Exhibit 10.2
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (the "Agreement"), dated as of March 28, 2003,
between ANNTAYLOR STORES CORPORATION, a Delaware corporation (the "Company"),
and Jerome Jessup (the "Executive").
WHEREAS, the Company desires to provide for the employment of the
Executive with the Company and the Executive wishes to become so employed,
all in accordance with the terms and conditions provided herein;
NOW, THEREFORE, in consideration of the premises and the respective
covenants and agreements of the parties herein contained, and intending to be
legally bound hereby, the parties hereto agree as follows:
1. Employment. The Company hereby agrees to employ the Executive, and
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the Executive hereby agrees to be employed by and to serve the Company,
effective as of May 1, 2003 (the "Effective Date"), on the terms and conditions
set forth herein.
2. Term. The term of this Agreement shall commence as of the Effective Date
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and will end on the third anniversary of the Effective Date; provided, however,
that commencing on the third anniversary of the Effective Date, and each such
anniversary thereafter, the term of the Executive's employment shall
automatically be extended for one additional year, unless, no later than 90 days
prior to such anniversary, either party shall have given notice (a "Non-Renewal
Notice")to the other that it does not wish to extend this Agreement. References
hereinafter to the "Term" of this Agreement shall refer to both the initial term
and any extended term of the Agreement hereunder. Notwithstanding expiration of
the Term or other provisions that survive by their intent, the provisions of
Sections 4, 7 and 8 hereof shall continue in effect.
3. Position and Duties. The Executive shall serve as Senior Executive Vice
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President, Merchandising and Design - AnnTaylor Stores, and shall have such
responsibilities, duties and authority consistent with such position as may from
time to time be determined by the Chief Executive Officer of the Company (the
"CEO"). The Executive shall devote substantially all of his working time and
efforts to the business and affairs of the Company. The Executive shall report
directly to the CEO or his designee who shall be a senior executive officer of
the Company.
4. Indemnification. To the fullest extent permitted by law and the
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Company's certificate of incorporation and by-laws, the Company shall indemnify
the Executive for all amounts (including, without limitation, judgments, fines,
settlement payments, losses, damages, costs and expenses (including reasonable
attorneys' fees)) incurred or paid by the Executive in connection with any
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action, proceeding, suit or investigation arising out of or relating to the
performance by the Executive of services for, or acting as a fiduciary of any
employee benefit plans, programs or arrangements of the Company or as a
director, officer or employee of, the Company or any subsidiary thereof. The
Executive shall be covered by the Company's D&O insurance policy in accordance
with its terms, as in effect from time to time.
5. Compensation and Related Matters.
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(a) Annual Compensation.
(i) Base Salary. During the period of the Executive's employment
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hereunder, the Company shall pay to the Executive an annual base salary at
a rate not less than $725,000, such salary to be paid in conformity with
the Company's policies relating to salaried employees. This salary may be
(but is not required to be) increased from time to time, subject to and in
accordance with the annual executive performance review procedures of the
Company.
(ii) Annual Bonus. During the period of Executive's employment
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hereunder, the Executive shall be eligible to participate in the Company's
annual bonus plan as in effect from time to time, and shall be entitled to
receive such amounts (a "Bonus") as may be authorized, declared and paid by
the Company pursuant to the terms of such plan. The Company currently
maintains a Management Performance Compensation Plan (the "Performance
Plan") pursuant to which it pays performance bonus compensation to certain
of its executives and employees. It is agreed that the Executive shall
participate in the Performance Plan. The Executive's Performance Percentage
(as that term is defined in the Performance Plan) shall be established at
60% per annum during the Term, provided that with respect to the Company's
2003 fiscal year, the Executive's bonus under the Performance Plan shall be
prorated from the Effective Date, and shall be at least $200,000,
regardless of whether the performance objectives under the Performance Plan
are achieved. The Executive shall also participate in the Long Term Cash
Incentive Compensation Plan currently maintained by the Company, and his
Target Award (as defined in such plan) shall be 40%. The Executive's
payment under the Long Term Cash Incentive Compensation Plan shall be
prorated from the Effective Date.
As soon as practicable after the Effective Date, but in no event later than
seven days after the Effective Date, the Company will pay the Executive $150,000
(the "Signing Bonus"), provided that the Employee will be required to pay back
the entire Signing Bonus in the event he voluntarily terminates his employment
hereunder prior to the second anniversary of the Effective Date (other than for
"Good Reason", as defined below), and to the extent the Employee fails to pay
back any portion of the Signing Bonus as provided herein, the Company shall have
the right to offset any other payments provided hereunder by such amount.
