Exhibit 10.1

 

AMENDMENT TO

SECOND AMENDED AND RESTATED EMPLOYMENT AGREEMENT

 

THIS AMENDMENT is made effective on October 1, 2008 by and between MOTHERS WORK,
INC. (the “Company”) and EDWARD M. KRELL (“Employee”).

 

WHEREAS, the Company and Employee are parties to a Second Amended and Restated
Employment Agreement dated as of May 15, 2007 (the “Employment Agreement”); and

 

WHEREAS, Section 13 of the Employment Agreement provides that the Company and
Employee may amend the Employment Agreement by agreement in writing; and

 

WHEREAS, the Company desires to appoint Employee to the position of Chief
Executive Officer, and the Employee desires to continue employment by the
Company in such position, on the terms and conditions set forth in the
Employment Agreement as hereby amended.

 

NOW, THEREFORE, in consideration of these premises and intending to be legally
bound hereby, the Employment Agreement is hereby amended as follows, effective
as of the date first above written:

 

1.             The “whereas” clauses in the preamble to the Employment Agreement
are deleted in their entirety and replaced with the following:

 

WHEREAS, the Company and Employee are parties to an Amended and Restated
Employment Agreement, dated April 26, 2005 pursuant to which Employee served as
the Executive Vice President—Chief Financial Officer of the Company (the
“Existing Employment Agreement”);

 

WHEREAS, the Existing Employment Agreement was amended and restated in its
entirety by this Agreement to reflect Employee’s promotion to the position of
Chief Operating Officer; and

 

WHEREAS, this Agreement has been amended, effective October 1, 2008, to reflect
Employee’s promotion to the position of Chief Executive Officer.

 

2.             Section 1 is amended in its entirety to read as follows:

 

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

 

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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.

 

3.             Paragraph 2(C) and 2(H) are deleted in their entirety. Existing
paragraphs 2(D), 2(E), 2(F), 2(G) and 2(I), and all references to any of those
paragraphs, are renumbered 2(C), 2(D), 2(E), 2(F) and 2(G), respectively.

 

4.             The first sentence of existing paragraph 2(G)(2) (now paragraph
2(F)(2), as revised pursuant to this Amendment) is amended to read as follows:

 

“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);
or (iii) a relocation of Employee’s principal worksite more than 50 miles.

 

5.             Paragraph 3 is renumbered paragraph 3(A) and is amended in its
entirety to read as follows:

 

If the termination giving rise to the payments described in paragraph 2(B),
2(C) and 2(G) 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 additional tax under Section 409A of the Code to payments due
to Employee upon or following his Separation from Service, then

 

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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.

 

6.             A new paragraph 3(B) is added to read as follows:

 

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.

 

7.             Paragraph 4(C)(1) is amended by adding the following sentence
immediately after the first sentence of that paragraph:

 

Any additional payment made pursuant to this paragraph 4(C)(1) shall be paid by
the Company at the time the applicable Parachute Excise Tax is required to be
withheld by the Company and remitted to the Internal Revenue Service or 5
business days before it is required to be paid by the Employee.

 

8.             Paragraph 4(C)(3) is amended by adding the following sentence to
the beginning of such paragraph:

 

If a reduction to the Total Payments is required pursuant to paragraph 4(C)(2),
such reduction shall occur to the payments, vesting or other benefits
constituting the Total Payments in the

 

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order that results in the greatest economic present value of all Total Payments
actually made to Employee.

 

9.             Paragraph 6(A) is amended by revising the Base Salary amount from
$525,000 to $650,000.

 

10.           Paragraph 6(B) is amended in its entirety to read as follows:

 

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 Mothers Work, Inc.
Management Incentive Plan, based on the Company’s achievement in the applicable
fiscal year of corporate and/or individual performance goals approved by the
Board or its Compensation Committee.

 

11.           Paragraphs 6(D)(2) and 6(D)(3) are amended in their entirety to
read as follows:

 

(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.

 

12.           The Employment Agreement, as amended by the foregoing changes, is
hereby ratified and confirmed in all respects.

 

[signature page follows]

 

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IN WITNESS WHEREOF, the Company has caused this Amendment to be executed by its
duly authorized officer and Employee has executed this Amendment, in each case
on the date(s) specified below.

 

 

MOTHERS WORK, INC.

 

 

 

By:

/s/ Rebecca C. Matthias

 

 

 

Name & Title:

Rebecca C. Matthias

 

 

President and Chief Creative Officer

 

 

 

Date:

9/26/08

 

 

 

 

 

EDWARD M. KRELL

 

 

 

/s/ Edward M. Krell

 

 

 

Date:

9/26/08

 

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