Exhibit 10.2

 

Letter Agreement

May 30, 2017

Mr. James Brett

 

Dear Jim:

Pursuant to our discussions regarding your employment with J. Crew Group, Inc.
(the “Company”), we thought it would be useful to lay out the terms and
conditions of our agreement in this letter agreement (this “Agreement”) for all
parties to sign.  This Agreement will be effective as of the date hereof, with
your employment to commence on or about July 10, 2017 on a date to be mutually
agreed upon by you and the Company (the “Commencement Date”).

In consideration of the premises and mutual covenants herein and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, you and the Company hereby agree as follows:

1.  Employment.

(a)The Company hereby agrees to employ you during the “Employment Period” (as
defined below) as its Chief Executive Officer and you hereby agree to serve the
Company in such capacity. You will report solely and directly to the board of
directors (the “Board”) of the Company. During the period commencing on your
Commencement Date and ending on the date your Termination Date (as defined in
Section 2(b) herein) (such period commencing on the Commencement Date and ending
on the Termination Date, the “Employment Period”) you shall be appointed to, and
serve as a member of, the Board. You shall have the duties, authority and
responsibilities commensurate with your position as Chief Executive Officer, and
with the highest level executive authority within the Company. Your employment
shall be located at the Company’s headquarters in New York, New York.

(b)During the Employment Period (as defined below), you shall devote
substantially all of your business time and energy, attention, skills and
ability to the performance of your duties and responsibilities hereunder and
shall faithfully and diligently endeavor to promote the business and best
interests of the Company and its Affiliates (as defined below). Accordingly, you
may not, directly or indirectly, without the prior written consent of the
Company, operate, participate in the management, operations or control of, or
act as an employee, officer, consultant, agent or representative of, any type of
business or service (other than as an employee of the Company), provided that it
shall not be a violation of the foregoing for you to (i) act or serve as a
director, trustee or committee member of any civic or charitable organization,
(ii) manage your personal, financial and legal affairs, or (iii) following
twenty-four (24) months after the Commencement Date, sit on one industry trade
or for-profit corporate board with the prior written consent of the Board, which
consent shall not be unreasonably withheld, so long as such activities
(described in clauses (i), (ii), or (iii)) do not interfere with the performance
of your duties and responsibilities to the Company and its Affiliates as
provided hereunder.  For purposes of this Agreement, except as otherwise
expressly provided herein, “Affiliate” means any entity or person directly or
indirectly controlled by or in common control with either the

--------------------------------------------------------------------------------

Company or Chinos Holdings, Inc. (“Parent”).  For the avoidance of doubt, except
with respect to Section 4(c) of this Agreement, “Affiliate” does not include any
other portfolio company or investment fund associated with TPG or LGP (each, as
defined in the Stockholders Agreement (as defined below)) other than Parent and
its subsidiaries.

2.  Employment Period.

(a)The Company shall employ you on the terms and subject to the conditions of
this Agreement commencing effective as of the Commencement Date and ending on
your Termination Date.  

(b)Your employment with the Company hereunder may be terminated upon the
earliest to occur of the following events: (i) your death or Disability (as
defined below), (ii) voluntary termination of employment by you without Good
Reason (as defined below) on at least two (2) months’ prior notice, unless
waived by the Company, (iii) voluntary termination of employment by you with
Good Reason in accordance with the procedure outlined in Section 2(f) below,
(iv) termination of employment by the Company without Cause (as defined below)
or (v) termination of employment by the Company for Cause.  The date on which
your employment is terminated hereunder for any reason shall be referred to as
the “Termination Date”.

(c)

i.Upon termination of the Employment Period for any reason, (A) the Company
shall provide you (or your estate, as the case may be) any earned but unpaid
Base Salary (as defined below) as of the Termination Date, any reimbursements
owed to you under applicable Company policy and any vested amounts arising from
your participation in, or vested benefits under, any employee benefit plans,
programs or arrangements, which amounts shall be payable in accordance with the
terms and conditions of such benefit plans, programs, or arrangements (such
amounts or benefits to be provided within 30 days following your Termination
Date or on such later date as may be required pursuant to the applicable
employee benefit plans, programs or arrangements), and (B) with respect to any
equity grants outstanding as of the Termination Date, except as provided herein,
the treatment of such equity grants shall be determined in accordance with the
terms and conditions of the applicable grant agreement pursuant to which such
equity awards were granted to you.  

ii.If the Company terminates the Employment Period without Cause or you
terminate the Employment Period with Good Reason, the Company shall provide you
with the following severance benefits (the “Severance Benefits”) (it being
understood that the payment of such Severance Benefits shall only commence, in
accordance with the timing provisions set forth below, upon your “separation
from service” within the meaning of Section 409A of the Internal Revenue Code of
1986, as amended, and any regulations thereunder (the “Code”)): (i) continuation
of your Base Salary as in effect immediately prior to such termination (without
taking into account any reduction resulting in Good Reason or otherwise reduced
in anticipation of such termination) (your “Ending Base Salary”) for a period of
eighteen (18) months following your Termination Date (the “Severance Period”),
payable in accordance with the regular payroll practices of the Company, (ii)
continuation of your medical benefits (including those of your spouse and
dependents, if applicable) during the Severance Period, which medical benefits
the

-2-

 

