UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
DC 20549
FORM
8-K
CURRENT
REPORT
Pursuant to
Section 13 or 15(d) of the
Securities
Exchange Act of 1934
Date
of
report (Date of earliest event reported):
May
20,
2008
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THE
CHILDREN’S PLACE RETAIL STORES,
INC.
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(Exact
Name of Registrants as Specified in Their
Charters)
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Delaware
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(State
or Other Jurisdiction of
Incorporation)
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0-23071
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31-1241495
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(Commission
File Number)
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(IRS
Employer Identification
No.)
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915
Secaucus Road, Secaucus, New
Jersey
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07094
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(Address
of Principal Executive
Offices)
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(Zip
Code)
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(201)
558-2400
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(Registrant’s
Telephone Number, Including Area
Code)
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Not
Applicable
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(Former
Name or Former Address, if Changed Since
Last Report)
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Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see
General
Instruction A.2. below):
o Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
o Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
o Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item
2.02 Results of Operations and Financial Condition
On
May
22, 2008, The Children’s Place Retail Stores, Inc. (the “Company”) issued a
press release containing its fiscal 2008 first quarter financial
results.
A
copy of
the press release relating to the foregoing is attached hereto as Exhibit 99.1
and is incorporated in this Item 2.02 by reference.
Item
5.02 Departure
of Directors or Principal Officers; Election of Directors; Appointment of
Principal Officers.
(b)
See
Item
5.02(e) below.
(e)
In
connection with the Company’s previously disclosed exit from the Disney Store
business, the Company notified Ms. Poseley of its intention to terminate her
employment as President, Disney Store North America, effective May 27, 2008
(the
“Separation Date”).
Pursuant
to Ms. Poseley’s Employment Agreement, dated July 28, 2006, as amended (the
“Employment Agreement”), prior to receiving any separation benefits under the
Employment Agreement, Ms. Poseley was required to execute an agreement and
general release with the Company. On May 20, 2008, the Company and Ms. Poseley
entered into such an agreement and general release (the “Separation Agreement”),
pursuant to which Ms. Poseley agreed to release the Company from any claims
or
liabilities arising out of her employment.
Accordingly,
Ms. Poseley is now entitled to receive a payment equal to $967,500, less legally
required payroll deductions, payable in 39 monthly installments. Ms. Poseley
also will receive a bonus in the amount of $322,500, less legally required
payroll deductions, payable on the date the Company makes the bonus payment
to
other eligible named executive officers. Ms. Poseley also will receive all
wages
and payments for paid time off that she had accrued prior to the Separation
Date.
Pursuant
to the terms of the Employment Agreement, Ms. Poseley remains subject to certain
confidentiality, non-disparagement, non-solicitation, and non-interference
covenants until the first anniversary of the Separation Date.
The
foregoing summary is qualified in its entirety by the full text of the
Separation Agreement, dated May 20, 2008, which is attached to hereto as Exhibit
10.1 and incorporated in this Item 5.02 by reference, and of the Employment
Agreement, a copy of which was filed on December 5, 2007, by the Company as
Exhibit 10.5 to its Quarterly Report on Form 10-Q for the period ended July
29,
2006, and amendments to the Employment Agreement , copies of which were filed
on
April 2, 2008, by the Company as Exhibits 10.52 and 10.53 to its Annual Report
on Form 10-K for the period ended February 2, 2008.
2
Item
9.01 Financial
Statement and Exhibits.
| (d) |
Exhibits.
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| Exhibit 10.1 |
Agreement
and General Release, dated May 20, 2008, between the Company and
Tara
Poseley.
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| Exhibit 99.1 |
Press
release, dated May 22, 2008, issued by the Company regarding fiscal
2008
first quarter financial results.
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3
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
| Date: May 22, 2008 | ||
| THE CHILDREN’S PLACE RETAIL STORES, INC. | ||
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| By: | /s/ Susan Riley | |
| Name: | Susan Riley | |
| Title: | Executive Vice President, Finance and Administration | |
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Exhibit
10.1
SEPARATION
AGREEMENT AND GENERAL RELEASE
This
Separation Agreement and General Release (the “Agreement”) is made this 20th day
of May, 2008 between Tara Poseley (the “Employee”) and The Children’s Place
Services Company, LLC and its direct and indirect parent, subsidiaries and
affiliated corporations (collectively, the “Employer” or the
“Company”).
1.
Termination
of Employment.
The
parties agree that the Employee’s employment with the Employer shall terminate
effective May 27, 2008 (the “Separation Date”).
2.
Separation
Payment.
