Document:

EXHIBIT 10.5

SEVERANCE AGREEMENT AND RELEASE DATED APRIL 19, 2006
WITH

HITEN PATEL.

 

 

Exhibit
10.5

SEVERANCE
AGREEMENT AND RELEASE

This
Severance Agreement and Release (the “Agreement”) is made this 19th day of April 2006
between Hiten Patel (the “Employee”) and The Children’s Place Services Company,
LLC, its parent and its direct and indirect affiliated corporations and other
entities (collectively, the “Company”).

1.             Termination of Employment. The
parties agree that the Employee’s employment with the Company shall terminate
effective April 15, 2006 (the “Separation Date”).

2.             Separation Payment.
(a) In consideration for entering into this Agreement, the Company shall
pay to the Employee the sum of One Hundred Eighty Thousand Dollars ($180,000),
less legally required payroll deductions (the “Separation Payment”), which sum
shall be paid to Employee with the Company’s regular payroll practices in
thirteen (13) equal bi-weekly installments commencing the first payperiod
following execution of this Agreement.

(b)           The Company also shall pay to the
Employee the sum of Twenty Seven Thousand Six Hundred Ninety-Two Dollars
($27,692.00), less legally required payroll deductions, for Employee’s accrued
but unused vacation and personal day as of the Separation Date, within fourteen
(14) days of full execution of this Agreement.

(c)           The Company also agrees that the
Transfer Restrictions under The Children’s Place Retail Stores, Inc.
Transfer Restriction Agreement dated January 27, 2006 (the “Transfer
Restriction Agreement”) shall lapse with respect to the Option Shares upon
execution of this Agreement. Capitalized terms not otherwise defined herein
shall have the meanings ascribed to them in the Transfer Restriction Agreement.

(d) The
Company represents and warrants that the consideration paid to the Employee
under this Agreement exceeds the amount the Employee would ordinarily be
entitled to upon termination of the Employee’s employment.

3.             Other Benefits. Any and all
other employment benefits received by the Employee shall terminate effective as
of the Separation Date.

4.             Return of Company Property. The
Employee agrees to return to the Company all keys, locks, documents, records,
materials, and other information of any type whatsoever that is the property of
the Company.

5.             Removal from Company Positions
and Indemnification. The Company agrees that as of the Separation Date the
Employee shall be removed from all positions held on behalf of the Company, its
parents, subsidiaries and affiliated companies and any other related entities
including, but not limited to, officer, director, agent, representative,
trustee, administrator, fiduciary and signatory. In addition, with respect to
all acts or omissions of Employee which occurred prior to the Separation Date,
the Company agrees to continue to indemnify the Employee to the same extent
that the Employee was

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indemnified prior
to the Separation Date and that the Employee shall retain the benefit of all
directors and officer liability insurance and coverage maintained by Employer,
in accordance with the terms of such policy.

6.             Consultation with Counsel and
Voluntariness of Agreement. (a) The Employee acknowledges that the
Company has advised the Employee in writing to consult with an attorney prior
to executing this Agreement. The Employee further acknowledges that, to the
extent desired, the Employee has consulted with the Employee’s own attorney in
reviewing this Agreement, that the Employee has carefully read and fully
understands all the provisions of this Agreement, and that the Employee is
voluntarily entering into this Agreement.

(b)           The Employee further acknowledges that
the Employee has had a period of at least twenty-one (21) days in which to
consider the terms of this Agreement.

(c)           The
Employee acknowledges that the Employee has been informed in writing that the
Employee has seven (7) calendar days following the execution of this
Agreement to revoke it, and that such revocation must be in writing, hand
delivered or sent via overnight mail and actually received by the Company
within such period. It is specifically understood that this Agreement shall not
be effective or enforceable until the seven-day revocation period has expired.

7.             Confidentiality of Agreement.
The Employee agrees not to disclose the terms and conditions of this Agreement
to any person or entity, except (a) to comply with this Agreement; (b) to
the Employee’s legal, financial or tax advisors, spouse, and to the Internal
Revenue Service or any similar state or local taxation authority; or (c) as
otherwise required by law. The Employee agrees that the Employee will not
publicly or privately disparage the Company or any of the Company’s products,
services, affiliates, or current or former officers, directors, trustees,
employees, agents, administrators, representatives or fiduciaries.

