Exhibit 10.2
THE CHILDREN'S PLACE
XXXXXXX XXXXX
EMPLOYEE STOCK PURCHASE
SECTION 423 SERVICING AGREEMENT
OCTOBER 30, 1997
EMPLOYEE STOCK PURCHASE PLAN SERVICING AGREEMENT
FOR INTERNAL REVENUE CODE SECTION 423 PLANS
Agreement dated as of 10/30, 1997 between The Children's Place____
(the "Employer") and Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
("Xxxxxxx Xxxxx").
WHEREAS, the Employer desires to use the services of Xxxxxxx Xxxxx
in connection with the Employer's Stock Purchase Plan, named on the accompanying
Schedule A and subject to the fees described in Schedule B, (the "Plan") to
which Section 423 of the Internal Revenue Code of 1986 (the "Code") applies.
NOW, THEREFORE IN CONSIDERATION of the mutual covenants set forth
herein, the Employer and Xxxxxxx Xxxxx agrees as follows:
SERVICE DESCRIPTION AND RESPONSIBILITIES
Section 1. Xxxxxxx Xxxxx Services
During the term of this Agreement, Xxxxxxx Xxxxx will perform the
following services with respect to the Plan and Employer's common stock (the
"Stock").
(a) Xxxxxxx Xxxxx will establish a separate brokerage Account for
each Participant in the Plan and maintain records of the Stock and transactions
in that Account.
(b) Xxxxxxx Xxxxx will: 1) allocate shares of Stock to the Accounts
of Participants, but only following Xxxxxxx Xxxxx'x ( i ) receipt of either a
certificate or certificates from the Employer, registered in the name of Xxxxxxx
Xxxxx or its nominee, for the total number of full shares to be allocated,
including instruments of transfer in a form acceptable to Xxxxxxx Xxxxx
permitting registration of such shares in the name of Xxxxxxx Xxxxx or its
nominee, (ii) receipt from the "Employer" of "available funds" for the residual
fraction of a share, if any, (iii) receipt of a file (a "Payroll File) from the
Employer setting forth a total payroll deduction amount in U.S. dollars for each
participant involved, (iv) receipt of a written statement from the Employer
specifying the fair market price and allocation price of the Stock and the date
to be reflected on Xxxxxxx Xxxxx'x records for use in allocating Sock to
Participant's Accounts and for reporting purposes, and such additional
information as Xxxxxxx Xxxxx may specify from time to time, and (v)
reconciliation of the shares of Stock received and the "available funds"
received with the Payroll File to determine that the aggregate amount of shares
and "available funds" received corresponds to the aggregate of the amounts
specified in the Payroll File; 2) provide a
2
periodic report to the Employer in Xxxxxxx Xxxxx'x standard from as in effect
from time to time setting forth information concerning shares of Stock acquired
under the Plan which were held in the account of each Participant and which
prior to a specified date have been sold on the market, delivered to
Participants, or transferred to another Xxxxxxx Xxxxx account, to another
broker, or to a third party. Xxxxxxx Xxxxx makes no representation or warranty
as to whether the information set forth on such periodic reports will be
sufficient for the Employer to determine whether the holding period specified in
Section 423(a) of the Code has been satisfied with regard to any share of Stock
or to determine the amount of any tax deduction to which the Employer may be
entitled by reason of any "disposition" or shares of Stock as that term is used
in Section 423 of the Code, and 3) to comply with Section 423 of the Code,
Xxxxxxx Xxxxx will maintain and age the Employer's Stock held in Participants'
Accounts in the following categories: Plan shares held under 2 years and Plan
shares held over 2 years and shares not acquired through payroll deduction under
the Plan (non-plan shares). Upon participants' instructions to liquidate shares
held in their Accounts, the disposition of shares will be as follows: non-plan
shares first. Followed by Plan shares held in a Participant's Account over 2
years and lastly Plan shares held under 2 years. Plan shares under 2 years are
disposed of on a first-in first-out basis.
(c) Xxxxxxx Xxxxx will arrange for the production of "Enrollment
Materials" to explain the Plan to employees and to enroll participants.
Enrollment materials consist of 1) an employee enrollment brochure to describe
the Plan, and 2) an enrollment form to establish the payroll deduction with the
Employer and the Account with Xxxxxxx Xxxxx. The contents of the enrollment form
will not be subject to change; however, supplemental information may be included
to satisfy the Employer's requirements. The Employer understands and agrees that
Xxxxxxx Xxxxx must review and approve all Enrollment Materials prior to printing
and distribution to employees. The production of the Enrollment Materials shall
be treated as an additional service pursuant to Section 9 of the Agreement.
