EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is entered
into between AnnTaylor, Inc., a Delaware corporation (the
"Company"), and DWIGHT F. MEYER ("Executive"), as of
September 20, 1996.
R E C I T A L S:
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WHEREAS, Executive presently serves as President of CAT
US Inc. ("CAT"), a corporation 40% owned by the Company; and
WHEREAS, pursuant to a Stock and Asset Purchase
Agreement dated as of June 7, 1996 (as amended, the
"Purchase Agreement"), among Cygne Designs, Inc., Cygne
Group (F.E.) Limited, the Company and AnnTaylor Stores
Corporation, a Delaware corporation and the parent
corporation of the Company ("ATSC"), the Company intends to
acquire, among other things, the remaining outstanding stock
of CAT and, upon consummation of such acquisition, CAT will
become a wholly owned subsidiary of the Company and will be
known as AnnTaylor Global Sourcing, Inc. (hereinafter
referred to as "ATGS"); and
WHEREAS, the services of Executive, his experience and
knowledge of the affairs of ATGS and the Company and his
reputation and contacts in the industry are considered
valuable to the Company, and the Company desires to employ
Executive and Executive desires to be employed by the
Company upon the terms and conditions hereinafter set forth;
NOW, THEREFORE, the parties hereto, for the
consideration herein set forth and the mutual covenants herein
contained and intending to be legally bound hereby, agree as
follows:
Section 1. Employment. Subject to Section 16 hereof,
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the Company hereby agrees to employ Executive as Executive
Vice President of Sourcing of the Company and ATGS during
the term set forth in Section 2 below and Executive hereby
accepts employment with the Company and ATGS and agrees to
perform his duties and responsibilities hereunder in
accordance with the terms and conditions hereinafter set
forth.
Section 2. Term. The term of employment of Executive
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under this Agreement (the "Term of Employment") shall be for
a period commencing on the date of the closing of the
transactions contemplated by the Purchase Agreement (the
"Starting Date"), and shall continue, unless earlier
terminated pursuant to Section 8 hereof, for a period of three
years from the Starting Date.
Section 3. Duties and Responsibilities. During the
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Term of Employment, Executive shall perform and discharge
such executive duties and responsibilities as may be
prescribed from time to time by the Board of Directors (the
"Company Board"), the Chairman or the President of the
Company. The principal location at which Executive will
perform his services will be at ATGS's offices in New York
City (except for required travel on the Company's business).
Section 4. Extent of Service. During the Term of
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Employment, Executive shall devote substantially all of his
business time and attention, reasonable vacation time and
absences for sickness excepted, to the business of the
Company and ATGS. Executive shall perform the duties as
signed to him with fidelity and to the best of his ability.
Section 5. Compensation. For all services to be
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rendered by Executive in any capacity hereunder during the Term
of Employment, the Company shall pay, or shall cause ATGS to
pay, Executive the following types and amounts of
compensation:
5.1. Base Salary. The Company shall pay, or
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shall cause ATGS to pay, Executive a base salary of $350,000
per annum, such salary to be paid in conformity with the
Company's policies relating to salaried employees. The
Company agrees to review annually Executive's base salary,
and may increase Executive's base salary at its sole
discretion.
5.2. Benefits. Executive shall, as long as he is
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a full-time employee of the Company or ATGS, have the right
to receive vacation, sick pay, life, medical and disability
insurance benefits and other fringe benefits provided to
executive employees of the Company generally. The Company
shall waive or cause to be waived the one-year waiting
period after commencement of employment applicable to its
life insurance and group accident insurance programs and any
other program where such waiver will not be a violation of
any Federal or state law or regulation. The Company will
reimburse Executive for travel, entertainment and other
business expenses reasonably incurred by him in connection with
the business of the Company consistent with Company policy.
5.3. Annual Bonus. During the Term of Employment,
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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. ATSC currently maintains a
Management Performance Compensation Plan (the "Performance
Plan"), a copy of which is attached to this Agreement,
pursuant to which certain executives and employees of the
Company are paid performance bonus compensation. It is
agreed that Executive shall participate in the Performance
Plan effective as of the Starting Date. Executive's
Performance Percentage (as that term is defined in the Performance
Plan) shall be established at 40% during the first year of
participation under the Performance Plan (20% per season)
and thereafter the Performance Percentage shall be
determined as provided in the Performance Plan.
