UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 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): April 2, 2018

 

 

DESTINATION MATERNITY CORPORATION

(Exact name of Registrant as specified in Charter)

 

 

 

Delaware   0-21196   13-3045573

(State or Other Jurisdiction of

Incorporation or Organization)

 

Commission

File number

 

(I.R.S. Employer

Identification Number)

232 Strawbridge Drive

Moorestown, NJ 08057

(Address of Principal Executive Offices)

(856) 291-9700

(Registrant’s telephone number, including area code)

 

 

Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

Written communications pursuant to Rule 425 under the Securities Act

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

 

 

 


Item 1.01 Entry into a Material Definitive Agreement.

Support Agreement

On April 2, 2018, Destination Maternity Corporation (the “Company”) entered into a support agreement (the “Agreement”) with Orchestra-Prémaman S.A. (“Orchestra-Prémaman”) and Yeled Invest S.A. (“Yeled” and together with Orchestra-Prémaman, “Orchestra”).

Pursuant to the Agreement and subject to the conditions set forth therein, the Company has agreed to (i) increase the size of the Board of Directors of the Company (the “Board”) to six members and (ii) appoint Pierre-André Mestre and Jean Claude Jacomin (together, the “Designees”) to the Board with each of their terms expiring at the Company’s 2018 Annual Meeting of Stockholders (the “Annual Meeting”). Under the Agreement and subject to the conditions set forth therein, immediately following the appointment of the Designees to the Board, the Board will (i) appoint Jean Claude Jacomin to the Audit Committee of the Board and Pierre-André Mestre to the Nominating and Corporate Governance Committee of the Board and (ii) form a Business Initiatives Committee of the Board (the “Business Initiatives Committee”), which shall be comprised of both Designees and two other members of the Board and will advise and consult with the Company’s management and report to the full Board on matters respecting the Company’s business initiatives.

In addition, the Company also agreed, subject to the terms of the Agreement, to include the Designees on the Company’s slate of directors for election at the Annual Meeting, recommend that the Company’s stockholders vote in favor of the election of the Designees, include the Designees in the Company’s proxy statement and proxy card for the Annual Meeting and otherwise support the Designees for election.

Under the Agreement and subject to the conditions set forth therein, Orchestra has agreed to vote, or cause to be voted, all shares of the Company’s common stock owned by it as of April 2, 2018 and acquired thereafter in favor of all of the Company’s nominees for director and in accordance with the Board’s recommendation with respect to any other proposals presented at the Annual Meeting. As of April 2, 2018, Orchestra-Prémaman and Yeled owned in the aggregate 1,922,820 shares of the Company’s common stock, representing approximately 13% of the Company’s outstanding shares of common stock. Mr. Mestre (i) is the Chairman of Orchestra-Prémaman, which is a majority owned subsidiary of Yeled, and (ii) indirectly owns a majority equity interest in Yeled.

Pursuant to the Agreement, Orchestra is subject to certain customary standstill provisions during the period commencing on April 2, 2018 and ending 30 calendar days prior to the beginning of the advance notice period for the submission by stockholders of director nominations for consideration at the Company’s 2019 Annual Meeting of Stockholders (as established by the Company’s bylaws) or earlier upon the occurrence of certain events set forth in the Agreement.

The foregoing description of the Agreement is not complete and is subject to and qualified in its entirety by reference to the full text of the Agreement, a copy of which is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference.

The representations, warranties and covenants set forth in the Agreement have been made only for the purposes of the Agreement and solely for the benefit of the parties thereto. In addition, such representations, warranties and covenants (i) are subject to qualifications contained in the Agreement, (ii) are made only as of the date specified in the Agreement and (iii) have not been included in the


Agreement for the purpose of establishing these matters as fact. Investors should not rely on the representations, warranties and covenants or any descriptions thereof as characterizations of the actual state of facts or condition of the parties or any of their respective affiliates.

Prior Transactional History of the Parties

As previously disclosed in a Current Report on Form 8-K filed with the Securities and Exchange Commission (the “Commission”) on December 20, 2016 (the “Initial Report”), on December 19, 2016, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Orchestra-Prémaman and its wholly owned subsidiary, US OP Corporation (“Merger Sub”). On the same date, and in connection with the Merger Agreement, the Company also entered into a Governance Agreement with Orchestra-Prémaman and Yeled (the “Governance Agreement”). The descriptions of the Merger Agreement and the Governance Agreement contained in the Initial Report are incorporated by reference herein.

Item 13 of Part III of Amendment No. 1 to the Company’s Form 10-K for the year ended January 28, 2017, filed with the Commission on May 26, 2017 (the “Form 10-K/A”) summarizes certain commercial agreements that the Company had entered into with Orchestra-Premaman USA Inc., a wholly-owned subsidiary of Orchestra-Prémaman (“Orchestra US”), in connection with the Merger Agreement. The descriptions of such commercial agreements contained in the Form 10-K/A are incorporated by reference herein.

On July 27, 2017, and as previously disclosed in a Current Report on Form 8-K filed with the Commission on that same date (the “Subsequent Report”), the Company, Orchestra-Prémaman, Merger Sub, Yeled and Orchestra US entered into a Termination Agreement (the “Termination Agreement”), pursuant to which they agreed to terminate the Merger Agreement and the commercial agreements. The description of the Termination Agreement contained in the Subsequent Report is incorporated by reference herein.

Indemnification Agreement

On April 2, 2018, the Company entered into an indemnification agreement with each of its directors, (each, an “Indemnitee”). The form of indemnification agreement (the “Indemnification Agreement”) was approved by the Board.

The Indemnification Agreement supplements the indemnification provisions already contained in the Company’s certificate of incorporation and bylaws and generally provides that the Company will indemnify the Indemnitee to the fullest extent permitted by law, subject to certain exceptions, against expenses, judgments, fines and other amounts incurred in connection with certain actions, suits or proceedings commenced after the date of the agreement that relate to his or her service as a director. The Indemnification Agreement also provides for rights to advancement of expenses and contribution.

The foregoing description of the Indemnification Agreement is not complete and is subject to and qualified in its entirety by reference to the full text of the form of Indemnification Agreement, a copy of which is filed as Exhibit 10.2 to this Current Report on Form 8-K and is incorporated herein by reference. The indemnification agreements entered into by the Company and each Indemnitee are the same, except for the Indemnitee’s name and information for notices.


Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

The information in Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference.

The Board increased the number of directors on the Board from four to six and elected Pierre-André Mestre and Jean Claude Jacomin to fill the resultant vacancies, effective April 2, 2018. In addition to their elections to the Business Initiatives Committee, it is expected that Mr. Mestre will also be elected to serve as a member of the Nominating and Corporate Governance Committee of the Board and Mr. Jacomin will also be elected to serve as a member of the Audit Committee of the Board, in each case effective as of April 2, 2018. Messrs. Mestre’s and Jacomin’s respective terms will expire at the Annual Meeting.

In connection with their elections, each of Mr. Mestre and Mr. Jacomin are expected to enter into an indemnification agreement with the Company, the terms of which will be the same as the terms of the Indemnification Agreement. In accordance with the Company’s Non-Employee Director Compensation Policy, as described in the Company’s definitive proxy statement on Schedule 14A filed on September 21, 2017 with the Commission, Messrs. Mestre’s and Jacomin’s compensation for their services as non-employee directors will be consistent with that of the Company’s other non-employee directors.

Other than as described in Item 1.01 of this Current Report on Form 8-K, there are no arrangements or understandings between Mr. Mestre or Mr. Jacomin and any other person pursuant to which they were selected as directors. Mr. Jacomin does not have a direct or indirect material interest in any transaction in which the Company is a participant that would require disclosure under Item 404(a) of Regulation S-K. Transactions in which Mr. Mestre has a direct or indirect material interest in which the Company is a participant that would require disclosure under Item 404(a) of Regulation S-K are described in Item 1.01 of this Current Report on Form 8-K.

 

Item 8.01 Other Events.

On April 3, 2018, the Company issued a press release announcing the elections of Messrs. Mestre and Jacomin to the Board and the Company’s entry into the Agreement. A copy of the press release is attached as Exhibit 99.1 to this Current Report on Form 8-K.