(d) Xxxxxxx Xxxxx will hold all Stock in each Account in the name of
Xxxxxxx Xxxxx or its nominee, unless otherwise directed by the Participant for
whom the Account is maintained, in which case Xxxxxxx Xxxxx may charge a fee to
the Participant for re-registration and delivery of the Shares involved unless
the Employer has agreed to pay for the Transfer/Delivery Fee in accordance with
Schedule B to the Agreement by checking the appropriate line thereon:
(e) Xxxxxxx Xxxxx will automatically reinvest all cash dividends on
Stock received in each Account in shares of the Employer's Stock to the extent
possible, unless the Participant directs otherwise, in which case all such
dividends
3
shall be remitted in check format to the Participant as soon as practicable.
(f) Xxxxxxx Xxxxx will transmit to each participant all proxy
statements, annual reports, meeting notices, etc. received from the Employer
with respect to Stock acquired pursuant to the Plan and held in the
Participant's Account. Proxies will be voted with respect to full Shares held in
a Participant's Account in accordance with the Participant's instructions duly
delivered to Xxxxxxx Xxxxx. For purposes of consolidating annual report mailings
and proxy solicitation, Xxxxxxx Xxxxx will, at the Employer's request and
subject to Section 9 of this Agreement, provide the Employer with name, address
and share balance information in the standard Xxxxxxx Xxxxx format for those
Plan Participants who have objected to disclosure of this information pursuant
to Rule 14b-1(b)(3)(i) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act").
(g) Xxxxxxx Xxxxx will prepare and distribute quarterly to each
Participant a statement as to the Stock acquired for the Participant's Account
under the Plan. If a separate confirmation for one or more such purchases is
requested by the Employer, a fee for the furnishings of such confirmations shall
be charged to the Employer pursuant to Section 9 of the Agreement.
Section 2. Employer Responsibilities
During the term of the Agreement, the Employer will assume the
responsibilities and perform the duties set forth below:
(a) The Employer will furnish to Xxxxxxx Xxxxx, on information forms
provided by Xxxxxxx Xxxxx or its designated agents or otherwise in a format
prescribed by Xxxxxxx Xxxxx, all Payroll Files and employee payroll and other
information which Xxxxxxx Xxxxx may require in order to establish an Account and
to perform its services or calculate its fees under this Agreement. In
particular, but not by way of limitation, the Employer will notify Xxxxxxx Xxxxx
in the manner specified by Xxxxxxx Xxxxx of the name and Account number of each
Participant who terminates participation in the Plan whether by reason of
termination of employment with the Employer, cessation of payroll deductions or
otherwise. Xxxxxxx Xxxxx shall have the right to close such terminated or
inactive Plan Participant's Account, subject to the notification process
described in Section 8 subsection (b). Xxxxxxx Xxxxx shall be entitled to rely
upon the accuracy and completeness of all information which it reasonably
believes to have been furnished to it by the Employer or at the Employer's
direction and shall have no duty to inquire about such information or about the
application of any funds,
4
securities or other assets held by the Employer under the Plan. Other than with
respect to a Participant's Account and transactions therein, the Employer shall
be solely responsible for resolving any dispute between the Employer and a
Participant and answering any inquiries relating to the Participant's rights and
entitlements under the Plan. Xxxxxxx Xxxxx shall have no obligation or liability
in this regard or for answering any inquiries concerning any transaction or
event affecting any Account which occurs prior to the later of (i) the date of
the Agreement and (ii) the establishment of such Account in accordance with the
Agreement.
(b) The Employer agrees to use the enrollment form designed by
Xxxxxxx Xxxxx for the purpose of authorizing payroll deductions and establishing
an Account with Xxxxxxx Xxxxx. This enrollment form will be distributed,
collected and maintained by the Employer. The Employer agrees to maintain a
record of these forms in such a manner as to allow retrieval and delivery of the
forms to Xxxxxxx Xxxxx within two business days, to comply with any Internal
Revenue Service (IRS), state, or other taxing authority inquiry, request or
audit. If such a request is made, a copy will be made for Xxxxxxx Xxxxx and the
original maintained by the Employer at all times, unless otherwise required by
law, regulation or legal process. The Employer agrees to maintain these original
enrollment forms on file for the life of the account plus a period of at least
seven years. In addition, The Employer agrees to follow identical procedures in
the event of other tax authority requests for documentation or information
relating to the Plan or its participants.
