This Agreement and General Release (the “Agreement”) is made as of the 19th day of June, 2012 between Eric Bauer (“Employee”) and The Children’s Place Services Company, LLC and its parents and direct and indirect subsidiaries and affiliated corporations (collectively, “Employer” or the “Company”). The Employee, Employer and/or the Company may be collectively referred to herein as the “Parties”.
1.Separation from Employment. Employee acknowledges, confirms and agrees that Employee’s last day of employment with the Company was June 19, 2012 (the “Separation Date”).
2. Separation Payment. As good and valuable consideration for Employee’s execution, delivery and non-revocation of this Agreement, Employer shall pay to Employee the amount of One Million Eighty One Thousand Five Hundred Dollars ($1,081,500), less legally required payroll deductions, which amount shall be paid in thirty-nine (39) equal bi-weekly installments commencing on the first pay date following August 23, 2012, provided that Employee has signed this Agreement on or before August 15, 2012 and has not revoked it pursuant to the provisions of Paragraph 6(c) below, and subject to the terms and conditions contained herein.
3. Benefits. As good and valuable consideration for Employee’s execution, delivery, and non-revocation of this Agreement, Employer also shall, subject to the effectiveness of this Agreement and General Release, waive Employee’s premium costs for continued health and/or dental coverage under the Company’s group health plan(s) pursuant to the provisions of the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) for a period ending on the earlier to occur of the eighteenth (18th) month anniversary of the Effective Date and the date Employee becomes entitled to comparable employer-related health insurance coverage, provided, that Employee timely elects such COBRA coverage in accordance with the requirements of such plan(s). These premium payments by the Employer shall constitute taxable income to the Employee.
4. Acknowledgments Regarding Payments and Benefits. Employee acknowledges that any monetary, equity-based or other amounts or benefits which, prior to the execution of this Agreement, Employee may have been awarded, earned or accrued or to which Employee may have been or be in the future entitled to be paid or provided, have been paid or provided, or have been fully addressed in this Agreement, or such payments or benefits have been released, waived or settled by Employee pursuant to this Agreement. Employee agrees that Employee is not entitled to and will not seek any further consideration, including, but not limited to, any wages, vacation pay, sick pay, disability pay, bonus, compensation (including equity-based compensation), payment or benefit from the Released Parties (as defined in Paragraph 12) other than that to which Employee is entitled pursuant to Paragraphs 2 and 3 of this Agreement. Employee further agrees that Employee shall not accrue any additional awards or rights pursuant to any equity or other incentive plan of the Company and shall forfeit any and all equity or other incentive awards and rights to any such awards to the extent not vested and/or not delivered on the Separation Date.
5. Return of Company Property. Employee represents and warrants that Employee has returned to the Company all laptops, cellular telephones, blackberries, iPhones, iPads, keys, locks, credit cards, documents, records, materials, and other information or property of any type whatsoever that is the property of the Company or its affiliates. Employee further agrees that Employee shall not retain or use for any purpose, and shall immediately return to the Company, any copies, images, or reproductions of correspondence, memoranda, reports, financial information, personnel information, notebooks, drawings, photographs, or other documents relating in any way to the business or affairs of the Company, its affiliates or their respective suppliers or vendors.
6. Consultation with Counsel and Voluntariness of Agreement.
(a) Employee acknowledges that Employer has advised Employee in writing to consult with an attorney at Employee’s own expense prior to executing this Agreement. Employee further acknowledges that, to the extent desired, Employee has consulted with Employee’s own attorney in reviewing this Agreement, that Employee has carefully read and fully understands all the provisions of this Agreement, and that Employee is voluntarily entering into this Agreement.
(b) Employee further acknowledges and agrees that Employee has had a period of at least twenty-one (21) days in which to consider the terms of this Agreement and changes to this Agreement, whether material or immaterial, do not restart the running of the 21-day period.