8.             Confidential and Proprietary
Information; Work Product. (a) The Employee acknowledges that the
Employee may possess certain confidential information, property or trade
secrets of the Company (“Confidential Information”) which would damage the
Company if disclosed or used by the Employee. Accordingly, the Employee
acknowledges a continuing duty of confidentiality to the Company and agrees
that the Employee will not use or disclose Confidential Information to any
person or entity or use the Confidential Information in any way. Confidential
information shall include, but shall not be limited to, the following: (i) documentation
or data contained in any files or any other records the Company may maintain;
ii) statements regarding any matters made by any employees, officers, agents,
representatives or attorneys of the Company at any meeting attended by the
Employee or which the Employee may have heard or obtained knowledge of which
may result in any detriment to the Company; (iii) actions taken or
contemplated by the Company with respect to any of its operations, assets or
employees; (iv) policies, practices, programs or plans contemplated,
initiated or effectuated by the Company; and (v) any other information,
records or data of a private nature to the

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Company.
Confidential Information shall not include information which is then in the
public domain (so long as the Employee did not, directly or indirectly, cause
or permit such information to enter the public domain). Notwithstanding the
foregoing, nothing contained in this Paragraph 8 shall prevent Employee from
disclosing Confidential Information if compelled to do so by legal process;
provided, that Employee immediately notifies Employer if disclosure of
Confidential Information is required by court order or other legal process to
allow Employer sufficient time to obtain a protective order or otherwise obtain
the fullest protection permitted by applicable law. In addition,
notwithstanding the foregoing, nothing contained in this Section 8 shall
serve as a restraint or limitation upon the Employee from exercising the
Employee’s general knowledge and expertise in the Employee’s field or from
earning a livelihood in said field.

(b)           Employee 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 him during his employment by the Company and for a
period of 6 months thereafter, that (i) relate, whether directly or
indirectly, to the Company’s actual or anticipated business, research or
development or (ii) are suggested by or as a result of any work performed
by Employee 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 property of the Company. To the extent that any such Work Product
may not, under applicable law, be considered works made for hire, Employee
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 his 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 his recognition of the Company’s absolute ownership of
all Work Product, Employee agrees that he shall (i) not use any Work
Product for the benefit of any party other than the Company and (ii) perform
such acts and execute such documents and instruments as the Company may now or
hereafter deem reasonably necessary or desirable to evidence the transfer of
absolute ownership of all Work Product to the Company; provided, however, if
following ten (10) days’ written notice from the Company, Employee
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 his attorney-in-fact to execute such documents on his behalf. This
agency is coupled with an interest and is irrevocable without the Company’s
prior written consent.

9.        Non-Competition, Non-Solicitation, and No Interference
With Business Operations. The Employee agrees that, for a period of six (6) months
following the Separation Date, the Employee will not:

(a)      Promote, participate or engage in any
business on behalf of any Direct Competitor of the Company, whether Employee is
acting as owner, partner, stockholder, employee, broker, agent, principal,
trustee, corporate officer, director, consultant or in any other capacity
whatsoever; provided, however, that this will not prevent Employee from

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holding for investment up
to 1% of any class of stock or other securities quoted or dealt in on a
recognized stock exchange or on Nasdaq. For purposes of this Section, a Direct
Competitor of the Company means (i) any division of The Gap, Inc. or
any entity under common control with The Gap, Inc. that is engaged in the
retail sale of children’s apparel, (ii) any division of The Limited, Inc.
or any entity under common control with The Limited, Inc. that is engaged
in the retail sale of children’s apparel, (iii) Gymboree or Kids R Us or
any entity under common control with Gymboree or Kids R Us, as the case may be,
or (iv) any entity with total sales in excess of $100,000,000 per year
engaged in the retail sale of children’s apparel or toys. For purposes of this
section “any division” and “any entity under common control with” shall not
include the parent company of any of the entities at issue (i.e. The Gap, Inc.,
The Limited, Inc., Gymboree or Toys R Us).

(b)      Directly or indirectly employ, solicit or
entice away any director, officer or employee of the Company or any of its
affiliated companies;

(c)        Take any action to interfere, directly or
indirectly, with the goodwill of the Company or any of its affiliated
companies, or induce or attempt to induce any person or entity known by the
Employee to be a current employee, distributor, source, supplier, customer, or
contractor of the Employee to sever or decrease the activity of any
relationship with the Company;

(d)        Use the name of the Company or its
subsidiaries in the conduct of any business activities or for Employee’s
personal use without the prior written consent of the Company.

10.           Injunctive Relief. Employee
acknowledges that a breach or threatened breach of any of the terms set forth
in section 7, 8 or 9 of this Agreement shall result in an irreparable and
continuing harm to the Employer for which there shall be no adequate remedy of
law. The Employer shall, without posting a bond, be entitled to obtain
injunctive and other equitable relief, in addition to any other remedies
available to the Employer in connection with Section 7, 8 or 9 of this
Agreement.