In order to establish an Account under this Agreement, the Employer
agrees to furnish the information requested by Xxxxxxx Xxxxx in a
machine-readable format. Accounts will be established automatically through the
processing of the Payroll File with the content and format specified by Xxxxxxx
Xxxxx. Specifically, the Employer must provide Participant name, address, social
security number (account number), and dollar contribution information. Since
Xxxxxxx Xxxxx will not retain the enrollment forms, The Employer understands and
agrees t review all enrollment forms received for 1) completeness, 2) for
exceptions indicated on the form, and 3) for any participants indicating foreign
residency or citizenship. The Employer is responsible for obtaining any missing
information or incomplete forms and further understands and agrees that Xxxxxxx
Xxxxx will rely on all social security number, name and address information
provided by the Employer to be current and accurate for individual Participant
tax reporting purposes. In the case of exceptions to the form or if foreign
residency or citizenship is indicated, copies of the forms will be provided by
the Employer to Xxxxxxx Xxxxx for special processing. Upon receipt of these
copies, Xxxxxxx Xxxxx will update the Account
5
according to the information indicated on the enrollment form .
The Employer will in no event permit the following employees to
become Participants in the Plan: 1) an employee who has not attained the age of
majority in the state or country in which the employee resides, and the Employer
will refuse to accept any enrollment forms submitted by such a individual, or 2)
an employee who has not completed enrollment form to the Employer. The Employer
further agrees to obtain and file executed enrollment forms on all employees
wishing to enroll in the Plan before including them on a Payroll File and
submitting to Xxxxxxx Xxxxx as active Plan Participants.
In the event another firm has provided services similar to those
provided by Xxxxxxx Xxxxx hereunder in respect of the Plan, the Employer agrees
to obtain executed enrollment forms from al Participants on the Payroll File
pursuant to the procedures described above and shall not be obligated to receive
in any Account assets from such firm until reconciliation of the assets so
received with information received from such firm or Employer detailing the
allocation of these assets to each relevant Account; provided that Xxxxxxx Xxxxx
will have no responsibility for determining the accuracy of the information
received or for reconciling such information with any Participant's entitlements
under the Plan; provided further that Xxxxxxx Xxxxx shall not be obligated in
any event to accept assets in an Account which are not allowable as an
investment in the Account in accordance with Section 8.
(c) The Employer will collect all amounts deductible pursuant to the
Plan from the compensation of Participants and other amounts contributed by the
Participant pursuant to the Plan and will make all required Employer
contributions, if any, in accordance with the Plan, and shall hold such amounts
or shares until delivered to Xxxxxxx Xxxxx in accordance with the schedule
specified on Schedule X. Xxxxxxx Xxxxx shall not be obligated to accept delivery
of shares other than in accordance with such schedule but may do so in its sole
discretion as an additional service pursuant to Section 9. The Employer will
promptly notify Xxxxxxx Xxxxx of any change in the information specified on
Schedule A to this Agreement.
(d) The Employer will consolidate all information and deliver a
single Payroll File to Xxxxxxx Xxxxx in a machine-readable format, conforming to
specifications furnished by Xxxxxxx Xxxxx from time to time. In the event that,
(i) the Employer is unable to submit one Payroll File, (ii) a Payroll File does
not conform to such specifications, the processing of such Payroll File by
Xxxxxxx Xxxxx shall not be required, or (iii) Xxxxxxx Xxxxx processes a file and
it does
6
not conform to such specifications, such processing shall be an additional
service pursuant to Section 9.
Each Payroll File shall be reconciled by the Employer against the
funds and Stock referenced in such file prior to delivery of the file to Xxxxxxx
Xxxxx. If any Payroll File submitted to Xxxxxxx Xxxxx in incomplete, incorrect
or subsequently changed by the Employer, the work performed by Xxxxxxx Xxxxx to
correct, change or otherwise prepare the Payroll File for processing also shall
be treated as an additional service by Xxxxxxx Xxxxx pursuant to Section 9. If
the Employer requests that Xxxxxxx Xxxxx make entry corrections to the Payroll
File after an investment has been made, the Employer agrees to provide Xxxxxxx
Xxxxx with a letter of authorization detailing the date of the error, type of
adjustment, Participant name and account number. An adjustment will be processed
by Xxxxxxx Xxxxx and a refund will be returned to the Employer, if applicable,
and this work shall also be treated as an additional service pursuant to Section
9.
(e) All remittances of funds by the Employer to Xxxxxxx Xxxxx in
respect to the Plan shall be made either by check or by wire transfer in
accordance with instructions received from Xxxxxxx Xxxxx. All Stock delivered
directly by the Employer to Xxxxxxx Xxxxx in respect of the Plan shall be fully
paid and nonassessable and registered in the name of Xxxxxxx Xxxxx or its
nominee, and all Stock and Payroll files shall be delivered to Xxxxxxx Xxxxx at
the place and in the manner specified in instructions transmitted by Xxxxxxx
Xxxxx to the Employer.
(f) All Stock and Payroll Files delivered to Xxxxxxx Xxxxx on behalf
of the Employer and any of its subsidiaries participating in the Plan, as well
as other notices and instructions relating to the Plan or this Agreement, shall
be delivered by the department, office or single source within the Employer, or
other person acting on behalf of the Employer, specified on Schedule A. For
purposes of the Agreement, any action taken by any person acting on behalf of
the Employer shall be considered as an action by the Employer. Delivery of Stock
or Payroll Files other than in accordance with Sections 2(e) and 2(f) shall not
constitute delivery within the meaning of Section 1(b).
