Exhibit 10.83


 


EMPLOYMENT AGREEMENT


 


THIS EMPLOYMENT AGREEMENT,
dated as of December 11, 2009 (the “Effective Date”) is by and between The
Children’s Place Retail Stores, Inc., a Delaware corporation (the “Company”),
and Jane T. Elfers (the “Executive”).


 


WHEREAS, the Company and the
Executive wish to enter into this Employment Agreement on the terms and
conditions set forth herein.


 


NOW, THEREFORE, in
consideration of the foregoing premises, the mutual covenants, terms and
conditions set forth herein, and other valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, it is hereby agreed between the
Company and the Executive as follows:


 


1.                                       Employment.  The Company agrees to employ the Executive
and the Executive agrees to employment with the Company on the terms and
conditions set forth in this agreement (the “Agreement”).


 


2.                                       Term.  The term of the Executive’s employment under
this Agreement (the “Term”) shall commence on January 4, 2010 (the “Start
Date”) and, subject to the earlier termination of the Term as provided in Section 5
below, shall continue through the last day of the Company’s fiscal year ending
immediately following the third (3rd) anniversary of the Start Date (the “Expiration
Date”); provided, however, that the Term shall automatically renew for
successive one-year terms (each, a “Renewal Period”) after the Expiration Date,
subject to its nonrenewal if either the Company or the Executive gives the
other party hereto written notice at least ninety (90) days’ prior to the
Expiration Date or the end of the then-current Renewal Period, as applicable (a
“Non-Renewal Notice”) of its or her intent not to renew the Term, during which
90 day period, the Executive shall, for so long as she is employed by the
Company, continue to accrue benefits and entitlements under each employee and
welfare benefit plan and program, and shall continue to accrue entitlements and
vest, as applicable, under each equity and incentive compensation plan, in each
case, in which she participates at the relevant time and to the extent provided
by the terms of such plan or program. 
For purposes of clarification, each Renewal Period shall be subject to
earlier termination as provided in Section 5 below.


 


3.                                       Positions;
Duties.


 


(a)                                  During the
Term, the Executive shall serve as Chief Executive Officer and President of the
Company and each of its subsidiaries. 
The Executive shall be responsible for the general management of the
business and affairs of the Company and each of its subsidiaries, shall report
solely and directly to the Board of Directors of the Company (the “Board”), and
shall have all of the authorities, duties and responsibilities customarily
exercised by an individual serving as chief executive officer and president of
a public company of the size, complexity and nature of the Company and its
subsidiaries, as well as such other duties consistent with her position and
titles as are 


 

















 


reasonably
assigned by the Board.  The Executive
shall, at the request of the Chair of the Board, meet on a regular basis with
the Chair of the Board.


 


(b)                                 At the first
meeting of the Board following the Effective Date (the “Meeting Date”), the
Company shall request the Board to elect the Executive to the Board as a
Director.  During the Term, at each
annual meeting of stockholders at which Directors are to be considered for
election, the Company shall nominate the Executive for election as a Director
if her term as a Director is expiring.


 


(c)                                  During the
Term, the Executive shall devote substantially all of her business time and
attention to the business and affairs of the Company and other enterprises
controlled by the Company and shall use her best efforts, skills and abilities
in the diligent and faithful performance of her duties and responsibilities
hereunder.  Notwithstanding the
foregoing, the Executive may (i) engage in personal investment activities
for herself and her family, (ii) engage in charitable and civic
activities, (iii) serve on the board of directors of the educational
institution on which she currently serves, and (iv) serve on one board of
directors of another enterprise (whether civic, charitable, educational or for
profit) which is not a Competing Business (as defined in Section 7(a) hereof),
provided the outside activities set forth in (i), (ii) and (iii) hereof
do not interfere or conflict with Executive’s performance of her duties and
responsibilities hereunder in any material respect.


 


(d)                                 During the
Term, the Executive’s principal office and principal place of employment shall
be within a 50 mile radius of midtown Manhattan, New York City or such other
place that the Executive consents to in writing; provided that the Executive
understands that she shall be required to travel domestically and
internationally from time to time for business reasons as the Company may, in
its reasonable discretion, require.


 


(e)                                  During the
Term, Executive will be subject to all of the written policies, rules and
regulations of which Executive is given notice applicable to senior executives
of the Company and will in good faith attempt to comply with all reasonable
directions and instructions of the Board which are consistent with her position
and titles.


 


4.                                       Compensation.


 


(a)                                  Base
Salary.  During the
Term, the Company shall pay to the Executive a base salary at the rate of one
million dollars ($1,000,000) on an annualized basis (the “Base Salary”), which
Base Salary shall be payable in equal installments in accordance with the
Company’s normal payroll procedures for other senior executives, but not less
frequently than monthly.  The Base Salary
shall be reviewed annually by the Board (or an authorized committee thereof)
and shall be subject to increase (but not decrease) at the discretion of the
Board (or such authorized committee). 
After any such increase, the term “Base Salary” as used in this
Agreement shall thereafter refer to the Base Salary as so increased.


 


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(b)                                 Stock
Awards.  On the
Start Date, the Company shall execute and deliver to the Executive the stock
award agreements in the form of Exhibits A and B hereto, with the applicable
numbers of shares of common stock of the Company inserted pursuant to the
instructions set forth in such award agreements.


 


(c)                                  Annual
Bonus.  For each
fiscal year of the Company commencing during the Term, beginning with the
Company’s fiscal year commencing on January 30, 2010 and ending on January 31,
2011 (the “2010 Fiscal Year”), the Executive shall be eligible to receive an
annual performance-based cash bonus award (each, an “Annual Bonus”) pursuant to
the Company’s annual bonus plan.  The
target amount of each Annual Bonus shall be equal to 100% of the Executive’s
Base Salary (the “Target Bonus”) and the maximum amount of the Annual Bonus
shall be 200% of the Executive’s Base Salary (the “Maximum Bonus”). The actual
Annual Bonus shall be earned and paid based on the achievement of performance
measure(s) (each, a “Performance Measure”) as described below.


 


The Performance Measure(s) shall
be established by the Compensation Committee of the Board (the “Compensation
Committee”) no later than the end of the first quarter of each fiscal year
commencing during the Term.  The
Compensation Committee shall establish a Performance Measure for the Target
Bonus and a Performance Measure for the Maximum Bonus for each such fiscal
year; provided that the Target Bonus for the 2010 Fiscal Year shall be earned
if Operating Income (as defined below) for the 2010 Fiscal Year is 110% of the
Operating Income achieved for the fiscal year of the Company ending January 29,
2010 (the “Target Operating Income”), and the Maximum Bonus for the 2010 Fiscal
Year shall be earned if Operating Income for the 2010 Fiscal Year is 120% of
such Target Operating Income; and provided, further, that notwithstanding the
foregoing, for the 2010 Fiscal Year, Executive shall receive an Annual Bonus of
no less than one million dollars ($1,000,000).


 


The Annual Bonus (whether it
is the Target Bonus, the Maximum Bonus or an amount between the Target Bonus
and the Maximum Bonus) earned for any fiscal year shall correspond to the
Performance Measure(s) achieved for the applicable fiscal year of the
Company when compared to the corresponding target Performance Measure(s).  Such comparison shall be made on a
straight-line interpolated basis and by reference to the Company’s audited
consolidated financial statements for the applicable fiscal year.


 


“Operating Income”,  for purposes of the foregoing,  shall
mean the Company’s consolidated annual operating income as set forth on the
Company’s annual audited consolidated statement of operations for the
applicable period, adjusted to exclude non-recurring items.


 


The Executive shall be paid
an Annual Bonus for a fiscal year at the same time as other senior executives
of the Company receive annual bonuses for such fiscal year, but in no event
later than 75 days following the close of the fiscal year of the Company for
which the Annual Bonus is earned. 
Subject to Section 6 below, to receive 


 


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an
Annual Bonus with respect to a fiscal year, the Executive must be employed by
the Company on the date such bonus is paid.


 


(d)                                 Long-Term
Incentive Awards.  In addition to
the Annual Bonuses, for each fiscal year during the Term, the Executive shall
be eligible to receive awards under the Company’s Long-Term Incentive Plan (or
any successor(s) to such Plan) (each, an “LTIP Award”), with the annual
performance metrics thereunder to be established during the first quarter of
each fiscal year by the Compensation Committee. 
The Compensation Committee shall review the achievement of performance
targets in respect of LTIP Awards to the Executive on an annual basis.


 


(e)                                  Additional
Equity.  During the
Term, the Executive shall be eligible to be granted equity interests in the
Company pursuant to the Company’s Amended and Restated 2005 Equity Plan (and
any successor(s) to such Plan) (the “2005 Equity Plan”) and any other
equity plan of the Company, in any case, at the same time and on a basis which
is no less favorable to the Executive than the most favorable basis on which
such equity interests are granted to any other senior executive officer of the
Company; provided, however, that the foregoing shall not apply to any equity
interests granted to any senior executive officer in connection with his or her
initial hire or promotion or other grants not in the regular course.


 


(f)                                    Executive
Benefits, Perquisites and Expenses.


 


(i)                                     Benefits
and Perquisites.  During the
Term, the Executive shall be eligible to participate in all employee benefit
and all perquisite plans, programs and arrangements offered by the Company
(including without limitation, all insurance coverage, vacation, retirement,
savings and stock purchase plans and perquisites) as the Company generally
makes available to senior executives of the Company from time to time.  Except as otherwise specifically provided by
a benefit plan or program established by the Company or as provided by separate
written agreement with the Company, the Executive’s Base Salary shall
constitute the compensation on the basis of which the amount of the Executive’s
benefits under any such plan or program shall be determined.


 


(ii)                                  Other
Benefits.  During the
Term, the Executive shall be provided financial planning and tax preparation
services (not to exceed $20,000 annually), payment or reimbursement for the
premium cost (not to exceed $10,000 annually) of supplemental life insurance,
and payment or reimbursement for the premium cost (not to exceed $25,000 per
year) of supplemental long-term disability insurance.  In addition, during the Term, the Company
shall provide the Executive for her use, at the Company’s expense, an
automobile commensurate with the Executive’s needs and position as the Company’s
most senior executive officer and shall provide the Executive with a suitably
experienced driver satisfactory to the Executive who shall be on the Company’s
payroll, including benefits, and shall be appropriately insured by the
Company.  The Company shall be
responsible for the cost of insurance, maintenance, gas, parking and other
related operating expenses incurred for such automobile during the Term.  All payments or reimbursements hereunder
shall be made by the Company as soon as practicable following the Executive’s
presentation of appropriate support therefor 


 


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in accordance with the Company’s policies for senior executives in
respect thereof provided to the Executive.


 


(iii)                               Expenses.


 


(x)                                   The Company
shall promptly reimburse the Executive for all out-of-pocket business expenses
as may be reasonably incurred by her in the performance of her duties hereunder
during the Term, subject to the Company’s policies for senior executives in
respect thereof provided to the Executive.


 


(y)                                 The Company
shall also promptly reimburse the Executive for, or at the Executive’s request
pay directly on the Executive’s behalf, all legal fees and expenses actually
and reasonably incurred by her in entering into this Agreement.  In the event of any dispute between the
Company and the Executive regarding Executive’s employment hereunder (or the
termination thereof), the Company shall also reimburse the Executive for all
reasonable legal expenses and all arbitration fees and expenses actually incurred
by Executive in connection with such dispute but if and only if (1) Executive
is determined by the arbitrator to have prevailed on at least one material
issue in dispute, and (2) the arbitration award with respect to such
material issue exceeds the amount of any offer of compromise made by the
Company.