 

Item 9.01. Financial Statements and Exhibits

 

(d) Exhibits

 

Exhibit

Number

  

Description

10.1    Support Agreement, dated as of April 2, 2018, by and between Destination Maternity Corporation, Orchestra-Prémaman S.A. and Yeled Invest S.A.
10.2    Indemnification Agreement, dated April  2, 2018 between Destination Maternity Corporation and Melissa Payner-Gregor. Pursuant to Instruction 2 to Item 601 of Regulation S-K, an Indemnification Agreement that is substantially identical in all material respects, except as to the parties thereto, between the Company and each of the Company’s other directors, was not filed.
99.1    Press Release dated April 3, 2018


SIGNATURE

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 duly authorized.

 

Date: April 3, 2018     DESTINATION MATERNITY CORPORATION
    By:  

/s/ Ronald J. Masciantonio

      Ronald J. Masciantonio
     

Executive Vice President &

Chief Administrative Officer

Exhibit 10.1

Destination Maternity Corporation

232 Strawbridge Drive

Moorestown, NJ 08057

April 2, 2018

Orchestra-Prémaman S.A.

200 Avenue des Tamaris

ZAC Saint-Antoine

Saint-Aunes, 34130

France

Attn: Pierre-André Mestre

Yeled Invest S.A.

318 rue de Neudorf

L-2222

Luxembourg

Attn: Fons Mangen

Support Agreement

Gentlemen:

This letter (this “ Agreement ”) constitutes the agreement between Destination Maternity Corporation, a Delaware corporation (the “ Company ”), Orchestra-Prémaman S.A., a société anonyme organized under the laws of France (“ Orchestra ”), and Yeled Invest S.A., a société anonyme organized under the laws of Luxembourg (“ Yeled ” and together with Orchestra, the “ Investors ”). The Company, Orchestra and Yeled are each referred to herein from time to time as a “ Party ” and are collectively referred to herein as the “ Parties .”

1.     Appointment of New Directors . Effective as of the date of execution of this Agreement, the Company’s Board of Directors (the “ Board ”) and all applicable committees of the Board have taken all action necessary to increase the size of the Board to six members and to appoint and seat Pierre-André Mestre and Jean Claude Jacomin (each a “ Designee ” and together, the “ Designees ”) to the Board with each of their terms expiring at the Company’s 2018 Annual Meeting of Stockholders (including any adjournment or postponement thereof, the “ Annual Meeting ”). The Parties agree that if, at any time during the Restricted Period, either Designee is unable to serve as a director and therefore resigns as a director, or is removed as a director, the Investors shall be entitled to name a substitute person to replace the Designee, provided, that, such substitute person must have no material conflict with the Company or its businesses, be “independent” pursuant to the listing rules of Nasdaq, meet the Company’s eligibility and qualification standards for directors in effect on the date of this Agreement, and be reasonably acceptable to the Board and its Nominating and Corporate Governance Committee.

2.    Committee Matters.

(a)    Immediately following the appointment of the Designees to the Board, the Board will appoint Jean Claude Jacomin to the Audit Committee of the Board and Pierre-André

 


Mestre to the Nominating and Corporate Governance Committee of the Board; provided, however, that in the event that such Designee does not meet the eligibility and qualification standards for membership on such committee applicable to all of its members, including under applicable listing rules of Nasdaq, such Designee shall not be appointed to such committee.

(b)    Immediately following the appointment of the Designees to the Board, the Board will form and maintain for the duration of the Restricted Period a Business Initiatives Committee of the Board (the “ Business Initiatives Committee ”) and shall appoint, seat and keep as members of the Business Initiatives Committee each of the Designees and two other members of the Board, with a director other than the Designees serving as chair of the Business Initiatives Committee. The Business Initiatives Committee’s responsibility will be to advise and consult with the Company’s management and report to the full Board on matters respecting the Company’s business initiatives. The Company, its management and its Board will provide reasonable and timely cooperation to the Business Initiatives Committee.

(c)    Other than the Business Initiatives Committee, the Board will not form any new committees or subcommittees of the Board during the Restricted Period unless each of the Designees is appointed to each such committee or subcommittee.

3.     Election Support . Subject to the Investors’ compliance with this Agreement and both of the Designees’ written consent to serve as a member of the Board if elected at the Annual Meeting, the Company will (a) include the Designees on the Company’s slate of directors for election at the Annual Meeting, (b) recommend that the Company’s stockholders vote in favor of the election of the Designees, (c) include the Designees in the Company’s proxy statement and proxy card for the Annual Meeting and (d) otherwise support the Designees for election in a manner no less rigorous and favorable than the manner in which the Company supports its other nominees.

4.     Director Benefits . The Designees will be entitled to the same director benefits as other members of the Board, including (a) compensation for his service as a director and reimbursement for his expenses on the same basis as all other non-employee directors of the Company; (b) equity-based compensation grants and other benefits, if any, on the same basis as all other non-employee directors of the Company; and (c) the same rights of indemnification (including as set forth in the form of Indemnification Agreement attached hereto as Exhibit A) and directors’ and officers’ liability insurance coverage as the other non-employee directors of the Company as such rights may exist from time to time.

5.     Voting Commitment . Subject to the Company’s performance of its obligations under this Agreement, at the Annual Meeting, the Investors will (a) cause all Voting Securities that are owned (beneficially or of record) by them as of the date hereof and all Voting Securities acquired hereafter to be present for quorum purposes and (b) vote, or cause to be voted, all Voting Securities owned (beneficially or of record) by them as of the date hereof and all Voting Securities acquired hereafter (i) in favor of all of the Company’s nominees for director (and not in favor of any other nominees); (ii) in favor of the ratification of the appointment of KPMG LLP as the Company’s independent registered public accounting firm for the fiscal year ending February 2, 2019; (iii) in accordance with the Board’s recommendation with respect to the Company’s “say-on-pay” proposal; and (iv) in accordance with the Board’s recommendation with respect to any other proposal presented at the Annual Meeting.

 

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6.     Standstill . Except with the prior written consent of the Company, at all times during the Restricted Period, each of the Investors agrees not to, directly or indirectly, and will cause each of its respective Affiliates, Associates, principals, directors, officers, employees and agents and representatives acting on its behalf (collectively, the “ Restricted Persons ”) not to, directly or indirectly, with respect to the Company (subject to the Company’s performance of its obligations under this Agreement):

(a)    engage in any “solicitation” (as such term is defined under the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”)) of proxies or consents with respect to the election or removal of directors or any other matter or proposal or become a “participant” (as such term is defined in Instruction 3 to Item 4 of Schedule 14A promulgated under the Exchange Act) in any such solicitation of proxies or consents, other than soliciting proxies on behalf of the Company in accordance with the recommendation of the Board;

(b)    knowingly encourage, advise or influence any other Person or knowingly assist any Person in so encouraging, advising or influencing any Person with respect to the giving or withholding of any proxy, consent or other authority to vote or in conducting any type of referendum, binding or non-binding, (other than such encouragement, advice or influence that is consistent with the recommendation of the Board in connection with such matter);

(c)    form, join or act in concert with any partnership, limited partnership, syndicate or other group, including a “group” as defined pursuant to Section 13(d) of the Exchange Act with respect to any Voting Securities, other than solely with other Affiliates with respect to Voting Securities now or hereafter owned by them;

(d)    make or in any way participate, directly or indirectly, in, or make any public statement regarding, any tender offer, exchange offer, merger, consolidation, acquisition, business combination, sale of a division, sale of substantially all assets, recapitalization, restructuring, liquidation, dissolution or extraordinary transaction involving the Company or any of its subsidiaries or its or their securities or assets (it being understood that the foregoing shall not restrict the Investor from tendering shares, receiving payment for shares or otherwise participating in any such transaction on the same basis as other stockholders of the Company, or from participating in any such transaction that has been approved by the Board); or make, directly or indirectly, any proposal, either alone or in concert with others, to the Company or the Board that would reasonably be expected to require a public announcement regarding any of the types of matters set forth above in this Section 6;

(e)    acquire, offer or agree to acquire directly or indirectly, through any swap or hedging transaction or otherwise, any security of the Company or any right decoupled from such underlying security that would result in the Investors owning, controlling or otherwise having any beneficial or other ownership interest of the then-outstanding Voting Securities in excess of that percentage interest represented by their ownership of Voting Securities as of the date hereof;

