Plan (the
"Plan"), the Compensation Committee of the Board of Directors of the Company
(the "Committee") authorized the grant to the Employee of an option (the
"Option") to purchase an aggregate of 10,000 shares of the authorized but
unissued Common Stock of the Company, $.01 par value (the "Common Stock"),
conditioned upon the Employee's acceptance thereof upon the terms and conditions
set forth in this Agreement and subject to the terms of the Plan; and
WHEREAS, the validity of all options, including the Option, is
subject to and conditioned upon the stockholders of the Company approving the
Plan on or before July 14, 1995; and
WHEREAS, the Employee desires to acquire the Option on
the terms and conditions set forth in this Agreement;
IT IS AGREED:
1. Grant of Stock Option. Subject to and conditioned upon (i) approval of
the Plan by the stockholders of the Company on or before July 14, 1995 (the
"Approval"), and (ii) immediately following such Approval, the cancellation and
surrender of all options granted to the Employee prior to the date hereof to
purchase the Company's Common Stock, the Company hereby grants the Employee the
Option to purchase all or any part of an aggregate of 10,000 shares of Common
Stock (the "Option Shares") on the terms and conditions set forth herein and
subject to the provisions of the Plan.
<PAGE>
2. Incentive Stock Option. The Option represented hereby is 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 $1.125 per
share, subject to adjustment as hereinafter provided.
4. Exercisability. This Option is exercisable, subject to the terms and
conditions of the Plan, as follows: (i) the right to purchase 20% of the Option
Shares (2,000 shares) shall be exercisable on and after July lst in the calendar
year following the calendar year in which Approval is obtained, and (ii) the
right to purchase an additional 20% of the Option Shares (2,000 shares) shall be
exercisable on and after July lst in each calendar year thereafter. After a
portion of the Option becomes exercisable, it shall remain exercisable except as
otherwise provided herein, until the close of business on July 14, 2004 (the
"Exercise Period").
5. Effect of Termination of Employment. If the Employee's employment by 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 employment
shall be exercisable by the Employee at any time during the ninety (90) day
period following the termination of employment; provided, however, that (i) in
the event that said employment is terminated as a result of the permanent and
total disability of the Employee, then the Employee'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; and (ii) in the event that the
Employee's employment is terminated because of death (or if death occurs within
ninety days after termination of the Employee's employment for reasons other
than those set forth in clause (i) above), then the Option shall be exercisable
by the Employee's personal representative or
<PAGE>
heirs, as the case may be, within ninety (90) days after the date of death of
the Employee if and to the extent that it was exercisable at the date of the
termination of employment.
6. Withholding Tax. Not later than the date as of which an amount first
becomes includible in the gross income of the Employee for Federal income tax
purposes with respect to the Option, the Employee 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. 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 such taxes from any payment of any kind
otherwise due to the Employee from the Company.
7. Adjustments. In the event of any merger, reorganization, consolidation,
recapitalization, consolidation, recapitalization, dividend (other than cash
dividend), stock split, reverse stock split, or other change in corporate
structure affecting the number of issued shares of Common Stock, the Company
shall proportionally adjust the number and kind of Option Shares and the
exercise price of the Option in order to prevent the dilution or enlargement of
the Employee's proportionate interest in the Company and the rights hereunder,
provided that the number of Option Shares shall always be a whole number.
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.
<PAGE>
8.2. Delivery of Option Shares. The Company shall
deliver a certificate for the Option Shares to the Employee as soon as
practicable after payment therefor.
8.3. Payment of Purchase Price. The Employee
shall make cash payments by certified or bank check, in each case payable to the
order of the Company; the Company shall not be required to deliver certificates
for Option Shares until the Company has confirmed the receipt of good and
available funds in payment of the purchase price thereof.
9. Nonassignability. The Option shall not be assignable or transferable
except by will or by the laws of descent and distribution in the event of the
death of the Employee. No transfer of the Option by the Employee by will or by
the laws of descent and distribution shall be effective to bind the Company
unless the Company shall have been furnished with written notice thereof and a
copy of the will and such other evidence as the Company may deem necessary to
establish the validity of the transfer and the acceptance by the transferee or
transferees of the terms and conditions of the Option.
10. Company Representations. The Company hereby represents and warrants to
the Employee that:
(i) the Company, by appropriate and all required
action, is duly authorized to enter into this Agreement and consummate
all of the transactions contemplated hereunder; and
(ii) the Option Shares, when issued and delivered by
the Company to the Employee in accordance with the terms and conditions
hereof, will be duly and validly issued and fully paid and
non-assessable.