(c) Unless revoked as provided below, this Agreement shall be effective and enforceable on the eighth (8th) day after execution and delivery of this Agreement to the Company by Employee (the “Effective Date”). The parties to this Agreement understand and agree that Employee may revoke this Agreement after having executed and delivered it to the Company by so advising the Company (Attention: General Counsel) in writing no later than 11:59 p.m. on the seventh (7th) day after Employee’s execution and delivery of this Agreement to the Company. If Employee revokes this Agreement, it shall not be effective or enforceable, and Employee shall not be entitled to the payments or benefits set forth in Paragraphs 2 and 3 of this Agreement.
7. Confidential and Proprietary Information: Work Product.
(a) Employee acknowledges that Employee may possess certain “Confidential Information” (as defined below) which would damage the Company if disclosed or used by Employee. Accordingly, Employee acknowledges a continuing duty of strict confidentiality to the Company and agrees that Employee will not disclose any Confidential Information to any person or entity, will not publish any Confidential Information, and will not use Confidential Information in any way, including for Employee’s benefit or for the benefit of another person or entity. Confidential Information shall include, but shall not be limited to, the following: (i) trade secrets of the Company, and other proprietary corporate information involving the Company, including plans, strategies, prospects, policies, and disputes and litigation involving the Company; (ii) documentation or data contained in any files or any other records the Company may maintain; (iii) statements regarding any matters made by any employees, officers, agents, representatives or attorneys of the Company at any meeting attended by Employee or which Employee may have heard or obtained knowledge of which may result in any detriment to the Company; (iv) actions taken or contemplated by the Company with respect to any of its operations, assets or employees
not known to the general public; (v) policies, practices, programs, plans or strategies contemplated, initiated or effectuated by the Company not known to the general public; (vi) documentation, data or other information concerning the Company’s stores, products, suppliers, lessors or other vendors, marketing plans, or the Company’s arrangements or business dealings with any such person or entity not known to the general public; and (vii) financial information, including sourcing, cost, merchandising, sales and pricing data, and financial and accounting policies, procedures or practices, actual or proposed; (viii) personnel information, including personnel lists, reporting and organizational structures, resumes, personal information, compensation information, performance evaluations and termination arrangements; and (ix) any other information, records or data of a private or proprietary nature to the Company. Confidential Information shall not include information which is then in the public domain (so long as Employee did not, directly or indirectly, cause or permit such information to enter the public domain). Notwithstanding the foregoing, nothing contained in this Paragraph 7 shall prevent Employee from disclosing Confidential Information if compelled to do so by legal process; provided, that Employee notifies Employer in writing within two (2) business days of Employee’s receipt of such court order or legal process if disclosure of Confidential Information is required by court order or other legal process to allow Employer sufficient time to obtain a protective order or otherwise obtain the fullest protection permitted by applicable law.
(b) Employee agrees that all copyrights, patents, trade secrets or other intellectual property rights associated with any ideas, concepts, techniques, inventions, processes, or works of authorship developed or created by Employee during Employee’s employment by the Company and for a period of six (6) months thereafter that (i) relate, whether directly or indirectly, to the Company’s actual or anticipated business, research or development, (ii) are suggested by or as a result of any work performed by Employee on the Company’s behalf, or (iii) result from any use of Confidential Information, or of the premises, equipment or other personal property (tangible or intangible) of the Company, shall, to the extent possible, be considered works made for hire within the meaning of the Copyright Act (17 U.S.C. § 101 et. seq.) (the “Work Product”). All Work Product shall be and remain the property of the Company. To the extent that any such Work Product may not, under applicable law, be considered works made for hire, Employee hereby grants, transfers, assigns, conveys and relinquishes, and agrees to grant, transfer, assign, convey and relinquish from time to time, on an exclusive basis, all of Employee’s right, title and interest in and to the Work Product to the Company in perpetuity or for the longest period otherwise permitted by law. Consistent with Employee’s recognition of the Company’s absolute ownership of all Work Product, Employee agrees that Employee shall (i) not disclose any Work Product to any person or entity or use any Work Product for the benefit of Employee or any other person or entity other than the Company and (ii) perform such acts and execute such documents and instruments as the Company may now or hereafter deem reasonably necessary or desirable to evidence the transfer of absolute ownership of all Work Product to the Company; provided, however, if following ten (10) days’ written notice from the Company, Employee refuses, or is unable, due to disability, incapacity, or death, to execute such documents relating to the Work Product, Employee hereby appoints each of the Company’s officers as Employee’s attorney-in-fact to execute such documents on Employee’s behalf. This agency is coupled with an interest and is irrevocable without the Company’s prior written consent.
