Exhibit 10.1

EXECUTION VERSION

2014 EMPLOYMENT AGREEMENT

2014 Employment Agreement (“Agreement”) by and between ASCENA RETAIL GROUP, INC.
(“Ascena”), and DAVID R. JAFFE (“Executive”) dated as of March 5, 2014 (the
“Effective Date”).

WHEREAS, Executive is currently employed by Ascena as its President and Chief
Executive Officer pursuant to an Employment Agreement between Ascena and
Executive, dated as of May 2, 2002, as amended (the “Prior Agreement”), that
will expire by its terms on September 21, 2014; and

WHEREAS, Ascena and Executive desire to set forth the terms and conditions of
Executive’s continued employment with Ascena as its President and Chief
Executive Officer commencing as of the Effective Date.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, Ascena and Executive agree as follows:

1. Employment. Ascena hereby agrees to continue to employ Executive, and
Executive hereby agrees to continue to be employed by Ascena, upon the terms and
subject to the conditions set forth in this Agreement.

2. Term of Employment. The period of Executive’s employment under this Agreement
shall begin as of the Effective Date and shall continue for a period ending
September 21, 2017 (the “End Date”), unless sooner terminated in accordance with
Section 5 below. As used in this Agreement, the phrase “Employment Term” refers
to Executive’s period of employment from the date of this Agreement until his
“Termination Date” (as defined in Section 5(f) below).

3. Duties and Responsibilities.

(a) Ascena will continue to employ Executive as its President and Chief
Executive Officer. In these capacities, Executive shall perform the customary
duties and have the customary responsibilities of such positions. Executive
shall report to the Chairman of Ascena’s Board of Directors (the “Board”) and
the Board, and shall perform such other duties as may be assigned to Executive
from time to time by the Chairman or the Board.

(b) Executive agrees to faithfully serve Ascena, devote his full working time,
attention and energies to the business of Ascena, its subsidiaries and
affiliated entities, and perform the duties under this Agreement to the best of
his abilities. Executive agrees not to engage in any other business or
employment without the written consent of Ascena except as otherwise
specifically provided herein. Executive may perform uncompensated services in
connection with either the management of personal investments or with charitable
or

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civic organizations; provided that such activities do not interfere with
Executive’s duties pursuant to this Agreement. Executive may serve on other
corporate boards of directors, with the approval of the Board, which approval
will not be unreasonably withheld. Executive shall also be entitled to
appropriate vacation each year.

4. Compensation and Benefits.

(a) Base Salary. During the Employment Term, Ascena shall pay Executive a base
salary at the annual rate of $1,000,000 per year or such higher rate as may be
determined from time to time by the Board or a Compensation Committee of the
Board (“Base Salary”). Such Base Salary shall be paid in accordance with
Ascena’s standard payroll practices for senior executives.

(b) Benefit Plans, Fringe Benefits and Incentive Programs. Executive shall be
entitled to participate in all of Ascena’s pension, insurance and other benefit
plans and programs and in all bonus and incentive plans, including the Ascena
semi-annual incentive bonus plans and stock incentive plans. Executive shall be
entitled to office, secretarial and administrative assistance, and to the use of
a car service at the Company’s expense as necessary for him to perform his
duties and responsibilities hereunder, including for transportation to and from
his home.

(c) Expense Reimbursement. Ascena shall promptly reimburse Executive for the
ordinary and necessary business expenses incurred by Executive in the
performance of his duties under this Agreement in accordance with Ascena’s
customary practices applicable to senior executives and Section 11(c) of this
Agreement.

5. Termination of Employment. Executive’s employment under this Agreement shall
terminate on the End Date, unless earlier terminated under any of the
circumstances set forth in this Section 5 (a) through (d). Upon termination,
Executive (or his beneficiary or estate, as the case may be) shall be entitled
to receive the compensation and benefits described in Section 6 below, and, if
applicable, Section 7 below.

(a) Death. Executive’s employment shall terminate upon Executive’s death.

