EXHIBIT 10.21
PERSONAL AND CONFIDENTIAL
March 25, 1999
Xx. Xxxxxx X. Xxxxx
00 Xxxx Xxxxx Xxxx
Xxxxxxxx, XX 00000
Dear Xxxxxx:
This will confirm the agreement between you and AnnTaylor, Inc.
(hereafter
referred to as the "Company") regarding your separation from the
Company.
1. We agree that your date of separation from employment with the Company will
be March 31, 1999 (the "Separation Date") and, effective as of the
Separation Date, you hereby resign from your positions as an officer and/or
director of the Company, its parent Company, and any of the Company's
subsidiaries.
2. In consideration of your delivery of the Release referred to in paragraph 4
and the representations and agreements set forth in this letter agreement,
including those set forth in paragraph 5 hereof, the Company agrees to pay
you the severance compensation described in paragraph 3 below, subject to
the terms and conditions set forth in this letter.
3. Subject to this letter agreement becoming effective and to your
compliance with the terms hereof, you shall receive severance
compensation equal to:
(a) Cash compensation of $122,500, minus all applicable federal, state and
local withholding taxes ("Taxes"), payable in twelve equal
semi-monthly installments of $10,208.33 (less Taxes), commencing as of
the Effective Date of this letter agreement (as defined in paragraph
11 below).
(b) If you have not procured other full time employment by the six-month
anniversary of the Effective Date, the Company will continue to pay
you semi-monthly installments of $10,208.33 (less Taxes) for up to six
additional months, commencing with the six-month anniversary of the
Effective Date, until the earlier of (i) the time you procure such
other full time employment and (ii) the twelve-month anniversary of
the Effective Date. The foregoing notwithstanding, the installment
payments provided for in this paragraph (b) shall be reduced by the
amount of any compensation you receive from other sources for
part-time or temporary employment, consulting engagements, or
otherwise, prior to procuring full-time employment, and shall cease
upon your commencement of other full time employment. You agree that
you will provide the Company prompt written notice of the amounts of
any such other compensation and, if you procure other full time
employment prior to the six-month anniversary of the Effective Date,
you will provide the Company prompt written notice of such other
employment. You also agree to return to the Company any excess
payments made to you by the Company, to the extent that actual
payments made exceed the net amount to which you are entitled pursuant
to this paragraph (b).
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Xx. Xxxxxx X. Xxxxx
March 25, 1999
Page 2
(c) The Company shall permit you to continue your participation in its
medical and dental insurance programs at the associate rate of
contribution, from the Separation Date throughout the period during
which you receive severance compensation pursuant to paragraphs 3(a)
and 3(b) above. At the end of that period, you shall be entitled to
participate in such programs in accordance with the applicable COBRA
regulations.
(d) An additional cash payment in an amount equal to the incentive
compensation payment you would have received under the company's
Management Performance Compensation Plan for the Fiscal Year 1998
Performance Period if you had continued to be employed by the Company
(less Taxes), and payable on the later of (i) the date on which
payments for such Performance Period are made to active employees
under the Plan, and (ii) five days after the Effective Date.
(e) The Performance Vesting Options and the Time Vesting Options
previously granted to you under the Company's 1992 Stock Option and
Restricted Stock and Unit Award Plan (the "Option Plan") and the
related stock option agreements, and listed on Schedule A attached
hereto, shall remain outstanding through January 31, 2000 and shall
continue to be eligible for vesting and exercise in accordance with
the terms of the Plan and the applicable option agreement between the
Company and you, as if you had continued to be employed by the Company
through January 31, 2000. Any such stock options remaining unvested or
unexercised at the close of business on January 31, 2000 shall be
canceled at such time.
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Xx. Xxxxxx X. Xxxxx
March 25, 1999
Page 3
(f) The Company shall make available to you, at the Company's expense,
executive outplacement services, to be provided by a consultant of
your choosing, selected from among the consultants referred by the
Company, for up to twelve months following the Effective Date.
4. In consideration of the compensation described in paragraph 3 above,
on the later of (i) the Separation Date and (ii) the date you execute
and deliver this letter agreement to the Company, you shall execute
and deliver to the Company a Release in the form of Schedule B
attached hereto.