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(b) Stock Option. The Executive will be granted a time-vested non-qualified
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stock option to acquire 75,000 shares of the Company's common stock ("Shares")
under the Company's 2003 Equity Incentive Plan (the "2003 Plan"), subject to
Compensation Committee approval of the grant and shareholder approval of the
2003 Plan. The exercise price shall be equal to the fair market value (as
defined in the 2003 Plan) of a Share on the Effective Date. The option shall
vest and become exercisable with respect to one-third of the Shares subject
thereto on each of the first three anniversaries of the Effective Date, provided
the Executive has remained continuously employed by the Company until the
applicable date (except as provided in Section 6(e)(vi) hereof). The option
granted hereunder shall contain such other terms and conditions as are set forth
in the Company's standard form of stock option agreements, including, but not
limited to, accelerated exercisability upon the occurrence of a "change in
control", which term shall have the same meaning as the term "Acceleration
Event," as defined in the 2003 Plan (hereinafter referred to as a "Change in
Control").
(c) Restricted Stock.
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(i) The Executive will be granted 23,334 time-vested restricted Shares
(the "Time Restricted Shares") under the 2003 Plan on the Effective Date,
subject to Compensation Committee approval of the grant and shareholder
approval of the 2003 Plan. 11,668 Shares of the Time Restricted Shares
shall vest on, and be delivered to the Executive promptly following, the
first anniversary of the Effective Date, and 5,833 Shares of the Time
Restricted Shares shall vest on, and be delivered to the Executive promptly
following, each of the second and third anniversaries of the Effective Date
provided the Executive has remained continuously employed by the Company
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until the applicable anniversary date (except as provided in Section
6(e)(v) hereof).
(ii) The Executive will be granted 11,666 performance vested
restricted Shares (the "Performance Restricted Shares") under the 2003 Plan
on the Effective Date, subject to Compensation Committee approval of the
grant and shareholder approval of the 2003 Plan. The Executive's rights to
the Performance Restricted Shares shall vest and the restrictions thereon
shall lapse as follows:
(1) 5,833 Performance Restricted Shares shall vest and become
exercisable as of the second anniversary of the Effective
Date if the AnnTaylor business division of the Company
shall have achieved operating profits for fiscal year
2004 of at least the target set forth in Exhibit A
attached hereto; and
(2) 5,833 Performance Restricted Shares shall vest and become
exercisable as of the third anniversary of the Effective
Date if the AnnTaylor business division of the Company
shall have achieved operating profits for fiscal year
2005 of at least the target set forth in Exhibit A
attached hereto.
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Any Performance Restricted Shares that shall not have vested, pursuant
to subparagraphs (c) (ii) (1) and (2) above as of April 15, 2006 shall
automatically be forfeited by the Executive.
(iii) The Company shall enter into a Restricted Stock Award
Agreement with the Executive for each of the above grants of restricted
Shares, incorporating the vesting terms set forth above with respect to each
such grant, and otherwise on the terms and conditions set forth in the
Company's standard form of restricted stock award agreement, including, but
not limited to, accelerated vesting upon the occurrence of a Change in
Control.
(d) Other Benefits. During the Executive's employment hereunder, the
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Executive shall be entitled to participate in all other employee benefit plans,
programs and arrangements of the Company, as now or hereinafter in effect, which
are applicable to the Company's employees generally or to its executive
officers, as the case may be, subject to and on a basis consistent with the
terms, conditions and overall administration of such plans, programs and
arrangements; provided, however, that the Executive hereby acknowledges and
agrees that he will not participate in the Company's Special Severance Plan.
During the period of Executive's employment hereunder, the Executive shall be
entitled to participate in and receive any fringe benefits or perquisites which
may become available to the Company's executive employees.
(e) Vacations and Other Leaves. The Executive shall be eligible for a
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paid time off bank of 25 days per year and paid holidays and sick days, all
as determined in accordance with applicable Company plans and policies.