(b) Total Disability. Ascena may terminate Executive’s employment upon his
becoming “Totally Disabled”. For purposes of this Agreement, Executive shall be
“Totally Disabled” if Executive is physically or mentally incapacitated so as to
render Executive incapable of performing his material and substantial duties
under this Agreement for a period of ninety (90) consecutive days or one hundred
twenty (120) non-consecutive days in any twelve (12) month period. Executive’s
receipt of disability benefits under Ascena’s long-term disability benefits plan
or receipt of Social Security disability benefits shall be deemed conclusive
evidence of Total Disability (as defined in this Section 5(b)) for purpose of
this Agreement; provided, however, that in the absence of Executive’s receipt of
such long-term disability benefits or Social Security benefits, the Board may
determine that Executive is Totally Disabled (as defined in this

 

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Section 5(b)) based upon the opinion of an impartial reputable physician
(“Impartial Physician”) selected by mutual agreement of the parties or their
representatives, or failing agreement within 10 days of a written request
therefor by Ascena to Executive, then an Impartial Physician designated by
mutual agreement of a physician selected by Executive (or his representatives)
and a physician selected by Ascena; the written opinion of such Impartial
Physician as to the issue of Total Disability shall be final and binding on the
parties.

(c) Termination by Ascena for Cause. Ascena may terminate Executive’s employment
for “Cause.” Such termination shall be effective as of the date specified in the
written Notice of Termination provided to Executive. For purposes of this
Agreement, the term “Cause” shall mean any of the following: (i) conviction of a
crime (including conviction on a nolo contendere plea) involving the commission
by Executive of a felony or of a criminal act involving, in the good faith
judgment of the Board, fraud, dishonesty, or moral turpitude but excluding any
conviction which results solely from Executive’s title or position with Ascena
and is not based on his personal conduct; (ii) intentional and willful failure
to satisfactorily perform employment duties reasonably requested by the Board
after thirty (30) days’ written notice of such failure to perform, specifying
that the failure constitutes cause (other than as a result of vacation,
sickness, illness or injury); (iii) fraud or embezzlement; (iv) gross misconduct
or gross negligence in connection with the business of Ascena or an affiliate
which has a substantial adverse effect on Ascena or the affiliate;
(v) Executive’s intentional and willful act or omission which is materially
detrimental to the business or reputation of Ascena; or (vi) willful breach of
any of the covenants set forth in Section 8 hereof.

(d) Termination by Executive for “Good Reason.” Executive may terminate his
employment under this Agreement for “Good Reason” after providing a Notice of
Termination to Ascena at least sixty (60) days prior to the Termination Date.
For purposes of this Agreement, the term “Good Reason” shall mean the
occurrence, without Executive’s consent, of any of the following circumstances:
(i) any material demotion of Executive from his position, job duties, or
responsibilities as President and Chief Executive Officer, or any demotion of
Executive from his position, job duties or responsibilities as President and
Chief Executive Officer occurring on a Change on Control (as defined below) or
during the 24 month period following a Change in Control (in any case except in
connection with the termination of Executive’s employment for Cause or due to
Total Disability or as a result of Executive’s death, or temporarily as a result
of Executive’s illness or other absence); (ii) a failure by Ascena to pay
Executive’s compensation and benefits in accordance this Agreement;
(iii) relocation of Executive’s principal place of work outside of a thirty-five
(35) mile radius of its current location; or (iv) any material breach (not
covered by clauses (i) - (iii) above) of any of Ascena’s obligations under this
Agreement.

(e) Notice of Termination. Any termination of Executive’s employment by Ascena
or by Executive (other than by reason of Executive’s death) shall be
communicated by delivery of a written notice of termination to the other party
in accordance with Section 9 below (“Notice of Termination”).

 

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(f) Termination Date. The effective date of Executive’s termination of
employment (the “Termination Date”) shall be

(i) the End Date;

(ii) in the event of Executive’s death, the date of death;

(iii) in the event of termination for Total Disability, the date specified in
the Notice of Termination;

(iv) in the event of termination for Cause, the date specified in the Notice of
Termination;

(v) in the event of termination for Good Reason, the date specified in the
Notice of Termination or such later date as may be mutually agreed by the
parties; and

(vi) in the event of any other termination, the last day of the sixty (60) day
period beginning on the date on which written Notice of Termination is given or
such earlier date as may be specified by Ascena or such later date as may be
mutually agreed by the parties.