Notwithstanding the foregoing, the minimum bonus to be paid
to Executive under the Performance Plan or otherwise for
each of the fall season of 1996 and the spring season of
1997 shall be $35,000, provided Executive's employment
hereunder during such period has not been terminated by the
Company for Cause or by the Executive without Good Reason.
5.4. Stock Options. The Executive will be grant
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ed a time-vested Non-Qualified Stock Option to acquire
35,000 shares (the "Option Shares") of common stock of ATSC
(the "Common Stock") under ATSC's Amended and Restated 1992
Stock Option and Restricted Stock and Unit Award Plan (the
"Option Plan") with an exercise price equal to the fair
market value (as defined and determined as of the Starting
Date under the Option Plan) of the Common Stock. The Option
shall vest in accordance with the vesting schedule
applicable to the options granted to the Company's
associates in 1996 under the Option Plan. The Executive shall
be eligible to receive additional options under the Option
Plan or other and additional option plans as may be adopted
by ATSC during the Term of Employment, taking into account,
among other things, Executive's performance and position
with the Company.
5.5 Anniversary Bonus. Subject to the provisions
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of Section 8 hereof, the Company shall, or shall cause ATGS
to, pay to Executive a one-time anniversary bonus of
$400,000 on September 21, 1997.
Section 6. Covenant Not to Compete.
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6.1. During the period in which Executive is
employed by the Company or ATGS and for a period of one year
thereafter, Executive shall not:
6.1.1. Engage or participate in any activity
or business (other than as an investor owning not more than
1% of the voting securities of any publicly-held corporation)
which is the same or similar to the business engaged
in by the Company or ATGS, or, with regard to the one-year
period referred to above, engaged in by the Company or ATGS
at the time of termination of Executive's employment with
the Company or ATGS.
6.1.2. Serve as, act as or be an employee,
agent, consultant, representative, officer, director or
investor (other than as an investor owning not more than 1%
of the voting securities of any publicly-held corporation)
with or of, or receive any payment in the way of
remuneration from, any entity, or an Affiliate (as defined in
Section 6.3) thereof, which engages or
becomes engaged in any activity or business which is the
same or similar to the business engaged in by the Company or
ATGS, or, with regard to the one-year period referred to
above, engaged in by the Company or ATGS at the time of
termination.
6.2. Directly or indirectly, for himself, or on
behalf of or in conjunction with any entity, (a) solicit,
raid, entice or induce any person who is an employee of the
Company or any of its Affiliates, or, with regard to the
one-year period referred to above, was an employee of the
Company or any of its Affiliates at the time Executive's
employment was terminated, to (i) refrain from rendering
services to, or (ii) become employed by or enter into
contractual relations with any person or entity other than
the Company or any of its Affiliates or (b) interfere with,
disrupt or attempt to disrupt the relationship, contractual
or otherwise, between the Company or any of its Affiliates,
and any franchisor, customer, supplier, lessor, lessee or
employee of the Company or any of its Affiliates.
6.3. For the purposes of this Agreement, an
"Affiliate" of any entity is any person, firm, partnership
or corporation which, directly or indirectly, through one or
more intermediaries, owns or controls, or is controlled by,
or is under common control with, any such entity. For the
purposes of this Agreement, "control" when used with respect
to any specified entity means the power to direct the
management and policies of such entity, directly or indirect
ly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" and
"controlled" have meanings relative to the foregoing.
6.4. Executive declares that the foregoing time
limitations are reasonable and properly required for the
adequate protection of the business of the Company. In the
event that the provisions of this Section 6 should ever be
deemed to exceed the time limitations permitted by
applicable law, then such provisions shall be deemed
reformed to the maximum time limitations permitted by
applicable law.
