EXHIBIT 10.21
THE CHILDREN'S PLACE RETAIL STORES, INC.
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of January 30, 1998, between Xxxxx Xxxxxxx
(Executive) and THE CHILDREN'S PLACE RETAIL STORES, INC., a Delaware corporation
(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 terms of Executive's employment under this Agreement (the Employment
Period) shall commence on February 2, 1998, and shall continue unless terminated
in accordance with the provisions of Section 5. Executive's employment is
conditioned upon consent by Talbots, that Executive's employment with Employer
does not violate any agreement Executive has with Talbots.
SECTION 3
DUTIES AND RESPONSIBILITIES
3.01. GENERALLY. During the Employment Period, Executive (i) shall be employed
as Executive Vice President-Merchandising, and (ii) shall devote his full
attention and expend his efforts, energies and skills on a full-time basis to
the business of Employer and other enterprises controlled by, or under common
control with Employer (collectively, the Company). Without limiting the
generality of the foregoing, Executive shall have all such duties as may be
delegated to him by the Chief Executive Officer and all such other duties and
responsibilities customarily undertaken and performed by persons in his position
in similar businesses to that of Employer. Executive's employment by Employer
shall constitute his exclusive employment during the Employment period. In no
event shall Executive serve as a director of any other business corporation or
as a general partner of any partnership or as a consultant to any other business
except with the prior 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.
3.03. PLACE OF EMPLOYMENT. Executive shall perform his duties primarily at the
Company's headquarters.
SECTION 4
COMPENSATION
4.01. COMPENSATION, GENERALLY. For all services rendered and required to be
rendered by covenants of, and restrictions imposed on, 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
and Performance Bonus, all as more fully described on Exhibit A (collectively,
the "Compensation").
4.02. OTHER BENEFITS. During the Employment Period, Executive shall be entitled
to receive such benefits as are at least as favorable as those provided by the
Employer to Employer's other executives (other than those benefits provided
under or pursuant to separately negotiated individual employment agreements or
arrangements) under any pension or retirement plan, stock purchase plan,
disability plan or insurance, group life insurance, medical insurance, or other
similar plan or program of Employer. 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. STOCK OPTIONS. Employer shall receive options to acquire 200,000 shares of
common stock of the Company at the price of the stock at the close of the market
on January 30, 1998. The options shall vest 20% on August 1, 1998 and each
additional 20% of the shares shall vest on the first, second, third and fourth
anniversaries thereafter. Such options shall be subject to the terms of the
Company's 1997 Stock Option Plan.
4.04. EXPENSE REIMBURSEMENT. Employer shall reimburse Executive for all business
expenses (other than living expenses, travel expenses to and from work and
expenses of the type for which an allowance is provided pursuant to the
following sentence) and travel expenses reasonably incurred by him in the
performance of his duties under this Agreement upon his presentation, not less
frequently than monthly, of signed, itemized accounts of such expenditures all
in accordance with Employer's procedures and policies as adopted and in effect
from time to time and applicable to its employees of comparable status. Employer
shall also provide Executive with an allowance of $833.33 each month during the
Employment Period to cover expenses associated with Executive's ownership and
operation of an automobile in connection with the business conducted by him.
Employer shall also reimburse Executive for temporary local housing expenses (up
to one month) during the time in which Executive locates permanent housing.
4.05. VACATIONS. Executive shall be entitled to two weeks vacation each year,
which shall be taken at such time or times as shall not unreasonably interfere
with Executive's performance of his duties under this Agreement.