(g) The Employer is solely responsible for the administration of the
Plan and execution and filing with any governmental authority of other person of
all reports or other documents required in connection with the Plan, and Xxxxxxx
Xxxxx shall have no reporting or tax withholding obligation in connection with
any aspect of the Plan. The foregoing, however, shall in no way limit any
reporting and withholding obligations which Xxxxxxx Xxxxx may have under
applicable law with respect to brokerage accounts generally.
7
(h) Xxxxxxx Xxxxx shall have no responsibility to monitor compliance
by the Employer with the terms and conditions of the Plan or any law applicable
thereto.
(i) Except as in Section 3 (c), each report and statement issued by
Xxxxxxx Xxxxx shall be deemed correct unless Xxxxxxx Xxxxx receives written
notice of any incorrectness, incompleteness or inaccuracy in the report or
statement within 30 days after the sending thereof to the person to whom the
report or statement is to be sent in accordance with the agreement.
(j) Except for the internal newsletters or other documents not
dedicated solely to describing the Plan and Xxxxxxx Xxxxx services under this
Agreement, The Employer shall obtain the prior written consent of Xxxxxxx Xxxxx
to any reference to Xxxxxxx Xxxxx or to services to be furnished by Xxxxxxx
Xxxxx in any communication or document pertaining to the Plan not prepared by
Xxxxxxx Xxxxx; provided that Merrill Lunch shall have no responsibility or
liability for the content of any such communication or document.
(k) The Employer shall pay all sales or use taxes or any taxes in
lieu thereof with respect to the services of Xxxxxxx Xxxxx under the Agreement.
(l) The Employer shall notify Xxxxxxx Xxxxx as soon as possible in
advance of any stock, Split, stock dividend or similar event which may affect
the Stock, and of any bankruptcy, insolvency, moratorium or other proceeding in
respect of the Employer affecting the enforcement of creditor's rights.
Likewise, Xxxxxxx Xxxxx will notify the Employer of any bankruptcy, insolvency,
moratorium or other proceeding with respect to Xxxxxxx Xxxxx affecting the
enforcement of creditor's rights. Notwithstanding any other provision of the
Agreement to the contrary, Xxxxxxx Xxxxx will have no obligation to perform any
services under this Agreement subsequent to the commencement of any bankruptcy,
insolvency, moratorium or other proceeding in respect to the Employer affecting
the enforcement of creditors' rights unless Xxxxxxx Xxxxx receives assurance
satisfactory to it that it will receive full payment for such services.
Section 3. Responsibility for Errors and Indemnification
(a) The Employer will promptly notify Xxxxxxx Xxxxx of any errors or
omissions in information supplied by the Employer to Xxxxxxx Xxxxx. In such an
event, or in the event that Xxxxxxx Xxxxx executes an allocation of shares of
Stock pursuant to Section 1(b) prior to satisfaction of all of the conditions
specified in clauses (i), (ii) and (iii) of the Section and subsequently
discovers an error or omission in information supplied to it by the Employer,
Xxxxxxx Xxxxx'x
8
sole obligation shall be to us reasonable best efforts to correct any resulting
errors in its own records or in any reports it has prepared for the Employer or
any participant, and such services shall be treated as an additional service
pursuant to Section 9.
(b) The Employer will defend, indemnify and hold harmless Xxxxxxx
Xxxxx and its parent company and each of their directors, officers and
employees, and any affiliate or subcontractor to which Xxxxxxx Xxxxx has
delegated (as permitted by Section 12 of this Agreement), any of its duties
hereunder, from and against all claims, liabilities, losses, damages or
expenses, including attorney's fees and reasonable costs of investigating,
preparing or defending any related litigation, asserted by the Employer or any
Participant, or any other person, (i) arising out of any failure of the Employer
to supply time and accurate information or funds needed to enable Xxxxxxx Xxxxx
to discharge its duties under the Agreement, (ii) arising out of any untrue
statement or alleged untrue statement of material fact contained in the
registration statement covering Stock or the omission or alleged omission
therefrom of a material fact required to be stated therein or necessary to make
the statement therein, in light of the circumstances under which it was made,
not misleading, or, if applicable, the Plan, (iii) arising out of any violation
or alleged violation of any "blue sky" or state securities law, or (iv) arising
out of any other cause other xxxx Xxxxxxx Xxxxx'x xxxxx negligence or willful
misconduct. The Employer further agrees to indemnify and hold harmless Xxxxxxx
Xxxxx for any fines, taxes and penalties imposed by the IRS, state or other
taxing authority, or for any other claims or costs arising from or relating to
inaccurate or omitted tax-related information.
