Exhibit 10.1

EXECUTION COPY

THIRD AMENDED AND RESTATED

EMPLOYMENT AGREEMENT

This Third Amended and Restated Employment Agreement (the “Agreement”) is made
as of this 6th day of March, 2012 (the “Effective Date”) by and between Edward
M. Krell (the “Employee”), and Destination Maternity Corporation f/k/a Mothers
Work, Inc. (the “Company”).

WHEREAS, the Company and Employee are parties to a Second Amended and Restated
Employment Agreement, dated May 15, 2007, as amended, pursuant to which Employee
serves as the Chief Executive Officer of the Company (the “Existing Employment
Agreement”); and

WHEREAS, on the terms and conditions set forth herein, the Company and Employee
desire to amend and restate the Existing Employment Agreement in its entirety.

THEREFORE, in consideration of the mutual premises and promises contained in the
Agreement, the parties agree as follows:

1. EMPLOYMENT, TERM AND DUTIES. The Company will continue to employ Employee and
Employee hereby accepts continued employment with the Company, as Chief
Executive Officer (the “Position”) on the terms herein described for the period
beginning on the date hereof and continuing until terminated by either party.
During his employment by the Company, except for reasonable vacations consistent
with paragraph 6(C), absences due to temporary illness or as otherwise provided
below in paragraph 5, Employee shall use his best efforts to serve the Company
faithfully and shall devote his full time, attention, skill and efforts to the
performance of the duties required by or appropriate for his Position. Employee
agrees to assume such duties and responsibilities as may be customarily incident
to the Position and as may be reasonably assigned to him from time to time by
the Company’s Board of Directors (the “Board”), consistent with the Company’s
Bylaws and with the level of responsibility appropriate to the Position. The
Company shall exercise its reasonable best efforts to cause Employee to be
nominated and elected (and, thereafter, re-elected, when applicable) to the
Board while he holds the Position. Upon any cessation of Employee’s service in
the Position, unless otherwise requested by the Board, Employee agrees to resign
from all director and officer positions with the Company and its affiliates.

2. TERMINATION.

A. Except as otherwise provided for herein, the Employee’s employment is at will
and may be terminated at any time for any reason by the Employee or by the
Company. Except in the event of termination of Employee by Company for Cause (as
defined below) or pursuant to paragraph 2(D) below, either party shall provide
the other with two weeks’ advance

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notice prior to termination of employment. Company may elect to pay Employee two
weeks’ pay in lieu of such notice period.

B. If Employee’s employment is terminated by the Company without Cause or by
Employee with Good Reason (as defined below):

(1) the Company will make a lump sum payment to Employee (less applicable
deductions and withholdings), at the time specified in Paragraph 2(E), of a
gross amount equal to (i) (U) if such termination occurs prior to January 1,
2013, $3,712,500, (V) if such termination occurs on or after January 1, 2013 but
prior to January 1, 2014, $3,525,000, (W) if such termination occurs on or after
January 1, 2014 but prior to January 1, 2015, $3,337,500, (X) if such
termination occurs on or after January 1, 2015 but prior to January 1, 2016,
$2,962,500, (Y) if such termination occurs on or after January 1, 2016 but prior
to January 1, 2017, $2,587,500, or (Z) if such termination occurs on or after
January 1, 2017, $2,212,500 plus (ii) any Annual Bonus earned but not previously
paid with respect to a year ended prior to the date of termination (and, for the
avoidance of doubt, the date of the notice by the Company of termination without
Cause or by the Employee of Good Reason, shall be the date of such termination
as used in clauses (U) through (Z) herein);

(2) the Company will pay Employee a pro-rata Annual Bonus for the year of
termination, determined and paid in the same manner and at the same time as his
Annual Bonus would otherwise have been determined and paid for the applicable
year, but for the termination. Such Annual Bonus will be pro-rated based on the
number of full and partial months of the year transpired prior to the date of
termination;

(3) (X) any stock options and restricted stock awards granted to Employee prior
to October 1, 2011 that remain outstanding and unvested immediately prior to
such termination will then become fully vested, (Y) any Time Vested Options and
Time Vested Restricted Shares (as such terms are defined below) granted pursuant
to paragraph 6(E) that remain outstanding and unvested immediately prior to such
termination will then become fully vested; and (Z) a pro-rata portion (based on
the full number of completed days of Employee’s employment with the Company in
the applicable performance period divided by 1095) of any outstanding
Performance Shares (as defined below) granted pursuant to paragraph 6(E) will
remain outstanding (notwithstanding Employee’s cessation of employment), will
vest to the extent earned based on the actual performance of the Company through
the end of the applicable performance period and will be settled within 2 1/2
months following the end of the applicable performance period

(4) the Company will continue to provide Employee the automobile and automobile
insurance described below in paragraph 6(D)(1) for a period of one year
following the date of such termination and the supplemental long term disability
insurance premiums described below in paragraph 6(D)(2) for a period of three
years following the date of such termination and transfer to Employee, but not
pay further premiums on, any key man term life insurance policy then held on his
life;

 

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(5) Employee will receive, in lieu of continuation coverage under COBRA,
continued coverage (for himself and, to the extent covered immediately prior to
the date of his termination, his spouse and eligible dependents) under the
Company’s group health plan, as in effect from time to time (or, at the election
of the Company, under a mutually agreed upon and reasonably comparable insured
individual arrangement), until the earlier of (i) the end of the three year
period following such termination, or (ii) Employee’s (or, as applicable, his
spouse’s or eligible dependents’) eligibility for Medicare or coverage under
another employer’s group health plan (or, in the case of his eligible
dependants, cessation of their status as eligible dependants under the terms of
the Company’s group health plan); and

(6) the Company will pay for full outplacement services for Employee, such
payment to be made to an agency selected by Employee, based upon the customary
fees charged by nationally rated firms engaged in such services.

C. If Employee is unable, after any reasonable accommodation required by law, to
perform his duties and responsibilities hereunder by reason of illness injury or
incapacity for more than six (6) consecutive months, Employee’s employment
hereunder may then be terminated by Company and, in that case:

(1) for a period of 30 months following the date of such termination, the
Company will make monthly supplemental disability payments to Employee, each
equal to 1/12 of Employee’s Base Salary as of the date of his termination;

(2) Employee will receive, in lieu of continuation coverage under COBRA,
continued coverage (for himself and, to the extent covered immediately prior to
the date of his termination, his spouse and eligible dependents) under the
Company’s group health plan, as in effect from time to time (or, at the election
of the Company, under a mutually agreed upon and reasonably comparable insured
individual arrangement) until the earlier of (i) the end of the 30 month period
following such termination, or (ii) Employee’s (or, as applicable, his spouse’s
or eligible dependents’) eligibility for Medicare or coverage under another
employer’s group health plan (or, in the case of his eligible dependants,
cessation of their status as eligible dependants under the terms of the
Company’s group health plan);

(3) the Company will continue to provide Employee the automobile and automobile
insurance described below in paragraph 6(D)(1) for a period of one year
following the date of such termination and transfer to Employee, but not pay
further premiums on, any key man term life insurance policy then held on his
life;

(4) the Company will pay Employee (i) a pro-rata Annual Bonus for the year of
termination, determined and paid in the same manner and at the same time as his
Annual Bonus would otherwise have been determined and paid for the applicable
year, but for the termination. Such Annual Bonus will be pro-rated based on the
number of full and partial months of the year transpired prior to the date of
termination plus (ii) any Annual Bonus earned but not previously paid with
respect to a year ended prior to the date of termination; and

 

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(5) outstanding equity awards will be treated as provided under paragraph
2(B)(3).

Amounts payable under this paragraph 2(C) will be reduced by (x) any disability
or life insurance benefits payable with respect to the same period under any
Company funded disability or death benefit plan, policy or arrangement
(including, without limitation, any insurance purchased with the allowance
described below in paragraphs 6(D)(2) and 6(D)(3)) or under the Social Security
Act, and (y) with respect to the 30 month period described above, any amounts
earned by Employee during that period for the performance of personal services.
To the extent any insurance benefit described in the preceding sentence is
exempt from federal income tax, then for purposes of this reduction, the amount
of that insurance benefit will be deemed to be 150% of the amount actually
received by Employee.

