EMPLOYMENT AGREEMENT DATED AS OF FEBRUARY 4, 2007 BETWEEN THE CHILDREN’S PLACE RETAIL STORES, INC. AND SUSAN J. RILEY
Execution
Copy
DATED
AS OF FEBRUARY 4, 2007
BETWEEN
THE
CHILDREN’S PLACE RETAIL STORES, INC.
AND
▇▇▇▇▇
▇. ▇▇▇▇▇
EMPLOYMENT
AGREEMENT, dated as of February 4, 2007 (this “Agreement”), between ▇▇▇▇▇
▇.
▇▇▇▇▇
(“Executive”) and THE CHILDREN’S PLACE RETAIL STORES, INC., a Delaware
corporation (“Employer”).
WHEREAS,
Employer and Executive entered into a certain Offer Letter dated as of March
13,
2006 (“Offer Letter”); and
WHEREAS,
this Agreement replaces and supersedes the Offer Letter in its
entirety;
NOW,
THEREFORE, in consideration of the premises and the mutual covenants and
agreements herein contained, the parties agree as follows:
SECTION
1
EMPLOYMENT
OF EXECUTIVE
Employer
hereby agrees to continue to employ Executive, and Executive hereby agrees
to
continue in the employ of Employer, upon the terms and conditions hereinafter
set forth.
SECTION
2
EMPLOYMENT
PERIOD
The
terms
of Executive’s employment under this Agreement (the “Employment Period”) shall
commence as of February 4, 2007 (the “Commencement Date”) and shall continue
until terminated in accordance with the provisions of
Section 5.
SECTION
3
DUTIES
3.01. Generally.
During
the Employment Period, Executive (i) shall be employed as Executive Vice
President, Finance and Administration of Employer, (ii) shall devote all of
her
business time and attention to the business and affairs of Employer and other
enterprises controlled by, or under common control with, Employer (collectively,
the “Company”), and (iii) shall use her best efforts, skills and abilities in
the diligent and faithful performance of her duties and responsibilities
hereunder. As Executive Vice President, Finance and Administration of the
Company, Executive shall play the role in the management of the Company’s
business and affairs and shall have the authority and responsibilities provided
by the resolution of the Board of Directors of Employer adopted on January
31,
2007 (including the role, authority and responsibilities, along with the Chief
Executive Officer, of a principal executive officer of Employer for purposes
of
the pertinent filings and submissions of Employer’s under the Securities
Exchange Act of 1934, as amended (the “Exchange Act”)); provided, however, that
the Board of Directors of Employer may from time to time change the role,
authority and responsibilities of Executive as long as (i) Executive shall
continue to be the senior officer of the Company with responsibility for the
Company’s financial, accounting, treasury and internal audit functions and
Employer’s General Counsel shall report to Executive as well as to the Chief
Executive Officer of Employer and the Board of Directors, (ii) Executive’s
reporting responsibilities shall be as provided in subsection 3.02 below and
(iii) the role, authority and responsibilities assigned to Executive shall
be
consistent with her role as a senior executive of Employer. Notwithstanding
the
foregoing, Executive shall have the right to (i) engage in personal investment
activities for herself and her family and (ii) engage in charitable and civic
activities, provided the outside activities set forth in (i) and (ii) hereof
do
not interfere with Executive’s performance of her duties and responsibilities
hereunder. Except for Executive’s current position
as a member of the board of directors of PJM Interconnection, Executive
shall not serve as an officer or director of any other business corporation
or
as a general partner of any partnership except with the prior written approval
of the Board of Directors of Employer or an authorized committee
thereof.
3.02. Reporting.
Commencing with the date hereof and until otherwise directed by the Board of
Directors of Employer in accordance with the following provisions of this
subsection 3.02, Executive shall report dually to the Chief Executive Officer
of
Employer and to the Board of Directors of Employer. In reporting to the Board
of
Directors of Employer, Executive shall on a regular basis report to the Chair
of
the Board of Directors. Notwithstanding the foregoing, in the event of a change
in Chief Executive Officer of Employer after the date hereof, if the Board
of
Directors so provides, Executive shall report to the Chief Executive Officer
of
Employer. Any right, power or discretion of the Board of Directors of the
Employer referred to herein, other than that referred to in subsection 5.02,
may
be exercised by any authorized committee of the Board of Directors of Employer,
including the Compensation Committee.
3.03. Location
of Executive’s Activities; Travel.
Executive’s principal place of business in the performance of her duties and
obligations under this Agreement shall be in the New York metropolitan area,
which includes Secaucus, New Jersey. For so long as Employer’s headquarters are
located in the New York City metropolitan area, Executive’s principal place of
business shall be located at such headquarters. Notwithstanding the foregoing
provisions of this subsection, Executive will engage in such travel and spend
time in other places as may be necessary or appropriate in furtherance of her
duties hereunder.
3.04. Compliance
with Company Policies.
During
the Employment Period, Executive will be subject to all of the written policies,
rules and regulations of which Executive is given notice applicable to senior
executives of Employer and will comply with all directions and instructions
of
the Board of Directors of Employer.
