EXHIBIT
10.1
SEPARATION, TRANSITION AND RELEASE AGREEMENT
THIS SEPARATION, TRANSITION AND RELEASE
AGREEMENT (this “ Agreement ”) is made as of the
30th day of July, 2007 by and between David Mangini (the “
Individual ”) and Mothers Work, Inc. (the “
Company ”).
WHEREAS, Individual and the Company wish to
mutually terminate Individual’s employment with the Company
on the Termination Date (defined below); and
WHEREAS, Company and Individual have each
agreed that Individual will be engaged by the Company as an
independent contractor from the Termination Date through the one
(1) year anniversary of the Termination Date (the “
Transition Period End Date ”) to provide consulting
services to the Company (the “ Transition Period
”);
WHEREAS, in exchange for his performance of
consulting services through the Transition Period and subject to
the execution of this Agreement, the Company has agreed to provide
the Individual with certain rights and benefits.
NOW
THEREFORE, in consideration of these premises and the mutual
promises contained herein, and intending to be legally bound
hereby, the parties agree as follows:
1.
Resignation and Status .
(a)
Termination Date . Individual agrees that he will
continue to provide services to the Company as an employee in his
current position and base salary until such time as Company
notifies Individual that it has selected a date (the “
Termination Date ”) on and after which Individual will
no longer be employed by the Company. The Termination Date
may be selected by Company in its sole and absolute discretion for
any reason or with no reason at any time.
(b)
Resignation . Upon the Termination Date, Individual will
resign immediately as an officer and employee of the Company and as
an officer, employee and/or director of any of the Company’s
affiliates (it being understood that no further action or writing
other than this Agreement is required).
(c) No
Further Compensation . Individual’s compensation
arrangements with the Company and the Company’s obligation to
pay Individual any amounts incident to Individual’s
employment (including, without limitation, base salary and bonus)
will cease on the Termination Date. Individual agrees that no
bonus has accrued, is payable or will become payable to Individual
incident to services provided for the Company after the Termination
Date.
(d)
Vacation Days . Any of Individual’s vacation hours
that remain accrued and unused as of the Termination Date will be
cashed out (based on Individual’s full, current rate of base
salary). The parties agree that Individual currently has 120
vacation hours.
(e) No
Further Benefits . After the Termination Date, Individual is
not eligible to participate in any of the employee benefit or
similar programs of Company except for COBRA. Company shall
not be liable to Individual as an employer for any claims or causes
of action arising out of or relating to services provided after the
Termination Date.
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(f)
COBRA . The Company agrees to pay 100% of
Individual’s premiums for COBRA medical and dental insurance
coverage for the one (1) year period beginning on the Termination
Date and ending on the first anniversary of the Termination
Date.
(g)
Restricted Stock . All unvested shares of restricted
stock granted to Individual by Company which are held by Individual
on the Termination Date will be and are hereby forfeited by
Individual in accordance with the plan documents on such
Termination Date.
(h)
Stock Options . Subject to applicable plan documents,
Individual shall have ninety (90) days from the Termination Date to
exercise any vested stock options. Stock options unvested as
of the Termination Date are herby forfeited by the Individual in
accordance with the plan documents.
2.
Transition Period: Consulting Services .
(a)
Duties .
1.
During the Transition Period, Individual will be available to
perform, and perform at the direction of the Company, full-time
consulting services to the Company as prescribed by the Company
from time to time. Such functions are anticipated to
include: (i) fashion consulting and certain other
non-management tasks consistent with the full-time services
required to be provided by Individual prior to the Termination
Date, (ii) assistance with a successor process and related
transition, and (iii) such other matters as reasonably requested by
the Company. Individual will perform such services on-site at
Company’s corporate headquarters location only if so
requested by Company.
2.
If Individual is unable or unwilling to be available to provide
full-time services to the Company as required herein (whether due
to Individual’s part or full-time employment by a third
party, any other provision of services to a third party or parties,
or for any other reason), the obligations of each of the parties
regarding the consulting services shall cease immediately,
including, without limitation, the Company’s duty to
compensate Individual per Section 2(b) of this Agreement.
Individual agrees that he will, upon request by the Company,
provide to the Company copies of his true and correct filed income
tax returns, W-2s, 1099s and any other reasonable documentation and
assurances evidencing that Individual maintained his full-time
availability during the Transition Period as required above.
If after Company’s review of such documentation, Company
reasonably concludes that Individual failed to maintain the
full-time availability as required by this Agreement, Individual
will, on demand, pay back to Company the portion of the gross
compensation paid to Individual under Section 2(b) which is
attributable to the period of time during the Transition Period
which Individual was not available to provide full-time services as
required by this Agreement.
