EXHIBIT 10.17
EMPLOYMENT AGREEMENT
PARTIES
This Employment Agreement (this "Agreement") dated and effective as of
February 1, 2002 (the "Effective Date"), is entered into by and between
Aeropostale, Inc., a Delaware corporation (the "Company"), and Xxxx X. Xxxxx
("Executive").
TERMS OF AGREEMENT
In consideration of the mutual covenants in this Agreement, the parties
agree as follows:
1. Definitions.
For purposes of this Agreement, the terms listed below shall be defined as
indicated.
Affiliate: A domestic or foreign business entity controlled by,
controlling, under common control with, the Company, including The Bear Xxxxxxx
Companies, Inc. and its affiliates.
Annual Bonus: See Section 3.2.
Base Salary: See Section 3.1.
Bear Entity: The Bear Xxxxxxx Companies Inc., Bear Xxxxxxx MB 1998-1999
Pre-Fund, LLC, and any and all Subsidiaries or Affiliates of any such entities.
Board: The Board of Directors of the Company.
Cause: See Section 5.1.
Change of Control: A "Change of Control" shall mean. (i) the acquisition
by any person or entity other than a Bear Entity of, directly or indirectly,
Beneficial Ownership (as defined in Rule 13d-3 of the Securities Exchange Act of
1934, as amended) of securities of the Company representing 33-1/3% (or more) of
the total voting power of all of the Company's then outstanding voting
securities, (ii) a merger or consolidation of the Company in which the Company's
voting securities immediately prior to the merger or consolidation do not
represent, or are not converted into securities (owned by stockholders in
substantially the same proportions as their ownership immediately prior to such
merger or consolidation) that represent, a majority of the voting power of an of
the voting securities of the surviving entity immediately after the merger or
consolidation, (iii) a sale of substantially all of the assets of the Company 0,
a liquidation or dissolution of the Company, or (iv) individuals, who, as of the
Effective Date, constitute the Board (the "Incumbent Board") cease for any
reason to constitute at least a majority of such Board; provided that any
individual who becomes a director of the Company subsequent to the Effective
date whose election or nomination for election by the Company's stockholders was
approved by the vote of at least a majority of the directors then in office
shall be deemed a member of the Incumbent Board.
Common Stock: The $.01 par value common stock of the Company.
Confidential Information: All secret proprietary information of the
Company and its Subsidiaries, not otherwise publicly disclosed (except if
disclosed by the Executive in violation of this Agreement), whether or not
discovered or developed by Executive, known by Executive as a consequence of
Executive's employment with the Company at any time (including prior to the
commencement of this Agreement) as an employee or agent. Without limiting the
generality of the foregoing, such proprietary information shall include (a)
customer lists; (b) acquisition, expansion, marketing, financial and other
business information and plans; (c) research and development; (d) computer
programs; (e) sources of supply; (f) identity of specialized consultants and
contractors and confidential information developed by them for the Company and
its Subsidiaries; (g) purchasing, operating and other cost data; (h) special
customer needs, cost and pricing data; (i) manufacturing methods; (j) quality
control information; (k) inventory techniques; (l) employee information; all of
which information is not generally known in the industries in which the Company
and its Subsidiaries are conducting business or shall at any time during
Executive's Employment conduct business including (without limitation) the
apparel retailing industry. Confidential Information also includes the overall
business, financial, expansion and acquisition plans of the Company and its
Subsidiaries, and includes information contained in manuals, memoranda,
projections, minutes, plans, drawings, designs, formula books, specifications,
computer programs and records, whether or not legended or otherwise identified
by the Company and its Subsidiaries as Confidential Information, as well as
information which is the subject of meetings and discussions and not so
recorded.
Consolidated Net Income: For any period the net income (or loss) of the
Company for such period determined on a consolidated basis in accordance with
generally accepted accounting principles; provided, however, that there shall be
excluded therefrom (to the extent included and without duplication) (i) all
management fees payable for such period to Sponsor (or its designees) pursuant
to the management agreement between the Company and Sponsor, (ii) any Annual
Bonus payable to Executive pursuant to this Agreement) (iii) any Annual Bonus
payable to Xxxxxx X. Xxxxxx ("Xxxxxx") pursuant to any employment agreement
between the Company and Xxxxxx then in effect, and (iv) all extraordinary gains
and extraordinary losses (as defined by GAAP), and (v) all preferred dividends.