--------------------------------------------------------------------------------

Company may elect to provide by making a payment to you on a monthly basis equal
to an amount that, after all applicable taxes are paid, is equal to the amount
of the monthly COBRA premiums incurred by you (including your spouse and
dependents, if applicable), if any (the “Continuation Medical Benefit”); (iii)
the Annual Bonus (as defined below) earned for the fiscal year immediately prior
to the fiscal year that includes the Termination Date, to the extent not yet
paid, payable when bonuses are generally paid to employees of the Company, but
in no event later than the date that is two and a half (2-1/2) months following
the end of the fiscal year with respect to which such Annual Bonus is paid,
(iv) an amount equal to 1.5 times your target Annual Bonus, payable in equal
monthly installments over the Severance Period, (v) the Annual Bonus for the
fiscal year in which your Termination Date occurs that you actually would have
been entitled to receive had your employment not been terminated (with any
subjective goals being treated as achieved at target), multiplied by a fraction
the numerator of which was the number of days that you were employed during such
fiscal year, and the denominator of which is 365 (“Pro-Rata Bonus”) payable in
cash when bonuses are generally paid to employees of the Company, but in no
event later than the date that is two and a half (2-1/2) months following the
end of the fiscal year with respect to which such Pro-Rata Bonus was earned,
(vi) the unpaid portion of your signing bonus, set forth in Section 3(g) herein,
payable as soon as reasonably practicable following your Termination Date, but
in no event later than the date that is two and a half (2-1/2) months following
the end of the fiscal year in which your Termination Date occurs, (vii) an
additional eighteen (18) months’ service credit with respect to management
equity, such as stock options or restricted stock units, granted to you whose
vesting is based solely on continued employment (i.e., time vesting) and (viii)
in the event that the applicable performance conditions are satisfied or a
Change of Control occurs within twelve (12) months following your Termination
Date, your management equity that vests based on satisfaction of performance
conditions shall then vest to the extent such management equity would have
vested had you remained employed by the Company through the satisfaction of the
applicable performance conditions or the date of the Change of Control, as
applicable; provided that the Severance Benefits are subject to and conditioned
upon your execution of a valid general release and waiver within sixty (60) days
after your termination of employment (and any payment that otherwise would be
made within such sixty (60)-day period pursuant to this paragraph shall be paid
at the expiration of such sixty (60)-day period) in the form attached hereto as
Exhibit A and your compliance with the provisions set forth in Section 4(b) and
in all material respects with the provisions of Section 4(c) through (f).  For
purposes of this Agreement, “Change of Control” shall have the same definition
provided under the Stockholders Agreement by and among Parent and certain
stockholders of Parent dated March 7, 2011 (as may be amended from time to time,
the “Stockholders Agreement”).

iii.Your right to receive the Continuation Medical Benefit shall cease
immediately upon your being eligible for coverage under another group health
plan with a new employer.  You shall immediately notify the Company upon
obtaining new employment and provide all information regarding medical coverage
reasonably requested by the Company.  Except as set forth herein, or in any
applicable equity grant documentation, the Company shall have no additional
obligations to pay you any severance, termination pay or other similar
compensation or benefits.

 

iv.Notwithstanding the foregoing paragraph, in the event the Company terminates
the Employment Period without Cause or you terminate the Employment Period with

-3-

 

--------------------------------------------------------------------------------

Good Reason, and you are a “specified employee” within the meaning of Section
409A of the Code (as determined in accordance with the methodology established
by the Company as in effect on the Termination Date), any amounts payable to you
on account of your termination of employment during the six (6)-month period
immediately following the date of your “separation from service” within the
meaning of Section 409A of the Code (not including any accrued but unpaid Base
Salary as of your Termination Date) that constitute the payment of nonqualified
deferred compensation within the meaning of Section 409A of the Code shall be
deferred and accumulated for a period of six (6) months from the date of
separation from service and paid in a lump sum on the first day of the seventh
month following such separation from service (or, if earlier, the date of your
death).  In addition, for purposes of clarification, each amount payable to you
under this Section 2(c) shall constitute a “separately identified amount” within
the meaning of Treasury Regulation Section 1.409A-2(b)(2).

v.Upon termination of your employment for death or Disability (as defined
below), you (or your estate, as the case may be) will be entitled receive (1)
the Annual Bonus earned for the fiscal year immediately prior to the fiscal year
that includes the Termination Date (with any subjective goals being treated as
achieved at target), to the extent not yet paid, payable when bonuses are
generally paid to employees of the Company, but in no event later than the date
that is two and a half (2-1/2) months following the end of the fiscal year with
respect to which such Annual Bonus is paid, (2) the Pro-Rata Annual Bonus
payable when bonuses are generally paid to employees of the Company, but in no
event later than the date that is two and a half (2-1/2) months following the
end of the fiscal year with respect to which such Pro-Rata Bonus was earned, (3)
the unpaid portion of your signing bonus, as described in Section 3(g) herein,
payable as soon as reasonably practicable following such termination, but in no
event later than the date that is two and a half (2-1/2) months following the
end of the year your Termination Date occurs, (4) a pro-rata portion of the
unpaid Performance Incentive Bonus (pro-rated based on actual performance
relative to the applicable performance goals), payable as soon as reasonably
practicable after the Termination Date, but in no event later than the date that
is two and a half (2-1/2) months following the end of the fiscal year with
respect to which such Pro-Rata Bonus was earned, and (5) all of the outstanding
management equity granted to you by the Company that is subject solely to
service-based vesting conditions shall be treated as fully satisfying such
conditions and shall be pro-rated for the portion of the vesting period
completed as of the date of your death or Disability; provided, that the
benefits provided under this Section 2(c)(v) are subject to and conditioned upon
your (or your estate’s, as applicable) execution of a valid general release and
waiver within sixty (60) days after such termination of employment (and any
payment that otherwise would be made within such sixty (60)-day period pursuant
to this paragraph shall be paid as set forth herein, but no earlier than the
expiration of any revocation period applicable to the release) in the form
attached hereto as Exhibit A and your (and to the extent applicable, your estate
or beneficiary’s) compliance with the provisions set forth in Section 4(b) and
in all material respects with the provisions of Section 4(c) through (f).  For
avoidance of doubt, the payments hereunder are without duplication in respect of
any other payments otherwise provided for in this Agreement.

vi.Upon termination of your employment without Cause or with Good Reason within
twenty-four (24) months following a Change of Control, all outstanding
management equity that is granted to you by the Company that is subject solely
to service-based vesting conditions (i.e., time vested) will become fully
vested.  For avoidance of doubt, for

-4-

 

--------------------------------------------------------------------------------

purposes of any vesting of management equity under this Section 2(c), management
equity that is subject to performance-based vesting conditions will be vested
only to the extent (except as specifically provided in Section 2(c)(ii) hereof)
that the performance conditions have been satisfied prior to the termination of
employment as set forth in the applicable grant agreement.

vii.In the event of your termination of employment by the Company without Cause,
by you with Good Reason or as a result of your death or Disability prior to the
grant of the equity awards set forth in Section 3(e) below, the shares shall be
granted to you when such grant would have been otherwise made and your
employment shall be treated for purposes of vesting of the grant as terminating
immediately following the date of grant and the vesting credit provisions of
this Section 2(c) shall apply.