(b)
Compensation . Subject to his continued full-time
availability and service during and through the end of the
Transition Period as required by and subject to Section 2(a) above,
Individual will be paid a total
amount of $502,745 which such amount will be earned and
payable in equal installments on a
bi-weekly schedule during the Transition Period.
(c)
Independent Contractor Status . Individual
acknowledges that after the Termination Date Individual is an independent contractor
, and will be responsible for the direction of Individual’s
own work. Individual thus
will be responsible for payment of all income, social security and
other employment-related taxes pertaining to Individual, and
Company will have
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no such
responsibilities . Individual will indemnify
Company and will hold Company harmless from and against any and all
claims, losses, liabilities, damages and costs (including
reasonable attorneys’ fees and other costs of litigation)
that may arise out of any such taxes and related items.
(d)
Termination of Consulting Services for Breach . In
addition to the automatic termination provided in Section 2(a)
above, Company may terminate the services provided by Individual
after the Termination Date at any time for
“breach.” For this purpose, “breach”
means (i) Individual’s failure or inability to satisfactorily
perform the transition services reasonably requested by Company,
(ii) any disruption of the Company’s operations caused by
Individual, or (iii) Individual’s material breach of any
provision of this Agreement or other agreement with the
Company. If the Company terminates Individual’s
provision of consulting services for “breach,” then
notwithstanding any other provision of this Agreement, the
Company’s obligations to Individual will be limited solely to
the payment of accrued and unpaid amounts accruing prior to the
effectiveness of such termination.
(e)
Release . In consideration of Individual’s
continued employment through the Termination Date and the rights
and benefits afforded hereunder, Individual agrees to execute a
release agreement substantially in the form attached hereto as
Exhibit A (the “ Release ”) prior to the
22nd day following the Termination Date and to not revoke such
release. Receipt of a fully executed copy of the Release is
and will be a condition precedent for Company’s obligations
to retain Individual to provide any consulting services under this
Agreement.
3.
Confidential Information . “Confidential
Information” means information which the Company regards as
confidential or proprietary and which the Individual learned or
developed during or related to his employment, including, but not
limited to, information relating to:
a.
the Company’s products, suppliers, strategic partners,
pricing, costs, sourcing, design, fabric and distribution
processes;
b.
the Company’s marketing plans and projections;
c.
lists of names and addresses of the Company’s employees,
agents, factories and suppliers;
d.
the methods of importing and exporting used by the Company;
e.
manuals and procedures created and/or used by the Company;
f.
trade secrets or other information that is used in the
Company’s business, and which give the Company an opportunity
to obtain an advantage over competitors who do not know such trade
secrets or how to use the same; and
g.
software in various stages of development (source code, object
code, documentation, flow charts), specifications, models, data and
customer information.
The term
“Confidential Information” will also include, without
limitation, any and all of the foregoing items as they relate to
the Company’s Futuretrust® Mastercard and/or 529 College
Savings Plan business, Futuretrust Family Financial Center™
business and any ancillary past, current or future business,
programs, services, products, business plans, marketing plans,
strategic business relationships, or other information of the
Company relating to, or offered in connection with, the
foregoing.
Individual assigns
to Company any rights Individual may have in any Confidential
Information. Individual shall not disclose any Confidential
Information to any third party or use any Confidential Information
for any purposes.
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4.
Surrender of Materials . The Individual hereby agrees to
deliver to the Company promptly at the end of the Transition Period
or earlier at the Company’s request, all documents, copies
thereof and other materials in the Individual’s possession
pertaining to the business of the Company and its customers,
including, but not limited to, Confidential Information (and each
and every copy, disk, abstract, summary or reproduction of the same
made by or for the Individual or acquired by the Individual), and
thereafter to promptly return documents and copies thereof and
other material in the Individual’s possession. The
Individual will be responsible for the value of all Company or
customer property that is not timely returned. Individual
authorizes the Company to deduct the fair market value of such
property from any monies owed to Individual.
5.
Disclosure of Information and Solicitation of Employees;
Non-Compete . The Individual acknowledges that the Company has
developed and maintains at great expense, a valuable supplier
network, supplier contacts, many of which are longstanding, product
designs, and other information of the type described in paragraph 3
of this Agreement, and that Individual was given and may be
provided further access to Confidential Information concerning such
suppliers and products, including information concerning such
suppliers’ purchasing personnel, policies, requirements, and
preferences, and such product’s design, manufacture, and
marketing.
(a)
Accordingly, the Individual agrees that during his employment,
through the Transition Period and for twenty-four (24) months after
the Transition Period End Date the Individual will not directly or
indirectly:
(i)
on Individual’s
behalf or on behalf of any other person or entity, perform any act
with respect to the design, manuf