(a) In
consideration for entering into this Agreement, the Employer shall pay to the
Employee the sum of Nine Hundred Sixty-Seven Thousand Five Hundred Dollars
($967,500), less legally required payroll deductions (“Separation Payment”). Of
that amount, $322,500 (“Initial Separation Payment”) will be severance pay
payable on involuntary termination of employment for good reason under the
Employment Agreement dated July 28, 2006, as amended (the “Employment
Agreement”) and the balance of $645,000 (“Additional Separation Payment”) will
be payable on involuntary termination of employment for good reason under the
Employment Agreement. The Company will pay the Initial Separation Payment in
thirteen (13) equal bi-weekly installments with the first such installment
paid
on the first pay period following the Separation Date. The Company will pay
the
Additional Separation Payment to Employee in twenty-six (26) equal bi-weekly
installments with the first such installment paid on the fourteenth
(14th)
pay
period following the Separation Date. The parties acknowledge that they have
reviewed the matter and have determined that the restrictions of Section
409A(a)(2)(B)(i) of the Internal Revenue Code of 1986, as amended, concerning
payments to “specified employees” are not applicable to the Initial Separation
Payment and that the Initial Separation Payment is not subject to any delay
of
payment because the Initial Separation Payment qualifies as separation pay
under
Treasury Regulation 1.409A-1(b)(9) which is exempt from the restrictions of
Section 409A.
The
parties intend that the Initial Severance Payment under this Section and the
continuation of health benefits under Section 3(a) will qualify as exempt from
the restrictions of Section 409A of the Code,
as
amended, and final regulations under Section
409A.
Notwithstanding
any other provision of this Agreement, to
the
extent any payments under Section 2(a), 3(a) or both could become subject
to
penalties, interest and additional income
tax under Section 409A of the Code, the parties will cooperate to amend this
Agreement to comply with Section 409A and to provide Employee with
the same
or equivalent value of
benefits
described under the applicable Section in a manner that does not result in
penalties, interest or additional income tax. The
Employee will cooperate with the Company to make any amendment, retroactively
if
necessary, which Employee and the Company reasonably determine necessary or
advisable to conform
this Agreement to, and
to
satisfy the conditions of, Section
409A of the Code and
related regulations and rulings
in a
manner that does not result in adverse
income tax consequences
to
Employee.
(b)
The
parties agree that the Employer shall pay to the Employee a bonus in the amount
of Three Hundred Twenty-Two Thousand Five Hundred Dollars ($322,500), less
legally required payroll deductions, which amount shall be paid on the date
the
Employer makes the bonus payment to other eligible named executive officers
regardless of whether Employee is employed at the payout date.
(c)
In
addition to the payment set forth above in Section 2(a), the parties acknowledge
that the Employee shall receive, in Employee’s final paycheck to be issued on
May 23, 2008, all wages from May 4-27, 2008 in the total amount of Forty-Two
Thousand One Hundred Seventy-Three Dollars and Eight Cents ($42,173.08), less
legally required payroll deductions, and payment for accrued paid time off
in
the total amount of Ninety Three Thousand Six Hundred Forty-Eight Dollars and
Seventy-Three Cents ($93,648.73), less legally required payroll
deductions.
(d)
The
Employer represents and warrants, and the Employee acknowledges, that the
consideration paid to the Employee under this Agreement is at least equal to
or
exceeds the amount the Employee would ordinarily be entitled to upon termination
of the Employee’s employment.
3.
Other
Benefits.
(a) Any
and all other employment benefits received by the Employee shall terminate
effective as of the Separation Date, except that in the event the Employee
elects to continue medical, dental, and vision benefits though COBRA, the
Employer agrees to waive the applicable premium cost that Employee would
otherwise be required to pay for continued group health coverage under
Employer’s medical and dental plans for a period of eighteen (18) months.
Employer’s obligation to waive the applicable premium cost under this Section
3(a) shall be reduced to the extent of receipt of substantially equivalent
coverage by Employee from any successor employer.
(b)
The
Employee agrees that the Employee is not entitled to and will not seek any
further consideration, including, but not limited to, any wages, vacation pay,
sick pay, disability pay, bonus, compensation, payment or benefit from the
Released Parties (as defined in Section 10) other than that to which the
Employee is entitled pursuant to this Agreement.
4.
Removal
from Company Positions and Indemnification.
The
Employee agrees that as of the Separation Date, the Employee shall resign from
all positions held on behalf of the Company including but not limited to
officer, agent, representative, trustee, administrator, fiduciary and signatory;
provided, however, that the Employee shall continue as a board member for Hoop
Holdings, Inc., Hoop Retail Stores, LLC, Hoop Canada Holdings, Inc. and Hoop
Canada, Inc. (collectively, the “Hoop Entities”) through confirmation of the
plan of liquidation or equivalent confirmation with respect to the Hoop Entities
and the Employee shall be entitled to receive any compensation or expense
reimbursement as other similarly situated independent board members of the
Hoop
Entities. In addition, with respect to all acts or omissions of Employee which
occurred prior to the Separation Date, the Company agrees to continue to
indemnify the Employee to the same extent that the Employee was indemnified
prior to the Separation Date and that the Employee shall retain the benefit
of
all directors and officers liability insurance and coverage maintained by the
Company with respect to claims made during the period provided by the Company’s
current policy and to the extent provided by any future policy from time to
time
maintained by the Company with respect to other former executives of the
Company, in each case on the terms and conditions of such policy.
2
5.
Return
of Company Property.
Company
confirms that Employee has returned all laptops, cellular telephones,
blackberries, keys, locks, credit cards, documents, records, materials, and
other information of any type whatsoever that is the property of the Company.
Employee further agrees that Employee shall not retain any copies or
reproductions of correspondence, memoranda, reports, notebooks, drawings,
photographs, or other documents relating in any way to the affairs of the
Company or its vendors.