(f) Relocation; Expenses. The Company will reimburse the Executive for his
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reasonable relocation expenses in accordance with the Company's relocation
policy. During the Executive's employment hereunder, the Executive shall be
entitled to receive prompt reimbursement for all reasonable and customary
expenses incurred by the Executive in performing services hereunder, including
all expenses of travel and accommodations while away from home on business or at
the request of and in the service of the Company; provided that, such expenses
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are incurred and accounted for in accordance with the policies and procedures
established by the Company.
6. Termination. (a) The Executive's employment hereunder may be
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terminated without breach of this Agreement only under the following
circumstances:
(i) Death. The Executive's employment hereunder shall terminate upon
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his death.
(ii) Cause. The Company may terminate the Executive's employment
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hereunder for "Cause". For purposes of this Agreement, the Company shall
have "Cause" to terminate the Executive's employment hereunder upon the (1)
the Executive's conviction for the commission of any act or acts
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constituting a felony under the laws of the United States or any state
thereof, (2) action by the Executive toward the Company involving
dishonesty, (3) the Executive's refusal to abide by or follow reasonable
written directions of the Board of Directors or the CEO, which does not
cease within ten business days after such written notice regarding such
refusal has been given to the Executive by the Company, (4) the Executive's
gross nonfeasance which does not cease within ten business days after
notice regarding such nonfeasance has been given to the Executive by the
Company, or (5) failure of the Executive to comply with the provisions of
Section 7 or 8 of this Agreement, or other willful conduct by the Executive
which is intended to have and does have a material adverse impact on the
Company.
(iii) Disability. If, as a result of the Executive's incapacity due to
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physical or mental illness, the Executive shall have been absent from his
duties hereunder on a full-time basis for the entire period of six (6)
consecutive months, and within thirty (30) days after written Notice of
Termination (as defined in Section 6(b) below) is given (which may occur
before or after the end of such six (6) month period) shall not have
returned to the performance of his duties hereunder on a full-time basis,
the Executive's employment hereunder shall terminate for "Disability".
(iv) Termination by the Executive. The Executive may terminate his
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employment hereunder for "Good Reason". For purposes of this Agreement, the
Executive shall have "Good Reason" to terminate his employment hereunder
(1) upon a failure by the Company to comply with any material provision of
this Agreement which has not been cured within ten business days after
notice of such noncompliance has been given by the Executive to the
Company, (2) upon action by the Company resulting in a diminution of the
Executive's title or authority, (3) upon the Company's relocation of the
Executive's principal place of employment outside of the New York City
metropolitan area, or (4) one year after a Change in Control.
(b) Notice of Termination. Any termination of the Executive's employment by
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the Company or by the Executive (other than termination under Section 6(a)(i)
hereof) shall be communicated by written Notice of Termination to the other
party hereto in accordance with Section 10 hereof. For purposes of this
Agreement, a "Notice of Termination" shall mean a notice which shall indicate
the specific termination provision in this Agreement relied upon and shall set
forth in reasonable detail the fact and circumstances claimed to provide a basis
for termination of the Executive's employment under the provision so indicated.
(c) Date of Termination. "Date of Termination" shall mean (i) if the
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Executive's employment is terminated by his death, the date of his death, (ii)
in the event that the Term shall expire as a result of a Non-Renewal Notice
provided by the Company to the Executive, the date of the expiration of the
current Term, and (iii) in each other case, the date specified in the Notice of
Termination; provided that, if within thirty days after any Notice of
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Termination is given, the party receiving such Notice of Termination notifies
the other party that a dispute exists concerning the termination, the Date of
Termination shall be the date on which the dispute is finally determined, either
by mutual written agreement of the parties or by a binding and final arbitration
award.
(d) Termination Upon Death; Disability; for Cause; Voluntary Termination
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other than for Good Reason. If the Executive's employment is terminated by
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reason of Executive's death or Disability, by the Company for Cause or
voluntarily by the Executive other than for Good Reason, the Company shall, as
soon as practicable after the Date of Termination, pay the Executive all unpaid
amounts, if any, to which the Executive is entitled as of the Date of
Termination under Section 5(a) hereof and shall pay to the Executive, in
accordance with the terms of the applicable plan or program, all other unpaid
amounts to which Executive is then entitled under any compensation or benefit
plan or program of the Company (collectively, "Accrued Obligations"); upon such
payment, the Company shall have no further obligations to the Executive under
this Agreement.