 


(z)                                   All
reimbursements and other payments to be made to or on behalf of the Executive
pursuant to this subclause (iii) shall be made by the Company as soon
as practicable following submission of a request therefor by the Executive,
accompanied by appropriate support therefor, in accordance with the Company’s
policies for senior executives in respect thereof provided to the Executive.


 


(v)                                 Additional
Provisions.  Notwithstanding any other provision herein,
the following provisions shall apply to any reimbursement of expenses and to
the provision of any in-kind benefits under this Section 4 or under any
other provision of this Agreement:  (i) the
amount of such expenses eligible for reimbursement, or in-kind benefits to be
provided, during any one calendar year shall not affect the amount of such
expenses eligible for reimbursement, or in-kind benefits to be provided, in any
other calendar year; (ii) reimbursement of any such expense shall be made
by no later than December 31 of the year following the calendar year in
which such expense is incurred; and (iii) the Executive’s right to receive
such reimbursements or in-kind benefits shall not be subject to liquidation or
exchange for another benefit.


 


5.                                       Termination
of Employment. 
Notwithstanding any other provisions of this Agreement to the contrary,
subject to Section 5(e) below, the employment of the Executive
pursuant to this Agreement (and the Term) may be terminated as follows:


 


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(a)                                  Termination
by the Company for Cause or Voluntary Termination by the Executive Without Good
Reason or Upon Expiration of the Term.  The Executive’s employment (and the Term) may
be terminated (i) by the Company for Cause, as defined in Section 13(a) below
or (ii) by the Executive without Good Reason, as defined in Section 13(d) below.  The Executive’s employment (and the Term)
shall automatically terminate upon expiration of the Term if either party has
given a Non-Renewal Notice to the other and the last day of the Term shall be
the Date of Termination for purposes of this Agreement.


 


(b)                                 Termination
by Either the Company or the Executive due to the Executive’s Disability.  The Executive’s employment (and the Term) may
be terminated by the Company or by the Executive upon the Executive’s
Disability, as defined in Section 13(c) below.


 


(c)                                  Termination
Due to Death.  The
Executive’s employment (and the Term) shall terminate upon her death and the
date of her death shall be the Date of Termination for purposes of this
Agreement.


 


(d)                                 Termination
by the Company Without Cause or by the Executive for Good Reason.   The Executive’s employment (and the Term) may
be terminated (i) by the Company without Cause (other than in the event of
the Executive’s Disability or death, as to which Sections 5(b) and 5(c) (as
applicable) above and Section 6(b) below shall be applicable) or (ii) by
the Executive for Good Reason.


 


(e)                                  Notice
of Termination.  Any
termination of the Executive’s employment (and the Term) hereunder (other than
the death of the Executive or as a result of the expiration of the Term if
either party has given a Non-Renewal Notice to the other), whether by the
Company or by the Executive, shall be communicated by written Notice of Termination
to the other party hereto.  For purposes
of this Agreement, a “Notice of Termination” shall mean a written notice that
shall indicate (i) the specific termination provision in this Agreement
relied upon and, other than in the case of a resignation by the Executive
without Good Reason, shall set forth in reasonable detail the basis for
termination of the Executive’s employment under the provision so indicated and (ii) the
date of termination (the “Date of Termination”).  Executive agrees if she elects to terminate
her employment other than for Good Reason, the Notice of Termination shall set
forth a Date of Termination that is not less than sixty (60) days after the
date of the Notice of Termination; provided, however, that the Company shall
have the right to accelerate such notice and make the Date of Termination the
date of the Notice of Termination or such other date prior to the Executive’s
intended Date of Termination as the Company deems appropriate, which
acceleration shall in no event be deemed a termination by the Company without
Cause or constitute Good Reason.


 


(f)                                    Removal
from any Boards and Position.  Upon the termination of the Executive’s
employment with the Company for any reason, she shall be deemed to resign (i) from
the Board or board of directors of any subsidiary of the Company or any 


 


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other
board to which she has been appointed or nominated by or on behalf of the
Company, and (ii) from any position with the Company or any subsidiary of
the Company, including, but not limited to, as an officer of the Company and
any of its subsidiaries.


 


6.                                       Compensation
and Benefits upon Termination, Etc.


 


(a)                                  General.  In the case of any of the terminations
described in Section 5 above, the Executive or her estate or designated
beneficiary(s), as the case may be, shall be entitled, in addition to any
payments and benefits applicable to the particular termination as set forth in
this Section 6 below, to the following (which, in the case of subclauses
(i), (ii), and (iii) below shall be paid within thirty (30) days after the
Date of Termination):


 


(i)                                     earned, but
unpaid, Base Salary through the Date of Termination;


 


(ii)                                  except if
payable pursuant to, or by reference to, Section 6(b)(i) or Section 6(c)(i) below,
if the Executive’s employment with the Company and its subsidiaries terminates
more than 75 days after the close of a fiscal year of the Company, or if the
Executive’s employment terminates at the expiration of the term due to the
Executive’s issuance of a Non-Renewal Notice, any Annual Bonus and other
incentive compensation earned with respect to such fiscal year, but not yet
paid;


 


(iii)                               any expense
reimbursement due, but not yet paid, to the Executive; and


 


(iv)                              to the extent
not provided pursuant to applicable specific terminations as set forth above or
below in this Section 6, all other payments, deliveries and benefits, if
any, in accordance with all applicable plans, programs and other arrangements
of the Company.


 


In
the event that the Executive is entitled to benefits under any provision
contained in this Section 6, to the extent that the Company’s plans,
programs and arrangements do not permit a continuation of the Executive’s
participation in a benefit plan, program or arrangement following her
termination of employment for the required period, the Company shall pay the
Executive, no less frequently than quarterly in advance, an amount which is
sufficient for the Executive and/or her eligible dependents to purchase
equivalent benefits for the remaining portion of the required period.


 


(b)                                 Termination
Due to Death or Disability.  If the Executive’s employment terminates as a
result of death or Disability, the Executive (or her estate or designated
beneficiary(s) in the event of her death) shall be entitled, subject to Section 6(g) below,
in addition to the payments, benefits and entitlements provided in Section 6(a) above,
to the following (which in the case of subclause (i) below shall be paid
within thirty (30) days following the Date of Termination):


 


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(i)                                     payment in cash
in a lump sum of any Annual Bonus earned for the most recent fiscal year ended
prior to the Date of Termination, but not paid as of the Date of Termination;


 


(ii)                                  continued
healthcare coverage under the Company’s group health plan until the earlier of (x) the
expiration of twelve months after the Date of Termination and (y) the date
that the Executive receives health care coverage under a plan or program of a
subsequent employer.  Such healthcare
coverage shall be provided pursuant to COBRA and the Company shall promptly
reimburse the Executive (or her eligible beneficiaries in the event of the
Executive’s death) for the applicable COBRA premiums under the Company’s group
health plan.


 


(c)                                  Termination
by the Company Without Cause or by the Executive for Good Reason or Due to
Non-Renewal by the Company.  In the event that (x) the Company
terminates the Executive’s employment without Cause (other than in the case of
her Disability or death, as to which Section 6(b) above shall apply),
(y) the Executive terminates her employment for Good Reason, or (z) the
Executive’s employment terminates at the expiration of the Term due to the
Company’s issuance of a Non-Renewal Notice, then, unless Section 6(d) below
applies, the Executive shall, subject to Section 6(g) below, be
entitled, in addition to the payments, benefits and entitlements provided in Section 6(a) above,
to the following (which, in the case of subclauses (i) and (iii) below
shall be paid within thirty (30) days following the Date of Termination):


 


(i)                                     payment in cash
in a lump sum of any Annual Bonus earned for the most recent fiscal year ended
prior to the Date of Termination, but not paid as of the Date of Termination;


 


(ii)                                  payment of a
cash amount equal to the sum of (a) two (2) times the Executive’s
then current Base Salary (not taking into account any reduction therein that is
a basis for a termination for Good Reason) and (b) the greater of two (2) times
(x) the Target Bonus or (y) the average of the immediately preceding
two year’s Annual Bonuses earned by the Executive (the greater of clause (x) or
(y), the “Bonus Amount”) over a period of twenty-four (24) months following the
Date of Termination (the “Severance Period”). 
Such amount shall be paid ratably in equal installments over the
Severance Period in accordance with the Company’s customary payroll practices,
commencing on the next regular pay date following the date that the Release
becomes effective and is no longer subject to revocation;


 


(iii)                               payment in cash
in a lump sum of a pro-rata portion (based on the number of days elapsed in the
applicable fiscal year of the Company until the Date of Termination divided by
365) of the Target Bonus for the fiscal year in which her employment terminates
payable on the next regular pay date following the date the Release becomes
effective and is no longer subject to revocation; and


 


(iv)                              continued
healthcare coverage under the Company’s group health plan until the earlier of (x) the
expiration of the Severance Period, (y) the date that 


 


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the
Executive’s COBRA coverage expires, and (z) the date that the Executive
receives health care coverage under a plan or program of a subsequent
employer.  Such healthcare coverage shall
be provided pursuant to COBRA and the Company shall promptly reimburse the
Executive for her COBRA premiums under the Company’s group health plan.  To the extent that Executive’s coverage under
the Company’s group health plan expires (other than for the reason set forth in
clause (z) above) before the expiration of the Severance Period, the
Company shall promptly reimburse the Executive for the cost of comparable
replacement coverage for the balance of the Severance Period.


 


(d)                                 Termination
Following a Change in Control,


 


(i) 
If, within two (2) years following the occurrence of a Change in Control
(as defined in Section 13(b) below) which constitutes a “change in
control event” within the meaning of Treas. Reg. §1.409A- 3(i)(5)(i), the
Company terminates the Executive’s employment without Cause or the Executive
terminates her employment for Good Reason or the Executive’s employment
terminates due to the Company’s issuance of a Non-Renewal Notice, the Executive
shall be entitled, in addition to the benefits provided in Sections 6(a), 6(c)(i) and
6(c)(iii) above (and in lieu of the benefits provided in 6(c)(ii) and
6(c)(iv) above), to the following:


 


(A)                              a lump sum cash
severance payment in an amount equal to three (3) times the sum of
Executive’s Base Salary and the Bonus Amount. 
Such amount shall be paid to the Executive within ten (10) business
days following the Executive’s Date of Termination (or, if later, upon the
expiration of the revocation period, if applicable, under the release required
by Section 6(g) below); and


 


(B)                                continued
healthcare coverage under the Company’s group health plan until the earlier of (x) the
expiration of the 36-month period following the Date of Termination, (y) the
date that the Executive’s COBRA coverage expires, and (z) the date that
the Executive receives health care coverage under a plan or program of a
subsequent employer.  Such healthcare
coverage shall be provided pursuant to COBRA and the Company shall promptly
reimburse the Executive for her COBRA premiums under the Company’s group health
plan.  To the extent that Executive’s
coverage under the Company’s group health plan expires (other than for the
reason set forth in clause (z) above) earlier than 36 months after the
Date of Termination, the Company shall promptly reimburse the Executive for the
cost of comparable replacement coverage for the balance of such 36-month period
in the manner provided in the last paragraph of Section 6(a) above.