11.           Confirmation of Employment. The
Company shall, if called upon, confirm the Employee’s dates of employment and
position with the Company.

12.           Violation of Terms. Should the
Employee violate any provision of this Agreement, then, in addition to all
other damages or legal remedies available to the Company (including without
limitation injunctive relief), the Employee immediately shall return to the
Company all monies paid to the Employee pursuant to this Agreement. Should the
Company violate any provision of this Agreement, then the Employee shall have
all remedies and civil actions available to remedy Employee’s damages. The
parties agree that, should either party seek to enforce the terms of this
Agreement through litigation, then the prevailing party, in addition to all
other legal remedies, shall be reimbursed by the other party for all reasonable
attorneys’ fees in relation to such litigation.

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13.           Cooperation. At all times
following the Separation Date, the Employee shall cooperate fully with and
render such assistance to the Company as requested in the orderly transfer of
his responsibilities to other Company employees and the transition of the
Finance Department. The Employee also shall furnish such information as
may be in his possession to, and cooperate with and assist, the Company as may
reasonably be requested by the Company in connection with any litigation or
investigation in which the Company is or may be a party.

14.           Release. In exchange for the
consideration set forth in Section 2, the Employee, on behalf of the Employee
and the Employee’s agents, assignees, attorneys, heirs, executors and
administrators, voluntarily and knowingly releases the Company, as well as the
Company’s successors, predecessors, assigns, parents, subsidiaries, divisions,
affiliates, officers, directors, shareholders, employees, agents and
representatives, in both their individual and representative capacities
(collectively, the “Released Parties”), from any and all claims, causes of
action, suits, grievances, debts, sums of money, controversies, agreements,
promises, damages, back and front pay, costs, expenses, attorneys’ fees and
remedies of any type by reason of any matter, cause, act or omission arising
out of or in connection with the Employee’s employment or separation from
employment with the Company, including but not limited to any claims based upon
common law, any federal, state or local employment statutes or civil rights
laws (such as Title VII of the Civil Rights Act of 1964, as amended; the Age
Discrimination in Employment Act; the Family and Medical Leave Act; the
Americans with Disabilities Act; the Employee Retirement Income Security Act of
1974; the New Jersey Conscientious Employee Protection Act; the Sarbanes-Oxley
Act of 2002; and laws prohibiting discrimination based upon race, color,
religion, creed, national origin, ancestry, family and/or medical leave,
citizenship status, sex, sexual orientation or preference, marital status, age
or disability), wrongful termination, failure to pay wages, breach of contract,
defamation, invasion of privacy, whistleblowing or infliction of emotional
distress, or any other matter. This release shall apply to all known, unknown,
unsuspected and unanticipated claims, liens, injuries and damages that have
accrued to the Employee as of the date of this Agreement. This release does not
waive rights or claims that may arise after this release is executed or related
to the enforcement of this Agreement.

15.
          No Admission. Nothing
contained in this Agreement nor the fact that the parties have signed this
Agreement shall be construed as an admission by either party.

16.           Waiver of Reinstatement. By
entering into this Agreement, the Employee acknowledges that the Employee
waives any claim to reinstatement and/or future employment with the Company. The
Employee further acknowledges that the Employee is not and shall not be
entitled to any payments, benefits or other obligations from the Released
Parties whatsoever (except as expressly set forth in this Agreement).

17.           Miscellaneous. This Agreement
contains the entire understanding between the parties. This Agreement
supersedes any and all previous agreements and plans, whether written or oral,
between the Employee and the Company. There are no other

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representations,
agreements or understandings, oral or written, between the parties relating to
the subject matter of this Agreement. No amendment to or modification of this
Agreement shall be valid unless made in writing and executed by the parties
hereto subsequent to the date of this Agreement. This Agreement shall be
enforced in accordance with the laws of the State of New Jersey, and the
parties agree that any litigation to enforce this Agreement will take place in
New Jersey. This Agreement may be executed in several counterparts, and all
counterparts so executed shall constitute one Agreement, binding upon the
parties hereto.

18.           Severability. If any term,
provision or part of this Agreement shall be determined to be in conflict with
any applicable federal, state or other governmental law or regulation, or otherwise
shall be invalid or unlawful, such term, provision or part shall continue in
effect to the extent permitted by such law or regulation. Such invalidity,
unenforceability or unlawfulness shall not affect or impair any other terms,
provisions and parts of this Agreement not in conflict, invalid or unlawful,
and such terms, provisions and parts shall continue in full force and effect
and remain binding upon the parties hereto.