6.5. Executive specifically acknowledges and
agrees that the remedy at law for any breach of the
provisions of this Section 6 will be inadequate (for reasons
which include, but are not limited to, the fact that
Executive's talents, and the services to be provided by
Executive, are unique) and that the Company, in addition to
any other relief available to it, shall be entitled to
temporary and permanent injunctive relief without the
necessity of proving actual damage. The existence of any
claim or cause of action by Executive against the Company
shall not constitute a defense to the enforcement by the
Company of the foregoing restrictive covenant, but such
claim or cause of action shall be litigated separately.
6.6. Executive (a) acknowledges and agrees that a
substantial and legally sufficient portion of the
consideration payable by the Company pursuant to this
Agreement is attributable to the non-competition and
non-interference covenants of this Section 6 and (b) hereby
expressly waives any right to assert inadequacy of
consideration as defense to enforcement of the non-competition
and non-interference covenants in this Section 6 should such
enforcement ever become necessary.
6.7. Notwithstanding any provision of this
Section 6 to the contrary, if the Company's business
operations are terminated and such business operations are
not carried on by any successor succeeding to the Company's
obligations under this Agreement, then Executive shall have
no further obligation of any nature on and after the date of
such termination under the provisions of this Section 6.
Section 7. Protection of Confidential Information.
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7.1 Executive acknowledges that his employment by
the Company will, throughout the Term of Employment, involve
his obtaining knowledge of confidential information
regarding the business and affairs of the Company and its
Affiliates. In recognition of the foregoing, the Executive
covenants and agrees that:
7.1.1 Except in compliance with legal
process, he will keep secret all confidential matters of the
Company and its Affiliates 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 of Employment, except with
the prior written consent of the Company Board or a person
authorized thereby; and
7.1.2 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 or its
Affiliates which he created, generated or obtained while
employed by, or otherwise serving or acting on behalf of, the
Company or ATGS and which he may then possess or have under
his control.
7.2. Executive specifically acknowledges and
agrees that the remedy at law for any breach of the
provisions of this Section 7 will be inadequate and that the
Company, in addition to any other relief available to it,
shall be entitled to temporary and permanent injunctive
relief without the necessity of proving actual damage. The
existence of any claim or cause of action by Executive
against the Company shall not constitute a defense to the
enforcement by the Company of the foregoing restrictive
covenant, but such claim or cause of action shall be
litigated separately.
Section 8. Termination of Employment. This Agreement
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shall terminate (except for Sections 6, 7 and 8) and the
Company and ATGS shall have no further liability or
obligation hereunder, on the earlier of (a) the expiration
of the Term of Employment, or (b) the occurrence of any one
of the following events:
8.1. Disability. In the event that Executive has
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a Total Disability (as hereinafter defined), this Agreement
may be terminated by the Company, and in such event the
Company and ATGS shall have no further liability or
obligation to Executive for compensation hereunder, other
than for (i) amounts accrued as of the date of the Total
Disability pursuant to Section 5 of this Agreement, (ii) if
such event occurs on or before September 21, 1997, the full
amount of the anniversary bonus referred to in Section 5.5,
and (iii) an amount equal to Executive's then current annual
base salary, payable in installments for a period of 12
months. "Total Disability" shall mean a physical or mental
condition which renders Executive unable to perform the
normal duties of his employment with the Company or ATGS and
is expected to be of extended duration of at least three
months or result in death. A Total Disability shall be
deemed to have occurred as of the date of any medical
opinion satisfactory to the Company to that effect and
reasonably satisfactory to Executive or his legal
representative.
8.2. Death. In the event that Executive dies
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during the Term of Employment, the Company shall, or shall
cause ATGS to, pay to his executors or administrators an
amount equal to (i) amounts accrued as of the date of death
pursuant to Section 5 of this Agreement, (ii) if such event
occurs on or before September 21, 1997, the full amount of
the anniversary bonus referred to in Section 5.5, and (iii)
amounts payable as a result of Executive's death as provided
for under and in accordance with the Company's insurance,
survivors' income and other employee welfare and benefit
plans, if any, covering Executive. Thereafter, the Company
and ATGS shall have no further liability or obligation to
Executive's executors or administrators, his heirs and
assigns or any other person claiming under or through him.
