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AGREEMENT
dated as of May 23, 2008 between MAIDENFORM, INC., a New York
corporation with a principal place of business at 485 F U.S.
Highway 1 South, Iselin, NJ 08830 (the
“Employer”), Christopher W. Vieth (the
“Employee”), and solely for purposes of
Sections 3(c), 4, and 19, Maidenform Brands, Inc.
(sometimes hereinafter referred to as
“Parent”).
W I T N E S S E T H :
WHEREAS,
the Employer wishes to employ the Employee for the period
provided in this Agreement, and the Employee is willing to
serve in the employ of the Employer for such period, upon the
terms and conditions hereinafter provided;
NOW,
THEREFORE, in consideration of the mutual covenants herein
contained, the parties agree as follows:
1.
Employment .
The Employer hereby employs the Employee and the Employee hereby
accepts employment upon the terms and conditions hereinafter set
forth.
2.
Term of Employment .
(a)
The
term of the Employee’s employment under this Agreement shall
commence on May 27, 2008 and it shall continue for a period of one
year thereafter (the “Initial Term”), unless this
Agreement shall be renewed for an additional term or terms in
accordance with paragraph (b) of this Section 2, or unless earlier
terminated as provided herein.
(b)
This
Agreement shall automatically be renewed upon the expiration
of the Initial Term for successive periods of one year each
(each an “Additional Term”), unless either party
notifies the other party in writing at least 120 days prior to
the expiration of the Initial Term or any such Additional Term
(the Initial Term and each Additional Term are collectively
referred to as “Term of Employment”).
3.
Compensation .
(a)
Base .
During the Term of Employment, the Employer shall pay the Employee
a base salary at not less than an annual rate of
Four Hundred and Twenty-Five Thousand ($425,000.00) Dollars
,
in accordance with the Employer’s normal payroll practices
(as increased in accordance with this Section 3(a), the
“Base Salary”). Such Base Salary shall be reviewed at
least annually by the Board of Directors of Maidenform Brands, Inc.
(the “Board”) and the Board may at any time increase
(but not decrease) the Employee’s Base Salary hereunder as
the Board may in its sole and absolute discretion deem reasonable
and appropriate.
(b)
Incentive Compensation .
The Employee shall be a participant in the Maidenform Brands, Inc.
2005 Annual Performance Bonus Plan (the “Bonus Plan”)
for the period from December 30, 2007 through January 3, 2009 (the
“2008 Fiscal Year”) with achievement of 100% Actual
Operating Percentage (as defined in the Bonus Plan) paying a bonus
of 80% of Deemed Base Salary (as hereinafter defined), payable in
accordance with the Bonus Plan and based upon such performance
goals permitted under the Bonus Plan, except that for the 2008
Fiscal Year, Deemed Base Salary (for purposes of determining
Compensation covered by the Bonus Plan for the 2008 Fiscal Year)
shall be Three Hundred Eighteen Thousand Seventy and Fifty
($318,750) Dollars. For fiscal years thereafter during the Term of
Employment, the Employee’s incentive compensation shall be
based upon Compensation as defined in the Bonus Plan and upon such
performance goals permitted under the Bonus Plan and subject to the
conditions set forth in the Bonus Plan.
(c)
Equity Incentives .
(i)
Equity Incentives Granted on or after the Date Hereof
.
Subject to the approval of the Compensation Committee of the Board
of Parent, on the first business day of the month next following
the commencement of employment with the Employer (the “Grant
Date”) Employee shall receive long term incentives pursuant
to the Maidenform Brands, Inc. 2005 Stock Incentive Plan (the
“Stock Incentive Plan”) with a Black-Scholes value of
Two Hundred Seventy-Six Thousand Two Hundred and Fifty ($276,250)
Dollars (65% of Annual Base Salary) based upon the
closing
stock price of the stock of Parent on the last business day before
the Grant Date and
calculated consistent with the methodology and assumptions used by
the Parent in connection with its financial statements, as
follows:
(x)
That
number of shares of Restricted Stock equal in value to One
Hundred Thirty- Eight
Thousand One Hundred and Twenty-Five ($138,125) Dollars based
upon the closing stock
price of the stock of Parent on the last business day before
the Grant Date; and
(y)
That
number of Non-Tandem Stock Appreciation Rights with a
reference price equal
to the closing stock price of the stock of Parent on the last
business day before the Grant
Date with a Black-Scholes value of One Hundred Thirty-Eight
Thousand One Hundred
and Twenty-Five ($138,125) Dollars.