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SECTION
4
COMPENSATION
4.01. Base
Salary and Performance Bonus.
For all
services rendered by Executive under this Agreement, Employer shall pay to
Executive during and with respect to the Employment Period, and Executive agrees
to accept (in full payment), Base Salary and Performance Bonus, all as more
fully described on Exhibit A, as well as the other benefits referred to in
subsection 4.03, 4.04 and 4.05 below.
4.02. Vacations.
Executive shall be entitled to four weeks vacation, and additional vacation
as
approved by the Chief Executive Officer of Employer, in each twelve-month period
worked, which shall be taken at such time or times as may be approved by the
Chief Executive Officer of Employer and shall not unreasonably interfere with
Executive’s performance of her duties under this Agreement.
4.03. Equity
Awards:
a. As
soon
as practicable after the Commencement Date (but in no event before such time
as
Employer determines that Employer is in compliance with the periodic reporting
requirements of Section 13(a) of the Exchange Act), Executive shall be granted,
pursuant to and subject to the provisions of Employer’s Amended and Restated
2005 Equity Incentive Plan (as amended by the Board of Directors of Employer
on
June 23, 2006) (the “2005 Equity Plan”), a “Restricted Stock Award” for 15,000
“Restricted Shares” (as such terms are defined in the 2005 Equity Plan), which
Restricted Shares shall be subject to restrictions on transfer and shall be
subject to forfeiture upon a termination of employment until they vest and
shall
vest as follows: 5,000 Restricted Shares on the first anniversary of the date
of
grant and 5,000 Restricted Shares on each of the next two anniversaries thereof,
except that any such Restricted Shares which are then unvested shall vest upon
Executive’s death, disability or the occurrence of a Change in Control as
provided by Section 13(a)(5) of the 2005 Equity Plan. Such Restricted Shares
shall not be subject to any performance-based vesting requirement and shall
not
be Performance Awards within the meaning of the 2005 Equity Plan. Such
Restricted Shares shall be granted pursuant to a Restricted Stock Award
Agreement in the form approved by the Board of Directors for general use for
comparable grants under the 2005 Equity Plan of Restricted Shares to senior
executives.
b. With
respect to each fiscal year of Employer during the Employment Term beginning
with the year beginning February 3, 2008, Executive shall be eligible for
participation in Employer’s plan or program for the award of equity incentives
to executives of Employer on a basis no less favorable to Executive than the
basis on which any other senior executive of Employer, other than the Chief
Executive Officer, is eligible to participate in such plan or
program.
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4.04. Other
Benefits. During
the Employment Period, Executive shall be eligible to receive such employee
benefits (including insurance coverage, participation in retirement, savings
and
stock purchase plans and perquisites) as the Company generally makes available
to Employer’s senior executives from time to time. Except as otherwise
specifically provided by a benefit plan or program established by the Company
or
as provided by separate written agreement with the Company, Executive’s Base
Salary shall constitute the compensation on the basis of which the amount of
Executive’s benefits under any such plan or program shall be
determined.
4.05. Expense
Reimbursement.
Employer
shall reimburse Executive for all business expenses reasonably incurred by
her
in the performance of her duties under this Agreement upon her presentation
of
itemized accounts of such expenses in accordance with Employer’s procedures and
policies as adopted and in effect from time to time and applicable to its senior
executives, provided that Employer shall be under no obligation to reimburse
Executive for any such business expense presented more than 60 days after
termination of Executive’s employment by Employer.
SECTION
5
TERMINATION
OF EMPLOYMENT PERIOD
5.01. Termination
Without Cause.
At any
time during the Employment Period, by notice to the other, Employer or Executive
may terminate Executive’s employment under this Agreement without having any
cause therefor; provided,
however,
that
termination by Employer pursuant to this subsection 5.01 shall require the
affirmative vote of a majority of the independent members of the Board of
Directors. Such notice shall specify the effective date of termination, which
in
the case of termination by Executive shall not be less than 30 days after the
date of such notice. For purposes hereof, the “independent members” of the Board
of Directors shall mean those members in office at the time who have been
determined to qualify as independent directors for purposes of the listing
standards of the principal U.s. securities market on which the shares of Common
Stock of Employer are then traded.
5.02. By
Employer For Cause.
At any
time during the Employment Period, by notice to Executive, Employer may
terminate Executive’s employment under this Agreement “For Cause” (as
hereinafter defined), effective immediately upon the giving of such notice
or at
such other time as is specified in such notice; provided,
however,
that
termination pursuant to this subsection 5.02 shall require the affirmative
vote
of a majority of the independent members of the Board of Directors of Employer.
