Document:

Exhibit 10.1

 

EMPLOYMENT AGREEMENT

 

This
Employment Agreement (the “Agreement”)
is made and entered into as of the date set forth on the signature page hereto,
by and between True Religion Apparel, Inc., a Delaware corporation (“TRA”), and Mike
Egeck, an individual (“Executive”).

 

RECITALS

 

TRA
and Executive desire to enter into an employment agreement setting forth the
terms and conditions of Executive’s employment with TRA.

 

AGREEMENT

 

NOW,
THEREFORE, in consideration of the foregoing recitals and the terms, covenants
and conditions contained herein, TRA and Executive agree as follows:

 

1.             EMPLOYMENT

 

As
of June 4, 2010, the “Effective Date”
of this Agreement, TRA employs Executive, and Executive accepts such
employment, as President of TRA, on the terms and subject to the conditions set
forth herein.  Notwithstanding the
foregoing, the effectiveness of this Agreement shall be conditioned upon
Executive reporting to work as a full-time employee of TRA on or before June 4,
2010, after first completing all pre-employment administrative procedures in
accordance with TRA’s employment policies applicable to executive-level
employees.  If for any reason Executive
does not report to work as a full-time employee of TRA as of the Effective
Date, this Agreement will be null and void and without effect.

 

2.             CAPACITY
AND DUTIES

 

(a)           Executive shall
serve TRA as its President, and shall report directly to the Chief Executive
Officer of TRA (the “CEO”).

 

(b)           Subject to the
direction and control of the CEO and the Board of Directors of TRA (the “Board”), Executive shall
perform such duties as are usual and customary for such position and such other
duties as the Board or the CEO shall from time to time reasonably assign to
Executive.  Initially, Executive shall have
responsibility for international, retail and e-commerce, sales, marketing and
operations and the employees managing these operations will report to Executive
or an executive designated by him; provided, that, at the direction of the CEO,
one or more of such persons may have dual reporting obligations to Executive
and the CEO and such dual reporting will not constitute a breach of this
Agreement.

 

(c)           At TRA’s request,
Executive shall serve TRA and/or its subsidiaries and affiliates in other
offices and capacities in addition to the foregoing.  In the event that Executive, during the
Employment Period (as defined herein), serves in any one or more of such
additional capacities, Executive’s compensation shall not be increased beyond
that specified in Section 4 of this Agreement.  In addition, in the event Executive’s service
in one or more of such additional capacities is subsequently terminated,
Executive’s compensation, as specified in Section 4 of this Agreement,
shall not be diminished or reduced in any manner as a result of such
termination for so long as Executive otherwise remains employed under the terms
of this Agreement.

 

(d)           During the
Employment Period Executive agrees to devote substantially all of Executive’s
business time, energy, skill and best efforts to the performance of Executive’s
duties hereunder in a manner that will faithfully and diligently further the
business and interests of TRA. 
Notwithstanding the foregoing, during the Employment Period it shall not
be a violation of this Agreement for Executive to (i) serve on civic or
charitable boards or committees consistent with TRA’s conflicts of interests
policies and corporate governance guidelines in effect from time to time,
(ii) deliver lectures or fulfill speaking engagements or (iii) manage
Executive’s personal investments, so long as such activities do not interfere
with the performance of Executive’s responsibilities as an executive officer of
TRA.

 

(e)           [Intentionally
Omitted]

 

(f)            Executive agrees
that Executive will not take personal advantage of any business opportunity
that arises during Executive’s employment by TRA which may be of benefit to TRA
unless all material facts regarding such opportunity are promptly reported by
Executive to the Board for consideration by TRA and the disinterested members
of the Board determine to reject the 

 

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opportunity
and to approve Executive’s participation therein.

 

(g)           The terms of this Section
2 shall not prevent Executive from investing or otherwise managing
Executive’s assets in such form or manner as Executive chooses and spending
such time, whether or not during business hours, as Executive deems necessary
to manage Executive’s investments, so long as Executive is able to fulfill
Executive’s duties pursuant to this Section 2.

 

(h)           Except for routine
travel incident to the business of TRA, Executive shall perform Executive’s
duties and obligations under this Agreement principally from an office provided
by TRA in Vernon, California or the surrounding area.

 

3.             TERM

 

Subject
to the provisions for earlier termination hereinafter provided, Executive’s
employment hereunder shall be for a term (the “Employment Period”) ending on the third
anniversary of the Effective Date (the “Initial Termination Date” ); provided,
however, that this Agreement shall be automatically extended for one
additional year on the Initial Termination Date and on each subsequent
anniversary of the Initial Termination Date, unless either Executive or TRA
elects not to so extend the term of this Agreement by notifying the other
party, in writing, of such election not less than ninety (90) days prior to the
last day of the term as then in effect. 
For the avoidance of doubt, non-renewal of this Agreement pursuant to
the provisions contained in the preceding sentence shall not be deemed to give
rise to any payment to Executive as might be the case in connection with a
termination of this Agreement.

 

4.             COMPENSATION

 

(a)           Base Salary.

 

(i)            During the
Employment Period, Executive shall receive a base salary (the “Base Salary”) of
$650,000 per annum, payable in accordance with TRA’s normal payroll
procedures.  During the Employment
Period, the Base Salary shall be reviewed at least annually for possible
increase (but not decrease) in TRA’s sole discretion, as determined by the
Board’s compensation committee (the “Compensation
Committee”) or the full Board; provided, however,
that Executive shall be entitled to any annual cost-of-living increases in Base
Salary that are generally granted to TRA’s Named Executive Officers, as such
term is defined in TRA’s proxy for its annual meeting of stockholders (“Senior Executives”).

 

(ii)           Any increase in
Base Salary shall not serve to limit or reduce any other obligation to
Executive under this Agreement.

 

(iii)          The term “Base
Salary” as utilized in this Agreement shall refer to the Base Salary as so
adjusted.

 

(b)           Bonuses.

