Exhibit 10.5
EMPLOYMENT AGREEMENT
EMPLOYMENT
AGREEMENT, dated as of
day of July,
2006 between Tara Poseley (“Executive”) and THE
CHILDREN’S PLACE SERVICES COMPANY, LLC, a Delaware limited
liability company (“Employer”).
SECTION 1
EMPLOYMENT OF EXECUTIVE
1.01.
Employer hereby agrees to employ Executive and Executive hereby
agrees to be and remain in the employ of Employer upon the terms
and conditions hereinafter set forth.
SECTION 2
EMPLOYMENT PERIOD
2.01.
The term of Executive’s employment under this Agreement shall
be effective as of September 18, 2006 (“Effective
Date”) and shall continue until termination of
Executive’s employment in accordance with the provisions of
Section 5. The period of Executive’s employment by Employer
shall be referred to as the “Employment Period” and the
date of Executive’s termination of employment with the
Employer shall be referred to as the “Termination
Date.”
SECTION 3
DUTIES
3.01.
Generally. During the
Employment Period, Executive (a) shall serve as President of Disney
Store North America, (b) shall serve as a member of the
Executive
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Management Committee of
Employer, (c) 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 (Employer and
such entities being referred to collectively as the
“Company”), and (d) shall use her best efforts, skills
and abilities in the diligent and faithful performance of her
duties and responsibilities hereunder. Notwithstanding the
foregoing, Executive shall have the right to (a) engage in personal
investment activities for herself and her family and (b) engage in
charitable and civic activities, provided the outside activities
set forth in (a) and (b) hereof do not interfere with
Executive’s performance of her duties and responsibilities
hereunder. In no event shall Executive 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
Chief Executive Officer of Employer.
3.02.
Reporting. Executive
shall report directly to the Chief Executive Officer of Employer.
During the Employment Period, Executive will be subject to all of
the 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 Chairman of the Board
and the Chief Executive Officer.
SECTION 4
COMPENSATION
4.01.
Compensation, Generally. For
all services rendered and required to be 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
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and Performance Bonus,
all as more fully described on Exhibit A, and the Incentive
Compensation described in Section 4.06 (collectively, the
“Compensation”).
4.02.
Other Benefits. Except
as otherwise provided herein, during the Employment Period,
Executive shall be eligible to receive such benefits that the
Employer generally makes available to Employer’s senior
executives from time to time (other than those benefits provided
under or pursuant to separately negotiated individual employment
agreements or arrangements). 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
fixed and determined.
4.03.
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, not less frequently than monthly, of signed, itemized
accounts of such expenditures all in accordance with
Employer’s policies and procedures as adopted and in effect
from time to time and applicable to its senior executives.
4.04.
Vacations. Executive
shall be entitled to four (4) weeks vacation each
twelve-month period worked, which vacation will accrue
ratably over the course of such twelve-month period and which shall
be taken at such time or times as may be approved by the Chief
Executive Officer and shall not unreasonably interfere with
Executive’s performance of her duties under this
Agreement.
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4.05.
Relocation Expenses .
Executive shall be eligible to
receive the Employer’s Tier 1 level relocation package which
includes the following: (a) Executive shall receive the net sum of
$10,000 for relocation incidentals, which sum shall be paid to
Executive within thirty (30) days of the Effective Date; (b)
Employer shall provide housing in the Los Angeles, California area
to Executive and her family for the period of September 18, 2006
through December 31, 2006; and (c) Employer shall pay the costs of
roundtrip airfare for either Executive or her family to travel from
Executive’s current residence and her principal place of
business for each week during the period of September 16, 2006
through December 31, 2006. In the event Executive’s
employment is terminated within one (1) year of the Effective Date
pursuant to Section 5.02 or Executive voluntarily resigns for any
reason other than Good Reason as that term is defined in Section
5.03, Executive shall pay to Employer an amount equal to the total
amount of relocation expenses paid on behalf of Executive pursuant
to this Section 4.05 within thirty (30) days of termination.
4.06.
Incentive Compensation .
Executive shall be eligible to
participate in the Company’s Long Term Compensation Program
for its senior executives. Executive shall be entitled to receive
an award of 40,000 performance shares at target subject to
execution of a performance stock award agreement.
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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 cause. Such notice shall specify the
effective date of termination, which in the case of termination by
Executive shall not be less than thirty (30) days after the date of
such notice.
5.02.