6. Compensation Following Termination of Employment; Change in Control.

(a) In the event Executive’s employment is terminated prior to the End Date by
the Company without Cause or the Executive resigns for Good Reason, in either
case other than as set forth in Section 6(b), in addition to all other payments
and benefits to which Executive shall be entitled, Executive shall be entitled
to receive an amount equal to two times the Executive’s Base Salary (at the rate
in effect on Executive’s Termination Date) (such amount, the “Severance
Payments”). The Severance Payments shall be made to the Executive in
installments for a period of twenty-four months following the date of
termination in accordance with Ascena’s standard payroll practices for senior
executives, subject to the Delay Period under Section 11(b) of the Agreement.
For the avoidance of doubt, the Severance Payments shall not be made to
Executive in the event that his employment terminates on or after the End Date.

(b) In the event that upon a Change in Control or during the 24 months following
a Change in Control, Executive’s employment is terminated by the Company without
Cause or the Executive resigns for Good Reason, Ascena shall pay the Executive
an amount equal to two times the sum of (x) the Base Salary at the rate in
effect on the date of the Notice of Termination and (y) an amount equal to the
aggregate incentive compensation paid to the Executive for the two most recently
completed seasons prior to the date of termination (i.e., the most recently
completed fall season and the most recently completed spring season), which
amount shall be paid to the Executive in installments for a period of
twenty-four months following the date of termination in accordance with Ascena’s
standard payroll practices for

 

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senior executives, subject to the Delay Period under Section 11(b) of the
Agreement. Notwithstanding receipt of such payments, Executive shall be entitled
to receive the payments and benefits hereinafter referred to in this Paragraph
6.

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 Ascena, excluding a person that is an affiliate (as such term is used
under that act) of Ascena on the date of this Agreement, or any affiliate of any
such person;

(ii) the majority of the board of directors of Ascena consists of individuals
other than Incumbent Directors, which term means the members of the board of
directors of Ascena on the date of this Agreement; 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) Ascena 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 Ascena are disposed of
pursuant to a merger, consolidation or other transaction (unless the
shareholders of Ascena 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 Ascena, all the common stock or other
ownership interests of the entity or entities, if any, that succeed to the
business of Ascena); or

(v) Ascena combines with another company and is the surviving corporation, but,
immediately after the combination, the shareholders of Ascena 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).

 

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(c) In the event that at any time prior to the End Date (whether prior to, upon
or during the 24 months following a Change in Control or in the absence of a
Change in Control) the Executive’s employment is terminated by the Company
without Cause or the Executive resigns for Good Reason:

(i) subject to Executive’s and/or his covered dependents’, as applicable, timely
election of continuation coverage under the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended (“COBRA”), and Executive’s or his covered
dependent’s, as applicable, continued copayment of premiums at the same level
and cost as if Executive were an employee of Ascena (excluding, for purposes of
calculating cost, an employee’s ability to pay premiums with pre-tax dollars),
continued participation in Ascena’s (or its successors) health and medical
insurance plans for Executive and his covered dependents (to the extent
permitted under applicable law and the terms of such plan), in a manner intended
to avoid any excise tax under Section 4980D of the Internal Revenue Code of
1986, as amended (“Code”), for a period though the earlier of (x) the applicable
period that Executive and/or his covered dependents’, as applicable, are
eligible for continuation coverage under COBRA and (y) the Executive becoming
eligible for coverage under the health and medical insurance plans of a
subsequent employer; and

(ii) Executive will be entitled to receive a pro rata incentive compensation
bonus payment for the season (i.e., the fall season or spring season) in which
such termination occurs based on the actual results for the season, pro-rated
based number of days during the season that Executive was employed by the
Company over the total number of days in the season (the “Pro Rata Bonus”),
payable when the incentive compensation bonus payment for such season is paid to
the Company’s other executive officers.

(d) Upon termination of Executive’s employment under this Agreement for any
reason, Executive (or his designated beneficiary or estate, as the case may be)
shall be entitled to receive the following compensation:

(i) Earned but Unpaid Compensation. Ascena shall pay Executive any accrued but
unpaid Base Salary for services rendered to the date of termination and any
accrued but unpaid expenses required to be reimbursed under this Agreement.