6.
Consultation
with Counsel and Voluntariness of Agreement.
(a) The
Employee acknowledges that the Employer has advised the Employee in writing
to
consult with an attorney prior to executing this Agreement. The Employee further
acknowledges that, to the extent desired, the Employee has consulted with the
Employee’s own attorney in reviewing this Agreement, that the Employee has
carefully read and fully understands all the provisions of this Agreement,
and
that the Employee is voluntarily entering into this Agreement.
(b)
The
Employee further acknowledges that the Employee has had a period of at least
twenty-one (21) days in which to consider the terms of this
Agreement.
(c)
The
Employee acknowledges that the Employee has been informed in writing that the
Employee has seven (7) calendar days following the execution of this Agreement
to revoke it, and that such revocation must be in writing, hand delivered or
sent via overnight mail and actually received by the Employer within such
period. It is specifically understood that this Agreement shall not be effective
or enforceable, and the payments and benefits set forth in this Agreement shall
not be paid until the seven-day revocation period has expired.
7.
Confidentiality
of Agreement.
The
Employee agrees not to disclose the existence of this agreement or the terms
and
conditions of this Agreement to any person or entity, except: (a) to comply
with
this Agreement; (b) to the Employee’s legal, financial or tax advisors, spouse,
and to the Internal Revenue Service or any similar state or local taxation
authority; or (c) as otherwise required by law.
8.
Non-Solicitation,
Use of Name, and Confidential Information.
The
Employee acknowledges and agrees that she continues to be bound by the portions
of Section 9 of the Employment Agreement attached to this Agreement as Exhibit
A; provided, however, to the extent of a conflict between Section 9 of the
Employment Agreement and this Agreement, the terms of this Agreement shall
govern.
3
9.
Confirmation
of Employment.
The
Employer shall, if called upon, confirm the Employee’s dates of employment and
position with the Employer.
10.
Release.
(a)
Employee represents and warrants that she is not aware of any misconduct by
any
employee or director of the Company that Employee should report in accordance
with the Company’s Code of Business Conduct or any irregularity in the Company’s
books or records or any other matter relating to the Company’s accounting that
could properly be reported by Employee pursuant to the procedures established
by
the Company for making such reports, except any that has already been reported
by Employee in writing to the appropriate personnel of the Company. In exchange
for the consideration set forth in Sections 2 and 3, the Employee, on behalf
of
the Employee and the Employee’s agents, assignees, attorneys, heirs, executors
and administrators, voluntarily and knowingly releases the Employer, as well
as
the Employer’s successors, predecessors, assigns, parents, subsidiaries,
divisions, affiliates, officers, directors, shareholders, employees, agents
and
representatives, in both their individual and representative capacities
(collectively, the “Employer’s Released Parties”), from any and all claims,
causes of action, suits, grievances, debts, sums of money, agreements, promises,
damages, back and front pay, costs, expenses, and attorneys’ fees by reason of
any matter, cause, act or omission arising out of or in connection with the
Employee’s employment or separation from employment with the Employer, including
but not limited to any claims based upon common law, any federal, state or
local
employment statutes or civil rights laws. Included in this release, without
limiting its scope, are claims arising under Title VII of the Civil Rights
Act
of 1964, as amended; the Age Discrimination in Employment Act; the Older Workers
Benefit Protection Act; the Americans with Disabilities Act; the Family and
Medical Leave Act, the Fair Labor Standards Act of 1938 as amended by the Equal
Pay Act of 1963; the Employee Retirement Income Security Act of 1974; the New
Jersey Conscientious Employee Protection Act; the New Jersey Law Against
Discrimination; the New Jersey Family Leave Act; the New Jersey Wage Payment
Act; the Sarbanes-Oxley Act of 2002; and any other laws prohibiting
discrimination, retaliation, wrongful termination, failure to pay wages, breach
of contract, defamation, invasion of privacy, whistleblowing or infliction
of
emotional distress, or any other matter. This release shall apply to all known,
unknown, unsuspected and unanticipated claims, liens, injuries and damages
that
have accrued to the Employee as of the date of this Agreement.
(b)
This
release does not waive rights or claims that may arise after this release is
executed and does not waive any rights or claims which cannot be waived as
a
matter of law. This Agreement does not affect the Employee’s right to file a
charge with the EEOC or to participate in any investigation conducted by the
EEOC, but the Employee acknowledges that the Employee is not entitled to any
other monies other than those payments described in this Agreement.
(c)
It
is the
intention of the Employee in executing this Agreement that it shall be effective
as a bar against each and all claims, causes of action, suits, grievances,
debts, sums of money, controversies, agreements, promises, damages, back and
front pay, costs, expenses, attorneys’ fees and remedies of any type described
in Section 10(a) above. In furtherance of this intention, the Employee expressly
waives any and all rights and benefits conferred upon the Employee by the
provisions of Section 1542 of the California Civil Code, which states:
A
general release does not extend to claims which the creditor does not know
or
suspect to exist in his or her favor at the time of executing the release,
which
if known by him or her must have materially affected his or her settlement
with
the debtor.