Such notice shall specify the cause for termination and, if the basis thereof
is
conduct referred to in clause (i) through (iv) of the next following sentence,
Executive shall be provided a reasonable opportunity before such vote to appear
before the Board of Directors to explain why her conduct either did not satisfy
the provisions of such clause or, notwithstanding the provisions of such clause,
termination of her employment for Cause is not warranted. For the purposes
of
this Agreement, “for Cause” means:
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(i) the
commission by Executive of any act involving intentional dishonesty or fraud
or
other intentional misconduct in connection with Executive’s employment by the
Company; or
(ii) a
breach
by Executive of her fiduciary duties to the Company that was done without a
good
faith belief that she was acting in what she reasonably believed to be the
best
interests of the Company ; or
(iii) any
other
material breach of this Agreement that Executive fails to remedy fully to the
reasonable satisfaction of Employer within ten (10) business days after notice
to Executive of such breach; or
(iv) any
conduct, action or behavior by Executive involving moral turpitude that has
or
may reasonably be expected to have a material adverse effect on the reputation
or interests of the Company; or
(v) Executive
shall have been barred by a court order issued under the Exchange Act from
serving as a director or officer of a company registered under Section 12 or
filing reports under Section 15(d) of the Exchange Act (including an order
issued upon consent without any admission of the charge) or shall have been
convicted of, or have entered a plea of nolo contendere or the equivalent in
respect of a charge of, any criminal act constituting a felony under the laws
of
the United States or any state or political subdivision thereof.
5.03. By
Executive for Good Reason.
Executive may, at any time during the Employment Period by notice to the Board
of Directors of Employer (delivered to the attention of the Chair of the Board),
terminate the Employment Period under this Agreement for “Good Reason” effective
immediately. For the purposes hereof, “Good Reason” means:
a. any
material breach by Employer of any provision of this Agreement (including any
failure to pay any compensation due to Executive when and as due) which, if
susceptible of being cured, is not cured within thirty (30) days of delivery
of
notice thereof to Employer by Executive;
b. a
demotion of Executive’s position or a material adverse change in Executive’s
authority or responsibility or the assignment to Executive of duties
inconsistent with Executive’s position, responsibilities, duties or status with
Employer, all as provided by Section 2 (including any change in Executive’s
reporting responsibilities from that provided by Section 2), except in
connection with the termination of her employment on account of Disability
(as
hereinafter defined) or for Cause;
c. a
relocation by Employer of Executive’s place of employment to a location more
than 30 miles outside the New York City metropolitan area;
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d. any
purported termination of Executive’s employment for Cause which fails to satisfy
the requirements of subsection 5.02 hereof.
5.04. Disability.
If
during the Employment Period, Executive becomes incapable of fulfilling her
obligations hereunder because of injury or physical or mental illness, and
such
incapacity exists for a period of at least 120 consecutive days or for shorter
periods aggregating at least 180 days during any period of twelve consecutive
months (“Disability”), Employer may, upon at least fifteen days’ prior written
notice to Executive, terminate Executive’s employment under this Agreement. In
the event of a dispute with respect to Executive’s Disability, whether or not
she has been disabled shall be determined by an independent physician reasonably
acceptable to both Employer and Executive or her representative.
5.05. Normal
Retirement.
Unless
earlier terminated as provided herein, Executive’s employment hereunder shall
terminate as of the end of the fiscal year of Employer following the year in
which Executive reaches normal retirement age as determined in accordance with
Employer’s retirement plan or policies; provided that, in the absence of a plan
or policy approved by the Board of Directors providing that normal retirement
shall occur at a different age, normal retirement age shall be age
65.
SECTION
6
COMPENSATION
UPON TERMINATION OF EMPLOYMENT
6.01. Compensation
Upon Termination Without Cause.
Subject
to the provisions of subsections 6.03, 6.04 and 6.05, if (A) Executive’s
employment hereunder is terminated by Employer pursuant to subsection 5.01
without Cause or (B) Executive terminates her employment with Employer pursuant
to subsection 5.03 for “Good Reason,” or (C) Executive terminates her employment
with Employer within one year after the occurrence of a Change in Control (other
than in circumstances where Employer could terminate Executive’s employment for
Cause), Executive shall be entitled, in addition to any amount of Base Salary
and Performance Bonus theretofore earned but not yet paid, to (1) continuation
of her Base Salary, payable in accordance with the Company’s normal payroll
practices for executives, for a period of one year following such termination
and (2) a pro rata portion of the Performance Bonus for Employer’s then current
fiscal year based on the portion of the year elapsed through the day on which
the Executive’s termination of employment occurs calculated based on the target
bonus determined for Executive for such year under Employer’s Annual Management
Incentive Bonus Plan; provided, however, that, if at the time notice of
termination of Executive’s Employment Period is given, (i) the amount of
Executive’s Performance Bonus for the previous fiscal year is not then
determinable in accordance with Employer’s Annual Management Incentive Bonus
Plan, the amount thereof shall be Executive’s targeted bonus amount for such
year, (ii) if a determination has not yet been made of the targeted bonus amount
of Executive’s Performance Bonus for the current fiscal year, the targeted bonus
amount for such year shall be deemed to be the same targeted bonus amount as
fixed for Executive for the previous fiscal year and (iii) if the performance
target(s) for Executive for such year shall not have been fixed, the same
performance target(s) as are applied under such plan to Employer’s Chief
Executive Officer for such year shall apply with respect to Executive. For
the
avoidance of doubt, it is understood and agreed that, upon a termination of
Executive’s employment without cause, she shall be entitled to a payment on
account of a Performance Bonus in accordance with clause (2) of the first
sentence of this subsection if, but only if, and only to the extent that, the
performance target(s) for Executive set under Employer’s Annual Management
Incentive Bonus Plan in respect of the fiscal year for which such payment is
to
be made have been or are satisfied and such payment shall be made at the time
the Performance Bonus would otherwise be payable to Executive under Employer’s
Annual Management Incentive Bonus Plan had Executive’s employment continued
through such time. Payment to Executive of the compensation provided by this
subsection is subject to execution by Executive of a general release in the
form
attached hereto as Exhibit B.
