EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (the "Agreement"), executed
November 25, 1996 (the "Execution Date"), and effective as
of December 9, 1996 (the "Effective Date"), between
ANNTAYLOR STORES CORPORATION, a Delaware corporation
(the "Company"), and Patricia DeRosa (the "Executive").
WHEREAS, the Company desires to provide for the
service and employment of the Executive with the Company
and the Executive wishes to perform services for the
Company, 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
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employ the Executive, and the Executive hereby agrees to
serve the Company, on the terms and conditions set forth
herein.
2. Term. The term of employment of the Executive
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by the Company hereunder (the "Term") will commence as of the
Execution Date and will end on the third anniversary of the
Effective Date. Notwithstanding expiration of the Term or other
provisions that survive by their in tent, the provisions of
Sections 4, 7 and 8 hereof shall continue in effect.
3. Position and Duties. The Executive shall
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serve as President and Chief Operating Officer of the
Company and shall have such responsibilities, duties and
authority consistent with such positions as may from time
to time be determined by the Board of Directors of the
Company (the "Board"). The Executive shall report directly
to the Chairman and Chief Executive Officer (the "CEO").
The Executive shall devote substantially all of her working
time and efforts to the business and affairs of the Company.
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4. Indemnification. To the fullest extent
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permitted by law and the 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 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.
5. Compensation and Related Matters.
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(a) Annual Compensation.
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(i) Base Salary. Commencing on the
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Effective Date and continuing during the period of
the Executive's employment hereunder, the Company
shall pay to the Executive an annual base salary at
a rate not less than $600,000, 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. Commencing on
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the Effective Date and continuing during the period
of Executive's employment 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 effective
as of the Effective Date. The Executive's Performance Percentage
(as that term is defined in the Performance Plan) shall be established
at 25% per season (50% per annum) during the Term. Notwithstanding the
foregoing, the minimum Bonus to be paid to the Executive under the
Performance Plan or otherwise for the Spring 1997 season shall be
$150,000.
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(b) Stock Options. As of the Execution
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Date, the Executive shall be granted ten-year options to
acquire 100,000 shares of common stock of the Company
("Shares") pursuant to the Company's Amended and Restated 1992
Stock Option and Restricted Stock Plan (the "1992 Plan").
The option price per Share shall be equal to the Fair Market Value
(as defined in the 1992 Plan) of a Share as of the Execution Date.
One-half of the Shares subject to such option shall be time-based
options ("Time-Based Options"). One-third of the Time-Based Options
shall become exercisable on each of the first three anniversaries of
the Effective Date, provided Executive has remained continuously
employed by the Company until the applicable date (except as provided
in Section 6(e)(vi) hereof). The other one-half of the Shares subject
to such option shall be performance stock options ("Performance Options").
Performance Options shall become exercisable on the earliest of: (i) the
date of achievement by the Company of total earnings per Share of at least
$1.50 over four consecutive quarters ending after the Effective Date;
(ii) the date on which the Fair Market Value of a Share on each of the ten
consecutive trading days immediately preceding such date is equal to at
least $35.00; provided that, in the case of each of clauses (i) and (ii)
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above, (1) such date occurs no later than the fifth anniversary of the
Effective Date and (2) a portion of the Performance Option may become
exercisable, based upon satisfaction of terms and conditions consistent
with those set forth in the Company's standard stock option agreement
applicable to performance options, if exercisability has not otherwise
occurred by the fifth anniversary of the Effective Date; or (iii) the ninth
anniversary of the Effective Date; provided that, in the case of each of
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clauses (i) - (iii), the Executive has remained continuously employed
by the Company until the applicable date. The Time-Based Option and
Performance Option granted hereunder shall contain such other terms and
conditions as are set forth in the Company's standard stock option
agreements applicable to such type of option, including, but not
limited to, accelerated exercisability upon the occurrence of a Change
in Control, which shall have the same meaning as the term "Acceleration
Event," as defined in the 1992 Plan (a "Change in Control").
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(c) Restricted Stock and Units. As of the Effective Date,
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Executive shall be granted 30,000 re stricted shares of common stock of the
Company (the "Re stricted Shares") and 20,000 restricted units (the "Restricted
Units"). A Restricted Unit represents the right to receive, on the date the
restrictions on the unit lapse, a cash payment equal to the closing price of
one share of Company common stock on the New York Stock Exchange on the trading
date immediately preceding the date the restrictions lapse. One-third of the
Restricted Shares and one-third of the Restricted Units shall vest on, and
be delivered to the Executive promptly following, each of the first three
anniversaries of the Effective Date, provided the Executive has remained
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continuously employed by the Company until the applicable date.
