Document:

EX-10.46

Exhibit 10.46

EXECUTION COPY

NON-QUALIFIED STOCK OPTION AGREEMENT

     THIS STOCK OPTION AGREEMENT AGREEMENT made as of January 29, 2009, by and between Frederick’s
of Hollywood Group Inc., a New York corporation (the “Company”), and Thomas Lynch (the “Employee”).

     WHEREAS, effective on January 29, 2009 (the “Grant Date”), pursuant to the terms and
conditions of the Company’s 1988 Stock Option Plan (the “Plan”), the Board of Directors of the
Company (the “Board”) authorized the grant to the Employee of an option (the “Option”) to purchase
an aggregate of 360,000 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 Employee desires to acquire the Option on the terms and conditions set forth in
this Agreement.

     IT IS AGREED:

     1. Grant of Stock Option. The Company hereby grants the Employee the Option to
purchase all or any part of an aggregate of 360,000 shares of Common Stock (the “Option Shares”) on
the terms and conditions set forth herein and subject to the provisions of the Plan.

     2. Non-qualified Stock Option. The Option represented hereby is not intended to be an
Option which qualifies as an “Incentive Stock Option” under Section 422 of the Internal Revenue
Code of 1986, as amended.

     3. Exercise Price. The exercise price of the Option shall be $0.38 per share, subject
to adjustment as hereinafter provided.

     4. Vesting and Exercisability. Subject to the terms and conditions of the Plan, and
provided that the Employee has remained continuously employed by the Company as of each vesting
date except as otherwise provided herein, this Option shall vest and become exercisable in three
(3) equal installments, covering one-third of the Option Shares (120,000 shares), on and after each
of (i)

 

 

the Grant Date, (ii) January 2, 2010 and (iii) January 2, 2011. After a portion of the Option
becomes exercisable, it shall remain exercisable, except as otherwise provided herein, until the
close of business on the day immediately preceding the tenth anniversary of the Grant Date (the
“Exercise Period”).

     5. Effect of Termination of Employment.

          5.1 Termination Due to Death. If Employee’s employment by the Company terminates by
reason of death, the portion of the Option, if any, that was exercisable as of the date of death
may thereafter be exercised by the Employee’s designated beneficiary (or, if no beneficiary is
designated, by the legal representative of the estate or by the legatee of the Employee under the
will of the Employee) for a period of one (1) year from the date of such death or until the
expiration of the Exercise Period, whichever period is shorter. The portion of the Option, if any,
which was not exercisable as of the date of death shall immediately expire upon death.

          5.2 Termination Due to Disability. If Employee’s employment by the Company terminates
by reason of Disability (as defined in the Employment Agreement, dated as of January 29, 2009,
between the Company and Employee, or any successor agreement (“Employment Agreement”)), the portion
of the Option, if any, that was exercisable as of the date of termination of employment may
thereafter be exercised by Employee for a period of one (1) year from the date of termination of
employment or until the expiration of the Exercise Period, whichever period is shorter. The
portion of the Option, if any, which was not exercisable as of the date of such termination of
employment shall immediately expire on the date of such termination of employment.

          5.3 Termination for Cause. If Employee’s employment by the Company is terminated for
Cause (as defined in the Employment Agreement), (i) this Option, whether or not exercisable, shall
immediately expire and (ii) the Company may require the Employee to pay to the Company the economic
value of any Option Shares purchased hereunder by the Employee within the six (6) month period
prior to the date of such termination of employment. For this purpose, the term “economic value”
means the difference between the Fair Market Value of the Option Shares on the date of such
termination of employment (or the sales price of such shares if the Option Shares were sold during
such six (6) month period) and the Exercise Price of such shares. In such event, the Employee
hereby agrees to remit to the Company, in cash, by no later than thirty (30) days after the date of
termination or the date established under the Employment Agreement for curing any conduct

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amounting to Cause has expired, whichever is later, an amount equal to the economic value as
defined above.

          5.4 Termination by the Company Without Cause or by Employee for Good Reason. If
Employee’s employment is terminated by the Company without Cause (as defined in the Employment
Agreement) or by Employee for Good Reason (as defined in the Employment Agreement), then the
portion of the Option which is exercisable on the date of termination of employment, and any
additional portion of the Option which would have otherwise vested within one year of the date of
termination, shall become immediately exercisable and shall continue to be exercisable thereafter,
absent the death of Employee (in which case the Option shall be exercisable by the Employee’s
personal representative or heirs, as the case may be, within one year after the date of death of
the Employee), for a period of three years from the date of termination. Any remaining unvested
portion of the Option shall expire on the date of termination.