Such
equity incentives will vest and become exercisable in equal
annual installments on each anniversary of the grant date over
a four year period (provided the Employee is continuously
employed by the Employer’s Group (as defined below)
through the applicable vesting date) subject to 100%
acceleration of vesting upon a Change in Control (as defined
in the Stock Incentive Plan). Upon the Employee’s
termination of employment by the Employer as a result of
non-renewal of the Term of Employment by the Employer pursuant
to Section 2(b) above or by the Employer without Cause
(as defined below) or by the Employee for Good Reason (as
defined below), such equity incentives shall become vested
with respect to the number of shares that would have vested if
the Employee’s employment would have continued for an
additional twelve month period. Following any such termination
described in this Section 3(c)(i) or termination due to
the Employee’s Disability or death, equity incentives
granted on or after the date hereof shall remain exercisable
until the earlier of (1) the original expiration date of
the option, or (2) one year following such termination of
employment.
4.
Duties .
During the Term of Employment, the Employee shall be engaged as
Executive Vice President and Chief Financial Officer/Chief
Operating Officer of Maidenform, Inc. and its subsidiary companies
(hereinafter individually and collectively along with the Parent
called the “Employer’s Group”). The Employee
shall have the responsibility and authority to manage and direct
the finance, Information technology, sourcing, distribution and
supply chain activities of the Employer, subject to the supervision
of the Chief Executive Officer and the Boards of Directors of the
Employer and the Parent and, with respect to his role as Chief
Financial Officer, to the Audit Committees of the Boards of
Directors of the Employer and the Parent, as well. In addition, the
Employee shall have such other or more specific responsibilities or
duties with respect to the business of the Employer’s Group
consistent with the Employee’s position as Executive Vice
President and Chief Financial Officer /Chief Operating Officer as
may be determined and assigned to the Employee from time to time by
or upon the authority of the Chief Executive Officer or the Board
of Directors of the Employer or the Parent. The Employee shall
report to the Chief Executive Officer and, with respect to his role
as the Chief Financial Officer to the Audit Committees of the
Boards of Directors of the Employer and the Parent, as well. The
Employee shall also serve as an Officer or Director of any member
of the Employer’s Group as requested by the Employer without
any additional compensation therefore other than as specified in
this Agreement. The Employer has Director’s and
Officer’s Liability Insurance in effect and will maintain
Director’s and Officer’s Liability Insurance Coverage
for benefit of Employee uninterruptedly in effect during the Term
of Employment.
5.
Extent of Service .
The Employee agrees to devote his best efforts, energies and skills
to the faithful discharge of the duties and responsibilities
attributable to his offices, and to this end will devote his full
working time and attention to the business and affairs of the
Employer’s Group. Employee shall be based at the
Employer’s Iselin, New Jersey office, but shall perform
services hereunder at other locations as shall be reasonably
appropriate. Notwithstanding the foregoing, it is understood that
the Employee may devote reasonable time and attention consistent
with the practice of other senior executives similarly situated, to
civic or community affairs and to service on the Board of Directors
or Advisory Board of other non-competing corporations, provided
that (i) the Employee shall serve on no more than two such
Corporate Boards or Advisory Boards at any time; (ii) the
Compensation Committee shall have approved such Board memberships,
which approval shall not be unreasonably withheld; and (iii) it
does not interfere in any material way with the performance of his
responsibilities to the Employer’s Group under this Agreement
or create a conflict of interest.
6.
Expenses .
The Employee is authorized to incur reasonable, ordinary and
necessary expenses in the performance of his duties hereunder
consistent with the Employer’s existing expense reimbursement
policy, as it may be amended from time to time, and the Employer
shall reimburse the Employee for all such expenses upon the
presentation by the Employee, from time to time, of an account of
such expenditures. To the extent any such reimbursements constitute
taxable income to the Employee for federal income tax purposes, all
such reimbursements shall be paid in accordance with the
Employer’s policy but in no event later than December 31 of
the calendar year next following the calendar year in which the
expenses to be reimbursed are incurred.