8.3. With Cause. This Agreement (except for
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Sections 6, 7 and 8) may be terminated by the Company, at
any time, for Cause. In the event this Agreement is
terminated by the Company pursuant to this Section 8.3, the
Company shall, or shall cause ATGS to, pay to Executive
amounts accrued as of the date of the termination pursuant
to Section 5 of this Agreement but shall have no further
liability to Executive pursuant to this Agreement or any
person claiming under or through him. Termination by the
Company for Cause shall mean Termination because of (i) the
Executive's conviction for the commission of any act or acts
constituting a felony under the laws of the United States or
any state thereof, (ii) action by the Executive toward the
Company or ATGS involving dishonesty, (iii) the Executive's
refusal to abide by or follow written directions of the
Company's Board, Chairman or President, (iv) the Executive's
gross nonfeasance which does not cease within ten business
days after notice regarding nonfeasance has been given to
the Executive by the Company, (v) failure of the Executive
to comply with the provisions of Section 6 or Section 7 of
this Agreement, or (vi) other willful conduct by the
Executive which is intended to have and does have a material
adverse impact on the Company or ATGS.
8.4. By Executive. This Agreement (except for
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Sections 6, 7 and 8) may be terminated by Executive, in his
sole discretion, at any time upon thirty days' prior written
notice. In the event this Agreement is terminated by the
Executive pursuant to this Section 8.4, the Company shall,
or shall cause ATGS to, pay to Executive all amounts accrued
as of the date of the termination pursuant to Section 5 of
this Agreement. Thereafter, the Company and ATGS shall have
no further liability or obligation to the Executive, the
Executive's executors or administrators, his heirs and
assigns, or any other person claiming under or through him.
8.5. Without Cause. This Agreement (except for
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Sections 6, 7 and 8) may be terminated without Cause by the
Company at any time. In the event this Agreement is
terminated by the Company pursuant to this Section 8.5, the
Company shall, or shall cause ATGS to, pay to Executive (a)
all amounts accrued as of the date of the termination
pursuant to Section 5 of this Agreement, (b) if such termination
occurs on or before September 21, 1997, the full amount of
the anniversary bonus referred to in Section 5.5, and (c)
for a period of 12 months or, if less, the remainder of the
original Term of Employment, an amount equal to the
Executive's then current monthly base salary; provided,
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however, that such payments shall cease as of the date when
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Executive becomes employed on a full-time basis by a person,
firm, partnership or corporation other than the Company or
ATGS.
8.6. By Executive for Good Reason. This
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Agreement (except for Sections 6, 7 and 8) may be terminated
by the Executive for Good Reason at any time. In the event
this Agreement is terminated by Executive pursuant to this
Section 8.6, the Company shall, or shall cause ATGS to, pay
to Executive (a) all amounts accrued as of the date of the
termination pursuant to Section 5 of this Agreement, (b) if
such termination occurs on or before September 21, 1997, the
full amount of the anniversary bonus referred to in Section
5.5, and (c) for a period of 12 months or, if less, the
remainder of the original Term of Employment, an amount
equal to the Executive's then current monthly base salary;
provided, however, that such payments shall cease as of the
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date when Executive becomes employed on a full-time basis by
a person, firm, partnership or corporation other than the
Company or ATGS. As used herein, "Good Reason" shall mean
(i) failure to re-elect Executive as an Executive Vice
President (provided that such failure is not in connection
with a termination of Executive's employment hereunder for
Cause), or (ii) a material change in Executive's authority,
functions, duties or responsibilities as an Executive Vice
President which would cause his position to become of
significantly less dignity, responsibility, importance or
scope, or (iii) a failure of the Company to comply with the
provisions of Section 5, after the Company shall have been
given written notice and thirty days to cure.
