EXHIBIT 10.34
SEVERANCE AGREEMENT DATED FEBRUARY 24, 2000
BETWEEN THE COMPANY AND ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
This Severance Agreement and Release (the "Agreement") is made as of this
24th day of February 2000, between ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ (the "Employee") and The
Children's Place Retail Stores, Inc. (the "Employer").
1. Termination of Employment. The parties agree that the Employee's employment
with the Employer shall terminate effective February 24, 2000 (the "Separation
Date"). The termination of employment shall be deemed a voluntary resignation by
the Employee. Employee shall effective the Separation Date resign from the Board
of Directors of the Employer and any subsidiary of the Employer. Attached hereto
as Exhibit A is Employee's resignation.
2. Separation Payment. In addition to salary and benefits earned prior to the
Separation Date, in the event that the Employee signs this Agreement and does
not revoke it within seven (7) days (as permitted in Section 15 of this
Agreement), then the Employee shall receive the following as consideration:
(a) The Employer shall pay to the Employee the sum of Seven Hundred
and Thirty Eight Thousand Four Hundred and Fifty Nine Dollars
($738,459.32), less legally required payroll deductions and
deductions for health insurance in twenty two (22) equal monthly
installments to be received by the last day of each month commencing
March 2000;
(b) The Employer shall continue to carry the Employee on the
Employer's health insurance plan until the earlier of: (i) December
31, 2001; or (ii) Employee is covered by another health insurance
policy, subject to standard employee contributions which shall be
withheld from the separation payments set forth above
(c) The Employer shall continue to pay the premiums on the
Employee's existing life insurance policies for coverage through
December 31, 2001; and
(d) The Employer shall reimburse the Employee for all unreimbursed
business expenses in accordance with the Employer's Standard
Policies and Procedures, incurred by Employee through the Separation
Date upon the delivery to the Employer of receipts for such
expenses.
The Employer represents and warrants, and the Employee acknowledges, that the
consideration paid to the Employee under this Agreement exceeds the amount the
Employee would ordinarily be entitled to upon termination of the Employee's
employment. The Employee acknowledges that other than the consideration paid to
the Employee under Section 2 of this Agreement, Employee is not entitled to and
hereby waives any claim for the 49,800 options which are scheduled to vest on
June 28, 2000, any bonus, commission, stock (other than the stock currently
owned and stock options vested through the date hereof), or any other
compensation including under any contract, agreement or arrangement, including
but not limited to the Employment Agreement dated, as of June 27, 1996, between
Employee and Employer.
3. Other Benefits. Any and all other employment benefits received by the
Employee shall terminate effective as of the Separation Date.
4. Consultation with Counsel and Voluntariness of Agreement. The Employee
acknowledges that the Employer has advised the Employee in writing to consult
with an attorney prior to executing this Agreement. The Employee further
acknowledges that the Employee was given at least twenty-one (21) days from the
date of the Employee's receipt of this Agreement to consider the terms of this
Agreement. The Employee further acknowledges that the Employee has consulted
with the Employee's own independent legal counsel in reviewing this Agreement,
that the Employee has carefully read and fully understands all the provisions of
this Agreement, and that the Employee is voluntarily entering into this
Agreement.
5. Confidentiality of Agreement. The Employee and the Employer agree not to
disclose the terms and conditions of this Agreement to any person or entity,
except (a) to comply with this Agreement; (b) to legal, financial or tax
advisors (all of whom must first agree to be bound by this Section) and to the
Internal Revenue Service or any similar state or local taxation authority; (c)
to the Securities and Exchange Commission; or (d) as otherwise required by law.
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6. Mutual Non-Disparagement. The Employee agrees that the Employee will not
publicly or privately disparage the Employer or any of the Employer's products,
services, affiliates, or current or former officers, directors, trustees,
employees, agents, administrators, representatives or fiduciaries. The Employer
agrees that the Employer will not publicly or privately disparage the Employee.
7. Confidential or Proprietary Information. The Employee acknowledges that the
Employee may possess certain confidential information, property or trade secrets
of the Employer which would damage the Employer if disclosed or used by the
Employee. Accordingly, the Employee acknowledges a continuing duty of
confidentiality to the Employer and agrees that the Employee will hold in the
utmost and strictest confidence and will not use or disclose any confidential
information, property or trade secrets. Confidential information, property and
trade secrets shall include, but shall not be limited to, the following: (a)
documentation or data contained in any files or any other records the Employer
may maintain; (b) statements regarding any matters made by any employees,
officers, agents, representatives or attorneys of the Employer at any meeting
attended by the Employee or which the Employee may have heard or obtained
knowledge of which may result in any detriment to the Employer; (c) actions
taken or contemplated by the Employer with respect to any of its operations,
assets or employees; (d) policies, practices, programs or plans contemplated,
initiated or effectuated by the Employer; (e) any other information, records or
data of a private nature to the Employer, provided that such restriction shall
not apply to information which is then in the public domain (so long as the
Employee did not, directly or indirectly, cause or permit such information to
enter the public domain); and (f) any information regarding contractors,
overseas agents and service providers to the Employer. Notwithstanding the
foregoing, nothing contained in this Section shall serve as a restraint or
limitation upon the Employee from exercising the Employee's general knowledge
and expertise in the Employee's field or from earning a livelihood in said
field.