D. Termination by Death. In the event that Employee dies during his employment
with the Company hereunder, the Company shall pay to Employee’s executors, legal
representatives or administrators an amount equal to the accrued and unpaid
portion of his Base Salary through the end of the month in which he dies and any
Annual Bonus otherwise payable with respect to a completed fiscal year but not
previously paid to Employee prior to the date of his death. In addition:

(1) the Company will pay to Employee’s executors, legal representatives or
administrators Employee’s pro-rata Annual Bonus for the year of termination,
determined and paid in the same manner and at the same time as his Annual Bonus
would otherwise have been determined and paid for the applicable year, but for
his death. Such Annual Bonus will be pro-rated based on the number of full and
partial months of the year transpired prior to the date of termination; and

(2) outstanding equity awards will be treated as provided under paragraph
2(B)(3).

E. In consideration of and as a condition to receiving all the rights and
benefits described in paragraphs 2(B), 2(C) or 2(D) above, Employee (or, as
applicable, the executors, legal representatives or administrators of his
estate) will be required to sign and deliver to the Company the Company’s
employment release agreement, substantially in the form attached hereto as
Exhibit A (the “Release”) within 45 days following his cessation of employment.
Subject to paragraph 3, below, and provided the Release is not revoked, the
severance, disability or death benefits described herein (as applicable) will
begin to be paid or provided (x) 15 days after the Release has been delivered,
if the 60 day period following the cessation of employment does not straddle two
calendar years; or (y) the later of 15 days after the Release has been delivered
or the first regularly scheduled payroll date in the calendar year following the
cessation of employment, if the 60 day period following such cessation straddles
two calendar years. Rights and benefits described in the aforesaid paragraphs
are in lieu of, and not in addition to, any severance or termination benefits
provided under any other plan, policy, or arrangement of the Company.

F. For purposes of this Agreement:

 

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(1) “Cause” shall include fraud, theft, gross misconduct, gross negligence, or
Employee’s unwillingness or refusal to perform the lawful and reasonable
requirements of his job, but shall not include the inability of Employee to
perform his duties and responsibilities hereunder by reason of illness, injury
or incapacity. No termination for Cause (other than with respect to fraud, theft
or gross misconduct) shall be effective unless the Company gives the Employee
written notice of the Board’s decision to terminate the Employee’s employment
for Cause and the Employee fails to cure such event giving rise to Cause (if
such event is reasonably capable of cure) to the reasonable satisfaction of the
Board within thirty (30) days after such notice. For avoidance of doubt,
termination of Employee’s employment under circumstances entitling him to
payments under paragraph 2(D) will not be construed as a termination without
Cause.

(2) “Code” means the Internal Revenue Code of 1986, as amended, and all rules
and regulations promulgated thereunder.

(3) “Good Reason” means any of the following, without Employee’s prior consent:
(i) a material, adverse change in title, authority or duties (including the
assignment of duties materially inconsistent with the Employee’s position);
(ii) a reduction in base salary or bonus opportunity (described in paragraph 6);
(iii) a relocation of Employee’s principal worksite more than 50 miles; or
(iv) the Company’s material breach of this Agreement, including the failure to
timely grant an equity award described in Paragraph 6(E). However, none of the
foregoing events or conditions will constitute Good Reason unless the Employee
provides the Company with written objection to the event or condition within 90
days following the occurrence thereof, the Company does not reverse or otherwise
cure the event or condition within 30 days of receiving that written objection,
and the Employee resigns his employment within 30 days following the expiration
of that cure period (for the avoidance of doubt, in the case of a failure under
clause (iv) above as to the equity awards, the cure shall make the Employee
economically whole).

G. Except as otherwise specifically set forth in this Agreement, all salary,
benefits and other amounts payable by the Company to Employee shall cease at the
time of any cessation of his employment with the Company, subject to the terms
of any benefit or compensation plans then in force and applicable to Employee;
provided, however, in the event of a good faith dispute over the operation of
the provisions of Paragraph 2(B)(1), 2(B)(3) or 6(E), the Company shall
reimburse the Employee’s reasonable legal fees and expenses if he substantially
prevails in such dispute.

3. TIMING OF PAYMENTS FOLLOWING TERMINATION.

A. If the termination giving rise to the payments described in paragraph 2(B)
and 2(C) is not a “Separation from Service” within the meaning of Treas. Reg. §
1.409A-1(h)(1) (or any successor provision), then the amounts otherwise payable
pursuant to those paragraphs will instead be deferred without interest and will
not be paid until Employee experiences a Separation from Service. In addition,
to the extent compliance with the requirements of Treas. Reg. § 1.409A-3(i)(2)
(or any successor provision) is necessary to avoid the application of an

 

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additional tax under Section 409A of the Code to payments due to Employee upon
or following his Separation from Service, then notwithstanding any other
provision of this Agreement (or any otherwise applicable plan, policy, agreement
or arrangement), any such payments that are otherwise due within six months
following Employee’s Separation from Service (taking into account the preceding
sentence of this paragraph) will be deferred without interest and paid to
Employee in a lump sum immediately following that six month period. This
paragraph should not be construed to prevent the application of Treas. Reg. §§
1.409A-1(b)(4) or -1(b)(9)(iii)(or any successor provisions) to any amount
payable to Employee. For purposes of the application of Treas. Reg. §
1.409A-1(b)(4)(or any successor provision) to this Agreement, each payment in a
series of payments will be deemed a separate payment.

B. Notwithstanding anything in this Agreement to the contrary or otherwise, to
the extent an expense, reimbursement or in-kind benefit provided pursuant to
paragraph 2 constitutes a “deferral of compensation” within the meaning of
Section 409A of the Code (1) the amount of expenses eligible for reimbursement
or in-kind benefits provided to the Employee during any calendar year will not
affect the amount of expenses eligible for reimbursement or in-kind benefits
provided to the Employee in any other calendar year, (2) the reimbursements for
expenses for which the Employee is entitled to be reimbursed shall be made on or
before the last day of the calendar year following the calendar year in which
the applicable expense is incurred and (3) the right to payment or reimbursement
or in-kind benefits hereunder may not be liquidated or exchanged for any other
benefit.

4. EFFECT OF CHANGE IN CONTROL ON OUTSTANDING EQUITY AWARDS. Effective
immediately prior to and contingent upon the occurrence of a Change in Control
(as defined in the Company’s Equity Incentive Plan): (A) any stock options and
restricted stock awards granted to Employee prior to October 1, 2011 that remain
outstanding and unvested will then become fully vested, (B) any Time Vested
Options and Time Vested Restricted Shares (as such terms are defined below)
granted pursuant to paragraph 6(E) that remain outstanding and unvested will
then become fully vested, (C) any outstanding Performance Shares (as defined
below) will then vest at the target level and be immediately settled, and
(D) any grants of time-vested stock options or time-vested restricted stock
awards made after 2011 (other than grants pursuant to Paragraph 6(E)) that
remain outstanding and unvested will also then become fully vested and any other
outstanding performance equity (other than grants pursuant to Paragraph 6(E))
will then, to the extent consistent with Section 409A of the Code, vest at the
target level and be immediately settled.

5. EXTENT OF SERVICES. During his employment by the Company, Employee will not,
directly or indirectly, engage in any other business activities or pursuits
whatsoever, except: (i) activities in connection with any charitable or civic
activities, (ii) personal investments, (iii) service as an executor, trustee or
in other similar fiduciary capacity, or (iv) other activities specifically
authorized by the Compensation Committee of the Board; provided, however, that
any of the foregoing exceptions do not: (x) interfere with Employee’s
performance of responsibilities and obligations pursuant to this Agreement, or
(y) create a conflict of interest with Employee’s responsibilities to the
Company. For avoidance of doubt, incidental use of Company facilities (such as
telephone or email systems) in furtherance of activities authorized under this
paragraph will not constitute an interference with Employee’s obligations to the
Company.

 

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6. COMPENSATION AND BENEFITS.

A. The Company shall pay to the Employee and the Employee agrees to accept from
the Company, in full payment for the Employee’s services hereunder, the annual
base salary of $750,000 or as otherwise agreed to by the parties (the “Base
Salary”). The Employee’s Base Salary will be reviewed on an annual basis and may
be increased from time to time in the discretion of the Compensation Committee
after consultation with the independent members of the Board.