 

(i)            Annual Cash
Bonus.  In addition to Base Salary,
Executive shall be eligible, for each fiscal year of TRA ending during the
Employment Period, to participate in TRA’s Executive Cash Incentive Bonus Plan
or other cash incentive plan then in existence and to receive an annual cash
performance bonus (an “Annual
Cash Bonus”) in accordance with the terms of such plan or
plans.  The amount of such Annual Cash
Bonuses and annual target performance goals during the Employment Period shall
be determined by the Compensation Committee, or the full Board, in its sole
discretion; provided, however,
Executive’s Annual Cash Bonus for fiscal 2010, will be $350,000 if the minimum
annual performance goal established by the Compensation Committee for 2010 is
achieved, $640,000 if the target annual performance goal established by the
Compensation Committee for 2010 is achieved, and $1,200,000 if the maximum annual
performance goal established by the Compensation Committee for 2010 is
achieved, in each case pro-rated based on the number of days from the Effective
Date to the end of 2010.

 

(ii)           Annual Equity
Incentive Bonus.  In addition to the
Base Salary, Executive shall be eligible, for each fiscal year of TRA ending
during the Employment Period, to participate in TRA’s 2009 Equity Incentive
Plan or such other equity incentive plan or plans then in existence for the
benefit of executive officers, and to receive an annual performance equity
award (an “Annual Equity
Award”) in accordance with the terms of such plan or plans.  The amount of such Annual Equity Awards, the
target performance goals and the vesting terms of such awards will be
determined by the Compensation Committee in its sole discretion; provided, however, Executive will
receive a grant of restricted stock for 2010 under the 2009 Equity Incentive
Plan with a fair market value on the date of grant of $1,660,000 if the minimum
annual performance goal established by the Compensation Committee for 2010 is
achieved, $2,410,000 if the target annual performance goal established by the
Compensation Committee for 2010 is achieved, and $2,610,000 if the maximum
annual performance goal established by the Compensation Committee for 2010 is
achieved, in each case pro-rated based on the number of days from the Effective
Date to the end of 2010.  The 2010
restricted stock awards shall vest (A) two-thirds on the later to occur of the
first anniversary of the Effective Date or the date the Compensation Committee
certifies the achievement of the annual performance goal and (B) one-third on
the second anniversary of the Effective Date.

 

(iii)          Effective Date
Grant of Restricted Stock.  Within 30
days following the Effective Date, TRA will grant to 

 

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Executive
100,000 shares of common stock of TRA (the “Restricted Stock Award”), which shares will vest in
three (3) equal installments on the first, second, and third anniversaries of
the Effective Date so long as Executive is employed by TRA on the applicable
anniversary date.

 

(c)           Benefits.

 

(i)            Incentive,
Savings and Retirement Plans.  During
the Employment Period, Executive shall be eligible to participate in all other
incentive plans, policies and programs, and all savings and retirement plans,
policies and programs, in each case that are applicable generally to Senior
Executives of TRA.

 

(ii)           Welfare Benefit
Plans.  During the Employment Period,
Executive and Executive’s eligible family members shall be eligible for
participation in the welfare benefit plans, practices, policies and programs
(including, if applicable, medical, dental, disability, employee life, group
life and accidental death insurance plans and programs) maintained by TRA for
its Senior Executives; provided, that
(i) the life insurance benefit shall be at least equal to $400,000, and (ii)
TRA shall fully pay any employee funded portion of the health insurance
premium.

 

(iii)          Expenses.  During the Employment Period, Executive shall
be entitled to receive prompt reimbursement for all reasonable business
expenses incurred by Executive in accordance with the policies, practices and
procedures of TRA provided to Senior Executives of TRA, which shall include
premium class hotel accommodations, business class air travel for all flights
and executive car service for ground transportation.

 

(iv)          Fringe Benefits.  During the Employment Period, Executive shall
be entitled to such fringe benefits and perquisites as are provided by TRA to
its Senior Executives from time to time, in accordance with the policies,
practices and procedures of TRA.

 

(v)           Vacation.  During the Employment Period, Executive shall
be entitled to paid vacation in accordance with the plans, policies, programs
and practices of TRA applicable to its Senior Executives but in no event shall
Executive receive less than four (4) weeks paid vacation per full year of
employment.

 

(vi)          Automobile.  During the Employment Period, Executive shall
be entitled to an automobile allowance of $1,200 per month.

 

5.             INDEMNIFICATION

 

TRA
and Executive are parties to an Indemnification Agreement, pursuant to which,
inter alia, TRA has agreed, on the terms and conditions therein set forth, to
indemnify Executive against certain claims arising by reason of the fact that
Executive is or was an officer of TRA.

 

6.             ADDITIONAL
AGREEMENTS

 

Executive
acknowledges the Confidentiality and Non-Disclosure Agreement, dated the
Effective Date, between Executive and TRA (the “Confidentiality
Agreement”).  Executive
represents that Executive is not in breach of any of the terms and conditions
of the Confidentiality Agreement, and affirms that the Confidentiality
Agreement remains in full force and effect pursuant to its terms.

 

7.             RETURN OF
CORPORATE PROPERTY AND TRADE SECRETS

 

Upon
termination of this Agreement for any reason, Executive, or Executive’s estate
in the event of Executive’s death, shall turn over to TRA all correspondence,
property, writings or documents then in Executive’s possession or custody
belonging to or relating to the affairs of TRA or any of its subsidiaries or
affiliates.

 

8.             TERMINATION
OF EMPLOYMENT

 

(a)           Termination by
Reason of Death or Disability.