The calculation of Consolidated Net Income for the 2001 Fiscal Year is set forth
on Exhibit A.
Disability: The absence of the Executive from the Executive's duties to
the Company on a full-time basis for a total of 120 days during any 12-month
period as a result of incapacity due to mental or physical illness which is
determined to be permanent by a physician selected by the Company and acceptable
to the Executive or the Executive's legal representative (such agreement as to
acceptability not to be withheld unreasonably).
Employment Period: Unless earlier terminated as provided in Section 5
hereof, the Employment Period shall be the period commencing on the Effective
Date and terminating on the last day of the 2003 Fiscal Year.
Fiscal Year: The 52 or 53 week period ending on the Saturday closest to
January 31 of each calendar year. Fiscal Years shall be referred to herein on
the basis of the calendar year
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which contains 11 months of such Fiscal Year. (For example, "1998 Fiscal Year"
means the twelve-month period ending January 30, 1999).
Inventions: Those discoveries, developments, concepts and ideas, whether
or not patentable, relating to the present, future and prospective activities
and Products and Services of the Company and its Subsidiaries, which such
activities and Products and Services are known to Executive by virtue of
Executive's employment with the Company and its Subsidiaries.
Percentage Increase in Consolidated Net Income: Percentage Increase in
Consolidated Net Income shall mean, with respect to any Fiscal Year of the
Company, the percentage increase, if any, in Consolidated Net Income of the
Company in such Fiscal Year over the Consolidated Net Income of the Company in
the immediately preceding Fiscal Year. By way of example, in the event that the
Consolidated Net Income of the Company in the 2002 Fiscal Year is $20 million
and the Consolidated Net Income of the Company in the 2003 Fiscal Year is $25
million, the Percentage Increase in Consolidated Net Income in the 2003 Fiscal
Year shall be equal to 25%.
Prior Employment Agreement: shall mean that certain Employment Agreement,
effective as of August 3. 1998, between the Company and Executive.
Products and Services: All products or services sold, rented, leased,
rendered or otherwise made available to its customers by the Company and its
Subsidiaries, or otherwise the subject of the business of the Company and its
Subsidiaries.
Restricted Period: The period beginning on the Effective Date and ending
on the later of the termination of Executive's employment or the date all
payments to Executive under Section 6.1(a) shall have been required to have been
made.
Sponsor: MSS Acquisition Corp. II, a wholly owned subsidiary of The Bear
Xxxxxxx Companies Inc.
Stock Option Plan: The 1998 Stock Option Plan of MSS - Delaware, Inc.
Stockholders Agreement: shall mean that certain "Stockholders Agreement"
dated August 3, 1998, to which the Company, MSS Acquisition Corp. II, FSS and
the Executive Group are parties.
Subsidiary: Any entity of which the Company owns, directly or indirectly,
50% or more of the aggregate voting power of the voting securities-
2. Employment.
(a) Subject to the terms and conditions of this Agreement, the
Company hereby agrees to employ and the Executive hereby accepts employment in
the position of President and Chief Operating Officer of the Company and agrees
during the Employment Period to perform to the best of Executive's ability,
experience and talent those acts and duties and to furnish ,those services to
the Company and its Subsidiaries in connection with and related to such
positions as the Board shall from time to time direct, provided such acts and
directives
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are consistent with the duties of President and Chief Operating Officer.
Executive shall. during the Employment Period, use Executive's best efforts to
promote the interests of the Company and its Subsidiaries.
(b) During the Employment Period, subject to Section 5.2(c) hereof,
Executive's principal place of employment shall be located at one of the
Company's principal places of business or principal executive office, wherever
located as designated from time to time by the Board, and Executive shall be
provided with secretarial services, an office and similar support services and
facilities as appropriate to Executive's position and responsibilities and of at
least substantially the same quality as provided to Executive on the Effective
Date.