(d)For purposes of this Agreement, the term “Cause” shall mean (i) an act of
material dishonesty made by you in connection with your responsibilities as an
employee; (ii) the conviction of or plea of nolo contendere to a felony or any
crime involving fraud, embezzlement or any or act of moral turpitude, (iii)
willful misconduct or gross negligence in connection with the performance of
your duties as an employee of the Company, (iv) a willful and material breach of
this Agreement, including without limitation, your refusal to perform your
duties and responsibilities hereunder (other than as a result of illness), after
you have been given written notice specifying such breach and at least thirty
(30) days to cure such breach, to the extent reasonably susceptible to cure, (v)
a fraudulent act or omission by you adverse to the reputation of the Company or
any Affiliate, (vi) the willful disclosure by you of any Confidential
Information (as defined below) to persons not authorized to know same, and (vii)
your willful violation of or failure to comply with (A) any material Company
policy, including, without limitation, the Code of Ethics and Business
Practices, or (B) any legal or regulatory obligations or requirements,
including, without limitation, failure to provide any certifications as may be
required by law, provided that with respect to this Section 2(d)(vi), you shall
be given thirty (30) days to cure such violation to the extent such violation is
reasonably susceptible to cure.  If, within ninety (90) days subsequent to the
termination of your employment, it is first discovered that your employment
could have been terminated for Cause pursuant to sections (i) or (v) of this
Section 2(d), your employment shall, at the election of the Company, in its sole
discretion, be deemed to have been terminated for Cause in which event the
Company shall be entitled to immediately cease providing any Severance Benefits
to you or on your behalf and recover any payments previously made to you or on
your behalf in the form of Severance Benefits.   For purposes of this provision,
no act or omission on your part shall be considered “willful” unless it is done,
or omitted to be done, by you in bad faith or without reasonable belief that
your action or omission was in the best interests of the Company.  Any act, or
failure to act, based upon authority given pursuant to a resolution duly adopted
by the Board or of the Board of Directors of the Parent or by the written
direction of counsel to the Company or the Parent shall be conclusively presumed
to be done, or omitted to be done, by you in good faith and in the best
interests of the Company.  

(e)For purposes of this Agreement, the term “Disability” shall mean, as
determined by a mutually agreed upon physician, your incapacity due to physical
or mental illness or injury, which results in your being unable to perform your
duties hereunder for a period of ninety (90) working days within a 180-day
period and with such physician determining that such illness or injury is
reasonably likely to continue for an indefinite period.

-5-

 

--------------------------------------------------------------------------------

(f)For purposes of this Agreement, the term “Good Reason” shall mean (i) any
action by the Company that results in a material diminution in your position,
authority, duties or responsibilities as Chief Executive Officer of the Company,
as described in Section 1(a) herein, or any subsequent parent operating company
of the Company (including any failure to appoint you to the Board or continue
you on the Board); (ii)  a reduction by the Company in your Base Salary (except
as provided in Section 3(a) herein) or a reduction in your Annual Bonus
opportunity, or a material failure by the Company to pay you any such amounts
when due; (iii) a relocation of your principal place of employment to more than
thirty-five (35) miles from the Company’s corporate headquarters (determined at
the Commencement Date), and (iv) a material breach of this Agreement or your
management equity agreements, in each case without your written
consent.  Termination of your employment for “Good Reason” shall not be
effective (other than with respect to clause (iii) above) until you deliver to
the Board a written notice specifically identifying the conduct of the Company
which you believe constitutes “Good Reason” in accordance with this Section 2(f)
within ninety (90) days of your knowledge of the initial occurrence of each
specific event constituting Good Reason and you provide the Board and/or Company
at least thirty (30) days to remedy such conduct after receipt of such written
notice, and to the extent not cured, you must terminate your employment within
thirty (30) days after such failure to cure.  

3.  Compensation and Benefits.

(a)Base Salary. During the Employment Period, your annual base salary shall not
be less than $1,250,000 (“Base Salary”); provided that your annual base salary
may be reduced to less than the Base Salary if the annual base salaries in
effect for all or the majority of other senior executive officers of the Company
are similarly reduced (for the purpose of determining similarly reduced, the
reduction shall be measured as a percentage of their base salary prior to such
reduction). The Base Salary shall be paid pursuant to regular Company payroll
practices for the senior executives of the Company and shall be reviewed
annually by the Company.  For all purposes herein, “Base Salary” shall mean Base
Salary as adjusted pursuant to this Section 3(a).

(b)Bonuses.  

i.Annual Bonus. In addition to the Base Salary, for each fiscal year during the
Employment Period, you will have the opportunity to earn an annual bonus
(“Annual Bonus”) at the following percentages of your Base Salary if both the
Company achieves certain performance objectives (which will be determined by the
Company for each such fiscal year in accordance with the Company’s bonus plan)
and you achieve your performance goals established by the Company: target Annual
Bonus of 150% of your Base Salary, up to a maximum bonus based upon the terms of
the bonus plan as in effect from time to time.  Notwithstanding the foregoing,
for each of fiscal years 2017 and 2018, the Annual Bonus will not be less than
your target Annual Bonus (for the avoidance of doubt, in determining the Annual
Bonus for 2017, Base Salary for 2017 shall be the annual rate of Base Salary
rather than the amount of Base Salary actually received in respect of
2017).  Any Annual Bonus will be paid only if you are actively employed with the
Company and not in breach of this Agreement on the date of actual payment,
except that such requirement of continued employment shall not apply to the
payment

-6-

 

--------------------------------------------------------------------------------

of any Pro-Rata Bonus or any accrued but unpaid Annual Bonus payable pursuant to
Section 2(c) hereof.

