Document:

EXHIBIT
10.2

 

EMPLOYMENT AGREEMENT

 

AGREEMENT dated as of June 14,
2005 between MAIDENFORM, INC., a New York corporation with a principal place of
business at 154 Avenue E, Bayonne, NJ 07002 (the “Employer”), Maurice Reznik
(the “Employee”), and solely for purposes of Sections 3(c), 4, and 19, Maidenform
Brands, Inc. (sometimes hereinafter referred to as “Parent”).

 

W I T N E S S E T H :

 

WHEREAS, the Employer wishes
to continue to employ the Employee for the period provided in this Agreement,
and the Employee is willing to continue to serve in the employ of the Employer
for such period, upon the terms and conditions hereinafter provided;

 

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

 

1.             Employment.  The Employer hereby employs
the Employee and the Employee hereby accepts employment upon the terms and
conditions hereinafter set forth.

 

2.             Term of Employment.  (a) 
The term of the Employee’s employment under this Agreement shall commence on
the date hereof and it shall continue for a period of one year thereafter (the “Initial
Term”), unless this Agreement shall be renewed for an additional term or terms
in accordance with paragraph (b) of this Section 2, or unless earlier
terminated as provided herein.

 

 

(b)           This Agreement shall automatically be renewed
upon the expiration of the Initial Term for successive periods of one year each
(each an “Additional Term”), unless either party notifies the other party in
writing at least 120 days prior to the expiration of the Initial Term or any
such Additional Term (the Initial Term and each Additional Term are
collectively referred to as “Term of Employment”).

 

3.             Compensation.  (a) 
Base.  During the Term of
Employment, the Employer shall pay the Employee a base salary at not less than
an annual rate of Four Hundred and Thirty Thousand($430,000.00) Dollars, in
accordance with the Employer’s normal payroll practices (as increased in
accordance with this Section 3(a), the “Base Salary”).  Such Base Salary shall be reviewed at least
annually by the Board of Directors of Maidenform Brands, Inc. (the “Board”)
and the Board may at any time increase (but not decrease) the Employee’s Base
Salary hereunder as the Board may in its sole and absolute discretion deem
reasonable and appropriate.

 

(b)           Incentive Compensation.  The
Employee shall be a participant in the Maidenform Brands, Inc. 2005 Annual
Performance Bonus Plan (the “Bonus Plan”) for fiscal year January 2, 2005
through December 31, 2005, with the operating targets, compensation percentage
and other terms with respect to the Employee as in effect on the date hereof.  For fiscal years thereafter during the Term
of Employment, the Employee’s incentive compensation shall be based upon such
performance goals permitted under the Bonus Plan, including, a Personal Goals
Bonus, an EBITDA Target Level Bonus and an Extraordinary EBITDA Target
Level Bonus, 

 

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each on the terms and subject to the conditions set forth below and the
Bonus Plan.  For fiscal year 2005, the
Personal Goals Bonus shall be up to 20% of the Base Salary in effect for the
year for which the bonus is paid and shall be based upon personal goals set by
the Compensation Committee of the Board (the “Compensation Committee”) after
consultation with the Employee, with the level of such achievement determined
by the Compensation Committee, in its discretion.  For fiscal year 2005, the EBITDA Target Level
Bonus shall be up to 80% of the Base Salary as in effect for the year for which
the bonus is paid, and it shall be based on achievement (as determined by the
Compensation Committee) of a EBITDA target set and structured by mutual
agreement on an annual basis by the Compensation Committee and the Employee.  For fiscal year 2005, the Extraordinary
EBITDA Target Level Bonus shall be up to 40% of the Base Salary as in effect
for the year for which the bonus is paid, and it shall be based on achievement
(as determined by the Compensation Committee) of a higher EBITDA target set and
structured by mutual agreement on an annual basis by the Compensation Committee
and the Employee.

 

(c)           Stock Options.

 

(i)            Stock Options Granted on or after the Date
Hereof.      With respect to options to purchase stock of
Parent granted on or after the date hereof, such stock options will have an
exercise price equal to at least the fair market value of Parent common stock
on the grant date and will vest and become exercisable in equal annual
installments over a four year period (provided the Employee is continuously
employed by the Employer through the applicable vesting

 

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date) subject to 100% acceleration of vesting upon a Change in Control
(as defined under the Maidenform Brands, Inc. 2005 Stock Incentive
Plan).  Upon the Employee’s termination
of employment by the Employer as a result of non-renewal of the Term of Employment
by the Employer pursuant to Section 2(b) above or by the Employer without
Cause (as defined below) or by the Employee for Good Reason (as defined below),
such stock options shall become vested with respect to the number of shares
that would have vested if the Employee’s employment would have continued for an
additional twelve month period. 
Following any such termination described in this Section 3(c)(i) or
termination due to the Employee’s Disability or death, stock options granted on
or after the date hereof shall remain exercisable until the earlier of (1) the
original expiration date of the option, or (2) one year following such
termination of employment.  The
provisions of this Section 3(c) shall supersede any conflicting
provision of the applicable stock option agreements between the Parent and the
Employee.

