EXHIBIT 10(uu)
EMPLOYMENT AGREEMENT
Employment Agreement ("Agreement") by and between THE DRESS BARN, INC.
("Dress Barn"), and XXXXX X. XXXXX ("Executive") dated as of May 2, 2002.
WHEREAS, Executive has been employed by Dress Barn for approximately 10
years in increasingly senior executive positions; and
WHEREAS, Executive has recently been promoted to President and Chief
Executive Officer.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Dress Barn and Executive agree as
follows:
1. Employment. Dress Barn hereby agrees to employ Executive, and Executive
hereby agrees to be employed by Dress Barn, upon the terms and subject to the
conditions set forth in this Agreement.
2. Term of Employment. The period of Executive's employment under this Agreement
shall begin as of May 2, 2002 (the "Effective Date") and shall continue for a
period ending July 30, 2005, unless sooner terminated in accordance with Section
5 below ("Initial Term"). The Employment Term shall be extended for successive
one (1) year periods (each a "Renewal Term") unless either party gives written
notice of non-renewal to the other party not less than one year prior to the end
of the Initial Term or Renewal Term (as applicable) then in effect. As used in
this Agreement, the phrase "Employment Term" refers to Executive's period of
employment from the date of this Agreement until his "Termination Date" (as
defined in Section 5(f) below).
3. Duties and Responsibilities.
(a) Dress Barn will employ Executive as its President and Chief Executive
Officer. In these capacities, Executive shall perform the customary duties and
have the customary responsibilities of such positions. Executive shall report to
the Chairman of Dress Barn's Board of Directors (the "Board") and the Board, and
shall perform such other duties as may be assigned to Executive from time to
time by the Chairman or the Board.
(b) Executive agrees to faithfully serve Dress Barn, devote his full
working time, attention and energies to the business of Dress Barn, its
subsidiaries and affiliated entities, and perform the duties under this
Agreement to the best of his abilities. Executive agrees not to engage in any
other business or employment without the written consent of Dress Barn except as
otherwise specifically provided herein. Executive may perform uncompensated
services in connection with either the management of personal investments or
with charitable or civic organizations; provided that such activities do not
interfere with Executive's duties pursuant to this Agreement. Executive may
serve on other corporate boards of directors, with the approval of the Board,
which approval will not be unreasonably withheld. Executive shall also be
entitled to appropriate vacation each year.
4. Compensation and Benefits.
(a) Base Salary. During the Employment Term, Dress Barn shall pay Executive
a base salary at the annual rate of $650,000 per year or such higher rate as may
be determined from time to time by the Board or a Compensation Committee of the
Board ("Base Salary"). Such Base Salary shall be paid in accordance with Dress
Barn's standard payroll practices for senior executives.
(b) Benefit Plans, Fringe Benefits and Incentive Programs. Executive shall
be entitled to participate in all of Dress Barn's pension, insurance and other
benefit plans and programs and in all bonus and incentive plans, including the
Dress Barn Management Incentive Plan and stock option plans. Executive shall be
entitled to office, secretarial and administrative assistance, exclusive use of
an automobile (and payment for gasoline, maintenance, repairs, insurance, taxes
and other related automobile expenses), tax preparation services including the
services of an outside accounting firm, and the non-exclusive use of a Dress
Barn apartment located in New York City.
(c) Stock Option Grant. In connection with Executive's promotion to
President and Chief Executive Officer, Dress Barn shall, within 90 days of the
Effective Date, grant Executive options to purchase 150,000 shares of Dress Barn
Common Stock at a price to be determined by Dress Barn within 90 days of the
Effective Date, such option to be granted pursuant to Dress Barn's 1995
Non-Qualified Stock Option Plan.
(d) Expense Reimbursement. Dress Barn shall promptly reimburse Executive
for the ordinary and necessary business expenses incurred by Executive in the
performance of his duties under this Agreement in accordance with Dress Barn's
customary practices applicable to senior executives.