 

ii.Performance Incentive Bonus.  You will be eligible to earn an additional
bonus (the “Performance Incentive Bonus”) in the aggregate amount of four
million dollars ($4,000,000), on the following basis: (1) 50% of the
Performance  Bonus will become vested upon achievement of Adjusted EBITDA
(“EBITDA”), determined on a trailing twelve fiscal month basis, of no less than
$250 million (“Tranche 1 EBITDA Target”); and (2) 50% of the Performance  Bonus
will become vested upon achievement of EBITDA, determined on a trailing twelve
fiscal month basis, of no less than $300 million (“Tranche 2 EBITDA Target”),
provided that in each case that the applicable EBITDA Target is sustained at
such level for a period of six (6) fiscal months thereafter, and except as set
forth in Section 2(c)(v), Participant has remained in continuous employment from
the Commencement Date until such vesting date.  The EBITDA Target shall be
equitably adjusted in good faith after the date hereof by the Board or the
Compensation Committee of the Board to reflect the consequences of future
acquisitions and dispositions.  In particular, but not in limitation of the
foregoing, the Board or the Compensation Committee shall equitably reduce the
EBITDA Target in the event of a sale or disposition of Madewell Inc.
(“Madewell”), including without limitation by reason of a spin-off and
distribution of Madewell stock to the Company’s shareholders.  Payment will be
made as reasonably practicable following the vesting of the applicable EBITDA
Target, but in no event later than two and one-half months following the end of
the calendar year in which the vesting date occurs. For this purpose, “Adjusted
EBITDA” shall have the same meaning as reported to the SEC on a quarterly basis
on Form 8-K.

 

(c)Employee Benefits. During the Employment Period, you will be entitled to
participate in the Company’s benefit package made generally available to other
senior executive officers of the Company, subject to the applicable terms of
each benefit plan. Currently, the Company’s benefit package includes paid time
off days, holidays, life insurance, medical insurance, a matching 401(k) tax
deferred savings plan, a flexible spending account, and the associate discount.
The Company reserves the right to change these benefits at any time in its sole
discretion.  You will be entitled to vacation in accordance with the Company’s
paid time off policy, such paid time off to be taken at your discretion, subject
to the needs of the business.

(d)Business Expense Reimbursement. The Company shall promptly reimburse you for
all reasonable business expenses incurred by you in connection with the
performance of your duties and responsibilities hereunder upon the presentation
of statements of such expenses in accordance with the Company’s policies and
procedures as may be in effect from time to time; provided that such
reimbursement shall occur no later than the last day of the calendar year
following the calendar year in which you incurred the reimbursable expense. You
shall be permitted to travel at a level of not less than business class.

(e)Equity.  In accordance with the Chinos Holdings, Inc. 2011 Equity Incentive
Plan (as amended from time to time, the “Plan”), you will as soon as reasonably
practicable following the Commencement Date be granted restricted shares of
Class A common stock of Parent (“Parent Stock”) (the form and terms of which
have been previously provided to you), (i) 50% of which will be subject to
time-based vesting (the service period of which shall commence as of your
Commencement Date notwithstanding that the grant may be made at a later date;
and (ii)

-7-

 

--------------------------------------------------------------------------------

50% of which shall be subject to performance-based vesting (together, the
“Equity Awards”).  Except as provided in Section 7(b), the Equity Awards are
subject to the Plan, the terms of the award agreements evidencing such Equity
Awards (the forms and terms of which have been previously provided to you), the
terms of the Stockholders Agreement and other restrictions and limitations
generally applicable to common stock of Parent or equity awards held by Company
executives or otherwise imposed by law.

(f)Director and Officer Insurance.  During the Employment Period, and at all
times thereafter during which you remain an executive officer of the Company,
the Company or its Affiliates will provide you with directors’ and officers’
insurance liability coverage to cover claims arising from your activities on
behalf of the Company and its Affiliates, in the same manner as such insurance
is provided to other similarly-situated executive officers or directors of the
Company and its Affiliates.

(g)Signing Bonus. The Company shall pay you a signing bonus in two installments:
(1) one million one-hundred twenty five thousand dollars ($1,125,000) within
thirty days of the Commencement Date (the “First Installment”), provided that if
you terminate your employment without Good Reason or the Company terminates your
employment for Cause, in either case prior to the one year anniversary of the
Commencement Date, you shall be required to repay to the Company the full amount
of the First Installment; (2) conditioned on your continued employment on the
first anniversary of the Commencement Date (the “First Anniversary”), one
million one-hundred twenty five thousand dollars ($1,125,000) within thirty days
of the First Anniversary (the “Second Installment”), provided that if you
terminate your employment without Good Reason or the Company terminates your
employment for Cause, in either case prior to the second anniversary of the
Commencement Date, you shall be required to repay to the Company the full amount
of the Second Installment; and (3) conditioned on your continued employment on
the second anniversary of the Commencement Date (the “Second Anniversary”),
seven hundred fifty thousand dollars ($750,000)  within thirty days of the
Second Anniversary (the “Third  Installment”), provided that if you terminate
your employment without Good Reason or the Company terminates your employment
for Cause, in either case prior to the third anniversary of the Commencement
Date, you shall be required to repay to the Company the full amount of the Third
Installment. In the event of your termination without Cause or your resignation
for Good Reason or your death or termination of employment as a result of
Disability, any unpaid installments shall be paid to you (or your estate) as
provided in Section 2(c)(ii) and Section 2(c)(v) and no previously paid
installments shall be repaid.

4.  Additional Agreements; Confidentiality.

(a)As additional consideration for the Company entering into this Agreement, you
agree that for a period of twelve (12) months following the Termination Date,
you shall not, directly or indirectly, (i) engage (either as owner, investor,
partner, employer, employee, consultant or director) in or otherwise perform
services for any Competitive Business (as defined below), provided that the
foregoing restriction shall not prohibit you from owning a passive investment of
(x) not more than five percent (5%) of the total outstanding securities of any
publicly-traded company or (y) not more than two percent (2%) of any
non-publicly traded entity through mutual funds, private equity funds, hedge
funds or similar passive investment vehicles, or (ii) solicit or cause another
person or entity to solicit any customers or suppliers of the

-8-

 

--------------------------------------------------------------------------------

Company to terminate or otherwise adversely modify their relationship with the
Company. The term “Competitive Business” means each of the companies listed on
Exhibit B (including their subsidiaries), as it may be amended from time to time
by mutual agreement of the parties.  For purposes of this Section 4, the term
“Company” means the Company and/or its Affiliates.  Notwithstanding the
foregoing, you shall not be in violation of this Section 4(a) if your employer
merges into, acquires or is acquired by a Competitive Business or a subsidiary
or parent of such Competitive Business, provided that you did not know, or have
reason to know, of any pending or actual transaction that resulted in such
merger or acquisition on or before the date on which you commenced working for
such employer.  Notwithstanding anything herein to the contrary, the provisions
of this Section 4(a) shall not apply in any of the following circumstances:  (i)
the Company terminates the Employment Period without Cause or (ii) you terminate
the Employment Period with Good Reason.