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6.02. Compensation
Upon Termination By Reason of Death, Disability or For Cause.
Subject
to the provisions of subsections 6.03, 6.04 and 6.05, if Executive’s employment
hereunder is terminated (A) by reason of Executive’s death or Disability, or (B)
by Employer For Cause, or (C) in accordance with subsection 5.04 upon Executive
reaching normal retirement age, Executive (or her estate, heirs or distributes)
shall be entitled to (1) any amount of Base Salary and Performance Bonus
theretofore earned but not yet paid and (2) except in the case of a termination
of employment by Employer For Cause, a pro rata portion of the Performance
Bonus
for Employer’s then current fiscal year determined in the same manner as
provided in clause (2) of the first sentence and in the second sentence of
subsection 6.01. Payment to Executive of the compensation provided by this
subsection is subject to execution by Executive of a general release in the
form
attached hereto as Exhibit B.
6.03. Equity
Awards Upon Termination.
Upon
any termination of Executive’s employment hereunder, Executive shall be entitled
to such rights in respect of any equity awards (including, without limitation,
awards of stock options, restricted shares, performance shares and any other
Incentive Award under the 2005 Equity Plan or any future equity incentive plan
or program of the Company) theretofore made to Executive, and to only such
rights, as are provided by the plan and award agreement pursuant to which such
equity awards have been granted to Executive, or other written agreement or
arrangement between Executive and the Company (specifically including the right
to acceleration of the vesting and delivery to Executive of the Restricted
Shares referred to in subsection 4.03(a) in the event of a Change in Control
of
Employer); provided,
however,
that,
in the event Executive’s employment is terminated by Employer without Cause
pursuant to subsection 5.01 or by Executive for Good Reason pursuant to
subsection 5.03 after such time as the performance criteria with respect to
the
Performance Shares under the 2005 Equity Plan held by Executive on the day
hereof have been satisfied, even though a Change in Control of Employer has
not
occurred before such time, Executive shall be entitled to receive the
Performance Shares subject to such awards not theretofore delivered to her
promptly after the termination of her employment.
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6.04. Other
Benefits Upon Termination.
Upon
any termination of Executive’s employment hereunder, Executive shall be entitled
to such rights in respect of any employee benefit plan in which Executive
participates (including, without limitation, health and life insurance coverage
and participation in retirement, savings, deferred compensation and stock
purchase plans but excluding any plan or program providing for equity awards
referred to in subsection 6.03 or any plan or program referred to in subsection
6.05), and to only such rights, as are provided by such plan or program in
the
prevailing circumstances (and to any other rights as may be provided by any
other written agreement or arrangement with the Company in respect of a
termination of her employment approved by the Board of Directors and applicable
in the prevailing circumstances).
6.05. No
Other Compensation Upon Termination of Employment; No Limit to Company’s Right
of Offset.
Executive shall not be entitled to any benefit or compensation following
termination of her employment hereunder except as set forth in this Section
6,
if applicable, notwithstanding any severance plan or policy that may otherwise
apply to Company employees. Executive’s entitlement hereunder to receive any
payment upon a termination of her employment shall not limit any right or claim
the Company may have against Executive by reason of any conduct by Executive
that constituted grounds for termination of her employment For Cause or that
may
otherwise have given rise to a right of the Company to damages against or a
refund of benefits improperly received by Executive.
6.06. Definition
of Change in Control.
As used
in this Agreement, “Change in Control” means the occurrence during the
Employment Term of any of the following events:
(i) the
sale
to any purchaser of (A) all or substantially all of the assets of Employer
or
(B) capital stock representing more than 50% of the stock of Employer entitled
to vote generally in the election of directors of Employer; or
(ii) the
merger or consolidation of Employer with another corporation if, immediately
after such merger or consolidation, less than a majority of the combined voting
power of the then-outstanding securities entitled to vote generally in the
election of directors of the surviving or resulting corporation in such merger
or consolidation is held, directly or indirectly, in the aggregate by the
holders immediately prior to such transaction of the outstanding securities
of
Employer; or
(iii) there
is
a report filed on Schedule 13D or Schedule 14D-1 (or any successor schedule,
form, or report or item therein), each promulgated pursuant to the Exchange
Act,
disclosing that any person (as the term “person” is used in Section 13(d)(3) or
Section 14(d) (2) of the Exchange Act) has become the beneficial owner (as
the
term “beneficial owner” is defined under Rule 13d-3 or any successor rule or
regulation promulgated under the Exchange Act) of securities representing 50%
or
more of the combined voting power of the voting stock of Employer entitled
to
vote generally in the election of directors; or
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(iv) Employer
files a report or proxy statement with the Securities and Exchange Commission
pursuant to the Exchange Act disclosing in response to Form 8-K or Schedule
14A
(or any successor schedule, form, or report or item therein) that a change
in
control of Employer has occurred.