 

(i)            Death or
Disability.  Executive’s employment
hereunder shall terminate immediately upon the death of Executive.  Executive’s employment may be terminated if
Executive suffers a Disability.  For
purposes of this Agreement, “Disability” means Executive’s inability by reason of
physical or mental illness to fulfill Executive’s obligations hereunder for
ninety (90) consecutive days or on a total of one hundred fifty (150) days in
any twelve (12) month period which, in the reasonable opinion of an independent
physician selected by TRA or its insurers and reasonably acceptable to
Executive or Executive’s legal representative, renders Executive unable to
perform the essential functions of Executive’s job, even after reasonable
accommodations are made by TRA.  TRA is
not, however, required to make unreasonable accommodations for Executive or
accommodations that 

 

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would
create an undue hardship on TRA.

 

(b)           Termination by
Executive for Good Reason.

 

(i)            Good Reason.  Executive’s employment may be terminated by
Executive for Good Reason;  provided,
however Executive may terminate this Agreement for Good Reason only
within the period of one hundred eighty (180) days following the occurrence of
the event which results in the right of termination hereunder;  provided  further (i)
Executive provides written notice to TRA of the occurrence of such event within
ninety (90) days of Executive first becoming aware of its occurrence and (ii)
TRA fails to fully cure the circumstances constituting Good Reason (provided
such circumstances are capable of cure) prior to the Date of Termination (as
defined below), which date will be at least thirty (30) days following the date
of such notice.  For purposes of this
Agreement, “Good Reason”
shall mean the occurrence of any one or more of the events listed below without
Executive’s prior written consent:

 

(A)          A
material reduction in Executive’s title, duties, authority and
responsibilities, or the assignment to Executive of any duties materially
inconsistent with Executive’s position, authority, duties or responsibilities
without the written consent of Executive;

 

(B)           TRA’s
reduction in a material amount of Executive’s Base Salary, as in effect on the
date hereof or as the same may be increased from time to time;

 

(C)           The
relocation of TRA’s office where Executive is required to perform Executive’s
duties to a location more than thirty-five (35) miles from TRA’s current
headquarters in Vernon, California; or

 

(D)          TRA’s
material breach of its obligations under this Agreement.

 

(c)           Termination by
TRA for Cause.

 

(i)            Cause.  TRA may terminate Executive’s employment
during the Employment Period for Cause or without Cause.  For purposes of this Agreement, “Cause” shall mean the
occurrence of any one or more of the following events:

 

(A)          Executive’s
willful failure to perform, or gross negligence in performing, Executive’s
duties owed to TRA, after fifteen (15) days following written notice
delivered to Executive by the Board, which notice specifies such failure or
negligence;

 

(B)           Executive’s
willful engagement in gross misconduct relating to Executive’s employment that
is materially injurious to TRA;

 

(C)           Executive’s
commission of an act of fraud or dishonesty in the performance of Executive’s
duties;

 

(D)          Executive’s
conviction of, or entry by Executive of a guilty or no contest plea to, any
(x) felony or (y) any misdemeanor involving moral turpitude;

 

(E)           Any
breach by Executive of Executive’s fiduciary duty of care or duty of loyalty to
TRA; or

 

(F)           Executive’s
material breach of any of the provisions of this Agreement or TRA’s Code of
Conduct applicable to executive officers, which, if curabale, is not cured
within thirty (30) days following written notice thereof from TRA.

 

(d)           Notice of
Termination.  Any termination by TRA
for Cause, or by Executive for Good Reason, shall be communicated by a Notice
of Termination (as defined herein) to the other party hereto given in
accordance with this Section 8(d). 
For purposes of this Agreement, a “Notice of Termination” means a written notice which
(i) indicates the specific termination provision in this Agreement relied
upon, (ii) to the extent applicable, sets forth in reasonable detail the
facts and circumstances claimed to provide a basis for termination of Executive’s
employment under the provision so indicated and (iii) if the Date of
Termination (as defined below) is other than the date of receipt of such
notice, specifies the termination date (which date shall be not more than
thirty days after the giving of such notice). 
The failure by Executive or TRA to set forth in the Notice of
Termination any fact or circumstance which contributes to a showing of Good
Reason or Cause shall not waive any right of Executive or TRA, respectively,
hereunder or preclude Executive or TRA, respectively, from asserting such fact
or circumstance in enforcing Executive’s or TRA’s rights hereunder.

 

(e)           Date of
Termination.  For the purposes of
this Agreement, “Date of
Termination” means (i) if Executive’s employment is
terminated by TRA for Cause, or by Executive for Good Reason, the date of receipt
of the Notice of Termination or any later date specified therein (which date
shall not be more than 30 days after the giving of such notice), as the case
may be, (ii) if Executive’s employment is terminated by TRA other than for
Cause or Disability, the Date of Termination shall be the date on which TRA
notifies Executive of such termination, (iii) if Executive’s employment is
terminated by Executive without Good Reason (which 

 

4

 

shall
constitute a breach of this Agreement), the Date of Termination shall be the
thirtieth day after the date on which Executive notifies TRA of such
termination, unless otherwise agreed by TRA and Executive, and (iv) if
Executive’s employment is terminated by reason of death, Disability or
expiration of the Employment Period, the Date of Termination shall be the date
of death or Disability of Executive, as the case may be.

 

9.             PAYMENTS
UPON TERMINATION

 

(a)           Termination
Without Cause or For Good Reason. 
If, during the Employment Period, TRA shall terminate Executive’s
employment without Cause or Executive shall terminate Executive’s employment
for Good Reason:

 

(i)            Executive shall be
paid, in two separate lump sum payments (A) Executive’s earned but unpaid
Base Salary and accrued but unpaid vacation pay through the Date of
Termination, and any Annual Cash Bonus required to be paid to Executive
pursuant to Section 4(b)(i) above for any fiscal year of TRA that
ends on or before the Date of Termination to the extent not previously paid
(the “Accrued
Obligations”), and (B) an amount (the “Severance Amount”)
equal to one and one-half (1.5) (the “Severance Multiple”) times the sum of
(x) the Base Salary in effect on the Date of Termination plus (y) the
average Annual Cash Bonus received by Executive for the two complete fiscal
years (or such lesser number of complete fiscal years as Executive has been
employed by TRA) of TRA immediately prior to the Date of Termination; provided,
that the Severance Multiple shall be reduced to 1.0 (one) during the last year
of the initial Employment Period and for each subsequent Employment Period
thereafter.  The Accrued Obligations
shall be paid when due under California law and the Severance Amount shall be paid
no later than March 15 of the calendar year following the year in which occurs
Executive’s “separation from service” as defined in Section 1.409A-1(h)(1) of
the Treasury Regulations, and not before the last day on which the Executive
could satisfy the conditions of Section 9(a)(vi) hereof, including any period
provided for revocation thereunder.