 

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(f)    other than through open market broker sale transactions where the identity of the purchaser is unknown, sell, offer or agree to sell directly or indirectly, through any swap or hedging transaction or otherwise, any security of the Company or any right decoupled from such underlying security held by the Investor to any Person that would knowingly result in such Person, together with its Affiliates, owning, controlling or otherwise having any beneficial or other ownership interest in the aggregate of 10% or more of the then-outstanding Voting Securities or would increase the beneficial or other ownership interest of any Person who, together with its Affiliates, has a beneficial or other ownership interest in the aggregate of 10% or more of the then-outstanding Voting Securities, except in each case in a transaction approved by the Board;

(g)    enter into a voting trust, arrangement or agreement or subject any Voting Securities to any voting trust, arrangement or agreement, in each case other than solely with other Affiliates of the Investor, with respect to Voting Securities now or hereafter owned by them and other than granting proxies in solicitations approved by the Board;

(h)    (i) seek, alone or in concert with others, election or appointment to, or representation on, the Board or nominate or propose the nomination of, or recommend the nomination of, any candidate to the Board, except as set forth herein, (ii) seek, alone or in concert with others, the removal of any member of the Board; or (iii) conduct any referendum of stockholders;

(i)    make or be the proponent of any stockholder proposal (pursuant to Rule 14a-8 under the Exchange Act or otherwise);

(j)    seek to call, or to request the call of, or call a special meeting of the stockholders of the Company, or make any request for stock list materials or other books and records of the Company under Section 220 or the General Corporation Law of the State of Delaware or other provisions (whether statutory, regulatory or otherwise) providing for shareholder access to books and records;

(k)    except as set forth herein, make any public proposal with respect to (i) any change in the number or term of directors or the filling of any vacancies on the Board, (ii) any material change in the capitalization of the Company, (iii) any other material change in the Company’s management, business or corporate structure, (iv) any waiver, amendment or modification to the Company’s certificate of incorporation or bylaws, or other actions which may impede the acquisition of control of the Company by any person, (v) causing a class of securities of the Company to be delisted from, or to cease to be authorized to be quoted on, any securities exchange or (vi) causing a class of equity securities of the Company to become eligible for termination of registration pursuant to Section 12(g)(4) of the Exchange Act;

(l)    institute, solicit, assist or join any litigation, arbitration or other proceeding against or involving the Company or any of its current or former directors or officers (including derivative actions) in order to effect or take any of the actions expressly prohibited by this Section 6; provided, however, that for the avoidance of doubt the foregoing shall not prevent any Restricted Person from (i) bringing litigation to enforce the provisions of this Agreement, (ii) making counterclaims with respect to any proceeding initiated by, or on behalf of, the Company against a Restricted Person, (iii) bringing bona fide commercial disputes that do not relate to the subject matter of this Agreement, or (iv) exercising statutory appraisal rights;

 

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(m)    assist, encourage or solicit, or enter into any negotiations, agreements or understandings with any third party to take any action that the Investor is prohibited from taking pursuant to this Section 6;

(n)    make any request or submit any proposal, directly or indirectly, to amend or waive the terms of this Agreement, in each case which would reasonably be expected to result in a public announcement of such request or proposal; or

(o)    otherwise take, or solicit, cause or encourage others to take, any action inconsistent with any of the foregoing.

Notwithstanding anything to the contrary, nothing in this Agreement (x) shall prohibit or restrict any director of the Company, including the Designees, from exercising his or her rights and fiduciary duties as a director of the Company, or (y) prohibit the Investors from (i) voting their shares as they see fit in connection with any strategic transaction or business combination involving the Company and a third party unaffiliated with the Investors, (ii) making public statements in connection with any such transaction or combination unless it has been unanimously approved by the Board, or (iii) tendering their shares in the Company into any tender offer for shares of the Company made by a third party unaffiliated with the Investors.

7.     Non-Disparagement . Subject to applicable law, each of the Parties covenants and agrees that, during the Restricted Period, it and its respective Affiliates, Associates, officers and directors will not in any way publicly disparage, call into disrepute or otherwise defame or slander the other Party or such other Party’s Affiliates, Associates, officers (including any current or former officer of such other Party), directors (including any current or former director of such other Party), employees, stockholders, agents, attorneys or representatives, or any of their businesses, products or services, in any manner that would reasonably be expected to damage the business or reputation of such other Party. This Section 7 will not apply to any statement made in connection with any action to enforce this Agreement.

8.     Representations by the Investors and by the Company .

(a)    The Investors represent and warrant to the Company that, as of the date of this Agreement, they, together with Pierre-André Mestre, own (beneficially and of record) in the aggregate 1,923,820 shares of the Company’s common stock, of which 1,000 shares are owned (beneficially and of record) directly by Pierre-André Mestre.

(b)    The Company represents and warrants to the Investors that, as of the date of this Agreement, to the knowledge of the Company’s CEO, CFO and Board of Directors: (i) the Company’s current cash and working capital positions, expected operating cash flows and available borrowing capacity will be sufficient to fund the Company’s cash requirements for working capital and capital expenditures for the next six months; and (ii) the Company will not be in material breach of a material agreement within the next six months.

 

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9.     Public Disclosure . Without the prior written consent of the other Parties, a Party may not publicly disclose this Agreement or the existence of this Agreement unless such Party is advised by counsel that such disclosure is required under applicable law, rule, regulation or stock exchange requirement, in which case such Party shall do no more than describe this Agreement and, if required, disclose a copy of this Agreement.

10.     Definitions . As used in this Agreement, the term (a) “ Person ” will be interpreted broadly to include, among others, any individual, general or limited partnership, corporation, limited liability or unlimited liability company, joint venture, estate, trust, group, association or other entity of any kind or structure; (b) “ Affiliate ” has the meaning set forth in Rule 12b-2 promulgated under the Exchange Act, and will include Persons who become Affiliates of any Person after the date of this Agreement; (c) “ Associate ” has the meaning set forth in Rule 12b-2 promulgated under the Exchange Act and will include Persons who become Associates of any Person after the date of this Agreement, but will exclude any Person not controlled by or under common control with the related Person; (d) “ Voting Securities ” means the shares of the Company’s common stock and any other securities of the Company entitled to vote in the election of directors, or securities convertible into, or exercisable or exchangeable for, such shares or other securities, whether or not subject to the passage of time or other contingencies; (e) “ Restricted Period ” means the period commencing on the date of this Agreement and ending on the earlier of (i) 30 calendar days prior to the beginning of the advance-notice period for the submission by stockholders of director nominations for consideration at the Company’s 2019 Annual Meeting of Stockholders (as established by the Company’s bylaws), (ii) the Company’s breach of its performance obligations under this Agreement and (iii) the occurrence of a Resignation Event; and (f) “ Resignation Event ” means both Designees’ resignation from the Board and all applicable committees following any one or more of the following: (i) the Company’s representation in Section 8(b) proving to have been inaccurate as of the date of this Agreement, (ii) any filing of an involuntary bankruptcy petition or similar state law dissolution or liquidation proceeding against the Company within six months of the date of this Agreement that is not dismissed with prejudice within 30 days of filing, (iii) any filing of a voluntary bankruptcy petition or similar state law dissolution or liquidation proceeding by the Company that was not approved by the Designees as directors, (iv) any breach by the Company of a covenant in a material contract of the Company, the notice of which is duly delivered by the counterparty thereto to the Company within six months of the date of this Agreement, (v) the discovery by a Designee of criminal or materially detrimental civil malfeasance or misfeasance at the Company, or (vi) the material failure of the Company’s management, the Business Initiatives Committee or the Board to pursue the intended purposes of the Business Initiatives Committee or to adopt in meaningful part the recommendations thereof; provided, however, that solely for purposes of Section 6, during the period commencing on the date of this Agreement and ending on the earlier of the completion of the Annual Meeting and June 30, 2018, the occurrence of any of the events described in clauses (i), (iv) and (vi) shall not give rise to a Resignation Event.