(c) Xxxxxxx Xxxxx will at its own expense, correct, or cause the
correction of, any errors in its records and in any reports prepared by it which
are attributable to errors of its employees.
(d) In case of errors or loss of data caused by power failure,
mechanical difficulties with information storage and retrieval systems, or other
events not attributable to its own gross negligence or willful misconduct or to
the gross negligence or willful misconduct of its agents or subcontractors,
Xxxxxxx Xxxxx'x sole obligation will be, at its own expense, to use its
reasonable efforts to reconstruct any records maintained by Xxxxxxx Xxxxx and to
amend any reports prepared by it which have been affected by such event.
Performance by Xxxxxxx Xxxxx and the Employer of their obligations hereunder is
subject to appropriate adjustment and extension of time in the event of strike,
fir, war, insurrection, riot, electrical failure or any other event that would
constitute force majeure under New York law, or in the
9
event of a circumstance beyond Xxxxxxx Xxxxx'x or the Employer's control.
Section 4. Survival
The provisions of Sections 3,5,8,13,14 and 20 shall survive the
termination of this Agreement.
Section 5. Proprietary Information
The Employer agrees that all computer programs, software, forms,
plans and procedures developed by Xxxxxxx Xxxxx to perform the services required
under the Agreement are trade secrets or other property of Xxxxxxx Xxxxx. In
addition, Xxxxxxx Xxxxx reserves the right to include the Employer's name on a
client list as an active plan sponsor of the Employee Stock Purchase Plan
Service.
Section 6. Confidentiality of Records
(a) Xxxxxxx Xxxxx will treat confidentially by not disclosing to
unaffiliated persons all records of, or other information in its possession
regarding the Plan, subject to Section 8, and will not, without written
authority from the Employer, disclose to such unaffiliated persons during the
term of the Agreement or thereafter any such records or information except (i)
in connection with the proper operation of the Agreement and the Plan, (ii)
incident to an assignment, subcontract or service contract or relationship
permitted by Section 12 of the Agreement, (iii) in connection with a proxy
solicitation, audit or regulatory examination, (iv) as may otherwise be legally
required, or (v) as directed by the Employer to transfer existing records and
accounts to a successor administrator. The transfer of records to a successor
administrator or additional reporting after the termination of this Agreement
will be treated as an additional service pursuant to Section 9 of the Agreement.
(b) During the term of the Agreement all records of the Plan in the
possession of Xxxxxxx Xxxxx will, subject to Section 8, be open to inspection
and audit at reasonable times by the Employer.
Section 7. Status of Parties
The relationship of the parties to each other in the execution and
performance of the Agreement shall be that of independent contractors. Nothing
in the Agreement or with respect to the obligations or services of Xxxxxxx Xxxxx
in connection with the Agreement shall constitute Xxxxxxx Xxxxx a fiduciary of
the Employer, the Plan, any Participant or any other person.
10
Section 8. Accounts
(a) Each Account established for a participant may be used by that
Participant for transactions in such securities designated by the Employer, and
that are allowable for investment under the Xxxxxxx Xxxxx Account (or any
successor program or account). The relationship between Xxxxxxx Xxxxx and each
participant with respect to the Account and transactions therein shall be
governed by a separate agreement of terms and conditions between them (an
"Account Agreement"), which constitutes part of the Enrollment Materials. Each
Account Agreement, unless previously terminated, shall survive the termination
of this Agreement, and each Account Agreement and the fees and commissions
applied thereunder may be amended from time to time in accordance with the terms
thereof without notice to or consent from the Employer.
(b) Xxxxxxx Xxxxx may notify any participants, including those
participants who have terminated employment with the Employer or inactive
Participants (those persons who have suspended payroll deductions for a
consecutive (12) month period), of their account closing options. On a regular
basis, Xxxxxxx Xxxxx will forward a report to the Employer listing inactive
accounts. At that time, the Employer may decide to pay the maintenance fee to
retain the accounts on the plan base or allow Xxxxxxx Xxxxx to contact these
Participants for the purpose of notification of the following options: i) sale
of the Participant's holdings of Stock and other securities, if any, subject to
applicable transaction and handling fees and closure of their account; ii)
receipt of a Stock certificate, and certificates for other securities in their
account, if any, subject to a certificate fee and closure of their account; or
iii) conversion of their Plan Account to a Xxxxxxx Xxxxx account, subject to
minimum balance requirements and applicable account maintenance, transaction and
handling fees. The above rights of Xxxxxxx Xxxxx shall be in addition to any
other rights and privileges included but not limited to the right to charge its
prevailing account maintenance fees for security registration, mailing and other
related brokerage or administrative services accorded to Xxxxxxx Xxxxx under the
terms and conditions of the Account Agreement governing the Participants'
Accounts at Xxxxxxx Xxxxx.