THE EMPLOYEE STATES THAT THE EMPLOYEE HAS CAREFULLY READ THIS AGREEMENT
PRIOR TO SIGNING IT, THAT THE AGREEMENT HAS BEEN FULLY EXPLAINED TO THE
EMPLOYEE PRIOR TO SIGNING IT, THAT THE EMPLOYEE HAS HAD THE OPPORTUNITY TO HAVE
IT REVIEWED BY AN ATTORNEY AND THAT THE EMPLOYEE UNDERSTANDS THE AGREEMENT’S
FINAL AND BINDING EFFECT PRIOR TO SIGNING IT, AND THAT THE EMPLOYEE IS SIGNING
THE RELEASE VOLUNTARILY WITH THE FULL INTENTION OF COMPROMISING, SETTLING, AND
RELEASING THE COMPANY AS STATED IN THIS AGREEMENT.

	
  The Children’s Place
  Services Company, LLC

  	
  Hiten Patel

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /S/ STEVEN
  BALASIANO

  	
   

  	
  /S/ HITEN PATEL

  
	
   

  	
  Steven Balasiano

  	
  Hiten Patel (signature)

  
	
   

  	
   

  	
   

  
	
  Dated:

  	
  April 19,
  2006

  	
   

  	
  Dated: 

  	
  April 19, 2006

  
						

 

 

 6EXHIBIT 10.6

AMENDED AND RESTATED EMPLOYMENT AGREEMENT DATED MAY 12,

2006 WITH EZRA DABAH.

 

 

Exhibit 10.6

 

AMENDED
AND RESTATED EMPLOYMENT AGREEMENT

 

AMENDED
AND RESTATED EMPLOYMENT AGREEMENT, dated as of May 12, 2006, between EZRA
DABAH (“Executive”) and THE CHILDREN’S PLACE RETAIL STORES, INC., a Delaware
corporation (“Employer”).

 

W I T N E S S E T H:

 

WHEREAS, Employer and
Executive are parties to a certain Employment Agreement dated June 27,
1996, as amended by letter dated May 17, 2005 (the “Prior Agreement”); and

 

WHEREAS, Executive and
Employer desire to amend and restate the Prior Agreement as set forth herein;

 

NOW, THEREFORE, in
consideration of the premises and the mutual covenants and agreements herein
contained, the parties agree as follows:

SECTION 1

 

EMPLOYMENT
OF EXECUTIVE

 

1.01                         Employer hereby agrees
to employ Executive and Executive hereby agrees to be and remain in the employ
of Employer upon the terms and conditions hereinafter set forth.

 

SECTION 2

 

EMPLOYMENT
PERIOD

 

2.01                         The terms of Executive’s
employment under this Agreement shall be effective as of May 12, 2006 (“Effective
Date”) and shall continue until May 12, 2009 and thereafter shall

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continue
for successive three year periods, until termination of Executive’s employment
in accordance with the provisions of Section 5. The period of Executive’s
employment by Employer shall be referred to as the “Employment Period” and the
date of Executive’s termination of employment with the Employer shall be
referred to as the “Termination Date.”

 

SECTION 3

 

3.01.        Generally.              During the Employment Period, Executive (a) shall
be employed as Chief Executive Officer and Chairman, (b) shall serve as a
member of the Executive Management Committee of Employer, and (c) shall
devote his full attention and expend his efforts, energies and skills on a
full-time basis to the business of Employer and other enterprises controlled
by, or under common control with Employer (Employer and such entities being
referred to collectively as the “Company”). Without limiting the generality of
the foregoing, Executive shall have all such duties and responsibilities
customarily undertaken and performed by persons in his position in similar
businesses to that of Employer. Executive’s employment by Employer shall
constitute his exclusive employment during the Employment Period. Executive is
permitted to serve as a director of any other business corporation or as a
general partner of any partnership in accordance with the corporate governance
guidelines of the Company.

 

3.02.        Reporting.             Executive shall report directly to the Board of
Directors of Employer (“Board”). During the Employment Period, Executive will
be subject to all of the policies, rules and regulations of which
Executive is given notice applicable to senior executives of Employer and will
comply with all directions and instructions of the Board.