B. For each fiscal year ending during Employee’s employment hereunder, Employee
will be eligible to earn an annual bonus (the “Annual Bonus”). The target amount
of such Annual Bonus will be 100% of Employee’s Base Salary for the applicable
year, with a maximum Annual Bonus opportunity of 200% of Employee’s Base Salary
for the applicable year. The actual amount of any Annual Bonus payable under
this paragraph 6(B) will be paid in accordance with the Destination Maternity
Corporation Management Incentive Plan or any successor arrangement, based on the
Company’s achievement in the applicable fiscal year of corporate and/or
individual performance goals approved by the Compensation Committee after
consultation with the independent members of the Board; provided that the Annual
Bonus with respect to Company’s 2012, 2013 and 2014 fiscal years shall be based
solely on the achievement of corporate performance goals, which goals will be
the same as the corporate performance goals applicable to the determination of
annual bonuses for other named executive officers of the Company for the
relevant year.

C. The Employee shall also receive all such benefits as are customarily provided
by the Company to employees or executives, as described in the Company’s Team
Member Handbook, if applicable, and in the Company’s benefit summary plan
descriptions and plan documents, if applicable, which are subject to change from
time to time, within the sole discretion of the Company and in accordance with
applicable law. Nonetheless, Employee will be entitled to four (4) weeks paid
vacation during each year of employment. Vacation days that remain unused at the
end of any year will accrue or expire to the extent provided by Company policy,
as in effect from time to time.

D. In addition to the benefits customarily provided to other employees
generally, or other executives, of the Company, the Company will:

(1) provide Employee with the use of an automobile comparable to that presently
made available to him, together with insurance coverage for the use of that
automobile commensurate with that presently provided;

(2) reimburse Employee for (or pay on Employee’s behalf) the reasonable costs of
purchasing supplemental long term disability insurance providing a disability
benefit of up to $18,000 per month; and

(3) reimburse Employee for (or pay on Employee’s behalf) the reasonable costs of
purchasing a supplemental term life insurance policy providing a two million
dollar ($2,000,000) death benefit.

 

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E. Subject to Employee’s continued employment with the Company, Employee will be
granted annual equity awards in the Company’s 2012, 2013 and 2014 fiscal years
on the terms specified in this paragraph. The equity awards granted for each
such year will collectively be referred to herein as the “Fiscal 2012-2014
Annual Award.” The Fiscal 2012-2014 Annual Award for the 2012 fiscal year will
be in the forms attached hereto as Exhibits B, C and D. The Fiscal 2012-2014
Annual Award for each of the 2013 and 2014 fiscal years will have a grant date
fair value equal to the lesser of (1) $750,000 ($900,000, if the common stock of
the Company exceeds $20.00 per share, as adjusted for any splits or similar
transactions, on the date that any Annual Award is made), or (2) the aggregate
fair value as of that date of 26,785 Performance Shares, 30,647 Time Vested
Options and 13,392 Time Vested Restricted Shares (each, as defined below). For
this purpose, fair value will be determined in accordance with then applicable
financial accounting rules and in a manner consistent with that applied in
connection with the preparation of the Company’s financial statements. The first
Fiscal 2012-2014 Annual Award will be made on or prior to the Effective Date;
the second Fiscal 2012-2014 Annual Award will be made on the date annual equity
awards are made to other executives for the applicable fiscal year, but no later
than December 23, 2012; and the third and final Fiscal 2012-2014 Annual Award
will be made on the date annual equity awards are made to other executives for
the applicable fiscal year, but no later than December 23, 2013, subject, in
each such case to Employee’s continued employment with the Company through the
applicable grant date. No more than 50% of the aggregate fair value of each such
Fiscal 2012-2014 Annual Award will consist of performance-based restricted stock
units that vest based on both the achievement of specified corporate performance
goals over the three fiscal year period commencing with the fiscal year that
includes the applicable grant date and the Employee’s continued service over the
three year period that follows the applicable grant date (“Performance Shares”);
no more than 25% of the aggregate fair value of each such Fiscal 2012-2014
Annual Award will consist of stock options having an exercise price equal to the
fair market value of the Company’s stock on the date of the grant and that vest
in four equal annual installments based solely on Employee’s continued
employment with the Company over the four year period following the applicable
grant date (the “Time Vested Options”); and the remaining portion of each Fiscal
2012-2014 Annual Award will consist of restricted shares (or restricted stock
units) that vest in four equal annual installments based solely on Employee’s
continued employment with the Company over the four year period that follows the
applicable grant date (the “Time Vested Restricted Shares”). The performance
targets applicable to such Performance Shares will be determined by the
Compensation Committee after consultation with the independent members of the
Board, provided that such performance goals will be the same as the applicable
corporate performance goals set for performance share awards made
contemporaneously to other named executive officers of the Company and will be
set in such a manner that Employee will have a reasonable opportunity to earn
such Performance Shares.

F. Beginning with the first quarter of fiscal year 2015 and for each fiscal year
thereafter, the Compensation Committee, after consultation with the independent
members of the Board, will consider whether to grant the Employee additional
equity awards, but no such additional awards are guaranteed.

G. Employee acknowledges that, as a result of the enactment of the Dodd–Frank
Wall Street Reform and Consumer Protection Act and the contemplated issuance of
implementing regulations by the United States Securities and Exchange Commission
(the “Act”), the Company

 

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will soon be required to adopt a clawback policy with respect to incentive-based
compensation. Employee agrees that all his rights to incentive-based
compensation from the Company will be subject to the terms of such policy,
provided that such policy (1) is generally applicable to other named executive
officers and (2) is reasonably calculated to facilitate compliance with the Act.
The foregoing notwithstanding, no incentive-based compensation paid, earned or
issued prior to the Company’s adoption of a clawback policy will be subject to
that policy, except to the extent required by applicable law; provided however
that Employee agrees that any compensation payable to him (even if attributable
to awards granted prior to the effective date of the Act or the Company’s
adoption of a clawback policy) may be offset by amounts otherwise required to be
repaid to the Company under the clawback policy.

7. CONFIDENTIAL INFORMATION. Confidential Information means information which
the Company regards as confidential or proprietary and which the Employee learns
or develops during or related to their employment, including, but not limited
to, information relating to:

 

  a. the Company’s products, suppliers, 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.

Employee assigns to Company any rights Employee may have in any Confidential
Information. Employee shall not disclose any Confidential Information to any
third-party or use any Confidential Information for any purposes other than as
authorized by the Company.

8. SURRENDER OF MATERIALS. The Employee hereby agrees to deliver to the Company
promptly upon request or on the date of termination of the Employee’s
employment, all documents, copies thereof and other materials in the Employee’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

 

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the same made by or for the Employee or acquired by the Employee), and
thereafter to promptly return documents and copies thereof and other material in
the Employee’s possession. The Employee will be responsible for the value of all
Company or customer property that is not timely returned. Employee authorizes
the Company to deduct the fair market value of such property from any monies
owed to Employee.

9. DISCLOSURE OF INFORMATION AND SOLICITATION OF EMPLOYEES; NON-COMPETE;
CONFIDENTIAL INFORMATION OF THIRD PARTIES. The Employee acknowledges that the
Company has developed and maintains at great expense, a valuable supplier
network, supplier contacts, many of which are of longstanding, product designs,
and other information of the type described in paragraph 7 of this Agreement,
and that in order to pursue Employee’s employment gainfully under the Agreement,
Employee will be given 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 Employee agrees that during the period of Employee’s
employment and for thirty-six (36) months after termination of employment with
the Company by Employee or by Company, for any reason, with or without Cause,
the Employee will not directly or indirectly:

(1) on Employee’s behalf or on behalf of any other person or entity, perform any
act with respect to the design, manufacture, sale, attempted sale or promotion
of the sale of any Conflicting Product.

(2) own, manage, operate, finance, join, control, or participate in the
ownership, management, operation, financing or control of, or be connected as an
officer, director, employee, partner, principal, agent, representative,
consultant or otherwise with, or use or permit Employee’s name to be used in
connection with: (a) any entity offering for sale or contemplating offering for
sale any Conflicting Product, or (b) any entity contacted by, or the
responsibility of, the Employee or any person under the Employee’s supervision
or direction, including applicable agents and suppliers (or, with respect to the
application of this provision following Employee’s termination of employment,
any entity which during the twenty-four (24) month period prior to such
termination was contacted by, or the responsibility of, the Employee or any
person under the Employee’s supervision or direction, including applicable
agents and suppliers), or (c) a Competing Business, or (d) any entity which
would require by necessity use of Confidential Information.

Notwithstanding the provisions of subparagraphs (1) and (2), Employee will not
be deemed to violate this paragraph 9(A) on any given date by virtue of his
involvement with a Competing Business, if sales of Conflicting Products by that
business in the 12 month period preceding that date do not exceed the lesser of
(a) 5% of the gross revenues of that business for that trailing 12 month period,
or (y) $30 million.