11. Employee Representations. The Employee hereby represents and warrants
to the Company that
<PAGE>
(i) he or she is acquiring the Option and shall
acquire the Option Shares for his or her own account and not
with a view towards the distribution thereof;
(ii) he or she has received a copy of all reports and
documents required to be filed by the Company with the Commission
pursuant to the Exchange Act within the last 24 months and all reports
issued by the Company to its stockholders;
(iii) he or she understands that he or she must bear
the economic risk of the investment in the Option Shares, which cannot
be sold by him or her unless they are registered under the Securities
Act of 1933 (the "1933 Act") or an exemption therefrom is available
thereunder and that the Company is under no obligation to register the
Option Shares for sale under the 1933 Act;
(iv) in his or her position with the Company, he or
she has had both the opportunity to ask questions and receive answers
from the officers and directors of the Company and all persons acting
on its behalf concerning the terms and conditions of the offer made
hereunder and to obtain any additional information to the extent the
Company possesses or may possess such information or can acquire it
without unreasonable effort or expense necessary to verify the accuracy
of the information obtained pursuant to clause (ii) above;
(v) he or she is aware that the Company shall place
stop transfer orders with its transfer agent against the transfer of
the Option Shares in the absence of registration under the 1933 Act or
an exemption therefrom as provided herein; and
(vi) The certificates evidencing the Option Shares
shall bear the following legends:
<PAGE>
"The shares represented by this certificate have been
acquired for investment and have not been registered
under the Securities Act of 1933. The shares may not
be sold or transferred in the absence of such
registration or an exemption therefrom under said
Act."
"The shares represented by this certificate have been
acquired pursuant to a Stock Option Agreement, dated
as of July 15, 1994, a copy of which is on file with
the Company, and may not be transferred, pledged or
disposed of except in accordance with the terms and
conditions thereof."
12. Restriction on Transfer of Option Shares. Anything in this Agreement to
the contrary notwithstanding, the Employee hereby agrees that he or she shall
not sell, transfer by any means or otherwise dispose of the Option Shares
acquired by him or her without registration under the 1933 Act, or in the event
that they are not so registered, unless (i) an exemption from the 1933 Act
registration requirements is available thereunder, and (ii) the Employee has
furnished the Company with notice of such proposed transfer and the Company's
legal counsel, in its reasonable opinion, shall deem such proposed transfer to
be so exempt.
13. Miscellaneous.
13.1. Notices. All notices, requests, deliveries,
payments, demands and other communications which are required or permitted to be
given under this Agreement shall be in writing and shall be either delivered
personally or sent by registered or certified mail, or by private courier,
return receipt requested, postage prepaid to the parties at their respective
addresses set forth herein, or to such other address as either shall have
specified by notice in writing to the other. Notice shall be deemed duly given
hereunder when delivered or mailed as provided herein.
13.2. Plan Paramount; Conflicts with Plan.
This Agreement and the Option shall, in all respects, be subject
<PAGE>
to the terms and conditions of the Plan, whether or not stated herein. In the
event of a conflict between the provisions of the Plan and the provisions of
this Agreement, the provisions of the Plan shall in all respects be controlling.
13.3. Stockholder Rights. The Employee shall
not have any of the rights of a stockholder with respect to the Option Shares
until such shares have been issued after the due exercise of the Option.
13.4. Waiver. The waiver by any party hereto
of a breach of any provision of this Agreement shall not operate or be construed
as a waiver of any other or subsequent breach.
13.5. Entire Agreement. This Agreement
constitutes the entire agreement between the parties with respect to the subject
matter hereof. This Agreement may not be amended except by writing executed by
the Employee and the Company.
13.6. Binding Effect; Successors. This Agree
ment shall inure to the benefit of and be binding upon the parties hereto and,
to the extent not prohibited herein, their respective heirs, successors, assigns
and representatives. Nothing in this Agreement, expressed or implied, is
intended to confer on any person other than the parties hereto and as provided
above, their respective heirs, successors, assigns and representatives any
rights, remedies, obligations or liabilities.
13.7. Governing Law. This Agreement shall be
governed by and construed in accordance with the laws of the State of New York
(without regard to choice of law provisions).
13.8. Headings. The headings contained herein
are for the sole purpose of convenience of reference, and shall not in any way
limit or affect the meaning or interpretation of any of the terms or provisions
of this Agreement.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have signed this
Agreement as of the day and year first above written.
MOVIE STAR, INC. Address:
136 Madison Avenue
New York, New York 10016
By:
----------------------------
MARK M. DAVID, CHAIRMAN
EMPLOYEE: Address:
- ------------------------------- ----------------------------
----------------------------
----------------------------
<PAGE>
EXHIBIT A
FORM OF NOTICE OF EXERCISE OF OPTION
- --------------------
DATE
Movie Star, Inc.
136 Madison Avenue
New York, New York 10016
Attention: The Board of Directors
Re: Purchase of Option Shares
Gentlemen:
In accordance with my Stock Option Agreement dated as of July
15, 1994 ("Agreement") with Movie Star, Inc. (the "Company"), I hereby
irrevocably elect to exercise the right to purchase _________ shares of the
Company's common stock, par value $.01 per share ("Common Stock"), which are
being purchased for investment and not for resale.
As payment for my shares, enclosed is a certified or bank
check payable to Movie Star, Inc. in the sum of $ .