 


(ii)                                  If, within two (2) years
following the occurrence of a Change in Control which does not constitute a “change
in control event” within the meaning of Treas. Reg. §1.409A- 3(i)(5)(i), the
Company terminates the Executive’s employment without Cause or the Executive
terminates her employment for Good Reason or the Executive’s employment
terminates due to the Company’s issuance of a Non-Renewal Notice, the Executive
shall be entitled, in addition to the benefits provided 


 


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in
Sections 6(a), 6(c)(i) and 6(c)(iii) above (and in lieu of the
benefits provided in 6(c)(ii) and 6(c)(iv) above), to the following:


 


(A)                              The Executive
shall be entitled to receive the same benefits that she would have been
entitled to receive under Section 6 (c)(ii) upon such termination of
her employment if no Change in Control had occurred, with such benefits payable
at the same times and in the same form as therein provided, except that (1) the
amount of the payments that would have been so paid to the Executive under Section 6(c)(ii) from
her Date of Termination through March 15 of the calendar year immediately
following the calendar year in which her Date of Termination occurs shall not
be paid to her in such form but shall be paid to her instead in the form of an
immediate cash lump sum; (2) the amount of the additional payments that
would have been so paid to the Executive under Section 6(c)(ii) during
the period from March 15 of the calendar year immediately following the
calendar year in which her Date of Termination occurs until such time
thereafter during the Severance Period therein specified as the aggregate
amount of such additional payments would have equaled but not exceeded the maximum
amount  qualifying for exemption from the
requirements of Section 409A (as defined in Section 25 below)
pursuant to Treas. Reg. 1.409A-1(b)(9)(iii), shall not be paid to her in the
form of periodic payments but shall be paid to her instead in the form of an
immediate cash lump sum; and (3) the amount of the payments that would
have been paid to the Executive under Section 6(c)(i) during the
remaining portion of the Severance Period therein specified shall be paid to
her during such period in the form of periodic payments as provided in Section 6(c)(ii).


 


(B)                                The Executive
shall also be entitled to receive an additional amount equal to the sum of (1) her
Base Salary as in effect immediately prior to her Date of Termination (not
taking into account any reduction therein that is a basis for a termination for
Good Reason), plus (2) her Bonus Amount, as determined in the manner
provided in Section 6(c)(ii). The additional amount so payable to the
Executive shall be paid to her in the form of an immediate cash lump sum.


 


(C)                                The lump sum
cash payments to be made to the Executive pursuant to Section 6(d)(ii)(A)(1) and
(2) and Section 6(d)(ii)(B) above shall be made within ten (10) business
days following the Executive’s Date of Termination (or, if later, upon the
expiration of the revocation period, if applicable, under the release required
by Section 6(g) below).


 


(D)                               The Executive
shall also be entitled to receive continued healthcare coverage under the
Company’s group health plan until the earlier of (x) the expiration of the
36-month period following the Date of Termination, (y) the date that the
Executive’s COBRA coverage expires, and (z) the date that the Executive
receives health care coverage under a plan or program of a subsequent
employer.  Such healthcare coverage shall
be provided pursuant to COBRA and the Company shall promptly reimburse the
Executive for her


 


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COBRA premiums under the
Company’s group health plan.  To the
extent that Executive’s coverage under the Company’s group health plan expires
(other than for the reason set forth in clause (z) above) earlier than 36
months after the Date of Termination, the Company shall promptly reimburse the
Executive for the cost of comparable replacement coverage for the balance of
such 36-month period in the manner provided in the last paragraph of Section 6(a) above.


 


(iii)                               If a Potential
Change in Control (as defined in Section 13(e) below) has occurred
and either (x) the Executive’s employment is terminated by the Company
without Cause at the direction of a Person (as such term is defined in Sections
3(a)(9) and 13(d)(3) of the Securities Exchange Act of 1934) who is
involved in the Potential Change in Control, or (y) the Executive
terminates her employment for Good Reason and the circumstance or event which
constitutes Good Reason occurs at the direction of such Person, then, in either
case, Executive’s termination of employment shall be deemed to have occurred
following a Change in Control and shall qualify for the compensation and
benefits specified in this subsection (d).


 


(e)                                  Equity
Awards Upon Termination.  Upon any termination of Executive’s
employment hereunder, Executive shall be entitled to such rights in respect of
any equity awards (including, without limitation, awards of stock options,
restricted shares, performance shares and any other award under the 2005 Equity
Plan or any future equity incentive plan or program of the Company) theretofore
made to Executive, and to only such rights, as are provided by the plan or the
award agreement pursuant to which such equity awards have been granted to
Executive or other written agreement or arrangement between Executive and the
Company (in any case, in the event of a conflict, the rights most favorable to
the Executive shall apply).


 


(f)                                    No
Mitigation or Offset.  In
the event of termination of the Executive’s employment for any reason, the
Executive shall be under no obligation to seek other employment and there shall
be no offset against amounts due to her on account of any remuneration or
benefits from any subsequent employment that she may obtain.


 


(g)                                 Release.  As a condition to the payments and other
benefits pursuant to Section  6(b) (other than payments and benefits
due arising out of a termination due to Executive’s death), 6(c) or Section 6(d) above,
the Executive must execute and deliver within 21 days (or 45 days in the case
of a group termination) following receipt by Executive and not revoke a release
of claims in substantially the form of Exhibit C hereto (the “Release”).  The Release will be delivered to Executive
within ten (10) business days following the Date of Termination.  Notwithstanding anything to the contrary
contained herein, in the event that any payment hereunder is contingent upon
Executive’s execution and delivery of the Release and the 21 (or 45 day) period
covers more than one calendar year, the payment shall be paid or commence (as
applicable) in the second calendar year (on the first regular pay date of such
calendar year following the date that the Release becomes effective and is no
longer subject to revocation, unless a later date is required by Section 25
below), regardless of whether the Executive executes and delivers the Release
in the first or the second calendar year encompassed in such 21 (or 45) day
period.


 


11

















 


7.                                       Noncompetition
and Nonsolicitation.  The
Executive agrees that her services hereunder are of a special, unique,
extraordinary and intellectual character, and her position with the Company
places her in a position of confidence and trust with employees, customers, and
suppliers of the Company.  The Executive
further agrees and acknowledges that in the course of the Executive’s
employment with the Company, the Executive has been and will be privy to
confidential information of the Company. 
The Executive consequently agrees that it is reasonable and necessary
for the protection of the trade secrets, goodwill and business of the Company
that the Executive make the covenants contained herein.  Accordingly, the Executive agrees as follows:


 


(a)                                  Noncompete
Restrictions.  The
Executive agrees that during the Term and for a period of twelve (12) months
following the Date of Termination (regardless of the reason therefore), the
Executive shall not, anywhere within the United States of America or any other
country or territory in which the Company or its subsidiaries then conducts or
proposes to conduct business, either directly or indirectly, whether alone or
as an owner, shareholder, partner, member, joint venturer, officer, director,
consultant, independent contractor agent, employee or otherwise of any company
or other business enterprise, or in any other individual or representative
capacity, assist in, engage in, participate in, or otherwise be connected to or
benefit from any “Competing Business”. 
For purposes of this Agreement, “Competing Business” shall mean (i) any
entity or business enterprise that derived twenty percent (20%) or more of its
annual gross revenue (measured by the most recent trailing twelve month period)
from the marketing, sale or distribution of children’s apparel and/or
accessories, or (ii) any entity or business enterprise that has a
subsidiary, affiliate, division or business segment that derived twenty percent
(20%) or more of such entity’s or business’ annual gross revenue (determined as
aforesaid) from marketing, sale or distribution of children’s apparel and/or
accessories. Without limitation of the foregoing, the following entities shall
be deemed to be Competing Businesses: 
Gymboree, Gap Kids, Aero PS, 77 Kids, Stride Rite, and Crew Cuts.


 


Notwithstanding the foregoing, nothing in this Section 7(a) shall
be deemed to prohibit Executive from becoming an owner, shareholder, partner,
member, joint venturer, officer, director, consultant, independent contractor
agent, employee or otherwise being associated with (i) a department store
(such as, for example, Macy’s), a mass merchandiser (such as, for example,
WalMart or Target) or a discounter (such as, for example, TJ Maxx) that sells
childrens’ clothing and/or accessories, or (ii) a subsidiary, affiliate,
division or business segment of a Competing Business (but not the direct or
indirect controlling entity of a Competing Business) provided that the
Executive does not, directly or indirectly, provide any services to, or
otherwise participate in, any business activities of the Competing Business
(e.g., the Executive may be employed by a sister company or subsidiary of a
Competing Business, provided that she does not provided any services to, or
participate in, any business activities of the Competing Business and does not
provide services to a controlling organization of the Competing Business with
respect to such Competing Business).  In
addition, anything herein to the contrary notwithstanding, the Executive shall
not be deemed to be engaged in a Competing Business if she provides services to
or has a financial interest in (A) a private equity firm, hedge fund or
other investor or (B) a consulting or other advisory firm 


 


12

















 


notwithstanding that such a firm, described in either clause (A) or
clause (B) above, (x) owns an interest in or operates a
Competing Business, (y) is engaged in the evaluation or execution of a
transaction which would result in the ownership or operation of a Competing
Business, or (z) is engaged in the provision of consulting or other advisory
services to a Competing Business, so long as in each case of (x), (y) and (z) above,
the Executive has no direct or indirect involvement in the management or
operation of such Competing Business, or in connection with any such
transaction or the provision of any such consulting or other advisory services.


 


Finally, notwithstanding the foregoing, nothing herein shall be deemed
to prohibit the Executive’s ownership of less than 1% of the outstanding shares
of any publicly traded corporation that conducts a business competitive with
that of the Company.


 


(b)                                 Nonsolicitation
of Vendors, Employees and Others.  The Executive agrees that during the Term and
for a period of eighteen (18) months following the Date of Termination
(regardless of the reason therefor), she will not, without the express prior
written consent of the Company, directly or indirectly: (i) for or on
behalf of a Competing Business, solicit, transact business with or perform
services for (or assist any third party in contacting, communicating,
soliciting, transacting business with or performing any services for) any
person that is or was (at any time within six (6) months prior to the
contact, communication, solicitation, transaction of business, or performance
of services), a vendor of the Company; (ii) solicit, recruit, hire, engage
or refer (or assist any third party in soliciting, recruiting, hiring, engaging
or referring) any person who is, or during six (6) months immediately
preceding the termination of her employment was, an employee, agent, consultant
or independent contractor of the Company; or (iii) interfere with, disrupt
or attempt to interfere with or disrupt the relationship, contractual or
otherwise, between the Company and any of its vendors, distributors,
manufacturers, lessors, independent contractors, agents or employees.


