**EXHIBIT 10.18**

 

**MOTHERS WORK, INC.**

**FORM OF NON-QUALIFIED STOCKOPTION AGREEMENT UNDER 1987 STOCK OPTION PLAN**

 

 

Mothers Work, Inc., aDelaware corporation (the “Company”), hereby grants to [insert name ofOptionee] (the “Optionee”) an option to purchase a total of [insert number ofshares] shares of Common Stock (the “Shares”) of the Company, at the price andon the terms set forth herein, and in all respects subject to the terms andprovisions of the Company’s 1987 Stock Option Plan, as amended (the “Plan”),which terms and provisions are incorporated by reference herein.  Unless the context herein otherwise requires,the terms defined in the Plan shall have the same meanings herein.

 

**1.****             ****Nature of the Option**. This Option is intended to be nonstatutory stock option and is notintended to be incentive stock option within the meaning of Section 422 of theInternal Revenue Code of 1986, as amended (the “Code”), or to otherwise qualifyfor any special tax benefits to the Optionee.

 

**2.     Date of Grant; Term of Option. **This Option is granted as of [insert grant date] andit may not be exercised later than [insert date that is 10 years after grantdate].

 

**3.     Option Exercise Price. **The Option exercise price is [insert exercise price]per Share.

 

**4.****             ****Exercise of Option. **This Option shall be exercisable during its term onlyin accordance with the terms and provisions of the Plan and this Option asfollows:

 

**(a)****         ****Right to Exercise.**  Subject to thelimitations set forth in the sentence following the table below, the Optioneeshall have the cumulative right to exercise the Option, and the Option is onlyexercisable, with respect to the following number of Shares on or after thefollowing dates (the “Exercise Dates”):

 

| **Table of  Number of Shares That May be Purchased On Or After**                                                                                                                                                                                                                                  |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                              |
|                                                                                                                                                                                                                                                                                              | Vesting Date |   | Vested Shares |
|                                                                                                                                                                                                                                                                                              | [insert vesting date(s)] |   | [insert shares vested on vesting date] |
|                                                                                                                                                                                                                                                                                              |   |   |
| Total Shares Subject to Option                                                                                                                                                                                                                                                                    |   | [insert total shares subject to option] |
|                                                                                                                                                                                                                                                                                              |   |   |
| [The vesting schedule is determined by the Board of  Directors of the Company, and options frequently vest either: (i) as to 100%  of the underlying shares on the date of grant, or (ii) as to 20% of the  underlying shares per year beginning on the first anniversary of the date of  grant.] |

 

Prior to the Option becoming exercisable with respect to any Shares,each Exercise Date which has not yet been reached shall be postponed, on acumulative basis, by one month for each calendar month during which Optioneedoes not work an average of three (3) days per week, and

 

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the Company’s business records reflecting the number of days on whichOptionee worked shall be deemed binding and conclusive for purposes of thisAgreement.

 

**(b)           Method of Exercise. **ThisOption shall be exercisable by written notice which shall state the election toexercise this Option, the number of Shares in respect to which the Option isbeing exercised and such other representations of agreements as to the Optionee’sinvestment intent with respect to such Shares as may be required by the Companyhereunder or pursuant to the provision of the Plan.  Such written notice shall be signed by theOptionee and shall be delivered in person or by certified mail to the Secretaryof the Company or such other person as may be designated by the Company.  The written notice shall be accompanied bypayment of the purchase price.  Paymentof the purchase price shall be by check or such consideration and method ofpayment authorized by the Board or the Committee pursuant to the Plan.  The certificate or certificates for theShares as to which the Option shall be exercised shall be registered in thename of the Optionee and shall be legended as required under the Plan and/orapplicable law.

 

**(c)           Restrictions on Exercise. **ThisOption may not be exercised if the issuance of the Shares upon such exercisewould constitute a violation of any applicable federal or state securities lawsor other laws or regulations.  As acondition to the exercise of this Option, the Company may require the Optioneeto make a representation and warranty to the Company or otherwise enter intoany stock purchase or other agreement as may be required by any applicable lawor regulation or as may otherwise be reasonably requested by the Board of theCommittee.

 

**5.****             ****Investment Representations. **Unless the Shares have been registered under the SecuritiesAct of 1933, in connection with acquisition of this Option, the Optioneerepresents and warrants as follows:

 

**(a)          **The Optionee is acquiring this Option, and upon exercise of thisOption, he will be acquiring the Shares for investment in his own account, notas nominee or agent, and not with a view to, or for resale in connection withany distribution thereof.

 

**(b)          **The Optionee has a preexisting business or personal  relationship with the Company or one of itsdirectors, officers or controlling persons and by reason of his business orfinancial experience, has, and could be reasonably assumed to have, thecapacity to protect his interest in connection with the acquisition of thisOption and the Shares.