          5.5 Other Termination. If Employee’s employment is terminated for any reason other
than (i) death, (ii) Disability, (iii) for Cause, (iv) without Cause by the Company or (v) by the
Employee for Good Reason, then the portion of the Option, if any, that was exercisable as of the
date of termination of employment may thereafter be exercised by the Employee for a period of
ninety (90) days from the date of termination of employment, and any remaining unvested portion of
the Option shall expire on the date of termination.

     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 (“Withholding Tax”). The obligations of the Company
under the Plan and pursuant to this Agreement shall be conditional upon such payment or
arrangements with the Company and the Company shall, to the extent permitted by law, have the right
to deduct any Withholding Taxes from any payment of any kind otherwise due to the Employee from the
Company.

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     7. Adjustments.

          7.1 In the event of a stock split, stock dividend, combination of shares, or any other similar
change in the Common Stock of the Company as a whole, the Board of Directors of the Company shall
make equitable, proportionate adjustments in the number and kind of shares covered by the Option
and in the option price hereunder.

          7.2 In the event of any reclassification or reorganization of the outstanding shares of Common
Stock other than a change covered by Section 7.1 or that solely affects the par value of such
shares of Common Stock, or in the case of any merger or consolidation of the Company with or into
another corporation (other than a consolidation or merger in which the Company is the continuing
corporation and that does not result in any reclassification or reorganization of the outstanding
shares of Common Stock), the Employee shall have the right thereafter (until the expiration of the
right of exercise of this Option) to receive upon the exercise hereof after such event, for the
same aggregate Exercise Price payable hereunder immediately prior to such reclassification,
reorganization, merger or consolidation, the amount and kind of consideration receivable by a
holder of the number of shares of Common Stock of the Company obtainable upon exercise of this
Option immediately prior to such event. The provisions of this Section 7.2 shall similarly apply
to successive reclassifications, reorganizations, mergers or consolidations, sales or other
transfers.

     8. Method of Exercise.

          8.1 Notice to the Company. The Option shall be exercised in whole or in part by
written notice in substantially the form attached hereto as Exhibit A directed to the Company at
its principal place of business accompanied by full payment as hereinafter provided of the exercise
price for the number of Option Shares specified in the notice and of the Withholding Taxes, if any.

          8.2 Delivery of Option Shares. The Company shall deliver a certificate for the Option
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 and of the Withholding Taxes, if any.

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     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:

          (i) he is acquiring the Option and shall acquire the Option Shares for his own account and not
with a view towards the distribution thereof;

          (ii) he has received a copy of all reports and documents required to be filed by the Company
with the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934 as
amended (“Exchange Act”) within the last 24 months and all reports issued by the Company to its
shareholders;

          (iii) he understands that he must bear the economic risk of the investment in the Option
Shares, which cannot be sold by him unless they are registered under the Securities Act of 1933, as
amended (“Securities Act”), or an exemption therefrom is available thereunder; provided that he
understands that the Company is under no obligation to register the Option Shares for sale under
the Securities Act;

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          (iv) in his position with the Company, he 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 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 Securities Act
or an exemption therefrom as provided herein; and

          (vi) in the absence of an effective registration statement under the Securities Act, the
certificates evidencing the Option Shares shall bear the following legend:

     “The securities represented by this certificate have been acquired for
investment and have not been registered under the Securities Act of 1933, as
amended, or applicable state securities laws and may not be sold or transferred in
the absence of such registration or pursuant to an exemption therefrom under said
Act and such laws, supported by an opinion of counsel, reasonably satisfactory to
the Company and its counsel, that such registration is not required.”

     12. Restriction on Transfer of Option Shares. Anything in this Agreement to the
contrary notwithstanding, the Employee hereby agrees that she shall not sell, transfer by any means
or otherwise dispose of the Option Shares acquired by the Employee without registration under the
Securities Act, or in the event that they are not so registered, unless (i) an exemption from the
Securities 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

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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 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 Shareholder Rights. The Employee shall not have any of the rights of a
shareholder 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 Agreement 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.