 


8.                                       Work
Product.  The
Executive agrees that all copyrights, patents, trade secrets or other
intellectual property rights associated with any ideas, concepts, techniques,
inventions, processes, or works of authorship developed or created by her
during her employment by the Company, that (i) relate, directly or
indirectly, to the Company’s actual or actively planned business, research or
development or (ii) are derived from any work performed by the Executive
on the Company’s behalf, shall, to the extent possible, be considered works
made for hire within the meaning of the Copyright Act (17 U.S.C. § 101 et seq.)
(the “Work Product”).  All Work Product
shall be and remain the sole and exclusive property of the Company.  To the extent that any such Work Product may
not, under applicable law, be considered works made for hire, the Executive
hereby grants, transfers, assigns, conveys and relinquishes, and agrees to
grant, transfer, assign, convey and relinquish from time to time, on an
exclusive basis, all of her right, title and interest in and to the Work
Product to the Company in perpetuity or for the longest period otherwise
permitted by law.  Consistent with her
recognition of the Company’s absolute ownership of all Work Product, the
Executive agrees that she shall (i) not use any Work Product for the
benefit of any party other than the Company and (ii) at the Company’s
expense, perform such acts and execute such documents and 


 


13

















 


instruments as the Company may now or hereafter reasonably deem
necessary or desirable to evidence the transfer of absolute ownership of all
Work Product to the Company; provided, however, if following ten (10) business
days’ written notice from the Company, the Executive refuses, or is unable, due
to disability, incapacity, or death, to execute such documents relating to the
Work Product, she hereby appoints any of the Company’s officers as her
attorney-in-fact to execute such documents on her behalf.  This agency is coupled with an interest and
is irrevocable without the Company’s prior written consent.


 


On the Effective Date, the Executive represents and warrants to the
Company that to the best of her knowledge, (i) there are no claims that
would adversely affect her ability to assign all of her right, title and
interest in and to the Work Product to the Company; (ii) the Executive has
the legal right to grant the Company the assignment of her interest in the Work
Product as set forth in this Agreement; and (iii) she will not bring to
her employment hereunder, or use in connection with such employment, any trade
secret, confidential or proprietary information of another, or computer
software, except for trade secrets, information or software that she has a
right to use for the purpose for which it shall be used, in her employment
hereunder.


 


9.                                       Nondisclosure
of Trade Secrets; Company Property; Nondisparagement.


 


(a)                                  Executive
acknowledges and agrees that during the Term, the Executive shall have access
to and become familiar with various trade secrets and proprietary and
confidential information of the Company and its subsidiaries as well as their
respective predecessors, successors and assigns (collectively, the “Protected
Parties”) regularly used in the operation of its or their business,
including, but not limited to, processes, computer programs, compilations of
information, records, sales procedures, customer requirements, pricing
techniques, customer lists and methods of doing business (collectively,
referred to as “Confidential Information”). 
The Executive shall not, at any time during or after the Term, use or
disclose any of the Confidential Information, directly or indirectly, except (i) in
the course of performing her duties under this Agreement, (ii) if such
Confidential Information has become public knowledge or known in the relevant
trade or industry other than as a result of an unauthorized disclosure by the
Executive, (iii) to enforce any rights or defend any claims hereunder or
under any other agreement to which the Executive is a party, provided that such
disclosure is relevant to the enforcement of such rights or defense of such
claims and is only disclosed to the extent necessary in the formal proceedings
related thereto, or (iv) when required to do so by a court of law, by any
governmental agency having jurisdiction or by any administrative or legislative
body (including a committee thereof) with jurisdiction to order her to divulge,
disclose or make accessible such information, provided
that the Executive shall give prompt written notice to the Company
of such requirement, disclose no more information than is so required, and
reasonably cooperate at the Company’s expense with any attempt by the Company
to obtain a protective order or similar treatment.  The Executive shall take all reasonable steps
to safeguard the Confidential Information in her possession or control and to
protect it against disclosure, misuse, 


 


14

















 


espionage,
loss and theft.  The Executive
understands and agrees that the Executive shall acquire no ownership rights to
any such Confidential Information.


 


(b)                                 All files,
records, documents, drawings, specifications, data, computer programs,
evaluation mechanisms and analytics and similar items relating thereto or to
the Protected Parties, as well as all customer lists, specific customer
information, compilations of product research and marketing techniques of the
Protected Parties, whether prepared by the Executive or otherwise coming into
the Executive’s possession, shall remain the exclusive property of the
Company.  The Executive shall deliver any
such material then in her possession promptly to the Company upon termination
of her employment with the Company. 
Anything to the contrary notwithstanding, the Executive shall be
entitled to retain (i) papers and other materials of a personal nature,
including, but not limited to, photographs, correspondence, personal diaries,
calendars and rolodexes, files of personal materials and phone books, (ii) information
showing her compensation and benefits or relating to reimbursement of expenses,
(iii) information that she reasonably believes may be needed for her own
personal tax purposes, and (iv) copies of employee benefit and
compensation plans, programs, agreements and other arrangements of the Company
in which she was a participant or covered.


 


(c)                                  The Executive
agrees that she will not at any time (whether during or after the Term) make
any public (or that would reasonably be expected to become public) Disparaging
(as defined below) remarks, comments or statements concerning the Company and
its respective parents and subsidiaries and their respective present and former
members, partners, directors, officers, shareholders, employees, agents,
attorneys, successors and assigns.  The
Company shall not at any time (whether during or after the Term) for itself or
permit any of  its subsidiaries or its
and their respective officers or directors to make public (or that would reasonably
be expected to become public) Disparaging remarks, comments or statements
concerning the Executive.  “Disparaging”
remarks, comments or statements are those that impugn the character, honesty,
integrity or morality of the individual or entity being disparaged.  Notwithstanding the foregoing, nothing in
this Section 9(c) shall prevent any person from (x) responding
publicly to incorrect, disparaging or derogatory public statements to the
extent reasonably necessary to correct or refute any such public statement or (y) making
any truthful statement to the extent (i) necessary with respect to any
litigation, arbitration or mediation involving this Agreement, including, but
not limited to, the enforcement of this Agreement or (ii) required by law
or by any court, arbitrator, mediator or administrative or legislative body
(including any committee thereof) with jurisdiction over such person.


 


10.                                 Indemnification.


 


(a)                                  The Company
agrees that if the Executive is made a party 
or subject to, or is threatened to be made a party or subject to, or
receives any legal process in, or receives any discovery request or request for
information in connection with, any claim, action, suit or proceeding, whether
civil, criminal, administrative or investigative (a “Proceeding”), by reason of
the fact that she is or was a director, officer, employee or agent of the
Company or any of its subsidiaries, or is or was serving at the written request



 


15

















 


of,
or on behalf of, the Company as a director, officer, member, employee or agent
of another corporation, limited liability corporation, partnership, joint
venture, trust or other person or entity, including service with respect to
employee benefit plans, whether or not the basis of such Proceeding is the
Executive’s alleged action in an official capacity while serving as a director,
officer, member, employee, consultant or agent of the Company, any of its
subsidiaries or other person or entity, the Executive shall be indemnified,
held harmless and advanced expenses by the Company to the fullest extent
permitted or authorized by the Company’s certificate of incorporation or, if
greater, by the Delaware General Corporation Law, against any and all costs,
expenses, liabilities and losses (including, without limitation, attorneys’
fees reasonably incurred, judgments, fines, excise taxes or penalties and
amounts paid or to be paid in settlement and any reasonable costs and fees
incurred in enforcing her rights to indemnification or contribution) incurred
or suffered by the Executive in connection therewith, and such indemnification
shall continue as to the Executive even though she has ceased to be a director,
officer, member, employee or agent of the Company or other entity and shall inure
to the benefit of the Executive’s heirs, executors and administrators.  The Company shall reimburse the Executive for
all costs and expenses (including, without limitation, reasonable attorneys’
fees) incurred by her in connection with any Proceeding within thirty (30) days
after receipt by the Company of a written request for such reimbursement and
appropriate documentation associated with these expenses.  Such request shall include an undertaking by
the Executive to repay the amount of such advance if it shall ultimately be
determined that she is not entitled to be indemnified against such costs and
expenses; provided that the amount of such obligation to repay, shall be
limited to the after-tax amount of such advance except to the extent that the
Executive is able to offset the taxes incurred on the advance by tax benefits,
if any, attributable to a deduction for repayment.


 


(b)                                 The Company
agrees to continue and maintain a directors’ and officers’ liability insurance
policy covering the Executive in an amount, and on terms and conditions
(including without limitation, with respect to scope, exclusions, sub-amounts
and deductibles), no less favorable to her than (x) the coverage the
Company provides other senior executives and directors from time to time or, if
greater, (y) the coverage provided to senior executives and directors on
the Effective Date.


 


(c)                                  Nothing in this
Section 10 shall be construed as reducing or waiving any right to
indemnification, or advancement of expenses, the Executive would otherwise have
under any separate agreement with the Company.


 


11.                                 Arbitration.


 


(a)                                  Any
controversy, dispute or claim between the Executive and the Company, or any of
its subsidiaries or affiliates, arising out of or relating to this Agreement,
any other agreement or arrangement between the Executive and the Company or any
of its subsidiaries, the Executive’s employment with the Company, or the
termination thereof, including, without limitation, any claims for
discrimination under applicable federal, state or local law or regulation, but
other than matters subject to Section 12 below (collectively, the “Covered
Claims”) shall be resolved by binding arbitration, to be held in New York, New
York (or such other location as shall be agreed 


 


16

















 


in
writing by the parties hereto).  The
arbitration shall be held before a single arbitrator.  Any arbitration may be initiated by either
party by written notice (“Arbitration Notice”) to the other party specifying
the subject of the requested arbitration.


 


(b)                                 The arbitration
proceeding shall be conducted in accordance with the Commercial Arbitration Rules of
the American Arbitration Association (“AAA”). 
The single arbitrator shall be appointed from the AAA’s list of arbitrators
by the mutual consent of the parties or, in the absence of such consent, by
application of any party to the AAA.  The
determination of the arbitrator shall be set forth in writing and shall be
final and binding upon the parties hereto (without the right to an appeal,
unless such appeal is based on fraud by the other party in connection with the
arbitration process).  Judgment upon any
arbitration award may be entered and enforced in any court of competent jurisdiction.


 


(c)                                  The parties
agree that this Section 11 shall be grounds for dismissal of any court
action commenced by either party with respect to the Covered Claims, other than
(i) post-arbitration actions seeking to enforce an arbitration award and (ii) actions
seeking appropriate equitable or injunctive relief, including, without
limitation, pursuant to Section 12 below.


 


(d)                                 The arbitrator’s
remedial authority shall be equal to the remedial power that a court of
competent jurisdiction over the parties and their dispute would have.


 


(e)                                  Subject to Section 4(f)(iii)(y) above,
the Company shall pay the fees of the arbitrator and each party shall be
responsible for her or its own legal fees, costs of her or its experts and
expenses of witnesses.


 


12.                                 Injunctive
Relief.   Without
limiting the remedies available to the parties and notwithstanding the
foregoing provisions of Section 11, the Executive and the Company
acknowledge that any breach of any of the covenants or provisions contained in
Sections 7, 8 or 9 above could result in irreparable injury to the nonbreaching
party for which there might be no adequate remedy at law, and that, in the
event of such a breach or threat thereof, the nonbreaching party may seek a
temporary restraining order, a preliminary injunction or a permanent injunction
from a court of competent jurisdiction, upon sustaining the burden of showing
the necessity therefor, restraining the other party hereto from engaging in any
activities prohibited by any covenant or provision in Sections 7, 8 or 9 above
or such other equitable relief as may be required to enforce specifically any
of the covenants or provisions of Sections 7, 8 or 9 above.