4
(d)
Employee
agrees to execute and deliver to Company on the Separation Date a further
Release in the form of Exhibit B.
11.
Cooperation.
Employee shall furnish such information as may be in her possession to, and
cooperate with, the Company as may reasonably be requested by the Company in
connection with any litigation or other proceeding in which the Company is
or
may be involved or a party.
12.
Violation
of Terms.
Should
the Employee breach any provision of this Agreement, which breach
is
not cured within twenty (20) business days after written notice to Employee,
then, in addition to all other damages or legal remedies available to the
Employer (including without limitation injunctive relief), the Employee
immediately shall return to the Employer all monies paid to the Employee
pursuant to this Agreement. Should
the Employer violate any provision of this Agreement, then the Employee shall
have all remedies and civil actions available to remedy Employee’s damages. The
parties agree that, should either party seek to enforce the terms of this
Agreement through litigation, then the prevailing party, in addition to all
other legal remedies, shall be reimbursed by the other party for all reasonable
attorneys’ fees in relation to such litigation. However, in accordance with
applicable laws, if the Employee violates this Agreement by commencing an action
under the Age Discrimination in Employment Act, then the requirements set forth
in this Section 12 shall not apply.
13.
No
Admission.
Nothing
contained in this Agreement nor the fact that the parties have signed this
Agreement shall be construed as an admission by either party.
14.
Waiver
of Reinstatement.
By
entering into this Agreement, the Employee acknowledges that the Employee waives
any claim to reinstatement and/or future employment with the Employer.
15.
Miscellaneous.
This
Agreement contains the entire understanding between the parties. This Agreement
supersedes any and all previous agreements and plans, whether written or oral,
between the Employee and the Employer. There are no other representations,
agreements or understandings, oral or written, between the parties relating
to
the subject matter of this Agreement. No amendment to or modification of this
Agreement shall be valid unless made in writing and executed by the parties
hereto subsequent to the date of this Agreement. This Agreement shall be
enforced in accordance with the laws of the State of California, and the parties
agree that any litigation to enforce this Agreement will take place in
California. This Agreement may be executed in several counterparts, and all
counterparts so executed shall constitute one Agreement, binding upon the
parties hereto.
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16.
Severability.
If any
term, provision or part of this Agreement shall be determined to be in conflict
with any applicable federal, state or other governmental law or regulation,
or
otherwise shall be invalid or unlawful, such term, provision or part shall
continue in effect to the extent permitted by such law or regulation. Such
invalidity, unenforceability or unlawfulness shall not affect or impair any
other terms, provisions and parts of this Agreement not in conflict, invalid
or
unlawful, and such terms, provisions and parts shall continue in full force
and
effect and remain binding upon the parties hereto.
17.
No
Duty to Mitigate.
Employee will not be required to mitigate the amount of any payments provided
by
this Agreement by seeking employment or otherwise, nor will the amount of any
cash payment of benefit provided under this Agreement be reduced by any
compensation or benefit earned by Employee after the Separation Date (except
as
provided in the last sentence of Section 3(a) above). Notwithstanding the
foregoing, if Employee is entitled, by operation of any applicable law, to
unemployment compensation benefits or benefits under the Worker Adjustment
and
Retraining Act of 1988 (known as the “WARN” Act) in connection with the
termination of her employment in addition to those required to be paid to her
under this Agreement, then to the extent permitted by applicable statutory
law
governing severance payments or notice of termination of employment, the
Employer will be entitled to offset the amounts payable hereunder by the amounts
of any such statutorily mandated payments.
18.
Notices.
Any
notice, payment or other communication required or permitted under this
Agreement will be deemed effective when (a) personally delivered or (b)
deposited in the United States mail, certified or registered, return receipt
requested, postage prepaid and addressed to Employee at the last address for
Employee in Employer’s payroll records or
to
Employer at 915 Secaucus Road, Secaucus, New Jersey 07094 Attn: General Counsel.
Either party may change address for purposes of this Section by sending a notice
of that changed address in accordance with this Section.
[The
remainder of the page is intentionally left blank.]
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THE
EMPLOYEE STATES THAT THE EMPLOYEE HAS CAREFULLY READ THIS AGREEMENT PRIOR TO
SIGNING IT, THAT THE AGREEMENT HAS BEEN FULLY EXPLAINED TO THE EMPLOYEE PRIOR
TO
SIGNING IT, THAT THE EMPLOYEE HAS HAD THE OPPORTUNITY TO HAVE IT REVIEWED BY
AN
ATTORNEY AND THAT THE EMPLOYEE UNDERSTANDS THE AGREEMENT’S FINAL AND BINDING
EFFECT PRIOR TO SIGNING IT, AND THAT THE EMPLOYEE IS SIGNING THE RELEASE
VOLUNTARILY WITH THE FULL INTENTION OF COMPROMISING, SETTLING, AND RELEASING
THE
COMPANY AS STATED IN THIS AGREEMENT.