          13.9 Section 409A. The Option granted hereunder is intended to be exempt from the
provisions of Section 409A of the Internal Revenue Code of 1986, as amended (“Section 409A “). To
the extent that the Options or any payments or benefits provided hereunder are considered deferred

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compensation subject to Section 409A, the Company intends for this Agreement and the Option to
comply with the standards for nonqualified deferred compensation established by Section 409A (the
“409A Standards”). Notwithstanding anything herein to the contrary, to the extent that any terms
of this Agreement or the Option would subject the Employee to gross income inclusion, interest or
an additional tax pursuant to Section 409A, those terms are to that extent superseded by the 409A
Standards. The Company reserves the right to amend the Option granted hereunder to cause such
Option to comply with or be exempt from Section 409A.

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     IN WITNESS WHEREOF, the parties hereto have signed this Agreement as of the day and year first
above written.

	 	 	 	 	 	 	 	 	 
	EMPLOYEE:	 	 	 	FREDERICK’S OF HOLLYWOOD GROUP INC.	 	 
	 
	 	 	 	 	 	 	 	 
	/s/ Thomas Lynch

	 	 	 	By:
	 	/s/ Peter Cole
	 	 
	 

	 	 	 	 	 	 	 	 
	THOMAS LYNCH

	 	 	 	 	 	Peter Cole	 	 
	 

	 	 	 	 	 	Executive Chairman	 	 
	 
	 	 	 	 	 	 	 	 
	Address of Employee:	 	 	 	Address of Company:	 	 
	 	 	 	 	1115 Broadway	 	 
	 	 	 	 	New York, New York 10010	 	 

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EXHIBIT A

FORM OF NOTICE OF EXERCISE OF OPTION

	 	 	 
	 

DATE

	 	 

Frederick’s of Hollywood Group Inc.

1115 Broadway

11th Floor

New York, New York 10010

Attention: The Board of Directors

			
	          Re:	 	Purchase of Option Shares

Gentlemen:

     In accordance with my Stock Option Agreement dated as of January 29, 2009 (“Agreement”) with
Frederick’s of Hollywood Group 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 Frederick’s of
Hollywood Group Inc. in the sum of $                .

     I hereby represent, warrant to, and agree with, the Company that

          (i) I acquired 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 shareholders;

          (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 “Securities 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 Securities
Act;

          (iv) 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;

          (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
Securities Act or an exemption therefrom as provided herein;

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     (vi) my rights with respect to the Option Shares shall, in all respects, be subject to
the terms and conditions of the Company’s 1988 Stock Option Plan and this Agreement; and

     (vii) in the absence of an effective registration statement under the Securities Act,
the certificates evidencing the Option Shares shall bear the following legend:

“The securities represented by this certificate have been acquired for
investment and have not been registered under the Securities Act of 1933, as
amended, or applicable state securities laws and may not be sold or
transferred in the absence of such registration or pursuant to an exemption
therefrom under said Act and such laws, supported by an opinion of counsel,
reasonably satisfactory to the Company and its counsel, that such
registration is not required.”

Kindly forward to me my certificate at your earliest convenience.

Very truly yours,

	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	(Signature)

	 	 	 	(Address)	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	(Print Name)

	 	 	 	(Address)	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 

(Social Security Number)
	 	 

11EX-10.47

Exhibit 10.47

EXECUTION COPY

RESTRICTED STOCK AGREEMENT

          THIS RESTRICTED STOCK AGREEMENT (this “Agreement”) dated as of January 29, 2009, by and
between Frederick’s of Hollywood Group Inc., a New York corporation (the “Company”), and Thomas
Lynch (the “Employee”).

          WHEREAS, on January 29, 2009, pursuant to the terms and conditions of the Company’s 2000
Performance Equity Plan (the “Plan”), the Board of Directors of the Company (the “Board”)
authorized the issuance to the Employee, effective on the date hereof, of 100,000 shares of the
authorized but unissued common stock of the Company, $.01 par value (“Shares”), 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 Employee desires to acquire the Shares on the terms and conditions set forth in
this Agreement and subject to the terms of the Plan;

          IT IS AGREED:

     1. Grant of Shares.

          1.1 The Company hereby issues to the Employee 100,000 Shares on the terms and conditions set
forth herein. Subject to Section 3 below, the Shares shall be subject to forfeiture in the event
of (a) the termination of Employee’s employment or (b) if Employee does not purchase a minimum of
250,000 shares of the Company’s common stock in the open market for his own account under a Rule
10b5-1 trading plan to be entered into during the first open window period during which Employee is
able to enter into a 10b5-1 trading plan in accordance with the terms of the Company’s Insider
Trading Policy (the “Stock Purchase”) prior to the following dates: (i) prior to January 2, 2010,
all 100,000 shares shall be subject to forfeiture even if the Stock Purchase has been completed
prior to January 2, 2010, (ii) on or after January 2, 2010 and prior to January 2, 2011, 50,000
shares shall be subject to forfeiture only if the Stock Purchase has been completed prior to
January 2, 2010; if the Stock Purchase has not been completed prior to such date, then all 100,000
shares shall be subject to forfeiture and (iii) on or