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SECTION 4

 

COMPENSATION

 

4.01         Compensation, Generally.   For all services rendered and required to be
rendered by covenants of, and restrictions imposed on, Executive under this
Agreement, Employer shall pay to Executive during and with respect to the
Employment Period, and Executive agrees to accept (in full payment) Base Salary
and Performance Bonus, all as more fully described on Exhibit A
(collectively, the “Compensation”).

 

4.02         Other Benefits.     Except as otherwise provided herein, during
the Employment Period, Executive shall be entitled to receive such benefits as
are at least as favorable as those provided by the Employer to Employer’s other
senior executives (other than those benefits provided under or pursuant to
separately negotiated individual employment agreements or arrangements),
including those under any pension or retirement plan, stock purchase, stock
option or stock ownership plan, disability plan or insurance, group life
insurance, medical insurance, or other similar plan or program of Employer. Employer
shall provide Executive with life insurance in such amount so that the annual
premium of such life insurance shall not exceed $20,000. Executive shall also
be entitled to a personal driver. Executive’s Base Salary shall constitute the
compensation on the basis of which the amount of Executive’s benefits under any
such plan or program shall be fixed and determined.

 

4.03         Expense Reimbursement.    Employer shall reimburse Executive for all
business expenses reasonably incurred by him in the performance of his duties
under this Agreement upon his presentation, not less frequently than monthly,
of signed, itemized accounts of such expenditures all in accordance with
Employer’s policies and procedures as adopted and in effect

 

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from time to time and
applicable to its employees of comparable status.

 

4.04         Personal Expenses Allowance           Employer shall provide Executive with
an allowance of $4,000 each month during the Employment Period to cover
personal expenses associated with Executive’s ownership and operation of an automobile
and other personal expenses. In the event the Employer makes any payments
directly to a third party under this Section, said allowance shall be reduced
by such amounts paid by Employer.

 

4.05.        Vacations.             Executive shall be entitled to five weeks vacation each
twelve month period worked, which shall be taken at such time or times as shall
not unreasonably interfere with Executive’s performance of his duties under
this Agreement.

 

SECTION 5

 

TERMINATION
OF EMPLOYMENT PERIOD

 

5.01.        Termination Without Cause.              At any time during the Employment
Period, by notice to the other, Executive or the Board may terminate Executive’s
employment under this Agreement without “Cause” (as defined below). Such notice
shall specify the effective date of termination which shall not be less than
sixty (60) days after the date of such notice.

 

5.02.        By Employer: Cause.           At any time during the Employment
Period, by notice to Executive, the Board may terminate Executive’s employment
under this Agreement for “Cause,” effective immediately. Such notice shall
specify the cause for termination. For the purposes of this Section 5.02, “Cause”
means:

 

(a)           a breach by Executive of any of the
material provisions of this Agreement;

 

(b)           the commission by Executive of an act
involving moral turpitude or 

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                dishonesty, whether or not
in connection with Executive’s employment hereunder;

 

(c)           Executive shall have committed any
act of fraud against the Employer or engaged in any other willful misconduct in
connection with his duties hereunder; or

 

(d)           Executive shall have been convicted
of a felony (other than a felony relating to motor vehicle laws).

 

In
each case, an event giving rise to “Cause” shall not be finally determined to
have occurred unless admitted to in writing by the Executive or set forth in a
final determination of an arbitrator as provided in Section 10.04 hereof. Notwithstanding
the foregoing, no Cause for termination shall be deemed to exist with respect
to the Executive’s acts described in (a) through (c) above unless the
Board shall have given prior written notice to the Executive specifying the
Cause with reasonable particularity and, within thirty (30) days after such
notice, the Executive shall not have cured or eliminated the problem or thing
giving rise to such Cause.

 

5.03.        By Executive for Good Reason.         Executive may, at any time during the
Employment Period by notice to the Board, terminate the Employment Period under
this Agreement for “Good Reason” effective immediately. For the purposes
hereof, “Good Reason” means:

 

(a)           any material breach by Employer of
any provision of this Agreement which, if susceptible of being cured, is not
cured within thirty (30) days of delivery of notice thereof to Employer by
Executive;

 

(b)           the assignment to Executive by
Employer of duties inconsistent with Executive’s position, responsibilities or
status with Employer as in effect on the Effective Date including, but not
limited to, any significant reduction in such position, duties,
responsibilities or

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status, any change in
Executive’s titles, offices or perquisites, as then in effect, or any removal
of Executive from or any failure to re-elect Executive to, any such positions,
except in connection with the termination of his employment on account of his
death, disability, or for Cause;

 

(c)           a relocation by Employer of Executive’s
place of employment described in Section 7.01 hereto;

 

(d)           any purported termination of
Executive’s employment for cause which is not effected in accordance with the
requirements of Section 5.02 hereof (and for purposes of this Agreement no
such purported termination shall be effective).