8. Hiring of Other Employees and Interference with Operations. The Employee
agrees that, for a period of two (2) years following the Separation Date, the
Employee will not (i) directly or indirectly employ, solicit or entice away any
person known by the Employee to be a current employee of the Employer; and (ii)
encourage or induce any person known by the Employee to be a current
distributor, source, supplier, customer or contractor of the Employer to sever
or decrease the activity of any relationship with the Employer.
9. Non-Competition. The Employee agrees that for a period of two (2) years
following the Separation Date, Employee will not promote, participate or engage
in any business in the United States on behalf of any Direct Competitor of the
Employer, whether Employee is acting as owner, partner, stockholder, employee,
broker, agent, principal, trustee, corporate officer, director, consultant or in
any other capacity whatsoever; provided, however, that this will not prevent
Employee from holding for investment up to 1% of any class of stock or other
securities quoted or dealt in on a recognized stock exchange or on NASDAQ. For
purposes of this Section, a "Direct Competitor of the Employer" means (i) The
Gap, Inc. or any person or entity under common control with The Gap, Inc., (ii)
The Limited, Inc. or any person or entity under common control with The Limited,
Inc., (iii) Gymboree or Baby Superstore or any person or entity under common
control with Gymboree or Baby Superstore, as the case may be, or (iv) any person
or entity engaged in the sale of children's apparel and who derives more than
fifty percent of its gross revenues from the retail sale of children's apparel.
10. Injunctive Relief. Employee acknowledges that a breach or threatened breach
of any of the terms set forth in section 7, 8 or 9 of this Agreement shall
result in an irreparable and continuing harm to the Employer for which there
shall be no adequate remedy of law. The Employer shall, without posting a bond,
be entitled to obtain injunctive and other equitable relief, in addition to any
other remedies available to the Employer in connection with Section 7, 8 or 9 of
this Agreement.
11. Survival of Terms; Representations. Employee represents and warrants that
Employee is sophisticated in business, and that the restrictions and remedies
set forth in the sections 7, 8 and 9 do not create an undue hardship on Employee
and will not prevent Employee from earning a livelihood. Employee and Employer
agree that the restrictions and remedies contained in the sections 7, 8 and 9
are reasonable and necessary to protect the Employer's legitimate business
interests regardless of the reason for or circumstances giving rise to such
termination and that Employee and the Employer intend that such restrictions and
remedies shall be enforceable to the fullest extent permissible by law. Employee
agrees that given the scope of the Employer's business and the sophistication of
the information highway, any geographic limitation on such remedies and
restrictions within the United States would deny the Employer the protection to
which it is entitled hereunder. If it shall be found by a court of competent
jurisdiction that any such restriction or remedy is unenforceable but would be
enforceable if some part thereof were deleted or modified, then such restriction
or remedy shall apply with such modification as shall be necessary to make it
enforceable to the fullest extent permissible under law.
12. Confirmation of Employment. The Employer shall, if called upon, confirm
the Employee's dates of employment and position with the Employer.
13. Violation of Terms. Should the Employee violate any provision of this
Agreement, then, in addition to all other damages or legal remedies
available to the Employer (including without limitation injunctive
relief), the Employee immediately shall return to the Employer all monies
paid to the Employee pursuant to this Agreement. Should the Employer
violate any provision of this Agreement, then the Employee shall have all
remedies and civil actions available to remedy Employee's damages. The
parties agree that, should either party seek to enforce the terms of this
Agreement through litigation, then the prevailing party, in addition to
all other legal remedies, shall be reimbursed by the other party for all
reasonable attorneys' fees in relation to such litigation.