(c) During the Employment Period, Executive shall devote his full
business time and best efforts to the business affairs of the Company; however,
the Executive may devote reasonable time and attention to:
(i) serving as a director of, or member of a committee of the
directors of, any not-far-profit organization or engaging in other
charitable or community activities; and
(ii) serving as a director of, or member of a committee of the
directors of. the corporations or organizations for which the Executive
presently serves in such capacity, and such other corporations and
organizations that the Board may from time to time approve in the future,
(iii) seeking alternative employment commencing October 1,
2004 so long as such time and attention do not unreasonably detract from
his duties hereunder if this Agreement shall not have been extended by the
parties on or prior to October 1, 2004,
provided that, except as specified above, the Executive may not accept
employment with any other individual or other entity, or engage in any other
venture which is indirectly or directly in conflict or competition with the then
existing business of the Company.
3. Compensation and Benefits: Disability.
3.1. Base Salary.
During the Employment Period; the Company shall pay Executive a Base
Salary for the 2002 Fiscal Year in the amount of $300,000 and a Base Salary for
the 2003 Fiscal Year in the amount of $400,000. The Base Salary shall be payable
in equal installments pursuant to the Company's customary payroll policies in
force at the time of payment (but in no event less frequently than monthly),
less required payroll deductions. The Base Salary shall be subject to increase
from time to time, including, without limitation, for cost of living, in the
sole discretion of the Board.
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3.2. Annual Bonus.
(a) In addition to Executive's Base Salary, during the Employment
Period the Company shall pay Executive, as soon as reasonably practicable but in
no event later than 30 days following the Company's receipt of its audited
financial statements for the applicable Fiscal Year, an Annual Bonus in cash for
each Fiscal Year commencing with the 2002 Fiscal Year as follows; With respect
to the 2002 Fiscal Year, the Company shall pay to Executive the Annual Bonus (as
defined in the Prior Employment Agreement) which he would have received under
the terms of the Prior Employment Agreement had the Prior Employment Agreement
not been superceded by this Agreement and all references in this Agreement to
the term "Annual Bonus" that are applicable to the 2002 Fiscal Year shall. to
the extent applicable to the 2002 Fiscal Year, be deemed references to the
Annual Bonus as such term is defined in the Prior Employment Agreement. With
respect to the 2003 and 2004 Fiscal Years, the Company shall pay to Executive an
Annual Bonus which is
the product of
(A) Percentage Increase in Consolidated Net Income for such
Fiscal Year times 100;
(B) 4%; and
(C) Executive's Base Salary.
By way of example, in the event that the Percentage Increase in
Consolidated Net Income of the Company in the 2003 Fiscal Year is 25%, Executive
shall be entitled to an Annual Bonus in an amount equal to $400,000 (i.e.. 25 x
..04 x $400,000). In the event that there is no Percentage Increase in
Consolidated Net Income in the 2003 Fiscal Year (either by reason of the
Consolidated Net Income declining or remaining unchanged between successive
Fiscal Years). Executive shall not be entitled to an Annual Bonus pursuant to
this Section 3.2(a) for such Fiscal Year.
(b) In the event that in the 2003 Fiscal Year Executive is not
entitled to an Annual Bonus pursuant to Section 3.2(a) or the Executive's Bonus
in such Fiscal Year is less than his then applicable Base Salary but the
Company's Consolidated Net Income for such Fiscal Year shall be greater than $51
Million, Executive shall be entitled to an Annual Bonus equal to one (1) times
his then applicable Base Salary. Such bonus shall be payable in cash as soon as
reasonably practicable but in no event later than 30 days following the
Company's receipt of its audited financial statements for the applicable Fiscal
Year.
(c) Notwithstanding anything to the contrary in this Section 3.2, in
no event shall Executive be entitled to receive an Annual Bonus in excess of one
and one-quarter (1 1/4) times his then applicable Base Salary in respect of the
2003 Fiscal Year.
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3.3. Intentionally omitted.