11.     Specific Performance . Each Party acknowledges and agrees that money damages may not be a sufficient remedy for any breach (or threatened breach) of this Agreement by it and that, in the event of any breach or threatened breach of this Agreement, (a) the Party seeking specific performance will be entitled to injunctive and other equitable relief; and (b) the Party against whom specific performance is sought agrees to waive any applicable right or requirement that a bond be posted. Such remedies will not be the exclusive remedies for a breach of this Agreement, but will be in addition to all other remedies available at law or in equity.

 

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12.     Entire Agreement; Binding Nature; Assignment; Waiver . This Agreement constitutes the only agreement between the Parties with respect to the subject matter of this Agreement and it supersedes all prior agreements, understandings, negotiations and discussions, whether oral or written. This Agreement binds, and will inure to the benefit of, the Parties and their respective successors and permitted assigns. No Party may assign or otherwise transfer either this Agreement or any of its rights, interests, or obligations under this Agreement without the prior written approval of the other Party. No amendment, modification, supplement or waiver of any provision of this Agreement will be effective unless it is in writing and signed by the affected Party, and then only in the specific instance and for the specific purpose stated in such writing. Any waiver by any Party of a breach of any provision of this Agreement will not operate as or be construed to be a waiver of any other breach of such provision or of any breach of any other provision of this Agreement.

13.     Severability . If any provision of this Agreement is held invalid or unenforceable by any court of competent jurisdiction, then the other provisions of this Agreement will remain in full force and effect. Any provision of this Agreement that is held invalid or unenforceable only in part or degree will remain in full force and effect to the extent not held invalid or unenforceable, and this Agreement will otherwise be construed so as to effectuate the original intention of the Parties reflected in this Agreement. The Parties further agree to replace such invalid or unenforceable provision of this Agreement with a valid and enforceable provision that will achieve, to the extent possible, the purposes of such invalid or unenforceable provision.

14.     Governing Law; Venue. This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware. Each Party hereby irrevocably and unconditionally submits to the exclusive jurisdiction of any State or Federal court sitting in Delaware over any suit, action or proceeding arising out of or relating to this Agreement. Each Party hereby irrevocably and unconditionally waives any objection to the placing of venue of any such suit, action or proceeding brought in any such court and any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum.

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

16.     Headings . The headings set forth in this Agreement are for convenience of reference purposes only and will not affect or be deemed to affect in any way the meaning or interpretation of this Agreement or any term or provision of this Agreement.

[Signature page follows.]

 

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Very truly yours,

 

Destination Maternity Corporation

/s/ Ronald J. Masciantonio

Name: Ronald J. Masciantonio

Title: Executive Vice President & Chief

Administrative Officer

 

Accepted and agreed to as of the date

first set forth above:

Orchestra-Prémaman S.A.

/s/ Pierre Mestre

Name: Pierre Mestre

Title: Chairman

Yeled Invest S.A.
/s/ Pierre Mestre

Name: Pierre Mestre

Title: Administrateur

 

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EXHIBIT A

Form of Indemnification Agreement

Exhibit 10.2

INDEMNIFICATION AGREEMENT

This Indemnification Agreement (this “ Agreement ”), dated as of April 2, 2018, is made by and between Destination Maternity Corporation, a Delaware corporation (the “ Corporation ”), and Melissa Payner-Gregor (the “ Indemnitee ”).

RECITALS

A.    The Corporation recognizes that competent and experienced persons are increasingly reluctant to serve or to continue to serve as directors of corporations unless they are protected by comprehensive liability insurance or indemnification, or both, due to increased exposure to litigation costs and risks resulting from their service to such corporations, and due to the fact that the exposure frequently bears no reasonable relationship to the compensation of such directors;

B.    The statutes and judicial decisions regarding the duties of directors are often difficult to apply, ambiguous, or conflicting, and therefore fail to provide such directors with adequate, reliable knowledge of legal risks to which they are exposed or information regarding the proper course of action to take;

C.    The Corporation and the Indemnitee recognize that plaintiffs often seek damages in such large amounts and the costs of litigation may be so enormous (whether or not the case is meritorious), that the defense and/or settlement of such litigation is often beyond the personal resources of directors;

D.    The Corporation believes that it is unfair for its directors to assume the risk of huge judgments and other expenses which may occur in cases in which such director received no personal profit and in cases where such director was not culpable;

E.    The Corporation, after reasonable investigation, has determined that the liability insurance coverage presently available to the Corporation may be inadequate in certain circumstances to cover all possible exposure for which the Indemnitee should be protected. The Corporation believes that the interests of the Corporation and its stockholders would best be served by a combination of such insurance and the indemnification by the Corporation of the directors of the Corporation;

F.    Article Twelve of the Corporation’s Restated Certificate of Incorporation (the “ Certificate of Incorporation ”) requires the Corporation to indemnify its directors and officers to the fullest extent permitted by the General Corporation Law of the State of Delaware, as amended (the “ DGCL ”). Article V, Section 7 of the Corporation’s Bylaws, as amended (the “ Bylaws ”), expressly provides that the indemnification and advancement of expenses provided by or granted pursuant to the Bylaws are not exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled, and contemplates that agreements may be entered into between the Corporation and its directors with respect to indemnification;

G.    Section 145 of the DGCL (“ Section  145 ”), under which the Corporation is organized, empowers the Corporation to indemnify its officers, directors, employees and agents by agreement and to indemnify persons who serve, at the request of the Corporation, as the directors, officers, employees or agents of other corporations or enterprises, and expressly provides that the indemnification provided by Section 145 is not exclusive;


H.    The board of directors of the Corporation (the “ Board of Directors ”) has determined that contractual indemnification as set forth herein is not only reasonable and prudent but also promotes the best interests of the Corporation and its stockholders;

I.    The Corporation desires and has requested the Indemnitee serve or continue to serve as a director of the Corporation free from undue concern for unwarranted claims for damages arising out of or related to such services to the Corporation; and

J.    The Indemnitee is willing to serve, continue to serve or to provide additional service for or on behalf of the Corporation on the condition that he or she is furnished the indemnity provided for herein, in addition to the protections afforded by the Certificate of Incorporation and the Bylaws, and the Corporation’s director and officer insurance program.

AGREEMENT

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth below, and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:

Section 1.     Generally .

To the fullest extent permitted by the laws of the State of Delaware:

(a)    The Corporation shall indemnify the Indemnitee if the Indemnitee was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, or investigation, whether civil, criminal, or administrative, commenced after the date hereof by a third party, a government agency, the Corporation, the Board of Directors, or a committee thereof, by reason of the fact that the Indemnitee is or was (after the date hereof) serving as a director of the Corporation, or while serving as a director of the Corporation, is or was (after the date hereof) serving or has agreed to serve at the request of the Corporation as a director, officer, employee or agent (which, for purposes hereof, shall include a trustee, partner or manager or similar capacity) of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, or by reason of any action alleged to have been taken or omitted in such capacity.

(b)    The indemnification provided by this Section 1 shall be from and against expenses (including reasonable attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by the Indemnitee or on the Indemnitee’s behalf in connection with such action, suit or proceeding and any appeal therefrom, but shall only be provided if the Indemnitee acted in good faith and in a manner the Indemnitee reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action, suit or proceeding, had no reasonable cause to believe the Indemnitee’s conduct was unlawful.

(c)    Notwithstanding the foregoing provisions of this Section 1, in the case of any threatened, pending or completed action or suit by or in the right of the Corporation to

 

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procure a judgment in its favor by reason of the fact that the Indemnitee is or was a director of the Corporation, or while serving as a director of the Corporation, is or was serving or has agreed to serve at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, no indemnification shall be made in respect of any claim, issue or matter as to which the Indemnitee shall have been adjudged to be liable to the Corporation unless, and only to the extent that, the Delaware Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, the Indemnitee is fairly and reasonably entitled to indemnity for such expenses which the Delaware Court of Chancery or such other court shall deem proper.

(d)    The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the Indemnitee did not act in good faith and in a manner that the Indemnitee reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that the Indemnitee’s conduct was unlawful.