 

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The term “Conflicting Product” shall mean any product, process or service which
is the same as, similar to, or is in any manner competitive with any Company
product (which includes third-party products that are distributed by Company),
process, or service. Conflicting Products include, but are not limited to,
maternity and nursing apparel and related accessories.

The term “Competing Business” shall mean any business or enterprise engaged in
the design, manufacture, distribution or sale of any maternity or nursing
apparel or related accessories, or any other business engaged in by the Company
(or, with respect to the application of this provision following any termination
of Employee’s employment, any other business engaged in by the Company at the
time of Employee’s termination of employment) within: (x) a state or
commonwealth of the United States or the District of Columbia, or (y) any
foreign country in which the Company has engaged in business, or has undertaken
preparations to engage in business within the preceding year (or, with respect
to the application of this provision following any termination of Employee’s
employment, within the year preceding Employee’s termination of employment).

B. During the period of Employee’s employment by the Company and for thirty-six
(36) months thereafter (the “Restricted Period”), the Employee will not induce,
attempt to induce or in any way assist any other person in inducing or
attempting to induce any employee or agent of the Company to terminate their
relationship with the Company. Further, during such period Employee will not
directly or indirectly, on Employee’s own behalf or on behalf of any other
person or entity, employ or solicit for employment any current or former Company
employee or agent.

C. If there is a breach or threatened breach of any of the foregoing provisions
of this section, or any other obligation contained in this Agreement, the
Company shall be entitled to an injunction restraining the Employee from any
such breach without the necessity of proving actual damages, and the Employee
waives the requirement of posting a bond. Nothing herein, however, shall be
construed as prohibiting the Company from pursuing other remedies for such
breach or threatened breach.

D. Employee agrees not to disclose to Company or use for its benefit any
confidential information that Employee may possess from any prior employers or
other sources.

E. Employee agrees to disclose the existence and terms of this paragraph 9 to
any enterprise for which Employee performs services during the Restricted
Period.

10. OTHER CONDITIONS OF EMPLOYMENT. The Employee shall be subject to other terms
and conditions of employment as set forth in the prevailing Company: a) Team
Member Handbook, b) commission, bonus or stock option programs and c) any other
Company policies or benefits, all of which shall be subject to interpretation
and change from time to time at the sole discretion of the Company.

11. GOVERNING LAW AND RELATED MATTERS. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the Commonwealth of

 

-11-

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Pennsylvania. Employee agrees that in the event of any violation of this
Agreement, or any other matter arising out of or relating to this Agreement, an
action may be removed to or commenced by Employer in any federal or state court
of competent jurisdiction in the Commonwealth of Pennsylvania. Employee hereby
waives, to the fullest extent permitted by law, any objection that Employee may
now or hereafter have to such jurisdiction or to the laying of the venue of any
such suit, action or proceeding brought in such a court and any claim that such
suit, action or proceeding has been brought in an inconvenient forum. Employee
agrees that effective service of process may be made upon Employee by mail to
any address Employee has provided to Company. In the event either party files
suit against the other for any reason, or in the event either party is otherwise
involved in litigation concerning this Agreement or the employment relationship
between the parties, and a court of competent jurisdiction finds in favor of a
party on any such matter, the losing party shall reimburse the prevailing party
its reasonable costs and attorney’s fees incurred in connection with such suit.

The various parts of this Agreement are intended to be severable. Should any
part be rendered or declared invalid be reason of any legislation or by a decree
of a court of competent jurisdiction, such part shall be deemed modified to the
extent required by such legislation or decree and the invalidation or
modification of such part shall not invalidate or modify the remaining parts
hereof. Without limiting the generality of the foregoing, if the scope of any
covenant contained in this Agreement is too broad to permit enforcement to its
full extent, such covenant shall be enforced to the maximum extent permitted by
law. The Employee agrees that such scope may be judicially modified accordingly.

12. SUCCESSORS AND ASSIGNMENT. The Company may assign its interest in connection
with this Agreement to any successor to all or substantially all of its assets
and business by means of liquidation, dissolution, merger, consolidation,
transfer of assets, or otherwise, provided that such successor assumes in
writing all of the obligations of the Company under this Agreement.

13. ENTIRE AGREEMENT. This Agreement and the Award Agreements attached hereto
represent the full and complete understanding between the Company and the
Employee with respect to the subject matter hereof and supersedes all prior
representations and understandings, whether oral or written and, except as
provided for herein, shall not be modified except upon written amendment
executed by Employee and an officer of Company holding the position of Vice
President or above.

14. ACKNOWLEDGMENT. Employee acknowledges that Employee was provided with an
unsigned copy of this Agreement in advance of continuing employment and was
accorded ample opportunity to read, ask questions, seek clarification, and seek
whatever counsel relative to the Agreement Employee desired. Employee further
acknowledges receipt of a signed copy of this Agreement and that Employee has
read and understands all of its terms and conditions.

 

-12-

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IN WITNESS WHEREOF, the parties have executed this instrument the day and year
above and below written.

 

DESTINATION MATERNITY CORPORATION     EDWARD M. KRELL By:  

/s/ Judd P. Tirnauer

   

/s/ Edward M. Krell

Title:  

Executive Vice President

& Chief Financial Officer

    Date: March 6, 2012     Date: March 6, 2012

Executed At: Philadelphia, PA

 

-13-

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Exhibit A

SEPARATION AND RELEASE AGREEMENT

THIS SEPARATION AND RELEASE AGREEMENT (this “Release”) is made by and between
EDWARD M. KRELL (“Employee”) and DESTINATION MATERNITY CORPORATION f/k/a Mothers
Work, Inc. (the “Company”).

WHEREAS, Employee’s employment by the Company has terminated; and

WHEREAS, pursuant to paragraph 2([  ]) of the Third Amended and Restated
Employment Agreement by and between the Company and Employee dated March 6, 2012
(the “Agreement”), the Company has agreed to pay Employee certain amounts and to
provide him with certain rights and benefits, subject to the execution of this
Release.

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 Consideration.

1.1. Effective immediately, Employee hereby resigns as an officer of the Company
and each of its subsidiaries and affiliates.

1.2. Employee acknowledges that: (i) the payments, rights and benefits set forth
in paragraph 2([  ]) of the Agreement constitute full settlement of all his
rights under the Agreement, (ii) he has no entitlement under any other severance
or similar arrangement maintained by the Company, and (iii) except as otherwise
provided specifically in this Release, the Company does not and will not have
any other liability or obligation to Employee. Employee further acknowledges
that, in the absence of his execution of this Release, the benefits and payments
specified in paragraph 2([  ]) of the Agreement would not otherwise be due to
him.

2. Employee’s Release.

2.1. Employee hereby fully and forever releases and discharges the Company, its
parent and subsidiary corporations and each of their predecessors, successors,
assigns, stockholders, affiliates, officers, directors, trustees, employees,
agents and attorneys, past and present (the Company and each such person or
entity is referred to as a “Released Person”) from any and all claims, demands,
liens, agreements, contracts, covenants, actions, suits, causes of action,
obligations, controversies, debts, costs, expenses, damages, judgments, orders
and liabilities, of whatever kind or nature, direct or indirect, in law, equity
or otherwise, whether known or unknown, arising through the date of this Release
out of Employee’s employment by the Company or the termination thereof,
including, but not limited to, any claims for relief or causes of action under
the Age Discrimination in Employment Act, 29 U.S.C. § 621 et seq., or any other
federal, state or local statute, ordinance or regulation regarding
discrimination in employment and any claims, demands or actions based upon
alleged wrongful or retaliatory discharge or breach of contract under any state
or federal law.

 

Exhibit -1

--------------------------------------------------------------------------------

2.2. Employee expressly represents that he has not filed a lawsuit or initiated
any other administrative proceeding against a Released Person and that he has
not assigned any claim against a Released Person. Employee further promises not
to initiate a lawsuit or to bring any other claim against the other arising out
of or in any way related to Employee’s employment by the Company or the
termination of that employment. This Release will not prevent Employee from
filing a charge with the Equal Employment Opportunity Commission (or similar
state agency) or participating in any investigation conducted by the Equal
Employment Opportunity Commission (or similar state agency); provided, however,
that any claims by Employee for personal relief in connection with such a charge
or investigation (such as reinstatement or monetary damages) would be barred.