(e) Termination Without Cause; Termination for Good Reason; Non-Renewal. If
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the Company shall terminate the Executive's employment other than for Cause or
the Executive shall terminate his employment for Good Reason or the Term expires
as a result of a Non-Renewal Notice having been provided by the Company to the
Executive, then, subject to compliance with the provisions of Sections 7 and 8
hereof:
(i) the Company shall pay to the Executive, as soon as practicable
after the Date of Termination, the Accrued Obligations;
(ii) (A) unless clause (B) below applies, then following the Date of
Termination and for the longer of twelve months thereafter or the balance
of the current Term, the Company shall pay to the Executive monthly an
amount ("Severance Payments") equal to the quotient of the Executive's
annual base salary at the rate in effect as of the Date of Termination (the
"Base Salary"), divided by the number 12 (minus any amounts payable to the
Executive during any such month as a disability benefit under a Company
paid plan), or (B) in the event the Date of Termination occurs following a
Change in Control, then, within five days after the Date of Termination,
the Company shall pay to the Executive in a lump sum an amount equal to the
product of (X) the sum of the Executive's Base Salary and the average of
the total bonuses earned by the Executive, including bonuses paid under the
Performance Plan and the Company's Long Term Incentive Cash Compensation
Plan, in the three fiscal years of the Company ended immediately prior to
the Date of Termination (or, if higher, in the three fiscal years of the
Company ended immediately prior to the Change in Control) multiplied by (Y)
two and one-half (2-1/2). For purposes of this subsection (ii): (I) if the
Date of Termination occurs prior to the occurrence of a Change in Control
but during the pendency of a Potential Change in Control (as hereinafter
defined), such Date of Termination shall be deemed to have occurred
following a Change in Control, and (II) a "Potential Change in Control"
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shall be deemed to have occurred if the event set forth in any one of the
following clauses shall have occurred:
(1) the Company enters into an agreement, the consummation of
which would result in the occurrence of a Change in Control;
(2) the Company or any person (as defined in Section 3(a)(9) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
as modified and used in Sections 13(d) and 14(d) thereof (a "Person"),
except that such term shall not include (i) the Company or any of its
subsidiaries, (ii) a trustee or other fiduciary holding securities
under an employee benefit plan of the Company or any of its
affiliates, (iii) an underwriter temporarily holding securities
pursuant to an offering of such securities, or (iv) a corporation
owned, directly or indirectly, by the stockholders of the Company in
substantially the same proportions as their ownership of stock of the
Company) publicly announces an intention to take or to consider taking
actions which, if consummated, would constitute a Change in Control;
(3) any Person becomes the beneficial owner (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly, of securities
of the Company representing 15% or more of either the then outstanding
shares of common stock of the Company or the combined voting power of
the Company's then outstanding securities (not including the
securities beneficially owned by such Person or any securities
acquired directly from the Company); or
(4) the Board adopts a resolution to the effect that, for
purposes of this subsection (ii), a Potential Change in Control has
occurred.
The pendency of a Potential Change in Control shall immediately cease upon
the adoption of a resolution of the Company's Board of Directors to that
effect. For purposes of this Agreement, the period during or with respect to
which the Executive is entitled to receive payments hereunder is referred to
as the "Severance Period";
(iii) the Company shall pay to the Executive, at the same
time as bonuses are paid to other Company executives, a Bonus
with respect to the fiscal year in which occurs the Date of
Termination, such Bonus to be based upon actual performance for
such fiscal year and pro rated to reflect the number of days in
such fiscal year through and including the Date of Termination;
and
(iv) The Executive shall continue to be provided with the
same medical and life insurance coverage (at the costs in effect,
from time to time, for current senior employees of the Company)
as existed immediately prior to the Notice of Termination or
Notice of Non-Renewal, as the case may be, such coverage to
continue throughout the period with respect to which the
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Executive is entitled to receive Severance Payments (or, if
clause (B) of Section 6(e)(ii) applies, for a period of two and
one-half years following the Date of Termination); provided,
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however, that benefits otherwise receivable by the Executive
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pursuant to this Section 6(e)(iv) shall be reduced to the extent
that benefits of the same type are received by or made available
to the Executive during the Severance Period (and any such
benefits received by or made available to the Executive shall be
reported to the Company by the Executive).;
(v) any outstanding Time Restricted Shares and Performance
Restricted Shares shall become fully vested;
(vi) in the event that the Date of Termination occurs prior
to a Change in Control, then (x) each outstanding Option shall
vest and become exercisable in accordance with the schedule set
forth in Section 5(b) hereof as if no termination of employment
occurred and such Option shall terminate 90 days after the
expiration of the Severance Period;
(vii) in the event that the Date of Termination occurs on or
after a Change in Control, then each outstanding Option which
became vested upon such Change in Control in accordance with the
terms of Sections 5(b) and (c) hereof shall terminate 90 days
after the expiration of the Severance Period.