 

(ii)           At the time when
Executive’s Annual Cash Bonus would otherwise be payable pursuant to Section
4(b)(i) of this Agreement for the fiscal year of TRA in which the Date of
Termination occurs, Executive shall, if the applicable performance goals are
satisfied (the highest of such performance goals which is satisfied being
referred to in this paragraph as the “Applicable Performance Goal”), be paid an
Annual Cash Bonus in an amount equal to the greater of: (x) the product of
(I) the amount of the Annual Cash Bonus to which Executive would have been
entitled if Executive’s employment had not been terminated, and (II) a
fraction, the numerator of which is the number of days in such fiscal year
through the Date of Termination and the denominator of which is the total
number of days in such fiscal year, or (y) the product of (I) the amount
of the Annual Cash Bonus to which Executive would have been entitled if
Executive’s employment had not been terminated, and (II) a percentage
which represents that percentage of the Applicable Performance Goal actually
satisfied as of the end of the fiscal quarter immediately preceding the Date of
Termination, (a “Pro-Rated
Annual Bonus”);

 

(iii)          For a period of
eighteen (18) months following the Date of Termination, TRA shall continue to
provide Executive and Executive’s eligible family members with group health
insurance coverage at least equal to that which would have been provided to
them if Executive’s employment had not been terminated (or at TRA’s election,
pay the applicable COBRA premium for such coverage); thereafter, Executive
shall be entitled to purchase, at Executive’s sole cost, insurance coverage
under COBRA for the period permitted pursuant to TRA policy and applicable law;
provided, however, that if Executive becomes re-employed with
another employer and is eligible to receive group health insurance coverage
under another employer’s plans, TRA’s obligations under this Section 9(a)(iii)
shall terminate and any such coverage shall be reported by Executive to TRA;

 

(iv)          The Restricted Stock
Award shall become immediately vested and exercisable in full;

 

(v)           All outstanding
Annual Equity Awards (except for performance based awards, which shall vest
only upon satisfaction of the performance goals) granted to Executive (or
awards substituted therefore covering the securities of a successor company)
which are scheduled to vest within twelve (12) months following the Date of
Termination, shall become immediately vested and exercisable in full; and

 

(vi)          To the extent not
theretofore paid or provided, TRA shall timely pay or provide to Executive any
vested benefits and other amounts or benefits required to be paid or provided
or which Executive is eligible to receive as of the Date of Termination under
any plan, contract or agreement of TRA and its affiliates (such other amounts
and benefits shall be hereinafter referred to as the “Other Benefits”) to which Executive is a party.

 

(vii)         Notwithstanding
anything herein to the contrary, it shall be a condition to Executive’s right
to receive the amounts provided for in Sections 9(a)(i)(B), 9(a)(ii) and
9(a)(iii) above that Executive timely execute and deliver to TRA, and not
revoke within the period provided therefor, a release of claims in a form to be
agreed upon by parties hereto.  Such
execution and delivery will be deemed timely only if completed within 21 days
(or such longer period as TRA may establish) of TRA’s delivery of such form to
Executive.

 

(b)           Termination For Cause
or Without Good Reason; Expiration of Employment Period.  If Executive’s employment shall be terminated
by TRA for Cause or by Executive without Good Reason during the Employment
Period or upon expiration of the 

 

5

 

Employment
Period, TRA shall have no further obligations to Executive under this Agreement
and the obligation to pay to Executive the Accrued Obligations when due under
California law and to provide the Other Benefits.

 

(c)           Termination by
Reason of Death or Disability.  Upon
termination of Executive’s employment by reason of death or Disability during
the Employment Period:

 

(i)            The Accrued
Obligations shall be paid to Executive’s estate or beneficiaries or to
Executive, as applicable, in cash when due under California law;

 

(ii)           One Hundred Percent
(100%) of Executive’s then current annual Base Salary, as in effect on the Date
of Termination, shall be paid to Executive’s estate or beneficiaries or to
Executive, as applicable, within thirty (30) days of the Date of
Termination;

 

(iii)          The Pro-Rated
Annual Bonus shall be paid to Executive’s estate or beneficiaries or to
Executive, as applicable, at the time when Annual Cash Bonuses are paid to TRA’s
other Senior Executives for the fiscal year of TRA in which the Date of
Termination occurs;

 

(iv)          For a period of
eighteen months following the Date of Termination, Executive and Executive’s
eligible family members shall continue to be provided with group health
insurance coverage at least equal to that which would have been provided to
them if Executive’s employment had not been terminated (or at TRA’s election,
pay the applicable COBRA premium for such coverage); thereafter, if applicable,
Executive shall be entitled to purchase, at Executive’s sole cost, insurance
coverage under COBRA for the period permitted pursuant to TRA policy and
applicable law; provided, however, that if Executive becomes
re-employed with another employer and is eligible to receive group health
insurance coverage under another employer’s plans, TRA’s obligations under this
Section 9(c)(iv) shall terminate, and any such coverage shall be
reported by Executive to TRA; and

 

(v)           The Other Benefits
shall be paid or provided to Executive’s estate or beneficiaries or to
Executive, as applicable, on a timely basis.