2.3. The foregoing will not be deemed to release the Company from (a) claims
solely to enforce paragraph 2([ ]) of the Agreement, (b) claims for benefits
(not including severance benefits) under the Company’s employee welfare benefit
plans and employee pension benefit plans, subject to the terms and conditions of
those plans, or (c) claims for indemnification under the Company’s By-Laws.

3. Company Release.

3.1. The Company hereby fully and forever releases and discharges the Employee
and his executors, administrators and heirs from any and all claims, demands,
liens, agreements, contracts, covenants, actions, suits, causes of action,
obligations, controversies, debts, costs, expenses, damages, judgments, orders
and liabilities, of whatever kind or nature, direct or indirect, in law, equity
or otherwise, whether known or unknown, arising through the date of this Release
out of Employee’s service to the Company or the termination thereof.

3.2. The Company expressly represents that it has not filed a lawsuit or
initiated any other administrative proceeding against Employee and that it has
not assigned any claim against Employee. The Company further promises not to
initiate a lawsuit or to bring any other claim against Employee arising out of
or in any way related to Employee’s service to the Company or the termination
thereof.

3.3. The foregoing will not be deemed to release Employee from claims (a) to
enforce paragraph 9 of the Agreement, (b) claims arising from acts or omissions
by Employee that would constitute a crime, or (c) claims that are not known to
any member of the Company’s Board of Directors (provided that a claim will be
deemed known if the basis for each material element of the claim could have been
ascertained by the Board of Directors prior to the date hereof upon reasonable
inquiry).

4. Restrictive Covenants. Employee acknowledges that restrictive covenants
contained in paragraph 9 of the Agreement will survive the termination of his
employment. Employee affirms that those restrictive covenants are reasonable and
necessary to protect the legitimate interests of the Company, that he received
adequate consideration in exchange for agreeing to those restrictions and that
he will abide by those restrictions.

5. Non-Disparagement. Employee will not disparage any Released Person or
otherwise take any action which could reasonably be expected to adversely affect
the personal or

 

Exhibit -2

--------------------------------------------------------------------------------

professional reputation of any Released Person. Similarly, the Company (meaning,
solely for this purpose, the executive officers and directors of the Company and
other persons authorized to make official communications on behalf of the
Company) will not disparage Employee or otherwise take any action which could
reasonably be expected to adversely affect the personal or professional
reputation of Employee. Notwithstanding the foregoing, in no event will any
legally required disclosure or action be deemed to violate this paragraph,
regardless of the content of such disclosure or the nature of such action.

6. Cooperation. Employee further agrees that, subject to reimbursement of his
reasonable expenses, he will cooperate fully with the Company and its counsel
with respect to any matter (including litigation, investigations, or
governmental proceedings) in which Employee was in any way involved during his
employment with the Company. Employee will render such cooperation in a timely
manner on reasonable notice from the Company, provided that the Company will
attempt to limit the need for Employee’s cooperation under this paragraph so as
not to unduly interfere with his other personal and professional commitments.

7. Notice. Any notice or communication required or permitted under this
Agreement shall be made in writing and sent by certified or registered mail,
return receipt requested, addressed as follows:

If to Employee:

Edward M. Krell

[mailing address redacted in filed version]

If to Company:

Destination Maternity Corporation

456 North Fifth Street

Philadelphia, PA 19123

Attn: General Counsel

or to such other address as either party may from time to time duly specify by
notice given to the other party in the manner specified above.

8. Rescission Right. Employee expressly acknowledges and recites that (a) he has
read and understands the terms of this Release in its entirety, (b) he has
entered into this Release knowingly and voluntarily, without any duress or
coercion; (c) he has been advised orally and is hereby advised in writing to
consult with an attorney with respect to this Release before signing it; (d) he
was provided 21 calendar days after receipt of the Release to consider its terms
before signing it; and (e) he is provided 7 calendar days from the date of
signing to terminate and revoke this Release, in which case this Release shall
be unenforceable, null and void. Employee may revoke this Release during those 7
days by providing written notice of revocation to the Company at the address
specified in paragraph 7 herein.

 

Exhibit -3

--------------------------------------------------------------------------------

9. Challenge. If Employee violates or challenges the enforceability of this
Release, no further payments, rights or benefits under paragraph 2([_]) of the
Agreement will be due to Employee.

10. Miscellaneous.

10.1. No Admission of Liability. This Release is not to be construed as an
admission of any violation of any federal, state or local statute, ordinance or
regulation or of any duty owed by the Company to Employee. There have been no
such violations, and the Company specifically denies any such violations.

10.2. Severability. Whenever possible, each provision of this Release will be
interpreted in such manner as to be effective and valid under applicable law.
However, if any provision of this Release is held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
will not affect any other provision, and this Release will be reformed,
construed and enforced as though the invalid, illegal or unenforceable provision
had never been herein contained.

10.3. Entire Agreement; Amendments. Except as otherwise provided herein, this
Release contains the entire agreement and understanding of the parties hereto
relating to the subject matter hereof, and merges and supersedes all prior and
contemporaneous discussions, agreements and understandings of every nature
relating to the subject matter hereof. This Release may not be changed or
modified, except by an agreement in writing signed by each of the parties
hereto.

10.4. Governing Law. This Release shall be governed by, and enforced in
accordance with, the laws of the State of Delaware, without regard to the
application of the principles of conflicts of laws.

10.5. Counterparts and Facsimiles. This Release may be executed, including
execution by facsimile signature, in multiple counterparts, each of which shall
be deemed an original, and all of which together shall be deemed to be one and
the same instrument.

[Signature page follows.]

 

Exhibit -4

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the Company has caused this Release to be executed by its
duly authorized officer, and Employee has executed this Release, in each case on
the date indicated below, respectively.

 

DESTINATION MATERNITY CORPORATION By:  

 

Name & Title:  

 

Date:  

 

EDWARD M. KRELL

 

Date:  

 

 

Exhibit -5

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Exhibit B

2012 PERFORMANCE SHARE AWARD AGREEMENT

RESTRICTED STOCK UNIT AWARD AGREEMENT

UNDER THE AMENDED AND RESTATED

DESTINATION MATERNITY CORPORATION

2005 EQUITY INCENTIVE PLAN

THIS RESTRICTED STOCK UNIT AWARD AGREEMENT (this “Agreement”) is made by and
between Destination Maternity Corporation, a Delaware corporation, (the
“Company”) and Edward M. Krell (the “Grantee”).

WHEREAS, the Company maintains the Amended and Restated Destination Maternity
Corporation 2005 Equity Incentive Plan (the “Plan”) for the benefit of its
employees, directors, consultants, and other individuals who provide services to
the Company; and

WHEREAS, the Plan permits the grant of Restricted Stock Units, including
Restricted Stock Units that are Performance Awards; and

WHEREAS, to compensate the Grantee for his or her service with the Company and
to further align the Grantee’s financial interests with those of the Company’s
other stockholders, the Board approved this Award of Restricted Stock Units on
December 29, 2011 (the “Effective Date”).

NOW, THEREFORE, in consideration of these premises and the agreements set forth
herein, the parties, intending to be legally bound hereby, agree as follows:

1. Award of Performance-Based Restricted Stock Units.

(a) Award. The Company hereby awards the Grantee 25,000 Restricted Stock Units
(the “Target Award”), subject to adjustment as set forth in Section 5 of this
Agreement and Section 3(c) of the Plan and subject further to the restrictions
and on the terms and conditions set forth in this Agreement (the “Restricted
Stock Units”). The terms of the Plan are hereby incorporated into this Agreement
by this reference, as though fully set forth herein. Except as otherwise
provided herein, capitalized terms herein will have the same meaning as defined
in the Plan.

(b) Performance Restricted Stock Units. The Restricted Stock Units are
Performance Awards and will become vested if and to the extent the service and
performance vesting conditions set forth in Section 2 are satisfied. To the
extent so vested, each Restricted Stock Unit represents an unfunded, unsecured
right of the Grantee to receive one Share at a specified time.