Section 9. Arbitration. Any controversy, dispute or
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claim arising out of or in connection with this Agreement,
or the breach, termination or validity hereof, shall be
settled by final and binding arbitration to be conducted by
an arbitrator in New York, New York pursuant to the rules of
the American Arbitration Association. The Office of the
American Arbitration Association in New York, New York shall
make the necessary appointment of such arbitrator pursuant
to the rules thereof. The decision or award of the
arbitrator shall be final, and judgment upon such decision
or award may be entered in any competent court or
application may be made to any competent court for judicial
acceptance of such decision or award and an order of
enforcement. In the event of any procedural matter not
covered by the aforesaid rules, the procedural law of The
State of New York shall govern.
Section 10. Contents of Agreement, Parties in Interest,
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Assignment, etc. This Agreement sets forth the entire
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understanding and supersedes all prior agreements, both
written and oral, between the parties hereto. No
representation, promise, inducement or statement of intent
has been made by any party to this Agreement to any other
party to this Agreement which is not embodied in this
Agreement, and no party shall be bound by or liable for any
alleged representation, promise, inducement or statement of
intention not embodied herein with respect to the subject
matter hereof. All of the terms and provisions of this
Agreement shall be binding upon and inure to the benefit of
and be enforceable by the respective heirs, representatives,
successors and assigns of the parties hereto; provided,
however, that the duties and responsibilities of Executive
hereunder and any right to receive payments hereunder shall
neither be assigned nor transferred in whole or in part by
Executive. The Company agrees that it will require any
successor (including, without limitation, by merger,
operation of law, consolidation, assignment or purchase of
all or substantially all of the assets of the Company) to
assume expressly and agree to perform this Agreement. This
Agreement shall not be amended except by written instrument
duly executed by the Company and Executive.
Section 11. Severability. The invalidity or
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unenforceability of any particular provision of this
Agreement shall not affect the other provisions hereof, and
this Agreement shall be construed in all respects as if such
invalid or unenforceable provision were omitted.
Section 12. Governing Law. This Agreement shall be
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construed and interpreted in accordance with the laws of the
State of New York relating to contracts to be performed in
the State of New York.
Section 13. Notices. All notices, consents, waivers
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or communications which are required or permitted hereunder
shall be sufficient if given in writing and delivered
personally or by registered or certified mail, return
receipt requested, postage prepaid, as follows (or to such
other addressee or address as shall be set forth in a notice
given in the same manner):
If to the Company:
AnnTaylor, Inc.
142 West 57th Street
New York, New York 10019
Attn: General Counsel
If to Executive:
Mr. Dwight F. Meyer
12 Woodside Avenue
Westport, Connecticut 06880
All such notices shall be deemed to have been given on the
date delivered or mailed in the manner provided above.
Section 14. Waiver. No purported waiver of either
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party of any default by the other party of any term or
provision contained herein shall be deemed to be a waiver of
such term or provision unless the waiver is in writing and
signed by the waiving party. No such waiver shall in any
event be deemed a waiver of any subsequent default under the
same or any other term or provision contained herein.
Section 15. Counterparts. This Agreement may be
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executed in any number of counterparts, each of which shall
be deemed an original but all of which shall together
constitute but one instrument.
Section 16. Effectiveness. This Agreement is
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conditioned upon and shall be of no force or effect unless
and until the transactions contemplated by the Purchase
Agreement have been consummated.
Section 17. Termination of Prior Agreement.
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Executive hereby acknowledges that, upon the Starting Date,
the Employment Agreement, dated as of May 1, 1992 (the "CAT
Agreement"), between Executive and CAT US, Inc. shall be
terminated and of no further force and effect. In
consideration of the sum of $1,600,000 to be paid to the
Executive on the Starting Date (less required withholding
taxes, if any) Executive hereby releases the Company, ATSC,
CAT US, Inc., C.A.T. (Far East) Ltd. and Cygne Designs,
Inc., as of the Starting Date, from any and all liabilities
and obligations under the CAT Agreement, including, without
limitation, the obligations of Cygne Designs, Inc. under the
Guaranty attached to the CAT Agreement.
The parties have set their hands on the day and year
first above mentioned.
ANNTAYLOR, INC.
By:_____________________________
Chairman and Chief Executive Officer
EXECUTIVE
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Dwight F. Meyer