EMPLOYMENT
AGREEMENT
AGREEMENT dated as of September 25, 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”), Gayle Weibley (the
“Employee”), and solely for purposes of Sections 3(c),
4, and 19, Maidenform Brands, Inc. (sometimes hereinafter referred
to as “Parent”).
WITNESSETH:
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 as of the date of
this agreement set forth above 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 Two Hundred and Forty-Four Thousand
($244,000.00) 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 not less than 50% of Base Salary, payable in accordance with the
Bonus Plan. 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.
Equity Incentives Granted on or after the Date
Hereof Any equity
incentives granted in the form of Non-Qualified Stock Options,
Non-Tandem Stock Appreciation Rights or Restricted Stock granted in
the sole discretion of the Compensation Committee on or after the
date hereof 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 Senior Vice President - Human Resources 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 commensurate with such position, which
duties shall include interacting with the Compensation Committee of
the Board of Parent upon their request, as they may determine in
their sole discretion. 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 Senior Vice President – Human
Resources as may be determined and assigned to the Employee from
time to time by or upon the authority of the Chief Executive
Officer or his designee. 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 her best
efforts, energies and skills to the faithful discharge of the
duties and responsibilities attributable to her office, and to this
end will devote her 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 her 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 her 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 commencing on each July 1 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 her 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, paid in accordance
with the Employer’s normal payroll practices. 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 her 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 her 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
or provided 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 in
accordance with the applicable bonus plan-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 (which for the purpose of this
Agreement shall not include a termination as a result of
non-renewal of the Term of Employment pursuant to Section 2(b)
above) 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 without Cause, or
by non-renewal pursuant to Section 2(b) or by the Employee for Good
Reason, then, in addition to 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 the
Employer (other than any severance pay plan maintained by the
Employer) paid or provided in accordance with the terms and
conditions of the applicable plan, subject to the Employee’s
execution, delivery and non-revocation of a release in accordance
with Section 10(e), 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:
(i) Payment
of an amount equal to the sum of her Base Salary (as in effect on
the Termination Date), plus an amount equal to one times her
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 her termination of employment,
determined by annualizing the bonus actually paid with respect to
any partial year. 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 she 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).
(ii) In
addition, if the Employee or her dependents are otherwise eligible
for COBRA continuation of group health plan coverage and the
Employee (or her 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 her 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:
(i) The
assignment to the Employee of duties that constitute a material
diminution of her authority, duties, or
responsibilities;
(ii) A
material diminution in the Employee’s Base Salary;
(iii) Relocation
of the Employee to a location outside a radius of 50 miles of the
Employer’s Iselin, New Jersey office; or
(iv) Any
other action or inaction by the Employer that constitutes a
material breach of this Agreement
provided that
within ninety (90) days after the initial existence of such event,
the Employer shall be given notice and an opportunity, not less
than thirty (30) days, to effectuate a cure for such asserted
“Good Reason” by the Employee. Employee’s
resignation hereunder for Good Reason shall not occur later than
one hundred fifty (150) days following the initial date on which
the event Employee claim constitutes Good Reason
occurred.
(d) A termination of employment shall not be
deemed to have occurred for purposes of any provision of this
Agreement providing for the payment of any amounts or benefits upon
or following a termination of employment unless such termination is
also a “separation from service” within the meaning of
Section 409A of the Internal Revenue Code of 1986, as amended (the
“Code”) and the regulations and guidance
promulgated thereunder (collectively “Code Section
409A”) and, for purposes of any such provision of this
Agreement, references to a “termination,”
“termination of employment” or like terms shall mean
“separation from service.” If Employee is deemed on the
date of termination of her