 

5.04         Disability.              During the Employment Period, if,
as a result of physical or mental incapacity or infirmity (including alcoholism
or drug addiction), Executive shall be unable to perform his duties under this
Agreement for:

 

(a)           a continuous period of at least 120
days, or

 

(b)           periods aggregating at least 180 days
during any period of 12 consecutive months (each a “Disability Period”), and at
the end of the Disability Period the Board of Directors shall have determined,
in good faith, that by reason of such physical or mental disability (“Disability”)
the Executive shall be unable to perform the services required of him
hereunder, the Employer may terminate the Employment Period for Disability by
delivery to Executive or Executive’s representative of sixty (60) days prior
written notice.

 

SECTION 6

 

TERMINATION
COMPENSATION

 

6.01         Entitlement to Payment.      (a) Subject to the provisions of Section 9.04,
if

 

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Executive’s employment hereunder
is terminated pursuant to Section 5.01, 5.03, 5.04 or 8.01 at any time
hereafter, then Employer will pay to Executive within thirty (30) days
following termination an amount (the “Severance Payment”), in a lump sum, equal
to the product determined by multiplying Executive’s annual rate of Base Salary
in effect immediately prior to such termination by three (3); provided, however,
that to the extent necessary to comply with the restriction of Section 409A(a)(2)(B) of
the Internal Revenue Code of 1986, as amended (“Code”) concerning payments to “specified
employees,” in no event shall such Severance Payment be made earlier than the
first business day of the seventh month following Executive’s Termination Date
(“Delayed Payment Date”). If as a result of the foregoing restriction, such
Severance Payment is delayed, the amount of the Severance Payment shall be
increased to include interest calculated from the Termination Date until the
Delayed Payment Date using the applicable federal short-term rate (compounded
monthly) in effect under Section 1274(d) of the Code on the
Termination Date. Executive shall be a “specified employee” for the 12-month
period beginning on the first day of the fourth month following each “Identification
Date” if Executive is a “key employee” (as defined in Section 416(i) of
the Code without regard to Section 416(i)(5) thereof) of Employer at
any time during the 12-month period ending on the Identification Date. For
purposes of this Agreement, the Identification Date shall be December 31.

 

                (b)           Upon
such termination, Executive shall also be entitled to any accrued but unpaid
bonus compensation and all outstanding unvested stock options under the
Employer’s stock option plan shall be deemed to immediately vest. In addition,
Executive shall be entitled to life insurance and medical benefits and all
other benefits, referred to in Section 4.02 and 4.03, for a period of
thirty-six (36) months.

 

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6.02.        No Other Termination Compensation.              Executive shall not be entitled to
any benefit or compensation following termination of his employment hereunder,
except as set forth in Section 6.01.

 

6.03         Mitigation             Executive shall not be required to
mitigate the amount of any payments or benefits provided for hereunder upon
termination of  Employment by seeking
employment with any other person, or otherwise, nor shall the amount of any
such payments or benefits be reduced by any compensation, benefit or other
amount earned by, accrued for or paid to Executive as the result of Executive’s
employment by or consulting or other association with any other person,
provided, that any medical, dental or hospitalization insurance or benefits
provided to Executive with his employment by or consulting with an unaffiliated
person during such period shall be primary to the benefits to be provided to
Executive pursuant to this Agreement for the purposes of coordination of
benefits.

 

SECTION 7

 

LOCATION
OF EXECUTIVE’S ACTIVITIES

 

7.01.        Principal Place of Business.               Executive’s
principal place of business in the performance of his duties and obligations
under this Agreement shall be in the New York metropolitan area, which includes
Secaucus, New Jersey. For so long as Employer’s headquarters are located in the
New York City metropolitan area, Executive’s principal place of business shall
be located at such headquarters.

 

7.02.        Travel.      Notwithstanding
the provisions of Section 7.01, Executive will engage in such travel and
spend time in other places as may be necessary or appropriate in furtherance of

 

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his duties hereunder.