8. Non-Competition, Non-Solicitation, and No Interference With Business Operations.
(a) Employee agrees that for a period of 12 months following the Separation Date (the “Restricted Period”), Employee will not without the express prior written consent of the Company, anywhere, either directly or indirectly, whether alone or as an owner, shareholder, partner, member, joint venturer, officer, director, consultant, independent contractor, agent, employee or otherwise of any person, entity or other business enterprise, assist in, engage in or otherwise be connected to or benefit from any business competitive with that of the Company. A “business competitive with that of the Company” is one that (i) designs, manufactures, contracts to manufacture or sells, or intends to design, manufacture, contract to manufacture or sell, children’s apparel and accessories and other children’s-oriented merchandise, or (ii) engages in or provides or intends to engage in or provide any products, services or other business which is of the same nature as a product, service or other business of the Company, or a product, service or other business which the Company is developing and of which Employee has knowledge. Notwithstanding the foregoing, nothing herein shall be deemed to prohibit Employee’s ownership of less than 1% of the outstanding shares of any publicly traded corporation that conducts a Competitive Business.
(b) Employee further agrees that during the Restricted Period, Employee will not, without the express prior written consent of the Company, directly or indirectly: (i) contact, communicate, solicit, transact business with or perform services for (or assist any third party in contacting, communicating, soliciting, transacting business with or performing any services for) any person or entity that is or was (at any time within twelve (12) months prior to the contact, communication, solicitation, transaction of business, or performance of services) a vendor of the Company; (ii) solicit, recruit, hire, engage, or refer (or assist any third party in soliciting, recruiting, hiring, engaging or referring) any person or entity who or which either is, or during the 12 months immediately preceding the Separation Date was, an employee, agent, consultant or independent contractor of the Company; or (iii) interfere with, disrupt or attempt to interfere with or disrupt the relationship, contractual or otherwise, between the Company and any of its vendors, lessors, independent contractors, agents or employees. Notwithstanding the foregoing, subject to Executive’s compliance with the other provisions of this Paragraph 8, nothing in this Section (b) shall be deemed to prohibit Executive from, after the termination of his employment with the Company, being directly employed by a vendor of the Company for the purpose of performing services for such vendor that are unrelated to the services performed or to be performed by vendor for the Company.
(c) Employee acknowledges and agrees that the restrictions on the activities in which Employee may engage that are set forth in Paragraphs 8(a) and (b) of this Agreement and the location and period of time for which such restrictions apply are reasonable and necessary to protect the Company’s legitimate business interests. Employee understands that the Company’s business is global and, accordingly, the restrictions cannot be limited to any particular geographic area except as otherwise provided herein. Employee further acknowledges that the restrictions contained in this Agreement will not prevent Employee from earning a livelihood.
9. Publications and Public Statements. Employee will obtain the Company’s prior written approval before publishing or submitting for publication any material that relates to any
work performed by Employee for the Company and/or which incorporates any Confidential Information. Further, any statement about the Company, its business, products, strategies or affairs which Employee creates and proposes to publish or post during his employment with the Company and for a period of six (6) months thereafter on any media accessible by the public, including but not limited to Facebook or Twitter pages, electronic bulletin or message boards and Internet-based chat rooms, must first be reviewed and approved in writing by the Chief Executive Officer of the Company before it is released in the public domain.
10. Injunctive Relief. Employee acknowledges that a breach or threatened breach of any of the terms set forth in Paragraphs 5, 7, 8 or 9 of this Agreement shall result in an immediate irreparable and continuing harm to Employer for which there shall be no adequate remedy of law. The Employer shall, without posting a bond, be entitled to obtain injunctive and other equitable relief, in addition to any other remedies available to Employer, in connection with Paragraphs 5, 7, 8 or 9 of this Agreement.