Section 2.     Successful Defense; Partial Indemnification . To the extent that the Indemnitee has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in Section 1 hereof or in defense of any claim, issue or matter therein, the Indemnitee shall be indemnified against expenses (including reasonable attorneys’ fees) actually and reasonably incurred in connection therewith. For purposes of this Agreement and without limiting the foregoing, if any action, suit or proceeding is disposed of, on the merits or otherwise (including a disposition without prejudice), without (i) the disposition being adverse to the Indemnitee, (ii) an adjudication that the Indemnitee was liable to the Corporation, (iii) a plea of guilty or nolo contendere by the Indemnitee, (iv) an adjudication that the Indemnitee did not act in good faith and in a manner the Indemnitee reasonably believed to be in or not opposed to the best interests of the Corporation, and (v) with respect to any criminal proceeding, an adjudication that the Indemnitee had reasonable cause to believe the Indemnitee’s conduct was unlawful, the Indemnitee shall be considered for the purposes hereof to have been wholly successful with respect thereto, and as provided herein indemnification is mandatory.

If the Indemnitee is entitled under any provision of this Agreement to indemnification by the Corporation for some or a portion of the expenses (including reasonable attorneys’ fees), judgments, fines or amounts paid in settlement actually and reasonably incurred by the Indemnitee or on the Indemnitee’s behalf in connection with any action, suit, proceeding or investigation, or in defense of any claim, issue or matter therein, and any appeal therefrom but not, however, for the total amount thereof, the Corporation shall nevertheless indemnify the Indemnitee for the portion of such expenses (including reasonable attorneys’ fees), judgments, fines or amounts paid in settlement to which the Indemnitee is entitled.

Section 3.     Determination That Indemnification Is Proper . Any indemnification hereunder shall (unless otherwise ordered by a court) be made by the Corporation unless a determination is made that indemnification of such person is not proper in the circumstances because he or she has not met the applicable standard of conduct set forth in Section 1(b) hereof. Any such determination shall be made (i) by a majority vote of the directors who are not and

 

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were not parties to, or threatened to be made a party to, the action, suit or proceeding in question (“ disinterested directors ”), even if less than a quorum, (ii) by a majority vote of a committee of disinterested directors designated by majority vote of disinterested directors, even if less than a quorum, (iii) by a majority vote of a quorum of the outstanding shares of stock of all classes entitled to vote on the matter, voting as a single class, which quorum shall consist of stockholders who are not at that time parties to the action, suit or proceeding in question, (iv) by independent legal counsel, or (v) by a court of competent jurisdiction; provided, however, that if (A) a Change in Control shall have occurred, (B) indemnification is sought in connection with a Corporation Authorized Proceeding or (C) the Indemnitee provides prompt written notice to the Corporation of his or her request that independent legal counsel should be engaged by the Corporation to make such determination, then in each case an indemnification determination hereunder shall be made by independent legal counsel in a written opinion to the Board of Directors, a copy of which shall be delivered to the Indemnitee.

Section 4.     Advance Payment of Expenses; Notification and Defense of Claim .

(a)    Expenses (including reasonable attorneys’ fees) incurred or reasonably anticipated to be incurred by the Indemnitee in defending a threatened or pending civil, criminal, administrative or investigative action, suit or proceeding, or in connection with an enforcement action pursuant to Section 5(b), shall be paid by the Corporation in advance of the final disposition of such action, suit or proceeding within 15 days after receipt by the Corporation of (i) a statement or statements from the Indemnitee requesting such advance or advances from time to time, and (ii) an undertaking, in substantially the form attached hereto as Exhibit A , by or on behalf of the Indemnitee to repay such amount or amounts if, and to the extent that, it shall ultimately be determined that the Indemnitee is not entitled to be indemnified by the Corporation for such Expenses. Such undertaking shall be accepted without reference to the financial ability of the Indemnitee to make such repayment. Advances shall be unsecured and interest-free.

(b)    Promptly after receipt by the Indemnitee of notice of the commencement of any action, suit or proceeding, the Indemnitee shall, if a claim thereof is to be made against the Corporation hereunder, notify the Corporation of the commencement thereof. The failure to promptly notify the Corporation of the commencement of the action, suit or proceeding, or the Indemnitee’s request for indemnification, will not relieve the Corporation from any liability that it may have to the Indemnitee hereunder, except to the extent the Corporation is prejudiced in its defense of such action, suit or proceeding as a result of such failure.

(c)    In the event the Corporation shall be obligated to pay the expenses of the Indemnitee with respect to an action, suit or proceeding, as provided in this Agreement, the Corporation, if appropriate, shall be entitled (subject to the other provisions of this paragraph) to assume the defense of such action, suit or proceeding, with counsel reasonably acceptable to the Indemnitee, upon the delivery to the Indemnitee of written notice of its election to do so. After delivery of such notice, approval of such counsel by the Indemnitee and the retention of such counsel by the Corporation, the Corporation will not be liable to the Indemnitee under this Agreement for any fees of counsel subsequently incurred by the Indemnitee with respect to the same action, suit or proceeding, provided that (regardless of the first sentence of this paragraph) (1) the Indemnitee shall have the right to employ the Indemnitee’s own counsel in such action, suit or proceeding at the Indemnitee’s expense and (2) if (i) the employment of counsel by the

 

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Indemnitee has been previously authorized in writing by the Corporation, (ii) counsel to the Corporation or counsel to the Indemnitee shall have reasonably concluded that there may be a conflict of interest or position, or reasonably believes that a conflict is likely to arise, on any significant issue between the Corporation and the Indemnitee in the conduct of any such defense or (iii) the Corporation shall not, in fact, have promptly employed counsel to assume and vigorously pursue the defense of such action, suit or proceeding, then the fees and expenses of the Indemnitee’s counsel shall be at the expense of the Corporation, except in the limited circumstances in which indemnity is prohibited by this Agreement. The Corporation shall not be entitled, without the consent of the Indemnitee, to assume the defense of any claim brought by or in the right of the Corporation or as to which counsel for the Corporation or the Indemnitee shall have reasonably made the conclusion provided for in clause (ii) above.

(d)    Notwithstanding any other provision of this Agreement to the contrary, to the extent that the Indemnitee is, by reason of the Indemnitee’s status with respect to the Corporation or any corporation, partnership, joint venture, trust, employee benefit plan or other enterprise which the Indemnitee is or was serving or has agreed to serve at the request of the Corporation, a witness or otherwise participates in any action, suit, investigation or proceeding at a time when the Indemnitee is not a party in the action, suit investigation or proceeding, the Corporation shall indemnify the Indemnitee against all expenses (including reasonable attorneys’ fees) actually and reasonably incurred by the Indemnitee or on the Indemnitee’s behalf in connection therewith, including in preparation.

Section 5.     Procedure for Indemnification .

(a)    To obtain indemnification, the Indemnitee shall promptly submit to the Corporation a written request, including therein or therewith such documentation and information as is reasonably available to the Indemnitee and is reasonably necessary to determine whether and to what extent the Indemnitee is entitled to indemnification. The Corporation shall, promptly upon receipt of such a request for indemnification, advise the Board of Directors in writing that the Indemnitee has requested indemnification. The Indemnitee shall reasonably cooperate with the person, persons or entity making such determination with respect to the Indemnitee’s entitlement to indemnification. Any expenses incurred by the Indemnitee in so cooperating shall be borne by the Corporation (irrespective of the determination as to the Indemnitee’s entitlement to indemnification) and the Corporation shall indemnify and hold the Indemnitee harmless therefrom.

(b)    The Corporation’s determination whether to grant the Indemnitee’s indemnification request shall be made promptly, and in any event within 15 days following receipt of a request for indemnification pursuant to Section 5(a). The right to indemnification as granted by Section 1 of this Agreement shall be enforceable by the Indemnitee in any court of competent jurisdiction if the Corporation denies such request, in whole or in part, or fails to respond within such 15-day period. It shall be a defense to any such action (other than an action brought to enforce a claim for the advance of costs, charges and expenses under Section 4 hereof where the required undertaking, if any, has been received by the Corporation) that the Indemnitee has not met the standard of conduct set forth in Section 1 hereof, but the burden of proving such defense by clear and convincing evidence shall be on the Corporation and all payments contemplated by this Agreement will be made without delay absent the satisfaction of

 

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that burden of proof by the Corporation. Neither the failure of the Corporation (including the Board of Directors or a committee thereof, its independent legal counsel, and its stockholders) to have made a determination prior to the commencement of such action that indemnification of the Indemnitee is proper in the circumstances because the Indemnitee has met the applicable standard of conduct set forth in Section 1 hereof, nor the fact that there has been an actual determination by the Corporation (including the Board of Directors or a committee thereof, its independent legal counsel, and its stockholders) that the Indemnitee has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that the Indemnitee has or has not met the applicable standard of conduct. The Indemnitee’s expenses (including reasonable attorneys’ fees) incurred in connection with successfully establishing the Indemnitee’s right to indemnification, in whole or in part, in any such proceeding or otherwise shall also be indemnified by the Corporation.

