THE CHILDREN’S PLACE, INC. July [--], 2025
EXHIBIT 10.4
All GVPs and above 2025
THE CHILDREN’S PLACE, INC.
July [--], 2025
The Children’s Place, Inc. (the “Company”) is offering you a performance-based cash award to reward your continued future service with the Company, subject to the terms and conditions set forth in this award agreement (this “Agreement”).
1.Establishment of Award. Subject to the terms and conditions set forth in this Agreement, and as otherwise provided in the Company’s Fourth Amended and Restated 2011 Equity Incentive Plan (the “Plan”), you will be eligible to receive a performance-based cash award (the “Award”) in April 2028, no later than April 13, 2028 (such date, the “Vesting Date”); provided, however, that the Award shall not be so delivered unless (a) you are in the employ of the Company or its subsidiaries on the Vesting Date, subject to Section 2 (Termination and Change in Control) and the other terms and conditions of this Agreement; and (b) a determination has been made by the Board of Directors of the Company (the “Board”) or the Human Capital and Compensation Committee (the “Committee”), as applicable, that the Adjusted Free Cash Flow target for the Performance Period set forth in Exhibit B has been achieved, and at what levels that target has been achieved (by reference to Exhibit B) (a “Determination”). The maximum amount of the Award that may be earned through the Vesting Date is set forth in Exhibit A to this Agreement. For the avoidance of doubt, the payment of the Award is in addition to any other compensation to which you may otherwise be entitled in respect of your service to the Company.
2.Termination and Change in Control. (a) Except as provided in Sections 2(b) and 2(c) of this Agreement, if your employment with the Company terminates for any reason, your right to receive the payment of the Award will be immediately forfeited, unless otherwise specifically provided otherwise by the Board or the Committee, as applicable. For purposes of this Agreement, you will not be considered to have incurred a termination of employment with the Company, unless your employment has terminated from the Company and each of its subsidiaries and Affiliates, as determined by the Board or the Committee, as applicable.
(b) Notwithstanding any provision herein to the contrary,
(i) if a Change in Control occurs prior to a Determination, then immediately prior to such Change in Control, the Award shall immediately vest at the “Target” level as set forth in Exhibit B to this Agreement and be immediately delivered to you on the Vesting Date (without regard to the achievement of the Adjusted Free Cash Flow target set forth on Exhibit B), provided that you are in the employ of the Company or its subsidiaries on the Vesting Date;
(ii) in the event that an Involuntary Termination Event occurs within one (1) year following the occurrence of a Change in Control, the Award shall immediately vest at the “Target” level as set forth in Exhibit B to this Agreement and be promptly delivered to you as soon as practicable (but not later than fifteen (15) days) following the Involuntary Termination Event; and
(iii) in the event that after a Determination, a Change in Control and an Involuntary Termination Event occur, then the Award shall immediately vest at the level as determined by the
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Board or the Committee, as applicable, and shall be promptly delivered to you as soon as practicable (but not later than fifteen (15) days) following the Involuntary Termination Event.
(c) Notwithstanding any provision herein to the contrary, in the event that your employment with the Company and/or its subsidiaries terminates due to your death, Disability or Retirement, with respect to the Award, (x) prior to a Determination, then the performance target in Exhibit B shall be deemed to have been achieved at target, and the conditions set forth in Exhibit B shall be deemed to have been satisfied, and, therefore, the Award (as set forth in Exhibit B) shall immediately become fully vested at the “Target” level and be promptly delivered to you (or your estate, as applicable) within fifteen (15) days following the date of such termination of employment (subject to Section 15(u)(ii) of the Plan); provided that if such termination of employment occurs on or prior to the date on which 50% of the Performance Period (as set forth in Exhibit B) has elapsed, only fifty percent (50%) of the Award at the “Target” level shall immediately become vested and be so delivered or (y) after a Determination, then the Award that has been determined to have been earned by you in accordance with Exhibit B shall, to the extent not previously delivered to you, shall immediately become vested and be promptly delivered to you (or your estate, as applicable) within fifteen (15) days following the date of such termination of employment (subject to Section 15(u)(ii) of the Plan).