3.4. Other Benefits.
Executive shall be entitled, during the Employment Period, to participate,
on the same basis and to the same extent as other executive employees of the
Company, in any pension, life insurance, health insurance, short-term disability
and hospital plans and other fringe benefits or benefit plans presently in
effect and hereafter maintained or created by the Company. In addition,
Executive shall receive an automobile allowance in the amount of $8,500 per
year, payable monthly which, at Executive's election, maybe applied towards the
Company's expense on the lease of the automobile currently being driven by
Executive, for the duration of such lease, so long as Executive reimburses the
Company for any costs related thereto in excess of $10,000. During the
Employment Period, Company agrees not to reduce the benefits provided to
Executive. Service with the Company. any Subsidiary, or Federated Department
Stores, Inc. ("Federated") or any affiliate of Federated shall be recognized for
vesting purposes under any benefit plan of the Company.
3.5. Vacation.
Executive may take such vacation period or periods during each year as
shall be consonant with Executive's responsibilities and (in the Company's
judgment) with the Company's vacation schedule and policies for senior officers.
which vacation shall be at least four weeks per calendar year.
3.6. Expenses.
Pursuant to the Company's customary policies in force at the time of
payment, Executive shall be promptly reimbursed, against presentation of
vouchers or receipts therefor, for all authorized expenses properly incurred by
Executive on the Company's behalf in the performance of Executive's duties
hereunder.
3.7. Exclusive Compensation.
In respect of services rendered to the Company, Executive shall receive
only the compensation set forth in this Section 3 and Sections 5 and 6.
4. Termination of Employment Period.
The Employment Period shall continue as described in Section 1 unless
earlier terminated by reason of (a) Executive's discharge for Cause pursuant to
Section 5.1, (b) Executive's discharge without Cause pursuant to Section 5.4,
(c) Executive's death or Disability pursuant to Section 5.3 or (d) termination
of this Agreement by Executive pursuant to Section 5.2. In all events, the post
employment provisions of Section 7 shall survive termination of the Employment
Period for the periods provided therein.
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5. Termination
5.1. By Company for Cause.
The Company may discharge Executive and terminate the Employment Period
for Cause. As used in this Section 5.1, "Cause" shall mean anyone or more than
one of the following:
(a) Gross negligence or gross or willful misconduct of Executive in
the performance of his duties hereunder during the Employment Period.
(b) Executive's conviction of a fraud, felony or crime of moral
turpitude during the Employment Period;
(c) Willful failure to follow instructions of the Board which
instructions are material, legal and not inconsistent with the duties assigned
to Executive hereunder and which failure is not cured within 5 business days
after written notice of such is delivered to Executive by the Board with respect
to failures which are curable; or
(d) Any breach of any of the material terms of this Agreement by
Executive which is not cured within 5 business days after written notice of
breach is delivered to Executive by the Board with respect to breaches which are
curable.
Upon discharge of Executive for Cause, the Company shall be relieved and
discharged of all obligations to make payments to Executive which would
otherwise be due under this Agreement except as to salary, benefits and bonuses
earned for actual services rendered prior to the date of termination, any
payment under Section 3.3 and otherwise reimbursable expenses under Section 3.6.
5.2. By Executive for Good Reason.
Executive may terminate the Employment Period upon the occurrence of any
of the following:
(a) any breach of any of the material terms of this Agreement by the
Company;
(b) without the consent of Executive. a material reduction in the
authorities, powers, functions and/or duties attached to Executive's position;
(c) without the consent of Executive, the Company relocates the
principal location of Executive's employment to a location more than 25 miles
from its current location, unless such relocation is proposed by the Chief
Executive Officer; or
(d) Executive is removed or not re-elected to the Board or the
offices of President and Chief Operating Officer of the Company.
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5.3. On Executive's Death or Disability.
The Employment Period shall terminate, and the Company shall be relieved
and discharged of all obligations to make further payment to Executive after the
date of the death or Disability of Executive, except as to salary earned for
actual services rendered prior to the date of the death or Disability of
Executive, reimbursement of expenses, payments under Section 3.3, and a pro-rata
portion of Executive's Annual Bonus for the full applicable Fiscal Year
calculated following such year and pro-rated for the number of days Executive
was actually employed in such Fiscal Year.
5.4. By Company Without Cause.
The Company may, on 30 days' written notice to Executive, terminate the
Employment Period without Cause at any time during the Employment Period.
