EMPLOYMENT
AGREEMENT
AGREEMENT (this “ Agreement
”) dated as of April 3, 2009, 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
”), Nanci Prado (the “ Employee ”), and
solely for purposes of Sections 3, 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 the Employee’s actual commencement of employment on April
20, 2009 (the “ Start Date ”) 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 Fifty Thousand ($250,000.00) 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 Compensation Committee (the “
Compensation Committee ”) of the Board of Directors of
Maidenform Brands, Inc. (the “ Board ”) and the
Compensation Committee may at any time increase (but not decrease)
the Employee’s Base Salary hereunder as the Compensation
Committee 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 January 4, 2009 through January 2, 2010 (the “ 2009
Fiscal Year ”) with achievement of 100% of the
performance goals set by the Compensation Committee in accordance
with the Bonus Plan for the 2009 Fiscal Year with respect to the
Employee’s and Parent’s performance paying a bonus of
40% of Base Salary, pro rated for the period from the Start Date
through January 2, 2010, paid in accordance with the
Bonus Plan. For fiscal years thereafter during the Term
of Employment, the Employee’s incentive compensation shall be
based on such performance goals permitted under the Bonus Plan (or
any successor plan thereto) or the Maidenform Brands, Inc. 2005
Stock Incentive Plan (as amended from time to time and any
successor plan thereto, the “ Stock Incentive Plan
”) and subject to the conditions set forth in the Bonus Plan
(or any successor plan thereto) or the Stock Incentive Plan, as
determined by the Compensation Committee in its sole
discretion.
(c)
Equity Incentives . Subject to the approval of
the Compensation Committee and the actual commencement of
employment by the Employee on the Start Date, on May 1, 2009 (the
“ Grant Date ”) Employee will receive the
following long term incentive awards pursuant to the Stock
Incentive Plan:
(x) a
grant of a number of shares Restricted Stock equal to Twenty-Five
Thousand Dollars ($25,000) divided by the closing price of the
Parent’s common stock on April 30, 2009; and
(y) a
grant of a number of Non-Tandem Stock Appreciation Rights with a
Black-Scholes value equal to Twenty-Five Thousand Dollars ($25,000)
based on the closing price of the Parent’s common stock on
April 30, 2009, with a reference price equal to such closing
price.
Such equity
incentives and any other equity incentives granted to Employee in
the sole discretion of the Compensation Committee after the Start
Date will vest and, if applicable, 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
and any other equity incentives granted to Employee in the sole
discretion of the Compensation Committee after the Start Date 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. To the extent
applicable following any such termination described in this
Section 3(c) or termination due to the Employee’s
Disability (as defined below) 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, General
Counsel and Secretary of Maidenform, Inc., Parent and their
subsidiary companies (hereinafter individually and collectively
called the “ Employer’s Group
”). The Employee shall have the responsibility and
authority commensurate with such position as the Chief Legal
Officer and Secretary of the Employer’s Group. 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
positions 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 therefor other than as expressly 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
offices in Iselin, New Jersey office and New York, New York, 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 boards 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 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 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 Dollars
($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 which
termination shall automatically occur on the date of
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 under this Section
9 or under Section 10(b) 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 the Term of Employment shall terminate
as of the Termination Date 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 upon notice by the Employee for Good Reason following
the expiration of the cure period under Section 10(c) 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 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:
(1) Payment
of an amount equal to the sum of:
(i) her
Base Salary (as in effect on the Termination Date), plus to the
extent applicable
(ii) in
the event such termination occurs after the end of the 2009 Fiscal
Year, (x) in the event such termination is a termination by the
Employer without Cause or by the Employee for Good Reason within
two (2) years following the consummation of a Change in Control (a
“ Post-CIC Termination ”), an amount equal to
one times the greater of (I) 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 (which, with respect
to the 2009 Fiscal Year will be deemed to have been paid for eight
months of service) (the “ 3-year Average Bonus Amount
”) and (II) her target bonus for the year in which the
termination occurs; or (y) in the event such termination is a
termination by the Employer without Cause or by the Employee for
Good Reason that is not a Post-CIC Termination, an amount equal to
one times the lesser of (I) the 3-year Average Bonus Amount and
(II) her target bonus for the year in which the termination
occurs.
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). For purposes of clarity, if there have been
fewer than three fiscal years immediately preceding the
Employee’s termination, the 3-year Average Bonus Amount will
be calculated using as a denominator the actual number of fiscal
years in which she has worked for the Employer.
(2) In
the event such termination occurs before the end of the 2009 Fiscal
Year, (x) in the event such termination is a termination by the
Employer without Cause or by the Employee for Good Reason that is a
Post-CIC Termination, an amount equal to one times the greater of
(I) an amount equal to the bonus the Employee would have been
entitled for the 2009 Fiscal Year had the Employee’s
employment not terminated, prorated to the Termination Date based
on the number of days actually employed during the 2009 Fiscal Year
and based upon actual results and the Employee’s and the
Parent’s performance for the 2009 Fiscal Year (the “
2009 Actual Bonus Amount ”), and (II) her target bonus
for the 2009 Fiscal Year; or (y) in the event such termination is a
termination by the Employer without Cause or by the Employee for
Good Reason that is not a Post-CIC Termination, an amount equal to
one times the lesser of (I) the 2009 Actual Bonus Amount and (II)
her target bonus for the 2009 Fiscal Year, in each case subject to
any delays required pursuant to Sections 10(d) and 10(e), payable
when such bonus would be payable to other employees for the 2009
Fiscal Year.
(3) 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 each such payment shall include a gross-up payment
in an amount equal to all such 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 hereund