2. Vesting of Restricted Stock Units.

(a) Performance Criteria. If the Grantee is continuously employed by the Company
and/or its Affiliates through the “Settlement Date” (as defined in Section 3),
the Grantee will

 

Exhibit -1

--------------------------------------------------------------------------------

vest in such percentage of the Target Award based on the Company’s cumulative
“Operating Income” (as defined below) with respect to the Company’s 2012 fiscal
year through and including the Company’s 2014 fiscal year (the “Performance
Period”), as set forth in the following table:

 

     Threshold Level      Target Level      Maximum Level  

Cumulative Operating Income

   $ 120,000,000       $ 126,000,000       $ 132,000,000   

Percent of Target Award Vested

    
  50% of Target
Award   
       
  100% of Target
Award   
       
  150% of Target
Award   
  

The Committee will interpolate to determine the Restricted Stock Units vested
for all levels of cumulative Operating Income above the Threshold Level but
below the Maximum Level. Notwithstanding the foregoing, if the Company’s
Operating Income for the 2014 fiscal year does not equal or exceed $38,244,000,
all of Grantee’s Restricted Stock Units will be forfeited with no further
compensation due to Grantee. Additionally, if cumulative Operating Income is
below the Threshold Level, all of Grantee’s Restricted Stock Units will be
forfeited with no further compensation due to Grantee.

(b) Definition of Operating Income. Operating Income shall mean the Company’s
operating income, as reflected in the Company’s financials, adjusted to exclude
the impact of (i) any changes to accounting principles that become effective
during the Performance Period; (ii) any expenses incurred by the Company in
connection with the Company’s evaluation, pursuit or consummation of one or more
strategic alternatives or transactions (which expenses are incurred in
connection with extraordinary, unusual or infrequently occurring events reported
in the Company’s public filings); (iii) gain or loss from the early
extinguishment, redemption, or repurchase of debt; and (iv) gain or loss from
all litigation and insurance claims and recoveries. Additionally, the Committee
reserves the right, in its sole judgment, to utilize negative discretion to make
equitable adjustments to Operating Income with respect to extraordinary, unusual
or infrequently occurring events and/or acquisitions or dispositions by the
Company of any entity or line of business (or acquisitions or dispositions of
all or substantially all of the assets of an entity or line of business) that
occur during the Performance Period.

(c) Change in Control. If a Change in Control occurs during the Performance
Period and the Grantee is continuously employed by the Company and/or its
Affiliates through the date of that Change in Control, the Grantee will vest in
the Restricted Stock Units at the Target Level and, and in full settlement of
his or her rights hereunder, will receive a distribution of the Shares
underlying such Restricted Stock Units immediately prior to but contingent upon
such Change in Control. In addition, upon a Change in Control that also
constitutes a “change of ownership or control” pursuant to Section 162(m) and
the regulations thereunder, the Committee reserves the right, on a case by case
basis, to increase the vested Restricted Stock Units from the Target Level to
the Maximum Level or to any other amount in between those levels. For avoidance
of doubt, this paragraph will not limit the right of the Board to take other
action with respect to the Restricted Stock Units under Section 3(d)(vi) of the
Plan upon the occurrence of any Change in Control.

(d) Certain Terminations of Service. If the Grantee’s employment with the
Company and its Affiliates is terminated prior to distribution of Shares in
respect of vested Restricted

 

Exhibit -2

--------------------------------------------------------------------------------

Stock Units (i) due to the Grantee’s death, (ii) due to the Grantee becoming
Disabled, (iii) by the Company without “Cause” or (iv) by the Grantee for “Good
Reason” (as such terms are defined in the employment agreement between the
Company and the Grantee), then notwithstanding such termination of employment,
the Grantee will vest in a number of the Restricted Stock Units equal to that
number of Restricted Stock Units that would otherwise have vested in accordance
with Section 2(a) above (i.e., based on the actual performance of the Company
through the end of the Performance Period), pro-rated in a ratio equal to the
full number of completed days of the Grantee’s employment with the Company or
its Affiliates in the Performance Period over 1095. Any remaining Restricted
Stock Units that do not then vest will be forfeited with no further compensation
due to Grantee. If the Grantee’s employment with the Company and its Affiliates
terminates or is terminated for any other reason prior to the Settlement Date,
all of the Grantee’s Restricted Stock Units will be forfeited immediately with
no further compensation due to Grantee. The foregoing treatment upon the
termination of the Grantee’s employment with the Company and its Affiliates
during the Performance Period will supersede any contrary treatment in any
presently existing employment agreement between the Company and the Grantee.

3. Settlement. Except as otherwise provided above in Section 2(c), the Committee
will certify the performance results, and the resulting number of vested
Restricted Stock Units, promptly following the end of the Performance Period.
Shares will be distributed to the Grantee in respect of vested Restricted Stock
Units within 2 1/2 months following the end of the Performance Period (the
“Settlement Date”).

4. Non-Transferability. Neither the Restricted Stock Units nor any right with
respect thereto may be assigned, alienated, pledged, attached, sold or otherwise
transferred or encumbered by the Grantee other than by will or by the laws of
descent and distribution, and any purported assignment, alienation, pledge,
attachment, sale, transfer or encumbrance will be void and unenforceable.

5. Rights of Grantee During Restricted Period. The Grantee will not have any
stockholder rights or privileges, including voting rights, with respect to the
Shares underlying the Restricted Stock Units until such Shares are delivered to
the Grantee. Notwithstanding the foregoing, if the Company declares and pays a
cash dividend or distribution with respect to its Shares prior to the Settlement
Date, the Restricted Stock Units then subject hereto will be increased by a
number of additional Restricted Stock Units determined by dividing (A) the total
dividend or distribution that would then be payable with respect to a number of
Shares equal to the number of Restricted Stock Units subject hereto on the
dividend or distribution record date (including any additional Restricted Stock
Units previously credited pursuant to this paragraph), divided by (b) the Fair
Market Value on the dividend or distribution record date. Additional Restricted
Stock Units credited under this paragraph will be subject to the same terms and
conditions (including the same performance vesting and settlement) as the
Restricted Stock Units subject hereto immediately prior to such dividend or
distribution.

6. Securities Laws. The Board may from time to time impose any conditions on the
Restricted Stock Units or the Shares underlying such award, as it deems
necessary or advisable to ensure that the Shares are issued and resold in
compliance with the Securities Act of 1933, as amended.

 

Exhibit -3

--------------------------------------------------------------------------------

7. Tax Consequences. The Grantee acknowledges that the Company has not advised
the Grantee regarding the Grantee’s income tax liability in connection with the
grant, vesting or settlement of the Restricted Stock Units. The Grantee has had
the opportunity to review with his or her own tax advisors the federal, state
and local tax consequences of the transactions contemplated by this Agreement.
The Grantee is relying solely on such advisors and not on any statements or
representations of the Company or any of its agents. The Grantee understands
that the Grantee (and not the Company) shall be responsible for the Grantee’s
own tax liability that may arise as a result of the transactions contemplated by
this Agreement.

8. The Plan. This Award of Restricted Stock Units is subject to, and the Grantee
agrees to be bound by, all of the terms and conditions of the Plan, as such Plan
may be amended from time to time in accordance with the terms thereof. Pursuant
to the Plan, the Board is authorized to adopt rules and regulations not
inconsistent with the Plan as it shall deem appropriate and proper. A copy of
the Plan in its present form is available for inspection during business hours
by the Grantee at the Company’s principal office. All questions of the
interpretation and application of the Plan and the Grantee shall be determined
by the Board and any such determination shall be final, binding and conclusive.

9. Entire Agreement. This Agreement, together with the Plan, represents the
entire agreement between the parties hereto relating to the subject matter
hereof, and merges and supersedes all prior and contemporaneous discussions,
agreements and understandings of every nature.

10. No Right to Continued Employment. Neither the Plan nor this Agreement shall
be construed as giving the Grantee the right to be retained in the employ of, or
in any consulting relationship with, the Company or any of its Affiliates.
Further, the Company (or, as applicable, its Affiliates) may at any time dismiss
the Grantee, free from any liability or any claim under the Plan or this
Agreement, except as otherwise expressly provided herein.

11. Electronic Delivery of Documents. The Grantee hereby authorizes the Company
to deliver electronically any prospectuses or other documentation related to
this Award, the Plan and any other compensation or benefit plan or arrangement
in effect from time to time (including, without limitation, reports, proxy
statements or other documents that are required to be delivered to participants
in such plans or arrangements pursuant to federal or state laws, rules or
regulations). For this purpose, electronic delivery will include, without
limitation, delivery by means of e-mail or e-mail notification that such
documentation is available on the Company’s Intranet site. Upon written request,
the Company will provide to the Grantee a paper copy of any document also
delivered to the Grantee electronically. The authorization described in this
paragraph may be revoked by the Grantee at any time by written notice to the
Company.