(d) For purposes of this Agreement, the terms (1) “Involuntary Termination Event” shall mean (i) the involuntary termination of your employment with the Company or any of its subsidiaries (other than for Cause, death or Disability) or (ii) your resignation of employment with the Company or any of its subsidiaries for Good Reason and (2) “Good Reason” shall mean the occurrence of any of the following without your prior written consent: (i) a material reduction in your then current base salary or target bonus percentage, (ii) a material diminution of your duties or responsibilities, (iii) the assignment to you of duties or responsibilities which are materially inconsistent with your previous duties or responsibilities, or (iv) relocation of your principal work location to a location more than thirty (30) miles from your previous principal work location; provided, however, that no such occurrence shall constitute Good Reason unless you provide the Company with written notice of the matter within thirty (30) days after you first have knowledge of the matter and, in the case of clauses (i), (ii) or (iii) of the definition of “Good Reason” hereof, the Company fails to cure such matter within thirty (30) days after its receipt of such notice, and if the Company fails to cure such matter, you resign within thirty (30) days following the expiration of the cure period.
(e) For purposes of this Agreement, the terms “Cause”, “Disability” and “Retirement” shall have the meanings given such terms under the Plan.
(f) For purposes of this Agreement, and for all purposes of the Award, notwithstanding the definition of Change in Control set forth in the Plan, “Change in Control” shall mean the following:
(i) the acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act (a “Person”)) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of more than fifty percent (50%) (on a fully diluted basis) of either (A) the then outstanding shares of the Company’s common stock, par value $0.10 per share (the “Common Stock”) taking into account as outstanding for this purpose such Common Stock issuable upon the exercise of options or warrants, the conversion of convertible stock or debt, and the exercise of any similar right to acquire such Common Stock (the “Outstanding Company Common Stock”) or (B) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”); provided, however, that for purposes of this
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Agreement, the following acquisitions shall not constitute a Change in Control: (I) any acquisition by the Company, (II) any acquisition by any employee benefit plan sponsored or maintained by the Company, (III) any acquisition by an underwriter temporarily holding securities pursuant to an offering of such securities, (IV) any acquisition by an entity owned, directly or indirectly, by stockholders of the Company in substantially the same proportions as their ownership of the Company or (V) any acquisition by Mithaq Capital SPC, Mithaq Holding Company or any person or entity that, directly or indirectly, controls, is controlled by or is under common control with Mithaq Capital SPC or Mithaq Holding Company (collectively, “Mithaq”); provided that the provisions of this subsection (i) are not intended to apply to or include as a Change in Control any transaction that is specifically excepted from the definition of Change in Control under subsection (iv) below;
(ii) individuals who, during any consecutive 12-month period from or after the date hereof, constitute the Board (the “Incumbent Directors”) cease for any reason to constitute at least a majority of the Board; provided, that any person becoming a director subsequent to the date hereof, whose election or nomination for election was approved by a vote of at least a majority of the Incumbent Directors then on the Board (either by a specific vote or by approval of the proxy statement of the Company in which such person is named as a nominee for director, without written objection to such nomination) shall be an Incumbent Director; provided, however, that no individual initially elected or nominated as a director of the Company as a result of an actual or threatened election contest, as such terms are used in Rule 14a-12 of Regulation 14A promulgated under the Exchange Act, with respect to directors or as a result of any other actual or threatened solicitation of proxies or consents by or on behalf of any person other than the Board shall be deemed to be an Incumbent Director;
(iii) the approval by the stockholders of the Company of a plan of complete dissolution or liquidation of the Company; or
(iv) the consummation of a reorganization, recapitalization, merger, consolidation, statutory share exchange or similar form of corporate transaction involving the Company other than any transaction with Mithaq (a “Business Combination”), or sale, transfer or other disposition of all or substantially all of the business or assets of the Company to an entity that is not an Affiliate of the Company and is not Mithaq (a “Sale”), that in each case requires the approval of the Company’s stockholders (whether for such Business Combination or Sale or the issuance of securities in such Business Combination or Sale), unless immediately following such Business Combination or Sale: (A) more than fifty percent (50%) of the total voting power of (x) the entity resulting from such Business Combination or the entity which has acquired all or substantially all of the business or assets of the Company in a Sale (in either case, the “Surviving Company”), or (y) if applicable, the ultimate parent entity that directly or indirectly has beneficial ownership of sufficient voting securities eligible to elect a majority of the board of directors (or the analogous governing body) of the Surviving Company (the “Parent Company”), is represented by the Outstanding Company Voting Securities that were outstanding immediately prior to such Business Combination or Sale (or, if applicable, is represented by shares into which the Outstanding Company Voting Securities were converted pursuant to such Business Combination or Sale), and such voting power among the holders thereof is in substantially the same proportion as the voting power of the Outstanding Company Voting Securities among the holders thereof immediately prior to the Business Combination or Sale, (B) no Person (other than any employee benefit plan sponsored or maintained by the Surviving Company or the Parent Company or Mithaq), is or becomes the beneficial owner, directly or indirectly, of more than fifty
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percent (50%) of the total voting power of the outstanding voting securities eligible to elect members of the board of directors (or the analogous governing body) of the Parent Company (or, if there is no Parent Company, the Surviving Company) and (C) at least a majority of the members of the board of directors (or the analogous governing body) of the Parent Company (or, if there is no Parent Company, the Surviving Company) following the consummation of the Business Combination or Sale were Board members at the time of the Board’s approval of the execution of the initial agreement providing for such Business Combination or Sale.