| The Children’s Place Services Company, LLC |
Tara
Poseley
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| By: |
/s/
Charles Crovitz
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/s/
Tara Poseley
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Tara
Poseley (signature)
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| Dated: |
May
20, 2008
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Dated: |
May
20, 2008
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7
EXHIBIT
A
PERTINENT
PORTIONS OF SECTION 9
OF
THE EMPLOYMENT AGREEMENT
(Captitalized
terms not otherwise defined in this Exhibit shall have the meanings ascribed
to
them in the Employment Agreement)
9.01
Non-Solicitation;
Use of Name. During
the Employment Period and continuing through the first anniversary of the date
in which Executive ceases to be an employee of the Company (the “Covenant
Period”), Executive will not:
(a)
Directly or indirectly employ (other than on behalf of the Company), solicit
or
entice away any director, officer or employee of the Company or any of its
subsidiaries; or
(b)
Take
any action to interfere, directly or indirectly, with the goodwill of the
Company or any of its subsidiaries, or induce or attempt to induce any Person
doing business with the Company to cease doing business with the Company; or
(c)
Use
the name of the Company or its subsidiaries in the conduct of any business
activities (except in furtherance of the Company’s business) or for Executive’s
personal use without the prior written consent of the Company.
9.02
Confidential
and Proprietary Information; Work Product; Warranty.
(a)
Confidentiality. Executive
acknowledges and agrees that there are certain trade secrets and confidential
and proprietary information (collectively, “Confidential Information”) which
have been developed by the Company and which are used by the Company in its
business. Confidential Information shall include, without limitation: (i)
customer lists and supplier lists; (ii) the details of the Company’s
relationships with its customers, including the financial relationship with
a
customer; (iii) the Company’s marketing and development plans, business plans;
and (iv) other information proprietary to the Company’s business. Executive
shall not, at any time during or after her employment hereunder, use or disclose
such Confidential Information, except to authorized representatives of the
Company or as required in the performance of her duties and responsibilities
hereunder. Executive shall return all Company property, such as computers,
software and cell phones, and documents (and any copies including in machine
or
human-readable form), to the Company when her employment terminates. Executive
shall not be required to keep confidential any information, which is or becomes
publicly available or is already in her possession (unless obtained from the
Company). Further, Executive shall be free to use and employ her general skills,
know-how and expertise, and to use, disclose and employ any generalized ideas,
concepts, know-how, methods, techniques or skills, including those gained or
learned during the course of the performance of any services hereunder, so
long
as she applies such information without disclosure or use of any Confidential
Information. Executive hereby acknowledges that her employment under this
Agreement does not conflict with, or breach any existing confidentiality,
non-competition or other agreement to which Executive is a party or to which
she
may be subject.
8
(b)
Work
Product.
Executive agrees that all copyrights, patents, trade secrets or other
intellectual property rights associated with any ideas, concepts, techniques,
inventions, processes, or works of authorship developed or created by her during
her employment by the Company and for a period of six (6) months thereafter,
that (i) relate, whether directly or indirectly, to the Company’s actual or
anticipated business, research or development or (ii) are derived from any
work
performed by Executive on the Company’s behalf, shall, to the extent possible,
be considered works made for hire within the meaning of the Copyright Act (17
U.S.C. Sec. 101 et. seq.) (the “Work Product”). All Work Product shall be and
remain the property of the Company. To the extent that any such Work Product
may
not, under applicable law, be considered works made for hire, Executive hereby
grants, transfers, assigns, conveys and relinquishes, and agrees to grant,
transfer, assign, convey and relinquish from time to time, on an exclusive
basis, all of her right, title and interest in and to the Work Product to the
Company in perpetuity or for the longest period otherwise permitted by law.
Consistent with her recognition of the Company’s absolute ownership of all Work
Product, Executive agrees that she shall (i) not use any Work Product for the
benefit of any party other than the Company and (ii) perform such acts and
execute such documents and instruments as the Company may now or hereafter
deem
reasonably necessary or desirable to evidence the transfer of absolute ownership
of all Work Product to the Company; provided, however, if following ten (10)
business days’ written notice from the Company, Executive refuses, or is unable,
due to disability, incapacity, or death, to execute such documents relating
to
the Work Product, she hereby appoints any of the Company’s officers as her
attorney-in-fact to execute such documents on her behalf. This agency is coupled
with an interest and is irrevocable without the Company’s prior written
consent.
(c)
Warranty. Executive
represents and warrants to the Company that (i) there are no claims that would
adversely affect her ability to assign all right, title and interest in and
to
the Work Product to the Company; (ii) the Work Product does not violate any
patent, copyright or other proprietary right of any third party; (iii) Executive
has the legal right to grant the Company the assignment of her interest in
the
Work Product as set forth in this Agreement; and (iv) she has not brought and
will not bring to her employment hereunder, or use in connection with such
employment, any trade secret, confidential or proprietary information of
another, or computer software, except for software that she has a right to
use
for the purpose for which it shall be used, in her employment
hereunder.
9.03
Injunctive
Relief.
Executive acknowledges that a breach or threatened breach of any of the terms
set forth in this Section 9 shall result in an irreparable and continuing harm
to the Company for which there shall be no adequate remedy at law. The Company
shall, without posting a bond, be entitled to obtain injunctive and other
equitable relief, in addition to any other remedies available to the
Company.
9
9.04
Essential
and Independent Agreements.