11. Confirmation of Employment. Employee shall refer all inquiries concerning Employee’s employment to Employer’s payroll department and Employer’s payroll department shall, if called upon, confirm Employee’s dates of employment, compensation and position with Employer.
12. Employee Release of Employer and Released Parties.
(a) In exchange for the consideration set forth above, Employee, on behalf of Employee and Employee’s agents, assignees, attorneys, heirs, executors and administrators, voluntarily and knowingly releases Employer, as well as Employer’s successors, predecessors, assigns, parents, subsidiaries, divisions, affiliates, officers, directors, shareholders, employees, agents and representatives, in both their individual and representative capacities (collectively, the “Released Parties”), from any and all claims, causes of action, suits, grievances, debts, sums of money, agreements, promises, damages, back and front pay, costs, expenses, and attorneys’ fees by reason of any matter, cause, act or omission arising out of or in connection with Employee’s employment with Employer or separation therefrom, including but not limited to any claims based upon common law, or any federal, state or local employment statutes or civil rights laws (hereafter the “Claims”). Claims, as included in this release, without limiting its scope, are claims arising under Title VII of the Civil Rights Act of 1964, as amended; the Age Discrimination in Employment Act (“ADEA”); the Older Workers Benefit Protection Act; the Americans with Disabilities Act; the Lily Ledbetter Act; Employee Retirement Income Security Act of 1974; the New Jersey Conscientious Employee Protection Act; the New Jersey Law Against Discrimination; the New Jersey Family Leave Act; the New Jersey Wage Payment Act; the Sarbanes-Oxley Act of 2002; and any other laws prohibiting discrimination, retaliation, wrongful termination, failure to pay wages, breach of contract, defamation, invasion of privacy, whistleblowing or infliction of emotional distress, or any other matter. This releases all Claims including those of which Employee is not aware and those not mentioned in this Agreement up to the date of the execution and delivery of this Agreement to the Company. Employee expressly acknowledges and agrees that, by entering into this Agreement, Employee is releasing and waiving any and all Claims, including, without limitation, Claims that
Employee may have arising under ADEA, which have arisen on or before the date of Employee’s execution and delivery of this Agreement to the Company.
(b) This release does not waive any rights or claims Employee may have (i) for indemnification of Employee by Employer, with respect to all acts or omissions of Employee which occurred prior to the Separation Date, to the same extent that Employee was indemnified by Employer prior to the Separation Date, or (ii) for the benefit of all directors and officers liability insurance and coverage maintained by the Company, with respect to claims made during the period provided by the Company’s current policy and to the extent provided by any future policy from time to time maintained by the Company with respect to other former executives of the Company, in each case on the terms and conditions of such policy.
(c) This release does not waive rights or claims that may arise after this release is executed, including any right or claim to enforce the terms of this Agreement, does not waive any rights to vested benefits under any deferred compensation program or plan, and does not waive any rights or claims which cannot be waived as a matter of law. This Agreement does not affect Employee’s right to file a charge with the EEOC or similar state agency or to participate in any investigation conducted by the EEOC or similar state agency, but Employee hereby waives any and all rights to recover under, or by virtue of, any such investigation, hearing or proceeding.