5. Termination of Employment. Executive's employment under this Agreement shall
terminate at the end of the Initial Term or Renewal Term by notice of
non-renewal by either party in accordance with Section 2, unless earlier
terminated under any of the circumstances set forth in this Section 5 (a)
through (d). Upon termination, Executive (or his beneficiary or estate, as the
case may be) shall be entitled to receive the compensation and benefits
described in Section 6 below, and, if applicable, Section 7 below.
(a) Death. Executive's employment shall terminate upon Executive's death.
(b) Total Disability. Dress Barn may terminate Executive's employment upon
his becoming "Totally Disabled". For purposes of this Agreement, Executive shall
be "Totally Disabled" if Executive is physically or mentally incapacitated so as
to render Executive incapable of performing the material and substantial duties
of President under this
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Agreement for a period of ninety (90) consecutive days or one hundred twenty
(120) non-consecutive days in any twelve (12) month period. Executive's receipt
of disability benefits under Dress Barn's long-term disability benefits plan or
receipt of Social Security disability benefits shall be deemed conclusive
evidence of Total Disability (as defined in this Section 5(b)) for purpose of
this Agreement; provided, however, that in the absence of Executive's receipt of
such long-term disability benefits or Social Security benefits, the Board may
determine that Executive is Totally Disabled (as defined in this Section 5(b))
based upon the opinion of an impartial reputable physician ("Impartial
Physician") selected by mutual agreement of the parties or their
representatives, or failing agreement within 10 days of a written request
therefor by Dress Barn to Executive, then an Impartial Physician designated by
mutual agreement of a physician selected by Executive (or his representatives)
and a physician selected by Dress Barn; the written opinion of such Impartial
Physician as to the issue of Total Disability shall be final and binding on the
parties.
(c) Termination by Dress Barn for Cause. Dress Barn may terminate
Executive's employment for "Cause." Such termination shall be effective as of
the date specified in the written Notice of Termination provided to Executive.
(i) For purposes of this Agreement, the term "Cause" shall mean any of the
following:
(A) conviction of a crime (including conviction on a nolo contendere
plea) involving the commission by Executive of a felony or of a
criminal act involving, in the good faith judgment of the Board,
fraud, dishonesty, or moral turpitude but excluding any conviction
which results solely from Executive's title or position with Dress
Barn and is not based on his personal conduct;
(B) intentional and willful failure to satisfactorily perform
employment duties reasonably requested by the Board after thirty (30)
days' written notice of such failure to perform, specifying that the
failure constitutes cause (other than as a result of vacation,
sickness, illness or injury);
(C) fraud or embezzlement;
(D) gross misconduct or gross negligence in connection with the
business of Dress Barn or an affiliate which has a substantial adverse
effect on Dress Barn or the affiliate;
(E) Executive's intentional and willful act or omission which is
materially detrimental to the business or reputation of Dress Barn; or
(F) willful breach of any of the covenants set forth in Section 8
hereof.
(d) Termination by Executive for "Good Reason." Executive may terminate his
employment under this Agreement for "Good Reason" after providing a Notice of
Termination to Dress Barn at least sixty (60) days prior to the Termination
Date.
(i) For purposes of this Agreement, the term "Good Reason" shall mean the
occurrence, without Executive's consent, of any of the following
circumstances:
(i) any material demotion of Executive from his position, job duties, or
responsibilities as President and Chief Executive Officer (except in
connection with the termination of Executive's employment for Cause or
due to Total Disability or as a result of Executive's death, or
temporarily as a result of Executive's illness or other absence);
(ii) a failure by Dress Barn to pay Executive's compensation and benefits
in accordance this Agreement;
(iii)relocation of Executive's principal place of work outside of a
thirty-five (35) mile radius of its current location;
(iv) any material breach (not covered by clauses (i) - (iii) above) of any
of Dress Barn's obligations under this Agreement; or
(v) a Change in Control, as defined in Paragraph 6 below, shall have
occurred and Executive shall have provided a Notice of Termination
thereafter.