Notwithstanding the foregoing, any outstanding Restricted Shares and
Restricted Units shall become fully vested on a Change in Control.
(d) Other Benefits. Commencing on the Effective Date
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and continuing during the period of Executive's employment hereunder,
the 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. 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
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entitled to four (4) weeks vacation per year and to paid holidays and
personal leave days determined in accordance with applicable Company plans
and policies.
(f) Expenses. During the period of the Executive's
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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 are
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incurred and accounted for in accordance with the policies and procedures
established by the Company.
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(g) Relocation Expenses. The Executive shall be entitled
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to receive reimbursement of relocation expenses consistent with the Company's
relocation expense reimbursement policy for senior executives of the Company.
In addition, the Executive shall be entitled to receive reimbursement of
losses incurred upon the sale of the Executive's principal residence;
provided, however, that the total amount of such sale-related reimbursement
(including all tax gross-up payments) shall not exceed $300,000.
In addition, if in connection with Executive's relocation
during the Term Executive purchases a principal residence in the New York
area prior to selling her current principal residence in Pennsylvania, at
Executive's request the Company shall make a loan to Executive, at the
closing of the purchase of the new residence, in a principal amount designated
by Executive but not to exceed the lesser of (i) Executive's purchase price
of the new residence and (ii) the appraised value of Executive's Pennsylvania
residence. Such loan shall bear interest at the per annum rate equal to the
rate designated from time to time by Bank of America, N.A. as its prime rate
of interest and shall be secured by a perfected first mortgage on Executive's
Pennsylvania residence and perfected security interest in any vested
Restricted Shares. Interest on and principal of the loan shall be payable in
full by Executive upon the earliest to occur of (i) sale by Executive of her
Pennsylvania residence, (ii) the one-year anniversary of the making of the
loan, and (iii) Executive's separation of employment with the Company for any
reason other than termination by the Company without Cause or by Executive with
Good Reason. Earlier partial prepayment on the loan shall be required to the
extent of the proceeds of the sale of any vested Restricted Shares (net of
stock broker commissions).
6. Termination. (a) The Executive's employment hereunder may
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be terminated without breach of this Agreement only under the following
circumstances:
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(i) Death. The Executive's employment hereunder shall
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terminate upon her death.
(ii) Cause. The Company may terminate the Executive's
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employment hereunder for "Cause". For purposes of this Agreement, the
Company shall have "Cause" to terminate the Executive's employment
hereunder upon (1) the Executive's conviction for the commission of an
act or acts 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 or the CEO, which does not
cease within ten (10) 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 (10)
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 will ful 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
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incapacity due to physical or mental illness, the Executive shall have
been absent from her 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 her
duties hereunder on a full-time basis, the Executive's employment
hereunder shall terminate for "Disability".
(iv) Termination by the Executive. The Executive may
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terminate her employment hereunder for "Good Reason". For purposes of
this Agreement, the Executive shall have "Good Reason" to terminate her
employment hereunder (1) upon a failure by the Company to comply with
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and material provision of this Agreement which has not been cured within
ten (10) 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 or (3) one year
after a Change in Control.
(b) Notice of Termination. Any termination of the Executive's
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employment by 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 facts 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
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(i) if the Executive's employment is terminated by her death, the date of her
death and (ii) in each other case, the date specified in the Notice of
Termination; provided that, if within thirty (30) 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
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Termination other than for Good Reason. If the Executive's employment is
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terminated by 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
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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.
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If the Company shall terminate the Executive's employment other than for
Cause or the Executive shall terminate her employment for Good Reason, 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) following the Date of Termination and for
the longer of twelve (12) months thereafter or the balance of the
Term (the "Severance Period"), the Company shall pay to the
Executive monthly an amount ("Severance Payments") equal
to the quotient of (1) the Executive's annual base salary at the
rate in effect as of the Date of Termination, divided by (2) the
number twelve (12);
(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 season in which occurs the Date of
Termination, such Bonus to be based upon actual performance for
such season and pro rated to reflect the number of days in such
season through and including the Date of Termination; and
(iv) the Executive shall continue to be provided
for the duration of the Severance Period with the same medical and
life insurance coverage as existed immediately prior to the Notice
of Termination; provided, however, that benefits otherwise receivable
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by the Executive 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);
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(v) any outstanding Restricted Shares and Restricted
Units shall become fully vested;
(vi) each outstanding Time-Based 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
Time-Based Option shall terminate 90 days after the expiration of the
Severance Period;
(vii) each outstanding Performance Option which had not
previously become exercisable shall be cancelled and any such Performance
Option which had previously become exercisable shall terminate 90 days
after the expiration of the Severance Period.