7.
Vacation .
The Employee shall be entitled to twenty (20) days of paid vacation
during each of the successive twelve (12) month periods comprising
the Term of Employment, or a pro rata portion thereof for any such
successive period which is less than twelve (12) months. Vacation
hereunder shall be taken at times which are mutually determined by
the Employer and the Employee not to interfere, in any material
respect, with the Employee’s performance of his duties
hereunder.
8.
Employee Benefits .
The Employee shall be entitled during the Term of Employment to
participate in any employee benefit program or arrangement
maintained by the Employer which is generally available to other
senior employees of the Employer, including any qualified or
non-qualified retirement or deferred compensation arrangements or
401(k) savings plan, life insurance, medical, long-term disability
plans, or other allowances, including the auto allowance of Seven
Hundred ($700) per month. Such participation shall be in accordance
with all applicable terms and conditions of such plans or programs,
including, without limitation, provisions respecting the
satisfaction of any applicable eligibility periods for plan
participation and the modification or termination of such
plans.
9.
Termination of Employment .
Notwithstanding any other provision of this Agreement, the
Employee’s employment under this Agreement may be terminated
at any time by the Employer in the event of:
(A)
(i) The
Employee’s conviction for or entry of a plea of guilty
or nolo contendere with respect to a felony or any crime that
constitutes a misdemeanor involving moral turpitude under
federal law or the law of any state, (ii) the Employee’s
willful misappropriation of funds or property of the
Employer’s Group or other acts of fraud, dishonesty,
self-dealing, any significant violation of any statutory or
common law duty of loyalty to the Employer’s Group,
(iii) the Employee’s perpetration of an illegal act
which causes material economic injury to the Employer or the
Employer’s Group, or (iv) a material breach of this
Agreement by the Employee or the Employee’s failure to
perform his duties hereunder in any material respect, provided
that as to (iv), the Employee shall be given written notice
and an opportunity, not to exceed ten (10) days, to effectuate
a cure, provided that such breach or failure is susceptible to
cure, as determined by the Board or the Board of Directors of
the Employer, in good faith (hereinafter
“Cause”).
(B)
The
Employee’s death; or
(C)
The
Employee’s inability due to any physical or mental
condition of the Employee, to perform his duties hereunder for
a period of ninety (90) consecutive days or one hundred twenty
(120) days (whether or not consecutive) within any twelve (12)
month period (hereinafter
“Disability”);
by
written notice to the Employee (except that notice of
termination shall not be required in the case of the
Employee’s death) specifying the event relied upon for
such termination and the effective date of such termination
(the effective date of any termination of employment hereunder
is referred to as the “Termination
Date”).
10.
Payments Upon Termination of Employment .
(a)
In
the event the Employee’s employment under this Agreement is
terminated for any reason specified in Section 9 above this
Agreement shall terminate and be deemed cancelled and the Employer
shall be under no obligation hereunder either to continue the
Employee’s employment or to provide the Employee with any
payment or benefit of any kind whatsoever, except for the
Employee’s Base Salary through the Termination Date paid in
accordance with the Employer’s normal payroll practices and
such vested benefits or rights which the Employee may have accrued
through the Termination Date hereunder or under any benefit plan of
Employer (other than any severance pay plan maintained by the
Employer) paid in accordance with the terms and conditions of the
applicable plan. In addition, in the event of termination pursuant
to 9(B) or (C) above, the Employer shall also pay the amount of any
incentive compensation as described in Section 3(b) hereof to which
the Employee would have been entitled for the year of termination
had the Employee’s employment not terminated, prorated to the
Termination Date based on the number of days actually employed
during the applicable year, payable when such incentive
compensation would be payable to other employees for that year and
based upon actual results and the Employer’s financial
performance for the full applicable year. In addition, in the event
of termination pursuant to 9(B) or (C) above, the Employee shall be
entitled to benefits under any group life insurance or disability
insurance benefits provided in accordance with the Employer’s
welfare benefit plans.