I hereby represent, warrant to, and agree with, the Company
that
(i) I am acquiring the Option and shall acquire the
Option Shares for my own account and not with a view towards the
distribution thereof;
(ii) I have received a copy of all reports and
documents required to be filed by the Company with the Commission
pursuant to the Exchange Act within the last 24 months and all reports
issued by the Company to its stockholders;
(iii) I understand that I must bear the economic risk
of the investment in the Option Shares, which cannot be sold by me
unless they are registered under the Securities Act of 1933 (the "1933
Act") or an exemption therefrom is available thereunder and that the
Company is under no obligation to register the Option Shares for sale
under the 1933 Act;
(iv) in my position with the Company, I have had both
the opportunity to ask questions and receive answers from the officers
and directors of the Company and all persons acting on its behalf
concerning the terms and conditions of the offer made hereunder and to
obtain any additional information to the extent the Company possesses
or may possess such information or can acquire it without unreasonable
effort or expense necessary to verify the accuracy of the information
obtained pursuant to clause (ii) above;
<PAGE>
(v) I am aware that the Company shall place stop
transfer orders with its transfer agent against the transfer of the
Option Shares in the absence of registration under the 1933 Act or an
exemption therefrom as provided herein;
(vi) my rights with respect to the Option Shares
shall, in all respects, be subject to the terms and conditions of this
Company's 1993 Stock Option Plan and this Agreement; and
(vii) the certificates evidencing the Option Shares
shall bear the following legends:
"The shares represented by this certificate have been
acquired for investment and have not been registered
under the Securities Act of 1933. The shares may not
be sold or transferred in the absence of such
registration or an exemption therefrom under said
Act."
"The shares represented by this certificate have been
acquired pursuant to a Stock Option Agreement, dated
as of July 15, 1994, a copy of which is on file with
the Company, and may not be transferred, pledged or
disposed of except in accordance with the terms and
conditions thereof."
Kindly forward to me my certificate at your earliest convenience.
Very truly yours,
- ------------------------------ ------------------------------
(Signature) (Address)
- ------------------------------ ------------------------------
(Print Name) (Address)
------------------------------
(Social Security Number)
<PAGE>
EXHIBIT 5.1
OPINION OF GRAUBARD MOLLEN & MILLER
<PAGE>
January 23, 1998
Movie Star, Inc.
136 Madison Avenue
New York, New York 10016
Re: Registration Statement on Form S-8
Gentlemen:
We have acted as counsel to you in connection with the
purchase and offering by Movie Star, Inc. ("Company"), of up to 2,750,000 shares
("Shares") of the Company's Common Stock, $.01 par value per share, pursuant to
options which have been or may be granted under the Company's 1994 Stock Option
Plan and 1988 Management Stock Option Plan
(collectively, the "Plans").
In such capacity, we have examined, signed and conformed
copies of the Registration Statement on Form S-8 relating to the Shares filed by
the Company with the Securities and Exchange Commission ("Commission") under the
Securities Act of 1933, as amended ("Act") on January 23, 1998, (hereinafter
referred to as the "Registration Statement"), and have examined the Prospectus
dated January 23, 1998 relating to the Shares ("Prospectus"). We have also
examined, among other documents, signed copies of the Stock Option Agreements
between the Company and the grantees of options under the Plans, copies of the
Certificate of Incorporation, as amended, and By-Laws of the Company, as
amended, and certified copies of resolutions adopted by the Company's Board of
Directors relating, among other things, to the authorization and sale of the
Shares. In addition, we have examined and relied upon, to the extent we deemed
such reliance proper, certificates of officers and directors of the Company,
certificates of certain public officials and such other records and documents as
we have considered necessary and proper in order that we may render the opinion
hereinafter set forth. We have assumed the authenticity of such Certificate of
Incorporation, as amended, By-Laws, as amended, resolutions, certificates,
records and other documents examined by us and the correctness of all statements
of fact contained therein, and nothing has come to our attention which indicates
that such documents and other items are not authentic or correct. With respect
to such examination, we have assumed the genuineness of all signatures appearing
on all documents presented to us as originals and the conformity to originals of
all documents presented to us as conformed or reproduced documents. We have not
examined the certificates for the Shares other than specimens thereof.
As members of the Bar of the State of New York, we do not
purport to be experts in the laws of any jurisdiction other than the State of
New York and with respect to the Federal laws of the United States.
Based on the foregoing we are of the opinion that the Shares
being offered pursuant to the Stock Option Agreements and the terms of
<PAGE>
the respective Plan to which each Stock Option Agreement relates have been duly
authorized and, when issued and delivered against payment therefor, as
contemplated by the Registration Statement and the Stock Option Agreements, will
be validly issued and fully paid and non-assessable.
This letter is being delivered to you solely for your benefit
and may not be relied upon in any manner by any other person.
Very truly yours,
/s/ Graubard Mollen & Miller
------------------------------
Graubard Mollen & Miller
<PAGE>
EXHIBIT 23.1
CONSENT OF DELOITTE & TOUCHE LLP
We consent to the incorporation by reference in this Registration Statement of
Movie Star, Inc. on Form S-8 of our report dated September 4, 1997, appearing in
the Annual Report on Form 10-K of Movie Star, Inc. for the year ended June 30,
1997.
DELOITTE & TOUCHE LLP
New York, New York
January 23, 1998