 


13.                                 Definitions.


 


(a)                                  “Cause” (meaning a
termination by the Company of the Executive’s employment for Cause) shall mean:


 


(i)                                     in connection with the Executive’s
employment by the Company, the commission by the Executive of any act involving
intentional dishonesty of a material nature or fraud; or


 


17

















 


(ii)                                  a material breach by Executive of her
fiduciary duties as determined by a court of competent jurisdiction or pursuant
to a binding arbitration; or


 


(iii)                               any material breach of a material
provision of this Agreement by the Executive that the Executive fails to remedy
to the reasonable satisfaction of the Company within thirty (30) days after
notice to the Executive of such breach setting forth with reasonable detail the
basis of the breach; or


 


(iv)                              any conduct, action or behavior by
Executive involving moral turpitude, gross negligence or willful misconduct,
that has or may reasonably be expected to have a material adverse effect on the
reputation or interests of the Company; or


 


(v)                                 Executive shall have been barred by a
court order issued under the Securities Exchange Act of 1934 (the “Exchange Act”)
from serving as a director or officer of a company registered under Section 12
or filing reports under Section 15(d) of the Exchange Act (including
an order issued upon consent without any admission of the charge) or shall have
been convicted of, or have entered a plea of nolo contendere or the equivalent
in respect of a charge of, any criminal act constituting a felony under the
laws of the United States or any state or political subdivision thereof.


 


For purposes hereof, an act
or omission shall not be deemed to be willful if taken or omitted in the good
faith belief that such was in, or not opposed to, the best interests of the
Company.  Anything herein to the contrary
notwithstanding, the Executive’s employment shall not be terminated for Cause,
within the meaning of clauses (i) — (iv) above unless written notice
stating the basis for the termination is provided to the Executive and the
Executive (together with her own counsel) has an opportunity to be heard before
the Board and, after such hearing, a majority of the Board (excluding the
Executive) duly votes to terminate her for Cause.


 


(b)                                 “Change in Control”
shall mean and shall be deemed to have occurred:


 


(i)                                     upon a transaction or series of related
transactions pursuant to which a person or entity (“Person”) or Persons “acting
as a group” (as defined in the regulations to Section 409A of the Code) (i) acquires
all or substantially all of the assets of the Company, (ii) acquires the
beneficial ownership (as defined in Rule 13d-3 under the Securities Exchange
Act of 1934) of securities representing more than fifty percent (50%) of the
securities of the Company entitled to vote generally in the election of
directors of the Company (other than through merger, consolidation or other
business combination), or (iii) consummates a merger, consolidation or
other business combination with the Company the result of which is that the
shareholders of the Company prior to such merger, consolidation or other
business combination own less than fifty percent (50%) of the securities


 


18

















 


entitled to vote
generally in the election of directors of the surviving entity after the consummation
of such merger, consolidation or other business combination;


 


(ii)                                  if the individuals (i) who, as of
the Effective Date, constitute the Board (the “Original Directors”) and (ii) who
thereafter are elected to the Board and whose election, or nomination for
election, to the Board was approved by a vote of a majority of the Original
Directors then still in office (such directors being called “Additional
Original Directors”) and (iii) who thereafter are elected to the Board
and whose election or nomination for election to the Board was approved by a
vote of a majority of the Original Directors and Additional Original Directors
then still in office, cease for any reason to constitute a majority of the
members of the Board; or


 


(iii)                               the Company adopts a plan of liquidation
providing for the distribution of all or substantially all of its assets (unless
such distribution is to a wholly-owned subsidiary of the Company.


 


Notwithstanding
anything contained herein to the contrary, in no event shall a Change in
Control occur solely as a result of a recapitalization or reclassification of
the Company’s outstanding equity interests. 
In addition, a transaction shall not constitute a Change in Control if
its sole purpose is to create a holding company that will be owned in
substantially the same proportions by the Persons who held the Company’s equity
interests immediately before such transaction.


 


(c)                                  “Disability” shall mean the Executive’s inability, due to
physical or mental incapacity, to substantially perform her duties and
responsibilities for a period of 180 consecutive days or for a period of 240
days in any consecutive 12-month period as determined by a medical doctor
selected by the Executive and approved by the Company (which approval shall not
be unreasonably withheld).  If the
parties cannot agree on a medical doctor, each party shall select a medical
doctor and the two doctors shall select a third who shall be the approved
medical doctor for this purpose.  In no
event shall any termination of the Executive’s employment for Disability occur
until the party terminating her employment gives written notice to the other
party in accordance with Section 5(e) above.


 


(d)                                 “Good Reason” shall mean the occurrence of any of the
following without the Executive’s prior written consent:


 


(i)                                     a material
reduction in the Executive’s then current Base Salary, the Target Bonus or the
Maximum Bonus, or the failure to pay any Base Salary, Annual Bonus, or any
other amount or award, including an equity award, when such payment is due;


 


(ii)                                  the taking of
any action by the Company that would diminish the aggregate value of all
employee benefits provided to the Executive in a material respect, or that
results in the diminution or reduction of all perquisites enjoyed by the
Executive in any material respect;


 


19

















 


(iii)                               a material
diminution of the Executive’s duties or responsibilities as set forth herein;


 


(iv)                              the failure of
the Executive to be a member of the Board following the Meeting Date (and prior
to the first meeting of shareholders after the Effective Date at which her
class of directors is to stand for election), the failure to nominate the
Executive to be, or to continue to be, a member of the Board, or the removal of
the Executive from the position of Chief Executive Officer or President of the
Company or any of its subsidiaries;


 


(v)                                 a material
interference with the Executive’s carrying out of her duties so that she is
unable to carry out her material duties and responsibilities hereunder;


 


(vi)                              the assignment
to the Executive of duties which are materially inconsistent with her duties or
which materially impair the Executive’s ability to function as the Chief
Executive Officer and President of the Company or of any of its subsidiaries;


 


(vii)                           a change in the
reporting structure so that (A) the Executive does not report solely and
directly to the Board or (B) any employee of the Company or any of the
Company’s subsidiaries does not report directly or indirectly to the Executive;


 


(viii)                        relocation of
the Company’s headquarters office, or the Executive’s own principal office, to
a location more than 50 miles from midtown Manhattan, New York City;


 


(ix)                                any material
breach (not otherwise included in this Section 13(d)) by the Company of
any material provision of this Agreement, including without limitation Sections
10 or 15 hereof.


 


Anything herein to the
contrary notwithstanding, the Executive’s employment shall not be terminated
for Good Reason unless (i) the Executive provides written notice to the
Company within sixty (60) days after the Executive obtains knowledge of the
event or condition alleged to constitute Good Reason first occurs stating the
basis of such termination and the Company is given thirty (30) days after
receipt of such notice to cure the action that is the basis of such claim, and
if the Company fails to cure such action within such thirty (30) day period the
Executive actually terminates her employment within two (2) business days
following such thirty (30) day period.


 


(e)                                  “Potential Change in Control” shall mean the earliest to occur of any
of the following events: (i)  the Company enters into an agreement or
letter of intent (or similar document), the consummation of which would
constitute a Change in Control; (ii) any person or entity publicly
announces an intention to take or to consider taking actions which, if
consummated, would constitute a Change in Control; or (iii) any other
event occurs which is deemed to be a Potential Change in Control by the Board
and the Board adopts a resolution to the effect that a Potential Change in
Control has occurred.


 


20














 


14.                                 Interpretation
of Restrictive Covenant; Severability.   In the event that any provision of Section 7,
8 or 9 above shall be determined to be invalid or unenforceable, in whole or in
part, for any reason, the remaining provisions of the applicable Section shall
remain in full force and effect to the fullest extent permitted by law and any
such invalid or unenforceable provision shall be reformed, to the extent
permitted by law, so as to give it legal effect to the fullest extent permitted
by law.


 


15.                                 Successors
and Assigns.


 


(a)                                  This Agreement
shall be binding upon and inure to the benefit of the parties and their
respective successors and permitted assigns, and, in the case of the Executive,
her heirs and legal representatives.  No
rights or obligations of the Company under this Agreement may be assigned or
transferred by the Company without the Executive’s prior written consent,
except that such rights or obligations may be assigned or transferred pursuant
to a merger or consolidation in which the Company is not the continuing entity,
or a sale, liquidation or other disposition of all or substantially all of the
assets of the Company, provided that the assignee or transferee is the
successor to all or substantially all of the assets of the Company and assumes
the liabilities, obligations and duties of the Company under this Agreement,
either contractually or as a matter of law. 
The Company further agrees that, in the event of any disposition of its
business and assets described in the preceding sentence, it shall cause such
assignee or transferee expressly to assume the liabilities, obligations and
duties of the Company hereunder.  No
rights or obligations of the Executive under this Agreement may be assigned or
transferred by the Executive, without the Company’s prior written consent,
other than her rights to compensation, benefits and other entitlements, which
may be transferred only by will or operation of law or by designating a
beneficiary in accordance with the rules of the applicable plans and programs
of the Company.


 


(b)                                 The Executive
shall be entitled, to the extent permitted under applicable law, to select and
change a beneficiary or beneficiaries to receive any compensation, benefit or
entitlement hereunder following the Executive’s death by giving the Company
written notice thereof.  In the event of
the Executive’s death or a judicial determination of her incompetence,
references in this Agreement to the Executive shall be deemed to refer, where
appropriate, to her legal representative, or, where appropriate, to her
beneficiary or beneficiaries.


 


16.                                 Number
and Gender.  Where the
context requires, the singular shall include the plural, the plural shall
include the singular, and any gender shall include all other genders.


 


17.                                 Section Headings.  The headings of the sections of this
Agreement are for convenience only and shall not be deemed to control or affect
the meaning or construction of any provision of this Agreement.


 


18.                                 Entire
Agreement.  This
Agreement (and the Exhibits hereto) constitute the entire agreement of the
parties with respect to the subject matter hereof (and thereof) and shall
supersede all prior agreements, whether written or oral, with respect
thereto.  In 


 


21

















 


the
event of any inconsistency between the terms of this Agreement and the terms of
any Company plan, policy, arrangement or agreement with the Executive, the
provisions most favorable to the Executive shall govern.


 


19.                                 Amendments
and Waivers.  No
provision in this Agreement may be amended unless such amendment is agreed to
in writing and signed by the Executive and an authorized officer of the Company
(other than the Executive).  No waiver by
either party of compliance by the other party of any condition or provision
contained in this Agreement to be performed by such other party shall be deemed
a waiver of a similar or dissimilar condition or provision at the same or any
prior or subsequent time.  Any waiver
must be in writing and signed by the party to be charged.


 


20.                                 Survivorship.  Except as otherwise expressly set forth in
this Agreement, upon the expiration or termination of the Term, the respective
rights and obligations of the parties shall survive such expiration or
termination to the extent necessary to carry out the intentions of the parties
as embodied in the rights (such as vested or accrued rights) and obligations of
the parties under this Agreement.  This
Agreement shall continue in effect until there are no further rights or
obligations of the parties outstanding hereunder and shall not be terminated by
either party without the express prior written consent of both parties.


 


21.                                 Counterparts.  This Agreement may be executed in any number
of counterparts, each of which shall be deemed an original as against any party
whose signature appears thereon, and all of which together shall constitute one
and the same instrument.  This Agreement
shall become binding when one or more counterparts hereof, individually or
taken together, shall bear the signatures of all of the parties reflected
hereon as the signatories.  Photographic,
faxed or PDF copies of such signed counterparts may be used in lieu of the
originals for any purpose.