(ii) Other Compensation and Benefits. Except as may otherwise be provided under
this Agreement, any benefits to which Executive may be entitled pursuant to any
other plans, programs and benefits referred to in Section 4 above shall be
determined and paid in accordance with the terms of such plans, programs and
benefits.

7. Benefits Payable Following Death or Total Disability.

(a) Death. In the event that Executive’s employment is terminated by reason of
his death, his designated beneficiary or estate (as the case may be) shall
receive (i) such life insurance or benefits to which Executive is entitled under
the plans and policies maintained by Ascena, (ii) Executive’s full Base Salary
at the rate in effect on the date of Executive’s death, as if his employment had
continued until one year following Executive’s death, payments of Base

 

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Salary to be made at the same time and in the same manner as such compensation
had been paid prior to such termination of employment, (iii) subject to
Executive’s covered dependents’ timely election of continuation coverage under
COBRA, and Executive’s covered dependent’s continued copayment of premiums at
the same level and cost as if Executive were an employee of Ascena (excluding,
for purposes of calculating cost, an employee’s ability to pay premiums with
pre-tax dollars), continued participation for Executive’s covered dependents in
Ascena’s health and medical insurance plans (to the extent permitted under
applicable law and the terms of such plan), in a manner intended to avoid any
excise tax under Code Section 4980D, for a period of one year following
Executive’s death, subject to the Executive’s covered dependent’s remaining
eligible for COBRA coverage during such period, and (iv) the Pro Rata Bonus,
payable when the incentive compensation bonus payment for such season is paid to
the Company’s other executive officers.

(b) Total Disability. In the event that Executive’s employment is terminated by
reason of his Total Disability as determined in accordance with Section 5(b),
Executive or his designated beneficiary or estate (as the case may be) shall
receive (i) such life insurance or disability benefits, if any, to which
Executive is entitled under the plans and policies maintained by Ascena;
(ii) Executive’s Base Salary as determined under Section 4(a) at the rate in
effect on his Termination Date, as if his employment had continued through the
End Date, and in no event less than one year following the Termination Date (the
“Disability Severance Payments”); (iii) subject to Executive’s and/or his
covered dependents’, as applicable, timely election of continuation coverage
under COBRA, and Executive’s or his covered dependent’s, as applicable,
continued copayment of premiums at the same level and cost as if Executive were
an employee of Ascena (excluding, for purposes of calculating cost, an
employee’s ability to pay premiums with pre-tax dollars), continued
participation in Ascena’s health and medical insurance plans for Executive and
his covered dependents (to the extent permitted under applicable law and the
terms of such plan), in a manner intended to avoid any excise tax under Code
Section 4980D, for a period that is the shorter of the date of termination
through (x) the later of the End Date and one year from the date of termination,
(y) the applicable period that Executive and/or his covered dependents’, as
applicable, are eligible for continuation coverage under COBRA and (z) the
Executive becoming eligible for coverage under the health and medical insurance
plans of a subsequent employer, and (iv) the Pro Rata Bonus, payable when the
incentive compensation bonus payment for such season is paid to the Company’s
other executive officers. Any Disability Severance Payments shall be made at the
same time and in the same manner as such compensation had been paid prior to
such termination of employment, subject to the Delay Period under Section 11(b)
of the Agreement.

8. Restrictive Covenants.

(a) Non-Competition. Executive covenants and agrees that at all times during the
Employment Term and for one (1) year thereafter, unless Ascena at its sole
discretion gives its prior written consent to such activity by Executive,
Executive will not, directly or indirectly, engage in, assist, or have any
active interest or involvement whether as an employee, agent, consultant,
creditor, advisor, officer, director, stockholder (excluding holdings of less
than

 

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1% of the stock of a public company), partner, proprietor or any type of
principal whatsoever in any person, firm, or business entity which, directly or
indirectly, is engaged in “Competition” with Ascena.

For purposes of this Agreement, “Competition” with Ascena shall mean (x) the
business of owning and/or operating one or more retail specialty stores that
sell women’s apparel, or (y) the business of selling women’s apparel through
catalogs or internet sales, or (z) any other business engaged in by Ascena or
any subsidiary of Ascena (i.e., any entity in which Ascena owns 25% or more of
the outstanding equity interests) during the Employment Term. As used in this
Section 8, Ascena includes its affiliates, which for this purpose includes any
person that directly or indirectly, through one or more intermediaries,
controls, or is controlled by, or is under common control with, Ascena.

