Pursuant to Rule 425 under
the Securities Act of 1933
and deemed to be filed
pursuant to Rule 14a-12 of
the Securities Exchange Act
of 1934
Subject Company: Movie Star,
Inc.
Commission File No.: 333-143619
1115 BROADWAY
Movie Star, Inc. Announces Meeting Date for Special Meeting in Lieu of
Annual Meeting
Registration Statement for $20 Million Rights Offering Declared
Effective by SEC
NEW YORK –November 29, 2007 –
Movie Star, Inc. (AMEX: MSI) (“Movie Star”) announced
today that its special meeting in lieu of its annual meeting of shareholders
will be held on January 23, 2008 at 10:30 a.m. Eastern Time, at Club 101 on the Main Floor, 101 Park Avenue, New York, New
York. Movie Star shareholders of
record as of November 27, 2007 (“Record Date”) will
be invited to attend Movie Star’s special meeting of shareholders and vote on
eight proposals, including (i) the approval of the issuance of 39,370,436 shares
of Movie Star common stock in connection with the merger, the non-transferable
rights offering and other transactions contemplated by the Agreement and Plan
of Merger and Reorganization by and among Movie Star, Fred Merger Corp. and FOH
Holdings, Inc., the parent and sole stockholder of Frederick’s of Hollywood,
Inc., (ii) the approval of an amendment to Movie Star’s certificate of
incorporation to increase the number of authorized shares of Movie Star common
stock from 30,000,000 to 200,000,000, (iii) the approval of an amendment to
Movie Star’s certificate of incorporation to change the name of Movie Star to “Frederick’s
of Hollywood Group Inc.”, (iv) the approval of an amendment to Movie Star’s certificate
of incorporation to authorize the issuance of up to 10,000,000 shares of
preferred stock, (v) to authorize the Movie Star board of directors to effect,
if necessary, a reverse stock split of Movie Star’s outstanding common stock immediately
prior to the closing of the merger in order to satisfy the minimum price
requirement of $2.00 per share for continued listing on the American Stock
Exchange, (vi) the adoption of an Amended and Restated 2000 Performance Equity
Plan to increase the number of shares available for issuance under the plan
from 750,000 to 4,000,000 shares, (vii) the election of eleven directors and (viii)
an adjournment proposal. These proposals
are described in detail in the definitive proxy statement, which Movie Star
expects to mail on or about November 30, 2007.
Movie Star also announced
today that the registration statement filed with the Securities and Exchange
Commission in connection with Movie Star’s previously announced
non-transferable rights offering has been declared effective as of November 29,
2007. The rights offering will commence
on December 3, 2007 and will expire on January 16, 2008 unless extended or
earlier withdrawn. Movie Star will
distribute to holders of Movie Star’s outstanding common stock as of the Record
Date, at no cost, non- transferable subscription rights to purchase up to an
aggregate of 11,363,636 shares of Movie Star common stock at a subscription
price of $1.76 per share. Record holders
of Movie Star’s common stock will receive one subscription right for each share
of Movie Star common stock held by them as of the close of business on the
Record Date. Each non-transferable
subscription right will entitle the holder to purchase 0.691417 shares of Movie
Star common stock. The number of shares
entitled to be purchased by each holder will be rounded down in the aggregate
to the nearest whole number.
Movie Star
shareholders who fully exercise all rights issued to them will be entitled to
subscribe for additional shares of Movie Star common stock at the subscription
price pursuant to an oversubscription privilege to the extent that other
eligible participants do not exercise their subscription privileges in
full. Fursa Alternative Strategies, LLC
(“Fursa”) and certain funds and accounts affiliated with, managed by, or over
which Fursa or any of its affiliates exercises investment authority, including,
without limitation, with respect to voting and dispositive rights, Tokarz
Investments, LLC and TTG Apparel, LLC, have agreed to act as standby purchasers
and purchase directly from Movie Star, at the same subscription price, all
shares of Movie Star common stock not subscribed for in the rights offering.