(f) Gross-Up Payment. In the event that any payment or benefit received or
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to be received by the Executive in connection with a Change in Control or the
termination of the Executive's employment, whether such payments or benefits are
received pursuant to the terms of this Agreement or any other plan, arrangement
or agreement with the Company, any person whose actions result in a Change in
Control or any person affiliated with the Company or such person (all such
payments and benefits being hereinafter called "Total Payments"), would be
subject (in whole or part), to the tax (the "Excise Tax") imposed under Section
4999 of the Internal Revenue Code of 1986, as amended (the "Code"), the Company
shall pay to the Executive such additional amounts (the "Gross-Up Payment") as
may be necessary to place the Executive in the same after-tax position as if no
portion of the Total Payments had been subject to the Excise Tax. In the event
that the Excise Tax is subsequently determined to be less than the amount taken
into account hereunder, the Executive shall repay to the Company, at the time
that the amount of such reduction in Excise Tax is finally determined, the
portion of the Gross-Up Payment attributable to such reduction (plus that
portion of the Gross-Up Payment attributable to the Excise Tax and federal,
state and local income tax imposed on the Gross-Up Payment being repaid by the
Executive to the extent that such repayment results in a reduction in Excise Tax
and/or a federal, state or local income tax deduction) plus interest on the
amount of such repayment at the rate provided in Section 1274(b)(2)(B) of the
Code. In the event that the Excise Tax is determined to exceed the amount taken
into account hereunder (including by reason of any payment the existence or
amount of which cannot be determined at the time of the Gross-Up Payment), the
Company shall make an additional Gross-Up Payment in respect of such excess
(plus any interest, penalties or additions payable by the Executive with respect
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to such excess) at the time that the amount of such excess is finally
determined. The Executive and the Company shall each reasonably cooperate with
the other in connection with any administrative or judicial proceedings
concerning the existence or amount of liability for Excise Tax with respect to
the Total Payments.
7. Nonsolicitation; Noncompete.
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(a) Subject to (c) below, during the period of Executive's employment,
during the period he is receiving Severance Payments hereunder and, in the case
where the Executive's employment is terminated for Cause or the Executive
voluntarily terminates his employment without Good Reason, for a period of
twelve months following such termination, the Executive shall not initiate
discussions with any person who is then an executive employee of the Company
(i.e., director level or above) with the intent of soliciting or inducing such
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person to leave his or her employment with a view toward joining the Executive
in the pursuit of any business activity (whether or not such activity involves
engaging or participating in a Competitive Business, as defined below).
Notwithstanding any other provision of this Agreement to the contrary, in the
event the Executive fails to comply with the preceding sentence, all rights of
the Executive and his surviving spouse or other beneficiary hereunder to any
future Severance Payments, Bonus payments and continuing life insurance and
medical coverage and all rights with respect to restricted stock and
exercisability of stock options shall be forfeited; provided that, the foregoing
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shall not apply if such failure of compliance commences following a Change in
Control.
(b) Subject to (c) below, as long as the Executive receives Severance
Payments, or in the case where the Executive's employment is terminated for
Cause or the Executive voluntarily terminates his employment without Good
Reason, for a period of twelve months following such termination, the Executive
shall not, without the prior written consent of the Company, engage or
participate in any business which is "in competition" (as defined below) with
the business of the Company or any of its 50% or more owned affiliates (such
business being referred to herein as a "Competitive Business"). Notwithstanding
any other provision of this Agreement to the contrary, in the event the
Executive fails to comply with the preceding sentence, all rights of the
Executive and his surviving spouse or other beneficiary hereunder to any future
Severance Payments, Bonus payments and continuing life insurance and medical
coverage and all rights with respect to restricted stock and exercisability of
stock options shall be forfeited; provided that, the foregoing shall not apply
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if such failure of compliance commences following a Change in Control.