SECTION
7
EXCLUSIVITY
OF SERVICES, CONFIDENTIAL INFORMATION
AND
RESTRICTIVE COVENANTS
7.01. Exclusivity
of Services; Use of Name.
During
the Employment Period and continuing through the first anniversary of the date
in which Executive ceases to be an employee of the Company (the “Covenant
Period”), Executive will not:
(i) promote,
participate or engage in any business on behalf of any “Direct Competitor” (as
hereinafter defined) of the Company, whether Executive 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 Executive from holding for investment up to 1% of any
class of stock or other securities quoted or dealt in on a recognized stock
exchange. For purposes of this Section, a “Direct Competitor” of the Company
means (A) any division of The Gap, Inc. or any person under common control
with
The Gap, Inc. that is engaged in the retail sale of children’s apparel, (B) any
division of The Limited, Inc. or any person under common control with The
Limited, Inc. that is engaged in the retail sale of children’s apparel, (C)
Gymboree or Kids R Us or any Person under common control with Gymboree or Kids
R
Us, as the case may be, or (D) any other Person engaged in the retail sale
of
children’s apparel.
(ii) directly
or indirectly employ (other than on behalf of the Company), solicit or entice
away any director, officer or employee of the Company; or
(iii) induce
or
attempt to induce any Person doing business with the Company to cease doing
business with the Company; or
(iv) use
the
name of the Company in the conduct of any business activities (except in
furtherance of the Company’s business) or for Executive’s personal use without
the prior written consent of the Company.
7.02. Confidential
and Proprietary Information; Work Product; Warranty.
a. Confidentiality.
Executive acknowledges and agrees that there are certain trade secrets and
confidential and proprietary information (collectively, “Confidential
Information”) which have been developed by the Company and which are used by the
Company in its business. Confidential Information shall include, without
limitation: (i) customer lists and supplier lists; (ii) the details of the
Company’s relationships with its customers, including the financial relationship
with a customer; (iii) the Company’s marketing and development plans,
business plans; and (iv) other information proprietary to the Company’s
business. Executive shall not, at any time during or after her employment
hereunder, use or disclose such Confidential Information, except to authorized
representatives of the Company or as required in the performance of her duties
and responsibilities hereunder. Executive shall return all Company property,
such as computers, software and cell phones, and documents (and any copies
including in machine or human-readable form), to the Company when her employment
terminates. Executive shall not be required to keep confidential any
information, which is or becomes publicly available or is already in her
possession (unless obtained from the Company). Further, Executive shall be
free
to use and employ her general skills, know-how and expertise, and to use,
disclose and employ any generalized ideas, concepts, know-how, methods,
techniques or skills, including those gained or learned during the course of
the
performance of any services hereunder, so long as she applies such information
without disclosure or use of any Confidential Information. Executive hereby
acknowledges that her employment under this Agreement does not conflict with,
or
breach any existing confidentiality, non-competition or other agreement to
which
Executive is a party or to which she may be subject.
9
b. Work
Product.
Executive agrees that all copyrights, patents, trade secrets or other
intellectual property rights associated with any ideas, concepts, techniques,
inventions, processes, or works of authorship developed or created by her during
her employment by the Company and for a period of 6 months thereafter, that
(i)
relate, whether directly or indirectly, to the Company’s actual or anticipated
business, research or development or (ii) are derived from any work performed
by
Executive on the Company’s behalf, shall, to the extent possible, be considered
works made for hire within the meaning of the Copyright Act (17 U.S.C. § 101 et
seq.) (the “Work Product”). All Work Product shall be and remain the property of
the Company. To the extent that any such Work Product may not, under applicable
law, be considered works made for hire, Executive hereby grants, transfers,
assigns, conveys and relinquishes, and agrees to grant, transfer, assign, convey
and relinquish from time to time, on an exclusive basis, all of her right,
title
and interest in and to the Work Product to the Company in perpetuity or for
the
longest period otherwise permitted by law. Consistent with her recognition
of
the Company’s absolute ownership of all Work Product, Executive agrees that she
shall (i) not use any Work Product for the benefit of any party other than
the
Company and (ii) perform such acts and execute such documents and instruments
as
the Company may now or hereafter deem reasonably necessary or desirable to
evidence the transfer of absolute ownership of all Work Product to the Company;
provided,
however,
if
following ten (10) business days’ written notice from the Company, Executive
refuses, or is unable, due to disability, incapacity, or death, to execute
such
documents relating to the Work Product, she hereby appoints any of the Company’s
officers as her attorney-in-fact to execute such documents on her behalf. This
agency is coupled with an interest and is irrevocable without the Company’s
prior written consent.
c. Warranty.