On or about November
30, 2007, subscription certificates evidencing the rights will be mailed to our
shareholders of record as of the Record Date, along with the final prospectus
describing, among other things, the terms, risks and other important
information about the rights offering. The closing of the rights offering is conditioned on
(i) the satisfaction or waiver of the conditions specified in the merger
agreement to the filing of the certificate of merger, other than the actual
delivery of the various closing documents and (ii) our acceptance of
subscriptions, which would occur immediately prior to the merger (and prior to
any reverse stock split effected in connection with the merger). The definitive
proxy statement will contain important information regarding the closing
conditions and the transactions in general.
This press
release shall not constitute an offer to sell or the solicitation of an offer
to buy nor shall there be any sale of such rights or common stock in any state
in which such offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities laws of any such state.
Important Additional Information Will be
Filed with the SEC
In connection with the transactions contemplated
by the merger agreement with FOH Holdings, Inc., Movie Star will file a
definitive proxy statement and a final prospectus for the rights offering with
the SEC. BEFORE MAKING ANY INVESTMENT
DECISION TO PARTICIPATE IN THE RIGHTS OFFERING, MOVIE STAR SHAREHOLDERS ARE
URGED TO READ THE FINAL PROSPECTUS CAREFULLY IN ITS ENTIRETY WHEN IT BECOMES
AVAILABLE BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED
RIGHTS OFFERING. BEFORE MAKING ANY
VOTING DECISION, MOVIE STAR SHAREHOLDERS ARE URGED TO READ THE DEFINITIVE PROXY
STATEMENT CAREFULLY IN ITS ENTIRETY WHEN IT BECOMES AVAILABLE BECAUSE IT WILL
CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTIONS. Movie Star shareholders and other interested
parties will be able to obtain, without charge, a copy of the definitive proxy
statement and final prospectus (when available) and other relevant documents
filed with the SEC, from the SEC’s website at http://www.sec.gov. Movie Star shareholders and other interested
parties will also be able to obtain, without charge, a copy of the definitive
proxy statement, final prospectus and other relevant documents (when available)
by directing a request by mail or telephone to Movie Star, Inc., 1115 Broadway,
New York, NY 10010, telephone: (212) 798-4700.
Participants in the Solicitation
Movie Star and its directors and officers
may be deemed to be participants in the solicitation of proxies from Movie Star
shareholders with respect to the transactions contemplated by the merger
agreement. Information about Movie
Star’s directors and executive officers and their ownership of Movie Star
common stock is set forth in a preliminary proxy statement currently on file
with the SEC and will be set forth in the definitive proxy statement. Shareholders and investors may obtain
additional information regarding the interests of Movie Star and its directors
and executive officers in the transactions contemplated by the merger
agreement, which may be different than those of Movie Star shareholders
generally, by reading the proxy statement and other relevant documents
regarding the transactions contemplated by the merger agreement that have been
or will be filed with the SEC.
Forward Looking Statement
Certain of the matters set forth in this
press release are forward-looking and involve a number of risks and
uncertainties. Among the factors that
could cause actual results to differ materially are the following: competition;
business conditions and industry growth; rapidly changing consumer preferences
and trends; general economic conditions; large variations in sales volume with
significant customers; addition or loss of significant customers; continued
compliance with government regulations; loss of key personnel; labor practices;
management of growth, increases in costs of operations or inability to meet
efficiency or cost reduction objectives; the timing of orders and deliveries of
products; foreign government regulations and risks of doing business abroad;
failure to realize the merger’s anticipated synergies; approval of the
transactions by Movie Star’s shareholders and satisfaction of various other
conditions to the closing of the merger contemplated by the merger agreement;
and the other risks that are described from time to time in Movie Star’s SEC
reports.
CONTACT: INVESTOR
RELATIONS:
Movie Star, Inc.
-or- SM Berger & Company, Inc.
Thomas Rende, CFO Stanley Berger
(212) 798-4700
(216) 464-6400