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 60 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, for cause means:
(i) a breach by Executive of any of the material provisions of
this Agreement that Executive fails to remedy or cease within 10 days
after notice thereof to Executive;
(ii) any conduct, action or behavior by Executive that has or
may reasonably be expected to have a material adverse effect on the
reputation of the Company or on Executive's reputation or that is not
befitting of a senior executive of the Company; or
(iii) the commission by Executive of an act involving moral
turpitude or dishonesty, whether or not in connection with Executive's
employment hereunder; or
(iv) Executive shall have committed any act of fraud against
the Employer or engaged in any other willful misconduct in connection
with his duties hereunder; or
(v) Executive shall have been convicted of a crime (other than
a misdemeanor relating to motor vehicle laws). Notwithstanding the
foregoing, no Cause for termination shall be deemed to exist with
respect to the Executive's acts described in clause (ii) above unless
the Chief Executive Officer shall have given prior written notice to
the Executive specifying the Cause with reasonable particularity and,
within thirty (30) days after such notice, the Executive shall not have
cured or eliminated the problem or thing giving rise to such Cause.
SECTION 6
TERMINATION COMPENSATION
6.01. ENTITLEMENT TO PAYMENT. (a) Subject to the provisions of Section 7.04, if
Executive's employment hereunder is terminated pursuant to Section 5.01, at any
time hereafter by the Employer, then Employer will pay to Executive an amount
equal to the Base Salary for one year following such termination. (The amount to
be paid pursuant to this Section 6.01 is referred to as the Termination
Compensation and the period for which such compensation is to be paid is
referred to as the Relevant Period). Such Termination Compensation shall be paid
to Executive in equal consecutive monthly installments during the Relevant
Period, 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.
Upon such termination, Executive shall also be entitled to any accrued but
unpaid bonus compensation. In addition, during the Relevant Period, Executive
shall be entitled to medical benefits and all other benefits, referred to in
Section 4.02.
6.02. NO OTHER TERMINATION COMPENSATION. Executive shall not be entitled to any
benefit or compensation following termination of his employment hereunder,
except as set forth in Section 6.01, if applicable.
SECTION 7
EXCLUSIVITY OF SERVICES, CONFIDENTIAL
INFORMATION AND RESTRICTIVE COVENANTS
7.01. EXCLUSIVITY OF SERVICES. During the Employment Period and continuing
through the second anniversary of the date in which Executive ceases to be an
employee of the Company (the "Covenant Period"), Executive will not:
(i) Promote, participate or engage in any business on behalf
of any Competitor of the Company, whether Executive is acting as owner,
partner, stockholder, employee, broker, agent, principal, trustee,
corporate officer, director, consultant or in any other capacity
whatsoever; provided, however, that this will not prevent Executive
from holding for investment up to 1% of any class of stock or other
securities quoted or dealt in on a recognized stock exchange or on
Nasdaq. For purposes of this Section, a Direct Competitor of the
Company means (A) The Gap, Inc. or any Person under common control with
The Gap, Inc., (B) The Limited, Inc. or any Person under common control
with The Limited, Inc., (C) Gymboree or Kids R Us or any Person under
common control with Gymboree or Kids R Us, as the case may be, or (D)
any Person engaged in the sale of children's apparel other than
department stores.
(ii) Directly or indirectly employ (other than on behalf of
the Company), solicit or entice away any director, officer or employee
of the Company or any of its subsidiaries; or
(iii) Take any action to interfere, directly or indirectly,
with the goodwill of the Company or any of its subsidiaries, or induce
or attempt to induce any Person doing business with the Company to
cease doing business with the Company.
7.02. CONFIDENTIAL INFORMATION. During the Covenant Period Executive will not
(except in furtherance of the Company's business or as required by law) furnish
confidential information relating to the business or affairs of the Company, its
subsidiaries or any Person having dealings therewith, or permit or encourage the
use of such confidential information by another. During the Covenant Period,
Executive will not use the name of the Company or its subsidiaries in the
conduct of any business activities (except in furtherance of the Company's
business) or for Executive's personal use without the prior written consent of
the Company.
7.03. MUTUALLY NON-DISPARAGEMENT. Neither Executive nor Employer will make or
authorize any public statement disparaging the other in its or his business
interests and affairs. Notwithstanding the foregoing, neither party shall be (i)
required to make any statement that it or he believes to be false or inaccurate,
or (ii) restricted in connection with any litigation, arbitration or similar
proceeding or with respect to its response to any legal process.