 

(ii)           Stock Options Granted Prior to the Date
Hereof.            With respect to options that were granted to
Employee prior to the date hereof and were not vested on or before December 31,
2004, if the Employee’s employment is terminated by the Employer by the giving
of notice of non-renewal of the term pursuant to Section 2(b) above
or terminated by the Employer without Cause (as defined below) or by the
Employee as a resignation for Good Reason (as defined below), such stock
options shall become vested with respect to the number of shares that would
have vested if the Employee’s employment would have continued for an additional
twelve month period.  Any stock options
that are subject to Section 409A of the Internal Revenue

 

A-4

 

Code of 1986, as amended (the “Code”) shall be amended to be
exercisable only at such time or times as permitted by Section 409A of the
Code and to otherwise comply therewith, as approved by Employer and
Employee.  Nothing contained herein shall
be deemed to amend any Rollover Common Stock Options or Rollover Preferred
Stock Options previously granted to Employee.

 

4.             Duties.  During the Term of Employment,
(i) the Employee shall be engaged as the President of Maidenform, Inc.
and the Parent.  The Employee shall have
the responsibility and authority to manage and direct the wholesale sales,
marketing, design, new product development and international wholesale sales
and marketing activities of the Employer, subject to the supervision of the Chief
Executive Officer of the Employer and the Parent.  In addition, the Employee shall have such
other or more specific responsibilities or duties with respect to the business
of the Employer consistent with the Employee’s position as President as may be
determined and assigned to the Employee from time to time by or upon the
authority of the Chief Executive Officer, the Board or the Board of Directors
of the Employer.  The Employee shall
report to the Chief Executive Officer of the Employer and the Parent.  Maidenform, Inc. and its subsidiary
companies are hereinafter individually and collectively along with the Parent
called the “Employer’s Group”  The
Employee shall also serve as an Officer or Director of any member of the
Employer’s Group as requested by the Employer without any additional
compensation therefore other than as specified in this Agreement.  The Employer has Director’s and Officer’s

 

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Liability Insurance in effect and will maintain Director’s and Officer’s
Liability Insurance Coverage uninterruptedly in effect during the Term of Employment.

 

5.             Extent of Service.  The
Employee agrees to devote his best efforts, energies and skills to the faithful
discharge of the duties and responsibilities attributable to his offices, and
to this end will devote his full working time and attention to the business and
affairs of the Employer’s Group.  Employee
shall be based at the Employer’s Bayonne, New Jersey office and its New York
City office, but shall perform services hereunder at other locations as shall
be reasonably appropriate.  Notwithstanding
the foregoing, it is understood that the Employee may devote reasonable time
and attention consistent with the practice of other senior executives similarly
situated, to civic or community affairs and to service on the Board of
Directors or Advisory Board of other non-competing corporations, provided that (i) the
Employee shall serve on no more than two such Corporate Boards or Advisory
Boards at any time; (ii) the Compensation Committee shall have approved
such Board memberships, which approval shall not be unreasonably withheld; and (iii) it
does not interfere in any material way with the performance of his
responsibilities to the Employer’s Group under this Agreement or create a
conflict of interest.

 

6.             Expenses.  The Employee is authorized to
incur reasonable, ordinary and necessary expenses in the performance of his
duties hereunder consistent with the Employer’s existing expense reimbursement
policy, as it may be amended from time to time, and the

 

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Employer shall reimburse the Employee for all such expenses upon the
presentation by the Employee, from time to time, of an account of such
expenditures.

 

7.             Vacation.  The Employee shall be entitled
to twenty (20) days of paid vacation during each of the successive twelve (12)
month periods comprising the Term of Employment, or a pro rata portion thereof
for any such successive period which is less than twelve (12) months.  Vacation hereunder shall be taken at times
which are mutually determined by the Employer and the Employee not to
interfere, in any material respect, with the Employee’s performance of his
duties hereunder.

 

8.             Employee Benefits.  The
Employee shall be entitled during the Term of Employment to participate in any
employee benefit program or arrangement maintained by the Employer which is
generally available to other senior employees of the Employer, including any
qualified or non-qualified retirement or deferred compensation arrangements or
401(k) savings plan, life insurance, medical, long-term disability plans,
severance arrangements, or other allowances. 
Such participation shall be in accordance with all applicable terms and
conditions of such plans or programs, including, without limitation, provisions
respecting the satisfaction of any applicable eligibility periods for plan
participation and the modification or termination of such plans

 

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9.             Termination of Employment.  Notwithstanding
any other provision of this Agreement, the Employee’s employment under this
Agreement may be terminated at any time by the Employer in the event of:

 

(A)          (i) The Employee’s conviction for or entry of a plea of guilty or
nolo contendere with respect to a felony or any crime that constitutes a
misdemeanor involving moral turpitude under federal law or the law of any state,
(ii) the Employee’s willful misappropriation of funds or property of the
Employer’s Group or other acts of fraud, dishonesty self-dealing, any significant
violation of any statutory or common law duty of loyalty to the Employer’s
Group, (iii) the Employee’s perpetration of an illegal act which causes
material economic injury to the Employer or the Employer’s Group, or (iv) a
material breach of this Agreement by the Employee or the Employee’s failure to
perform his duties hereunder in any material respect, provided that as to (iv),
the Employee shall be given written notice and an opportunity, not to exceed
ten (10) days, to effectuate a cure, provided that such breach or failure
is susceptible to cure, as determined by the Board or the Board of Directors of
the Employer, in good faith (hereinafter “Cause”).