(c) The records maintained by Xxxxxxx Xxxxx in respect of each
Account in accordance with the Account Agreement will be confidential and will
not, without written authority from the Participant involved, be disclosed too
the Employer except to the extent otherwise specifically set forth in the
Agreement, as required by operation of law or to transfer existing records and
accounts to a successor administrator.
11
Section 9. Additional Services
In addition to each of those categories of work specified in this
Agreement as an additional service pursuant to this Section 9, the parties may
agree from time to time that Xxxxxxx Xxxxx shall perform other additional
services for the Employer in connection with the Plan. Charges for additional
services shall be in accordance with Xxxxxxx Xxxxx'x then current fees for such
services.
Section 10. Xxxxxxx Xxxxx Compensation
(a) The Employer will pay Xxxxxxx Xxxxx the fees indicated on the
accompanying Schedule B for the services involved and any fees for additional
services pursuant to Section 9 within 30 days of the date of receipt of Xxxxxxx
Xxxxx'x invoice for the fees specified thereon. Xxxxxxx Xxxxx shall be entitled
to charge the Employer interest at the rate which is 2 percent above the
prevailing "Prime Rate" charged during such time by Citibank, N.A. on the
outstanding balance of all fees payable hereunder that are not paid by the
Employer within 30 days after the date of receipt of Xxxxxxx Xxxxx'x invoice
therefor. The fees and commissions provided for herein are in addition to, and
not in substitution for, Xxxxxxx Xxxxx'x usual fees for mailings of proxy
statements, annual reports, meeting notices, etc., services rendered as a
nominee for customers and other services performed by Xxxxxxx Xxxxx for which it
normally charges a separate fee. Xxxxxxx Xxxxx retains their right to change any
fees listed on Schedule B from time to time on 30 days' prior written notice to
the Employer.
(b) The Employer shall not be required to pay transaction fees
incurred in connection with the transactions executed upon the instructions of
Participants (other than transactions entered into in connection with the
processing of a Payroll File) or in connection with the reinvestment of
dividends (unless the Employer had assumed that obligation as specified on
Schedule B, in which case the fee payable in connection therewith shall be
billed to the Employer separately from the other fees provided for herein),
which transaction fees shall otherwise be for the accounts of the Participants
involved.
(c) The Employer understands and agrees that the service fee
schedule described in Schedule B will be modified each year to reflect any
increase in the Consumer Price Index on the anniversary date of each yearly
renewal of the Agreement.
12
Section 11. Term
This Agreement shall remain in effect for a period of one year
subsequent to the execution date. This Agreement will automatically renew for an
additional one year period thereafter, unless either party gives written notice
to the other not less than 90 days prior to the expiration of such one year
period of its election not to renew the Agreement.
Section 12. Assignments/Subcontracts
Neither party may assign this Agreement or any right or obligation
hereunder in whole or in part without the written consent of the other party,
except that (i) Xxxxxxx Xxxxx may assign any or all of its rights and duties
hereunder to any corporation directly or indirectly owned by Xxxxxxx Xxxxx Co.,
Inc. and (ii) Xxxxxxx Xxxxx may in any case employ independent subcontractors or
other agents to perform all or any part of the services otherwise to be
performed by Xxxxxxx Xxxxx itself under this Agreement. Xxxxxxx Xxxxx may also
contract or establish relationships with third parties for the provision of
services to Xxxxxxx Xxxxx which are useful to Xxxxxxx Xxxxx in connection with
its servicing Accounts.
Section 13. Waiver of Jury Trial
Each of Xxxxxxx Xxxxx and the Employer (in its own behalf and, to
the extent permitted by applicable law, on behalf of its shareholders) waives
all right to trial by jury in any action, proceeding or counterclaim (whether
based upon contract, tort, or otherwise) related to or arising out of the
engagement of Xxxxxxx Xxxxx pursuant to, or the performance by Xxxxxxx Xxxxx of
the services contemplated by, this Agreement.
Section 14. Representation and Warranties
(a) The Employer hereby represents and warrants that (i) it has full
power, authority and capacity to execute and deliver this Agreement and perform
its obligations hereunder on behalf of itself and on behalf of any subsidiary
participating in the plan, and that this Agreement constitutes a legal, valid
and binding obligation of the Employer, enforceable against the Employer in
accordance with its terms, except as enforcement may be limited by bankruptcy,
insolvency, moratorium or other laws affecting the enforcement of creditors'
rights generally, (ii) stock delivered to Xxxxxx Xxxxx in connection with the
Plan (if any), and all interests in the Plan (if required), will be the subject
of an effective registration statement under the Securities Act of 1933, as
amended, and will be registered or qualified under
13
the securities laws of each state in which such registration or qualification is
necessary and the Employer will keep such registration statements and
qualifications in effect during such period of time as is required by applicable
law, and (iii) that it is not a broker dealer registered under the Exchange Act
and is not a member of the National Association of Securities Dealers, Inc.