7.04. BREACHES OF PROVISIONS. If Executive breaches any of the provisions of
this Section 7 then, and in any such event, in addition to other remedies
available to Employer, Executive shall not be entitled to any Termination
Compensation, if any, made to him hereunder prior to Employer's discovery of
such breach.
SECTION 8
MISCELLANEOUS
8.01. NOTICES. Any notice, consent, or authorization required or permitted to be
given pursuant to this Agreement shall be in writing and sent to the party for
or to whom intended, at the address of such party set forth below, by certified
mail, postage paid, or at such other address as either party shall designate by
notice given to the other in the manner provided herein.
If to Employer:
Attention: Xxxxxx Xxxxxxxxx
Vice President & General Counsel
The Children's Place Retail Stores, Inc.
0 Xxxxx Xxxxx
Xxxx Xxxxxxxx, Xxx Xxxxxx 00000
With Copies to:
Xxxx Xxxxx
CEO/ Chairman
The Children's Place Retail Stores, Inc.
0 Xxxxx Xxxxx
Xxxx Xxxxxxxx, Xxx Xxxxxx 00000
If to Executive:
Xxxxx Xxxxxxx
000 Xxxxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
8.02. TAXES. Employer is authorized to withhold from payments made hereunder to
Executive such amounts for income tax, social security, unemployment
compensation and other judgment of Employer to comply with applicable laws and
regulations.
8.03. GOVERNING LAW. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of New Jersey applicable to
agreements made and to be performed therein.
8.04. HEADINGS. All descriptive headings in this Agreement are inserted for
convenience only and shall be disregarded in construing or applying any
provision of this Agreement.
8.05. COUNTERPARTS. This Agreement may be executed in counterparts, each of
which shall be deemed to be an original, but all of which together shall
constitute one and the same instrument.
8.06. SEVERABILITY. If any provision of this Agreement or part thereof, is held
to be unenforceable, the remainder of such provisions of this Agreement, as the
case may be, shall nevertheless remain in full force and effect.
8.07. ENTIRE AGREEMENT AND INTEGRATION. This Agreement contains the entire
agreement and understanding between Employer and Executive with respect to the
subject matter hereof. Such agreement supersedes any prior agreement between the
parties relating to the subject matter hereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
THE CHILDREN'S PLACE RETAIL STORES, INC.
By: /S/ XXXX XXXXX
Xxxx Xxxxx, Chairman and Chief Executive Officer
/S/ XXXXX XXXXXXX
Xxxxx Xxxxxxx
EXHIBIT A
COMPENSATION
1. BASE SALARY: At the initial rate of $400,000 per year, payable in equal
installments not less frequently than monthly during each year of the Employment
Period. Base Salary shall be subject to annual review, as the Compensation
Committee may determine.
2. PERFORMANCE BONUS: Following each Bonus Period (as defined below), Executive
shall be entitled to receive a Performance Bonus based upon the Earnings of
Employer during such Bonus Period as established by the Compensation Committee.
The Performance Bonus for each such Period will be payable within 90 days after
the end of such period. The amount of the Performance Bonus for each Bonus
Period will be equal to a product equal to (a) Employee's semi-annual Base
Salary, times (b) 30%, times (c) the Bonus Percentage (as hereinafter defined).
The following provisions shall apply to determinations relating to Performance
Bonus.
Bonus Percentage shall mean, for each Bonus Period, a percentage for such period
that is determined based upon Earnings in accordance with a schedule adopted by
the Compensation Committee for all senior executives prior to commencement of
such period or as soon thereafter as possible, and no more than 200% for any
Bonus Period. For the first two years of Executive's employment, the Company
shall guarantee Executive 50% of the target bonus payout ($60,000 per annum).
This amount shall be paid in equal monthly installments.
"Bonus Period" shall mean each of the two periods of approximately six months
duration within each fiscal year of the Employer, one beginning on the first day
of the fiscal year and ending on the Saturday on or nearest (whether following
or preceding) July 31, of the calendar year in which it commenced, and the other
beginning on the Sunday following such Saturday and ending on the last day of
such fiscal year.
