**Exhibit 10.1**

 

**AMENDMENT TO**

**AMENDED AND RESTATEDEMPLOYMENT AGREEMENT**

 

THIS AMENDMENT is made as of December 29, 2005 by and between MOTHERSWORK, INC. (the “Company”) and DAN W. MATTHIAS (“Executive”).

 

WHEREAS,the Company and Executive are parties to an Amended and Restated EmploymentAgreement dated as of April 28, 2005 (the “Employment Agreement”); and

 

WHEREAS,Section 17 of the Employment Agreement provides that the Company and Executivemay amend the Employment Agreement by agreement in writing; and

 

WHEREAS,the Company has requested that Executive agree to certain changes with respectto the treatment of stock options held upon cessation of employment or upon theoccurrence of certain transactions.

 

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

 

1.             Section 11.2 isdeleted in its entirety and replaced with the following:

 

11.2         Treatment of StockOptions Held at Termination.

 

(a)           In the event of atermination of Employee’s employment hereunder pursuant to Sections 9.3 or 9.4,at Employee’s election given by written notice to the Company within 30 days ofsuch termination (provided that, if necessary, such period will be extended toterminate one day after the Employee could effect the transaction withoutincurring liability under section 16(b) of the Securities Exchange Act of 1934or otherwise violating applicable securities laws or insider trading policies),the Company shall be obligated to repurchase all vested stock options issued bythe Company and then held by Employee in exchange for a cash payment equal to(i) the number of shares of Common Stock subject to such options multiplied bythe Fair Market Value as of the date of such election, less (ii) the aggregateexercise price of such options (the “Aggregate Repurchase Price”).  Promptly following the Company’s physicalreceipt of such election, the Company will pay in immediately available fundsthe Aggregate Repurchase Price to Employee. As of the date of such election, Employee will cease to have anyinterest in or rights with 

 

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respect to those options, other than a right to receive paymenttherefor in accordance with the preceding sentence.

 

(b)           In the event of atermination of Employee’s employment hereunder pursuant to Section 9.6, atEmployee’s election given by written notice within the period specified below,the Company will repurchase from Employee up to all nonforfeitable shares ofCommon Stock acquired upon exercise of stock options issued by the Company, tothe extent that such stock options were held by the Employee at the time ofthat termination.  Such election may bemade by the Employee within the 30 day period beginning six months and one dayfollowing the acquisition of those shares upon the exercise of such stockoptions (or, in the event of multiple exercises, six months and one dayfollowing the last of such exercises); *provided,however*, that if necessary, such period will be extended toterminate one day after the Employee could elect such repurchase withoutincurring liability under section 16(b) of the Securities Exchange Act of 1934or otherwise violating applicable securities laws or insider trading policies.  Such written notice will be accompanied byall certificates representing the shares to be repurchased and suchrepresentations and warranties by Employee as may be reasonably requested bythe Company regarding Employee’s ownership of and ability to convey thoseshares, including a representation that such shares are free and clear of allliens, claims or encumbrances.  Promptlyfollowing the date that such election, certificates and representations andwarranties are physically received by the Company (the “Election Date”),the Company will pay to Employee in immediately available funds the Fair MarketValue of those shares as of the Election Date. As of the Election Date, Employee will cease to have any interest in orrights with respect to those shares, other than a right to receive paymenttherefor in accordance with the preceding sentence.

 

2.             The following newSection 24 is added:

 

24.           Cashout of StockOptions in Connection with Certain Transactions.  With respect to stock options granted toEmployee under the Company’s 1987 Stock Option Plan (whether as originally ineffect or as subsequently amended and restated), Employee agrees that Section15(c) of that plan will not apply automatically and will instead apply only tothe extent determined by the Board (or by the committee of the Board authorizedto administer the plan on behalf of the Board) in its discretion.

 

3.             The EmploymentAgreement, as amended by the foregoing changes, is hereby ratified andconfirmed in all respects.

 

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IN WITNESS WHEREOF, the Company has caused this Amendment to beexecuted by its duly authorized officer and Executive has executed thisAmendment, in each case on the date first written above.

 
|   | **MOTHERS WORK****, INC.** |                                                |
|--------|----------------------------|-----------------------------------------------------|
|   |                       |                                                |
|   | By:                        | /s/ Edward M. Krell                                 |   |
|   |                       |                                                |
|   | Name & Title:          | Executive Vice President - Chief Financial  Officer |   |
|   |                       |                                                |
|   |                       |                                                |
|   | DAN W. MATTHIAS            |                                                |
|   |                       |                                                |
|   | /s/ Dan W.  Matthias       |                                                |
|        |                            |                                                     |  |  |

 

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