 

SECTION 8

 

CHANGE IN
CONTROL

 

8.01.        Effect of
Change in Control.               If a Change in Control (as hereinafter
defined) shall occur, the Executive may terminate his employment hereunder and
such termination shall be deemed to be a termination by Employer without Cause.
As used in this Agreement, “Change in Control” means the occurrence during the
Employment Period of any of the following events:

 

(a )          The sale to any purchaser of (i) all
or substantially all of the assets of the Employer or (ii) capital stock representing
more than 50% of the stock of the Employer entitled to vote generally in the
election of directors of the Employer; or

 

(b) 
         The merger or consolidation of
the Employer with another corporation if, immediately after such merger or
consolidation, less than a majority of the combined voting power of the
then-outstanding securities entitled to vote generally in the election of
directors of the surviving or resulting corporation in such merger or
consolidation is held, directly or indirectly, in the aggregate by the holders
immediately prior to such transaction of the outstanding securities of
Employer;

 

(c)           There is a report filed on Schedule
13D or Schedule 14D-1 (or any successor schedule, form, or report or item
therein), each promulgated pursuant to the Securities Exchange Act of 1934, as
amended (the “Exchange Act”), disclosing that any person (as the term “person”
is used in Section 13(d)(3) or Section 14(d) (2) of
the Exchange Act) has become the beneficial owner (as the term “beneficial owner”
is defined under Rule 13d-3 or any successor

 9
 

 

rule or regulation
promulgated under the Exchange Act) of securities representing 50% or more of
the combined voting power of the voting stock of Employer; or

 

(d)           Employer files a report or proxy
statement with the Securities and Exchange Commission pursuant to the Exchange
Act disclosing in response to Form 8-K or Schedule 14A (or any
successor schedule, form, or report or item therein) that a change in control
of Employer has occurred or will occur in the future pursuant to any then
existing contract or transaction.

 

SECTION 9

EXCLUSIVITY OF SERVICES,
CONFIDENTIAL

INFORMATION AND RESTRICTIVE
COVENANTS

9.01.                        Exclusivity of
Services. During the Employment Period and continuing through the fifth
anniversary of the Executive’s Termination Date (the “Covenant Period”),
Executive will not:

                (a)           Promote, participate or engage in any business on behalf
of any Direct Competitor of the Company, whether Executive is acting as owner,
partner, stockholder, employee, broker, agent, principal, trustee, corporate
officer, director, consultant or in any other capacity whatsoever; provided,
however, that this will not prevent Executive from holding for investment up to
1% of any class of stock or other securities quoted or dealt in on a recognized
stock exchange or on Nasdaq. For purposes of 
this Section,  a “Direct
Competitor of the Company” means (i) The Gap, Inc. or any Person
under common control with The Gap, Inc., (ii) The Limited, Inc.
or any Person under common control with The Limited, Inc., (iii) Gymboree
or

 10

 

any
Person under common control with Gymboree, as the case may be, or (iv) any
Person engaged in the sale of children’s apparel and who derives more than
fifty percent of its gross revenues from the retail sales of children’s
apparel.

                (b)           Directly or indirectly employ other than on behalf of the
Company, solicit or entice away any director, officer or employee of the
Company or any of its subsidiaries; or

                (c)           Take any action to interfere, directly or indirectly, with
the goodwill of the Company or any of its subsidiaries, or induce or attempt to
induce with any Person doing business with the Company to cease doing business
with the Company.

9.02                         Confidential
Information. During the Covenant Period, Executive will not (except in
furtherance of the Company’s business or as required by law) furnish
confidential information relating to the business or affairs of the Company,
its subsidiaries or any Person having dealings therewith, or permit or
encourage the use of such confidential information by another. During the
Covenant Period, Executive will not use the name of the Company or its
subsidiaries in the conduct of any business activities (except in furtherance
of the Company’s business) or for Executive’s personal use without the prior
written consent of the Company.

9.03.                        Mutual
Non-Disparagement.             Neither
Executive nor Employer will make or authorize any public statement disparaging
the other in its or his business interests and affairs. Notwithstanding the
foregoing, neither party shall be (a) required to make any statement that
it or he believes to be false or inaccurate, or (b) restricted in
connection with any litigation, arbitration or similar proceeding or with
respect to its response to any legal process.

9.04.                        Breaches of
Provisions.      If Executive breaches
any of the provisions of this Section 9 then, and in any such event, in
addition to other remedies available to Employer,

 11
 

 

 

Executive
shall not be entitled to any Severance Payment, if any, made to him hereunder
prior to Employer’s discovery of such breach.

SECTION 10

MISCELLANEOUS

10.01.                      Notices. Any  notice, consent, or authorization required or
permitted to be given pursuant to this Agreement shall be in writing and sent
to the party for or to whom intended, at the address of such party set forth
below, by certified mail, postage paid, or at such other address as either
party shall designate by notice given to the other in the manner provided
herein.