It is
understood by the parties hereto that Executive’s obligations and the
restrictions and remedies set forth in this Section 9 are essential elements
of
this Agreement and that but for her agreement to comply with and/or agree to
such obligations, restrictions and remedies, the Company would not have entered
into this Agreement or employed her. Executive’s obligations and the
restrictions and remedies set forth in this Section 9 are independent agreements
and the existence of any claim or claims by her against the Company under this
Agreement or otherwise will not excuse her breach of any of her obligations
or
affect the restrictions and remedies set forth under this Section
9.
9.05
Survival
of Terms; Representations. Obligations
under this Section 9 hereof shall remain in full force and effect
notwithstanding the termination of Executive’s employment. Executive
acknowledges that she is sophisticated in business, and that the restrictions
and remedies set forth in this Section 9 do not create an undue hardship on
her
and will not prevent her from earning a livelihood. She further acknowledges
that she has had a sufficient period of time within which to review this
Agreement, including this Section 9, with an attorney of her choice and she
has
done so to the extent she desired. Executive and the Company agree that the
restrictions and remedies contained in this Section 9 are reasonable and
necessary to protect the Company’s legitimate business interests regardless of
the reason for or circumstances giving rise to such termination and that she
and
the Company intend that such restrictions and remedies shall be enforceable
to
the fullest extent permissible by law. Executive agrees that given the scope
of
the Company’s business and the sophistication of the information highway, any
further geographic limitation on such remedies and restrictions would deny
the
Company the protection to which it is entitled hereunder. If it shall be found
by a court of competent jurisdiction that any such restriction or remedy is
unenforceable but would be enforceable if some part thereof were deleted or
modified, then such restriction or remedy shall apply with such modification
as
shall be necessary to make it enforceable to the fullest extent permissible
under law.
9.06
Mutual
Non-Disparagement.
Neither
Executive nor senior executives of Employer will make or authorize any public
statement disparaging the other in its or her business interests and affairs.
Notwithstanding the foregoing, neither party shall be (a) required to make
any
statement that it or she believes to be false or inaccurate, or (b) restricted
in connection with any litigation, arbitration or similar proceeding or with
respect to its response to any legal process.
9.07
Other
Duties of Employee During and After Employment Period.
Both
during and after the Employment Period, Executive shall, upon reasonable notice,
furnish such information as may be in her possession to, and cooperate with,
the
Company as may reasonably be requested by the Company in connection with any
litigation in which the Company is or may be a party.
10
9.08
Breaches
of Provisions.
If
Executive breaches any of the provisions of this Section 9 then, and in any
such
event, in addition to other remedies available to Employer, Executive shall
not
be entitled to any Termination Compensation, including any Termination
Compensation made to her hereunder prior to Employer’s discovery of such
breach.
11
EXHIBIT
B
RELEASE
1.
In
exchange for the payments and benefits set forth in the Separation Agreement
and
Release dated May 20, 2008 (the “Severance Agreement”) by and between Tara
Poseley (“Employee”) and The Children’s Place Services Company, LLC (the
“Employer” or the “Company”), the Employee, on behalf of the Employee and the
Employee’s agents, assignees, attorneys, heirs, executors and administrators,
voluntarily and knowingly releases the Employer, as well as the Employer’s
successors, predecessors, assigns, parents, subsidiaries, divisions, affiliates,
officers, directors, shareholders, employees, agents and representatives, in
both their individual and representative capacities (collectively, the “Released
Parties”), from any and all claims, causes of action, suits, grievances, debts,
sums of money, agreements, promises, damages, back and front pay, costs,
expenses, and attorneys’ fees by reason of any matter, cause, act or omission
arising out of or in connection with the Employee’s employment or separation
from employment with the Employer, including but not limited to any claims
based
upon common law, any federal, state or local employment statutes or civil rights
laws. Included in this release, without limiting its scope, are claims arising
under Title VII of the Civil Rights Act of 1964, as amended; the Age
Discrimination in Employment Act; the Older Workers Benefit Protection Act;
the
Americans with Disabilities Act; the Family and Medical Leave Act, the Fair
Labor Standards Act of 1938 as amended by the Equal Pay Act of 1963; the
Employee Retirement Income Security Act of 1974; the New Jersey Conscientious
Employee Protection Act; the New Jersey Law Against Discrimination; the New
Jersey Family Leave Act; the New Jersey Wage Payment Act; the Sarbanes-Oxley
Act
of 2002; and any other laws prohibiting discrimination, retaliation, wrongful
termination, failure to pay wages, breach of contract, defamation, invasion
of
privacy, whistleblowing or infliction of emotional distress, or any other
matter. This Release shall apply to all known, unknown, unsuspected and
unanticipated claims, liens, injuries and damages that have accrued to the
Employee as of the date of this Agreement.
2.
This
Release does not waive rights or claims that may arise after this release is
executed and does not waive any rights or claims which cannot be waived as
a
matter of law. This Release does not affect the Employee’s right to file a
charge with the EEOC or to participate in any investigation conducted by the
EEOC, but the Employee acknowledges that the Employee is not entitled to any
other monies other than those payments described in the Severance Agreement.
3.