 

(B)           The Employee’s death; or

 

(C)           The Employee’s inability due to any physical or mental condition of the
Employee, to perform his duties hereunder for a period of ninety (90)
consecutive days or

 

A-8

 

one hundred twenty (120) days (whether or not
consecutive) within any twelve (12) month period (hereinafter “Disability”);

 

by written notice to the
Employee (except that notice of termination shall not be required in the case
of the Employee’s death) specifying the event relied upon for such termination
and the effective date of such termination (the effective date of any
termination of employment hereunder is referred to as the “Termination Date”).

 

10.           Payments Upon Termination of Employment.  (a) 
In the event the Employee’s employment under this Agreement is terminated for
any reason specified in Section 9 above this Agreement shall terminate and
be deemed cancelled and the Employer shall be under no obligation hereunder
either to continue the Employee’s employment or to provide the Employee with
any payment or benefit of any kind whatsoever, except for the Employee’s Base
Salary through the Termination Date and such vested benefits or rights which
the Employee may have accrued through the Termination Date hereunder or under any
benefit plan of Employer (other than any severance pay plan maintained by the
Employer).  In addition, in the event of
termination pursuant to 9(B) or (C) above, the Employer shall also
pay the amount of any incentive compensation as described in Section 3(b) hereof
to which the Employee would have been entitled for the year of termination had
the Employee’s employment not terminated, prorated to the Termination Date
based on the number of days actually employed during the applicable year,
payable when such incentive compensation would be payable to other employees
for that year

 

A-9

 

and based upon actual results and the Employer’s financial performance
for the full applicable year.  In
addition, in the event of termination pursuant to 9(B) or (C) above,
the Employee shall be entitled to benefits under any group life insurance or
disability insurance benefits provided in accordance with the Employer’s
welfare benefit plans.

 

(b)           The Employee’s employment under this
Agreement may also be terminated on fifteen (15) days’ prior notice by the Employer
not for Cause and it may be terminated by the Employee for Good Reason if
circumstances constituting Good Reason exist, and neither of such terminations
of employment shall be a breach of this Agreement by the Employer so long as
the benefits set forth below are provided to the Employee.  In the event that the Employee’s employment
with the Employer is terminated by the Employer as a result of non-renewal of
the Term of Employment pursuant to Section 2(b) above or terminated
by the Employer without Cause or by the Employee for Good Reason, then, in
addition to the Employee’s Base Salary through the Termination Date and such
vested benefits or rights which the Employee may have accrued through the
Termination Date hereunder or under any benefit plan of the Employer (other
than any severance pay plan maintained by the Employer), subject to the
Employee’s execution and delivery of a release, to the fullest extent permitted
by law in favor of the Employer’s Group (and its affiliates) in substantially
the form attached hereto, as may be modified to take into account changes in
applicable law, the Employee will be entitled to the following:

 

A-10

 

(1)     Payment of a lump sum equal to one and one-half (1.5) times his Base
Salary (as in effect on the Termination Date), plus an amount equal to one
times his average annual bonus (taking into account all annual bonuses paid
under Section 3(b) hereof for the applicable year) over the three
calendar years immediately preceding his termination of employment.  This amount shall be subject to tax and other
required withholdings and be payable within thirty days of the date of termination
of employment (but not prior to the end of the Revocation Period (as defined in
Exhibit A hereto)), or such later date as required under Section 409A
of the Code.

 

(2)     In addition, if the Employee or his dependents are otherwise eligible
for COBRA continuation of group health plan coverage and the Employee (or his
dependents) timely elect such coverage, the Employer shall pay the cost of such
COBRA coverage in an amount equal to 100% of the monthly premium for such
coverage for eighteen months.

 

(3)     In addition, the Employer will provide the Employee with outplacement
services up to a maximum of $10,000, provided that such benefit shall cease on
the date the Employee obtains subsequent employment.

 

Notwithstanding the
foregoing, nothing in this Agreement shall be construed to require the Employee
to seek other employment following the termination of his employment hereunder
and

 

A-11

 

there shall be no offset
against any amounts due the Employee under this Agreement on account of any
remuneration attributable to any subsequent employment that Employee may
obtain.

 

(c)           For the purposes of this Agreement “Good
Reason” shall mean:

 

(1)           The assignment to the Employee of duties inconsistent in any material
way with his position (including title and reporting requirements), authority,
duties, or responsibilities;

 

(2)           Reduction in the Employee’s Base Salary or annual bonus opportunity; or

 

(3)           Relocation of the Employee to a location outside a radius of 50 miles
of the Employer’s Bayonne, New Jersey office and its New York, NY office;

 

provided that, as to (1) and
(2), the Employer shall be given written notice and an opportunity, not to
exceed ten (10) days, to effectuate a cure for such asserted “Good Reason”
by the Employee.