5.5. By Executive Without Good Reason.
The Executive may terminate the Employment Period
(a) in connection with a Change of Control, or
(b) at any other time,
upon at least ten days prior written notice to the Company. In the event of a
termination by Executive pursuant to Section 5.5(b), the Company shall be
relieved and discharged of all obligations to make further payment to Executive
after the date as of which the Employment Period terminates, except as to salary
earned for actual services rendered prior such date, payment of any Annual Bonus
under Section 3.2 with respect to any Fiscal Year ending prior to such date,
reimbursement of expenses and payments under Section 3.3. All amounts payable
pursuant to Section 5.5(b) shall be paid to Executive in a single lump sum in
cash not later than ten (10) days after the date of termination or with respect
to the Annual Bonus, within ten (10) days of its determination in accordance
with the terms hereof
6. Severance.
6.1. Severance.
Upon termination of employment pursuant to Sections 5.2, 5.4 or 5.5(a) (so
long as Executive's employment is terminated by Executive within six months of
the occurrence of such Change of Control) (but in any event not upon termination
of the Employment Period pursuant to Sections 5.1, 5.3, 5.5(b) or upon
expiration of the Employment Period or otherwise), and so long as the Executive
executes a release in the Company's customary form and the Executive has not
breached any of his representations set forth in Section 8, the Company shall
pay to Executive
(a) an amount equal to the lesser of (x) the amount of Base Salary
due and owing Executive through the expiration of the Employment Period (such
amount to be calculated based upon his then current Base Salary), and (y) one
(1) times his then applicable Base Salary, and
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(b) an amount equal to a pro rata portion (based upon the portion of
the Fiscal Year elapsed to the date of such termination) of the Annual Bonus
which would have been payable to the Executive had Executive been employed by
the Company under this Agreement for the entire Fiscal Year in which such
termination occurs.
All amounts payable pursuant to Section 6.1(a) shall be paid to Executive
in a single lump sum in cash not later than five (5) days after the date of
termination. Any amount due and payable to Executive under Section 6.1(b) shall
be paid within ten (10) days of its determination in accordance with the terms
hereof
6.2. Restricted Period.
In the event that Executive's employment shall be terminated pursuant to
Sections 5.2, 5.4 or 5.5(a) (x) prior to the end of the 2003 Fiscal Year. then
the definition of Restricted Period shall be deemed amended to provide that the
Restricted Period shall terminate on the earlier of (i) the first anniversary of
the termination date, and (ii) July 31,2004.
7. Inventions, Confidential Information and Related Matters.
7.1. Assignment of Inventions.
All Inventions which are at any time made by Executive, acting alone or in
conjunction with others,
(a) during the Employment Period, or
(b) if based on or related to any Confidential Information on, made
by Executive within one year after the termination of the Employment Period,
shall be the property of the Company. Executive agrees that Executive shall, at
the cost and expense of the Company, execute formal application for U.S. and
other patents, and also do all other acts and things (including, among others,
the execution and delivery of instruments of further assurance or confirmation)
deemed by the Company to be necessary or desirable at any time to perfect the
full assignment to the Company of Executive's right and title (if any) to such
Invention.
7.2. Restrictions on Use and Disclosure.
Except as required by Executive's duties hereunder, Executive shall never,
directly or indirectly, use, publish, disseminate or otherwise disclose any
Confidential Information or Inventions which are the subject of Section 7.1
without the prior written consent of the Board, except as required by law.
Nothing in this Section shall prevent disclosure of information which has been
completely disclosed in a published patent or other integrated publication of
general circulation, nor shall this Section govern the right to use Inventions
for which a patent may have been issued.
7.3. Return of Documents and Materials.
Upon termination of the Employment Period. Executive shall forthwith
deliver to the Company all procedural manuals. guides, specifications, formulas,
plans, drawing, designs and
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similar materials, records, notebooks and similar repositories of or containing
Confidential Information and Inventions which are the subject of Section 7.1,
including all copies, then in Executive's possession or control, whether
prepared by Executive or others, as well as all other Company property in
Executive's possession or control.