(e) Notice of Termination. Any termination of Executive's employment by
Dress Barn or by Executive (other than by reason of Executive's death) shall be
communicated by delivery of a written notice of termination to the other party
in accordance with Section 9 below ("Notice of Termination"). Any notice of
non-renewal pursuant to Section 2 shall be delivered in accordance with Section
9 below.
(f) Termination Date. The effective date of Executive's termination of
employment (the "Termination Date") shall be
(i) in the event of termination for non-renewal by Dress Barn or Executive
pursuant to Section 2, at the end of the then current Initial Term or
Renewal Term;
(ii) in the event of Executive's death, the date of death;
(iii)in the event of termination for Total Disability, the date specified
in the Notice of Termination;
(iv) in the event of termination for Cause, the date specified in the
Notice of Termination;
(v) in the event of termination for Good Reason, the date specified in the
Notice of Termination or such later date as may be mutually agreed by
the parties; and
(vi) in the event of any other termination, the last day of the sixty (60)
day period beginning on the date on which written Notice of
Termination is given or such earlier date as may be specified by Dress
Barn or such later date as may be mutually agreed by the parties.
6. Compensation Following Termination of Employment; Change in Control.
(a) In the event Executive's employment is terminated during the Initial
Term or Renewal Term for a reason other than for death, Total Disability, for
Cause or following a Change in Control, in addition to all other payments and
benefits to which Executive shall be entitled, Executive shall be entitled to
receive an amount equal to the amount of Executive's Base Salary (at the rate in
effect on Executive's Termination Date) for a period equal to what would have
otherwise been the period remaining in the applicable term, but not less than
one year. Payments to Executive under this Section shall be made at the same
time and in the same manner as such compensation had been paid prior to such
termination of employment.
(b) Upon a Change in Control (as hereinafter defined), Executive may, at
his option, terminate his employment under this Agreement by Notice of
Termination given at any time thereafter. In the event Executive's employment is
terminated by reason of a Notice of Termination following a Change in Control,
Dress Barn shall pay the Executive in a single lump sum on or before the
sixtieth day following such election, an amount equal to two times the Base
Salary at the rate in effect on the date of the Notice of Termination.
Notwithstanding receipt of such lump sum payment, Executive shall be entitled to
receive the payments and benefits hereinafter referred to in this Paragraph 6.
A Change in Control shall mean the occurrence of any one of the
following events:
(i) any "person," as such term is used in sections 3(a)(9) and 13(d) of
the Securities Exchange Act of 1934, becomes a "beneficial owner," as
such term is used in Rule 13d-3 under that act, of 30% or more of the
outstanding common stock of Dress Barn, excluding a person that is an
affiliate (as such term is used under that act) of Dress Barn on the
date of this Agreement, or any affiliate of any such person;
(ii) the majority of the board of directors of Dress Barn consists of
individuals other than Incumbent Directors, which term means the
members of the board of directors of Dress Barn on the date of this
Agreement; provided that any person becoming a director subsequent to
such date whose election or nomination for election was supported by
two-thirds of the directors who then comprised the Incumbent Directors
shall be considered an Incumbent Director;
(iii)Dress Barn adopts any plan of liquidation providing for the
distribution of all or substantially all its assets;
(iv) all or substantially all the assets or business of Dress Barn are
disposed of pursuant to a merger, consolidation or other transaction
(unless the shareholders of Dress Barn immediately prior to such
merger, consolidation or other transaction beneficially own, directly
or indirectly, in substantially the same proportion as they own the
common stock of Dress Barn, all the common stock or other ownership
interests of the entity or entities, if any, that succeed to the
business of Dress Barn); or (v) Dress Barn combines with another
company and is the surviving corporation, but, immediately after the
combination, the shareholders of Dress Barn immediately prior to the
combination hold, directly or indirectly, 50% or less of the common
stock or other ownership interests of the combined company (there
being excluded from the number of shares held by such shareholders,
but not from the common stock or other ownership interests of the
combined company, any shares or other ownership interests received by
affiliates of such other company in exchange for stock of such other
company).