Terms used in the foregoing definition of “Change in Control” but not defined therein shall have the meanings set forth in the Plan.
3.Taxes. The Company shall withhold from all amounts payable under this Agreement all federal, state and local and other taxes that are required to be withheld pursuant to any applicable laws and regulations. It is intended that the Award be taxed as compensation at ordinary income rates. This Agreement and the Award shall be governed by, and construed in accordance with, Section 15(u) of the Plan relating to Section 409A of the Internal Revenue Code of 1986, as amended. Notwithstanding the foregoing, neither the Company nor any of its subsidiaries or Affiliates will have any obligation to indemnify or otherwise hold you (or any beneficiary) harmless from any or all of such taxes or penalties.
4.Administration. The Board or the Committee, as applicable, will have the sole discretion and authority to administer and interpret this Agreement. The decisions of the Board or the Committee, as applicable, will be final, binding and conclusive on you and the Company.
5.Clawback/Forfeiture. You acknowledge and agree to abide by the terms of the Company’s Clawback Policy, as in effect from time to time (the “Clawback Policy”), in respect of all compensation that you receive from the Company or any of its Affiliates, whether pursuant to this Agreement, the Plan, the Company’s annual bonus plan or otherwise to the extent set forth in the Clawback Policy (collectively, “Covered Compensation”), and you further agree that, in the event that any Covered Compensation previously paid to you is subject to recovery pursuant to the Clawback Policy, you hereby consent to recovery by the Company through any means determined by the Company in its sole discretion, including through withholding by the Company or any of its Affiliates of your salary, wages or any other cash or equity-based compensation payable to you by the Company or any of its Affiliates. Furthermore, to the extent required by applicable law (including without limitation Section 304 of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 and Section 954 of the ▇▇▇▇ ▇▇▇▇▇ Wall Street Reform and Consumer Protection Act) and/or the rules and regulations of NASDAQ or other securities exchange or inter-dealer quotation system on which the Common Stock is listed or quoted, or if so required pursuant to a written policy adopted by the Company, your Award shall be subject (including on a retroactive basis) to clawback, forfeiture or similar requirements (and such requirements will be deemed incorporated by reference into this Agreement).
6.Notices. Notices or communications to be made hereunder shall be in writing and shall be delivered in person, by electronic mail, by registered mail, by confirmed facsimile or by a reputable overnight courier service to the Company at its principal office or to you at your address and/or email address, as applicable, as contained in the records of the Company.
7.Awardee Representations. You have reviewed with your own tax advisors the federal, state, local and foreign tax consequences of the transactions contemplated by this Agreement. You are relying solely on such advisors and not on any statements or representations of the Company or any of its
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agents, if any, made to you. You understand that you shall be responsible for your own tax liability arising as a result of the transactions contemplated by this Agreement.
8.At-Will Relationship/Other Arrangements. You acknowledge that this Agreement is not intended to constitute a contract of employment and that your employment is an at-will relationship that has no specific duration. Neither this Agreement nor the payment of any amounts hereunder nor any action of the Company, or the Board or the Committee, as applicable, with respect to this Agreement will be held or construed to confer upon you any legal right to continue being in the employ of the Company or to receive any particular rate of cash or other compensation. You further acknowledge that either the Company or you may terminate your employment at any time, with or without reason, and with or without notice (subject to the requirements of any separate employment or similar agreement between you and the Company). No payment under this Agreement will be taken into account in determining any benefits under any pension, retirement, profit sharing, group insurance or other benefit plan of the Company, except as expressly required otherwise by law or the terms of such plan. The terms and definitions under this Agreement will govern the terms and conditions of the Award in all respects, notwithstanding anything to the contrary contained in any employment or other agreement between you and the Company or any of its Affiliates or subsidiaries. This Agreement will not affect the ability of the Company to establish, adopt or enter into any other Company plan, program or policy.