 

11.           Confidentiality.  The
Employee recognizes and acknowledges that the Proprietary Information (as
hereinafter defined) is a valuable, special and unique asset of the Employer.  As a result, during the Term of Employment
and thereafter, the Employee shall not, without the prior written consent of
the Board, for any reason, either directly or indirectly, divulge to any third
party (except as may be required to further the interests of the Employer) or
use for his own benefit, or for any purpose other than the exclusive benefit of
the Employer, any

 

A-12

 

and all confidential, proprietary, business and technical information
or trade secrets of the Employer’s Group (“Proprietary Information”) revealed,
obtained or developed in the course of his employment with the Employer’s Group.  Such Proprietary Information shall include but
shall not be limited to, marketing and development plans, confidential cost and
pricing information, identities of customers and suppliers, the relationship of
the Employer’s Group with actual or prospective customers who are engaged in
discussions with the Employer’s Group, the needs and requirements of any such
customers, and any other confidential information relating to the business of
the Employer’s Group, provided that nothing herein contained shall restrict the
Employee’s ability to make such disclosures during the course of his employment
as may be necessary or appropriate to the effective and efficient discharge of
his duties hereunder or such disclosures as may be required by law; and further
provided that nothing herein contained shall restrict Employee from divulging
or using for his own benefit or for any other purpose any Proprietary
Information which is readily available to the general public so long as such
information did not become available to the general public as a direct or
indirect result of Employee’s breach of this Section 11.

 

12.           Property and Inventions.

 

(a)           All Proprietary Information shall be and
remain the sole property of the Employer. 
During the Term of Employment, and thereafter, Employee shall not remove
from the Employer’s Group offices or premises any documents, records,
notebooks, files, correspondence,

 

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reports, memoranda or similar materials of or containing information of
the type identified in Section 11 hereof, or other materials or property
of any kind unless necessary or appropriate in accordance with his duties and
responsibilities hereunder and, in the event that such materials or property
are removed, all of the foregoing shall be returned to their proper files or
places of safekeeping as promptly as reasonably possible after the removal
shall serve its specific purpose.  Employee
shall not make, retain, remove and/or distribute any copies of any of the
foregoing for any reason whatsoever except as may be necessary in the discharge
of his assigned duties; and upon the termination of his employment with the
Employer, he shall leave with or return to the Employer all originals and
copies of the foregoing then in his possession, whether prepared by Employee or
by others.

 

(b)           The Employee acknowledges that all
developments, including, without limitation, inventions, patentable or
otherwise, discoveries, improvements, patents, trade secrets, designs, reports,
computer software, flow charts and diagrams, procedures, data, documentation,
ideas and writings and applications thereof relating to the business or planned
business of the Employer or any of its subsidiaries or affiliates that, alone
or jointly with others, the Employee may conceive, create, make, develop,
reduce to practice or acquire during the Term of Employment (or while employed
with the Employer prior the Term of Employment) (collectively, the “Developments”)
are works made for hire and shall remain the sole and exclusive property of the
Employer and the Employee hereby assigns to the Employer all of his right,
title and interest in and to all such Developments.  The Employee shall promptly and fully
disclose all future material

 

A-14

 

Developments to the Board and, at any time upon request and at the
expense of the Employer, shall execute, acknowledge and deliver to the Employer
all instruments that the Employer shall prepare, give evidence and take all
other actions that are necessary or desirable in the reasonable opinion of the
Employer to enable the Employer to file and prosecute applications for and to
acquire, maintain and enforce all letters patent, trademark registrations or
copyrights covering the Developments in all countries in which the same are
deemed necessary by the Employer.  All
memoranda, notes, lists, drawings, records, files, computer tapes, programs,
software, source and programming narratives and other documentation (and all
copies thereof) made or compiled by the Employee or made available to the
Employee concerning the Developments or otherwise concerning the business or
planned business of the Employer or any of its subsidiaries or affiliates shall
be the property of the Employer or such subsidiary or affiliate and shall be
delivered to the Employer or such subsidiary or affiliate promptly upon the
expiration or termination of the Term of Employment.

 

(c)           The provisions of this Section shall,
without any limitation as to time, survive the expiration or termination of the
Employee’s employment hereunder, irrespective of the reason for any
termination.

 

13.           Covenant not to Compete and Non-Solicitation.  In
consideration for the benefits and payments described herein and other good and
valuable consideration, the Employee shall not, during the Term of Employment
and for a period of eighteen (18) months after

 

A-15

 

his employment terminates for any reason, engage in any of the
following directly or indirectly without the prior written consent of the
Board:

 

(a)           engage or participate in any business activity directly competitive
with the business of the Employer’s Group as conducted upon the termination of
the Employee’s employment with the Employer or proposed to be conducted at such
time;

 

(b)           become interested in (as owner, stockholder, lender, partner,
co-venturer, director, officer, employee, agent, consultant or otherwise) any
person, firm, corporation, association or other entity engaged in any business that
is, taken as a whole, directly competitive with the business of the Employer’s
Group as conducted upon the termination of the Employee’s employment (or
proposed to be conducted at such time) with the Employer, or become interested
in (as owner, stockholder, lender, partner, co-venturer, director, officer,
employee, agent, consultant or otherwise) any subsidiary or division of the
business of any person, firm, corporation, association or other affiliate where
such portion of such business is directly competitive with the business of the
Employer’s Group as conducted upon termination of the Employee’s employment
with the Employer (or proposed to be conducted at such time).  Notwithstanding the foregoing, nothing
contained in this Section 13 shall prohibit the Employee from (i) holding
not more than five percent (5%) of the outstanding securities of any class of
any publicly-traded company, or (ii) after the Term of Employment engaging
or participating in or having an interest in