(b) Xxxxxxx Xxxxx hereby represents and warrants that it has full
power, authority and capacity to execute and deliver this Agreement and performs
its obligations hereunder, and that this Agreement constitutes a legal, valid
and binding obligation of Xxxxxxx Xxxxx, enforceable against Xxxxxxx Xxxxx in
accordance with its terms, except as enforcement may be limited by bankruptcy,
insolvency, moratorium or other laws affecting the enforcement of creditor's
rights generally.
Section 15. Notices
Any notice or instructions to be given to the Employer or Xxxxxxx
Xxxxx under this Agreement shall be in writing or on such other medium as may be
agreed to by the Employer and Xxxxxxx Xxxxx, and delivered by hand, or sent by
certified mail, postage prepaid, return receipt requested, or by courier or
overnight delivery service to the address listed below, or to such other address
as may be designated in a written notice transmitted in accordance with this
Section 15.
14
If to Xxxxxxx Xxxxx by overnight, hand or courier delivery:
Xxxxxx Xxxxx, Xxxxxx, Xxxxxx & Xxxxx Incorporated
Group Employee Services
000 Xxxxxxxx Xxxxxx - 2nd Floor
Somerset, New Jersey 08873
United States of America
Attn: Employee Stock Purchase Plan Manager
If to Xxxxxxx Xxxxx by first class or certified mail:
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
Group Employee Services
X.X. Xxx 00000
Xxx Xxxxxxxxx, Xxx Xxxxxx 00000-0000
Xxxxxx Xxxxxx of America
Attn: Employee Stock Purchase Plan Manager
If to the Employer:
The address of the employer set forth on Schedule A
Any report or statement to be sent to a Participant by Xxxxxxx Xxxxx
under this Agreement shall be sent by first class mail, postage prepaid, to the
most recent address of such Participant as shown on Xxxxxxx Xxxxx'x records
maintained for the purposes of this Agreement.
Section 16. Successors
This Agreement shall be binding upon, and inure to the benefit of,
the Employer and Xxxxxxx Xxxxx and their respective successors and
permitted assigns.
Section 17. Amendment
This Agreement will not be modified or amended except by an
instrument in writing signed by the Employer and Xxxxxxx Xxxxx.
Section 18. Waiver
No term or condition of this Agreement shall be deemed to have been
waived, nor shall there be an estoppel against the enforcement of any provision
of this Agreement, except by written instrument of the party charged with such
waiver or estoppel. No such written waiver shall be deemed a continuing waiver
unless specifically stated therein, and each such shall operate only as the
specific term or condition waived and shall not constitute a waiver of such term
or condition for the future or as to any act other than that specifically
waived.
15
Section 19. Severability
The invalidity or unenforceability of any provision of the Agreement
shall not affect the other provisions, and this Agreement is to be construed in
all respects to the extent possible to fulfill the purposes of this Agreement as
if such invalid or unenforceable provision was omitted.
Section 20. Governing Law
THIS AGREEMENT SHALL BE CONSIDERED AS EXECUTED AND DELIVERED IN THE
STATE OF NEW YORK AND SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THAT STATE.
Section 21. Counterparts
This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
Section 22. Entire Agreement
This Agreement (including Schedule A and Schedule B hereto)
constitutes the entire agreement between the parties with respect to the matters
dealt with herein, and supersedes all previous agreements and documents with
respect to such matters.
16
AUTHORIZATION
IN WITNESS WHEREOF, the Employer and Xxxxxxx Xxxxx have each caused this
Agreement to be executed in its corporate name by the duly authorized officers,
all as of the date first above written.
EMPLOYER'S NAME
Attest: /s/ Xxxx Xxxxxx By: /s/ Xxxxxx Xxxxxxxxx
----------------------------- -----------------------------
Print Name: Xxxx Xxxxxx Print Name: Xxxxxx Xxxxxxxxx
Title: Chief Financial Officer Title: Vice President
XXXXXXX LYNCH, PIERCE, XXXXXX
XXXXX INCORPORATED
Attest: /s/ Xxxxxx Xxxxxxx-Xxxxxx By: /s/ Xxxx X. Xxxxx
----------------------------- -----------------------------
Print Name: Xxxxxx Xxxxxxx-Xxxxxx Print Name: Xxxx X. Xxxxx
Title: Assistant Vice President Title: Vice President
17
SCHEDULE A
Data Sheet for Xxxxxxx Xxxxx
Employee Stock Purchase Plan Servicing Agreement
1. Name of Employer: The Children's Place Retail Stores, Inc.
2. Name of Subsidiaries or Affiliates of the Employer
Participating in the Plan: None
3. Name of Plan: The Children's Place Retail Stores, Inc. Employee Stock
Purchase Plan.
