EXHIBIT 10.1

SEPARATION, TRANSITION AND RELEASE AGREEMENT

THIS SEPARATION, TRANSITION AND RELEASE AGREEMENT (this “Agreement”) is made as
of the 30th day of July, 2007 by and between David Mangini (the “Individual”)
and Mothers Work, Inc. (the “Company”).

WHEREAS, Individual and the Company wish to mutually terminate Individual’s
employment with the Company on the Termination Date (defined below); and

WHEREAS, Company and Individual have each agreed that Individual will be engaged
by the Company as an independent contractor from the Termination Date through
the one (1) year anniversary of the Termination Date (the “Transition Period End
Date”) to provide consulting services to the Company (the “Transition Period”);

WHEREAS, IN EXCHANGE FOR HIS PERFORMANCE OF CONSULTING SERVICES THROUGH THE
TRANSITION PERIOD AND SUBJECT TO THE EXECUTION OF THIS AGREEMENT, THE COMPANY
HAS AGREED TO PROVIDE THE INDIVIDUAL WITH CERTAIN RIGHTS AND BENEFITS.

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 Status.

(a)       Termination Date.  Individual agrees that he will continue to provide
services to the Company as an employee in his current position and base salary
until such time as Company notifies Individual that it has selected a date (the
“Termination Date”) on and after which Individual will no longer be employed by
the Company.  The Termination Date may be selected by Company in its sole and
absolute discretion for any reason or with no reason at any time.

(b)       Resignation. Upon the Termination Date, Individual will resign
immediately as an officer and employee of the Company and as an officer,
employee and/or director of any of the Company’s affiliates (it being understood
that no further action or writing other than this Agreement is required).

(c)       No Further Compensation. Individual’s compensation arrangements with
the Company and the Company’s obligation to pay Individual any amounts incident
to Individual’s employment (including, without limitation, base salary and
bonus) will cease on the Termination Date.  Individual agrees that no bonus has
accrued, is payable or will become payable to Individual incident to services
provided for the Company after the Termination Date.

(d)       Vacation Days. Any of Individual’s vacation hours that remain accrued
and unused as of the Termination Date will be cashed out (based on Individual’s
full, current rate of base salary).  The parties agree that Individual currently
has 120 vacation hours.

(e)       No Further Benefits. After the Termination Date, Individual is not
eligible to participate in any of the employee benefit or similar programs of
Company except for COBRA.  Company shall not be liable to Individual as an
employer for any claims or causes of action arising out of or relating to
services provided after the Termination Date.

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(f)        COBRA.  The Company agrees to pay 100% of Individual’s premiums for
COBRA medical and dental insurance coverage for the one (1) year period
beginning on the Termination Date and ending on the first anniversary of the
Termination Date.

(g)       Restricted Stock.  All unvested shares of restricted stock granted to
Individual by Company which are held by Individual on the Termination Date will
be and are hereby forfeited by Individual in accordance with the plan documents
on such Termination Date.

(h)       Stock Options.  Subject to applicable plan documents, Individual shall
have ninety (90) days from the Termination Date to exercise any vested stock
options.  Stock options unvested as of the Termination Date are herby forfeited
by the Individual in accordance with the plan documents.

2.             Transition Period: Consulting Services.

(a)       Duties.

1.             During the Transition Period, Individual will be available to
perform, and perform at the direction of the Company, full-time consulting
services to the Company as prescribed by the Company from time to time.   Such
functions are anticipated to include:  (i) fashion consulting and certain other
non-management tasks consistent with the full-time services required to be
provided by Individual prior to the Termination Date, (ii) assistance with a
successor process and related transition, and (iii) such other matters as
reasonably requested by the Company.  Individual will perform such services
on-site at Company’s corporate headquarters location only if so requested by
Company.

2.             If Individual is unable or unwilling to be available to provide
full-time services to the Company as required herein (whether due to
Individual’s part or full-time employment by a third party, any other provision
of services to a third party or parties, or for any other reason), the
obligations of each of the parties regarding the consulting services shall cease
immediately, including, without limitation, the Company’s duty to compensate
Individual per Section 2(b) of this Agreement.  Individual agrees that he will,
upon request by the Company, provide to the Company copies of his true and
correct filed income tax returns, W-2s, 1099s and any other reasonable
documentation and assurances evidencing that Individual maintained his full-time
availability during the Transition Period as required above.  If after Company’s
review of such documentation, Company reasonably concludes that Individual
failed to maintain the full-time availability as required by this Agreement,
Individual will, on demand, pay back to Company the portion of the gross
compensation paid to Individual under Section 2(b) which is attributable to the
period of time during the Transition Period which Individual was not available
to provide full-time services as required by this Agreement.