12. Tax Withholding. The Company hereby agrees that, at the election of the
Grantee and except as would otherwise violate the terms of any financing
agreement to which the Company is then a party, the minimum required tax
withholding obligations arising in connection with this Award may be settled by
withholding the delivery of nonforfeitable Shares otherwise distributable
hereunder in respect of vested Restricted Stock Units based on the Fair Market
Value of those Shares.

 

Exhibit -4

--------------------------------------------------------------------------------

13. Governing Law. This Agreement will be construed in accordance with the laws
of the Commonwealth of Pennsylvania, without regard to the application of the
principles of conflicts of laws.

14. Amendment. Subject to the provisions of the Plan, this Agreement may only be
amended by a writing signed by each of the parties hereto.

15. Execution. This Agreement may be executed, including execution by facsimile
signature, in one or more counterparts, each of which will be deemed an
original, and all of which together shall be deemed to be one and the same
instrument.

[This space left blank intentionally; signature page follows.]

 

Exhibit -5

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the Company’s duly authorized representative and the Grantee
have each executed this Restricted Stock Unit Award Agreement on the respective
date below indicated.

 

DESTINATION MATERNITY CORPORATION By:  

 

Name: Judd P. Tirnauer Title:   Executive Vice President & Chief Financial
Officer Date:   March 6, 2012 EDWARD M. KRELL

Signature:  

 

Date: March 6, 2012

 

Exhibit -6

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Exhibit C

2012 TIME VESTED RESTRICTED SHARE AWARD AGREEMENT

RESTRICTED STOCK AWARD AGREEMENT

UNDER THE AMENDED AND RESTATED

DESTINATION MATERNITY CORPORATION

2005 EQUITY INCENTIVE PLAN

EDWARD M. KRELL

THIS RESTRICTED STOCK AWARD AGREEMENT (this “Agreement”) is made by and between
Destination Maternity Corporation, a Delaware corporation, (the “Company”) and
the individual named above (the “Grantee”).

WHEREAS, the Company maintains the Amended and Restated Destination Maternity
Corporation 2005 Equity Incentive Plan (the “Plan”) for the benefit of its
employees, directors, consultants, and other individuals who provide services to
the Company; and

WHEREAS, the Plan permits the grant of Restricted Stock; and

WHEREAS, to compensate the Grantee for his service to the Company and to further
align the Grantee’s financial interests with those of the Company’s other
stockholders, the Board approved this Award of Restricted Stock effective on
March 6, 2012 (the “Effective Date”), subject to the restrictions and on the
terms and conditions contained in the Plan and this Agreement.

NOW, THEREFORE, in consideration of these premises and the agreements set forth
herein, the parties, intending to be legally bound hereby, agree as follows:

1. Award of Restricted Shares. The Company hereby awards the Grantee 18,299
Shares of Restricted Stock, subject to the restrictions and on the terms and
conditions set forth in this Agreement (the “Restricted Shares”). The terms of
the Plan are hereby incorporated into this Agreement by this reference, as
though fully set forth herein. Except as otherwise provided herein, capitalized
terms herein will have the same meaning as defined in the Plan.

2. Vesting of Restricted Shares. The Restricted Shares are subject to forfeiture
to the Company until they become nonforfeitable in accordance with this
Section 2. While subject to forfeiture, the Restricted Shares may not be sold,
pledged, assigned, otherwise encumbered or transferred in any manner, whether
voluntarily or involuntarily by the operation of law.

(a) Vesting. Provided that the Grantee remains continuously employed or engaged
by the Company through the applicable vesting date, the Restricted Shares will
become nonforfeitable as follows:

 

Exhibit -1

--------------------------------------------------------------------------------

i. 25% of the Restricted Shares will become nonforfeitable on November 18, 2012;

ii. An additional 25% of the Restricted Shares will become nonforfeitable on
November 18, 2013;

iii. An additional 25% of the Restricted Shares will become nonforfeitable on
November 18, 2014; and

iv. The final 25% of the Restricted Shares will become nonforfeitable on
November 18, 2015.

The vesting of the Restricted Shares will also be subject to acceleration to the
extent described in that certain Third Amended and Restated Employment Agreement
by and between the Company and Grantee dated March 6, 2012 (the “Employment
Agreement”).

(b) Unvested Shares Forfeited Upon Cessation of Service. Upon any cessation of
the Grantee’s service with the Company (whether initiated by the Company,
Grantee or otherwise): (i) any Restricted Shares that are not then
nonforfeitable will immediately and automatically, without any action on the
part of the Company, be forfeited, and (ii) the Grantee will have no further
rights with respect to those shares.

3. Issuance of Shares.

A. The Company will cause the Restricted Shares to be issued in the Grantee’s
name either by book-entry registration or issuance of a stock certificate or
certificates.

B. While the Restricted Shares remain forfeitable, the Company will cause an
appropriate stop-transfer order to be issued and to remain in effect with
respect to the Restricted Shares. As soon as practicable following the time that
any Restricted Share becomes nonforfeitable (and provided that appropriate
arrangements have been made with the Company for the withholding or payment of
any taxes that may be due with respect to such Share), the Company will cause
that stop-transfer order to be removed. The Company may also condition delivery
of certificates for Restricted Shares upon receipt from the Grantee of any
undertakings that it may determine are appropriate to facilitate compliance with
federal and state securities laws.

C. If any certificate is issued in respect of Restricted Shares, that
certificate will be legended as described in Section 8(b) of the Plan and held
in escrow by the Company’s secretary or his or her designee. In addition, the
Grantee may be required to execute and deliver to the Company a stock power with
respect to those Restricted Shares. At such time as those Restricted Shares
become nonforfeitable, the Company will cause a new certificate to be issued
without that portion of the legend referencing the previously applicable
forfeiture conditions and will cause that new certificate to be delivered to the
Grantee (again, provided that appropriate arrangements have been made with the
Company for the withholding or payment of any taxes that may be due with respect
to such Shares).

 

Exhibit -2

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4. Substitute Property. If, while any of the Restricted Shares remain subject to
forfeiture, there occurs a merger, reclassification, recapitalization, stock
split, stock dividend or other similar event or transaction resulting in new,
substituted or additional securities being issued or delivered to the Grantee by
reason of the Grantee’s ownership of the Restricted Shares, such securities will
constitute “Restricted Shares” for all purposes of this Agreement and any
certificate issued to evidence such securities will immediately be deposited
with the secretary of the Company (or his or her designee) and subject to the
escrow described in Section 3(c), above.

5. Rights of Grantee During Restricted Period. The Grantee will have the right
to vote the Restricted Shares and to receive dividends and distributions with
respect to the Restricted Shares; provided, however, that any cash dividends or
distributions paid in respect of the Restricted Shares while those Shares remain
subject to forfeiture will be delivered to the Grantee only if and when the
Restricted Shares giving rise to such dividends or distributions become
nonforfeitable.

6. Securities Laws. The Board may from time to time impose any conditions on the
Restricted Shares as it deems necessary or advisable to ensure that the
Restricted Shares are issued and resold in compliance with the Securities Act of
1933, as amended.

7. Tax Consequences. The Grantee acknowledges that the Company has not advised
the Grantee regarding the Grantee’s income tax liability in connection with the
grant of or the lapse of forfeiture restrictions on the Restricted Shares. The
Grantee has had the opportunity to review with his or her own tax advisors the
federal, state and local tax consequences of the transactions contemplated by
this Agreement. The Grantee is relying solely on such advisors and not on any
statements or representations of the Company or any of its agents. The Grantee
understands that the Grantee (and not the Company) shall be responsible for the
Grantee’s own tax liability that may arise as a result of the transactions
contemplated by this Agreement.

8. The Plan. This Award of Restricted Shares is subject to, and the Grantee
agrees to be bound by, all of the terms and conditions of the Plan, as such Plan
may be amended from time to time in accordance with the terms thereof. Pursuant
to the Plan, the Board is authorized to adopt rules and regulations not
inconsistent with the Plan as it shall deem appropriate and proper. A copy of
the Plan in its present form is available for inspection during business hours
by the Grantee at the Company’s principal office. All questions of the
interpretation and application of the Plan and the Grantee shall be determined
by the Board and any such determination shall be final, binding and conclusive.

9. Entire Agreement. This Agreement, together with the Plan and the relevant
portions of the Employment Agreement, represent the entire agreement between the
parties hereto relating to the subject matter hereof and merges and supersedes
all prior and contemporaneous discussions, agreements and understandings of
every nature.