(d) Notwithstanding anything set forth in this Agreement to the contrary, nothing in this Agreement shall affect or be used to interfere with Employee’s protected right to test in any court, under the Older Workers’ Benefit Protection Act, or like statute or regulation, the validity of the waiver of rights under ADEA set forth in this Agreement
13. Representations; Covenant Not to Sue. Employee hereby represents and warrants to the Released Parties that: (a) Employee has not filed, caused, or permitted to be filed any pending proceeding (nor has Employee lodged a complaint with any governmental or quasi-governmental authority) against the Released Parties, nor has Employee agreed to do any of the foregoing; (b) Employee has not assigned, transferred, sold, encumbered, pledged, hypothecated, mortgaged, distributed, or otherwise disposed of or conveyed to any third party any right or Claim against the Released Parties that has been released in this Agreement; (c) Employee has not directly or indirectly assisted any third party in filing, causing, or assisting to be filed, any Claim against the Released Parties; (d) Employee has not made any misrepresentations or engaged in any misconduct or malfeasance during his employment that would constitute a material violation under the Company’s Code of Business Conduct; and (e) Employee is not aware of any misconduct by or other matter involving any employee or director of the Company that Employee should report in accordance with the Company’s Code of Business Conduct or any irregularity in the Company’s books or records or any other matter relating to the Company’s financial or accounting policies, procedures or practices, actual or proposed, that should properly be reported by Employee under the Code of Business Conduct or otherwise, including pursuant to the procedures established by the Company for making such reports, except any that has already been reported by Employee in writing to the appropriate personnel of the Company. Except as set forth in Paragraphs 12(b) and (c) above, Employee covenants and agrees that Employee shall not encourage or solicit or voluntarily assist
or participate in any way in the filing, reporting or prosecution by himself or any third party of a proceeding or claim against any of the Released Parties unless compelled to do so by law.
14. Violation of Terms. The parties agree that, should either Party seek to enforce the terms of this Agreement through litigation, then the prevailing Party, in addition to all other legal and equitable remedies, shall be reimbursed by the other Party for all reasonable attorneys’ fees in relation to such litigation. The term “prevailing Party” in the prior sentence shall mean such Party that obtains in excess of fifty (50%) percent of the relief sought in the litigation.
15. No Admission. Nothing contained in this Agreement nor the fact that the Parties have signed this Agreement shall be construed as an admission by either Party.
16. Waiver of Reinstatement. By entering into this Agreement, Employee acknowledges that Employee waives any claim to reinstatement and/or future employment with Employer. Employee further acknowledges that Employee is not and shall not be entitled to any payments, benefits or other obligations from the Released Parties whatsoever (except as expressly set forth in this Agreement).
17. Delay in Payments as Required by Section 409A of the Code. Notwithstanding any provisions herein to the contrary, if all or any portion of the payments or benefits due under Paragraphs 2 or 3 hereof are reasonably determined by the Parties to be “nonqualified deferred compensation” subject to Section 409A of the Code and the Company determines that Employee is a “specified employee” (as defined in Section 409A(a)(2)(B)(i) of the Code and the other guidance promulgated thereunder), then such payments shall commence on the first regular payroll date on or immediately following the first day of the seventh month following Employee’s “separation from service”, as defined in Treasury Regulation Section. 1.409A-1(h), including the default presumptions and the first of such payments shall include all amounts otherwise payable prior to the first payment date but for the application of this Paragraph 17. The Company hereby advises Employee that it has determined that Employee is a “specified employee” (as so defined). However, the Parties have determined that the payments and benefits due under this Agreement during the first six months following Employee’s “separation from service” do not constitute “nonqualified deferred compensation” for purposes of Section 409A of the Code and, accordingly, no delay in the commencement of payments is necessary.
18. Section 409A of the Code. Employee hereby acknowledges and agrees with the Company that the interpretation of Section 409A of the Code and its application to the terms of this Agreement is uncertain and may be subject to change as additional guidance and interpretations become available. Anything to the contrary herein notwithstanding, all benefits or payments provided by the Company to Employee that would be deemed to constitute “nonqualified deferred compensation” within the meaning of Section 409A of the Code are intended to comply with Section 409A of the Code, and to the extent that any provision of this Agreement is unclear or ambiguous as to its compliance with Section 409A, the provision shall be read in such manner so that all payments comply with or are exempt from Section 409A. Both Parties believe in good faith that all payments and benefits provided for under this Agreement are either exempt from said Section 409A or comply with the requirements of such Section and will not cause an acceleration of taxation or imposition of interest or penalties under Section 409A or any other provision of the Code, and
the Parties agree that all tax reporting and withholding will be consistent with this belief. If, however, any such benefit or payment is deemed by either Party to not comply with Section 409A of the Code, Employee and the Company agree to renegotiate in good faith any such benefit or payment (including, without limitation, as to the timing of any payment or benefit payable hereunder), if possible, so that either (i) Section 409A of the Code will not apply or (ii) compliance with Section 409A of the Code will be achieved. In any event, neither the Company nor any of its employees or representatives shall have any liability to Employee with respect to Section 409A of the Code. For purposes of 409A, each payment made under this Agreement shall be treated as a separate payment.