(b)
The
Employee’s employment under this Agreement may also be
terminated on fifteen (15) days’ prior notice by the
Employer not for Cause and it may be terminated by the
Employee for Good Reason if circumstances constituting Good
Reason exist, and neither of such terminations of employment
shall be a breach of this Agreement by the Employer so long as
the benefits set forth below are provided to the Employee. In
the event that the Employee’s employment with the
Employer is terminated by the Employer as a result of
non-renewal of the Term of Employment pursuant to
Section 2(b) above or terminated by the Employer without
Cause or by the Employee for Good Reason, then, in addition to
the Employee’s Base Salary through the Termination Date
and such vested benefits or rights which the Employee may have
accrued through the Termination Date hereunder or under any
benefit plan of the Employer (other than any severance pay
plan maintained by the Employer), subject to the
Employee’s execution, delivery and non-revocation of a
release, to the fullest extent permitted by law in favor of
the Employer’s Group (and its affiliates) in
substantially the form attached hereto as Exhibit
“A”, as may be modified to take into account
changes in applicable law and any other changes
as
are legally necessary at the time of execution to make it
enforceable (the “
Release ”)
,
the Employee will be entitled to the following:
(1)
Payment
of an amount equal to the sum of his Base Salary (as in effect
on the Termination Date), plus, in the event such termination
occurs after the end of Fiscal 2008, an amount equal to one
times his average annual bonus (taking into account all annual
bonuses paid under Section 3(b) hereof for the applicable
year) over the three fiscal years immediately preceding his
termination of employment, determined by annualizing the bonus
actually paid with respect to any partial year (which, with
respect to the 2008 Fiscal Year will be deemed to have been
paid for 9 months of service). For purposes of clarity, if
there have been fewer than three fiscal years immediately
preceding any such termination, the average of such annual
bonuses will be calculated using as a denominator the actual
number of fiscal years in which he has worked for the
Employer. This amount shall be subject to tax and other
required withholdings and, subject to any delays required
pursuant to Sections 10(d) and 10(e), will be payable in equal
periodic installments over a period of twelve (12) months from
the Termination Date paid in accordance with the
Employer’s normal payroll policies as if the Employee
continued to be an employee of the Employer (but off
payroll).
(2)
In
the event such termination occurs during Fiscal 2008, payment
of an amount equal to the bonus the Employee would have been
entitled for Fiscal 2008 had the Employee’s employment
not terminated, prorated to the Termination Date based on the
number of days actually employed during Fiscal 2008 and based
upon actual results and the Employer’s financial
performance for Fiscal 2008, and, subject to any delays
required pursuant to Sections 10(d) and 10(e), payable when
such bonus would be payable to other employees for Fiscal
2008.
(3)
In
addition, if the Employee or his dependents are otherwise
eligible for COBRA continuation of group health plan coverage
and the Employee (or his dependents) timely elect such
coverage, then for a period of twelve (12) months following
the Termination Date, subject to any delays required pursuant
to Sections 10(d) and 10(e), the Employer shall pay to the
Employee on the first Employer payroll date in each month
following the Termination Date an amount equal to 100% of the
monthly premium for such COBRA coverage for the applicable
month. The foregoing payments shall each be a bonus to the
Employee subject to tax and other required withholdings and
shall be grossed up to reflect all applicable taxes at the
Employee’s maximum marginal rates.
Notwithstanding
the foregoing, nothing in this Agreement shall be construed to
require the Employee to seek other employment following the
termination of his employment hereunder and there shall be no
offset against any amounts due the Employee under this
Agreement on account of any remuneration attributable to any
subsequent employment that Employee may obtain.
(c)
For
the purposes of this Agreement “Good Reason” shall
mean the occurrence of any of the following events without the
Employee’s consent:
(1)
The
assignment to the Employee of duties that constitute a
material diminution of his authority, duties, or
responsibilities (including reporting
requirements);
(2)
A
material diminution in the Employee’s Base
Salary;
(3)
Relocation
of the Employee to a location outside a radius of 50 miles of
the Employer’s Ise
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