7.4. Competitive Activities.
During the Restricted Period, Executive shall not, without the prior
written approval of the Board, directly or indirectly, within the United States,
become an employee or consultant or otherwise render services to, lend funds to,
serve on the board of, invest in (other than as a 1 % or less shareholder of a
publicly-traded corporation) or guarantee the debts of, any business
organization that competes with the Company in those retail businesses in which
the Company and its Subsidiaries are engaged on the date the Employment Period
is terminated. The Company may in its sole discretion give Executive written
approval to engage in such activities or render such services after. termination
of the Employment Period if Executive and such prospective (pound)inn or
business organization gives the Company written assurances, satisfactory to the
Board in its sole discretion, that the integrity of the Confidential
Information, the Inventions and the good will of the Company and its
Subsidiaries will not be jeopardized by such employment. Executive shall, during
the Restricted Period, notify the Company of any change in address and identify
each subsequent employment or business activity in which Executive shall engage
during such Restricted Period, stating the name and address of the employer or
business organization and the nature of Executive's position.
7.5. Solicitation of Employees.
During the Restricted Period, and for a period of 12 months thereafter,
Executive shall not, without the prior written approval of the Board, directly
or indirectly, (i) solicit. raid, entice or induce any person who presently is
or at any time during the six (6) months immediately prior to the date of
termination of Executive shall be an employee of the Company or any of its
Subsidiaries to become employed by any other person, firm or corporation in any
retail business in competition with the Company or (ii) employ in any person.
rum or corporation engaged in any retail business in competition with the
Company, any person who presently is or at any time during the six (6) months
immediately prior to the date of termination of Executive shall be an employee
of the Company or any of its subsidiaries.
8. No Other Contracts.
Executive represents and warrants that neither the execution and delivery
of this Agreement by Executive nor the performance by Executive of Executive's
obligations hereunder, shall constitute a default under or a breach of the terms
of any other agreement, indenture or contract to which Executive is a party or
by which Executive is bound, nor shall the execution and delivery of this
Agreement by Executive or the performance of Executive's duties and obligations
hereunder give rise to any claim or charge against either Executive or the
Company based upon any other contract, indenture or agreement to which Executive
is a party or by which Executive is bound.
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9. Notices.
Any notices or communication given by any party hereto to the other party
shall be in writing and personally delivered or mailed by registered or
certified mail, return receipt requested, postage prepaid at the following
addresses:
If to the Company:
0000 Xxxxxxxx
0xx Xxxxx
Xxx Xxxx, XX 00000
If to the Executive:
Xxxx X. Xxxxx
000 Xxxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
Mailed notices shall be deemed given when received. Any person entitled to
receive notice may designate in writing, by notice to the others, such other
address to which notices to such party shall thereafter be sent.
10. Indemnification and Insurance; Legal Expenses.
The Company shall indemnify the Executive to the fullest extent permitted
by the laws of the State of Delaware, as in effect at the time of the subject
act or omission, and shall advance to the Executive reasonable attorney's fees
and expenses as such fees and expenses are incurred (subject to an undertaking
from the Executive to repay such advances if it shall be finally determined by a
judicial decision which is not subject to further appeal that the Executive was
not entitled to the reimbursement of such fees and expenses) and he will be
entitled to the protection of any insurance policies the Company may elect to
maintain generally for the benefit of its directors and officers (Directors and
Officers Insurance) against all costs, charges and expenses incurred or
sustained by him in connection with any action, suit or proceeding to which he
may be made a party by reason of his being or having been a director, officer or
employee of the Company or any of its Subsidiaries or his serving or having
served any other enterprise as a director, officer or employee at the request of
the Company (other than any dispute, claim or controversy arising under or
relating to this Agreement or to the extent a result of a breach by Executive of
his representations in Section 8). The Company covenants to maintain during the
Employment Period for the benefit of the Executive (in his capacity as an
officer and director of the Company) Directors and Officers Insurance providing
customary benefits to the Executive.
11. Miscellaneous.
11.1. Entire Agreement.
This Agreement contains the entire understanding of the parties in respect
of its subject matter and supersedes the Prior Employment Agreement (except as
otherwise specifically set forth herein) all prior oral and written agreements
and understandings between the parties with
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respect to such subject matter. Nothing contained herein shall be deemed to
amend or modify the Stockholders Agreement or the Stock Option Plan (or any
options issued pursuant to the Prior Employment Agreement).