 

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(as owner, stockholder, lender, partner,
co-venturer, director, officer, employee, agent, consultant or otherwise) any
subsidiary or division of the business of any person, firm, corporation,
association or other affiliate where such portion of such business is not
directly competitive with the business of the Employer’s Group as conducted
upon termination of the Employee’s employment with the Employer (or proposed to
be conducted at such time), provided Employee does not breach the provisions of
Section 13 (c) or (d) or (e), hereof;

 

(c)           solicit or attempt to solicit either directly or indirectly any
customer of the Employer’s Group with whom the Employer’s Group shall have
dealt regularly at any time during the one (1) year period immediately
preceding the termination of the Employee’s employment with the Employer for
the purpose of offering or selling any products or services which are
identical, substantially similar or comparable to the products or services then
offered to the customer by the Employer’s Group;

 

(d)           influence or attempt to influence any supplier, customer, or potential
customer of the Employer’s Group to terminate or modify any written or oral
agreement or course of dealing with the Employer’s Group; or

 

(e)           (i) influence or attempt to influence any person to terminate or
modify his employment (or other service relationship) with the Employer’s
Group, or (ii) employ or retain directly or indirectly, any person
employed or retained by the Employer’s Group as

 

A-17

 

an employee or other service provider at any time
during the six (6) month period preceding the effective date of the Employee’s
termination.

 

14.           Specific Performance.  The Employee
acknowledges that the services to be rendered by the Employee are of a special,
unique and extraordinary character and, in connection with such services, the
Employee will have access to confidential information vital to the Employer’s
business and the business of its subsidiaries and affiliates.  By reason of this, the Employee acknowledges
consents and agrees that if the Employee violates any of the provisions of
Sections 11, 12 or 13 hereof, the Employer would sustain irreparable
injury and that money damages would not provide adequate remedy to the Employer
and that, in addition to any other remedies the Employer might have, including
money damages, the Employer shall be entitled to have Sections 11, 12 and
13 specifically enforced by any court having jurisdiction by means of any and
all equitable remedies.  The provisions
of Sections 10, 11, 12, 13, 14, 16 and 19 shall survive the termination of
this Agreement.

 

15.           Notices.  Any notice required or
permitted to be given under this Agreement shall be sufficient if in writing, and
shall be delivered personally by telecopier or by courier providing for next
day delivery or sent by registered or certified mail return receipt requested
to the following addresses:

 

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To the Employer:

 

Maidenform, Inc.

154 Avenue E

Bayonne, New Jersey  07002

Attention:

Steven N. Masket

Telecopier:  201-436-9506

 

To the Employee:

 

Maurice Reznik

At the address on file with the Employer

 

With a copy to:

 

Gregory C. Schick

Of Counsel

Orrick, Herrington & Sutcliffe LLP

The Orrick Building

405 Howard Street

San Francisco, CA 94105

 

Any such notices shall be
deemed given, if personally, upon delivery; if sent by certified or registered
mail, 3 days after deposit (postage pre-paid) with the U.S. Mail Service;
if by courier service providing for next day delivery, the next day following
deposit with such courier; and, if telecopied, when telecopied.  Any party may change the address for notices
by sending written notice of such change of address in accordance with this Section 15.

 

16.           Benefits.  This Agreement shall inure to
the benefit of and shall be binding upon the Employer and its successors and
assigns, and upon the Employee, his heirs and legal representatives.  This Agreement and all rights and obligations
hereunder are personal to the Employee and shall not be assignable.

 

A-19

 

17.           Entire Agreement.  This
Agreement embodies the entire agreement of the parties concerning the subject
matter hereof and supersedes any prior or contemporaneous agreements or
understandings in connection therewith.  Without
limiting the generality of the foregoing, this Agreement, so long as it becomes
effective under Section 2(a) above, supersedes the Employment
Agreement dated as of June 1, 1998 between the Employer and the Employee
which, upon the beginning of the Term of Employment hereunder, shall have no
further force or effect.  The Agreement
may be amended or modified only by a written instrument executed by both
parties hereto.

 

18.           Severability.  If
any term or provision of this Agreement is held by a court of competent
jurisdiction to be invalid or unenforceable, the remainder of the terms and
provisions of this Agreement shall remain in full force and effect and shall in
no way be affected or invalidated.  To
the extent required to enforce any provision of this Agreement, such provision
may be reformed in order to preserve its validity if it would otherwise be held
unenforceable.

 

19.           Indemnification.  The
indemnification provisions in the Parent’s Amended and Restated Certificate of
Incorporation covering officers of the Parent and the Employer shall apply to
the Employee in his capacity as an employee (or former employee), such
indemnification to be in addition to any other indemnification right in favor
of the Employee.

 

20.           Withholding.  The Employer may deduct and
withhold from any amounts which it is otherwise obligated to pay hereunder any
amount which it may determine it is

 

A-20

 

required to deduct or withhold pursuant to any applicable statute, law,
regulation or order of any jurisdiction whatsoever.

 

21.           Governing Law.  This
Agreement shall be subject to, and governed, construed and enforced in
accordance with, the laws of the State of New York, without giving effect to
the principles thereof relating to the conflict of laws.

