EXHIBIT 10(tt)
May 2, 2002
Xx. Xxxxxx X. Xxxxx
The Dress Barn, Inc.
00 Xxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Dear Xx. Xxxxx:
The purpose of this letter is to set forth the terms under which The Dress
Barn, Inc. (the "Company" or "we") have agreed to continue to employ you and you
have agreed to continue to be employed by the Company. The terms set forth in
this letter have been approved by the Compensation Committee of the Board of
Directors of the Company.
As founder of the Company, you have been employed by the Company in a
senior management capacity for over 40 years and your current title is Chairman
of the Board. It is the Company's hope and desire that you continue to be active
in the management of the Company for many years and that even after your active
participation ceases, you will continue to provide consultative advice and
guidance to the Company to which you have devoted virtually your entire working
life.
1. We and you have agreed that unless sooner terminated as described below,
your term as Executive Chairman of the Board shall continue until the end of our
fiscal year ending July 2005. That term will be extended for each of two
successive one year periods unless either you or we gives the other written
notice of non-extension at least 90 days prior to the end of the term then in
effect. Beyond the fiscal year ending July 2007, a further extension of your
term as Executive Chairman of the Board will require our mutual written
agreement. Notwithstanding the foregoing, you may elect to terminate your term
as Executive Chairman of the Board on 90 days' notice to us effective at any
time after July 31, 2004.
As Executive Chairman of the Board you will continue to have the customary
duties and responsibilities of an executive chairman of the board and you will
continue to be involved in the senior management of the Company, including
active participation in major decisions relating to real estate, operations and
other matters.
2. Effective upon the termination of your term of employment as Executive
Chairman of the Board, you and we have agreed that you will continue for the
rest of your life to be employed by the Company in a non-executive capacity, at
least initially as the Non- Executive Chairman of the Board. You will have the
customary duties and responsibilities of a non-executive chairman of the board
and shall provide such advisory and consultative services as the Chief Executive
Officer of the Company (or if you so elect, the Board of Directors) may request,
it being understood that such advisory and consultative services may be provided
by you at times and at locations that are reasonably satisfactory to you and
that do not involve more than twenty-four (24) days per fiscal year. During this
non-executive term we shall have the right to change your title to Chairman
Emeritus, Honorary Chairman or the like.
3. During your term as Executive Chairman of the Board, you shall receive a
salary at the annual rate of $600,000 per year. During the period following the
termination of your term of employment as Executive Chairman of the Board, you
will receive a salary (which is in the nature of a pension payment) at the
annual rate of $300,000 or such higher amount as results from an increase in the
cost of living (recalculated at the end of each of our fiscal years) from July
31, 2002. Nothing contained in this letter shall preclude the Board of Directors
in its discretion from increasing your salary at any time.
4. During your term as Executive Chairman of the Board, you shall be
entitled to participate in all of the Company's bonus and incentive plans and
all employee pension, insurance and benefit plans and programs available to the
Company's senior executives or its employees in general. You will also be
entitled to office and secretarial and administrative assistance comparable to
the office and assistance you currently have, to the exclusive use of a Company
car and driver, to tax preparation services including the services of an outside
accounting firm, and to the use of a Dress Barn apartment in New York City.
During the period of your employment by the Company in a non-executive capacity,
you will be entitled to participate in all group insurance plans and programs
available to the Company's senior executives or its employees generally (and in
any event to health insurance coverage), tax preparation services, and, for as
long as you may want them, an office and secretarial and administrative
assistance.
5. It is the company's intention that you continue to serve as a member of
the Board of Directors of the Company both during your term as Executive
Chairman of the Board and thereafter. However, your salary and other benefits as
provided in this letter shall not be reduced or eliminated even if you are no
longer a Director or no longer have any Chairman title.
6. If your employment by the Company terminates by reason of your death,
you will be entitled to a death benefit of one year's salary at the compensation
rate in effect on the date of your death.
7. If there is a Change in Control (as defined below) during your term as
Executive Chairman of the Board, you may, at your option, by notice to the
Company at any time thereafter, terminate your term as Executive Chairman of the
Board and relinquish your Chairman and directorship positions. Upon such
election, the Company shall pay you in a single lump sum on or before the 30th
day following such election an amount equal to two times your annual salary in
effect immediately prior to such election. In the event such payment or any part
thereof is determined to constitute a "parachute payment", as that term is
defined in Section 280G(b)(2) of the Internal Revenue Code of 1986, as amended
(the "Code"), notwithstanding anything to the contrary in this letter, you shall
be entitled to receive a "Gross-Up Payment" in an amount such that after payment
by you of all taxes, including any income taxes and any excise taxes imposed by
Section 4999 of the Code (including any interest or penalties imposed with
respect to such taxes), upon the Gross-Up Payment, you will retain an amount of
the Gross-Up Payment equal to the taxes imposed on the "parachute payment".
