Exhibit 10.1


 


AMENDMENT TO


SECOND AMENDED AND RESTATED EMPLOYMENT
AGREEMENT


 


THIS AMENDMENT is made by and
between DESTINATION MATERNITY CORPORATION (formerly known as MOTHERS WORK,
INC.) (the “Company”) and REBECCA C. MATTHIAS (“Employee”).


 


WHEREAS, the Company and Employee
are parties to a Second Amended and Restated Employment Agreement dated March 2,
2007 (the “Employment Agreement”); and


 


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


 


WHEREAS, the parties desire to
amend the Employment Agreement to ensure compliance with, or exemption from,
the provisions of the Section 409A of the Internal Revenue Code of 1986,
as amended, and its implementing regulations and guidance.


 


NOW, THEREFORE, in
consideration of these premises and intending to be legally bound hereby, the
Employment Agreement is hereby amended as follows, effective on the latest date
signed by either party.


 


1.             Section 9.3(c)(i) is
restated as follows:


 


(i)            a lump sum in cash
to be paid by the Company to Employee in an amount equal to (A) three
times (1) Employee’s Base Salary as in effect on the date of the event
giving rise to such payment (the “Severance Event”)(taking into account any reduction
occasioned by Employee’s change to part-time status, as described above in Section 2.2),
plus (2) the target amount of Employee’s Cash Bonus for the year of the
Severance Event (again, taking into account any reduction occasioned by
Employee’s change to part-time status, as described above in Section 2.2),
and (B) any accrued vacation pay, to the extent not theretofore paid;


 


2.             Section 9.6(e)(i) is
amended by adding the following sentence to the end thereof:


 


Any additional payment made pursuant to this section will be paid at
the time the Parachute Excise Tax is required to be withheld by the Company and
remitted to the Internal Revenue Service or, if the Company is not required to
withhold such tax, on the 5th business day preceding the date it is required to
be remitted by the Employee.


 

















 


3.             Section 9.6(e)(iii) is
amended by adding the following sentence to the beginning thereof:


 


If a reduction to the Total Payments is required pursuant to Section 9.6(e)(ii),
such reduction shall be made to the payments, vesting or other benefits
constituting the Total Payments in the following order: (A) stock options
or stock appreciation rights, (B) restricted stock or restricted stock
units, (C) non-cash fringe benefits, (D) cash severance payments, (E) supplemental
pension rights, and (F) other rights, payments or benefits.  If multiple rights, payments or benefits are
contained in the same category, each such right, payment or benefit will be
reduced ratably, based on the proportion that the value of such right, payment
or benefit bears to the total value of all the rights, payments or benefits
contained in the same category (value, for this purpose, being the amount determined
for purposes of calculations under Section 280G of the Code).


 


4.             Section 9.8
is restated as follows:


 


Payment and Release.  Notwithstanding any other provision of this
Agreement, the payments and benefits contemplated by Sections 9.1, 9.3, 9.4,
9.5, 9.6 and 9.7 are conditioned on, and made in consideration for, the
execution and delivery by Employee (or, in the case of Section 9.1, by the
executor, legal representative or administrator of Employee’s estate) of a
general and mutual release of claims in substantially the form attached hereto
as Exhibit I within 45 days following the cessation of Employee’s
employment (the “Release”).  The payments
and benefits contemplated by those sections will be paid or provided (or will
commence to be paid or provided) within 60 days following cessation of Employee’s
employment (subject to any delay required by Section 24), provided the
Release has been timely delivered and has not been revoked.


 


5.             Section 10
is restated as follows:


 


In the event Employee’s employment hereunder is terminated pursuant to
Sections 9.3, 9.4 or 9.6, the Company shall, (a) pay for full outplacement
services for Employee for up to one year following termination of employment,
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, and (b) provide
to Employee, for up to one year following termination of employment, office
space and secretarial support to assist Employee in searching for and obtaining
a new position, the location of such office space to be reasonably determined
by Employee.


 


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6.             Section 24 is
renumbered Section 24.1 and is restated as follows:


 


If the termination giving rise to the
payments described in Sections 9.3, 9.4, 9.6(c), 9.7(b) 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
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.


 


7.             The following new Section 24.2
is added:


 


Notwithstanding anything to the contrary contained
in this Agreement or otherwise, to the extent an expense, reimbursement or
in-kind benefit due to Employee constitutes a “deferral of compensation” within
the meaning of Section 409A of the Code: (a) 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, (b) reimbursement of expenses will be made on or before the
last day of the calendar year following the calendar year in which the
applicable expense is incurred, and (c) the right to payment,
reimbursement or in-kind benefits may not be liquidated or exchanged for any
other benefit.


 


[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 on the date(s) specified below, respectively.


 


	
   

  	
  DESTINATION MATERNITY CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Edward
  M. Krell

  
	
   

  	
   

  
	
   

  	
  Name &
  Title: Edward M. Krell, Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
  Date:

  	
  December 18,
  2008

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  REBECCA
  C. MATTHIAS

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Rebecca C. Matthias

  
	
   

  	
   

  
	
   

  	
  Date:

  	
  December 18,
  2008

  
				



 


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