It
is the
intention of the Employee in executing this Agreement that it shall be effective
as a bar against each and all claims, causes of action, suits, grievances,
debts, sums of money, controversies, agreements, promises, damages, back and
front pay, costs, expenses, attorneys’ fees and remedies of any type described
in Section 10(a) above. In furtherance of this intention, the Employee expressly
waives any and all rights and benefits conferred upon the Employee by the
provisions of Section 1542 of the California Civil Code, which states:
A
general release does not extend to claims which the creditor does not know
or
suspect to exist in his or her favor at the time of executing the release,
which
if known by him or her must have materially affected his or her settlement
with
the debtor.
12
4.
(a)
The
Employee acknowledges that the Employer has advised the Employee in writing
to
consult with an attorney prior to executing this Agreement. The Employee further
acknowledges that, to the extent desired, the Employee has consulted with the
Employee’s own attorney in reviewing this Release, that the Employee has
carefully read and fully understands all the provisions of this Release, and
that the Employee is voluntarily signing this Release.
(b)
The
Employee further acknowledges that the Employee has had a period of at least
twenty-one (21) days in which to consider the terms of this
Release.
(c)
The
Employee acknowledges that the Employee has been informed in writing that the
Employee has seven (7) calendar days following the execution of this Release
to
revoke it, and that such revocation must be in writing, hand delivered or sent
via overnight mail and actually received by the Employer within such period.
It
is specifically understood that this Release shall not be effective or
enforceable, and the payments and benefits set forth in the Severance Agreement
shall not be paid, until the seven-day revocation period has
expired.
| Tara Poseley | |
| Date |
13
Exhibit
99.1
FOR
IMMEDIATE RELEASE
THE
CHILDREN’S PLACE RETAIL STORES, INC. REPORTS FIRST QUARTER 2008 FINANCIAL
RESULTS
Secaucus,
New Jersey - May 22, 2008 - The Children’s Place Retail Stores, Inc. (Nasdaq:
PLCE) today
reported financial results for the fiscal first quarter ended May 3, 2008.
The
Disney Store North America (“DSNA”) business has been classified as discontinued
operations in accordance with generally accepted accounting principles (“GAAP”)
reflecting the Company’s decision to exit the business. Results from continuing
operations for both the first quarter of 2008 and 2007 reflect The Children’s
Place business only.
|
·
|
Net
sales of The Children’s Place business for the thirteen-weeks ended May 3,
2008, increased 12% to $400.2 million, compared to $356.0 million
last
year.
|
|
·
|
Comparable
store sales of The Children’s Place business increased 5% in the quarter,
on top of last year’s 2% comparable store sales increase.
|
|
·
|
Income
from continuing operations before interest and taxes increased 15%
to
$34.0 million from $29.6 million last
year.
|
|
·
|
Income
from continuing operations was $19.4 million compared to income from
continuing operations of $19.1 million last year.
|
|
·
|
Diluted
earnings per share from continuing operations were $0.66 compared
to
diluted earnings per share from continuing operations of $0.64 last
year.
|
|
·
|
Net
income including the impact of discontinued operations was $19.5
million,
or $0.67 per diluted share, compared to $14.7 million, or $0.49 per
diluted share last year.
|
|
·
|
The
effective tax rate for continuing operations in the first quarter
was 42%
compared to 38% last year, as the Company is no longer permanently
invested in its Asian subsidiary.
|
|
·
|
During
the first quarter, the Company opened three The Children’s Place stores
and closed one.
|
Chuck
Crovitz, Interim Chief Executive Officer of The Children’s Place Retail Stores,
Inc., commented, “Our first quarter results show progress toward our goal of
returning the Company to its historical level of profitability. During the
quarter, we exited the Disney Store business at cash costs that are expected
to
be at the low end of our previously disclosed range of $50 million to $100
million. In addition, we began the reduction of our cost structure, announced
lower capital spending for 2008 and expect our inventory position to be below
last year’s level at the end of the second quarter. Further, we continue to be
encouraged by the customer response to our summer merchandise and believe that
The Children’s Place, as a leading value player in the children’s apparel
market, is well-positioned in this difficult economic environment.”
The
Children’s Place will host a conference call to discuss its first quarter
results today at 10:00 a.m. Eastern Time. Interested parties are invited to
listen to the call by dialing (800)
862-9098 and
providing the Conference ID, PLCE. The call will also be webcast live and can
be
accessed via the Company’s web site, www.childrensplace.com.
A
replay of the call will be available approximately one hour after the conclusion
of the call, until midnight on May 29, 2008. To access the replay, please dial
(800)
753-6121,
or you
may listen to the audio archive on the Company’s website, www.childrensplace.com.
-more-
PLCE
- First Quarter 2008 Financial Results
Page
2
The
Children’s Place Retail Stores, Inc. is a leading specialty retailer of
children’s merchandise. The Company designs, contracts to manufacture and sells
high-quality, value-priced merchandise under the proprietary “The Children’s
Place” brand name. As of May 3, 2008, the Company owned and operated 906 The
Children’s Place stores and its online store at www.childrensplace.com.
| Contact: |
The
Children’s Place Retail Stores,
Inc.
|
Susan
Riley, EVP, Finance & Administration, 201/558-2400
Rich
Paradise, Chief Financial Officer, 201/558-2400
Media:
Diane
Zappas/Evan Goetz of FD, 212/850-5600
(Tables
Follow)
THE
CHILDREN’S PLACE RETAIL STORES, INC.