 

(d)           Timing of Payment.  Notwithstanding anything to the contrary in
this Agreement, to the extent required to comply with Section 409A of the
Internal Revenue Code of 1986, as amended (the “Code”), if Executive is deemed to be a “specified
employee” for purposes of Section 409A(a)(2)(B) of the Code, Executive
agrees that any non-qualified deferred compensation payments due to Executive
under this Agreement in connection with a termination of Executive’s employment
that would otherwise have been payable at any time during the six-month period
immediately following such termination of employment shall not be paid prior
to, and shall instead be payable in a lump sum on the first business day of the
seventh month following Executive’s “separation from service” as that term is
defined in Section 1.409A-1(h) of the Treasury Regulations.

 

10.          Change in
Control

 

(a)           Severance Payment.  If a Change in Control (as defined herein)
occurs during the Employment Period, and the Executive’s employment is
terminated by TRA without Cause or by the Executive for Good Reason, in each
case within one (1) year after the effective date of the Change in
Control, then the Executive shall be entitled to the payments and benefits
provided in Section 9(a), subject to the terms and conditions
thereof; provided, that for purposes of this Section 10,
(x) the Severance Multiple shall equal three (3.0), and (y) all
outstanding Annual Equity Awards (except for performance based awards, which
shall vest only upon satisfaction of the performance goals) granted to
Executive (or awards substituted therefore covering the securities of a
successor company) shall become immediately vested and exercisable in full.

 

(b)           Change in Control.  For purposes of this Agreement, “Change in Control” shall mean
the occurrence of any of the following events:

 

(i)            Any transaction,
whether effected directly or indirectly, resulting in any “person” or “group”
(as those terms are defined in Sections 3(a)(9), 13(d), and 14(d)  of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”),
and the rules thereunder) having “beneficial ownership” (as determined pursuant
to Rule 13d-3 under the Exchange Act) of securities entitled to vote
generally in the election of directors (“Voting Securities”) of TRA that
represent greater than 35% of the combined voting power of TRA’s then
outstanding Voting Securities, other than:

 

(A)          any
transaction or event resulting in the beneficial ownership of Voting Securities
by a trustee or other fiduciary holding securities under any employee benefit
plan (or related trust) sponsored or maintained by TRA or any Person controlled
by TRA or by any employee benefit plan (or related trust) sponsored or
maintained by TRA or any Person controlled by TRA, or

 

(B)           any
transaction or event resulting in the beneficial ownership of Voting Securities
by TRA or a 

 

6

 

corporation owned, directly or indirectly, by the stockholders of TRA
in substantially the same proportions as their ownership of the stock of TRA,
or

 

(C)           any
transaction or event resulting in the beneficial ownership of Voting Securities
pursuant to a transaction that would not be a Change in Control pursuant to Section
10(b)(iii)(A).

 

(ii)           Individuals who, as
of the Effective Date, constitute the Board (the “Incumbent Board”) cease for any reason
to constitute at least a majority of the Board; provided, however,
that any individual becoming a director subsequent to the date hereof whose
election by TRA’s stockholders, or nomination for election by the Board, was
approved by a vote of at least a majority of the directors then comprising the
Incumbent Board shall be considered as though such individual were a member of
the Incumbent Board, but excluding, for this purpose, any such individual whose
initial assumption of office occurs as a result of an election contest with
respect to the election or removal of directors or other solicitation of
proxies or consents by or on behalf of a Person other than the Board;

 

(iii)          The consummation by
TRA (whether directly involving TRA or indirectly involving TRA through one or
more intermediaries) of (x) a merger, consolidation, reorganization, or
business combination, (y) a sale or other disposition of all or substantially
all of TRA’s assets, or (z) the acquisition of assets or stock of another
entity, in each case, other than a transaction:

 

(A)          which
results in TRA’s Voting Securities outstanding immediately before the
transaction continuing to represent (either by remaining outstanding or by
being converted into Voting Securities of TRA or the Person that, as a result
of the transaction, controls, directly or indirectly, TRA or owns, directly or
indirectly, all or substantially all of TRA’s assets or otherwise succeeds to
the business of TRA (TRA or such person, the “Successor Entity”)) directly or
indirectly, greater than 50% of the combined voting power of the Successor
Entity’s outstanding Voting Securities immediately after the transaction, and
after which no Person or group beneficially owns Voting Securities representing
greater than 50% of the combined
voting power of the Successor Entity;  provided,
however, that no Person or group shall be treated for purposes of this Section
10(b)(iii) as beneficially owning greater than 50% of combined voting
power of the Successor Entity solely as a result of the voting power held in
TRA prior to the consummation of the transaction; or

 

(B)           the
approval by TRA’s stockholders of a liquidation or dissolution of TRA.

 

(c)           For purposes of Section
10(b)(i) above, the calculation of voting power shall be made as if
the date of the acquisition were a record date for a vote of TRA’s
stockholders, and for purposes of Section 10(b)(iii) above, the
calculation of voting power shall be made as if the date of the consummation of
the transaction were a record date for a vote of TRA’s stockholders.

 

(d)           The following terms
shall have the following meanings for purposes of this Section 10:

 

(i)            “Affiliate” shall
mean, with respect to any Person, any Person directly or indirectly
controlling, controlled by or under common control with such Person.  Control of any Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of Voting Securities or other interests, by
contract or otherwise, and the terms “controlling” and “controlled” have
meanings correlative to the foregoing.

 

(ii)           “Immediate Family Member”
shall mean a natural person’s estate or heirs or current spouse or former
spouse, parents, parents-in-law, children (whether natural, adopted or by
marriage), siblings and grandchildren and any trust or estate, all of the
beneficiaries of which consist of such person or such person’s spouse, or
former spouse, parents, parents-in-law, children, siblings or grandchildren.

 

(iii)          “Person” shall mean an
individual or a corporation, partnership, limited liability company, trust,
unincorporated organization, association or other entity.