 

A-21

 

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

 

 

	
  MAIDENFORM, INC.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
    /s/ Thomas J. Ward

  	
   

  	
   

  	
    /s/ Maurice Reznik

  	
   

  
	
   

  	
  Thomas J. Ward

  	
   

  	
  Maurice Reznik

  
	
   

  	
  Chief Executive Officer

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Solely with respect to Sections 3(c),

  4, and 19:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Maidenform Brands, Inc.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
    /s/ Thomas J. Ward

  	
   

  	
   

  	
   

  
	
   

  	
  Thomas J. Ward

  	
   

  	
   

  
	
   

  	
  Chief Executive Officer

  	
   

  	
   

  

 

A-22EXHIBIT 10.11(a)

 

MF ACQUISITION CORPORATION

NONQUALIFIED ROLLOVER COMMON STOCK OPTION AGREEMENT

 

WHEREAS, MF
Acquisition Corporation has entered into an Agreement and Plan of Merger, dated
as of March 16, 2004 (as amended through the date hereof, the “Merger
Agreement”) among Maidenform, Inc., MF Acquisition Corporation, MF Merger
Corporation and Ares Corporate Opportunities Fund, L.P. under which Maidenform, Inc.
will merge with MF Merger Corporation, with Maidenform, Inc. surviving the
merger as a subsidiary of MF Acquisition Corporation (the “Merger”); and

 

WHEREAS, the
Employee (as defined below) holds a nonqualified option to purchase shares of
common stock of Maidenform, Inc. (the “Old Option) and references herein to
the Old Option relate solely to that portion of such option as relate to 78,019
shares of common stock of Maidenform, Inc. that may be purchased for $5.73
per share and to which an Option Adjustment Amount of $5.64 per share is related,
and which were granted on October 21, 2002; and

 

WHEREAS,
pursuant to the Merger Agreement, MF Acquisition Corporation is granting the
stock option set forth in this Agreement in substitution for the Old Option;
and

 

WHEREAS,
following the grant of this stock option, the Old Option will be terminated and
have no further force or effect; and

 

WHEREAS, this
Nonqualified Rollover Common Stock Option Agreement has been entered into in
connection with discussions and negotiations regarding the terms and conditions
of Employee’s (as defined below) employment following the Merger.

 

NOW,
THEREFORE, in consideration of the mutual covenants and premises set forth
herein, the parties hereto agree as follows:

 

This
Nonqualified Rollover Common Stock Option Agreement (this “Agreement”) is made
as of May 11, 2004 by and between MF Acquisition Corporation, a Delaware
corporation (the “Corporation”), and Thomas J. Ward (“Employee”).  This option is granted in substitution for
the Old Option, and it is granted pursuant to and is subject to the MF
Acquisition Corporation 2004 Rollover Stock Option Plan (the “Plan”).  The termination of the Old Option will take
effect immediately prior to the Merger and the grant of this stock option shall
be conditioned and effective upon the occurrence of the Merger.  In the event the Merger does not occur, the
Old Option shall continue in effect in accordance with its terms.

 

1.                                       The Corporation
grants Employee an option to purchase the number of shares of Common Stock
described in Annex A at the exercise price and on the terms and conditions contained
in Annex A, this Agreement and the general terms and conditions set forth in the
Plan.  At the time of exercise of this
option, Employee shall also receive an amount of cash equal to the Option
Adjustment Amount per Share described in Annex A for each share of Common Stock
received on exercise.

 

 

2.                                       Employee may
exercise the option, in whole or in part, at any time prior to the expiration
date described in Annex A, except that Employee may not exercise the option for
a fraction of a share of Common Stock (unless the number of shares to be
purchased is the total balance for which the option is then exercisable).  In order to exercise this option Employee
must also exercise his or her option to purchase Preferred Stock granted under
a Nonqualified Rollover Preferred Stock Option Agreement of even date herewith
for a number of shares of Preferred Stock equal to the lesser of (i) the
number of shares of Common Stock for which this option is exercised divided by
55 (subject to any necessary rounding due to the inability to issue fractional
shares) or (ii) the number of shares of Preferred Stock remaining subject
to such option, if any.

 

3.                                       To exercise this
option, Employee shall submit to the Secretary of the Corporation no more than
ten (10) days prior to the effective date of exercise, a notice of
exercise substantially in the form of Annex B, the purchase price for the Common
Stock to be acquired upon exercise and such other information as may be
required from time to time by the Committee administering the Plan in
accordance with the terms of the Plan. 
The purchase price may be paid by certified or bank check, or by such
other method as the Committee may from time to time prescribe.

 

4.                                       By acceptance of
this option, Employee agrees to reimburse the Corporation for any taxes or
other obligations required by any government to be withheld or otherwise
deducted and paid by the Corporation with respect to the issuance or
disposition of the Common Stock subject to the option.  In lieu thereof, the Corporation shall have
the right to withhold the amount of such taxes from any other sums due or to
become due from the Corporation to Employee. 
The Corporation may, in its discretion, hold the stock certificate or
certificates to which Employee is entitled upon the exercise of the option as
security for the payment of such withholding tax liability until cash
sufficient to pay that liability has been accumulated.  Employee shall not have any of the rights of
a shareholder with respect to the Common Stock underlying the option until the
option is exercised and Employee receives the purchased Common Stock.