Executive represents and warrants to the Company that (i) there are no claims
that would adversely affect her ability to assign all right, title and interest
in and to the Work Product to the Company; (ii) the Work Product does not
violate any patent, copyright or other proprietary right of any third party;
(iii) Executive has the legal right to grant the Company the assignment of
her
interest in the Work Product as set forth in this Agreement; and (iv) he has
not
brought and will not bring to her employment hereunder, or use in connection
with such employment, any trade secret, confidential or proprietary information
of another, or computer software, except for software that he has a right to
use
for the purpose for which it shall be used, in her employment
hereunder.
7.03. Injunctive
Relief.
Executive acknowledges that a breach or threatened breach of any of the terms
set forth in this Section 7 shall result in an irreparable and continuing harm
to the Company for which there shall be no adequate remedy at law. The Company
accordingly shall, without posting a bond, be entitled to seek, and Executive
shall not object to the Company obtaining, injunctive and other equitable relief
against any such breach or threatened breach, in addition to any other remedies
available to the Company.
7.04. Essential
and Independent Agreements.
It is
understood by the parties hereto that Executive’s obligations and the
restrictions and remedies set forth in this Section 7 are essential elements
of
this Agreement and that, but for her agreement to comply with and/or agree
to
such obligations, restrictions and remedies, the Company would not have entered
into this Agreement or continue her employment on the terms provided hereby.
Executive’s obligations and the restrictions and remedies set forth in this
Section 7 are independent agreements and the existence of any claim or claims
by
her against the Company under this Agreement or otherwise will not excuse her
breach of any of her obligations or affect the restrictions and remedies set
forth under this Section 7.
7.05. Survival
of Terms; Representations.
Executive’s obligations under this Section 7 hereof shall remain in full force
and effect notwithstanding the termination of Executive’s employment. Executive
acknowledges that whe is sophisticated in business, and that the restrictions
and remedies set forth in this Section 7 do not create an undue hardship on
her
and will not prevent her from earning a livelihood. She further acknowledges
that she has had a sufficient period of time within which to review this
Agreement, including this Section 7, with an attorney of her choice and she
has
done so to the extent she desired. Executive and the Company agree that the
restrictions and remedies contained in this Section 7 are reasonable and
necessary to protect the Company’s legitimate business interests regardless of
the reason for or circumstances giving rise to a termination of Executive’s
employment by Employer and that she and the Company intend that such
restrictions and remedies shall be enforceable to the fullest extent permissible
by law. Executive agrees that, given the scope of the Company’s business and the
sophistication of the dissemination of information relating to the Company’s
business, any further geographic limitation on such remedies and restrictions
would deny the Company 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.
10
7.06. Mutually
Non-Disparagement.
Upon
any termination of Executive’s employment by the Company, neither Executive nor
any executive of Employer will make or authorize any public statement
disparaging the other in its or her business interests and affairs.
Notwithstanding the foregoing, neither party shall be (i) required to make
any
statement that it or he believes to be false or inaccurate, or (ii) restricted
in connection with any litigation, arbitration or similar proceeding or with
respect to its response to any legal process.
7.07. Other
Duties of Executive During and After Employment Period.
Both
during and after the Employment Period, Executive shall, upon reasonable notice,
furnish such information as may be in her possession to, and cooperate with,
the
Company as may reasonably be requested by the Company in connection with any
investigation or litigation in respect of which the Company is or may be a
subject or party.
7.08. Breaches
of Provisions.
If
Executive breaches any of the provisions of this Section 7 then, and in any
such
event, without limiting Employer’s right to pursue any other remedies available
to Employer, Employer shall be entitled to offset against payment to Executive
of any termination compensation payable to Executive pursuant to subsections
6.01, 6.02 or 6.03, including any earned prior to Employer’s discovery of such
breach.
SECTION
8
MISCELLANEOUS
8.01. Notices.
Any
notice, consent, or authorization required or permitted to be given pursuant
to
this Agreement shall be in writing and sent to the party for or to whom intended
by personal delivery or certified mail, postage paid, , at the address of such
party set forth below or at such other address as either party shall designate
by notice given to the other in the manner provided herein.
If
to
Employer:
The
Children’s Place Retail Stores, Inc.
▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
Chief Executive Officer
11
with
copies to:
The
Children’s Place Retail Stores, Inc.
▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
General Counsel
and
Weil,
Gotshal & ▇▇▇▇▇▇ LLP
▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
If
to
Executive:
▇▇▇▇▇
▇.
▇▇▇▇▇
▇▇▇
▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
with
a
copy to:
Fried
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇,
▇.▇. ▇▇▇▇▇-▇▇▇▇
Attention:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
8.02. Tax
Withholding.
Employer is authorized to withhold from any payment to be made hereunder to
Executive such amounts for income tax, social security, unemployment
compensation, excise taxes and other taxes and penalties as in the judgment
of
Employer is required to comply with applicable laws and
regulations.
8.03. Governing
Law.