(c) In the event of a violation of paragraphs 7(a) or 7(b) hereof, the
remedies of the Company shall be limited to (i) if such violation occurs during
the period of Executive's employment hereunder, termination of the Executive for
Cause and the associated rights of the Company specified herein resulting
therefrom, (ii) regardless of when such violation occurs, forfeiture by the
Executive of the payments, benefits and other rights set forth in paragraphs (a)
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and (b) above if and to the extent provided in such paragraphs, and (iii) the
right to seek injunctive relief in accordance with and to the extent provided in
Section 14 hereof.
(d) For purposes hereof, a business will be "in competition" with the
business of the Company or its 50% or more owned affiliates if (i) the Company's
business with which the other business competes accounted for 20% or more of the
Company's consolidated revenues as of the end of its most recently completed
fiscal year prior to the Date of Termination, and (ii) the entity (including all
50% or more owned affiliates) through which the other business is or will be
operated maintains a "women's apparel" business which generated at least $50
million in revenue during the entity's most recently completed fiscal year ended
prior to the date the Executive commences (or proposes to commence) to engage or
participate in the other business. For purposes hereof, "women's apparel" shall
consist of dresses, jackets, pants, shorts, skirts, blouses, sweaters, T-shirts,
outerwear, footwear and accessories.
(e) Notwithstanding the foregoing, the Executive's engaging in the
following activities shall not be construed as engaging or participating in a
Competitive Business: (i) investment banking; (ii) passive ownership of less
than 2% of any class of securities of a public company; (iii) engaging or
participating in noncompetitive businesses of an entity which also operates a
business which is "in competition" with the business of the Company or its
affiliates; (iv) serving as an outside director of an entity which operates a
business which is "in competition" with the business of the Company or its
affiliates, so long as such business did not account for 10% or more of the
consolidated revenues of such entity as of the end of its most recently
completed fiscal year prior to the date the Executive commences (or proposes to
commence) serving as an outside director; (v) engaging in a business involving
licensing arrangements so long as such business is not an in-house arrangement
for any entity "in competition" with the business of the Company or its
affiliates; (vi) affiliation with an advertising agency, and (vii) after
cessation of employment, engaging or participating in the "wholesale" side of
the women's apparel business, which for purposes hereof shall mean the design,
manufacture and sale of piece goods and women's apparel to unrelated third
parties, provided that if the entity for which the Executive so engages or
participates (including its affiliates) also conducts a retail women's apparel
business, then effective upon the Executive's engaging or participating in such
business, all continuing life insurance and medical coverage provided by the
Company shall cease and all Severance Payments shall cease except for amounts
representing the excess (if any) of the Executive's annual base salary hereunder
(at the rate in effect as of the Date of Termination) over the executive's base
salary received from such entity and its affiliates, which amounts shall
continue to be paid by the Company for the remainder of the period in which the
Executive is entitled to receive Severance Payments hereunder. The exceptions
contained in subparagraph (vii) above and subparagraph (iii) above to the extent
covered by subparagraph (vii) shall not be applicable if the Executive's
cessation of employment is voluntary by the Executive without Good Reason and
his new engagement or participation involves "wholesale" operations which
include or also conduct retail sales of women's apparel other than factory
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outlet or discount stores to liquidate unsold women's apparel of such wholesale
operations.
8. Protection of Confidential Information.
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(a) The Executive acknowledges that his employment by the Company will,
throughout the Term of this Agreement, involve his obtaining knowledge of
confidential information regarding the business and affairs of the Company. In
recognition of the foregoing, the Executive covenants and agrees that:
(i) except in compliance with legal process, he will keep secret all
confidential matters of the Company which are not otherwise in the public
domain and will not intentionally disclose them to anyone outside of the
Company, wherever located (other than to a person to whom disclosure is
reasonably necessary or appropriate in connection with the performance by
Executive of his duties as an executive officer of the Company), either
during or after the Term, except with the prior written consent of the
Board of Directors or a person authorized thereby; and
(ii) he will deliver promptly to the Company on termination of his
employment or at any other time the Company may so request, all memoranda,
notes, records, customer lists, reports and other documents (and all copies
thereof) relating to the business of the Company which he obtained while
employed by, or otherwise serving or acting on behalf of, the Company and
which he may then possess or have under his control.
(b) Notwithstanding the provisions of Section 14 of this Agreement, if the
Executive commits a breach of the provisions of Section 8(a)(i) or 8(a) (ii),
the Company shall have the right and remedy to have such provisions specifically
enforced by any court having equity jurisdiction, it being acknowledged and
agreed that any such breach or threatened breach will cause irreparable injury
to the Company and that money damages will not provide an adequate remedy to the
Company.