 

5.                                       If Employee
incurs a Termination of Employment prior to the expiration date, this option
shall remain exercisable until the expiration date described in Annex A.

 

6.                                       This option and
shares purchased on the exercise of this option shall be subject to the terms
of the Stockholders Agreement dated as of May 6, 2004 among the
Corporation and the investors named therein, as the same may be amended from
time to time (the “Stockholders Agreement”). 
This option shall be transferable by Employee as set forth in the
Stockholders Agreement.

 

7.                                       The Corporation
represents and warrants to Employee that the shares subject to this option have
been duly reserved for issuance and upon issuance and payment of the exercise
price, will be duly authorized, validly issued, fully paid and non-assessable,
and free of all liens and encumbrances other than pursuant to the Stockholders
Agreement.

 

8.                                       If the
Corporation, in its sole discretion, shall determine that it is necessary or
desirable, to comply with applicable securities laws and/or corporate law or
otherwise, the certificate

 

2

 

or certificates representing the Common Stock purchased pursuant to the
exercise of the option shall bear an appropriate legend in form and substance,
as determined by the Corporation, giving notice of applicable restrictions on
transfer under or with respect to such laws.

 

9.                                       Employee
covenants and agrees with the Corporation that if, at the time of exercise of
the option, there does not exist a Registration Statement on an appropriate
form under the Securities Act of 1933, as amended (the “Act”), which
Registration Statement shall have become effective and shall include a
prospectus that is current with respect to the Common Stock subject to the
option, then Employee shall execute and deliver a certificate to the
Corporation indicating (i) that he is purchasing the Common Stock for his
own account and not with a view to the resale or distribution thereof, (ii) that
any subsequent offer for sale or sale of any such Common Stock shall be made
either pursuant to (x) a Registration Statement on an appropriate form under
the Act, which Registration Statement shall have become effective and shall be
current with respect to the Common Stock being offered and sold, or (y) a
specific exemption from the registration requirements of the Act and any rules and
regulations thereunder and applicable state securities laws and regulations,
but in claiming such exemption, Employee shall, prior to any offer for sale or
sale of such Common Stock, obtain a favorable written opinion from counsel for
or approved by the Corporation as to the applicability of such exemption and (iii) that
Employee agrees that the certificate or certificates evidencing such Common
Stock shall bear a legend to the effect of the foregoing.

 

10.                                 Employee covenants and
agrees that Employee shall not, without the prior written consent of the
Corporation, sell or otherwise dispose of any shares of stock of the
Corporation during such period (a “Market Stand Off Period”) as the Corporation
or its underwriters shall establish in connection with the filing of a
Registration Statement.  The Market Stand
Off Period shall not exceed one hundred eighty (180) days.  The Market Stand Off Period may be
supplemented or superseded by any additional or conflicting restrictions in the
Stockholders Agreement.

 

11.                                 This Agreement is not
a contract of employment and the terms of Employee’s employment shall not be
affected hereby or by any agreement referred to herein except to the extent
specifically so provided herein or therein. 
Nothing herein shall be construed to impose any obligation on the
Corporation to continue Employee’s employment, and it shall not impose any
obligation on Employee’s part to remain in the employ of the Corporation.

 

12.                                 Employee acknowledges
and agrees that neither the Corporation, its shareholders nor its directors and
officers, has any duty or obligation to disclose to Employee any material
information regarding the business of the Corporation or affecting the value of
the shares before or at the time of a termination of the employment of Employee
by the Corporation, including, without limitation, any information concerning
plans for the Corporation to make a public offering of its securities or to be
acquired by or merged with or into another firm or entity.

 

3

 

13.                                 The parties hereto
intend that the substitution of this option for the Old Option will not result
in income tax liability at the time of such substitution and that Employee will
be subject to income tax at ordinary income rates upon exercise of the option
on the excess of the value of the Shares received on exercise plus the Option Adjustment
Amount received over the exercise price. 
If it is determined that income tax is payable upon the substitution, the
Corporation will gross-up Employee in cash, on an after-tax basis, for any net
additional income tax cost (taking into account the time value of money) of Employee
(including any interest and penalties) due to acceleration of the taxable event
to the date of the substitution (taking into account that it would only be an
acceleration of the time of payment of ordinary income tax and also taking into
account any differences in applicable tax rates).  The Corporation’s obligation under the prior
sentence shall terminate immediately following the closing of an initial public
offering of the Common Stock of the Corporation and the expiration of any
Market Stand Off Period resulting therefrom. 
Any gross-up payable hereunder shall be paid to Employee at the time Employee
pays the tax; provided, however, that Employee shall not pay the tax
without the written consent of the Corporation, which consent shall not be
unreasonably withheld, delayed or conditioned. 
If the Corporation does not consent to Employee’s payment of the tax,
the Corporation will be responsible for the reasonable costs (including attorneys
fees) incurred by Employee in disputing the tax, so long as the attorney
representing Employee has been selected by the Corporation or selected by
Employee and approved by the Corporation, which approval shall not be
unreasonably withheld, delayed or conditioned. 
If a gross-up is payable under this Section 13 prior to the time of
exercise of this option, if permissible under applicable law, this Section 13
will be effectuated by a nonrecourse loan from the Corporation to Employee in
the amount of the income tax (plus any interest and penalties) payable by
Employee on the option substitution with respect to this option, which loan
shall be due upon exercise or other settlement of this option, at which time
the net amount finally payable hereunder shall be computed and final settlement
made.