5. You represent that you have not filed against the
Company or the Company's parents, subsidiaries, affiliates or any
Related Persons, any complaints, charges or law suits arising out of
your employment by the Company, or any other matter arising on or
prior to the date hereof. You covenant and agree that you will not
seek recovery against the Company or any of its parents, subsidiaries,
affiliates or any Related Person arising out of any of the matters set
forth in this paragraph or any of the matters that are the subject of
the Release referred to in paragraph 4.
6. Nothing set forth in this agreement shall prevent you from enforcing
the terms of this agreement, nor do you waive or lose any rights that
you have to compensation for vested accrued unused 1999 vacation, or
any rights that you have as a former employee under the Company's
stock option plans, stock purchase plan, or retirement or insurance
plans, as applicable, or your entitlement to continue participation in
the Company's medical insurance programs in accordance with the
applicable COBRA regulations.
7. You represent that you have returned or will immediately return to the
Company all property and all confidential information of the Company
("Company Information"), and you will not retain any copies,
reproductions or excerpts thereof, including without limitation
training manuals, reports, files, memoranda, records, mailing lists,
customer lists, credit cards, laptop computer, cellular telephone,
door and file keys, and other physical or personal property which you
received or prepared or helped prepare in connection with your
employment by the Company, and other technical, business or financial
information or trade secrets, the use or disclosure of which might
reasonably be construed to be contrary to the interests of the Company
or any Related Person. Confidential Company Information includes but
is not limited to information relating to the Company or its parent,
subsidiary or affiliated companies, regarding strategic plans,
financial information, inventory levels, marketing strategy, sales
strategy, training programs, anticipated future merchandise designs or
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Xx. Xxxxxx X. Xxxxx
March 25, 1999
Page 4
styles, patterns and fits of garments, and information relating to the
Company's actual or anticipated business, research, development,
product or sales, that is not otherwise disclosed publicly by the
Company.
8. In the course of your employment with the Company you acquired
confidential Company Information. You understand and agree that such
Company Information was disclosed to you in confidence and for the
benefit and use of only the Company. You acknowledge that you have no
ownership right or interest in any Company Information used or
developed during the course of your employment. You understand and
agree that (a) you will keep such Company Information confidential at
all times after your employment with the Company and (b) you will not
make use of Company Information on your own behalf or on behalf of any
third party.
9. You agree that, from the date hereof through March 31, 2000, you will
not solicit, entice, persuade, induce or influence any individual who
is an employee of the Company to terminate his or her employment with
the Company or to become employed by any other individual or entity,
and you shall not approach any such employee for any such purpose. Any
breach of the terms of this paragraph shall result in your automatic
forfeiture of the severance compensation set forth in paragraph 3
above.
10. The Company advises you to consult with an attorney of your
choosing prior to signing this agreement. You confirm that you have
the right and have been given the opportunity to review this agreement
and, specifically, the release set forth in paragraph 4 and the
representations and agreements set forth in paragraph 5, with an
attorney of your choice. You also understand and agree that the
Company is under no obligation to offer you the severance compensation
set forth in paragraph 3 and that you are under no obligation to
consent to the release set forth in paragraph 4 and the
representations and agreements set forth in paragraph 5, and that you
have entered into this agreement freely and voluntarily.
11. You may have twenty-one days to consider the terms of this agreement.
Furthermore, once you have signed this agreement, you will have seven
additional days from the date you sign it to revoke your consent. To
revoke this agreement you must clearly communicate your decision to do
so to the Senior Vice President - Human Resources of the Company
(212-541-3361) within the seven day period. This agreement will not
become effective until seven days after the date you have signed it,
as indicated on the last page hereof. Such seventh day is considered
to be the "Effective Date" of this agreement.
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Xx. Xxxxxx X. Xxxxx
March 25, 1999
Page 5
12. You agree to keep the terms of your severance compensation and this
agreement confidential, other than as necessary to consult with your
legal or tax advisors.
13. The terms in this letter constitute the entire agreement between us
and may not be altered or modified other than in a writing signed by
you and the Company. You represent that in executing this letter
agreement you do not rely and have not relied upon any representation
or statement not set forth herein made by the Company or any of its
agents, representatives, attorneys or Related Persons with respect to
the subject matter, basis or effect of this letter agreement, or
otherwise.