(b)       Compensation.  Subject to his continued full-time availability and
service during and through the end of the Transition Period as required by and
subject to Section 2(a) above, Individual will be paid a total amount of
$502,745 which such amount will be earned and payable in equal installments on a
bi-weekly schedule during the Transition Period.

(c)       Independent Contractor Status.  Individual acknowledges that after the
Termination Date Individual is an independent contractor, and will be
responsible for the direction of Individual’s own work.  Individual thus will be
responsible for payment of all income, social security and other
employment-related taxes pertaining to Individual, and Company will have

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no such responsibilities.  Individual will indemnify Company and will hold
Company harmless from and against any and all claims, losses, liabilities,
damages and costs (including reasonable attorneys’ fees and other costs of
litigation) that may arise out of any such taxes and related items.

(d)       Termination of Consulting Services for Breach.  In addition to the
automatic termination provided in Section 2(a) above, Company may terminate the
services provided by Individual after the Termination Date at any time for
“breach.”  For this purpose, “breach” means (i) Individual’s failure or
inability to satisfactorily perform the transition services reasonably requested
by Company, (ii) any disruption of the Company’s operations caused by
Individual, or (iii) Individual’s material breach of any provision of this
Agreement or other agreement with the Company.  If the Company terminates
Individual’s provision of consulting services for “breach,” then notwithstanding
any other provision of this Agreement, the Company’s obligations to Individual
will be limited solely to the payment of accrued and unpaid amounts accruing
prior to the effectiveness of such termination.

(e)       Release.  In consideration of Individual’s continued employment
through the Termination Date and the rights and benefits afforded hereunder,
Individual agrees to execute a release agreement substantially in the form
attached hereto as Exhibit A (the “Release”) prior to the 22nd day following the
Termination Date and to not revoke such release.  Receipt of a fully executed
copy of the Release is and will be a condition precedent for Company’s
obligations to retain Individual to provide any consulting services under this
Agreement.

3.             Confidential Information. “Confidential Information” means
information which the Company regards as confidential or proprietary and which
the Individual learned or developed during or related to his employment,
including, but not limited to, information relating to:

a.             the Company’s products, suppliers, strategic partners, 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.

The term “Confidential Information” will also include, without limitation, any
and all of the foregoing items as they relate to the Company’s Futuretrust®
Mastercard and/or 529 College Savings Plan business, Futuretrust Family
Financial Center™ business and any ancillary past, current or future business,
programs, services, products, business plans, marketing plans, strategic
business relationships, or other information of the Company relating to, or
offered in connection with, the foregoing.

Individual assigns to Company any rights Individual may have in any Confidential
Information.  Individual shall not disclose any Confidential Information to any
third party or use any Confidential Information for any purposes.

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4.             Surrender of Materials. The Individual hereby agrees to deliver
to the Company promptly at the end of the Transition Period or earlier at the
Company’s request, all documents, copies thereof and other materials in the
Individual’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 the same made by or for
the Individual or acquired by the Individual), and thereafter to promptly return
documents and copies thereof and other material in the Individual’s possession. 
The Individual will be responsible for the value of all Company or customer
property that is not timely returned.  Individual authorizes the Company to
deduct the fair market value of such property from any monies owed to
Individual.

5.             Disclosure of Information and Solicitation of Employees;
Non-Compete. The Individual acknowledges that the Company has developed and
maintains at great expense, a valuable supplier network, supplier contacts, many
of which are longstanding, product designs, and other information of the type
described in paragraph 3 of this Agreement, and that Individual was given and
may be provided further access to 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 Individual agrees that during his employment, through
the Transition Period and for twenty-four (24) months after the Transition
Period End Date the Individual will not directly or indirectly:

(i)                                   on Individual’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.

(ii)                                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
Individual’s name to be used in connection with, any:  (a) entity offering for
sale or contemplating offering for sale any Conflicting Product, or (b) any
entity which prior to such Transition Period End Date was contacted by or the
responsibility of the Individual or any person under the Individual’s
supervision or direction; this includes applicable agents and suppliers, or (c)
Competing Business, or (d) any entity which would require by necessity use of
Confidential Information.