(f) Gross-Up Payment. In the event that any payment or
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benefit received or 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
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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 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 she is receiving Severance Payments hereunder
and, in the case where the Executive's employment is terminated for
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Cause or executive voluntarily terminates her employment without Good Reason,
for a period of twelve (12) 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 person to leave his or her employment, with a view
to ward 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 Executive fails
to comply with the preceding sentence, all rights of the Executive and
her 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
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foregoing shall not apply if such failure of compliance commences
following a Change in Control.
(b) Subject to (c) below, for as long as Executive receives
Severance Payments, or in the case where the Executive's employment is
terminated for Cause or executive voluntarily terminates her employment with
out Good Reason, for a period of twelve (12) months following such termination,
Executive shall not, without the prior written consent of the Company (which
consent shall not be unreasonably withheld), 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"). Not withstanding 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 her
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 if
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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 there from, (ii) regardless of when such violation occurs,
forfeiture by the Executive of the payments, benefits and other rights set
forth in paragraphs (a) 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
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business. For purposes hereof, "women's apparel" shall consist of dresses,
jackets, pants, 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 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 Severance Period. 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 her
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) Executive acknowledges that her employment by the Company
will, throughout the Term of this Agreement, involve her obtaining knowledge
of confidential information regarding the business and affairs of the Company.
In recognition of the foregoing, the Executive covenants and agrees:
(i) that, except in compliance with legal process,
she 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 her
duties as an executive officer of the Company), either during or
after the Term, except with the prior written consent of the Board
or a person authorized thereby; and
(ii) that she will deliver promptly to the Company
on termination of her 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 she obtained while employed by, or otherwise
serving or acting on behalf of, the Company and which she may
then possess or have under her 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.
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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 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,
distributees, devisees and legatees. If the Executive should die while any
amounts would still be payable to her hereunder if she 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 be no such designee, to the Executive's estate.
10. Notice. For the purposes of this Agreement, notices, demands
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and all other communications provided for in this Agreement shall be in
writing and shall be deemed to have been duly given when delivered or
(unless otherwise specified) mailed by United States certified or registered
mail, return receipt requested, postage prepaid, addressed as follows:
If to the Company:
AnnTaylor Stores Corporation
142 West 57th Street
New York, New York 10019
Attn: General Counsel
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With a copy to:
Skadden, Arps, Slate, Meagher & Flom
919 Third Avenue
New York, New York 10022
Attn: Stuart N. Alperin, Esq.
If to the Executive:
Patricia DeRosa
1222 Meadow Bank Road
Villanova, PA 19805
With a copy to:
Farella Braun & Martell LLP
235 Montgomery Street, Suite 300
San Francisco, CA 94104
Attn: Jeffrey P. Newman, Esq.
or to such other address as any 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
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modified, waived or discharged unless such waiver, modification or discharge
is agreed to in writing signed by the Executive and such officer of the
Company as may be specifically designated by the Board. 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 by either 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 shall be subject to
applicable Federal, State and local tax withholding requirements.
12. Validity. The invalidity or unenforceability of any
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provision or 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.
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13. Counterparts. This Agreement may be executed in one or more
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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
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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 that, the Company shall be entitled to seek a
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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, with out limitation, legal fees) in connection with any
arbitration proceeding instituted hereunder.
15. Entire Agreement. This Agreement, to gether with the
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compensation and benefits plans and practices referred to in Section 5
hereof, sets forth the entire agreement of the parties hereto in respect
of the subject matter contained herein and all other prior agreements,
promises, covenants, arrangements, communications, representations or
warranties, whether oral or written, by any officer, employee or
representative of any party hereto; and any prior agreement of the parties
hereto in respect of the subject matter contained herein is hereby
terminated and cancelled.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date and year first above written.
ANNTAYLOR STORES CORPORATION
By: /s/ J. Patrick Spainhour
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Name: J. Patrick Spainhour
Title: President & Chief Operating Officer
/s/ Patricia DeRosa
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Patricia DeRosa