Exhibit 10.7(b)
January 30, 2003
Mr. Xxxxx Xxxxxx
000 Xxxx 00/xx/ Xxxxxx, #0
Xxx Xxxx, XX 00000
Dear Xxxxx:
This letter will confirm our understanding of the arrangements under
which your Employment Agreement, dated December 12, 2001, with the Company
("Employment Agreement") is terminated. The terms and conditions of the
termination of your employment with the Company are set out below.
1. The parties hereby acknowledge and confirm that your employment
with the Company is terminated effective as of January 30, 2003
(the "Termination Date").
2. Subject to this Agreement becoming effective (as described in
Paragraph 18 hereof), the Company will continue to pay you your
base salary of $400,000 per annum for the twelve (12) month
period beginning on the day immediately following the
Termination Date ("Severance Period"), payable in accordance
with the Company's regular payroll practices for its employees.
You will also continue to have medical coverage during the
Severance Period on the same terms and conditions as medical
coverage is then made available to the employees of the Company.
The foregoing payments shall be reduced by any required tax
withholdings and shall not be taken into account as compensation
and no service credit shall be given after the Termination Date
for purposes of determining the benefits payable under any other
plan, program, agreement or arrangement of the Company. You
acknowledge that, except for the foregoing payments, you are not
entitled to any payment by the Company in the nature of either
severance or termination pay or other compensation of any kind.
3. As of the Termination Date, you have no vested options to
purchase shares of Common Stock ("Common Stock") of J. Crew
Group, Inc. ("Parent") and 30,000 unvested options to purchase
Common Stock at $10.00 per share. You acknowledge that all of
your unvested options terminate effective immediately, in
accordance with the provisions of your stock option agreements
with Parent and the J. Crew Group, Inc. 1997 Stock Option Plan,
as amended (the "Option Plan").
4. By signing this Agreement, you agree that in exchange for the
consideration set forth herein, you hereby voluntarily, fully
and unconditionally release and forever discharge the Company,
Parent, their present and former parent corporation(s),
subsidiaries, divisions, affiliates and otherwise related
entities and their respective incumbent and former employees,
directors, plan administrators, officers and agents,
individually and in their official capacities (collectively, the
"Releasees"), from any and all charges, actions, causes of
action, demands, debts, dues, bonds, accounts, covenants,
contracts, liabilities, or damages of any
nature whatsoever, whether now known or claimed, to whomever
made, which you have or may have against any or all of the
Releasees for or by reason of any cause, nature or thing
whatsoever, up to the present time, arising out of or related to
your employment with the Company or the termination of such
employment, including, by way of examples and without limiting
the broadest application of the foregoing, any actions, causes
of action, or claims under any contract or federal, state or
local decisional law, statues, regulations or constitutions, any
claims for notice, pay in lieu of notice, wrongful dismissal,
breach of contract, defamation or other tortious conduct,
discrimination on the basis of actual or perceived disability,
age, sex, race or any other factor (including, without
limitation, any claim pursuant to Title VII of the Civil Rights
Act of 1964, Americans with Disabilities Act of 1990, the Age
Discrimination in Employment Act of 1967, as amended, the Family
and Medical Act of 1993, the Equal Pay Act of 1963, the Fair
Labor Standards Act, the State, City and local laws of New York,
and the equal employment law or laws of the state and/or city in
which you work), any claim pursuant to any other applicable
employment standards or human rights legislation or for
severance pay, salary, bonus, incentive or additional
compensation, vacation pay, insurance, other benefits, interest,
and/or attorney's fees. You acknowledge that this general
release is not made in connection with an exit incentive or
other employment termination program offered to a group or class
of employees.
If you have made or should hereafter make any complaint, charge,
claim, allegation or demand, or commence or threaten to commence
any action, complaint, charge, claim or proceeding, against any
or all of the Releasees for or by reason of any cause, matter or
thing whatsoever existing up to the present time, this Agreement
may be raised as and shall constitute a complete bar to any such
action, complaint, charge, claim, allegation or proceeding, and,
subject to a favorable ruling by a tribunal of final
jurisdiction, the Releasees shall recover from you, and you
shall pay to the Releasees, all costs incurred by them,
including their attorneys' fees, as a consequence of any such
action, complaint charge, claim, allegation or proceeding;
provided, however, that this shall not limit you from enforcing
your rights under this Agreement, and in the event any action is
commenced to enforce your rights under this Agreement, each
party shall bear its own legal fees and expenses; and provided
further, however, that this is not intended to interfere with
your right to file a charge with the Equal Employment
Opportunity Commission ("EEOC") in connection with any claim you
believe you may have against any Releasee. However, by signing
this Agreement, you agree to waive any right to recover in any
proceeding you may bring before the EEOC (or any state human
rights commission) or in any proceeding brought by the EEOC (or
any state human rights commission) on your behalf.
You specifically release all claims under the Age Discrimination
in Employment Act ("ADEA") relating to your employment and its
termination.
5. You acknowledge that the payments described in Section 2 above
that you are receiving in connection with the foregoing release
are in accordance with your Employment Agreement.
2
6. You hereby agree and acknowledge that you shall be bound by and
comply with the restrictive covenants provided in Section 4 of
the Employment Agreement (the "Restrictive Covenants"), and that
such Restrictive Covenants are hereby made part of this
Agreement as if specifically restated herein and that the
payments described in Section 2 above that you are receiving are
subject to and contingent upon your compliance with Restrictive
Covenants.
