Xxxxxx Xxxxx Associates, Inc.
c/o Financo, Inc.
000 Xxxxxxx Xxxxxx - 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
September 11, 1996
Mothers Work, Inc.
000 Xxxxx 0xx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Re: Consulting Agreement
Gentlemen:
This letter confirms the mutual understanding and agreement between Mothers
Work, Inc. (the "Company") and Xxxxxx Xxxxx Associates, Inc. ("MTA") with
respect to the Company's engagement of MTA to provide consulting and advisory
services upon the terms and conditions specified herein.
1. Engagement. The Company hereby retains MTA to perform, and MTA hereby
agrees to perform, consulting and advisory services for the Company during the
Term (as hereinafter defined) in connection with the growth and strategic
development of the Maternity and Episode businesses. MTA will consult with and
advise the management on merchandising, marketing and positioning of the various
brands in the Company including the new Xxxxxx and Xxxxxxx labels, on the
Company's efforts to increase its presence in leased departments in department
stores, and on analysis of entry into European and other foreign markets, as
well as such other projects as MTA and the Company shall mutually agree.
Such consulting and advisory services shall be performed at such times and
at such locations as shall be mutually satisfactory to MTA and the Company. MTA
is being engaged as an independent contractor and will not be an agent of the
Company, and, except as provided in Paragraph 5 hereof, the directors, officers
and employees of MTA shall act solely on behalf of MTA and shall not be
directors, officers, employees or agents of the Company.
The services to be performed by MTA hereunder shall be performed by
Xxxxxx X. Xxxxx.
2. Cash Compensation and Expenses. The Company shall pay to MTA
$200,000 per annum for its services during the Term payable in twelve (12) equal
monthly installments of $16,666.66. The Company will not withhold any wage or
employment taxes in
Mothers Work, Inc.
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September 11, 1996
respect of such compensation, but will issue MTA information reports relating
thereto, as required by applicable law and regulations.
MTA also will be reimbursed by the Company for all reasonable business and
travel expenses incurred or paid by MTA during the Term in the course of MTA's
performance of services for the Company hereunder, promptly following submission
of customary documentation therefor. MTA will obtain the Company's prior
approval for any such expenses in excess of $1,000 individually or $5,000 in
aggregate in any month.
3. Stock Options. As further consideration for MTA's services hereunder
during the initial Term, the Company shall grant to MTA on October 1, 1996
options to acquire 16,667 shares of common stock of the Company (the "Initial
Options"). If the Term is extended, on each subsequent October 1st during the
Term, the Company shall grant to MTA options to acquire 16,666 additional shares
of common stock of the Company (the "Subsequent Options"). All such options
shall be granted at a per share exercise price equal to the closing price of the
shares as reported on the stock exchange or market on which the shares are
primarily traded on the day prior to the issuance of the options. The Subsequent
Options shall vest, and become exercisable, in eleven monthly installments of
1,389 shares and a twelfth monthly installment of 1,387 shares following the
date of grant unless the Term shall have been terminated for any reason other
than the death or disability of Xxxxxx X. Xxxxx. Unvested Subsequent Options
shall fully vest and become exercisable on the death or disability of Xxxxxx X.
Xxxxx. The Initial Options and all vested Subsequent Options shall be
exercisable at any time or from time to time from the date of grant until one
(1) year after Xxxxxx X. Xxxxx ceases to be a director of the Company.
4. Term. The term of MTA's consultancy hereunder shall commence on October
1, 1996 and shall continue for an initial term of one year through September 30,
1997. Notwithstanding the foregoing, the Term shall terminate on the death or
total disability of Xxxxxx X. Xxxxx. The parties shall agree on or before
June 30, 1997 whether or not to extend the Term.
5. Directorship. Xxxxxx X. Xxxxx agrees, if elected, to serve as a member
of the board of directors of the Company. On the termination of this Agreement,
Xxxxxx X. Xxxxx shall resign as a director of the Company, unless otherwise
agreed between Xxxxxx X. Xxxxx and the Company.
Mothers Work, Inc.
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September 11, 1996
6. Registration of Option Shares. The Company will use its best efforts to
register on Form S-8 under the Securities Act of 1933 the issuance of the shares
issuable upon exercise of the Initial Options and, if applicable, the Subsequent
Options.
7. Confidential Information. During the Term, MTA shall, and shall cause
its directors, officers and employees to, keep secret and retain in strictest
confidence, and shall not use for its benefit or the benefit of others, nor
permit its directors, officers or employees to use for their benefit or the
benefit of others, any and all confidential information relating to the Company
disclosed to MTA in the course of its consultancy including, without limitation,
trade secrets, customer lists and other secret or confidential aspects of the
company's business, and MTA shall not disclose such information, nor permit its
directors, officers or employees to disclose such information to anyone outside
the Company or any of its affiliates, except in the performance by MTA of its
services hereunder or as required by law in connection with any judicial or
administrative proceeding or inquiry (provided prior written notice thereof is
given by MTA to the Company) or with the Company's prior written consent, unless
such information is known generally to the public or the trade through sources
other than MTA's (or its directors', officers' or employees') unauthorized
disclosure.
8. Entire Agreement. This agreement contains the entire agreement between
the parties hereto with respect to the subject matter hereof and supersedes all
other agreements and understandings with respect thereof, oral or otherwise.
9. Amendment. No amendment, modification or waiver of this agreement or any
of its provisions shall be binding unless made in writing and signed by both
parties hereto, except in the case of a waiver or consent, which shall be signed
by the party against which enforcement is sought.
10. Governing Law. This agreement shall be governed by and construed in
accordance with the laws of the State of New York applicable to agreements made
and to be performed entirely within such state.
Mothers Work, Inc.
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September 11, 1996
If the foregoing accurately reflects the agreement between us, please
confirm your approval and acceptance thereof by signing the enclosed copy of
this letter and returning it to the undersigned.
Very truly yours,
XXXXXX XXXXX ASSOCIATES, INC.
By: /s/ Xxxxxx X. Xxxxx
---------------------------
Name: Xxxxxx X. Xxxxx
Title: Chairman
AGREED AND ACCEPTED AS OF
THE DATE WRITTEN ABOVE:
MOTHERS WORK, INC.
By: /s/ Xxx X. Xxxxxxxx
----------------------
Name: Xxx X. Xxxxxxxx
Title: Chairman