(c) Upon termination of Executive's employment under this Agreement for any
reason, Executive (or his designated beneficiary or estate, as the case may be)
shall be entitled to receive the following compensation:
(i) Earned but Unpaid Compensation. Dress Barn shall pay Executive
any accrued but unpaid Base Salary for services rendered to the
date of termination and any accrued but unpaid expenses required
to be reimbursed under this Agreement.
(ii) Other Compensation and Benefits. Except as may otherwise be
provided under this Agreement, any benefits to which Executive
may be entitled pursuant to any other plans, programs and
benefits referred to in Section 4 above shall be determined and
paid in accordance with the terms of such plans, programs and
benefits.
7. Benefits Payable Following Death or Total Disability.
(a) Death. In the event that Executive's employment is terminated by reason
of his death, Executive or his designated beneficiary or estate (as the case may
be) shall receive (i) such life insurance or benefits to which Executive is
entitled under the plans and policies maintained by the Company, (ii)
Executive's full Base Salary at the rate in effect on the date of Executive's
death, as if his employment had continued until one year following Executive's
death, payments of Base Salary to be made at the same time and in the same
manner as such compensation had been paid prior to such termination of
employment, and (iii) continuation of Executive's health and medical insurance
coverage for his family until one year following Executive's death.
(b) Total Disability. In the event that Executive's employment is
terminated by reason of his Total Disability as determined in accordance with
Section 5(b), Executive or his designated beneficiary or estate (as the case may
be) shall receive (i) such life insurance or disability benefits, if any, to
which Executive is entitled under the plans and policies maintained by Dress
Barn; (ii) Executive's Base Salary as determined under Section 4(a) at the rate
in effect on his Termination Date, as if his employment had continued through
the period remaining in the applicable term, and in no event less than one year
following the Termination Date. Such payments shall be made at the same time and
in the same manner as such compensation had been paid prior to such termination
of employment. Executive's health and medical insurance coverage for the
Executive and his family shall also continue in effect for the same period as
his Base Salary as provided in (ii) above.
8. Restrictive Covenants.
(a) Non-Competition. Executive covenants and agrees that at all times
during the Employment Term and for one (1) year thereafter, unless Dress Barn at
its sole discretion) gives its prior written consent to such activity by
Executive, Executive will not, directly or indirectly, engage in, assist, or
have any active interest or involvement whether as an employee, agent,
consultant, creditor, advisor, officer, director, stockholder (excluding
holdings of less than 1% of the stock of a public company), partner, proprietor
or any type of principal whatsoever in any person, firm, or business entity
which, directly or indirectly, is engaged in "Competition" with Dress Barn.
For purposes of this Agreement, "Competition" with Dress Barn shall mean
(x) the business of owning and/or operating one or more retail specialty stores
that sell women's apparel, or (y) the business of selling women's apparel
through catalogs or internet sales, or (z) any other business engaged in by
Dress Barn or any subsidiary of Dress Barn (i.e., any entity in which Dress Barn
owns 25% or more of the outstanding equity interests) during the Employment
Term. As used in this Section 8, the term "affiliate" shall mean, with respect
to a particular person, a person that directly, or indirectly through one or
more intermediaries, controls, or is controlled by, or is under common control
with, such person.
(b) Non-Solicitation. Executive covenants and agrees that at all times
during the Employment Term and for one (1) year thereafter, he will not directly
or indirectly recruit, solicit, hire, or cause to be hired, any individual who
is then, or who has been within the preceding six (6) month period, an employee
of Dress Barn.
(c) Non-Disparagement. Executive covenants and agrees that during the
course of his employment by Dress Barn or at any time thereafter, Executive
shall not, directly or indirectly, in public or private, deprecate, impugn,
disparage, or make any remarks that would tend to or be construed to tend to
defame Dress Barn or any of its employees, members of its board of directors or
agents, nor shall Executive assist any other person, firm or company in so
doing.