This
Agreement shall be governed by and construed and enforced in accordance with
the
internal laws of the State of Delaware, as applicable to agreements made and
to
be performed therein, without reference to principles, policies or provisions
thereof concerning conflicts of law.
8.04. Legal
Expenses.
Employer shall reimburse Executive for the legal expenses (including attorney’s
fees and disbursements) actually and reasonably incurred by Executive in
connection with the negotiation, execution and delivery of this Agreement and,
in the event of any dispute between Employer and Executive regarding Executive’s
employment hereunder, any legal expenses and court costs actually and reasonably
incurred by Executive in connection with such dispute to the extent that
Executive shall ultimately be successful in such dispute.
8.05. References
to Sections and Subsections; Headings.
All
references herein to sections or subsections are to the sections or subsections
of this Agreement unless otherwise specified. All descriptive headings in this
Agreement are inserted for convenience only and shall be disregarded in
construing or applying any provision of this Agreement. Should any provision
of
this Agreement require judicial interpretation, the court interpreting or
construing the same shall not construe the provision against any party by reason
of the rule of interpretation that a document is to be construed more strictly
against the party who prepared the same.
12
8.06. Waiver
of Breach.
The
waiver by either party of a breach of any provision of this Agreement by the
other party must be in writing and shall not operate or be construed as a waiver
of any other or subsequent breach by such other party.
8.07. Assignment.
This
Agreement is personal in its nature and the parties shall not, without the
consent of the other, assign or transfer this Agreement or any rights or
obligations hereunder; provided,
however,
that
Employer may assign this Agreement to any of its affiliates or in connection
with the reorganization, merger or sale of Employer or the sale of substantially
all the assets of Employer, and the provisions of this Agreement shall inure
to
the benefit of, and be binding upon, each successor of Employer, whether by
merger, consolidation, transfer of all or substantially all of its assets or
otherwise.
[The
rest
of this page has intentionally been left blank.]
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8.08. Counterparts.
This
Agreement may be executed in counterparts, each of which shall be deemed to
be
an original, but all of which together shall constitute one and the same
agreement.
8.09. Severability.
If any
provision of this Agreement or part thereof, is held to be unenforceable, the
remainder of such provisions of this Agreement, as the case may be, shall
nevertheless remain in full force and effect.
8.10. Entire
Agreement and Integration.
Except
insofar as explicit reference is made herein to other agreements or documents,
this Agreement contains the entire agreement and understanding between Employer
and Executive with respect to the subject matter hereof. This Agreement
supersedes any prior agreement between the parties relating to the subject
matter hereof.
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date
first written above.
| THE CHILDREN’S PLACE RETAIL STORES, INC. | ||
| By: | /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇ | |
|
▇▇▇▇▇ ▇▇▇▇▇▇▇ Chair,
Compensation Committee of the
Board of Directors
Dated:
April 16, 2007
|
||
| ▇▇▇▇▇ ▇. ▇▇▇▇▇ | ||
|
/s/
▇▇▇▇▇ ▇. ▇▇▇▇▇
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14
Exhibit
A
COMPENSATION
A. Base
Salary:
Executive’s annual salary rate shall initially be $525,000 per year, payable in
equal installments not less frequently than monthly during each year of the
Employment Period. Executive’s annual salary rate shall be subject to annual
review by the Board of Directors and to increase by action of the Board of
Directors in its discretion and, to the extent increased, such increased salary
rate shall thereafter apply for purposes of the Agreement; provided that the
Board of Directors may reduce such increased annual rate to a degree
proportionate to that applied to all other executive officers of the Company
upon a finding that such action is warranted in the best interests of the
Company.
B. Performance
Bonus:
(1) In
respect of each fiscal year during the Employment Period, Executive shall be
entitled to participate in, and to an opportunity to receive a “Performance
Bonus” pursuant to, Employer’s “Annual Management Incentive Bonus Plan” in
effect for such year on the terms hereinafter provided. The “Annual Management
Incentive Bonus Plan” shall mean the Annual Management Incentive Bonus Plan
approved by Employer’s stockholders on June 22, 2006, as such plan may be
amended in accordance with its terms, or any successor plan of a like nature
approved by Employer’s stockholders or, if in respect of any fiscal year during
the Term, Employer’s stockholders have not approved any such plan, such plan as
the Board of Directors shall apply with respect to the payment of
performance-based bonuses to the senior executives of Employer. In respect
of
each year during the Employment Period Executive shall be entitled to
participate in the Annual Management Incentive Bonus Plan on a basis no less
favorable to Executive than that on which any other executive of Employer,
other
than the Chief Executive Officer of Employer, participates in such plan;
provided that Executive shall be eligible for each year during the Employment
Period for an annual bonus under the plan (subject to attainment of the
performance levels specified for such year pursuant to the plan) in an amount
not less than 50% of Executive’s Base Salary. Bonuses shall be payable under the
Annual Management Incentive Bonus Plan on the terms provided therein, subject
to
the provisions of subsections 6.01 and 6.02.