Notwithstanding your making such election and your receipt of a lump sum
payment following a Change in Control, you will be entitled to receive the
benefits described in Paragraph 4 as applicable during the period of your
employment in a non-executive capacity, be entitled to receive the salary (in
the nature of a pension payment) described in Paragraph 3 beginning two years
thereafter, be relieved of the obligation to provide advisory and consultative
services as provided in Paragraph 2, but shall continue to be subject to the
non-competition restrictions described in Paragraph 8 below.
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 the Company, excluding a person that is an
affiliate (as such term is used under that act) of the Company on the
date of this letter, or any affiliate of any such person;
(ii) the majority of the board of directors of the Company consists of
individuals other than Incumbent Directors, which term means the
members of the board of directors of the Company on the date of this
letter; 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)the Company 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 the Company are
disposed of pursuant to a merger, consolidation or other transaction
(unless the shareholders of the Company 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 the Company, all the common stock or other ownership
interests of the entity or entities, if any, that succeed to the
business of the Company); or
(v) the Company combines with another company and is the surviving
corporation, but, immediately after the combination, the shareholders
of the Company 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).
8. You have agreed that so long as you are receiving any salary payments
from the Company (including the two year hiatus if you exercise your option to
receive and have received a lump sum payment following a "Change in Control"),
neither you nor any person, entity or enterprise controlled by you will become a
director, officer, agent, employee, lender or shareholder of a corporation or
member of or lender to a partnership, engage as a sole proprietor in any
business, or act as a consultant to any of the foregoing or otherwise directly
or indirectly engage in any business that is in direct competition with the
business then conducted by the Company in any state in the United States or in
any other country in which the Company has engaged in such business, except with
the Company's written permission, provided, however, that this shall not
prohibit you from owning less than 1% of the outstanding securities of any class
of capital stock of a corporation the securities of which are regularly traded
or quoted on a national securities exchange or on an inter- dealer quotation
system. You have acknowledged that there is no adequate remedy at law for a
breach of this Paragraph 8 and that, in the event of such a breach or threatened
breach, the Company shall be entitled to injunctive or other equitable relief to
prevent any such breach without prejudice to any other remedies for damages or
otherwise. You and we have both acknowledged that the type and periods of
restriction described in this Paragraph 8 are fair and reasonable in your case
and are reasonably required for the protection of Dress Barn.
9. The agreement set forth in this letter shall inure to your and the
Company's benefit and our respective successors, heirs (in your case) and
assigns. No rights or obligations of the Company under this agreement may be
assigned or transferred by the Company, except pursuant to a merger or
consolidation, or the sale or liquidation of all or substantially all the assets
of the Company, provided that, in the case of such a sale or liquidation, the
assignee or transferee assumes in writing the obligation to perform this
agreement (it being understood, however, that no such assignment or transfer
shall relieve the Company of its liabilities or obligations under this
agreement). This agreement may not be amended or waived, except by an instrument
in writing signed by the party to be charged.
If any provision of this agreement is invalid or unenforceable, the
remaining provisions of this agreement shall remain in effect. This agreement
shall be governed by and construed and interpreted in accordance with the law of
the State of New York as applied to agreements among New York residents entered
into and to be performed entirely within New York. Any notice or other
communication under this letter shall be in writing and shall be deemed to have
been duly given when personally delivered or mailed by registered or certified
mail, postage prepaid, return receipt requested, or by facsimile to the
respective addresses listed below or to such other addresses as each party may
specify by notice to the other:
to The Dress Barn, Inc.
00 Xxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Attention: Chief Executive Officer
to you: Xxxxxx X. Xxxxx
00 Xxxxxxxx Xxxxx
Xxxxxxx, XX 00000
This letter contains the entire agreement and understanding of the parties
concerning its subject matter and supersedes all prior agreements and
understandings with respect to that subject matter. Nothing in this agreement is
intended to or shall affect the rights or obligations of the parties under any
agreement relating to the maintenance of life insurance, stock options or other
employee benefits.
If the foregoing accurately sets forth our agreement, please countersign
and return to us a copy of this letter.
Very truly yours,
THE DRESS BARN, INC.
By:/S/ XXXXXX XXXXXXX
Senior Vice President
Chief Financial Officer
May 2, 2002
ACCEPTED AND AGREED TO:
/S/ XXXXXX X. XXXXX
Xxxxxx X. Xxxxx
May 2, 2002