14. This agreement will be governed by the laws of the State of New York,
without reference to its choice of law rules.
If this letter correctly sets forth our understanding, please so signify by
signing and dating the enclosed copy of this letter and returning it to the
Senior Vice President - Human Resources, AnnTaylor, Inc., 000 Xxxx 00xx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000. Very truly yours,
AnnTaylor, Inc.
By: /s/Xxxxx Xxxxxxxx
---------------------------
Senior Vice President -
Human Resources
AGREED TO AND ACCEPTED:
/s/ Xxxxxx X. Xxxxx
-----------------------
XXXXXX X. XXXXX
Dated: April 1, 1999
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Xx. Xxxxxx X. Xxxxx
March 25, 1999
Page 6
SCHEDULE A
Unexercised Stock Options Outstanding
at March 25, 1999
-----------|-----------|-------------|---------------|-------------------------
A | B | C | D | E
-----------|-----------|-------------|---------------|-------------------------
-----------|-----------|-------------|---------------|-------------------------
| | | Number of |
| | Number of | Outstanding | Summary of
| | Options | Options in | Vesting Terms (see
| Exercise | Remaining | Column C that| Option Agreement for
Grant Date | Price | Outstanding| are Vested | full terms)
-----------|-----------|-------------|---------------|-------------------------
2/23/94 | $25.375 | 5,000 | 0 | Vest on 2/23/03
-----------|-----------|-------------|---------------|-------------------------
| | | |
2/24/95 | $33.000 | 6,665 | 0 | Vest upon achievement
| | | | of specified
| | | | performance target of
| | | | $2.84 EPS or $60
| | | | Market Price,
| | | | provided target is
| | | | achieved by 2/24/00
-----------|-----------|-------------|---------------|-------------------------
5/1/96 | $17.125 | 1,250 | 0 | 625 per year, on each
| | | | of 5/1/99 and 5/1/00
-----------|-----------|-------------|---------------|-------------------------
2/20/97 | $21.00 | 2,668 | 0 | 1,334 per year, on
| | | | each of 2/20/00 and
| | | | 2/20/01
-----------|-----------|-------------|---------------|-------------------------
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Xx. Xxxxxx X. Xxxxx
March 25, 1999
Page 7
SCHEDULE B
FORM OF RELEASE
Reference is made to the agreement dated March 25, 1999 between the undersigned,
Xxxxxx X. Xxxxx, and AnnTaylor, Inc. (the "Company"), relating to the separation
of employment of the undersigned from the Company (the "Agreement").
In consideration of the compensation described in paragraph 3 of the Agreement,
I, Xxxxxx X. Xxxxx, hereby voluntarily, knowingly and willingly release and
forever discharge the Company, its parents, subsidiaries and affiliates,
together with its and their respective officers, directors, partners,
shareholders, employees, successors and assigns (collectively, the "Related
Persons"), from any and all charges, complaints, claims, promises, agreements,
controversies, causes of action and demands of any nature whatsoever which
against any of them I or my heirs, executors, administrators, successors or
assigns ever had, now have or hereafter can, shall or may have by reason of any
matter, cause or thing whatsoever arising through the date of this Release. This
release includes, but is not limited to, any rights or claims relating in any
way to my employment relationship with the Company, or the termination thereof,
or under any statute, including claims for age discrimination under the federal
Age Discrimination in Employment Act, and claims under Title VII of the Civil
Rights Act, The Americans With Disabilities Act, the New York Human Rights Law,
the Connecticut Human Rights and Opportunities Law, and any other federal, state
or local law.
I represent that I have not filed against the Company or the Company's parent,
subsidiaries, affiliates or any Related Persons, any complaints, charges or law
suits arising out of my employment by the Company or any other matter arising on
or prior to the date hereof, and I covenant and agree that I will not seek
recovery against the Company or any of its parents, subsidiaries, affiliates or
any Related Person arising out of any of the xxxxxx set forth in this Release.
IN WITNESS WHEREOF, I have executed and delivered this Release to the Company
this 1st day of April, 1999.
/s/ Xxxxxx X. Xxxxx
----------------------
Xxxxxx X. Xxxxx
/s/ Xxxxx X. Xxxxx
____________________
Witness