 

11.          FULL
SETTLEMENT

 

In
no event shall Executive be obligated to seek other employment or take any
other action by way of mitigation of the amounts payable to Executive under any
of the provisions of this Agreement and except as expressly provided, such
amounts shall not be reduced whether or not Executive obtains other
employment.  If any party to this
Agreement institutes any action, suit, counterclaim, appeal, arbitration or
mediation for any relief against another party, declaratory or otherwise
(collectively an “Action”),
to enforce the terms hereof or to declare rights hereunder, then the Prevailing
Party (as defined herein) in such Action shall be entitled to recover from the
other party all costs and expenses of the Action, including reasonable
attorneys’ fees and costs (at the Prevailing Party’s attorneys’ then-prevailing
rates) incurred in bringing and prosecuting or defending such Action and/or
enforcing any judgment, order, ruling or award (collectively, a “Decision”) granted
therein, all of which shall be deemed to have accrued on the commencement of
such Action and shall be paid whether or not such Action is prosecuted to a
Decision.  Any Decision entered in such
Action shall contain a specific provision providing for the recovery of
attorneys’ fees and costs incurred in enforcing such Decision.  A court or arbitrator shall fix the amount of
reasonable attorneys’ fees and costs upon the request of either party.  Any judgment or order entered in any final
judgment shall contain a specific provision providing for the recovery of all
costs and expenses 

 

7

 

of
suit, including reasonable attorneys’ fees and expert fees and costs incurred
in enforcing, perfecting and executing such judgment.  For the purposes of this paragraph, costs
shall include, without limitation, in addition to costs incurred in prosecution
or defense of the underlying action, reasonable attorneys’ fees, costs,
expenses and expert fees and costs incurred in the following: (a) post
judgment motions and collection actions; (b) contempt proceedings;
(c) garnishment, levy, debtor and third party examinations; (d) discovery;
(e) bankruptcy litigation; and (f) appeals of any order or
judgment.  “Prevailing Party” within the meaning of this Section 11
includes, without limitation, a party who agrees to dismiss an Action in
consideration for the other party’s payment of the amounts allegedly due or
performance of the covenants allegedly breached, or obtains substantially the
relief sought by such party.

 

12.          MISCELLANEOUS

 

(a)           Entire Agreement.  This Agreement contains the entire
understanding of the parties hereto relating to the subject matter hereof and
cannot be changed or terminated except in writing signed by both Executive and
TRA.

 

(b)           Governing Law.  This Agreement has been made and entered into
in the state of California and shall be construed in accordance with the laws
of the State of California without regard to the conflict of law principles
thereof.

 

(c)           Arbitration.  To the fullest extent allowed by law, any
controversy, claim or dispute between Executive and TRA (and/or any of its
owners, directors, officers, employees, affiliates, or agents) in any way
related to or arising out of Executive’s employment or the cessation of that
employment will be submitted to final and binding arbitration before a retired
state or federal judge in the County of Los Angeles, State of California, for
determination in accordance with the Judicial Arbitration and Mediation
Services (“JAMS”)
National Rules for the Resolution off Employment Disputes, as the exclusive
remedy for such controversy, claim or dispute. 
In any such arbitration, the parties may conduct discovery in accordance
with the applicable rules of the arbitration forum, except that the arbitrator
shall have the authority to order and permit discovery as the arbitrator may
deem necessary and appropriate in accordance with applicable state or federal
discovery statutes.  The arbitrator shall
issue a reasoned, written decision, and shall have full authority to award all
remedies which would be available in court. 
The parties shall share the filing fees required for the arbitration, provided
that Executive shall not be required to pay an amount in excess of the filing
fees required by a federal or state court with jurisdiction.  TRA shall pay the arbitrator’s fees and any
JAMS administrative expenses.  The award
of the arbitrator shall be final and binding upon the parties and may be
entered as a judgment in any California court of competent jurisdiction and the
parties hereby consent to the exclusive jurisdiction of the courts of
California.  Possible disputes covered by
the above include (but are not limited to) unpaid wages, breach of contract,
torts, violation of public policy, discrimination, harassment, or any other
employment-related claims under laws including but not limited to, Title VII of
the Civil Rights Act of 1964, the Americans With Disabilities Act, the Age
Discrimination in Employment Act, the California Fair Employment and Housing
Act, the California Labor Code, and any other statutes or laws relating to an
employee’s relationship with his/her employer, regardless of whether such
dispute is initiated by the employee or TRA. 
Thus, this bilateral arbitration agreement applies to any and all claims
that TRA may have against an employee, including but not limited to, claims for
misappropriation of TRA property, disclosure of proprietary information or
trade secrets, interference with contract, trade libel, gross negligence, or
any other claim for alleged wrongful conduct or breach of the duty of loyalty
by an employee.  However, notwithstanding
anything to the contrary contained herein, TRA and Executive shall have their
respective rights to seek and obtain injunctive relief with respect to any
controversy, claim or dispute to the extent permitted by law.  Claims for workers’ compensation benefits and
unemployment insurance (or any other claims where mandatory arbitration is
prohibited by law) are not covered by this arbitration agreement, and such
claims may be presented by either Executive or TRA to the appropriate court or
government agency.  BY AGREEING TO THIS
BINDING ARBITRATION PROVISION, BOTH EXECUTIVE AND TRA GIVE UP ALL RIGHTS TO
TRIAL BY JURY.  This arbitration
agreement is to be construed as broadly as is permissible under applicable law.

 

(d)           Sarbanes-Oxley
Act of 2002.  Notwithstanding
anything herein to the contrary, if TRA determines, in its good faith judgment,
that any transfer or deemed transfer of funds hereunder is likely to be
construed as a personal loan prohibited by Section 13(k) of the Exchange Act
and the rules and regulations promulgated thereunder, then such transfer or
deemed transfer shall not be made to the extent necessary or appropriate so as
not to violate the Exchange Act and the rules and regulations promulgated
thereunder.

 

(e)           Withholding.  TRA may withhold from any amounts payable
under this Agreement such Federal, state, local or foreign taxes as shall be
required to be withheld pursuant to any applicable law or regulation.