(c)    The Indemnitee shall be presumed to be entitled to indemnification under this Agreement upon submission of a request for indemnification pursuant to this Section 5, and the Corporation shall have the burden of proof by clear and convincing evidence in overcoming that presumption in reaching a determination contrary to that presumption. Such presumption shall be used as a basis for a determination of entitlement to indemnification unless the Corporation overcomes such presumption by clear and convincing evidence.

(d)    If it is determined that the Indemnitee is entitled to indemnification, payment shall be timely made after that determination.

Section 6.     Insurance and Subrogation .

(a)    The Corporation hereby covenants and agrees to use all reasonable efforts to purchase and maintain directors’ and officers’ liability insurance from one or more established and reputable carriers in reasonable amounts on behalf of the Indemnitee who is or was serving or has agreed to serve at the request of the Corporation as a director of the Corporation, and the Corporation may purchase and maintain insurance on behalf of the Indemnitee who is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise against any liability asserted against, and incurred by, the Indemnitee or on the Indemnitee’s behalf in any such capacity, or arising out of the Indemnitee’s status as such, whether or not the Corporation would have the power to indemnify the Indemnitee against such liability under the provisions of this Agreement. If the Corporation has such insurance in effect at the time the Corporation receives from the Indemnitee any notice of the commencement of a proceeding, the Corporation shall give prompt notice of the commencement of such proceeding to the insurers of such insurance in accordance with the procedures set forth in the insurance policy. The Corporation shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of the Indemnitee, all amounts payable as a result of such proceeding in accordance with the terms of such policy.

(b)    In the event of any payment by the Corporation under this Agreement, the Corporation shall be subrogated to the extent of such payment to all of the rights of recovery of the Indemnitee with respect to any insurance policy, who shall execute all papers required and take all action necessary to secure such rights, including execution of such documents as are

 

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necessary to enable the Corporation to bring suit to enforce such rights in accordance with the terms of such insurance policy. The Corporation shall pay or reimburse all expenses actually and reasonably incurred by the Indemnitee in connection with such subrogation.

(c)    The Corporation shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable hereunder (including, but not limited to, judgments, fines, ERISA excise taxes or penalties, and amounts paid in settlement) if and to the extent that the Indemnitee has otherwise actually received such payment under this Agreement or any insurance policy, contract, agreement or otherwise.

Section 7.     Certain Definitions . For purposes of this Agreement, the following definitions shall apply:

(a)    The term “ action, suit or proceeding ” shall be broadly construed and shall include, without limitation, the investigation, preparation, prosecution, defense, settlement, arbitration and appeal of, and the giving of testimony in, any threatened, pending or completed claim, action, suit or proceeding, whether civil, criminal, administrative or investigative, including investigations commenced by the Corporation, the Board of Directors, or a committee thereof.

(b)    The term “ by reason of the fact that the Indemnitee is or was (after the date hereof) serving as a director of the Corporation, or while serving as a director of the Corporation, is or was (after the date hereof) serving or has agreed to serve at the request of the Corporation as a director, officer, employee or agent (which, for purposes hereof, shall include a trustee, partner or manager or similar capacity) of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise ” shall be broadly construed and shall include, without limitation, any actual or alleged act or omission to act.

(c)    The term “ expenses ” shall be broadly and reasonably construed and shall include, without limitation, all direct and indirect costs of any type or nature whatsoever (including, without limitation, all reasonable attorneys’ fees and related disbursements, appeal bonds, other out-of-pocket costs and reasonable compensation for time spent by the Indemnitee for which the Indemnitee is not otherwise compensated by the Corporation or any third party, provided that the rate of compensation and estimated time involved is approved by the Board of Directors, which approval shall not be unreasonably withheld), actually and reasonably incurred by the Indemnitee in connection with either the investigation, defense or appeal of a proceeding or establishing or enforcing a right to indemnification under this Agreement, Section 145 or otherwise.

(d)    The term “ judgments, fines and amounts paid in settlement ” shall be broadly construed and shall include, without limitation, all direct and indirect payments of any type or nature whatsoever (including, without limitation, payments of reasonable attorneys’ fees, all penalties and amounts required to be forfeited or reimbursed to the Corporation, as well as any penalties or excise taxes assessed on a person with respect to an employee benefit plan).

(e)    The term “ Corporation ” shall include, without limitation and in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent)

 

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absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, and employees or agents, so that any person who is or was a director, officer, employee or agent of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, shall stand in the same position under the provisions of this Agreement with respect to the resulting or surviving corporation as he or she would have with respect to such constituent corporation if its separate existence had continued.

(f)    The term “ other enterprises ” shall include, without limitation, employee benefit plans.

(g)    The term “ serving at the request of the Corporation ” shall include, without limitation, any service as a director of the Corporation which imposes duties on, or involves services by, such director with respect to an employee benefit plan, its participants or beneficiaries.

(h)    A person who acted in good faith and in a manner such person reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner “ not opposed to the best interests of the Corporation ” as referred to in this Agreement.

(i)    “ Change in Control ” means a change in control of the Corporation occurring after the Effective Date of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A (or in response to any similar item on any similar schedule or form) promulgated under the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”), whether or not the Corporation is then subject to such reporting requirement; provided, however, that, without limitation, such a Change in Control shall be deemed to have occurred if after the Effective Date:

(i)    any “ person ” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “ beneficial owner ” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Corporation representing 15% or more of the outstanding shares entitled to vote generally in the election of directors without the prior approval of at least two-thirds of the members of the Board of Directors in office immediately prior to the time such person becomes such a beneficial owner; or

(ii)    there occurs a proxy contest, or the Corporation is a party to a merger, consolidation, sale of assets, plan of liquidation or other reorganization not approved by at least two-thirds of the members of the Board of Directors then in office, as a consequence of which members of the Board of Directors in office immediately prior to such transaction or event constitute less than a majority of the Board of Directors thereafter; or

(iii)    during any period of two consecutive years, individuals who at the beginning of such period constituted the Board of Directors (together with any new directors whose election or nomination for election by the Corporation’s stockholders was approved by a vote of at least two-thirds of the directors then still in office who either were directors at the beginning of such period or whose election or nomination for election was previously so approved) shall cease for any reason other than death or disability to constitute a majority of the Board of Directors then in office.

 

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(j)    “ Effective Date ” means the date on which the Indemnitee became a director of the Corporation.

(k)    “ Independent legal counsel ” means a law firm, or a member of a law firm, that is experienced in matters of corporation law and neither is, nor in the past five years has been, retained to represent: (i) the Corporation, the Indemnitee or one of the other directors of the Corporation in any matter material to any such party, or (ii) any other party to the action, suit or proceeding giving rise to a claim for indemnification hereunder. Independent legal counsel shall be selected by the Corporation, with the approval of the Indemnitee, which approval will not be unreasonably withheld; provided, however, that independent legal counsel shall be selected by the Indemnitee, with the approval of the Board of Directors, which approval will not be unreasonably withheld, (i) from and after the occurrence of a Change in Control, and (ii) in connection with an action, suit or proceeding by or in the right of the Corporation authorized or not disapproved by the Board of Directors alleging claims against the Indemnitee that, if sustained, reasonably might give rise to a judgment for money damages of more than $1,000,000 and/or injunctive relief (“ Corporation Authorized Proceeding ”). The fees and costs of independent legal counsel shall be paid by the Corporation.

Section 8.     Limitation on Indemnification . Notwithstanding any other provision herein to the contrary, the Corporation shall not be obligated pursuant to this Agreement:

(a)     Claims Initiated by The Indemnitee . To indemnify or advance expenses to the Indemnitee with respect to an action, suit or proceeding (or part thereof) initiated by the Indemnitee, except with respect to an action, suit or proceeding brought to establish or enforce a right to indemnification (which shall be governed by the provisions of Section 8(b) of this Agreement), unless such action, suit or proceeding (or part thereof) was authorized or consented to by the Board of Directors.