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14. Release. In exchange for the consideration set forth in Section 2, the
Employee, on behalf of the Employee and the Employee's agents, assignees,
attorneys, heirs, executors and administrators, voluntarily and knowingly
releases the Employer, as well as the Employer's successors, assigns, parents,
subsidiaries, divisions, affiliates, officers, directors, shareholders,
employees, agents and representatives, in both their individual and
representative capacities (collectively, the "Released Parties"), from any and
all claims, causes of action, suits, grievances, debts, sums of money,
controversies, agreements, promises, damages, back and front pay, costs,
expenses, attorneys' fees and remedies of any type by reason of any matter,
cause, act or omission arising out of or in connection with the Employee's
employment or separation from employment with the Employer, including but not
limited to any claims based upon common law, any federal, state or local
employment statutes or civil rights laws (such as Title VII of the Civil Rights
Act of 1964, as amended; the Age Discrimination in Employment Act; the Family
and Medical Leave Act; the Americans with Disabilities Act; the Employee
Retirement Income Security Act of 1974; and laws prohibiting discrimination
based upon race, color, religion, creed, national origin, ancestry, family
and/or medical leave, citizenship status, sex, sexual orientation or preference,
marital status, age or disability), wrongful termination, failure to pay wages,
breach of contract (including without limitation under Employee's Employment
Agreement), defamation, invasion of privacy, whistleblowing or infliction of
emotional distress, or any other matter. This release shall apply to all known,
unknown, unsuspected and unanticipated claims, liens, injuries and damages that
have accrued to the Employee as of the date of this Agreement. This release
shall not apply to Employee's right to receive benefits of, and to enforce the
provisions of this Agreement or to receive benefits under the Employer's 401(k)
plan accrued through the Separation Date, in accordance with its terms. It is
understood and agreed that the consideration paid or given in connection with
this release is not to be construed as an admission by the Released Parties of
any liability, error, violation or omission.
Employer, on behalf of the Employer and the Employer's agents,
assignees, attorneys, heirs, executors and administrators, voluntarily and
knowingly releases the Employee, as well as the Employee's successors, assigns,
agents and representatives, in both their individual and representative
capacities, from any and all claims, causes of action, suits, grievances, debts,
sums of money, controversies, agreements, promises, damages, back and front pay,
costs, expenses, attorneys' fees and remedies of any type by reason of any
matter, cause, act or omission arising out of or in connection with the
Employee's employment or separation from employment with the Employer. This
release shall not apply to Employee's obligations under this Agreement.
15. Right to Revoke. The Employee acknowledges that the Employee has been
informed in writing that the Employee has seven (7) calendar days following the
execution of this Agreement to revoke it, and that such revocation must be in
writing, hand delivered or sent via overnight mail and actually received by the
Employer within such period.
16. Waiver of Reinstatement. By entering into this Agreement, the Employee
acknowledges that the Employee waives any claim to reinstatement and/or future
employment with the Employer. The Employee further acknowledges that the
Employee is not and shall not be entitled to any payments, benefits or other
obligations from the Released Parties whatsoever (except as expressly set forth
in this Agreement).
17. Indemnification. Nothing in this Agreement shall affect the Employee's
rights of indemnification under the Employer's by-laws or certificate of
incorporation with respect to any event occurring prior to the Separation Date
or to retain the benefit of all directors and officers liability insurance and
coverage maintained by Employer with respect to acts or omissions which occurred
prior to the Separation Date, in accordance with the terms of such policy.
18. Secondary Expenses. The Employer waives its claim against Employee for the
Employee's pro rata share of the fees and expenses incurred in connection with a
planned secondary offering in 1999 which was withdrawn.
19. Miscellaneous. This Agreement contains the entire understanding between the
parties. There are no other representations, agreements or understandings, oral
or written, between the parties relating to the subject matter of this
Agreement. No amendment to or modification of this Agreement shall be valid
unless made in writing and executed by the parties hereto subsequent to the date
of this Agreement. This Agreement shall be enforced in accordance with the laws
of the State of New Jersey, and the parties agree that any litigation to enforce
this Agreement will take place in New Jersey. This Agreement may be executed in
several counterparts, and all counterparts so executed shall constitute one
Agreement, binding upon the parties hereto.
20. Severability. If any term, provision or part of this Agreement shall be
determined to be in conflict with any applicable federal, state or other
governmental law or regulation, or otherwise shall be invalid or unlawful, such
term, provision or part shall continue in effect to the extent permitted by such
law or regulation. Such invalidity, unenforceability or unlawfulness shall not
affect or impair any other terms, provisions and parts of this Agreement not in
conflict, invalid or unlawful, and such terms, provisions and parts shall
continue in full force and effect and remain binding upon the parties hereto.
IN WITNESS WHEREOF, the parties have each executed this Agreement.
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WITNESS: EMPLOYEE:
/s/ ▇▇▇▇▇ Silver /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------- ----------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
WITNESS: EMPLOYEE:
The Children's Place Retail Stores, Inc.
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ /s/ ▇▇▇▇ ▇▇▇▇▇
----------------------------- ----------------------------------------
By: ▇▇▇▇ ▇▇▇▇▇
Its: Chairman-- CEO
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EXHIBIT A
▇▇▇▇▇▇▇ ▇. SILVER
▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Secretary
The Children's Place
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
As of February 24, 2000, please accept my resignation as President and
Chief Operating Officer together with membership of the Board of Directors
and all subsidiaries of The Children's Place.
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. Silver
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