UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant To Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (date of earliest event reported): November 17, 2005
AnnTaylor Stores Corporation
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(Exact Name of Registrant as Specified in its Charter)
Delaware
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(State or Other Jurisdiction of Incorporation)
1-10738 13-3499319
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(Commission File Number) (IRS Employer Identification No.)
7 Times Square, New York, NY 10036
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(Address of Principal Executive Offices, Including Zip Code)
(212) 541-3300
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(Registrant's Telephone Number, Including Area Code)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
|_| Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
ITEM 1.01. Entry into a Material Definitive Agreement.
EMPLOYMENT AGREEMENT WITH MS. KATHERINE KRILL
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On November 17, 2005, the Board of Directors (the "Board") of
AnnTaylor Stores Corporation (the "Company") approved, upon the recommendation
of the Compensation Committee of the Board (the "Compensation Committee"), a
new employment agreement with Ms. Katherine Krill (the "Agreement") in
connection with Ms. Krill's promotion to Chief Executive Officer of the
Company. A copy of the Agreement is filed herewith as Exhibit 10, and a summary
description of the material terms of the Agreement is set forth below which
summary is qualified in its entirety by the attached Agreement.
Under the Agreement, Ms. Krill will serve as Chief Executive Officer
of the Company and for as long as Ms. Krill is employed as the Chief Executive
Officer, the Company shall nominate her for re-election as a member of the
Board. The Agreement is effective as of October 1, 2005 and has an initial
three-year term, provided, that, commencing October 1, 2008, the term shall be
automatically renewed for successive one-year periods unless either party
provides notice of non-renewal at least six months prior to the applicable
October 1. Under the Agreement, Ms. Krill will receive an annual base salary of
at least $1,000,000. For each fiscal year, Ms. Krill shall be eligible to earn
an annual cash bonus under the Company's Management Performance Compensation
Plan (the "Bonus Plan"). Commencing with the Company's 2006 fiscal year, Ms.
Krill's Performance Percentage (as defined in the Bonus Plan) shall be 100% per
annum and the business criterion to be used in determining the relevant
performance goals shall be determined by the Compensation Committee and
approved by the Board. Ms. Krill shall also participate in the Company's Long
Term Cash Incentive Compensation Plan and the 2004 Long Term Cash Incentive
Compensation Plan with a target award of 50% of base salary.
Concurrent with the Board's approval of the Agreement, the Company
granted Ms. Krill an option to purchase 200,000 shares of Company common stock
under the 2003 Equity Incentive Plan, as amended (the "Plan"). The option was
granted with an exercise price equal to fair market value on the date of grant
($28.49) and generally shall vest with respect to one-third of such shares on
each of October 1, 2006, 2007 and 2008, subject to Ms. Krill's continued
employment. Subject to shareholder approval of an amendment to the Plan to
increase the number of shares of Company common stock available for issuance
under the Plan, the Company granted Ms. Krill 400,000 shares of restricted
common stock on November 17, 2005; 200,000 of such restricted shares generally
shall vest over time with one-third vesting on each of October 1, 2006, October
1, 2007 and October 1, 2008; and the remaining 200,000 restricted shares
generally shall be eligible to vest pro rata on the March 15 following the end
of each of the Company's 2006, 2007 and 2008 fiscal years based upon the
attainment of certain performance goals as determined by the Compensation
Committee and approved by the Board (in each case, subject to Ms. Krill's
continued employment with the Company).
Ms. Krill is eligible to participate in each of the Company's benefit
plans in which other executive officers of the Company participate. In
addition, the Company shall maintain a supplemental life insurance policy on
behalf of Ms. Krill which provides for a death benefit equal to no less than
$7,000,000.
Upon a termination of employment without "cause" or for "good reason"
(as defined in the Agreement), or upon non-renewal of the term by the Company,
in each case prior to the occurrence of a "change in control" of the Company
(as defined in the Agreement), Ms. Krill shall be entitled to receive for the
greater of the remainder of the term of the Agreement or 18 months, monthly
cash severance based on salary plus average short-term bonus over the prior 3
fiscal years (or lesser period so as to exclude any year prior to fiscal 2006).
Upon such a termination, all equity awards granted on or after October 1, 2005
shall fully vest, except that in the case of performance-based restricted
stock, only that portion of the award which is eligible to vest on the March 15
following the end of the fiscal year of termination shall vest and then only on
a pro rata basis based on actual performance for the year. All equity awards
granted prior to the effective date of the Agreement shall remain governed by
the terms of Ms. Krill's prior employment agreement with the Company and the
individual award agreements under which such awards were granted. The Company
shall also provide medical/health coverage to Ms. Krill for the longer of the
remainder of the term of employment agreement or eighteen months, but in no
event beyond the second calendar year following the year in which the date of
termination of employment occurs. Upon such a termination following a change in
control, Ms. Krill shall be entitled to receive a cash severance lump sum equal
to three times the sum of salary plus a bonus component (including both
short-term and long-term bonuses) the calculation of which will depend upon
whether the termination occurs prior to or after the end of fiscal 2006. In the
event that any payment under the Agreement is subject to the excise tax for
golden parachute payments, the Company shall provide Ms. Krill with a gross-up
payment as may be necessary to put her in the same after-tax position as if the
payments had not been subject to the excise tax.
The Agreement imposes restrictive covenants on Ms. Krill relating to
non-competition and non-solicitation of Company employees.
ITEM 9.01. Financial Statements and Exhibits.
(c) Exhibits.
Exhibit No. Description
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10 Employment Agreement with Katherine L. Krill, effective
as of October 1, 2005.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this Current Report on Form 8-K to be signed on
its behalf by the undersigned hereunto duly authorized.
AnnTaylor Stores Corporation
By: /s/ Barbara K. Eisenberg
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Name: Barbara K. Eisenberg
Title: Executive Vice President,
General Counsel and Secretary
Dated: November 23, 2005
EXHIBIT INDEX
Exhibit No. Description
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10 Employment Agreement with Katherine L. Krill, effective as
of October 1, 2005.