(b)During the Employment Period and for a period of twenty-four (24) months
following the Termination Date, you shall not, directly or indirectly, solicit,
hire, or seek to influence the employment decisions of, any employee of the
Company on behalf of any person or entity other than the
Company.  Notwithstanding the foregoing, this provision shall not be violated by
your providing a personal reference or by you posting a general advertisement
not directly specifically at employees of the Company.

(c)You agree that during the Employment Period and thereafter you will hold in
strict confidence any proprietary or Confidential Information (as defined below)
related to the Company, except to the extent that such Confidential Information
(i) becomes a matter of public record or is published in a newspaper, magazine
or other periodical available to the general public, other than as a result of
your act or omission, (ii) is required to be disclosed by any law, regulation or
order of any court, other tribunal, regulatory commission or administrative
agency,  provided that, to the extent legally permitted, you give prompt notice
of such requirement to the Company to enable the Company to seek an appropriate
protective order prior to such disclosure, (iii) is required to be used or
disclosed by you to perform properly your duties under this Agreement or (iv) or
is reasonably necessary to be disclosed in connection with any litigation
between you and the Company or any of its subsidiaries or Affiliates.  For
purposes of this Agreement, the term “Confidential Information” shall mean all
information of the Company in whatever form which is not generally known to the
public, including without limitation, customer lists, trade practices, marketing
techniques, fit specifications, design, pricing structures and practices,
research, trade secrets, processes, systems, programs, methods, software,
merchandising, distribution, planning, inventory and financial control, store
design and staffing.  Upon termination of your employment, you shall not take,
without the prior written consent of the Company, any drawing, specification or
other document or computer record (in whatever form) of the Company embodying
any Confidential Information and will return any such information (in whatever
form) then in your possession.

(d)You agree to deliver promptly to the Company upon termination of the
Employment Period for any reason, or at any other time that the Company may so
request, all documents (and all copies thereof), whether written, electronic, or
in any other form, relating to the business of the Company and all property
associated therewith, which you may then possess or have under your control;
provided, that notwithstanding anything herein to the contrary, you may retain
your calendar, contacts, personal correspondence, compensation documents and all

-9-

 

--------------------------------------------------------------------------------

information reasonably needed for tax return preparation. You agree that all
sketches, drawings, samples, design samples, designs, patterns, methods,
processes, techniques, themes, layouts, mechanicals, trade secrets, copyrights,
trademarks, patents, ideas, specifications, business or marketing practices,
concepts, strategies and techniques and other material or work product
(“Intellectual Property”) created, developed or assembled, whether or not by
you, during and in connection with your employment with the Company, shall
become the permanent and exclusive property of the Company to be used in any
manner it sees fit, in its sole discretion and that all rights to Intellectual
Property are vested in the Company. You shall not communicate to the Company any
ideas, concepts, or information of any kind (i) which were earlier communicated
to you in confidence by any third party, or (ii) which you know or have reason
to know is the proprietary information of any third party, or (iii) which is
subject to any claim of proprietary interest by any third party. Further, you
shall adhere to and comply with the Company’s Code of Ethics and Business
Practices.  All Intellectual Property created or assembled, whether or not by
you, in connection with your employment with the Company shall be the permanent
and exclusive property of the Company.  You and the Company mutually agree that
all Intellectual Property and work product created in connection with this
Agreement, which is subject to copyright, shall be deemed to be “work made for
hire,” and that all rights to copyrights shall be vested in the Company.  If for
any reason the Company cannot be deemed to have commissioned “work made for
hire,” and its rights to copyright are thereby in doubt, then you agree not to
claim to be the proprietor of the work prepared for the Company, and to
irrevocably assign to the Company, at the Company’s expense, all rights in the
copyright of the work prepared for the Company.  You further agree to execute
any documentation reasonably necessary to assign over or vest any Intellectual
Property in the Company.

(e)You agree that during the Employment Period and thereafter you shall not
defame or disparage the Company or any of its Affiliates or their respective
officers, directors, members, executives or associates; provided, however, that
this Section 4(e) shall not prevent you from having any communications with your
immediate family or your financial and tax advisors, accountants or attorneys or
from giving testimony that may be required before any court, other tribunal,
regulatory commission or administrative agency or pursuant to compulsory process
of law or other applicable law or as may be reasonably necessary in connection
with any litigation with the Company or any of its Affiliates. The Company
agrees that, during the Employment Period and thereafter, it shall not, and it
shall cause its executive officers and directors not to, defame or disparage
you. For the avoidance of doubt, statements made during the Employment Term in
the ordinary course of employment (e.g., performance reviews) shall not result
in a violation of this Section 4(e).  

(f)You agree that during the Employment Period and thereafter, in the event that
you are served with legal process or other request purporting to require you to
testify, plead, respond or defend and/or produce documents in connection with
any legal or governmental proceeding, threatened proceeding, investigation or
inquiry involving the Company or any of its Affiliates or their respective
officers, directors, members, executives or associates, you will, if legally
permitted: (1) provide testimony or Company documents only if served with a
subpoena, court order or similar process from a regulatory agency or with the
prior written consent of the Company; (2) within three (3) business days or as
soon thereafter as practical, provide oral notification to the Company’s General
Counsel of your receipt of such process or request to testify or produce
documents; and (3) provide the Company’s General Counsel by overnight

-10-

 

--------------------------------------------------------------------------------

delivery service a copy of all legal papers and documents served upon you. You
further agree that in the event you are served with such process, you will meet
and confer with the Company’s designee(s) in advance of giving such testimony or
information. You also agree to reasonably cooperate with the Company and/or, at
the Company’s written request, any of its Affiliates and their respective
officers, directors, members, executives or associates in connection with any
existing, future or threatened litigation or governmental proceeding,
investigation or inquiry involving the foregoing parties, whether
administrative, civil or criminal in nature, in which and to the extent the
Company deems your cooperation reasonably necessary. Any such cooperation shall
be subject to your reasonable work and personal commitments and you shall not be
required to cooperate against your own legal interests. The Company agrees to
promptly reimburse you for your reasonable out-of-pocket expenses incurred in
connection with the performance of your obligations under this Section 4(f)
(including, to the extent permitted by applicable law, reasonable attorneys’
fees incurred in the event you and the Company mutually agree that independent
counsel is appropriate) upon the presentation of statements of such expenses in
accordance with the Company’s policies and procedures as may be in effect from
time to time for its active employees; provided that such reimbursement shall be
paid to you no later than the end of the calendar year immediately following the
calendar year in which such expenses were incurred.