 

14.                                 This option is subject
to adjustment for such dilution events as are provided in, and subject to, the
Plan.

 

15.                                 Employee acknowledges
and agrees that the Old Option has terminated effective immediately prior to the
Merger and Employee shall have no right whatsoever to payments under the Merger
Agreement or the Old Option, that the Old Option shall be of no further force
or effect and that Maidenform, Inc. and all parties to the Merger
Agreement may rely upon such termination having occurred as third party
beneficiaries hereof.  In the event the
Merger does not occur, the Old Option shall continue in effect in accordance
with its terms.

 

16.                                 This Agreement
supersedes any conflicting provisions in the Exchange and Support Agreement
dated March 15, 2004.

 

17.                                 By signing this
Agreement, the holder of this option (the “Holder”) represents, warrants and
agrees that: (i) this option and the underlying securities (collectively,
the “Securities”) are being acquired for Holder’s own account and not with the
view to, or for resale in connection with, any distribution, (2) Holder
acknowledges that he or she is an accredited investor within the meaning of Rule 501
of Regulation D under the Act and has such

 

4

 

knowledge, skill and experience in business, financial and investment
matters that he or she is capable of evaluating the merits, risks and
consequences of an investment in the Securities and is able to bear the
economic risk of loss of this investment; (3) Holder has made such
independent investigation of the Corporation, Maidenform and the transactions
contemplated by the Merger Agreement as he or she deems necessary or advisable
in connection herewith; and (4) the Securities are the subject of material
transfer restrictions.

 

[signature page follows]

 

5

 

By execution
below, the Corporation and Employee accept this option and acknowledge and
agree that this option is granted under and governed by the terms and
conditions of this Nonqualified Rollover Common Stock Option Agreement, Annex A
hereto and the Plan, both of which are hereby made a part of this document.

 

	
   

  	
  MF ACQUISITION CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Thomas J. Ward

  	
   

  	
  By:

  	
  /s/ David B. Kaplan

  	
   

  
	
  Thomas J. Ward

  	
   

  	
  David B. Kaplan

  President

  	
   

  
					

 

6

 

ANNEX A TO

 

MF ACQUISITION CORPORATION

NONQUALIFIED ROLLOVER COMMON STOCK OPTION AGREEMENT

 

	
  GRANTED
  TO:

  	
   

  	
  Thomas J.
  Ward (“Employee”)

  
	
   

  	
   

  	
   

  
	
  DATE OF GRANT:

  	
   

  	
  May 11,
  2004

  
	
   

  	
   

  	
   

  
	
  EXPIRATION
  DATE(a):

  	
   

  	
  October 21,
  2012

  
	
   

  	
   

  	
   

  
	
  NUMBER OF
  UNDERLYING SHARES:

  	
   

  	
  465,457.83
  Shares of Common Stock

  
	
   

  	
   

  	
   

  
	
  TYPE OF
  OPTION:

  	
   

  	
  NonQualified
  Stock Option

  
	
   

  	
   

  	
   

  
	
  EXERCISE
  PRICE:

  	
   

  	
  $0.96 per
  Share

  
	
   

  	
   

  	
   

  
	
  VESTING
  SCHEDULE:

  	
   

  	
  Employee
  shall be vested in, and this option shall be exercisable as to, 100% of the
  Shares subject to this option on the Date of Grant.

  
	
   

  	
   

  	
   

  
	
  OPTION
  ADJUSTMENT AMOUNT:

  	
   

  	
  $0.95 per
  Share

  

 

(a)                                  Ten
years from original date of grant of Old Options.

 

 

ANNEX B TO

 

MF ACQUISITION CORPORATION

NONQUALIFIED ROLLOVER COMMON STOCK OPTION AGREEMENT

 

SAMPLE NOTICE OF EXERCISE

 

MF Acquisition
Corporation

c/o Maidenform, Inc.

154 Avenue E

Bayonne, NJ  07002

 

Attn:  Corporate Secretary

 

To the
Corporate Secretary:

 

I hereby
exercise my stock option granted under the Nonqualified Rollover Common Stock Option
Agreement dated May 6, 2004 between MF Acquisition Corporation (the “Corporation”)
and                                    
(the “Agreement”) and notify you of my desire to purchase the shares of Common
Stock that have been offered pursuant to the Agreement as described below.

 

I shall pay
for the shares by delivery of a certified or bank check payable to the
Corporation in the amount described below in full payment for such shares plus
all amounts required to be withheld by the Corporation under state, federal or
local law as a result of such exercise or shall provide such documentation as
is satisfactory to the Corporation demonstrating that I am exempt from any
withholding requirement.

 

This notice of
exercise is delivered this          day
of                                
(month)           (year).

 

	
  No. Shares
  to be Acquired

  	
   

  	
  Type of Option

  	
   

  	
  Exercise Price

  	
   

  	
  Total

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Nonqualified

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Estimated Withholding

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Amount Paid

  	
   

  	
   

  	
   

  	
   

  

 

	
  Very truly yours,

  	
  Employee’s Name and Mailing Address

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Employee’s Social Security Number

  
	
  Signature of Employee

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