19. Miscellaneous. This Agreement contains the entire agreement and understanding between the parties. This Agreement supersedes any and all previous agreements and plans, whether written or oral, between Employee and Employer. There are no other representations, agreements or understandings, oral or written, between the Parties relating to the subject matter of this Agreement. No amendment to or modification of this Agreement shall be valid unless made in writing and executed by the Parties hereto subsequent to the date of this Agreement. This Agreement may be executed in counterparts, including by fax or pdf, and all counterparts so executed shall constitute one agreement, binding upon the Parties. This Agreement shall be binding upon and inure to the benefit of the Parties, as well as their administrators, representatives, agents, executors, successors and assigns.
20. Choice of Law and Jurisdiction. This Agreement shall be governed by and construed in accordance with the laws of the State of New Jersey applicable to contracts made and performed in such State and without regard to the conflicts or choice of law provisions thereof that would give rise to the application of the substantive law of any other jurisdiction. Except in the event Employer seeks to enforce its rights under Paragraphs 5, 7, 8 or 9 of this Agreement, the Parties agree to mediate any dispute arising under this Agreement. In the event of any such dispute subject to mediation, the Parties, within thirty (30) days of a written request for mediation, shall attend a mediation to be conducted in New Jersey in order to make a good faith reasonable effort to resolve such dispute. The Parties shall attempt, in good faith, to agree to a mediator. If the Parties are unable to agree to a mediator, the Parties shall submit the matter to the American Arbitration Association to appoint a mediator and conduct the mediation in New Jersey. Either Party may commence, if this good faith mediation effort fails to resolve the dispute arising under this Agreement, and Employer may commence, in the event Employer seeks to enforce its rights under Paragraphs 5, 7, 8 or 9 of this Agreement, a legal suit, action or proceeding to resolve such dispute, provided that such legal suit, action or proceeding arising out of or relating to this Agreement shall be instituted in a New Jersey federal or state court. Employee and Employer agree to waive any objection which either may now or hereafter have to the laying of venue of any such suit, action or proceeding and Employee and Employer irrevocably submit to the exclusive jurisdiction of any such court in any suit, action or proceeding.
21. Severability. If any term, provision or part of this Agreement shall be determined to be in conflict with any applicable federal, state or other governmental law or regulation, or otherwise shall be invalid or unlawful, such term, provision or part shall continue in effect to the extent permitted by such law or regulation. Such invalidity, unenforceability or unlawfulness shall
not affect or impair any other terms, provisions and parts of this Agreement not in conflict, invalid or unlawful, and such terms, provisions and parts shall continue in full force and effect and remain binding upon the parties hereto.
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EMPLOYEE STATES THAT EMPLOYEE HAS CAREFULLY READ THIS AGREEMENT PRIOR TO SIGNING IT, THAT THE AGREEMENT HAS BEEN FULLY EXPLAINED TO EMPLOYEE PRIOR TO SIGNING IT, THAT EMPLOYEE HAS HAD THE OPPORTUNITY TO HAVE IT REVIEWED BY AN ATTORNEY AT EMPLOYEE’S OWN EXPENSE AND EMPLOYEE UNDERSTANDS THE AGREEMENT’S FINAL AND BINDING EFFECT PRIOR TO SIGNING IT, AND THAT EMPLOYEE IS SIGNING THE RELEASE KNOWINGLY AND VOLUNTARILY WITH THE FULL INTENTION OF COMPROMISING, SETTLING, AND RELEASING THE RELEASED PARTIES AS STATED IN THIS AGREEMENT.
Agreed to and accepted by, on this 8th day of June, 2012.
Agreed to and accepted by, on this 13th day of June, 2012.
THE CHILDREN’S PLACE SERVICES COMPANY, LLC
By: /s/ Lawrence McClure
Name: Lawrence McClure
Title: Senior Vice President, Human Resources