 

**6.****             ****Termination of Status as anEmployee. **Subject to the provisions of Section 7 hereof,if the Optionee ceases to serve as an employee of the Company or itsSubsidiaries for any reason other than death or Disability and therebyterminates his status as an Employee, the Optionee shall have the right toexercise this Option at any time within the three (3) month period after thedate of such termination to the extent that the Optionee was entitled toexercise the Option at the date of such termination, subject to extension atthe discretion of the Committee.  If theOptionee ceases to serve as an employee due to death or Disability, this optionmay be exercised at any time within one (1) year after the date of death ortermination of employment due to Disability, in the case of death, by theOptionee’s estate or by a person who acquired the right to exercise this Optionby bequest or inheritance, or, in the case of Disability, by the Optionee, butin any case only to the extent the Optionee was entitled to exercise thisOption at the date of such termination. To the extent that the Optionee was not entitled to exercise the Optionat the date of termination, or to the extent the Option is not exercised withinthe time

 

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specified herein, this Option shall terminate.  Notwithstanding the foregoing, this Optionshall not be exercisable after the expiration of the term set forth in Section2 hereof.

 

**7.****             ****Forfeiture of Option. **Notwithstanding any other provision of this Option, ifthe Optionee’s employment is terminated by the Company for cause or if theBoard of Directors makes a determination that the Optionee (i) has engaged inany type of disloyalty to the Company, including without limitation, fraud,embezzlement, theft, or dishonesty in the course of his employment, or (ii) hasbeen convicted of a felony or (iii) has disclosed Proprietary Information ofthe Company or (iv) has breached his Confidentiality and Non-Competition Agreementwith the Company, all unexercised Options shall terminate on the earlier of thedate of termination for cause or the date of such determination.

 

**8.****             ****Nontransferability ofOption. **This Option may not be sold, pledged, assigned, hypothecated,gifted, transferred or disposed or in any manner either voluntarily orinvoluntarily by the operation of law, other than by the will or by the laws ofdescent or distribution, and may be exercised during the lifetime of theOptionee only by such Optionee.  Subjectto the foregoing and the terms of the Plan, the terms of this Option shall bebinding upon the executors, administrators, heirs, successors and assigns ofthe Optionee.

 

**9.****             ****Continuation of Employment. **Neither the Plan nor this Option shall confer upon anyOptionee any right to continue in the employment of the Company or any of itssubsidiaries or limit in any respect the right of the Company to discharge theOptionee at any time, with or without cause and with or without notice.

 

**10.****      ****Withholding. **The Company reserves the right towithhold, in accordance with any applicable laws, from any considerationpayable to Optionee any taxes required to be withheld by federal, state orlocal law as a result of the grant or exercise of this Option or the sale or otherdisposition of the Shares issued upon exercise of this Option.  If the amount of any consideration payable tothe Optionee, is insufficient to pay such taxes or if no consideration ispayable to the Optionee, upon request of the Company, the Optionee (or suchother person entitled to exercise the Option pursuant to Section 6 hereof)shall pay to the Company an amount sufficient for the Company to satisfy anyfederal, state or local tax withholding requirements it may incur, as a resultof the grant or exercise of this Option or the sale of or other disposition ofthe Shares issued upon exercise  of thisOption.

 

**11.****      ****The Plan. **This Option is subject to, and theCompany and its Optionee agree to be bound by, all of the terms and conditionsof the Plan as such Plan may be amended from time to time in accordance withthe terms thereof.  Pursuant to the Plan,the Board of Directors of the Company is authorized to adopt rules andregulations not inconsistent with the Plan as it shall deem appropriate andproper.  A copy of the Plan in itspresent form is available for inspection during business hours by the Optioneeor the persons entitled to exercise this Option at the Company’s principaloffice.  All questions of theinterpretation and application of the Plan and the Option shall be determinedby the Committee designated under the Plan, and determination shall be final,binding and conclusive.

 

**12.****      ****Employment. **Nothing herein contained shall affect theright of the Company or any Subsidiary to terminate the Optionee’s employment,services, responsibilities, duties, or authority to represent the Company orany Affiliate at any time for any reason whatsoever.

 

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**13.****      ****Entire Agreement. **This Agreement, together with the Planand other exhibits attached thereto or hereto, represents the entire agreementbetween the parties.

 

**14.****      ****Governing Law. **This****Agreementshall be construed in accordance with the laws of the Commonwealth ofPennsylvania.

 

**15.****      ****Amendment. **Subject to the provisions of the Plan,this Agreement may only be amended by writing signed by each of the partieshereto.

 
| Date: [insert date of signature] | **MOTHERS WORK, INC.** |
|----------------------------------|------------------------|
|                             |                   |   |
|                             | By:                    |   |
|                             | Name:                  |   |
|                             | Title:                 |   |
|                                  |                        |  |  |

 
|                   Name: | [insert name of optionee]               |
|-------------------------------------------------------------------------------------------------------------------|-----------------------------------------|
| Shares in Option:                                                                                                 | [insert total shares subject to option] |
| Exercise Price:                                                                                                   | [insert exercise price]                 |

 

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