11.2. Amendment: Waiver.
This Agreement may not be amended, supplemented, canceled or discharged,
except by written instrument executed by the Executive and the Company. No
failure to exercise, and no delay in exercising, any right, power or privilege
hereunder shall operate as a waiver thereof. No waiver of any preceding breach
of this Agreement shall operate as a waiver of a succeeding breach of this
Agreement.
11.3. Binding Effect; Assignment.
The rights and obligations of this Agreement shall bind and inure to the
benefit of any successor or successors of the Company by reorganization, merger
or consolidation, or any assignee of all or substantially all of the Company's
business and properties; Executive's rights or obligations under this Agreement
may not be assigned by Executive.
11.4. Headings.
The headings contained in this Agreement (except those in Section 1) are
for reference purposes only and shall not affect the meaning or interpretation
of this Agreement.
11.5. Governing Law; Interpretation.
This Agreement shall be construed in accordance with and governed for all
purposes by the laws and public policy of the State of New York applicable to
contracts executed and to be wholly performed within such State. Service of
process in any dispute shall be effective (a) upon the Company, if served on any
senior officer of the Company (other than Executive); (b) upon Executive, if
served at Executive's residence last known to the Company. Executive
acknowledges that breach of Sections 7.1 through 7.5 would entail irreparable
injury and that, in addition to the Company's other express and implied
remedies, the Company shall be entitled to injunctive and other equitable relief
to prevent any actual, intended or likely such breach.
11.6. Dispute Resolution.
All controversies, claims and disputes arising out of or relating to this
Agreement, including without limitation any alleged violation of its terms,
shall be resolved by final and binding arbitration before a single arbitrator in
New York, New York in accordance with the Commercial Arbitration Rules of the
American Arbitration Association ("AAA"). The arbitration shall be commenced by
filing a demand for arbitration with the AAA within sixty (60) days after the
filing party has given notice of such breach to the other party. The subject
matter of the arbitration shall be limited to the conduct of the parties hereto
and their employees. Each party shall bear its own costs and expenses, including
costs and expenses of counsel and expert!;, in any such arbitration.
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11.7. Further Assurances.
Each party agrees at any time, and from time-to-time, to execute.
acknowledge, deliver and perform, and/or cause to be executed, acknowledged,
delivered and performed, all such further acts, deeds, assignments, transfers,
conveyances, powers of attorney and/or assurances as may be necessary, and/or
proper to carry out the provisions and/or intent of this Agreement.
11.8. Gender; Singular/Plural.
In this Agreement, the use of one genders (e.g., "he", "she" and "if')
shall mean each other gender; and the singular shall mean the plural, and vice
versa, all as the context may require.
11.9. Severability.
The parties acknowledge that the terms of this Agreement are fair and
reasonable at the date signed by them. However, in light of the possibility of a
change of conditions or differing interpretations by a court of what is fair and
reasonable, the parties stipulate as follows: if anyone or more of the terms,
provisions, covenants and restrictions of this Agreement shall be determined by
a court of competent jurisdiction to be invalid, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions of this Agreement
shall remain in fun force and effect and shall in no way be affected. impaired
or invalidated; further, if anyone or more of the provisions contained in this
Agreement shall for any reason be determined by a court of competent
jurisdiction to be excessively broad as to duration, geographical scope,
activity or subject, it shall be construed, by limiting or reducing it, so as to
be enforceable to the extent compatible with then applicable law.
11.10. Counterparts.
This Agreement may be executed in two or more counterparts, each of which
will be deemed an original.
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EXECUTION
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date and year above first written.
/s/ Xxxx X. Xxxxx
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Xxxx X. Xxxxx
AEROPOSTALE, INC.
a Delaware Corporation
By: /s/ Xxxxxx X. Xxxxxx
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EXHIBIT A
The Consolidated Net Income of the Company for the 2001 Fiscal Year, as
determined in accordance with the definition of Consolidated Net Income, is
$31,373,000.