(b)     Action for Indemnification . To indemnify the Indemnitee for any expenses incurred by the Indemnitee with respect to any action, suit or proceeding instituted by the Indemnitee to enforce or interpret this Agreement, unless the Indemnitee is successful in establishing the Indemnitee’s right to indemnification in such action, suit or proceeding, in whole or in part, or unless and to the extent that the court in such action, suit or proceeding shall determine that, despite the Indemnitee’s failure to establish their right to indemnification, the Indemnitee is entitled to indemnity for such expenses; provided, however, that nothing in this Section 8(b) is intended to limit the Corporation’s obligation with respect to the advancement of expenses to the Indemnitee in connection with any such action, suit or proceeding instituted by the Indemnitee to enforce or interpret this Agreement, as provided in Section 4 hereof.

(c)     Section 16 Violations . To indemnify the Indemnitee on account of any proceeding with respect to which final judgment is rendered against the Indemnitee for payment or an accounting of profits arising from the purchase or sale by the Indemnitee of securities in violation of Section 16(b) of the Exchange Act or any similar successor statute.

 

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(d)     Non-compete and Non-disclosure . To indemnify the Indemnitee in connection with proceedings or claims involving the enforcement of non-compete and/or non-disclosure agreements or the non-compete and/or non-disclosure provisions of employment, consulting or similar agreements the Indemnitee may be a party to with the Corporation, or any subsidiary of the Corporation or any other applicable foreign or domestic corporation, partnership, joint venture, trust or other enterprise, if any.

Section 9.     Certain Settlement Provisions . The Corporation shall have no obligation to indemnify the Indemnitee under this Agreement for amounts paid in settlement of any action, suit or proceeding without the Corporation’s prior written consent, which shall not be unreasonably withheld. The Corporation shall not settle any action, suit or proceeding in any manner that would (i) impose any fine or other obligation on the Indemnitee, (ii) impose a duty or restriction on the Indemnitee or (iii) force a personal admission on behalf of the Indemnitee, in each case, without the Indemnitee’s prior written consent.

Section 10.     Savings Clause . If any provision or provisions of this Agreement shall be invalidated on any ground by any court of competent jurisdiction, then the Corporation shall nevertheless indemnify the Indemnitee as to costs, charges and expenses (including reasonable attorneys’ fees), judgments, fines and amounts paid in settlement with respect to any action, suit or proceeding, whether civil, criminal, administrative or investigative, including an action by or in the right of the Corporation, to the full extent permitted by any applicable portion of this Agreement that shall not have been invalidated and to the full extent permitted by applicable law.

Section 11.     Contribution . In order to provide for just and equitable contribution in circumstances in which the indemnification provided for herein is held by a court of competent jurisdiction to be unavailable to the Indemnitee in whole or in part, it is agreed that, in such event, the Corporation shall, to the fullest extent permitted by law, contribute to the payment of the Indemnitee’s costs, charges and expenses (including reasonable attorneys’ fees), judgments, fines and amounts paid in settlement with respect to any action, suit or proceeding, whether civil, criminal, administrative or investigative, in an amount that is just and equitable in the circumstances, taking into account, among other things, contributions by other directors and officers of the Corporation or others pursuant to indemnification agreements or otherwise; provided, that, without limiting the generality of the foregoing, such contribution shall not be required where such holding by the court is due to (i) the failure of the Indemnitee to meet the standard of conduct set forth in Section 1 hereof, or (ii) any limitation on indemnification set forth in Section 6(c), 8 or 9 hereof.

Section 12.     Form and Delivery of Communications . Any notice, request or other communication required or permitted to be given to the parties under this Agreement shall be in writing and either delivered in person or sent by telecopy, telex, telegram, overnight mail or courier service, or certified or registered mail, return receipt requested, postage prepaid, to the parties at the following addresses (or at such other addresses for a party as shall be specified by like notice):

 

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If to the Corporation:

Destination Maternity Corporation

232 Strawbridge Drive

Moorestown, NJ 08057

Attn: General Counsel

Facsimile: 856-291-9905

If to the Indemnitee:

[address]

Section 13.     Subsequent Legislation . If the DGCL is amended after adoption of this Agreement to expand further the indemnification permitted to directors, then the Corporation shall indemnify the Indemnitee to the fullest extent permitted by the DGCL, as so amended.

Section 14.     Nonexclusivity . The provisions for indemnification and advancement of expenses set forth in this Agreement shall not be deemed exclusive of any other rights which the Indemnitee may have under any provision of law, the Certificate of Incorporation or the Bylaws, in any court in which a proceeding is brought, the vote of the Corporation’s stockholders or disinterested directors, other agreements or otherwise, and the Indemnitee’s rights hereunder shall continue after the Indemnitee has ceased acting as an agent of the Corporation and shall inure to the benefit of the heirs, executors and administrators of the Indemnitee. However, no amendment or alteration of the Certificate of Incorporation or the Bylaws or any other agreement shall adversely affect the rights provided to the Indemnitee under this Agreement.

Section 15.     Enforcement . The Corporation shall be precluded from asserting in any judicial proceeding that the procedures and presumptions of this Agreement are not valid, binding and enforceable. The Corporation agrees that its execution of this Agreement shall constitute a stipulation by which it shall be irrevocably bound in any court of competent jurisdiction in which a proceeding by the Indemnitee for enforcement of his rights hereunder shall have been commenced, continued or appealed, that its obligations set forth in this Agreement are unique and special, and that failure of the Corporation to comply with the provisions of this Agreement will cause irreparable and irremediable injury to the Indemnitee, for which a remedy at law will be inadequate. As a result, in addition to any other right or remedy the Indemnitee may have at law or in equity with respect to a breach of this Agreement, the Indemnitee shall be entitled to injunctive or mandatory relief directing specific performance by the Corporation of its obligations under this Agreement.

Section 16.     Interpretation of Agreement . It is understood that the parties hereto intend this Agreement to be interpreted in the manner most favorable to the Indemnitee, and enforced so as to provide indemnification to the Indemnitee to the fullest extent now or hereafter permitted by law.

Section 17.     Entire Agreement . This Agreement and the documents expressly referred to herein constitute the entire agreement between the parties hereto with respect to the matters covered hereby, and any other prior or contemporaneous oral or written understandings or agreements with respect to the matters covered hereby are expressly superseded by this Agreement.

 

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Section 18.     Modification and Waiver . No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by both of the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provision hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.

Section 19.     Successor and Assigns . All of the terms and provisions of this Agreement shall be binding upon, shall inure to the benefit of and shall be enforceable by the parties hereto and their respective successors, assigns, heirs, executors, administrators and legal representatives. The Corporation shall require and cause any direct or indirect successor (whether by purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets of the Corporation, by written agreement in form and substance reasonably satisfactory to the Indemnitee, to expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Corporation would be required to perform if no such succession had taken place.

Section 20.     Service of Process and Venue . For purposes of any claims or proceedings to enforce this agreement, the Corporation consents to the jurisdiction and venue of any federal or state court of competent jurisdiction in the state of Delaware, and waives and agrees not to raise any defense that any such court is an inconvenient forum or any similar claim.

Section 21.     Governing Law . This Agreement shall be governed exclusively by and construed according to the laws of the State of Delaware, as applied to contracts between Delaware residents entered into and to be performed entirely within Delaware. If a court of competent jurisdiction shall make a final determination that the provisions of the law of any state other than Delaware govern indemnification by the Corporation of its directors, then the indemnification provided under this Agreement shall in all instances be enforceable to the fullest extent permitted under such law, notwithstanding any provision of this Agreement to the contrary.

Section 22.     Employment Rights . Nothing in this Agreement is intended to create in the Indemnitee any right to employment or continued employment.

Section 23.     Counterparts . This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original and all of which together shall be deemed to be one and the same instrument, notwithstanding that both parties are not signatories to the original or same counterpart.

Section 24.     Headings . The section and subsection headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.