(g)You also agree that breach of the provisions provided in this Section 4 would
cause the Company to suffer irreparable harm for which money damages would not
be an adequate remedy and therefore, if you breach any of the provisions in this
Section 4, the Company will be entitled to seek an injunction restraining you
from violating such provision without the posting of any bond.  If the Company
shall institute any action or proceeding to enforce the terms of any such
provision, you hereby waive the claim or defense that the Company has an
adequate remedy at law and you agree not to assert in any such action or
proceeding the claim or defense that the Company has an adequate remedy at
law.  The foregoing shall not prejudice the Company’s right to require you to
account for and pay over to the Company, and you hereby agree to account for and
pay over, the compensation, profits, monies, accruals and other benefits derived
or received by you as a result of any transaction constituting a breach of any
of the provisions set forth in this Section 4 if such breach occurs during the
24-month period following your termination of employment.  Without limiting the
foregoing, you further agree that, in the event your employment is terminated
and you fail to comply with Section 4(a) or 4(b) of this Agreement, the Company
shall have the immediate right to cease making any severance payments under
Section 2(c) of this Agreement and shall have the right to require you to repay
any severance payments that had been paid to you prior to the date of such
breach.

5.  Representations.

The parties hereto hereby represent and warrant that they have the authority to
enter into this Agreement and perform their respective obligations hereunder.
You hereby represent and warrant to the Company that (i) the execution and
delivery of this Agreement and the performance of your duties hereunder shall
not constitute a breach of or otherwise violate any other agreements,
arrangements or commitments with any other party to which you are a party or by
which you are bound, and (ii) you will not use or disclose any confidential
and/or proprietary information or trade secrets obtained by you in connection
with your former employments with

-11-

 

--------------------------------------------------------------------------------

respect to your duties and responsibilities hereunder. You further represent
that you are not aware of any facts or circumstances that would adversely affect
your ability to serve as the Company’s Chief Executive Officer.

6.  Indemnification.

The Company agrees that if you are made a party or threatened to be made a party
to any threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative (a “Proceeding”), other than
any Proceeding related to any contest or dispute between you and the Company or
any of its Affiliates with respect to this Agreement or the services described
hereunder, by reason of the fact that you are or were an officer or a director
of the Company or any subsidiary of the Company or are or were serving at the
request of the Company as a director, officer, member, employee or agent of
another corporation or a partnership, joint venture, trust or other enterprise,
the Company shall indemnify you for, and hold you harmless against, all expenses
(including attorneys’ fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by you to the fullest extent authorized by the
Company’s Certificate of Incorporation and Bylaws (including, without
limitation, the advancement of expenses in accordance with the Company’s
Bylaws).

7.  Miscellaneous.

(a)Any notice or other communication required or permitted under this Agreement
shall be effective only if it is in writing and shall be deemed to be given when
delivered personally or four days after it is mailed by registered or certified
mail, postage prepaid, return receipt requested or one day after it is sent by a
reputable overnight courier service and, in each case, addressed as follows:

If to the Company:

J. Crew Group, Inc.

770 Broadway

New York, NY  10003
Attention: General Counsel

 

If to you:

To the address on file with the Company.

Copy to:

Katzke & Morgenbesser LLP

1345 Avenue of Americas

New York, NY 10105

Attention:    Michael S. Katzke

 

or to such other address as any party may designate by notice to the other.

-12-

 

--------------------------------------------------------------------------------

(b)This Agreement and any other agreement specifically referred to herein
constitute the entire agreement between you and the Company with respect to the
subject matter hereof and thereof, and supersede and are in full substitution
for any and all prior understandings or agreements with respect to the subject
matter hereof and thereof.  In the event that any provision of this Agreement
conflicts with the respective provisions of the Plan, the terms of any of the
award agreements evidencing the Equity Awards, or the Stockholders Agreement,
the relevant provision contained in this Agreement shall govern.   In addition,
notwithstanding the terms of the Stockholders Agreement, the Plan, the award
agreements evidencing the Equity Awards or any other agreement or policy
relating to your employment with the Company, (x) you shall not be subject to
any restrictive covenants contained therein to the extent that they are not also
contained in this Agreement, and (y) any dispute involving such Plan or the
Equity Awards shall be adjudicated in the State of New York in accordance with
Section 7(j) hereof except that, in accordance with such Equity Award
agreements, Delaware law shall apply.    

(c)This Agreement shall inure to the benefit of and be an obligation of the
Company’s assigns and Successors (as defined below), provided that, in
connection with and notwithstanding any assignment to an Affiliate of the
Company, the Company shall continue to be liable and responsible for all of its
obligations hereunder, as stated herein, without termination or modification
(unless mutually agreed by you and the Company); however you may not assign any
of your rights or duties hereunder to any other party other than the assignment
to your beneficiaries (or estate) of any amounts due to you following your
death.  The term “Successor” shall mean, with respect to the Company, any other
business entity that, by merger, consolidation, purchase of the assets, or
otherwise, acquires all or a material part of its assets.  Any assignment by the
Company of its rights or obligations hereunder to any Affiliate of or Successor
to the Company shall not be a termination of the Employment Period for purposes
of this Agreement.  Notwithstanding anything herein to the contrary, in the
event of any transaction that results in a Successor (other than a transaction
in which the Company survives following the transaction), the Company shall
require such Successor to assume its obligations under this Agreement in
connection with such transaction.