4. Stock to be Allocated: 360,000 shares of common stock par value .10
5. Exchange/Market on which Stock is Traded: NASDAQ
6. Source of Stock (check one): Treasury |_|
New Issue |X|
7. Single Source for all Information, Payments and Documents
to Employer:
Company Name: The Children's Place
Address: 0 Xxxxx Xxxxx
Xxxx Xxxxxxxx, XX 00000
Attention: Xxxxxx Xxxxxxxx
Title: Manager of Human Resources
Telephone Number: (000) 000-0000 X 0000
Fax Number: (000) 000-0000
10/8/97
18
8. Employer Discount Percentage: 15%
9. a. Schedule for Delivery of Money and/or Stock and Payroll Files to
Xxxxxxx Xxxxx under the Plan (check one):
Monthly |X|
Quarterly |_|
Semi-Annual |_|
Other |_|
b. First month in which delivery is to be made: January 1998
10. Medium in which Payroll Files Furnished (check one):
Magnetic Tape |X|
PC Transmission |_|
Cartridge |_|
Electronic Data Transmission |_|
11. Shares to be delivered by (check one):
Delivery of physical certificates |_|
DTC transfer |X|
12. Other Additions or Modifications to Agreement:
19
SCHEDULE B
Service Fees
1. Service Fee:
Annual Per Participant Fee
$25.00
The number of participants is the number of Participants referenced in the
Payroll File with respect to which the Service Fee is to be determined.
The Per Participant Fee is determined by multiplying (a) the number of
Participants referenced in the Payroll File being processed by (b) a prorata
portion of the indicated per Participant Dollar amount specified above. The pro
ration is determined on the basis of the number of Payroll Files scheduled to be
delivered on an annual basis under the schedule for delivery specified in
Schedule A to the Agreement (e.g., if Schedule A to the Agreement provides for
semi-annual delivery of Payroll Files, the Per Participant Fee Payable with
respect to each Payroll File delivered is one-half of the indicated dollar
amount).
The Service Fee is payable with respect to each Payroll File processed by
Xxxxxxx Xxxxx under the Plan. If the aggregate Fee calculated as described above
for a Payroll File processed by Xxxxxxx Xxxxx during any calendar year is less
than $5,000.00 the Employer will be billed, and will pay the difference between
$5,000.00 and the amount of Fee so calculated.
The Service Fee schedule will be modified each year on the execution date of
this Agreement upon the annual plan renewal to reflect any increase in the
Consumer Price Index.
20
2. Fees for reinvestment of dividends paid on company stock.
a. |X| Not applicable, the company does not currently pay dividends.
Should the company declare a dividend in the future and checked
Section 2 item (a) of Schedule B, Xxxxxxx Xxxxx will automatically
supply Section 2 item (b) of Schedule B unless noted otherwise,
below.
If currently paying a dividend or intend to pay a dividend, please check
one:
b. |_| To be paid in all events by Participants at the applicable rate.
c. |_| To be paid by the Employer at the rates set forth below with
respect to Accounts shown on Xxxxxxx Xxxxx'x records. Designate
which classification of account holders you will assume
responsibility for dividend reinvestment fees.
(check one)
|_| Active Plan Participants (Employees currently participating in
the Plan.)
|_| Active and Inactive Plan Participants (Employees currently
participating in the Plan and those not participating but are
shown on Xxxxxxx Xxxxx'x records as Plan Accounts.)
Fee as Percentage
Average Cash Dividend of Aggregate Dividend
Payable to Accounts Amount (All Accounts)
------------------- ---------------------
$ 0.01 - 100.00 4.0 %
100.01 - 500.00 2.0 %
more than $500.00 1.5 %
* If the fee payable at the 2% rate is less than the product of
$4.00 and the number of accounts with respect to which the Employer has assumed
this obligation, the fee payable by the Employer is equal to that product.
To determine the Average Cash Dividend Payable to Accounts, determine the sum of
the cash dividend payable to accounts with respect to which the employer has
assumed this obligation and divide that sum by the number of such accounts.
3. The Employer (check one) |_| has / |X| has not agreed to pay the fee for
Monthly Confirmations ($1.00 per confirmation)
4. The Employer (check one) |_| has/ |X| has not agreed to pay the Fee
Transfer Delivery of Certificates $15.00 per certificate)
5. The Employer (check one) |X| has/ |_| has not chosen to receive a Key
Officer Report and must contact Xxxxxxx Xxxxx with a list of appropriate
officers.
There is a fee of $25.00 per entry correction made to the Payroll File as
requested by the Employer after a plan purchase has been executed.
21