CONDENSED
STATEMENTS OF INCOME
(In
thousands, except per share amounts)
(Unaudited)
|
13
Weeks Ended:
|
|||||||
|
May
3,
2008
|
May
5,
2007
|
||||||
|
Net
sales
|
$
|
400,212
|
$
|
355,995
|
|||
|
Cost
of sales
|
229,120
|
204,021
|
|||||
|
Gross
profit
|
171,092
|
151,974
|
|||||
|
Selling,
general and administrative expenses
|
119,410
|
107,775
|
|||||
|
Depreciation
and amortization
|
17,652
|
14,597
|
|||||
|
Income
from continuing operations before interest and taxes
|
34,030
|
29,602
|
|||||
|
Interest
(expense) income
|
(493
|
)
|
1,000
|
||||
|
Income
from continuing operations before income taxes
|
33,537
|
30,602
|
|||||
|
Provision
for income taxes
|
14,117
|
11,533
|
|||||
|
Income
from continuing operations
|
19,420
|
19,069
|
|||||
|
Income
(loss) from discontinued operations, net of income taxes
|
98
|
(4,355
|
)
|
||||
|
Net
income
|
$
|
19,518
|
$
|
14,714
|
|||
|
Basic
income from continuing operations per common share
|
$
|
0.67
|
$
|
0.66
|
|||
|
Income
(loss) from discontinued operations per common share
|
0.00
|
(0.15
|
)
|
||||
|
Basic
net income per common share
|
$
|
0.67
|
$
|
0.51
|
|||
|
Basic
weighted average common shares outstanding
|
29,182
|
29,084
|
|||||
|
Diluted
income from continuing operations per common share
|
$
|
0.66
|
$
|
0.64
|
|||
|
Income
(loss) from discontinued operations per common share
|
0.00
|
(0.15
|
)
|
||||
|
Diluted
net income per common share*
|
$
|
0.67
|
$
|
0.49
|
|||
|
Diluted
weighted average common shares and common share equivalents
outstanding
|
29,275
|
30,002
|
|||||
*
Does
not add due to rounding.
Note:
Both periods presented above reflect the exit of the DSNA business, which has
been classified as a discontinued operation in accordance with GAAP. Continuing
operations, as presented above, includes the operations of The Children’s Place
business.
THE
CHILDREN’S PLACE RETAIL STORES, INC.
CONDENSED
BALANCE SHEETS
(In
thousands)
(Unaudited)
|
May
3, 2008
|
February
2, 2008
|
May
5, 2007
|
||||||||
|
Current
assets:
|
||||||||||
|
Cash
and investments
|
$
|
118,315
|
$
|
81,626
|
$
|
172,994
|
||||
|
Accounts
receivable
|
34,661
|
41,143
|
33,524
|
|||||||
|
Inventories
|
179,065
|
196,606
|
159,570
|
|||||||
|
Other
current assets
|
92,406
|
92,910
|
53,332
|
|||||||
|
Restricted
assets in bankruptcy estate of subsidiary
|
99,068
|
--
|
--
|
|||||||
|
Current
assets held for sale
|
--
|
98,591
|
79,550
|
|||||||
|
Total
current assets
|
523,515
|
510,876
|
498,970
|
|||||||
|
Property
and equipment, net
|
338,450
|
354,141
|
306,630
|
|||||||
|
Other
assets, net
|
91,911
|
128,357
|
86,474
|
|||||||
|
Non-current
assets held for sale
|
--
|
4,163
|
61,509
|
|||||||
|
Total
assets
|
$
|
953,876
|
$
|
997,537
|
$
|
953,583
|
||||
|
Current
liabilities:
|
||||||||||
|
Revolving
credit facility
|
$
|
27,936
|
$
|
88,976
|
$
|
--
|
||||
|
Accounts
payable
|
59,303
|
80,807
|
85,538
|
|||||||
|
Accrued
expenses and other current liabilities
|
109,273
|
140,712
|
136,864
|
|||||||
|
Liabilities
subject to compromise
|
123,694
|
--
|
--
|
|||||||
|
Total
current liabilities
|
320,206
|
310,495
|
222,402
|
|||||||
|
Other
liabilities
|
141,504
|
214,809
|
196,505
|
|||||||
|
Total
liabilities
|
461,710
|
525,304
|
418,907
|
|||||||
|
Stockholders’
equity
|
492,166
|
472,233
|
534,676
|
|||||||
|
Total
liabilities and stockholders’ equity
|
$
|
953,876
|
$
|
997,537
|
$
|
953,583
|
||||
Note:
The
balance sheet as of May 3, 2008, reflects DSNA restricted assets available
to
settle its liabilities through bankruptcy. “Assets held for sale” on the
February 2, 2008, and May 5, 2007, balance sheets reflect the assets sold to
an
affiliate of The Walt Disney Company. The remaining assets and liabilities
of
the DSNA business are reflected in their respective balance sheet categories
on
the February 2, 2008, and May 5, 2007, balance sheets.
###