(d)No provision of this Agreement may be amended or waived, unless such
amendment or waiver is specifically agreed to in writing and signed by you and
an officer of the Company duly authorized to execute such amendment. The failure
by either you or the Company at any time to require the performance by the other
of any provision hereof shall in no way affect the full right to require such
performance at any time thereafter, nor shall the waiver by you or the Company
of a breach of any provision hereof be taken or held to be a waiver of any
succeeding breach of such provision or a waiver of the provision itself or a
waiver of any other provision of this Agreement.

(e)You and the Company acknowledge and agree that each of you has reviewed and
negotiated the terms and provisions of this Agreement and has had the
opportunity to contribute to its revision. Accordingly, the rule of construction
to the effect that ambiguities are resolved against the drafting party shall not
be employed in the interpretation of this Agreement. Rather, the terms of this
Agreement shall be construed fairly as to both parties and not in favor or
against either party.

-13-

 

--------------------------------------------------------------------------------

(f)Any provision of this Agreement (or portion thereof) which is deemed invalid,
illegal or unenforceable in any jurisdiction shall, as to that jurisdiction and
subject to this Section, be ineffective to the extent of such invalidity,
illegality or unenforceability, without affecting in any way the remaining
provisions thereof in such jurisdiction or rendering that or any other
provisions of this Agreement invalid, illegal, or unenforceable in any other
jurisdiction. If any covenant should be deemed invalid, illegal or unenforceable
because its scope is considered excessive, such covenant shall be modified so
that the scope of the covenant is reduced only to the minimum extent necessary
to render the modified covenant valid, legal and enforceable.

(g)The Company may withhold from any amounts payable to you hereunder all
federal, state, city or other taxes that the Company may reasonably determine
are required to be withheld pursuant to any applicable law or regulation (it
being understood, that you shall be responsible for payment of all taxes in
respect of the payments and benefits provided herein).

(h)This Agreement may be executed in two counterparts, both of which shall be
deemed an original, but all of which shall constitute one and the same
instrument.

(i)The headings in this Agreement are inserted for convenience of reference only
and shall not be a part of or control or affect the meaning of any provision
hereof.

(j)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 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.

(k)If all, or any portion, of the payments provided under this Agreement, either
alone or together with other payments or benefits that you receive or are
entitled to receive from the Company or an Affiliate (the “Total Payments”),
would constitute an “excess parachute payment” within the meaning of Section
280G of Code (“Section 280G”), then the Company, its Affiliates and you shall
use customary, reasonable and good faith efforts to avoid all, or any portion,
of the Total Payments constituting an “excess parachute payment” within the
meaning of Section 280G, by, if available, seeking a vote of stockholders of the
Company or an Affiliate, as applicable, in a manner and form that is intended to
comply with the stockholder approval procedures set forth in Section
280G(b)(5)(B) of the Code and the regulations thereunder.

(l)It is the intent of the parties that this Agreement be interpreted in a
manner that complies with the requirements of Section 409A of the Code. If any
provision of this Agreement (or any award of compensation or benefits provided
under this Agreement) would cause you to incur any additional tax or interest
under Section 409A of the Code, the Company and you shall reasonably cooperate
to reform such provision to comply with Section 409A of the Code and the Company
agrees to maintain, to the maximum extent practicable without violating Section
409A of the Code, the original intent and economic benefit to you of the
applicable provision; provided

-14-

 

--------------------------------------------------------------------------------

that nothing herein shall require the Company to provide you with any gross-up
for any tax, interest or penalty incurred by you under Section 409A of the Code.
Notwithstanding anything herein to the contrary, any amount of expenses eligible
for reimbursement pursuant to this Agreement during a calendar year shall not
affect the amount of expenses eligible for reimbursement during any other
calendar year. In addition, the right to reimbursement pursuant to this
Agreement shall not be subject to liquidation or exchange for any other benefit.
All rights to payments and benefits under this Agreement shall be treated as
rights to receive a series of separate payments and benefits to the fullest
extent allowed by Section 409A of the Code.

(m)Within thirty (30) days following your submission to the Company of a written
invoice, the Company shall reimburse you for or pay directly all legal fees
reasonably incurred in connection with the negotiation and execution of this
Agreement in an amount not to exceed $40,000.  

(n)No payments hereunder or under any equity-based agreement of the Company or
any of its Affiliates shall be subject to mitigation or any duty to mitigate.

If the terms of this Agreement meet with your approval, please sign and return
one copy to me.

 

 

 

 

 

Sincerely,

 

 

 

 

 

 

 

 

 

 

 

 

 

/s/Lynda Markoe

 

 

 

 

 

Name:

Lynda Markoe                

 

 

 

 

 

Title:    

Executive Vice President,

 

 

 

 

 

 

Human Resources & Legal

 

 

AGREED TO AND ACCEPTED:

/s/James Brett

James Brett

 

Dated: May 31, 2017

-15-

 

--------------------------------------------------------------------------------

EXHIBIT A

 

General Release

 

 

1.General Release of All Claims:  In exchange for the Company’s payment and
provision of the amounts and benefits described in Section 2(c) of your
employment agreement with the Company dated May 30, 2017 (the “Employment
Agreement”), as amended from time to time, you voluntarily, fully and
unconditionally release and forever discharge the Company and its past and
present parents, subsidiaries, affiliates, predecessors, successors, assigns,
and their respective officers, directors, employees, agents and plan
administrators, in their individual and corporate capacities (hereinafter
collectively referred to as “Releasees”) from any and all charges, actions,
causes of action, demands, debts, dues, bonds, accounts, covenants, contracts,
liabilities, or damages of any nature whatsoever, whether now known or unknown,
to whomever made, which you have or may have against any or all of the Releasees
for or by reason of any cause, nature or thing whatsoever arising out of or
related to your employment with the Company, or the termination of such
employment, from the beginning of time up to and including the date on which you
sign this Agreement, except as otherwise specifically stated in this Agreement.