(b) Non-Solicitation. Executive covenants and agrees that at all times during
the Employment Term and for one (1) year thereafter, he will not directly or
indirectly recruit, solicit, hire, or cause to be hired, any individual who is
then, or who has been within the preceding six (6) month period, an employee of
Ascena.

(c) Non-Disparagement. Executive covenants and agrees that during the course of
his employment by Ascena or at any time thereafter, Executive shall not,
directly or indirectly, in public or private, deprecate, impugn, disparage, or
make any remarks that would tend to or be construed to tend to defame Ascena or
any of its employees, members of its board of directors or agents, nor shall
Executive assist any other person, firm or company in so doing.

(d) Confidentiality. Executive agrees that the Executive shall not, directly or
indirectly, use, make available, sell, disclose or otherwise communicate to any
person, other than in the course of Executive’s duties and for the benefit of
Ascena, either during the period of the Executive’s employment with Ascena or at
any time thereafter, any business and technical information or trade secrets,
nonpublic, proprietary or confidential information, knowledge or data relating
to Ascena whether the foregoing shall have been obtained by Executive during
Executive’s employment by Ascena (or any predecessors) or otherwise. The
foregoing shall not apply to information that (i) was known to the public prior
to its disclosure to Executive; (ii) becomes generally known to the public
subsequent to disclosure to Executive through no wrongful act of Executive or
any representative of Executive; or (iii) Executive is required to disclose by
applicable law, regulation or legal process (provided that Executive provides
Ascena with prior notice of the contemplated disclosure and cooperates with
Ascena at its expense in seeking a protective order or other appropriate
protection of such information).

(e) Right to Injunction. Executive acknowledges that the services to be rendered
by him to Ascena are of a special and unique character, which gives this
Agreement a peculiar value to Ascena. Executive acknowledges that a breach of
the covenants set forth in this Section 8 will cause irreparable damage to
Ascena with respect to which Ascena’s remedy at law for damages will be
inadequate. Therefore, in the event of breach or anticipatory breach of the
covenants set forth in this Section 8 by Executive, Executive and Ascena agree
that Ascena

 

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shall be entitled, in addition to remedies otherwise available to it at law or
equity, to injunctions, both preliminary and permanent, enjoining or restraining
such breach or anticipatory breach and Executive hereby consents to the issuance
thereof forthwith and without bond by any court of competent jurisdiction.

(f) Acknowledgments and Separability of Covenants. The parties acknowledge that
the type and periods of restriction imposed in Section 8 are fair and reasonable
and are reasonably required for the protection of Ascena; and that the time,
scope and other provisions of such Section have been specifically negotiated by
the parties. Executive specifically acknowledges that the restrictions
contemplated by this Agreement will not prevent him from being employed or
earning a livelihood. The covenants contained in this Section constitute a
series of separate covenants, one for each applicable State in the United States
and the District of Columbia, and one for each applicable foreign country. If in
any judicial proceeding, a court shall hold that any of the covenants set forth
in Section 8 are not permitted by applicable laws, Executive and Ascena agree
that such covenants shall and are hereby reformed to the maximum time,
geographic, or occupational limitations permitted by such laws. Further, in the
event a court shall hold unenforceable any of the separate covenants deemed
included herein, then such unenforceable covenant or covenants shall be deemed
eliminated from the provisions of this Agreement for the purpose of such
proceeding to the extent necessary to permit the remaining separate covenants to
be enforced in such proceeding.

9. Notices. Any notice, consent, request or other communication made or given in
connection with this Agreement shall be in writing and shall be deemed to have
been duly given when delivered or mailed by registered or certified mail, return
receipt requested, or by facsimile or by hand delivery, to the party listed
below at their following respective addresses or at such other address as each
may specify by notice to the other:

To Ascena:

Ascena Retail Group, Inc.

30 Dunnigan Drive

Suffern, NY 10901

Attention: Chairman of the Board of Directors

To Executive: at the last address (or to the facsimile number) shown on the
records of Ascena.