9.Entire Agreement. This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings relating to the subject matter of this Agreement. Notwithstanding the foregoing, this Agreement and the payment of the Award shall be subject to the terms of the Plan. In the event of a conflict between this Agreement and the Plan, the terms and conditions of the Plan shall control.
10.Incorporation by Reference, Etc. The provisions of the Plan are hereby incorporated herein by reference. Except as otherwise expressly set forth herein, this Agreement shall be construed in accordance with the provisions of the Plan and any interpretations, amendments, rules and regulations promulgated by the Board or the Committee, as applicable, from time to time pursuant to the Plan. The Board or the Committee, as applicable, shall have final authority to interpret and construe the Plan and this Agreement and to make any and all determinations under them, and its decision shall be binding and conclusive upon you and your legal representative in respect of any questions arising under the Plan or this Agreement. By signing this Agreement, you acknowledge that you have had an opportunity to review the Plan and agree to be bound by all the terms and provisions of the Plan (and this Agreement).
11.Governing Law; Consent to Jurisdiction. This Agreement shall be governed by and construed in accordance with the internal laws of the State of Delaware applicable to contracts made and performed wholly within the State of Delaware, without giving effect to the conflict of laws provisions thereof.
12.Miscellaneous. This Agreement shall be binding upon and inure to the benefit of the Company and you, and each party’s respective permitted successors, assigns, heirs, beneficiaries and representatives. This Agreement is personal to you and may not be assigned by you without the prior written consent of the Company. Any attempted assignment in violation of this Section shall be null and void. If any provision of this Agreement is held invalid or unenforceable by any court of competent jurisdiction, the other provisions of this Agreement will remain in full force and effect. This Agreement may be amended or modified only as provided in Section 14 of the Plan or by a written instrument executed by both the Company and you. The Company will not be required to fund or otherwise segregate any cash or any other assets for payment of obligations under this Agreement. This Agreement
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will constitute an “unfunded” arrangement of the Company. Your rights to payment hereunder will be limited to those of a general unsecured creditor of the Company. Except as expressly provided by the Board or the Committee, as applicable, no right hereunder will be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or charge by you, and any such attempted action by you will be void. This Agreement shall continue in effect until there are no further rights or obligations of the parties outstanding hereunder and shall not be terminated by either party without the express written consent of both parties.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement or caused their duly authorized officer to execute this Agreement as of the date first written above.
THE CHILDREN’S PLACE, INC.
By: _______________________________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Chief Administrative Officer, General Counsel & Secretary
Title: Chief Administrative Officer, General Counsel & Secretary
AWARDEE
By: _____________________________________________
Name:
Date:__________________________________________
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Exhibit A
(a) Awardee’s Name:
(b) Award Date: July 3, 2025
(c) Performance Period: The three (3) fiscal years of the Company commencing on February 2, 2025 and ending on January 29, 2028 (“Fiscal Years 2025-2027”)
(d) Target Cash Amount:
(e) Maximum Cash Amount available to be earned: 200% of the Target Cash Amount set forth above
A-1
Exhibit B
Adjusted Free Cash Flow Target
You shall earn the percentage of the Target Cash Amount (as listed on Exhibit A) that is scheduled to vest in April 2028, no later than April 13, 2028, by reference to the Adjusted Free Cash Flow achieved for the three (3) fiscal years of the Company commencing on February 2, 2025 and ending on January 29, 2028 (the “Performance Period”) as set forth in the following table. If the Adjusted Free Cash Flow achieved for the Performance Period falls between the thresholds set forth in the following table, the percentage of the Target Cash Amount to be earned shall be determined by linear interpolation:
Adjusted Free Cash Flow for Performance Period – Fiscal Years 2025-2027 | Percentage of the Target Cash Amount Earned | ||||
| $275,000,000 | 200% | ||||
| $225,000,000 | 175% | ||||
| $200,000,000 | 150% | ||||
| $175,000,000 | 125% | ||||
| $150,000,000 | 100% (Target) | ||||
| $135,000,000 | 75% | ||||
| $120,000,000 | 50% | ||||
| $110,000,000 | 25% | ||||
| $100,000,000 | 0% | ||||
“Adjusted Free Cash Flow” shall mean the Company’s cash flow from operations minus (i) capital expenditures and/or (ii) other unusual or non-recurring items, each as approved by the Committee.
B-1