 

 

after January 2, 2011, no shares shall be subject to forfeiture only if the Stock Purchase has
been completed prior to January 2, 2011; if the Stock Purchase has not been completed prior to such
date, then all 100,000 shares shall be subject to forfeiture (each a “Restriction Period” with
respect to the applicable number of Shares). The Shares shall be represented by two stock
certificates registered in the name of the Employee, each representing 50,000 Shares. Both
certificates (“Share Certificates”) shall bear the legends set forth in Sections 6(vi) and 6(vii)
of this Agreement. The Share Certificates shall be deposited with the Company, together with stock
powers endorsed in blank by the Employee and signature Medallion Guaranteed, which will permit
transfer to the Company of the Shares represented by each such Share Certificate that is forfeited
or shall not become vested in accordance with the terms of this Agreement and the Plan.

          1.2 After issuance, the Shares shall constitute issued and outstanding shares of common stock
of the Company for all corporate purposes, and the Employee shall have the right to vote such
Shares, to receive and retain all cash dividends as the Board may, in its sole discretion, pay on
such Shares, and to exercise all of the rights, powers and privileges of a holder of common stock
with respect to such Shares, except that (a) the Employee shall not be entitled to delivery of a
Share Certificate until the Shares represented by such Share Certificate vest in accordance with
Section 1.3 below and (b) other than cash dividends as the Board, in its sole discretion,
distributes, the Company will retain custody of all distributions (“Retained Distributions”) made
or declared with respect to the Shares (and such Retained Distributions will be subject to the same
restrictions, terms and conditions as applicable to the Shares) until such time, if ever, as the
Shares with respect to which such Retained Distributions shall have been distributed have become
vested.

          1.3 If the Employee is still an employee of the Company at the end of a Restriction Period and
the Stock Purchase has been completed during the applicable Restriction Period as set forth in
Section 1.1, all of the Shares that are no longer subject to forfeiture, and the Retained
Distributions with respect thereto, shall vest and shall no longer be subject to forfeiture by the
Employee. After the date that any Shares become vested, the Company shall instruct its transfer
agent to issue and deliver to the Employee a new certificate for the Shares, which certificate
shall not bear the legend set forth in Section 6(vii). If, at any time prior to the vesting

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of any Shares in accordance with the first sentence of this Section 1.3, the Employee’s
employment with the Company is terminated for any reason, subject to the provisions of Section 3,
or the Stock Purchase has not been completed in accordance with Section 1.1, then the Shares that
have not then vested (and the Retained Distributions with respect thereto) shall be forfeited to
the Company and the Employee shall not thereafter have any rights with respect to such Shares. In
such event, the Company is authorized by the Employee to complete the stock powers to transfer the
Shares to the Company and deliver the Share Certificates and stock powers to the Company’s transfer
agent to return the Shares to the status of authorized but unissued shares of common stock.

          1.4 “Employment”. The Employee shall be considered to be employed by the Company
pursuant to this Section 1 if the Employment Agreement dated as of January 29, 2009 between the
Company and the Employee, as it may be amended from time to time (“Employment Agreement”), has not
been terminated by either party.

          1.5 No Right to Employment. Nothing in the Plan or in this Agreement shall confer on
the Employee any right to continue in the employ of, or other relationship with, the Company (or
with any parent, subsidiary or affiliate of the Company) or limit in any way the right of the
Company (or of any parent, subsidiary or affiliate of the Company) to terminate the Employee’s
employment or other relationship with the Company (or with any parent, subsidiary or affiliate of
the Company) at any time, with or without cause.

     2. 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
Shares, the Employee shall pay to the Company, or make arrangements satisfactory to the Company
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. Notwithstanding anything in this Agreement to the
contrary, 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.