10. Miscellaneous.

(a) This Agreement shall be governed by and construed and enforced in accordance
with the laws of the State of New York applicable to agreements made and to be
performed entirely in New York. Any dispute between the parties hereto arising
out of or relating to this Agreement (other than any dispute relating to
Section 8 above) shall be settled exclusively by arbitration in New York, New
York in accordance with the provisions of this Agreement and the commercial
rules of the American Arbitration Association then in effect. Judgment may be
entered on the arbitrator’s award in any court having jurisdiction.

 

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(b) The article and section headings contained herein are for reference purposes

(c) This Agreement sets forth the entire agreement and understanding of the
parties relating to the subject matter hereof, and supersede all prior
agreements, arrangements and understandings, written or oral, relating to the
subject matter hereof, including the Prior Agreement. This Agreement may not be
amended except by a written agreement signed by both parties.

(d) Except as otherwise provided in this Agreement, this Agreement shall inure
to the benefit of and be binding upon the parties hereto and their respective
heirs, representatives, successors and assigns. This Agreement and the rights
and benefits of Executive under this Agreement shall not be assignable by
Executive; provided, however, that nothing in this Section 10 shall preclude
Executive from designating a beneficiary or beneficiaries to receive any benefit
payable on his death.

(e) No provision of this Agreement may be modified, waived or discharged unless
such waiver, modification or discharge is agreed to in writing and signed by the
Employee and the Board.

(f) The provisions of this Agreement shall be deemed severable and the
invalidity or unenforceability of any provision shall not affect the validity or
enforceability of the other provisions hereof.

(g) This Agreement may be executed (including by facsimile transmission) with
counterpart signature pages or in several counterparts, each of which shall be
deemed to be an original but all of which together will constitute one and the
same instrument.

11. Code Section 409A.

(a) Although Ascena does not guarantee to the Executive any particular tax
treatment relating to the payments and benefits paid in accordance with the
terms and conditions of this Agreement, it is the intent of the parties that
payments and benefits under this Agreement comply with or be exempt from
Section 409A of the Internal Revenue Code of 1986, as amended, and the
regulations and guidance promulgated thereunder (collectively “Code
Section 409A”) and, accordingly, to the maximum extent permitted, this Agreement
shall be interpreted to be in compliance therewith. The parties agree to
reasonably cooperate to take all further actions necessary to satisfy the
requirements of Code Section 409A.

(b) A termination of employment shall not be deemed to have occurred for
purposes of any provision of this Agreement providing for the payment of any
amounts or

 

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benefits that are considered “nonqualified deferred compensation” under Code
Section 409A upon or following a termination of employment unless such
termination is also a “separation from service” within the meaning of Code
Section 409A and, for purposes of any such provision of this Agreement,
references to a “termination,” “termination of employment” or like terms shall
mean “separation from service.” If the Executive is deemed on the date of
termination to be a “specified employee” within the meaning of that term under
Code Section 409A(a)(2)(B), then with regard to any payment or the providing of
any benefit made subject to this Section 11(b), to the extent required to be
delayed in compliance with Code Section 409A(a)(2)(B), such payment or benefit
shall be made or provided at the date which is the earlier of (i) the expiration
of the six (6)-month period measured from the date of the Executive’s
“separation from service,” and (ii) the date of the Executive’s death (the
“Delay Period”). Upon the expiration of the Delay Period, all payments and
benefits delayed pursuant to this provision (whether they would have otherwise
been payable in a single sum or in installments in the absence of such delay)
shall be paid or reimbursed to the Executive in a lump sum on the first business
day following the end of the Delay Period, and any remaining payments and
benefits due under this Agreement shall be paid or provided in accordance with
the normal payment dates specified for them herein.

(c) All expenses or other reimbursements paid pursuant to this Agreement that
are taxable income to the Executive shall be paid at the time provided by
Ascena’s applicable policies and customary practices, but in no event shall be
paid later than the end of the calendar year next following the calendar year in
which the Executive incurs such expense. With regard to any provision herein
that provides for reimbursement of costs and expenses or in-kind benefits,
except as permitted by Section 409A, (i) the right to reimbursement or in-kind
benefits shall not be subject to liquidation or exchange for another benefit,
(ii) the amount of expenses eligible for reimbursement, of in-kind benefits,
provided during any taxable year shall not affect the expenses eligible for
reimbursement, or in-kind benefits to be provided, in any other taxable year,
provided that the foregoing clause (ii) shall not be violated with regard to
expenses reimbursed under any arrangement covered by Code Section 105(b) solely
because such expenses are subject to a limit related to the period the
arrangement is in effect and (iii) such payments shall be made on or before the
last day of the Executive’s taxable year following the taxable year in which the
expense occurred.