The term “Conflicting Product” shall mean any product, process or service which
is the same as, similar to, or in any manner competitive with any Company
product (which includes third-party products that are distributed by Company),
process, or service.  Conflicting Product includes, but is 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 or sale of any maternity or nursing apparel or related
accessories, or in any other business engaged in by the Company at the time of
Individual’s termination of employment from the Company within:  (x) a state or
commonwealth of the United States or the

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District of Columbia, or (y) any foreign country, in which the Company has
engaged in any such business within the prior year or has undertaken
preparations to engage.

(b)       During his employment, through the Transition Period and for
twenty-four (24) months after the Transition Period End Date, the Individual
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 periods
Individual will not directly or indirectly, on Individual’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 Individual from
any such breach without the necessity of proving actual damages, and the
Individual 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.

6.             Release, Confidentiality and Non-Disparagement.

(a)       Individual, for and in consideration of the undertakings of the
Company set forth herein, and intending to be legally bound, DOES HEREBY RELEASE
AND FOREVER DISCHARGE the Company, together with its parents, subsidiaries and
affiliates, and its officers, directors, shareholders in their capacity as such,
employees, agents, predecessors, partners, successors, assigns, heirs, executors
and administrators (hereinafter referred to collectively as “Releasees”), of and
from all manner of actions and causes of actions, suits, debts, claims and
demands whatsoever in law or in equity, which Individual ever had, now has, or
which his heirs, executors or administrators hereafter may have by reason of any
matter, cause or thing whatsoever, from the beginning of his employment with the
Company until the present, and particularly, but without limitation of the
foregoing general terms, any claims concerning or relating in any way to
Individual’s employment relationship or the termination of his employment
relationship with the Company, including, but not limited to, any claims which
have been asserted or could have been asserted against the Releasees, including
any claims arising under the Age Discrimination in Employment Act, 29 U.S.C. §
621 et seq., as amended, Title VII of the Civil Rights Act of 1964, 42 U.S.C. §
2000e et seq., as amended, the Americans with Disabilities Act, 42 U.S.C. §
12101 et seq., the Employee Retirement Income Security Act of 1974, 29 U.S.C. §
301 et seq., as amended, the Pennsylvania Human Relations Act, 43 Pa. Stat. Ann.
§ 951 et seq., the common law of the Commonwealth of Pennsylvania, and any and
all other federal, state or local laws, and any common law claims now or
hereafter recognized, as well as all claims for attorneys’ fees and costs.  This
Release specifically includes claims that may not be known as of the date
hereof.  However, it is specifically understood and agreed that this Release
does not include any claims by the Individual against the Company for a breach
of the terms and conditions of the Agreement by the Company.

(b)       Individual represents and covenants that he has not communicated or
disclosed, nor will he communicate or disclose, the fact or the terms of this
Agreement, the settlement of any claims as described herein, or the fact or
terms of any offers of settlement, to any persons other than his immediate
family, his attorney, or his financial advisor, who will be informed of and will
agree to respect the confidential nature of this Agreement.  Individual further
agrees that if he is asked about the resolution of, or the facts underlying, the
Agreement by any third party, he will respond by stating only

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that the matter has been resolved.  Individual agrees to keep all facts relating
or referring to this Agreement confidential.  Individual further agrees that, if
served with a subpoena or order that would compel the disclosure of this
Agreement, he will notify the Company, both telephonically and in writing, and
provide a copy of the subpoena or order to the attention of General Counsel,
Mothers Work, Inc., 456 North Fifth Street, Philadelphia, PA 19123, immediately,
but in no event later than three (3) business days after being so served, for
the purpose of providing the opportunity to obtain a protective order against
testimony regarding or production of this Agreement.

7.             Successors and Assigns. Individual may not assign any right or
duty hereunder.  The Company may assign its rights hereunder to any affiliate or
any successor to its business by means of liquidation, dissolution, merger,
consolidation, transfer of assets or otherwise, provided that such successor
also assumes the obligations of the Company hereunder.

8.             Applicable Law. This Agreement and the obligations of the parties
shall be construed, interpreted and enforced in accordance with the laws of the
Commonwealth of Pennsylvania, without regard to the application of the
principles of conflicts or choice of laws.