 


22.                                 Representations.


 


(a)                                  The Company
represents and warrants to the Executive that (i) the execution, delivery
and performance of this Agreement (and the Exhibits hereto) by the Company has
been fully and validly authorized by all necessary corporate action, (ii) the
officer signing this Agreement (and the Exhibits hereto) on behalf of the
Company is duly authorized to do so, (iii) the execution, delivery and
performance of this Agreement (and the Exhibits hereto) does not violate any
applicable law, regulation, order, judgment or decree or any agreement, plan or
corporate governance document to which the Company or any of its subsidiaries
is a party or by which it or such subsidiary is bound and (iv) upon
execution and delivery of this Agreement 
(and the Exhibits hereto) by the parties hereto, each shall be a valid,
and binding obligation of the Company enforceable against it in accordance with
its respective terms, except to the extent that enforceability may be limited
by applicable bankruptcy, insolvency or similar laws affecting the enforcement
of creditors’ rights generally.


 


(b)                                 The Executive
represents and warrants to the Company that she is under no contractual or
other binding legal restriction which would prohibit her from 


 


22

















 


entering
into and performing under this Agreement or, except for normal and customary
confidentiality provisions, that would limit the performance her duties under
this Agreement.


 


23.                                 Non-Exclusivity
of Rights.  Nothing in the Agreement shall prevent or
limit the Executive’s continuing or future participation in, or entitlements
under, any benefit, bonus, incentive or other plan or program of the Company
for which Executive may qualify, nor shall anything herein limit or reduce such
rights as the Executive may have under any other agreement with the Company.  In the event of any conflict between the
terms and conditions hereof and those of any plan, program or arrangement of
the Company in which the Executive participates, the terms and conditions more
favorable to the Executive shall prevail.


 


24.                                 Withholding
Taxes.  The Company
may withhold from any amounts or benefits payable under this Agreement income
taxes that are required to be withheld pursuant to any applicable law or
regulation.


 


25.                                 Internal
Revenue Code Section 409A.  The
parties hereto intend that all payments and benefits to be made or provided to
the Executive hereunder and under any Plan (as defined in clause (f) below)
will be paid or provided in compliance with all applicable requirements of Section 409A
(as defined in clause (f) below), and the provisions of this Agreement and
of each Plan (to they extent they relate to the Executive’s entitlements under
such Plan) shall be construed and administered in accordance with such intent.
In furtherance of the foregoing, the provisions set forth below shall apply
notwithstanding any other provision in this Agreement, or (where applicable)
any provision in any Plan, to the contrary.


 


(a)                                  All payments to
be made to the Executive hereunder or under any Plan, to the extent they
constitute a deferral of compensation subject to the requirements of Section 409A
(after taking into account all exclusions applicable to such payments under Section 409A),
shall be made no later, and shall not be made any earlier, than at the time or
times specified herein or in any Plan for such payments to be made, except as
otherwise permitted or required under Section 409A.


 


(b)                                 The date of the Executive’s “separation from service”, as defined in Section 409A
(and as determined by applying the default presumptions in Treas. Reg. §1.409A-1(h)(1)(ii)),
shall be treated as the date of her termination of employment for purposes of
determining the time of payment of any amount that becomes payable to the
Executive hereunder and under any Plan upon her termination of employment and
that is properly treated as a deferral of compensation subject to  Section 409A after taking into account
all exclusions applicable to such payment under Section 409A .


 


(c)                                  To the extent any payment or delivery otherwise required to be made to
the Executive hereunder or under any Plan on account of  her separation from service is properly
treated as a deferral of compensation subject to Section 409A after taking
into account all exclusions applicable to such payment and delivery under Section 409A,
and if the Executive is a “specified employee” under Section 409A at the
time of 


 


23

















 


her separation from service, then such payment and
delivery shall not be made until the first business day after the earlier of (i) the
expiration of six months from the date of 
the Executive’s separation from service, or (ii) the date of her
death (such first business day, the “Delayed Payment Date”). On the Delayed
Payment Date, there shall be paid or delivered to the Executive or, if she has
died, to her estate, in a single payment or delivery (as applicable) all
entitlements so delayed, and in the case of cash payments, in a single cash
lump sum, an amount equal to aggregate amount of all payments delayed pursuant
to the preceding sentence, plus interest thereon at the Delayed Payment
Interest Rate (as defined below) computed from the date on which each such
delayed payment otherwise would have been made to the Executive until the
Delayed Payment Date.  For purposes of
the foregoing, the “Delayed Payment Interest Rate” shall mean the national
average annual rate of interest payable on jumbo six-month bank certificates of
deposit, as quoted in the business section of the most recently published
Sunday edition of The New York Times preceding the Executive’s Date of
Termination.


 


(d)                                 In the
case of any amounts  payable to the
Executive under this Agreement, or under any Plan, that may be treated as
payable in the form of “a series of installment payments”, as defined in Treas.
Reg. §1.409A-2(b)(2)(iii), (A) the Executive’s right to receive such
payments shall be treated as a right to receive a series of separate payments
for purposes of Treas. Reg. §1.409A-2(b)(2)(iii), and (B) to the extent
any such existing Plan does not already so provide, it is hereby amended to so
provide, with respect to amounts that may become payable to the Executive
thereunder.


 


(e)                                  The
Company agrees that at all times during the Term, it will use its reasonable
best efforts to  maintain each Plan in
documentary and operational compliance with all requirements under Section 409A,
in so far as such requirements are applicable to the payments or benefits to be
made or provided to the Executive under such Plan. The Company further agrees
that to the extent permitted under 409A, this Agreement, and the
terms of any Plan (to they extent they
relate to the Executive’s entitlements under such Plan) shall be
modified, as reasonably requested by the Executive, to the extent necessary to
comply with all applicable requirements of, and to avoid the imposition of any
additional tax, interest and penalties under, Section 409A in connection
with, the benefits and payments to be provided or paid to the Executive
hereunder or under such Plan. Any such modification shall maintain the original
intent and economic benefit to the Executive of the applicable provision of
this Agreement or such Plan, to the maximum extent possible without violating
any applicable requirement of Section 409A. Any such modification to the
terms of any Plan may be made by means of a separate written agreement between
the Company and the Executive so as to limit the applicability of such
modification to just the payments or benefits to be provided to the Executive
under such Plan.


 


(f)                                    For purposes of the foregoing, the following terms shall have the
following meanings:


 


(1)                                  “Plan” shall mean any plan, program, agreement
(other than this Agreement, but including the Exhibits hereto) or other
arrangement maintained by the Company or any of its affiliates that is a “nonqualified
deferred compensation 


 


24

















 


plan” within the meaning of Section 409A
and under which any payments or benefits are to be made or provided to the
Executive, to the extent they constitute a deferral of compensation subject to
the requirements of Section 409A after taking into account all exclusions
applicable to such payments under Section 409A.


 


(2)                                  “Section 409A” shall mean section 409A of the
Code, the regulations issued thereunder and all notices, rulings and other
guidance issued by the Internal Revenue Service interpreting same.


 


(g)                                 The Executive
acknowledges and agrees that, while this Agreement is intended to comply with Section 409A,
any tax liability incurred by the Executive under Section 409A is solely
the responsibility of the Executive provided that the Company complies with its
obligations as set forth herein.  The
Company shall be deemed to have complied with its obligations for purposes of
this Section 25(g) if it has made a good faith attempt to comply with
Section 409A, and the Company shall be deemed to have acted in good faith
for such purpose if it reasonably relies upon the advice of tax counsel.


 


26.                                 Governing
Law.  This Agreement shall be
governed, construed, performed and enforced in accordance with the laws of the
State of Delaware, without reference to principles of conflict of laws.


 


27.                                 Notices.  Any notice, consent, demand, request, or
other communication given to a party in connection with this Agreement shall be
in writing and shall be deemed to have been given to such party (a) when
delivered personally to such party, (b) three (3) business days after
being sent by prepaid certified or registered mail provided that a written
acknowledgment of receipt is obtained, or (c)  two (2) business days
after being sent by an internationally recognized overnight courier, in any
instance to the address specified below for such party (or to such other
address as such party shall have specified by ten (10) days’ advance
notice given in accordance with this Section 27).


 


	
  If
  to the Company:

  	
   

  	
  500
  Plaza Drive 

  Secaucus,
  New Jersey 07094 

  Attention
  of Both: 

  Chief
  Financial Officer and 

  Director
  of Human Resources

  
	
  If
  to the Executive:

  	
   

  	
  The
  address of her principal residence as it appears in the Company’s records,
  with a copy to her (during the Term) at her office in Secaucus, New Jersey or
  such other location to which such office may have been relocated.

  
	
  If
  to the estate or a beneficiary of the Executive:

  	
   

  	
  The
  address most recently specified by the Executive, or her estate or
  beneficiary.

  



 


[Signature Page Follows]


 


25

















 


IN WITNESS WHEREOF, the
parties have duly executed this Agreement as of the date first above written.


 


 


	
   

  	
  /s/ Jane T. Elfers

  
	
   

  	
  Jane T. Elfers

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  THE
  CHILDREN’S PLACE RETAIL STORES, INC.

  
	
   

  	
   

  
	
   

  	
  /s/
  Norman L. Matthews

  
	
   

  	
  By: 

  	
  Norman
  L. Matthews

  
	
   

  	
  Its: 

  	
  Chairman
  of the Board

  



 


26

















 


Exhibit A


 


DEFERRED STOCK AWARD AGREEMENT


 


THE CHILDREN’S PLACE RETAIL
STORES, INC.


 


This Deferred Stock Award Agreement (the “Agreement”) is entered into
on the 4th day of January 2010 (the “Award Date”) by and between The
Children’s Place Retail Stores, Inc., a Delaware corporation (the “Company”), and Jane T. Elfers (the “Awardee”).


 


WHEREAS, the Company has
retained Awardee as its President and Chief Executive Officer pursuant to the
Employment Agreement dated as of the date hereof between the Company and the
Awardee (the “Employment Agreement”); and


 


WHEREAS, the Company desires to provide the Awardee an
incentive to participate in the success and growth of the Company through the
opportunity to earn a proprietary interest in the Company; and


 


WHEREAS, to give effect to the foregoing intentions, the Company
desires to grant the Awardee an award of
Deferred Stock with respect to the Company’s common stock, par value $.10 per share (the “Common Stock”) pursuant
to Section 15 of the Amended and Restated 2005 Equity Incentive Plan of
The Children’s Place Retail Stores, Inc. (the “Plan”);


 


NOW, THEREFORE, in consideration of the mutual covenants hereinafter
set forth and for other good and valuable consideration, the parties hereto
agree as follows:


 


1.                                       Award.  Subject to Sections 2 and 3
hereof, the Company shall issue and deliver to the Awardee (i)               (1) shares
of Common Stock on or within 10 days after the first anniversary of the Award
Date (the “First Vesting Date”), (ii)               (2) shares
of Common Stock on or within 10 days after the second anniversary of the Award
Date (the “Second Vesting Date”), and (ii)               (3) shares
of Common Stock within 10 days following the third anniversary of the Award
Date (the “Third Vesting Date”); provided, however, that, except as provided
Sections 2 and 3 hereof, the shares of Common Stock deliverable in accordance
with the foregoing following each of the First Vesting Date, the Second Vesting
Date and the Third Vesting Date, respectively, shall not be so delivered unless
the Awardee is in the employ of the Company or a Subsidiary on such respective
First Vesting Date, Second Vesting Date and Third 


 






(1)                                                                                  Number to be calculated by dividing $3 million by the closing price of the
Company’s common stock on the Award Date, divided by three.


(2)                                                                                  Same number as calculated in footnote 1.


(3)                                                                                  Same number as calculated in footnote 1.