 

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IN WITNESS WHEREOF, this Agreement has been duly executed and delivered to be effective as of the date first above written.

[Signature page follows.]

 

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  DESTINATION MATERNITY CORPORATION
By   /s/ Ronald J. Masciantonio
Name:   Ronald J. Masciantonio
Title:   Executive Vice President & Chief Administrative Officer
  INDEMNITEE
By   /s/ Melissa Payner-Gregor
Name:   Melissa Payner-Gregor

[Signature page to Indemnification Agreement]


EXHIBIT A

UNDERTAKING TO REPAY INDEMNIFICATION EXPENSES

Pursuant to the Indemnification Agreement, by and between Destination Maternity Corporation (the “ Corporation ”) and the undersigned (the “ Indemnitee ”), the Indemnitee agrees to reimburse the Corporation for all expenses paid to the Indemnitee by the Corporation for the Indemnitee’s defense in any civil or criminal action, suit, or proceeding, or in connection with any covered investigation, in the event, and to the extent that it shall ultimately be determined that the Indemnitee is not entitled to be indemnified by the Corporation for such expenses.

 

INDEMNITEE  
Signature    
Print Name    
Office:    

 

Exhibit A-1

Exhibit 99.1

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232 Strawbridge Drive, Moorestown, NJ 08057  ●  856.291.9700  ●  destinationmaternitycorp.com

Destination Maternity Appoints Two New Directors

MOORESTOWN, N.J., April 3, 2018 — Destination Maternity Corporation (NASDAQ: DEST), the world’s leading maternity apparel retailer, today announced that Pierre-André Mestre, Chairman of the Board of Directors of French children’s clothing retailer Orchestra-Prémaman, and Jean-Claude Jacomin, an accomplished international C-Suite executive, have been elected to and seated on the Company’s Board of Directors. With these additions, Destination’s Board will expand to six members. Messrs. Mestre and Jacomin will be included in the Company’s slate of six nominees for election to the Board at the 2018 Annual Meeting of Stockholders.

Destination Maternity also announced the Board’s creation of a new Business Initiatives Committee consisting of Messrs. Mestre and Jacomin, Barry Erdos, Chairman of Destination’s Board, and Melissa Payner-Gregor, a director and interim chief executive officer. The Business Initiatives Committee, which will be chaired by Mr. Erdos, will work with Destination’s senior management to identify and recommend to the full Board innovative ideas to improve operational performance and sales for the benefit of all stockholders.

“The Board has been actively pursuing the addition of new members to expand the skills and experience on the Board to accelerate Destination Maternity’s turnaround and path to profitable growth. In keeping with this objective, I am pleased to announce the addition of Pierre and Jean-Claude to the Destination Maternity Board,” said Barry Erdos, Chairman of Destination Maternity. “Pierre is a natural choice for the Board. He represents our largest stockholder group, and as Chairman and founder of Orchestra-Prémaman, he understands the opportunities and challenges of operating a childrenswear and maternity business. Jean-Claude is equally suited given his track record of success, including as Group President of Juvenile products at Dorel, where he guided the turnaround of the business in North America and successfully implemented new product, marketing, and supply chain strategies. We look forward to Pierre’s and Jean-Claude’s contributions as well as the continued value enhancing efforts of our other members. The Company has already seen its strategies gain traction with notable strength in its ecommerce channel following the upgrade of its web platform.”

“I am extremely excited to join Destination’s Board of Directors and assist the Company in capitalizing on its leadership position in maternity apparel in the United States,” said Mr. Mestre. “I believe there are many opportunities that are available to Destination Maternity to drive new sales and expand operating margin and look forward to assisting the Company and my fellow Board members in achieving this goal.”

Mr. Jacomin added, “I am delighted to join the Destination Maternity Board and believe my experience as a senior leader in the areas of product, marketing and supply chain will benefit the Company and its stockholders. I look forward to working with the full Board to help the Company achieve its potential in a rapidly evolving retail environment.”

 

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Destination Maternity also announced that it has entered into a support agreement with Orchestra-Prémaman and affiliates which will be filed with the Securities and Exchange Commission.

About Pierre-André Mestre

Pierre-André Mestre currently serves as the Chairman of the Board of Directors of Orchestra-Prémaman S.A., a French-based clothing retailer specializing in maternity, children’s fashions and childcare products. Mr. Mestre has over 25 years of experience in the children’s clothing industry. Prior to founding Orchestra-Prémaman S.A., he set up and served as a Marketing and Development Manager of a German subsidiary of Kidiliz Group (f/k/a Zannier Group), a French-based children’s clothing retailer. Orchestra-Prémaman S.A. has become a major player in the European childcare products market, in particular due to external growth operations, such as the acquisition of Baby 2000 and the Prémaman Group, which is Europe’s oldest maternity wear brand, dating back to 1947. Having increased its presence internationally, the Group now operates 565 shops in more than 40 countries, selling more than 80 million pieces per year.

About Jean-Claude Jacomin

Jean-Claude Jacomin currently serves as President of Glocal Performance Consulting SAS, a French-based consulting firm he founded, providing its corporate clients with strategic counsel related to domestic and international expansion. Prior to creating Glocal Performance, he spent 13 years at Dorel Industries Inc., a Canadian-based worldwide juvenile product and bicycle manufacturer. At Dorel, he enjoyed increasing levels of responsibility, ascending to the Group President & CEO of the Juvenile Segment, where he oversaw over $1.2 billion in sales and 7500 people across 25 countries. Mr. Jacomin earned his MBA, from the Essec Business School in Paris and his license in law from Nanterre University.

About Destination Maternity

Destination Maternity Corporation is the world’s largest designer and retailer of maternity apparel. As of October 28, 2017, Destination Maternity operates 1,147 retail locations in the United States, Canada and Puerto Rico, including 501 stores, predominantly under the trade names Motherhood Maternity ® , A Pea in the Pod ® and Destination Maternity ® , and 646 leased department locations. The Company also sells merchandise on the web primarily through its brand-specific websites, motherhood.com and apeainthepod.com, as well as through its destinationmaternity.com website. Destination Maternity has international store franchise and product supply relationships in the Middle East, South Korea, Mexico and Israel. As of October 28, 2017, Destination Maternity has 208 international franchised locations, including 16 standalone stores operated under one of the Company’s nameplates and 192 shop-in-shop locations.

Forward-Looking Statements

The Company cautions that any forward-looking statements (as such term is defined in the Private Securities Litigation Reform Act of 1995) contained in this press release or made from time to time by management of the Company, including those regarding our various business initiatives, involve risks and uncertainties, and are subject to change based on various important factors. The following factors, among others, in some cases have affected and in the future could affect the Company’s financial performance and actual results and could cause actual results to differ materially from those expressed or implied in any such forward-looking statements: the strength or weakness of the retail industry in general and of apparel purchases in particular, our ability to successfully manage our various business initiatives, the success of our international business and its expansion, our ability to successfully manage and retain our leased department and international franchise relationships and marketing partnerships,

 

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future sales trends in our various sales channels, unusual weather patterns, changes in consumer spending patterns, raw material price increases, overall economic conditions and other factors affecting consumer confidence, demographics and other macroeconomic factors that may impact the level of spending for apparel (such as fluctuations in pregnancy rates and birth rates), expense savings initiatives, our ability to anticipate and respond to fashion trends and consumer preferences, unanticipated fluctuations in our operating results, the impact of competition and fluctuations in the price, availability and quality of raw materials and contracted products, availability of suitable store locations, continued availability of capital and financing, our ability to hire, develop and retain senior management and sales associates, our ability to develop and source merchandise, our ability to receive production from foreign sources on a timely basis, our compliance with applicable financial and other covenants under our financing arrangements, potential debt prepayments, the trading liquidity of our common stock, changes in market interest rates, our compliance with certain tax incentive and abatement programs, war or acts of terrorism and other factors set forth in the Company’s periodic filings with the U.S. Securities and Exchange Commission (the “SEC”), or in materials incorporated therein by reference. Although it is believed that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct and persons reading this announcement are therefore cautioned not to place undue reliance on these forward-looking statements which speak only as at the date of this announcement. The Company assumes no obligation to update or revise the information contained in this announcement (whether as a result of new information, future events or otherwise), except as required by applicable law.

 

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