9.             Entire Agreement. This Agreement, together with the other
documents and agreements referenced herein, contains the entire agreement and
understanding of the parties hereto relating to the matters herein described,
and merges and supersedes all prior and contemporaneous discussions, agreements
and understandings of every nature regarding these matters.  This Agreement may
only be modified or amended in a writing signed by both parties.

10.           Acknowledgements. Individual hereby certifies and acknowledges as
follows:

(a)       that he has no entitlement under any severance or similar arrangement
maintained by the Company or any of its affiliates, and that except as otherwise
provided specifically in this Agreement, neither the Company nor any of its
affiliates have or will have any other liability or obligation to the
Individual;

(b)       that the Releasees are intended third-party beneficiaries of this
Agreement and that this Agreement is not, and shall not be construed to be, an
admission of any violation of any federal, state or local statute, ordinance or
regulation, or of any duty owed by Releasees to Individual;

(c)       that he has read the terms of this Agreement and that he understands
its terms and effects, including the fact that he has agreed to release and
forever discharge the Releasees from any legal or administrative claims arising
out of his employment relationship with the Company;

(d)       that he has signed this Agreement voluntarily and knowingly in
exchange for the consideration described herein, which he acknowledges is
adequate and satisfactory to him and which he acknowledges is in addition to any
other benefits to which he is otherwise entitled;

(e)       that he has been advised by the Releasees through this document to
consult with an attorney concerning this Agreement prior to signing this
Agreement, and that he has done so;

(f)        that he is not prevented 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 him for personal
relief in connection with such a charge or investigation will be barred.

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(g)       that he does not waive rights or claims that may arise after the date
this Agreement is executed;

(h)       that the Releasees provided him with a period of at least twenty-one
(21) days in which to consider this Agreement, and that he has signed on the
date indicated below after concluding that this Agreement is satisfactory;

(i)        that he has been advised by the Company that he may revoke this
Agreement within seven (7) days after execution, that this Agreement shall not
become effective until such revocation period expires, and that if he revokes
this Agreement, the Company will have no obligations hereunder; and

(j)        that neither the Releasees nor any of their agents, representatives,
employees, or attorneys have made any representations to him concerning the
terms or effects of this Agreement.

IN WITNESS WHEREOF, and intending to be legally bound hereby, the parties have
executed this Agreement in each case on the date indicated below, respectively.

MOTHERS WORK, INC.

 

DAVID MANGINI

 

 

 

 

 

 

/s/ Dan Matthias

 

 

/s/ David Mangini

 

Dan Matthias, CEO

 

David Mangini

Dated:

July 30, 2007

 

 

Dated:

July 27, 2007

 

 

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Exhibit A

GENERAL RELEASE

THIS GENERAL RELEASE is for and in consideration of payments, rights and
benefits provided to David Mangini (the “EMPLOYEE”) in connection with that
certain Separation, Transition and Release Agreement dated July 30, 2007 by and
between Mothers Work, Inc. (the “COMPANY”) and the Employee (the “SEPARATION
AGREEMENT”) and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged.

1.             Employee, intending to be legally bound, does hereby RELEASE AND
FOREVER DISCHARGE the Company, together with its parents, subsidiaries and
affiliates, and its officers, directors, shareholders in their capacity as such,
employees, agents, predecessors, partners, successors, assigns, heirs, executors
and administrators (hereinafter referred to collectively as “RELEASEES”), of and
from all manner of actions and causes of actions, suits, debts, claims and
demands whatsoever in law or in equity, which Employee ever had, now has, or
which his heirs, executors or administrators hereafter may have by reason of any
matter, cause or thing whatsoever, from the beginning of his employment with the
Company until the present, and particularly, but without limitation of the
foregoing general terms, any claims concerning or relating in any way to
Employee’s employment relationship or the termination of his employment
relationship with the Company, including, but not limited to, any claims which
have been asserted or could have been asserted against the Releasees, including
any claims arising under the Age Discrimination in Employment Act, 29 U.S.C. §
621 et seq., as amended, Title VII of the Civil Rights Act of 1964, 42 U.S.C. §
2000e et seq., as amended, the Americans with Disabilities Act, 42 U.S.C. §
12101 et seq., the Employee Retirement Income Security Act of 1974, 29 U.S.C. §
301 et seq., as amended, the Pennsylvania Human Relations Act, 43 Pa. Stat. Ann.
§ 951 et seq., the common law of the Commonwealth of Pennsylvania, and any and
all other federal, state or local laws, and any common law claims now or
hereafter recognized, as well as all claims for attorneys’ fees and costs.  This
Release specifically includes claims that may not be known as of the date
hereof.