 

















 


Vesting Date.  The
total number of shares of Common Stock that may be earned if Awardee remains employed
by the Company or a Subsidiary through the Third Vesting Date is
                
shares (the “Deferred Shares”).  Capitalized
terms used but not otherwise defined in this Agreement shall have the meanings
as set forth in the Plan.


 


2.                                       Accelerated
Vesting in the Event of Termination Due to Death, Disability, Termination
Without Cause or Resignation Due to Good Reason.  In the event that the Awardee’s employment
with the Company terminates in accordance with Sections 5(b), 5(c) or 5(d) of
the Employment Agreement, or under the circumstances set forth in Section 6(d)(iii) of
the Employment Agreement, all of the Deferred
Shares, to the extent not previously issued and delivered, shall be issued and
delivered to Awardee (or Awardee’s estate, in the event of Awardee’s death)
within 10 days after Awardee’s Date of Termination (as defined in the
Employment Agreement).


 


3.                                       Accelerated Vesting in the Event of a Change in Control. In the event
that a “Change in Control” (as defined in the Employment
Agreement) occurs before the Awardee’s employment with the Company
terminates, all of the Deferred Shares, to the
extent not previously issued and delivered, shall be issued and delivered to
Awardee immediately prior to such Change in Control.


 


4.                                       Transfer Restrictions.  Prior to delivery of any Common Stock with
respect to the Deferred Shares, the Awardee shall not be deemed to have any
ownership or shareholder rights (including without limitation dividend and
voting rights) with respect to such shares, nor may the Awardee sell, assign,
pledge or otherwise transfer (voluntarily or involuntarily) any of the Deferred
Shares prior to delivery thereof.


 


5.                                       Adjustment
of Shares. 
Notwithstanding anything contained herein to the contrary, in the event of
any change in Common Stock resulting from a corporate transaction including,
but not limited to, a subdivision or consolidation, reorganization,
recapitalization, merger, share split, reverse share split, share distribution,
combination of shares or the payment of a share dividend, the Deferred Shares shall be treated in the same
manner in any such transaction as other Common Stock.


 


6.                                       Government
Regulations. 
Notwithstanding anything contained herein to the contrary, the Company’s
obligation to issue or deliver certificates evidencing the Deferred Shares
shall be subject to the terms of all applicable laws, rules and
regulations and to such approvals by any governmental agencies or national
securities exchanges as may be required; provided that the Company shall use
commercially reasonable best efforts to ensure that the terms of all applicable
laws, rules and regulations and approvals by any governmental agencies or
national securities exchanges as may be required are timely satisfied or
obtained, as applicable.


 


7.                                       Transferable
Shares.  All shares of Common Stock
delivered by the Company to the Awardee hereunder shall (i) not contain
any legends and (ii) shall be freely transferable (including in publicly
traded open market transactions) by the Awardee upon receipt.


 


2

















 


8.                                       Withholding
Taxes.  The Company
shall have the right to withhold from amounts payable to the Awardee, as
compensation or otherwise, or alternatively, to require the Awardee to remit to
the Company, an amount sufficient to satisfy all federal, state and local
withholding tax requirements. 
Notwithstanding the foregoing, the Company shall provide for such
withholding through sale of the Deferred Shares through a broker or such other
arrangement as is reasonably acceptable to the Company.


 


9.                                       Awardee
Representations. 
The Awardee has reviewed with her own tax advisors the federal, state,
local and foreign tax consequences of the transactions contemplated by this
Agreement.  The Awardee is relying solely
on such advisors and not on any statements or representations of the Company or
any of its agents, if any, made to the Awardee. 
The Awardee understands that the Awardee (and, subject to Section 8
above, not the Company) shall be responsible for the Awardee’s own tax
liability arising as a result of the transactions contemplated by this
Agreement.


 


10.                                 Employment.  Neither this Agreement nor any
action taken hereunder shall be construed as giving the Awardee any right of
continuing employment by the Company.


 


11.                                 Notices. 
Notices or communications to be made hereunder shall be in writing and
shall be made in accordance with the Employment Agreement.


 


12.                                 Governing
Law.  This
Agreement shall be construed under the laws of the State of Delaware, without
regard to conflict of laws principles.


 


13.                                 Entire
Agreement. 
This Agreement constitutes the entire agreement between the parties
hereto with respect to the subject matter hereof, and supersedes all prior
agreements and understandings relating to the subject matter of this
Agreement.  Notwithstanding the
foregoing, this Agreement and the award made hereby shall be subject to the
terms of the Plan.  However, in the event
of a conflict between this Agreement and the terms of the Plan, the terms and
conditions most favorable to the Awardee shall control.  To the extent that there is any conflict
between the terms and provisions of this Agreement and/or the Employment
Agreement and any other agreement between the Awardee and the Company, the
terms and provisions most favorable to the Awardee shall control.


 


14.                                 Binding
Effect.  This
Agreement shall be binding upon and inure to the benefit of the Company and the
Awardee and their respective permitted successors, assigns, heirs,
beneficiaries and representatives.  This
Agreement is personal to the Awardee and may not be assigned by the Awardee without
the prior consent of the Company.  Any
attempted assignment in violation of this Section shall be null and void.


 


15.                                 Amendment.  This Agreement may be amended or
modified only by a written instrument executed by both the Company and the
Awardee.


 


[Signature Page Follows]


 


3

















 


IN WITNESS WHEREOF, the parties hereto have executed this Agreement or caused their duly
authorized officer to execute this Agreement on the date first written above.


 


	
   

  	
  THE CHILDREN’S PLACE RETAIL STORES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
  Date:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  AWARDEE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:  Jane T. Elfers

  
	
   

  	
  Date:

  	
   

  
					



 


4














 


Exhibit B


 


PERFORMANCE STOCK AWARD AGREEMENT


 


THE CHILDREN’S PLACE RETAIL
STORES, INC.


 


This Performance Stock Award Agreement (the “Agreement”) is entered
into on the 4th day of January 2010 (the “Award Date”) by
and between The Children’s Place Retail Stores, Inc., a Delaware
corporation (the “Company”), and Jane T. Elfers (the “Awardee”).


 


WHEREAS, the Company has
retained Awardee as its President and Chief Executive Officer pursuant to the
Employment Agreement dated as of the date hereof between the Company and the
Awardee (the “Employment Agreement”); and


 


WHEREAS, the Company desires to provide the Awardee an
incentive to participate in the success and growth of the Company through the
opportunity to earn a proprietary interest in the Company; and


 


WHEREAS, to give effect to the foregoing intentions, the Company
desires to grant the Awardee a performance stock
award with respect to the Company’s common stock, par value $.10 per share (the “Common Stock”) pursuant
to the Amended and Restated 2005 Equity Incentive Plan of The Children’s Place
Retail Stores, Inc. (the “Plan”);


 


NOW, THEREFORE, in consideration of the mutual covenants hereinafter
set forth and for other good and valuable consideration, the parties hereto
agree as follows:


 


1.                                       Award.  Subject to Sections 2, 3 and 4
hereof, the Company shall issue and deliver to the Awardee the number of shares
of Common Stock determined in accordance with Exhibit A (the “Performance
Shares”) within 10 days following a determination by the Board or an appropriate
committee thereof that the performance target(s) set forth on Exhibit A
have been achieved, but in no event later than March 15, 2012; provided
that, subject to Sections 2, 3 and 4 hereof, the Awardee is in the employ of
the Company or a Subsidiary on the last day of the Performance Period set forth
in Exhibit A.  Capitalized
terms used but not otherwise defined in this Agreement shall have the meanings
as set forth in the Plan.


 


2.                                       Termination of
Employment Due to Death or Disability.  If Awardee’s employment with the Company
terminates before the end of the Performance Period in accordance with Section 5(b) or 5(c) of the Employment
Agreement, the Awardee (or Awardee’s estate) shall, if the Target
Performance Goal set forth in Exhibit A is achieved, be entitled to the
number of Initial Performance Shares set forth in Exhibit A multiplied by a
fraction, the numerator of which is the number of days the Awardee was employed
by the Company during the Performance Period and the denominator of which is
365.  Such Initial Performance Shares, if
any, shall be issued and delivered to the Awardee (or Awardee’s estate, as
applicable) within 10 days following a
determination by the Board or an appropriate committee thereof that the
performance target(s) set forth on Exhibit A have been achieved, but
in no event later than March 15, 2012.


 

















 


3.                                       Accelerated
Vesting in the Event of Termination Without Cause or Resignation Due to Good
Reason.  In the event
that the Awardee’s employment with the Company terminates before the end
of the Performance Period pursuant to Section 5(d) the
Employment Agreement or under the circumstances set forth in Section 6(d)(iii) of
the Employment Agreement, the Awardee shall, if the Target Performance Goal set
forth in Exhibit A is achieved, be entitled to the number of Initial
Performance Shares set forth in Exhibit A).  Such Initial Performance Shares shall
be issued and delivered to the Awardee within 10
days following a determination by the Board or an appropriate committee thereof
that the performance target(s) set forth on Exhibit A have been
achieved, but in no event later than March 15, 2012; provided, however,
that if a “Change in Control” (as defined in the Employment Agreement) occurs after a termination of the Awardee’s
employment under the circumstances set forth in Sections 5(d) or 6(d)(iii) of
the Employment Agreement but before such a determination has been made by the Board or an appropriate committee thereof, then the Initial
Performance Shares shall be issued and delivered to Awardee immediately prior
to such Change in Control.


 


4.                                       Acceleration of
Initial Performance Shares Upon a Change in Control.  In the event that a “Change in Control” (as
defined in the Employment Agreement)
occurs prior to a determination by the Board or
an appropriate committee thereof as to whether the performance target(s) set
forth on Exhibit A have been achieved and Awardee is then employed
by the Company, the Awardee shall be entitled to receive the number of Initial
Performance Shares set forth in Exhibit A. 
Such Initial Performance Shares shall be issued and delivered to Awardee
immediately prior to such Change in Control.


 


5.                                       Transfer Restrictions.  Prior to vesting of any Performance Shares,
the Awardee shall not be deemed to have any ownership or shareholder rights
(including without limitation dividend and voting rights) with respect to such
shares, nor may the Awardee sell, assign, pledge or otherwise transfer
(voluntarily or involuntarily) any of the Performance Shares prior to delivery
thereof.


 


6.                                       Adjustment
of Shares. 
Notwithstanding anything contained herein to the contrary, in the event of
any change in Common Stock resulting from a corporate transaction including,
but not limited to, a subdivision or consolidation, reorganization, recapitalization,
merger, share split, reverse share split, share distribution, combination of
shares or the payment of a share dividend, the Performance
Shares shall be treated in the same manner in any such transaction as
other Common Stock.


 


7.                                       Government
Regulations. 
Notwithstanding anything contained herein to the contrary, the Company’s
obligation to issue or deliver certificates evidencing the Performance Shares
shall be subject to the terms of all applicable laws, rules and
regulations and to such approvals by any governmental agencies or national
securities exchanges as may be required; provided that the Company shall use
commercially reasonable best efforts to ensure that the terms of all applicable
laws, rules and regulations and approvals by any governmental agencies or
national securities exchanges as may be required are timely satisfied or
obtained, as applicable.


 


2

















 


8.                                       Transferable
Shares.  All shares of Common Stock
delivered by the Company to the Awardee hereunder shall (i) not contain
any legends and (ii) shall be freely transferable (including in publicly
traded open market transactions) by the Awardee upon receipt.