10. Tax Withholding. The Company hereby agrees that, at the election of the
Grantee and except as would otherwise violate the terms of any financing
agreement to which the Company is then a party, the minimum required tax
withholding obligations arising in

 

Exhibit -3

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connection with this Award may be settled in nonforfeitable Shares subject to
this Award based on the Fair Market Value of those Shares.

11. Governing Law. This Agreement will be construed in accordance with the laws
of the Commonwealth of Pennsylvania, without regard to the application of the
principles of conflicts of laws.

12. Amendment. Subject to the provisions of the Plan, this Agreement may only be
amended by a writing signed by each of the parties hereto.

13. Execution. This Agreement may be executed, including execution by facsimile
or electronic signature.

[signature page follows]

 

Exhibit -4

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IN WITNESS WHEREOF, this Agreement has been executed by the parties on the 6th
day of March, 2012.

 

DESTINATION MATERNITY CORPORATION By:  

 

Name: Judd P. Tirnauer Title:   Executive Vice President & Chief Financial
Officer Date:   March 6, 2012 EDWARD M. KRELL

Signature:  

 

Date: March 6, 2012

 

Exhibit -5

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Exhibit D

TIME VESTED OPTION AWARD AGREEMENT

NON-QUALIFIED STOCK OPTION AGREEMENT

UNDER THE AMENDED AND RESTATED

DESTINATION MATERNITY CORPORATION

2005 EQUITY INCENTIVE PLAN

Destination Maternity Corporation, a Delaware corporation (the “Company”),
hereby grants to Edward M. Krell (the “Optionee”) an option to purchase a total
of 28,604 shares of Common Stock (the “Shares”) of the Company, at the price and
on the terms set forth herein, and in all respects subject to the terms and
provisions of the Company’s Amended and Restated 2005 Equity Incentive Plan, as
amended from time to time (the “Plan”), which terms and provisions are
incorporated by reference herein. Unless the context herein otherwise requires,
the terms defined in the Plan shall have the same meanings herein.

A. Nature of the Option. This Option is intended to be a non-statutory stock
option and is not intended to be an Incentive Stock Option within the meaning of
Section 422 of the Code, or to otherwise qualify for any special tax benefits to
the Optionee.

B. Date of Grant; Term of Option. This Option was granted on March 6, 2012 (the
“Grant Date”), and it may not be exercised later than the date that is 10 years
after the Grant Date, subject to earlier termination as provided in the Plan.

C. Option Exercise Price. The Option exercise price is $18.20 per Share, the
Fair Market Value on the Grant Date.

D. Exercise of Option.

(1) Right to Exercise. The Option will become vested and exercisable with
respect to 25% of the Shares subject hereto on November 18, 2012 and on each of
the three (3) subsequent anniversaries thereof, provided, in each case, that the
Optionee remains in continuous service with the Company through the applicable
date. In addition, the Option will become fully vested and exercisable
immediately prior to and contingent upon the occurrence of a Change in Control
(as defined in the Plan) provided that the Optionee remains in continuous
service with the Company through the date of that Change in Control. The vesting
of the Option will also be subject to acceleration to the extent described in
that certain Third Amended and Restated Employment Agreement by and between the
Company and Grantee dated March 6, 2012 (the “Employment Agreement”). Upon a
cessation of the Optionee’s service, any then unvested portion of the Option
(determined after giving effect to the preceding sentence) will then terminate
and any then vested portion of the Option will survive and remain exercisable to
the extent provided in Section 7 of the Plan.

(2) Method of Exercise. This Option shall be exercisable by written notice which
shall state the election to exercise this Option, the number of Shares in
respect to which the

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Option is being exercised and such other representations of agreements as to the
Optionee’s investment intent with respect to such Shares as may be required by
the Company hereunder or pursuant to the provision of the Plan. Such written
notice shall be signed by the Optionee and shall be delivered in person or by
certified mail to the Secretary of the Company or such other person as may be
designated by the Company. The written notice shall be accompanied by payment of
the purchase price and the amount of any tax withholding arising in connection
with the exercise of the Option. Payment of the purchase price and tax
withholding shall be by check, by means of a “broker-assisted cashless exercise”
conducted in accordance with procedures permitted by rules or regulations of the
Federal Reserve Board or by such other method of payment authorized by the
Board. The certificate or certificates for the Shares as to which the Option
shall be exercised shall be registered in the name of the Optionee and shall be
legended as required under the Plan and/or applicable law.

(3) Restrictions on Exercise. This Option may not be exercised if the issuance
of the Shares upon such exercise would constitute a violation of any applicable
federal or state securities laws or other laws or regulations. As a condition to
the exercise of this Option, the Company may require the Optionee to make a
representation and warranty to the Company or otherwise enter into any stock
purchase or other agreement as may be required by any applicable law or
regulation or as may otherwise be reasonably requested by the Board.

E. Investment Representations. Unless the Shares have been registered under the
Securities Act of 1933, in connection with acquisition of this Option, the
Optionee represents and warrants as follows:

(1) The Optionee is acquiring this Option, and upon exercise of this Option, he
will be acquiring the Shares for investment in his own account, not as nominee
or agent, and not with a view to, or for resale in connection with any
distribution thereof.

(2) The Optionee has a preexisting business or personal relationship with the
Company or one of its directors, officers or controlling persons and by reason
of his business or financial experience, has, and could be reasonably assumed to
have, the capacity to protect his interest in connection with the acquisition of
this Option and the Shares.

F. Nontransferability of Option. This Option may not be sold, pledged, assigned,
hypothecated, gifted, transferred or disposed or in any manner either
voluntarily or involuntarily by the operation of law, other than by the will or
by the laws of descent or distribution, and may be exercised during the lifetime
of the Optionee only by such Optionee. Subject to the foregoing and the terms of
the Plan, the terms of this Option shall be binding upon the executors,
administrators, heirs, successors and assigns of the Optionee.

G. Continuation of Service. Neither the Plan nor this Option shall confer upon
any Optionee any right to continue in the service of the Company or any of its
subsidiaries or limit in any respect the right of the Company to discharge the
Optionee at any time, with or without cause and with or without notice.

H. Withholding. The Company may withhold from any consideration payable to
Optionee any taxes required to be withheld by federal, state or local law as a
result of the grant or

 

-2-

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exercise of this Option or the sale or other disposition of the Shares issued
upon exercise of this Option. If the amount of any consideration payable to the
Optionee is insufficient to pay such taxes or if no consideration is payable to
the Optionee, upon request of the Company, the Optionee (or such other person
entitled to exercise the Option pursuant to Section 7 of the Plan) shall pay to
the Company an amount sufficient for the Company to satisfy any federal, state
or local tax withholding requirements it may incur, as a result of the grant or
exercise of this Option or the sale of or other disposition of the Shares issued
upon exercise of this Option.

I. The Plan. This Option is subject to, and the Optionee agrees to be bound by,
all of the terms and conditions of the Plan as such Plan may be amended from
time to time in accordance with the terms thereof. Pursuant to the Plan, the
Board is authorized to adopt rules and regulations not inconsistent with the
Plan as it shall deem appropriate and proper. A copy of the Plan in its present
form is available for inspection during business hours by the Optionee or the
persons entitled to exercise this Option at the Company’s principal office. All
questions of the interpretation and application of the Plan and the Option shall
be determined by the Board, whose determination shall be final, binding and
conclusive.

J. Entire Agreement. This Agreement, together with the Plan and Employment
Agreement, represents the entire agreement between the parties hereto relating
to the subject matter hereof, and merges and supersedes all prior and
contemporaneous discussions, agreements and understandings of every nature.

K. Governing Law. This Agreement will be construed in accordance with the laws
of the Commonwealth of Pennsylvania, without regard to the application of the
principles of conflicts of laws.

L. Amendment. Subject to the provisions of the Plan, this Agreement may only be
amended by a writing signed by each of the parties hereto.

M. Execution. This Agreement may be executed, including execution by facsimile
signature, in one or more counterparts, each of which will be deemed an
original, and all of which together shall be deemed to be one and the same
instrument.

[Signature page follows.]

 

-3-

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IN WITNESS WHEREOF, this Agreement has been executed by the parties on the 6th
day of March, 2012.

 

DESTINATION MATERNITY CORPORATION By:  

 

Name: Judd P. Tirnauer Title:   Executive Vice President & Chief Financial
Officer Date:   March 6, 2012 EDWARD M. KRELL

Signature:  

 

Date: March 6, 2012

 

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