2.             Employee represents and covenants that he has not communicated or
disclosed, nor will he communicate or disclose, the fact or the terms of this
Release or the Separation Agreement to any persons other than his immediate
family, his attorney, or his financial advisor, who will be informed of and will
agree to respect the confidential nature of this Release.  Employee further
agrees that if he is asked about the resolution of, or the facts underlying, the
Release by any third party, he will respond by stating only that the matter has
been resolved.  Employee agrees to keep all facts relating or referring to this
Release confidential.  Employee further agrees that, if served with a subpoena
or order that would compel the disclosure of this Release, he will notify the
Company, both telephonically and in writing, and provide a copy of the subpoena
or order to the attention of Ed Krell, Mothers Work, Inc., 456 North Fifth
Street, Philadelphia, PA 19123, immediately, but in no event later than three
(3) business days after being so served, for the purpose of providing the
opportunity to obtain a protective order against testimony regarding or
production of this Release.

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3.             Employee agrees that he will not disparage the Company or engage
in any activity which interferes with its existing or prospective business
relationships or economic prospects.

4.             Employee further agrees to be available to and assist Company in
effectively addressing any business issues that he dealt with or was familiar
with during Employee’s employment with Company.

5.             Employee hereby agrees and acknowledges that his employment
relationship with Releasees has been permanently and irrevocably severed, and
that Releasees do not have any obligation, contractual or otherwise, to hire,
rehire, or re-employ him in the future.  Furthermore, Employee agrees not to
seek employment with Releasees at any time in the future.

6.             Employee agrees and acknowledges that the Releasees are intended
third party beneficiaries of this Agreement and that this Release is not, and
shall not be construed to be, an admission of any violation of any federal,
state or local statute, ordinance or regulation, or of any duty owed by
Releasees to Employee.

7.             Employee agrees and acknowledges that he has no entitlement under
any severance or similar arrangement maintained by the Company or any of its
affiliates, and that except as otherwise provided specifically in the Separation
Agreement, neither the Company nor any of its affiliates have or will have any
other liability or obligation to the Employee.

8.             This Release shall be construed, interpreted and enforced in
accordance with the laws of the Commonwealth of Pennsylvania, without regard to
the application of the principles of conflicts or choice of laws.

9.             Employee hereby certifies and acknowledges as follows:

(i)            that he has read the terms of this Release, and that he
understands its terms and effects, including the fact that he has agreed to
RELEASE AND FOREVER DISCHARGE Releasees from any legal or administrative claims
arising out of his employment relationship with the Company and the termination
of that employment relationship;

(ii)           that he has signed this Release voluntarily and knowingly in
exchange for valuable consideration to which he is not otherwise entitled;

(iii)          that he has been advised by Releasees through this document to
consult with an attorney concerning this Release prior to signing this Release,
and that he has done so;

(iv)          that he does not waive rights or claims that may arise after the
date this Release is executed;

(v)           that Releasees provided him with a period of at least twenty one
(21) days in which to consider this Release, and that he has signed on the date
indicated below after concluding that this Release is satisfactory; and

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(vi)          that he has been advised by Releasees that he may revoke this
Release within seven (7) days after execution, that this Release shall not
become effective until such revocation period expires, and that if he revokes
this Release, the Releasees will have no further obligation under the Separation
Agreement; and

(vii)         that neither Releasees nor any of their agents, representatives,
employees, or attorneys, have made any representations to him concerning the
terms or effects of this Release.

IN WITNESS WHEREOF, Employee has executed this Agreement on the date indicated
below.

 

David Mangini

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dated:

 

 

 

 

 

 

 

 

COMMONWEALTH OF PENNSYLVANIA

 

:

 

 

: SS.

COUNTY OF PHILADELPHIA

 

:

 

On this       day of           , 2007, before me personally appeared David
Mangini, known to me or satisfactorily proven to be the person described in and
who executed this General Release, and acknowledged that he executed the same as
his free act and deed.

IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal.

 

 

 

 Notary Public

 

My Commission Expires:

 

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