 


9.                                       Withholding
Taxes.  The Company
shall have the right to withhold from amounts payable to the Awardee, as
compensation or otherwise, or alternatively, to require the Awardee to remit to
the Company, an amount sufficient to satisfy all federal, state and local
withholding tax requirements.  Notwithstanding
the foregoing, the Company shall provide for such withholding through sale of
the Performance Shares through a broker or such other arrangement as is
reasonably acceptable to the Company.


 


10.                                 Awardee
Representations. 
The Awardee has reviewed with her own tax advisors the federal, state,
local and foreign tax consequences of the transactions contemplated by this
Agreement.  The Awardee is relying solely
on such advisors and not on any statements or representations of the Company or
any of its agents, if any, made to the Awardee.  The Awardee understands that the Awardee (and,
subject to Section 9 above, not the Company) shall be responsible for the
Awardee’s own tax liability arising as a result of the transactions
contemplated by this Agreement.


 


11.                                 Employment.  Neither this Agreement nor any
action taken hereunder shall be construed as giving the Awardee any right of
continuing employment by the Company.


 


12.                                 Notices. 
Notices or communications to be made hereunder shall be in writing and
shall be made in accordance with the Employment Agreement.


 


13.                                 Governing
Law.  This
Agreement shall be construed under the laws of the State of Delaware, without
regard to conflict of laws principles.


 


14.                                 Entire
Agreement. 
This Agreement constitutes the entire agreement between the parties hereto
with respect to the subject matter hereof, and supersedes all prior agreements
and understandings relating to the subject matter of this Agreement.  Notwithstanding the foregoing, this Agreement
and the award made hereby shall be subject to the terms of the Plan.  However, in the event of a conflict between
this Agreement and the terms of the Plan, the terms and conditions most
favorable to the Awardee shall control. 
To the extent that there is any conflict between the terms and provisions
of this Agreement and/or the Employment Agreement and any other agreement
between the Awardee and the Company, the terms and provisions most favorable to
the Awardee shall control.


 


3

















 


15.                                 Binding
Effect.  This Agreement
shall be binding upon and inure to the benefit of the Company and the Awardee
and their respective permitted successors, assigns, heirs, beneficiaries and
representatives.  This Agreement is
personal to the Awardee and may not be assigned by the Awardee without the
prior consent of the Company.  Any
attempted assignment in violation of this Section shall be null and void.


 


16.                                 Amendment.  This Agreement may be amended or
modified only by a written instrument executed by both the Company and the
Awardee.


 


[Signature Page Follows]


 


4

















 


IN WITNESS WHEREOF, the parties hereto have executed this Agreement or caused their duly
authorized officer to execute this Agreement on the date first written above.


 


	
   

  	
  THE CHILDREN’S PLACE RETAIL STORES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
  Date:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  AWARDEE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:  Jane T. Elfers

  
	
   

  	
  Date:

  	
   

  
					



 


5

















 


EXHIBIT A


 


1.                                       (a).                               Awardee’s Name:  Jane T. Elfers


 


(b).                              Award Date:  January 4, 2010


 


(c).                               Performance Period:  The Company’s fiscal year ending January 31,
2011


 


(d).                              Performance Shares available to
be earned (“Initial Performance Shares”)(1):


 


(e)                                  Additional Performance
Shares available to be earned (“Additional Performance Shares”)(2):


 


(f).                                 Performance Requirements:


 


Subject to the terms and conditions set forth in the
Performance Stock Award Agreement, Awardee shall earn and receive the number of
Performance Shares set forth above if the Company’s “Operating Income” (as defined
in the Employment Agreement) for the Performance Period set forth above equals
or exceeds the “Target Operating Income” (as defined in the Employment
Agreement) (the “Target Performance Goal”) and Awardee shall earn and receive
the number of Additional Performance Shares set forth above if the Company’s
Operating Income for the Performance Period set forth above equals or exceeds
120% of the Target Performance Goal.  The
number of Performance Shares to be issued to Awardee between the number of
Performance Shares and the number of Additional Performance Shares shall be
determined on a straight line interpolated basis.  The determination of whether the Target
Performance Goal or the 120% of the Target Performance Goal is achieved shall
be made by the Board or an appropriate committee thereof.


 


For
clarity, “Target Operating Income” under the Employment Agreement means 110% of
“Operating Income” (as defined in the Employment Agreement) for the fiscal year
of the Company ending January 29, 2010.


 


	
   

  	
  (Initials)

  	
   

  
	
  Jane Elfers

  	
   

  
	
   

  	
   

  
	
   

  	
  (Initials)

  	
   

  
	
  Company Signatory

  	
   

  



 






(1)                                                                                  Number to be
calculated by dividing $2 million by the closing price of the Company’s common
stock on the Award Date.


 


(2)                                                                                  Same number as
calculated in footnote 1 above.


 


6

















 


Exhibit C


 


Release of Claims


 


RELEASE


 


WHEREAS, Jane T. Elfers (the
“Executive”) and The Children’s Place Retail Stores, Inc. (the “Company”)
are parties to an Employment Agreement, dated as of December     ,
2009 (the “Employment Agreement”), which provided for the Executive’s
employment on the terms and conditions specified therein; and


 


WHEREAS, capitalized terms
used in this Release and not defined herein shall have the meanings ascribed to
them in the Employment Agreement;


 


WHEREAS, Executive’s
employment with the Company and the Employment Agreement has been terminated
[by the Executive for Good Reason ] [by the Company without Cause (other than
as a result of the Executive’s death or Disability)] [by the Company as a
result of Executive’s Disability] [as a result of the expiration of the Term
due to the Company’s issuance of a Non-Renewal Notice]


 


WHEREAS, this Release is the
“Release” referred to in Section 6(g) of the Employment Agreement;
and


 


NOW, THEREFORE, in consideration
of the premises and for other good and valuable consideration received or to be
received in accordance with the terms of the Employment Agreement, it is agreed
as follows:


 


1.                                       Without
prejudice to enforcement of the covenants, promises and/or rights reserved
herein, the Executive (on her own behalf and on behalf of her heirs and legal
representatives) hereby irrevocably and unconditionally releases, acquits and
forever discharges the Company, each of its past, present, and future direct
and indirect affiliated entities, subsidiaries, related companies and divisions
and each of their respective past, present and future stockholders, trustees,
members, partners, employee benefit plans (and such plans’ fiduciaries, agents,
administrators and insurers), directors, officers employees, agents and
attorney (individually and in their official capacities), as well as any
predecessors, future successors and assigns or estates of any of the foregoing
(collectively, “Releasees”), or any of them, from any and all charges,
complaints, claims, liabilities, obligations, promises, agreements,
controversies, damages, actions, causes of action, suits, rights, demands,
costs, losses, debts and expenses (including attorneys’ fees and costs actually
incurred) of any nature whatsoever, known or unknown, suspected or unsuspected,
arising out of the Employment Agreement or the termination of the Term
thereunder or Executive’s employment by the Company or the termination thereof,
including, without limitation, under Title VII of the Civil Rights Act of 1964,
as amended, the Equal Pay Act, the Lilly Ledbetter Fair Pay Act of 2009, the
Federal Age Discrimination in Employment Act of 1967 (“ADEA”), as
amended, the Employee 


 


7

















 


Retirement
Income Security Act (“ERISA”), as amended, the Civil Rights Act of 1991,
as amended, the Rehabilitation Act of 1973, as amended, the Older Workers
Benefit Protection Act (“OWBPA”), as amended, the Worker Adjustment
Retraining and Notification Act (“WARN”), as amended, the Fair Labor
Standards Act (“FLSA”), as amended, the Occupational Safety and Health Act of
1970 (“OSHA”), and the Sarbanes-Oxley Act of 2002, that the Executive
now has, or has ever had, or ever will have, against each or any of the Releasees,
by reason of any and all acts, omissions, events, circumstances or facts
existing or occurring up through the date of the Executive’s execution and
delivery hereof.  Anything to the
contrary notwithstanding, nothing herein shall release the Company or any other
Releasees from any claims or damages based on (i) any right the Executive
may have to enforce this Release or the provisions of the Employment Agreement
which survive a termination of employment, (ii) any right or claim that
arises after the date this Release is executed, (iii) any right the
Executive may have to vested or accrued benefits or entitlements under any
applicable plan, agreement, program, award, policy or arrangement of the
Company, (iv) the Executive’s right to indemnification and advancement of
expenses in accordance with applicable laws and/or the certificate of
incorporation and by-laws of the Company or Section 10 of the Employment
Agreement, or any applicable insurance policy or (v) any right the
Executive may have to obtain contribution as permitted by law in the event of
entry of judgment against the Executive as a result of any act or failure to
act for which the Executive, on the one hand, and the Company or any other
Releasees, on the other hand, are jointly liable.


 


2.                                       Subject to
Executive’s execution, delivery within 21 days(1) of the date of delivery
and non-revocation of this Agreement, in accordance with Section [6(b)]
[6(c)] [6(d)] [6(e)] of the Employment Agreement the Company shall make the
following payments and provide the following benefits to Executive:


 


[Enumerate amounts and
benefits set forth in the applicable subsection of Section 6 of the
Employment Agreement]


 


3.                                       The Executive
understands that she has been given a period of 21 days to review and consider
this Release before signing it pursuant to ADEA.  The Executive further understands that she
may use as much of this 21-day period as the Executive wishes prior to signing.


 


4.                                       The Executive
acknowledges and represents that she understands that she may revoke this
Release within 7 days of signing this Release. 
Revocation can be made by delivering a written notice of revocation to
[                                                  ].  For this revocation to be effective, written
notice must be received no later than the close of business on the seventh day
after the Executive signs this Release. 
If the Executive revokes this Release, the Company shall have no
obligations to the Executive under Section 6 of the Employment Agreement.


 






(1) Substitute
45 days for 21 days if applicable in accordance with the ADEA or OWBPA.  Corresponding change to paragraph 3 to be
made and applicable schedule(s) of other terminated employees to be
included if applicable.


 


8

















 


5.                                       The Executive
represents and acknowledges that in executing this Release she is not relying
upon, and has not relied upon, any representation or statement not set forth
herein made by any of the agents, representatives or attorneys of the Company
with regard to the subject matter of this Release.


 


6.                                       This Release
shall not in any way be construed as an admission by the Company or any of the
Releasees that it or they have acted wrongfully.


 


7.                                       Should any
provision hereof be invalid or otherwise unenforceable under any law, such
provision affected will be curtailed and limited to the extent necessary to
bring it within the requirements of law, and the remaining provisions of this
Release will remain in full force and effect and be fully valid and
enforceable.


 


8.                                       The Executive
represents and agrees (a) that the Executive has, to the extent she
desires, discussed all aspects of this Release with her attorney, (b) that
the Executive has carefully read and fully understands all of the provisions of
this Release, and (c) that the Executive is voluntarily entering into this
Release.


 


9.                                       This Release
shall be governed by, and construed in accordance with, the laws of the State
of New York, without giving effect to the conflict of laws principles thereof.


 


PLEASE READ
CAREFULLY.  THIS RELEASE INCLUDES 

A RELEASE OF CERTAIN KNOWN AND UNKNOWN CLAIMS.


 


This Release is executed as
of the          day of
                        ,
20    .


 


 


	
   

  	
   

  
	
   

  	
  Jane T. Elfers

  



 


9