Exhibit 10.12
Conformed Copy
December 16, 1997
Xx. Xxxxx XxXxxxxx
00 Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Dear Xxxx,
This letter will supersede your current employment
agreement dated December 6, 1996 (countersigned by you on May 27,
1997) and your Stock Option Plan dated February 5, 1997 as
amended on February 10, 1997 ("prior XxXxxxxx Stock Option
Agreement") and all of their provisions, as well as any other
arrangements of any kind pertaining to your employment,
compensation, equity or other incentive programs or transaction
bonuses or other perquisites and whether in writing or orally
understood. Any and all such employment arrangements shall
hereafter be governed solely by this letter agreement and any
amendments to this letter signed by an authorized officer of J.
Crew Group, Inc. and by you. You will continue to be employed as
President, J. Crew Retail (consisting primarily of Xxxxx Xxxxxx,
Inc. and H. F. D. No. 55, Inc.).
You are to continue to devote your full time and best
efforts, attention, and energy to the performance of your duties
as one of the top executives of J. Crew Group and its
subsidiaries and affiliates (the "Company"). You will be paid
bi-weekly for the annualized base salary as set forth below,
commencing:
December 12, 1997 - June 1, 1998 $525,000.
June 1, 1998 - May 31, 1999 $550,000
June 1, 1999 $575,000
In addition, you will continue to be eligible for an
annual bonus in fiscal year 1997 which will be determined in
accord with the provisions of Appendix A hereto. The Company will
present to you in 1998 a bonus schedule for fiscal year 1998. It
is Company policy to make bonus payments in mid-April after the
close of our fiscal year, and only to individuals actively
employed on the date of disbursement. Of course this policy shall
apply to all bonuses payable hereunder.
As consideration for the cancellation of the Prior
XxXxxxxx Stock Option Agreement and in lieu of any common stock
or the proceeds thereof that might otherwise have
been or may hereafter be due thereunder, the Company agrees to
pay you $369,063.73, within five business days of your
countersignature of this letter agreement. In addition, you will
be eligible for a new stock option grant under a new Stock Option
Plan which is in process of being finalized. Your option grant
will be the subject of a separate letter agreement proposal that
will be sent to you as and when the new Stock Option Plan is
finalized.
During your employment hereunder, the Company will
provide you with a car allowance of $600 per period (13
periods/year).
The Company's benefit package currently includes 3
weeks vacation, 3 personal days, holidays, life insurance,
medical insurance, long term disability, 401(k) tax deferred
savings plan, a health flexible spending account, and the
employee discount. The Company reserves the right to change these
benefits at any time at its sole discretion.
If the Company terminates your employment for any
reason whatsoever other than death, disability, or cause (cause
shall include breach of this agreement, dishonesty, theft,
embezzlement, material dereliction in the performance of your
duties, insobriety or drug use while performing duties and
conviction of a crime other than traffic violations or minor
misdemeanors), the Company will continue your base pay and
medical benefits for a period of twelve months; provided that you
execute a general release and waiver, waiving all claims you may
have against the Company. During such period, salary continuation
and medical benefits will be paid provided that you exercise good
faith efforts to promptly obtain comparable employment. The
Company shall have the right to terminate medical continuation
benefits when you obtain new employment and to offset your base
pay continuation by the amount of compensation that you earn
during such twelve-month period from such new employment. If,
however, you resign, become disabled, die, or are terminated for
cause, no salary and benefit continuation will be paid. Your
relationship with the Company is one of employment at will and
the payments described in this paragraph are the only payments to
which you will be entitled as a result of the termination of your
employment.
As additional consideration for the Company entering
into this agreement and agreeing to make the salary continuation
payments described above, you agree that during your employment
by the Company and for a period of twelve (12) months after the
later of the date on which any employment or consulting
relationship is terminated or the date on which the last salary,
salary continuation, bonus, or other payment is made, you shall
not directly or indirectly solicit, hire, or seek to influence on
behalf of any person or entity any employee of the Company.
You agree that, while employed and thereafter, you
will hold in strict confidence any proprietary or confidential
information or material related to the Company and its
affiliates. This includes but is not limited to customer lists,
trade practices, marketing techniques, pricing structures and
practices, research, trade secrets, processes, systems, programs,
methods, software, merchandising, planning, inventory and
financial control, store design, staffing, etc. You also agree
that breach of the confidentiality or non-pirating provisions
previously noted would cause the Company to suffer irreparable
harm for which money damages would not be an adequate remedy and
we would be entitled to temporary and permanent injunctive relief
in any Court of competent jurisdiction (without the need to post
any bond).
This Agreement shall inure to the benefit of and be an
obligation of the Company's assigns and successors; however you
may not assign your duties and obligations hereunder to any other
party.
You agree not to disclose any information regarding
the existence or substance of this agreement, except to an
attorney with whom you choose to consult regarding your
consideration of this agreement or to your spouse or tax advisor;
provided that you notify such
individuals that they are strictly bound by the non-disclosure
restrictions. Further, you agree not to directly or indirectly
disparage or defame J. Crew.
This Agreement and all amendments thereof shall, in
all respects, be governed by and construed and enforced in
accordance with the internal laws (without regard to principles
of conflicts of law) of the State of New York. Each party hereto
hereby agrees to and accepts the exclusive jurisdiction of any
court in New York County or the U.S. District Court for the
Southern District of New York in that County in respect of any
action or proceeding relating to the subject matter hereof,
expressly waiving any defense relating to jurisdiction or forum
non conveniens, and consents to service of process by U.S.
certified or registered mail in any action or proceeding with
respect to this Agreement.
If the terms of this letter agreement meet with your
approval, please sign and return one copy to me.
We are very pleased that you will be continuing as a
key executive of the Company.
Sincerely,
/s/ Xxxxx Xxxxx
-------------------
Xxxxx Xxxxx
Chairman
Agreed to and Accepted:
/s/ Xxxxx XxXxxxxx 12/22/97
Xxxxx XxXxxxxx Date