 

(f)            No Waiver.  Executive’s or TRA’s failure to insist upon
strict compliance with any provision of this Agreement or the failure to assert
any right Executive or TRA may have hereunder, including, without limitation,
the right of Executive to terminate employment for Good Reason pursuant to Section
8(b) of this Agreement, shall not be deemed to be a waiver of such
provision or right or any other provision or right of this Agreement.

 

(g)           Consultation With
Counsel.  Executive acknowledges that
Executive has had a full and complete opportunity to consult with counsel and
other advisors of Executive’s own choosing concerning the terms, enforceability
and implications of this 

 

8

 

Agreement,
and that TRA has not made any representations or warranties to Executive
concerning the terms, enforceability or implications of this Agreement other
than as reflected in this Agreement.

 

(h)           Notices.  All notices, requests and other
communications given pursuant to this Agreement shall be in writing, and shall
be delivered by facsimile transmission with a copy delivered by personal
service or by United States first class, registered or certified mail (return
receipt requested), postage prepaid, addressed to the party at the address set
forth below:

 

	
   

  	
  If to TRA:

  	
  True Religion Apparel,
  Inc.

  2263 E.  Vernon Avenue

  Vernon, CA 90058

  Attention: Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  with a copy to:

  	
  Akin Gump Strauss Hauer
  & Feld LLP

  2029 Century Park East

  Suite 2400

  Los Angeles, CA 90067

  Attn:  Frank Reddick

  
	
   

  	
   

  	
   

  
	
   

  	
  If to Executive:

  	
  Executive’s most recent
  address

  on the records of TRA

  

 

Any
notice shall be deemed duly given when received by the addressee thereof, provided
that any notice sent by registered or certified mail shall be deemed to have
been duly given three (3) days from date of deposit in the United States mails,
unless sooner received.  Either party may
from time to time change its address for further notices hereunder by giving
notice to the other party in the manner prescribed in this Section 12(h).

 

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

 

(j)            Severable
Provisions.  The provisions of this
Agreement are severable, and if any one or more provisions are determined to be
judicially unenforceable, in whole or in part, the remaining provisions shall
nevertheless be binding and enforceable.

 

(k)           Successors and
Assigns.  This Agreement and all obligations
and benefits Executive and TRA hereunder shall bind and inure to the benefit
Executive and TRA, their respective affiliates, and their respective successors
and assigns.

 

(l)            Amendments and
Waivers.  No amendment or waiver of
any term or provision of this Agreement shall be effective unless made in
writing.  Any written amendment or waiver
shall be effective only in the instance given and then only with respect to the
specific term or provision (or portion thereof) of this Agreement to which it
expressly relates, and shall not be deemed or construed to constitute a waiver
of any other term or provision (or portion thereof) waived in any other
instance.

 

(m)          Title and Headings.  The titles and headings contained in this
Agreement are included for convenience only and form no part of the agreement
between the parties.

 

9

 

IN
WITNESS WHEREOF, this Agreement has been executed as of the date set forth
below.

 

	
   

  	
  TRUE RELIGION APPAREL,
  INC.

  
	
   

  	
   

  
	
   

  	
  /s/ Jeffrey Lubell

  
	
   

  	
  Name:

  	
  Jeffrey Lubell

  
	
   

  	
  Title:

  	
  Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
  Date:

  	
  5/13/10

  
	
   

  	
   

  
	
   

  	
   

  
	
  ACCEPTED AND AGREED TO:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Mike Egeck

  	
   

  	
   

  
	
  Name:  Mike Egeck

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date:

  	
  5/12/10

  	
   

  	
   

  
					

 

10Exhibit 10.2

 

AMAG PHARMACEUTICALS, INC.

 

Non-Employee Director Compensation Policy

 

The
Board of Directors (the “Board”) of AMAG Pharmaceuticals, Inc. (the “Company”
or “AMAG”) has approved the following policy which establishes compensation to
be paid to non-employee directors of the Company, effective May 25, 2010,
which policy supersedes in its entirety the policy previously amended and
restated on May 5, 2009, to provide an inducement to obtain and retain the
services of qualified persons to serve as members of the Company’s Board.  Each such director will receive as
compensation for his or her services equity grants and cash compensation, all
as further set forth herein.

 

Applicable Persons

 

This
Policy shall apply to each director of the Company who is not an employee of
the Company or any Affiliate (each, an “Outside Director”).  Affiliate shall mean a corporation which is a
direct or indirect parent or subsidiary of the Company, as determined pursuant
to Section 424 of the Internal Revenue Code of 1986, as amended.

 

Equity Grants

 

Equity
Grant Upon Initial Appointment or Election as a Director

 

Commencing
in May 2010, each new Outside Director, on the date of his or her initial
appointment or election to the Board, will receive an equity grant comprised of
two components: (i) an inducement grant and (ii) an annual grant.

 

As
an inducement to joining the Board, each new Outside Director will be granted a
non-qualified stock option to purchase 6,000 shares of the Company’s common
stock pursuant to the Company’s Second Amended and Restated 2007 Equity
Incentive Plan (the “Stock Plan”), subject to automatic adjustment in the event
of any stock split or other recapitalization affecting the Company’s common
stock.  Such option shall vest in equal
monthly installments over a period of two years from the date of his or her
election to the Board, provided such Outside Director continues to serve as a
member of the Board.

 

Upon
joining the Board, each new Outside Director who joins the Board subsequent to
the date of the Annual Meeting of Stockholders will also receive an annual
equity grant of non-qualified stock options and restricted stock units (“RSUs”)
on the date of his or her appointment or election as described below under the
heading “Annual Equity Grant;” provided, that the amount of options and RSUs
granted to such new Outside Director will be pro-rated based on the number of
expected months of service before the next Annual Meeting of Stockholders;
provided further, that such options and RSUs will vest in equal monthly
installments beginning on the first day of the first full month following
appointment or election and continuing on the first day of each month
thereafter through the first day of the month in which the next Annual Meeting
of 

 

 

Stockholders
is to be held, so long as the newly-appointed Outside Director continues to
serve as a member of the Board.