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     3. Special Vesting in Certain Circumstances. If Employee’s employment is terminated
by the Company for any reason other than (i) death, (ii) Disability (as defined in the Employment
Agreement) or (iii) for Cause (as defined in the Employment Agreement), or if Employee terminates
his employment for Good Reason (as defined in the Employment Agreement), then all of the Shares
that would otherwise have vested on each of January 2, 2010 and January 2, 2011 shall continue to
vest as scheduled, provided that the Stock Purchase has been completed in accordance with Section
1.1.

     4. Nonassignability of Shares. The Shares shall not be assignable or transferable
until they have vested.

     5. 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 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.

     6. Employee Representations. The Employee hereby represents and warrants to the
Company that:

          (i) he is acquiring the Shares for his own account and not with a view towards the
distribution thereof;

          (ii) he has received a copy of all reports and documents required to be filed by the Company
with the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, as
amended (“Exchange Act”) within the last twenty-four (24) months and all reports issued by the
Company to its shareholders;

          (iii) he understands that he must bear the economic risk of the investment in the Shares,
which cannot be sold by him unless they are registered under the Securities Act of

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1933, as amended (“Securities Act”), or an exemption therefrom is available thereunder;
provided that he understands that the Company is under no obligation to register the Shares for
sale under the Securities Act;

          (iv) in his position with the Company, he 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 is aware that the Company shall place stop transfer orders with its transfer agent
against the transfer of the Shares in the absence of registration under the Securities Act or an
exemption therefrom as provided herein;

          (vi) in the absence of an effective registration statement under the Securities Act, the
certificates evidencing the Shares shall bear the following legend:

“The securities represented by this certificate have been acquired for
investment and have not been registered under the Securities Act of 1933, as
amended, or applicable state securities laws and may not be sold or
transferred in the absence of such registration or pursuant to an exemption
therefrom under said Act and such laws, supported by an opinion of counsel,
reasonably satisfactory to the Company and its counsel, that such
registration is not required.”

; and

          (vii) he understands that the certificates evidencing the Shares shall also bear the following
legend:

“The shares represented by this certificate have been acquired pursuant to a
Restricted Stock Agreement, dated as of January 29, 2009, 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.”

     7. Restriction on Transfer of Shares. Notwithstanding anything in this Agreement to
the contrary, and in addition to the provisions of Section 4 of this Agreement, the Employee

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hereby agrees that he shall not sell, transfer by any means or otherwise dispose of the Shares
acquired by him without registration under the Securities Act, or in the event that they are not so
registered, unless (i) an exemption from the Securities 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.

     8. Miscellaneous.

          8.1 Notices. All notices, requests, deliveries, payments, demands and other
communications that are required or permitted to be given under this Agreement shall be in writing
and shall be either delivered personally or by private courier (e.g., Federal Express), or sent by
registered or certified mail, return receipt requested, postage prepaid, to the parties at their
respective addresses set forth herein, or to such other address as either party shall have
specified by notice in writing to the other. Notice shall be deemed duly given hereunder when
delivered or mailed as provided herein.

          8.2 Plan Paramount; Conflicts with Plan. This Agreement shall, in all respects, be
subject 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.

          8.3 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.

          8.4 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 in
writing executed by the Employee and the Company.

          8.5 Binding Effect; Successors. This Agreement 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

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respective heirs, successors, assigns and representatives any rights, remedies, obligations or
liabilities.

          8.6 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.

          8.7 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.

          8.8 Section 409A. This Agreement is intended to comply with the provisions of Section
409A of the Internal Revenue Code of 1986, as amended (“Section 409A”). To the extent that the
Shares or any payments or benefits provided hereunder are not considered compliant with Section
409A, the parties agree that the Company shall take all actions necessary to make such payments
and/or benefits become compliant.

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7

 

     IN WITNESS WHEREOF, the parties hereto have signed this Agreement as of the day and year first
above written.

	 	 	 	 	 	 	 	 	 
	EMPLOYEE	 	 	 	FREDERICK’S OF HOLLYWOOD GROUP INC.	 	 
	 
	 	 	 	 	 	 	 	 
	/s/ Thomas Lynch

	 	 	 	By:
	 	/s/ Peter Cole
	 	 
	 

	 	 	 	 	 	 	 	 
	THOMAS LYNCH

	 	 	 	 	 	Peter Cole	 	 
	 

	 	 	 	 	 	Executive Chairman	 	 
	 
	 	 	 	 	 	 	 	 
	Address of Employee:	 	 	 	Address of Company:	 	 
	 	 	 	 	1115 Broadway	 	 
	 	 	 	 	New York, New York 10010	 	 

8

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