(d) Right to Injunction. Executive acknowledges that the services to be
rendered by him to Dress Barn are of a special and unique character, which gives
this Agreement a peculiar value to Dress Barn. Executive acknowledges that a
breach of the covenants set forth in this Section 8 will cause irreparable
damage to Dress Barn with respect to which Dress Barn's remedy at law for
damages will be inadequate. Therefore, in the event of breach or anticipatory
breach of the covenants set forth in this Section 8 by Executive, Executive and
Dress Barn agree that Dress Barn shall be entitled, in addition to remedies
otherwise available to it at law or equity, to injunctions, both preliminary and
permanent, enjoining or restraining such breach or anticipatory breach and
Executive hereby consents to the issuance thereof forthwith and without bond by
any court of competent jurisdiction.
(e) Acknowledgments and Separability of Covenants. The parties acknowledge
that the type and periods of restriction imposed in Section 8 are fair and
reasonable and are reasonably required for the protection of Dress Barn; and
that the time, scope and other provisions of such Section have been specifically
negotiated by the parties. Executive specifically acknowledges that the
restrictions contemplated by this Agreement will not prevent
him from being employed or earning a livelihood. The covenants contained in this
Section constitute a series of separate covenants, one for each applicable State
in the United States and the District of Columbia, and one for each applicable
foreign country. If in any judicial proceeding, a court shall hold that any of
the covenants set forth in Section 8 are not permitted by applicable laws,
Executive and Dress Barn agree that such covenants shall and are hereby reformed
to the maximum time, geographic, or occupational limitations permitted by such
laws. Further, in the event a court shall hold unenforceable any of the separate
covenants deemed included herein, then such unenforceable covenant or covenants
shall be deemed eliminated from the provisions of this Agreement for the purpose
of such proceeding to the extent necessary to permit the remaining separate
covenants to be enforced in such proceeding. 9. Notices. Any notice, consent,
request or other communication made or given in connection with this Agreement
shall be in writing and shall be deemed to have been duly given when delivered
or mailed by registered or certified mail, return receipt requested, or by
facsimile or by hand delivery, to the party listed below at their following
respective addresses or at such other address as each may specify by notice to
the other:
To Dress Barn:
The Dress Barn, Inc.
00 Xxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Attention: Chairman of the Board of Directors
To Executive:
Xxxxx X. Xxxxx
00 Xxxxxxx Xxxxx
Xxxxxx, XX 00000
10. Miscellaneous.
(a) This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of New York applicable to agreements made
and to be performed entirely in New York. Any dispute between the parties hereto
arising out of or relating to this Agreement (other than any dispute relating to
Section 8 above) shall be settled exclusively by arbitration in New York, New
York in accordance with the provisions of this Agreement and the commercial
rules of the American Arbitration Association then in effect. Judgment may be
entered on the arbitrator's award in any court having jurisdiction.
(b) The article and section headings contained herein are for reference
purposes
(c) This Agreement sets forth the entire agreement and understanding of the
parties relating to the subject matter hereof, and supersede all prior
agreements, arrangements and understandings, written or oral, relating to the
subject matter hereof. It may not be amended except by a written agreement
signed by both parties.
(d) Except as otherwise provided in this Agreement, this Agreement shall
inure to the benefit of and be binding upon the parties hereto and their
respective heirs, representatives, successors and assigns. This Agreement and
the rights and benefits of Executive under this Agreement shall not be
assignable by Executive; provided, however, that nothing in this Section 10
shall preclude Executive from designating a beneficiary or beneficiaries to
receive any benefit payable on his death.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
DRESS BARN, INC.
Date: May 2, 2002 By:/S/ XXXXXX XXXXXXX
Name:Xxxxxx Xxxxxxx
Title:Senior Vice President
Date: May 2, 2002 By:/S/ XXXXX X. XXXXX
Name:Xxxxx X. Xxxxx