9. Successors; Binding Agreement.
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(a) Neither this Agreement nor any rights hereunder shall be assignable or
otherwise subject to hypothecation by the Executive (except by will or by
operation of the laws of intestate succession) or by the Company, except that
the Company will require any successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially all of the business
and/or assets of the Company, by agreement in form and substance reasonably
satisfactory to the Executive, to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform it if no such succession had taken place. As used in this
Agreement, "Company" shall mean the Company as herein before defined and any
successor to its business and/or assets as aforesaid which executes and delivers
the agreement provided for in this Section 9 or which otherwise becomes bound by
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all the terms and provisions of this Agreement by operation of law.
(b) This Agreement and all rights of the Executive hereunder shall inure to
the benefit of and be enforceable by the Executive's personal or legal
representatives, executors, administrators, successors, heirs, devisees and
legatees. If the Executive should die while any amounts would still be payable
to him hereunder if he had continued to live, all such amounts, unless otherwise
provided herein, shall be paid in accordance with the terms of this Agreement to
the Executive's devisee, legatee, or other designee or, if there is no such
designee, to the Executive's estate.
10. Notice. For the purposes of this Agreement, notices, demands and all
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other communications provided for in this Agreement shall be in writing and
shall be deemed to have been duly given when personally delivered to the
Executive or an executive officer of the Company, mailed by United States
certified or registered mail, return receipt requested, postage prepaid, or
shipped by an overnight courier service, to the address as follows:
If to the Company:
AnnTaylor Stores Corporation
142 West 57th Street
New York, New York 10019
Attn: General Counsel
If to the Executive:
Jerome Jessup
9 River Lane
Westport, CT 06880
or to such other address as a party may have furnished to the other in
writing in accordance herewith, except that notices of change of address
shall be effective only upon receipt.
11. Miscellaneous. No provisions of this Agreement may be modified, waived
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or discharged unless such waiver, modification or discharge is agreed to in a
writing signed by the Executive and such officer of the Company as may be
specifically designated by the Board of Directors. No waiver by either party
hereto at any time of any breach by the other party hereto of, or compliance
with, any condition or provision of this Agreement to be performed by such other
party shall be deemed a waiver of similar or dissimilar provisions or conditions
at the same or at any prior or subsequent time. No agreements or
representations, oral or otherwise, express or implied, with respect to the
subject matter hereof have been made either by party which are not set forth
expressly in this Agreement. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of New
York without regard to its conflicts of law principles. All payments hereunder
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shall be subject to applicable Federal, State and local tax withholding
requirements.
12. Validity. The invalidity or unenforceability of any provision or
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provisions of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in full force and
effect.
13. Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
14. Arbitration. Any dispute or controversy arising under or in connection
-----------
with this Agreement shall be settled exclusively by arbitration, conducted
before a panel of three arbitrators in New York City in accordance with the
rules of the American Arbitration Association then in effect. Judgment may be
entered on the arbitrator's award in any court having jurisdiction; provided
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that, the Company shall be entitled to seek a restraining order or injunction in
- ----
any court of competent jurisdiction to prevent any continuation of any violation
of the provisions of Section 7 or 8 of the Agreement and the Executive hereby
consents that such restraining order or injunction may be granted without the
necessity of the Company's posting any bond. Each party shall bear its own costs
and expenses (including, without limitation, legal fees) in connection with any
arbitration proceeding instituted hereunder.
15. Representation. The Executive hereby represents and warrants to the
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Company that (i) the execution and delivery of this Agreement and the
performance of his duties hereunder shall not constitute a breach of or
otherwise violate any other agreement to which he is a party or by which he is
bound; and (ii) he will not use or disclose any confidential information
obtained by him in connection with his former employment with respect to his
duties and responsibilities hereunder.
16. Entire Agreement. This Agreement, sets forth the entire agreement of
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the parties hereto in respect of the subject matter contained herein and
supercedes any other prior agreements, promises, covenants, arrangements,
communications, representations or warranties, whether oral or written, by any
officer, employee or representative of any party hereto.
ANNTAYLOR STORES CORPORATION
By: /s/ J. Patrick Spainhour
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Name: J. Patrick Spainhour
Title: Chairman and Chief Executive Officer
/s/ Jerome Jessup
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Jerome Jessup
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