7. You acknowledge and agree that, notwithstanding any other
provision of this Agreement, if you breach any of your
obligations under this Agreement or any Restrictive Covenant,
(a) you will forfeit your right to receive the payments and
benefits described in Section 2 above (to the extent the
payments were not theretofore paid) and the Company shall be
entitled to recover any payments already made to you or on your
behalf, (b) the Vested Options shall expire as of the date of
such breach to the extent not theretofore exercised and, if
exercised as of the date of such breach, you shall immediately
reimburse the Company for the profit upon exercise (such profit
calculated as the difference between the (i) greater of either
the Fair Market Value (as defined in the Option Plan) of a share
of Common Stock on the date of exercise or the amount paid by
the Company to you per share of Common Stock for the purchase of
the shares acquired upon exercise, and (ii) exercise price,
times the number of options exercised).
8. You hereby agree that the breach of any Restrictive Covenant may
cause the Company to suffer irreparable harm for which money
damages would not be an adequate remedy and therefore, if you
breach a Restrictive Covenant, the Company would be entitled to
temporary and permanent injunctive relief in any court of
competent jurisdiction (without the need to post any bond)
without prejudice to any other remedies under this Agreement or
otherwise.
9. You agree that, in the event that you are served with legal
process or other request purporting to require you to testify,
plead, respond or defend and/or produce documents at a legal
proceeding, threatened proceeding, investigation or inquiry
involving the Releasees, you will: (1) refuse to provide
testimony or documents absent a subpoena, court order or similar
process from a regulatory agency: (2) within three (3) business
days or as soon thereafter as practical, provide oral
notification to the Company's Executive Vice-President of Human
Resources of your receipt of such process or request to testify
or produce documents; and (3) provide to the Company's Executive
Vice-President of Human Resources by overnight delivery service
a copy of all legal papers and documents served upon you. You
further agree that in the event you are served with such
process, you will meet and confer with the Company's designee(s)
in advance of giving such testimony or information. You also
agree to cooperate fully with the Releasees in connection with
any existing or future litigation against the Releasees, whether
administrative, civil or criminal in nature, in which and to the
extent the Releasees deem your cooperation necessary. The
Company agrees to reimburse you for your reasonable
out-of-pocket expenses incurred in connection with the
performance of your obligations under this Section 9.
10. This Agreement does not constitute an admission of liability or
wrongdoing of any kind by you or the Company or its affiliates.
3
11. The terms of this Agreement shall be binding on the parties
hereto and their respective successors, assigns, heirs and
representatives.
12. This Agreement constitutes the entire understanding of the
Company and you with respect to the subject matter hereof and
supersedes all prior understandings, written or oral. The terms
of this Agreement may be changed, modified or discharged only by
an instrument in writing signed by the parties hereto. A failure
of the Company or you to insist on strict compliance with any
provision of this Agreement shall not be deemed a waiver of such
provision or any other provision hereof. If any provision of
this Agreement is determined to be so broad as to be
unenforceable, such provision shall be interpreted to be only so
broad as is enforceable.
13. This Agreement shall be construed, enforced and interpreted in
accordance with and governed by the laws of the State of New
York.
14. The parties hereto acknowledge and agree that each party has
reviewed and negotiated the terms and provisions of this
Agreement and has contributed to its revision. Accordingly, the
rule of construction to the effect that ambiguities are resolved
against the drafting party shall not be employed in the
interpretation of this Agreement. Rather, the terms of this
Agreement shall be construed fairly as to both parties hereto
and not in favor or against either party.
15. This Agreement may be executed in any number of counterparts and
by different parties on separate counterparts, each of which
counterpart, when so executed and delivered, shall be deemed to
be an original and all of which counterparts, taken together,
shall constitute but one and the same Agreement.
16. You acknowledge that, by your free and voluntary act of signing
below, you agree to all of the terms of this Agreement and
intend to be legally bound thereby.
17. You acknowledge that you have received this Agreement on or
before January 30, 2003. You understand that you may consider
whether to agree to the terms contained herein for a period of
twenty-one (21) days after the date hereof. However, the
operation of the provisions of Sections 2 through 4 above may be
delayed until you execute this Agreement and return it to the
Company and it becomes effective as provided below. You
acknowledge that you have consulted with an attorney prior to
your execution of this Agreement or have determined by your own
free will not to consult with an attorney.
18. This Agreement will become effective, enforceable and
irrevocable seven days after the date on which it is executed by
you (the "Effective Date"). During the seven-day period prior to
the Effective Date, you may revoke your agreement to accept the
terms hereof by indicating in writing to the Executive
Vice-President of Human Resources your intention to revoke. If
you exercise your right to revoke hereunder, you shall forfeit
your right to receive any of the payments and other benefits
provided for herein, and to the extent such payments or benefits
have already been made, you agree that you will immediately
reimburse the Company for the value of such payments and
benefits.
4
If the foregoing correctly reflects our understanding, please sign the
enclosed copy of this letter agreement, whereupon it will become a binding
agreement between us.
J. CREW OPERATING CORP.
By: _________________________
Xxxxx X. Xxxxx
Executive Vice-President,
Human Resources
Agreed to and accepted:
By:_______________________
Xxxxx Xxxxxx
Dated: _____________, 2003
Acknowledgment
STATE OF _________________)
ss:
COUNTY OF _______________)
On the __ day of _______, 2003, before me personally came Xxxxx Xxxxxx who,
being by me duly sworn, did depose and say that he resides at
_________________________________, and did acknowledge and represent that he has
had an opportunity to consult with attorneys and other advisers of his choosing
regarding the Agreement set forth above, that he has reviewed all of the terms
of the Agreement and that he fully understands all of its provisions, including
without limitation, the general release and waiver set forth therein.
_________________________
Notary Public
Date:____________________
5