(2) Nothing
contained in this section B or in any other provision of the Agreement shall
restrict the ability of Employer to pay to Executive a bonus or any other form
of incentive compensation in addition to that provided by the foregoing
paragraph (1). In the event Employer shall establish any other plan or program
pursuant to which bonuses are paid to executives of Employer (other than the
Chief Executive Officer), Executive shall be entitled to participate therein
and
to have an opportunity to receive a bonus under such plan or program on a basis
not materially less favorable to Executive than the basis on which any other
executive of Employer (other than the Chief Executive Officer) is entitled
to
participate in, and to have an opportunity to receive a bonus under, such plan
or program.
15
Exhibit
B1
FORM
OF RELEASE
THIS
RELEASE (the “Release”) is entered into by __________ (the
“Executive).
WHEREAS,
the Executive and The Children’s Place Retail Stores, Inc., a Delaware
corporation (together with its successors and assigns, the “Company”), have
entered into an Employment Agreement dated as February 4, 2007 (the “Employment
Agreement”); and
WHEREAS,
the Executive’s employment has been terminated by the Company or by the
Executive or upon Executive’s death or disability and as such the Executive is
due certain payments and entitlements pursuant to the Employment Agreement
subject to the Executive’s executing this Release;
NOW,
THEREFORE, in consideration of the payments set forth in the Employment
Agreement and other good and valuable consideration, the Executive agrees as
follows:
The
Executive, on behalf of himself and his dependents, heirs, administrators,
agents, executors, successors and assigns (the “Executive Releasees”), hereby
releases and forever discharges the Company and its affiliated companies and
their past and present parents, subsidiaries, successors and assigns (the
“Company Affiliated Parties”) and all of the Company Affiliated Parties’ past
and present directors, officers, employees, agents and their successors and
assigns (but as to any such individual or agent, only in connection with, or
in
relationship to, his or its capacity as a director, officer, employee, agent,
successor or assign of any Company Affiliated Party and not in connection with,
or in relationship to, his or its personal capacity unrelated to any Company
Affiliated Party) (collectively, the “Company Releasees”), from any and all
claims, demands, obligations, liabilities and causes of action of any kind
or
description whatsoever, in law, equity or otherwise, whether known or unknown,
that any Executive Releasee had, may have had or now has against the Company
or
any other Company Releasee, as of the date of the execution of this Release
by
the Executive, arising out of or relating to the Executive’s employment
relationship, or the termination of that relationship, with the Company or
any
affiliate, including, but not limited to, any claim, demand, obligation,
liability or cause of action arising under any Federal, state, or local
employment law or ordinance (including, but not limited to, Title VII of the
Civil Rights Act of 1964, the Civil Rights Acts of 1866, 1871, 1964 or 1991,
the
Equal Pay Act, the Americans with Disabilities Act of 1991, the National Labor
Relations Act, the Fair Labor Standards Act of 1938, the Workers Adjustment
and
Retraining Notification Act, the Employee Retirement Income Security Act of
1974, as amended (other than any claim for vested benefits), the Family and
Medical Leave Act of 1993, the Age Discrimination in Employment Act of 1967,
as
amended, the Older Workers’ Benefit Protection Act of 1990 and the Consolidated
Omnibus Budget Reconciliation Act of 1985), tort, contract or any alleged
violation of any other legal obligation. Anything to the contrary
notwithstanding in this Release or the Employment Agreement, nothing herein
shall release any Company Releasee from any claims or damages based on (i)
any
right or claim that arises after the date the Executive executes this Release,
(ii) any right the Executive may have to payments, benefits or entitlements
under the Employment Agreement or any applicable plan, policy, program or
arrangement of, or other agreement with, the Company or any affiliate, (iii)
the
Executive’s eligibility for indemnification in accordance with applicable laws
or the certificate of incorporation or by-laws of Company or its affiliates
or
under any applicable insurance policy with respect to any liability the
Executive incurs or has incurred as a director, officer or employee of the
Company or any affiliate or (iv) any right the Executive may have to obtain
contribution as permitted by law in the event of entry of judgment against
the
Executive as a result of any act or failure to act for which the Executive
and
any Company Releasee are jointly liable.
_________________
1
To
be appropriately modified if entered into by Executive’s estate or
guardian.
16
The
Executive acknowledges that he has been provided a period of at least 21
calendar days in which to consider and execute this Release. The Executive
further acknowledges and understands that he has seven calendar days from the
date on which he executes this Release to revoke his agreement by delivering
to
the Company written notification (in accordance with Section 16 of the
Employment Agreement) of his intention to revoke this Release. This Release
becomes effective when signed by the Executive unless revoked in writing by
the
Executive in accordance with this seven-day provision. To the extent that the
Executive has not otherwise done so, the Executive is advised to consult with
an
attorney prior to executing this Release.
This
Release shall be governed by and construed and interpreted in accordance with
the internal laws of State of Delaware, as applicable to agreements made and
to
be performed therein, without reference to principles, policies or provisions
thereof concerning conflicts of law.
IN
WITNESS WHEREOF, the Executive has executed this Release as of the date
indicated below.
|
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▇. ▇▇▇▇▇
Date:____________________
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17