By Employer: Cause. At any
time during the Employment Period, by notice to Executive, Employer
may terminate Executive’s employment under this Agreement for
“Cause,” effective immediately. Such notice shall
specify the cause for termination. For the purposes of this Section
5.02, “Cause” means:
(a) a breach by
Executive of any of the material provisions of this Agreement that
Executive fails to remedy or cease within ten (10) business days
after notice thereof to Executive; or
(b) any conduct,
action or behavior by Executive that has or may reasonably be
expected to have a material adverse effect on the reputation or
interests of the Company or Executive; or
(c) the commission
by Executive of an act involving moral turpitude, dishonesty or
fraud, or the engagement in any other willful or intentional
misconduct, whether or not in connection with Executive’s
employment hereunder; or
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(d) Executive
shall have committed an 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 Employer, terminate
Executive’s employment under this Agreement “for Good
Reason” effective immediately. For the purposes of this
Section 5.03, “Good Reason” means:
(a)
a relocation of Executive’s principal place of business to a
location more than sixty (60) miles from Employer’s current
California-based office in Pasadena, California.
(b)
a demotion of Executive’s position, a material, adverse
change in Executive’s duties and responsibilities, or an
adverse change in Executive’s reporting as set forth in
Section 3.02; or
(c)
Employer’s failure to pay any amount or benefits when due,
which failure is not cured within ten (10) business days after
notice to Employer; or
(d)
Employer’s material breach of this Agreement which breach is
not cured within ten (10) business days after notice to
Employer.
(e)
Ezra Dabah no longer holds the position of Chief Executive Officer
of Employer.
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
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at least 180 days
during any period of twelve consecutive months
(“Disability”), Employer may, upon at least fifteen
(15) days’ prior written notice to Executive, terminate
Executive’s employment under this Agreement. The Disability
of Executive shall be determined by an independent physician
acceptable to both Employer and Executive or her
representative.
SECTION 6
TERMINATION COMPENSATION
6.01.
Entitlement to Payment Upon Termination Without Cause.
Subject to the provisions of
Sections 6.02 and 9.08, if Executive’s employment hereunder
is terminated by Employer pursuant to Sections 5.01, 5.03, or 8.01
at any time thereafter, Executive shall be entitled to continuation
of her Base Salary for a period of one (1) year following such
termination (“Severance Payment”), which Severance
Payment shall be paid to Executive in equal consecutive bi-weekly
installments with the first such installment paid on the first day
of the month next following the effective date of termination of
Executive’s employment hereunder; provided, however, that to
the extent necessary to comply with the restriction of Section
409A(a)(2)(B) of the Internal Revenue Code of 1986, as amended
(“Code”) concerning payments to “specified
employees,” in no event shall any portion of the Severance
Payment be made earlier than the first business day of the seventh
month following Executive’s Termination Date (“Delayed
Payment Date”). Executive shall be a “specified
employee” for the 12-month period beginning on the first day
of the fourth month following each “Identification
Date” if Executive is a “key employee” (as
defined in Section 416(i) of the Code without regard to Section
416(i)(5) thereof) of Employer at any time during the 12-month
period ending on the
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Identification Date.
For purposes of this Agreement, the Identification Date shall be
December 31. Receipt of the Severance Payment shall be subject to
execution of a separation agreement and general release (the terms
of which shall be consistent with this Agreement) in a form
reasonably satisfactory to Employer.
6.02.
No Other Termination Compensation.
Executive shall not be entitled
to any benefit or compensation following termination of her
employment hereunder, except as set forth in this Section 6 and
Section 8.01, if applicable.
SECTION 7
LOCATION OF EXECUTIVE’S
ACTIVITIES
7.01.
Principal Place of Business.
Executive’s principal
place of business in the performance of her duties and obligations
under this Agreement shall be in the Los Angeles, California area,
which includes Pasadena, California. For so long as
Employer’s California-based offices are located in the Los
Angeles area, Executive’s principal place of business shall
be located at such office.
7.02.
Travel . Notwithstanding
the provisions of Section 7.01, Executive will engage in such
travel and spend time in other places as may be necessary or
appropriate in furtherance of her duties hereunder.
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SECTION 8
CHANGE IN CONTROL
8.01.
Effect of Change in Control.
If a Change in Control (as
hereinafter defined) shall occur and if Executive is terminated by
Employer or Executive for any reason, all outstanding options or
restricted shares, if any, previously granted to Executive,
excluding any equity-based compensation granted to Executive
pursuant to any long term compensation program which shall be
governed by the terms of such long term compensation program, shall
immediately vest and Executive shall be entitled to all the
payments in Section 6.01.
As used in this
Agreement, “Change in Control” means the occurrence
during the Term of any of the following events:
(a)
The sale to any purchaser of (i) all or substantially all of the
assets of the Employer or (ii) capital