 

Such claims, obligations, or liabilities include, but are not limited to: claims
for compensation allegedly due or owing; claims sounding in contract or implied
contract; claims for wrongful dismissal; claims sounding in tort; claims arising
under common law, civil law, equity, or federal, state, or local statutes or
ordinances, including but not limited to, the Age Discrimination in Employment
Act, as amended; Title VII of the Civil Rights Act of 1964, as amended; the
Civil Rights Act of 1991; Section 1981 of the Civil Rights Act of 1866; the
Equal Pay Act; the Americans with Disabilities Act and/or the Rehabilitation Act
of 1973; the Employee Retirement Income Security Act; the WARN Act; the
Consolidated Omnibus Budget Reconciliation Act; the Family Medical Leave Act, as
amended; the Genetic Information Nondiscrimination Act of 2008; state statutes
governing the payment of wages, discrimination in the workplace, or any other
statute or laws governing the employer-employee relationship, including but not
limited to, the New York State Human Rights Law, the New York Labor Law, the New
York State Constitution, the New York Civil Rights Law, the New York wage-hour
laws, the New York City Human Rights Law; the Virginia Human Rights Act; the
North Carolina Equal Employment Practices Act, the North Carolina Persons with
Disabilities Protection Act, the North Carolina Retaliatory Employment
Discrimination Act, the North Carolina Wage & Hour Act; any other claim pursuant
to any other federal, state or local employment laws, statutes, standards or
human rights legislation; or any claim for severance pay, notice, pay in lieu of
notice, salary, bonus, incentive or additional compensation, vacation pay,
insurance, other benefits, interest, and/or attorney’s fees.  You acknowledge
that this general release is not made in connection with any exit incentive or
other employment termination program offered to a group or class of employees.

 

Notwithstanding the foregoing, nothing in this Agreement waives your right to
(a) pursue a claim that cannot be released by private agreement, including,
workers compensation claims, claims arising after the date on which you sign
this Agreement, and your right to file administrative

-16-

 

--------------------------------------------------------------------------------

charges with certain government agencies; (b) challenge the Company’s failure to
comply with its obligation in Paragraph 1 above; (c) your vested and accrued
rights under Company qualified retirement, health, or welfare plans; and (d) any
rights you may have to indemnification or the protection of directors’ and
officers’ liability insurance.  

 

2.No Claims Filed:  You represent that you have not filed or permitted to be
filed against the Releasees, individually or collectively, any lawsuits, actions
or claims, and you covenant and agree that you will not do so at any time
hereafter with respect to the subject matter of this Agreement and claims
released pursuant to this Agreement (including, without limitation, any claims
relating to your employment and/or the termination of your employment).

 

You understand that nothing in this Agreement shall limit you from filing a
charge with, or participating in any investigation or proceeding conducted by,
the Equal Employment Opportunity Commission, National Labor Relations Board, the
Securities and Exchange Commission and/or any other federal, state or local
agency.  However, by signing this Agreement, you hereby waive any and all rights
to recover monetary damages in any charge, complaint or lawsuit filed by you or
by anyone else on your behalf.  

 

3.Waiver:  By signing this Agreement, you acknowledge that:

 

 

(a)

You have received and carefully read this Agreement;

 

(b)

You fully understand all of the terms contained in this Agreement;

 

(c)

You are freely and voluntarily entering into this Agreement and knowingly
releasing the Releasees in accordance with the terms contained in Paragraph 1
above;

 

(d)

Before signing this Agreement, you were advised of your right and had an
opportunity to consult with an attorney of your choice;

 

(e)

In accordance with Paragraph 1 above, you hereby expressly waive, among other
claims, any and all claims arising under the Age Discrimination in Employment
Act of 1967 (29 U.S.C. § 621 et seq.), which you have or may have against the
Releasees;

 

(f)

The release of claims described in Paragraph 1, above, of this Agreement does
not waive any rights or claims that you may have against the Company and/or the
Releasees arising after the date on which this Agreement becomes effective;

 

(g)

You have received or shall receive something of value from the Company which you
would not otherwise be entitled to receive;

 

(h)

Before signing this Agreement, you were given up to twenty-one (21) calendar
days to consider its terms and, should you sign this Agreement without waiting
the full 21 days, you attest that your decision in this regard is knowing and
voluntary and not induced through fraud, coercion, misrepresentation or a threat
to withdraw or alter the offer contained herein, and agree that any changes to
this Agreement do not restart the running of the 21 day period;

-17-

 

--------------------------------------------------------------------------------

 

(i)

The period of time until [DATE], that you had to consider your rights and
obligations under this Agreement was reasonable; and

 

(j)

For a period of seven (7) calendar days following the date on which you sign
this Agreement, you may revoke this Agreement; and

 

(k)

This Agreement, absent its timely revocation, shall become binding on the
Company and you on the eighth calendar day following the date on which you sign
this Agreement.  The Company shall not be required to perform any of its
obligations under this Agreement until after your time to revoke this Agreement
has expired.

4.Return of Signed Agreement:  You should return this signed Agreement to [•],
Human Resources, 770 Broadway, New York, NY 10003 by no later than [DATE].

 

5.Effective Date:  You will not receive the benefits identified in Section 2(c)
of the Employment Agreement until after the revocation period has expired and
this Agreement becomes effective.  You have seven (7) days from the date that
you sign this Agreement to change your mind.  Any revocation within this period
must be (a) submitted in writing to the Company; (b) state “I hereby revoke my
execution of the General Release”; and (c) be personally delivered to the
Company’s Executive Vice President, Human Resources, or mailed to their
attention at J. Crew, 770 Broadway, New York, NY 10003 within seven (7) days of
the execution of this Agreement.

 

 

   

Very truly yours,

 

J. CREW

 

 

By______________________________

    [Name / Title]    

 

Received, Read, Understood and Agreed:

 

___________________________

James Brett

 

Dated: _______________, 20__

 

 

-18-

 

--------------------------------------------------------------------------------

 

 

 

Acknowledgement of Receipt of

General Release

 

 

I acknowledge receiving today a General Release in connection with the
termination of my employment with J. Crew.  I have been informed of the time
periods for my consideration of the Agreement and for its revocation after I
sign it if I later change my mind.

 

 

Date

 

 

 

 

 

 

James Brett

-19-

 

--------------------------------------------------------------------------------

EXHIBIT B

Competitive Businesses

Abercrombie and Fitch

Aeropostale

Amazon (in respect to fashion)

American Eagle

Ascena

Bonobos

Coach

Cole Haan

Everlane

Fast Retailing

Gap

J. Jill

Kate Spade

Land’s End

PVH

Ralph Lauren

Steven Alan

Talbots

Tory Burch

Urban Outfitters

Vince

Vineyard Vines

 

 

-20-