 

Annual
Equity Grant

 

Commencing
in May 2010, at the first meeting of the Board following the Annual
Meeting of Stockholders, each Outside Director, other than the Chairman, will
be provided an equity grant equal to a pre-determined value with reference to
comparable annual grants provided to non-employee directors of companies in
AMAG’s then current peer group as established by the Compensation Committee of
the Board (the “Compensation Committee”). 
The exact value and size of the foregoing equity grant will be
determined by the Compensation Committee in its reasonable discretion using a
Black-Scholes or other equity valuation methodology deemed appropriate by the
Compensation Committee and taking into account any advice or recommendations of
any independent compensation consultant deemed appropriate by the Compensation
Committee.

 

One
half of the total value of the foregoing annual equity grant will be comprised
of a non-qualified stock option to purchase shares of the Company’s common
stock, and the remaining one half will be comprised of RSUs covering shares of
the Company’s common stock, in each case pursuant to the Stock Plan and subject
to automatic adjustment in the event of any stock split or other
recapitalization affecting the Company’s common stock.  Notwithstanding the foregoing, the May 2010
annual grant to each Outside Director, other than the Chairman, shall be
pro-rated to reflect the number of months of continuous Board service performed
by each such Outside Director since the last annual grant to such Outside
Director.  The foregoing options and RSUs
will vest in twelve equal monthly installments beginning on the first day of
the first full month following the Annual Meeting of Stockholders and
continuing on the first day of each of the following eleven months thereafter,
so long as the Outside Director continues to serve as a member of the Board;
provided, that delivery of any vested shares of common stock underlying the
foregoing RSUs shall be deferred until the earlier of (i) the third
anniversary of the date of grant or (ii) the date the Outside Director’s
service to the Company terminates; provided, that such termination constitutes
a “separation from service” as such term is defined in Treasury Regulation Section 1.409A-1(h).

 

Commencing
in May 2010, at the first meeting of the Board following the Annual
Meeting of Stockholders, the Chair of the Board, provided that he or she is also
an Outside Director, will be provided an equity grant comprised of (i) a
non-qualified stock option to purchase two times the number of shares of the
Company’s common stock issuable to other Outside Directors in accordance with
the immediately preceding paragraph and (ii) RSUs covering a total of two
times the number of shares of the Company’s common stock issuable to other
Outside Directors in accordance with the immediately preceding paragraph, in
each case pursuant to the Stock Plan and subject to automatic adjustment in the
event of any stock split or other recapitalization affecting the Company’s
common stock.  Notwithstanding the
foregoing, the May 2010 annual grant to the Chairman shall be pro-rated to
reflect the number of months of continuous Board service since the last annual
grant to the Chair.  The foregoing
options and RSUs will vest in twelve equal monthly installments beginning on
the first day of the first full month following the Annual Meeting of
Stockholders and continuing on the first day of each of 

 

2

 

the
following eleven months thereafter, so long as the Chairman continues to serve
as a member of the Board; provided, that delivery of any vested shares of
common stock underlying the foregoing RSUs shall be deferred until the earlier
of (i) the third anniversary of the date of grant or (ii) the date
the Chair’s service to the Company terminates; provided, that such termination
constitutes a “separation from service” as such term is defined in Treasury
Regulation Section 1.409A-1(h).

 

Exercise Price and Term of Options

 

Each
option granted to an Outside Director shall have an exercise price per share
equal to the fair market value of the common stock of the Company on the date
of grant of the option (as determined by the Board in accordance with the Stock
Plan), have a term of ten years and shall be subject to the terms and
conditions of the Stock Plan.  Each such
option grant shall be evidenced by the issuance of the Company’s form non-qualified
stock option agreement for Outside Director grants.

 

Early
Termination of Options or RSUs Upon Termination of Service

 

If
an Outside Director ceases to be a member of the Board for any reason, any then
vested and unexercised options granted to such Outside Director may be
exercised by the Outside Director (or, in the case of the director’s death or
disability, by the director’s personal representative, or the director’s
survivors) within three years after the date the director ceases to be a member
of the Board and in no event later than the expiration date of the option.

 

If
an Outside Director’s service to the Company is terminated (provided, that such
termination constitutes a “separation from service” as such term is defined in
Treasury Regulation Section 1.409A-1(h)), all then vested and undelivered
shares underlying any RSUs held by such Outside Director shall be delivered to
the Outside Director (or, in the case of the director’s death or disability, by
the director’s personal representative, or the director’s survivors) as of the
date he or she ceases to be a member of the Board.

 

Retainer Fees

 

Each
Outside Director, other than the Chairman, will receive an aggregate annual
retainer fee of $30,000, payable in four equal quarterly installments. The
Chairman, provided that he or she is also an Outside Director, will receive an
aggregate annual retainer fee of $60,000, payable in four equal quarterly
installments.

 

Each
member of each of the Company’s standing committees, other than the Chair, will
be paid an additional aggregate annual retainer fee in four equal quarterly
installments as follows:

 

Audit
Committee: $10,000

Compensation
Committee: $7,500

Nominating
and Corporate Governance Committee: $5,000

 

3

 

The
Chair of each of the standing committees will be paid an additional aggregate
annual retainer fee in four equal quarterly installments as follows:

 

Audit
Committee: $20,000

Compensation
Committee: $15,000

Nominating
and Corporate Governance Committee: $10,000

 

Expenses

 

Upon
presentation of documentation of such expenses reasonably satisfactory to the
Company, each Outside Director shall be reimbursed for his or her reasonable
out-of-pocket business expenses incurred in connection with attending meetings
of the Board, Committees thereof or in connection with other Board related
business.

 

Amendments

 

The
Board shall review this Policy from time to time to assess whether any
amendments in the type and amount of compensation provided herein should be
adjusted in order to fulfill the objectives of this Policy.

 

4

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