If to Employer:

	
  

  	
  Attention:

  	
  Steven Balasiano, Esq.

  
	
   

  	
  Senior Vice President, General Counsel

  
	
   

  	
  and Chief
  Administrative Officer

  
	
   

  	
  The Children’s
  Place Retail Stores, Inc.

  
	
   

  	
  915 Secaucus
  Road

  
	
   

  	
  Secaucus, New
  Jersey 07094

  
	
  If to Executive:

  	
   

  
	
   

  	
   

  
	
   

  	
  Ezra Dabah

  
	
   

  	
  The Children’s
  Place Retail Stores, Inc.

  
	
   

  	
  915 Secaucus
  Road

  
	
   

  	
  Secaucus, New
  Jersey 07094

  

 

10.02.                      Taxes.      
Employer is authorized to withhold from payments made hereunder to
Executive such amounts for income tax, social security, unemployment
compensation and other judgment of Employer to comply with applicable laws and
regulations.

10.03.                      Governing Law. This
Agreement shall be governed by and construed and enforced in accordance with
the laws of the State of New York applicable to agreements made

 12
 

 

 

and to
be performed therein.

10.04.                      Arbitration. Any
dispute or controversy arising under or in connection with this Agreement shall
be settled exclusively by arbitration in New York, New York in accordance with
the rules of the American Arbitration Association then in effect. Judgment
may be entered on the arbitration award in any court having jurisdiction;
provided, however, that Executive shall be entitled to seek specific
performance of his right to be paid until expiration of the Employment Period
during the pendency of any arbitration.

10.05.                      Headings. All
descriptive headings in this Agreement are inserted for convenience only and
shall be disregarded in construing or applying any provision of this Agreement.

10.06.                      Counterparts.         This Agreement may be executed in
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.

10.07.                      Severability.          If any provision of this Agreement or
part thereof, is held to be unenforceable, the remainder of such provisions of
this Agreement, as the case may be, shall nevertheless remain in full force and
effect.

[The remainder of this page is intentionally left
blank.]

 13
 

 

 

10.08.                      Entire Agreement and
Integration.    This Agreement
contains the entire agreement and understanding between Employer and Executive
with respect to the subject matter hereof. Such Agreement supersedes any prior
agreement between the parties relating to the subject matter hereof, including
without limitation the Prior Agreement.

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

	
  

  	
  THE CHILDREN’S PLACE RETAIL STORES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ STEVEN BALASIANO

  
	
   

  	
  Steven Balasiano

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /S/ EZRA DABAH

  
	
   

  	
  Ezra Dabah

  

 

 14
 

 

 

EXHIBIT A

COMPENSATION

1.             Base Salary:
At the initial rate of $1,000,000 per year, payable in equal installments not
less frequently than monthly during the Employment Period. Base Salary shall be
subject to annual review, as the Board may determine.

2.             Performance
Bonus:  Following each
Bonus Period (as hereinafter defined), Executive shall be entitled to receive a
Performance Bonus based upon the Employer’s performance during such Bonus
Period. The Performance Bonus for each such Period will be payable within
ninety (90) days after the last day of such period; provided, however, that in
no event shall such Performance Bonus be paid later than the latest of (i) the
15th day of the third month following Executive’s
first taxable year in which the Bonus Period ends, or (ii) the 15th day of the third month following the end of
Employer’s first taxable year coincident with or next following the last day of
the Bonus Period. The amount of the Performance Bonus for each Bonus Period
will be equal to a product equal to (a) Executive’s annual Base Salary,
times (b) a percentage equal to or greater than 100% as directed by the
Compensation Committee, times (c) the Bonus Percentage (as hereinafter
defined). The following provisions shall apply to determinations relating to
Performance Bonus.

“Bonus Percentage” shall mean, for each Bonus Period,
a percentage for such period that is based upon the Employer’s performance in
accordance with a schedule adopted by the Compensation Committee for all senior
executives prior to commencement of such period or as soon thereafter as possible,
except that the Bonus percentage shall not be more than 200% for

 15
 

 

 

any
Bonus Period. In addition, if the Annual
Management Incentive Bonus Plan is approved by the stockholders at the Employer’s
2007 annual meeting of stockholders, then the Bonus Percentage shall be
determined pursuant to the requirements of such plan. If the Annual Management Incentive Bonus Plan is not approved by the stockholders at the Employer’s 2007
annual meeting of stockholders, then the Bonus Percentage shall be determined
in accordance with the procedures adopted by the Compensation Committee.

“Bonus Period” shall mean each fiscal year of
Employer.

 

 16

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