12. Parachute Payments. If there is a change in ownership or control of Ascena
that causes any payment, distribution or benefit provided by Ascena, any person
whose actions result in a change in ownership covered by Section 280G(b)(2) or
any person affiliated with Ascena or such person, to or for the benefit of the
Executive (whether provided, to be provided, paid or payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise) (a
“Payment”) to be subject to the excise tax imposed by Section 4999 of the Code
(such excise tax, together with any interest or penalties incurred by the
Executive with respect to such excise tax, the “Excise Tax”) (any such Payment,
a “Parachute Payment”), then the following provisions shall apply:

(i) If the Parachute Payment, reduced by the sum of (A) the Excise Tax and
(B) the total of the federal, state, and local income and employment taxes
payable by

 

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the Executive on the amount of the Parachute Payment which are in excess of the
Threshold Amount (as defined below), are greater than or equal to the Threshold
Amount, the Executive shall be entitled to the full benefits payable under this
Agreement.

(ii) If the Threshold Amount is less than (A) the Parachute Payment, but greater
than (B) the Parachute Payment reduced by the sum of (x) the Excise Tax and
(y) the total of the federal, state, and local income and employment taxes
payable by the Executive on the amount of the Parachute Payment which are in
excess of the Threshold Amount, then the Parachute Payment shall be reduced (but
not below zero) to the extent necessary so that the sum of all Parachute
Payments shall not exceed the Threshold Amount. In such event, the Parachute
Payment shall be reduced in the following order: (1) cash payments not subject
to Code Section 409A; (2) cash payments subject to Code Section 409A; (3) stock
options (and other exercisable awards) that have exercise prices higher than the
then fair market value price of the stock (based on the latest vesting
tranches), (4) restricted stock and restricted stock units based on the last
ones scheduled to be distributed, (5) other stock options based on the latest
vesting tranches, and (6) other non-cash forms of benefits. To the extent any
payment is to be made over time (e.g., in installments, etc.), then the payments
shall be reduced in reverse chronological order.

For the purposes of this Section 5, “Threshold Amount” shall mean three times
the Executive’s “base amount” within the meaning of Section 280G(b)(3) of the
Code and the regulations promulgated thereunder less one dollar ($1.00). The
determination as to which of the alternative provisions of this Section 12 shall
apply to the Executive shall be made by a certified public accounting firm
designated by Ascena and reasonably acceptable to the Executive (the “Accounting
Firm”). The Accounting Firm shall make, and shall provide to the parties, such
determination within 60 days following the occurrence of the event that subjects
the Executive to the Excise Tax. All Payments will be treated as “parachute
payments” (within the meaning of Section 280G(b)(2) of the Code) and any
Payments in excess of the base amount shall be treated as subject to the Excise
Tax unless otherwise determined by the Accounting Firm. All fees and expenses of
the Accounting Firm shall be borne solely by Ascena. Any determination by the
Accounting Firm shall be binding upon Ascena and the Executive. The Executive
and Ascena shall provide the Accounting Firm with all information which the
Accounting Firm reasonably deems necessary in computing the Threshold Amount.
For purposes of determining which of the alternative provisions of this
Section 12 shall apply, the Executive shall be deemed to pay federal income
taxes at the highest marginal rate of federal income taxation applicable to
individuals for the calendar year in which the determination is to be made, and
state and local income taxes at the highest marginal rates of individual
taxation in the state and locality of the Executive’s residence on the
determination date, net of the maximum reduction in federal income taxes which
could be obtained from deduction of such state and local taxes.

[Signature page follows]

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above written.

 

ASCENA RETAIL GROUP, INC. By:  

/s/ Gene Wexler

Name:   Gene Wexler Title:   SVP, General Counsel By:  

/s/ David R. Jaffe

Name:   David R. Jaffe

 

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