Exhibit 10.1  Execution
Copy  SEPARATION AGREEMENT AND GENERAL
RELEASE  This Separation Agreement and General Release (the Agreement), is entered into on this
19th day of November, 2008, by and among New York & Company, Inc.
(f/k/a/ NY & Co. Group, Inc.), a Delaware corporation (Holdings), Lerner
New York, Inc., a Delaware corporation (Lerner, and, together with Holdings,
the Companies),
and Ronald Ristau (Executive).  WHEREAS,
the parties are party to the Second Amended and Restated Employment Agreement,
dated as of August 25, 2004, as amended by Amendment No. 1 to the
Second Amended and Restated Employment Agreement, dated as of December 22,
2006, by and among the Companies and Executive, and as further amended by
Amendment No. 2 to the Second Amended and Restated Employment Agreement,
dated as of April 10, 2008, by and among the Companies and Executive (the
Employment Agreement);  WHEREAS, Executives employment with the Companies has
terminated as of October 24, 2008 (the Separation Date); and  WHEREAS, Executive and the Companies would like to
formalize their agreement regarding the termination of their relationships.  NOW, THEREFORE, in consideration of the payments due
Executive under the Employment Agreement, and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties
hereto agree as follows:  1.Termination.  Executive and the Companies agree that
Executives employment with the Companies and their direct and indirect
Subsidiaries (as defined in Section 16 of the Employment Agreement) ceased
as of the close of business on the Separation Date.  Executive andthe Companies further agree that, in accordance with the
provisions of Section 21 of the Employment Agreement, any requirement under
the Employment Agreement in respect of any written notice of termination shall
be deemed waived.  In connection
therewith, the Companies acknowledge (i) having received, as of the
Separation Date, written notice of Executives resignation (the Resignation Letter)
from each of Executives positions as an officer, director or manager of
Holdings or any of its Subsidiaries, including Executives positions as
President and Chief Financial Officer of Holdings and Lerner as well as
Executives position as a member of the Board of Directors of Holdings and (ii) that
the receipt of such Resignation Letter will have fully discharged the Executive
of any responsibilities to the Companies under Section 22 of the
Employment Agreement.  2.Acceptance of
Agreement; Revocation.  This
Agreement was received by Executive on November 19, 2008.  Executive may accept this Agreement by
returning a signed original to Lerner or to Holdings at any time before December 11,
2008.  This Agreement shall be withdrawn
if not accepted as provided in the previous sentence on or before December 10,
2008.  Executive shall have seven days
after signing this Agreement to revoke it by delivering written


confirmation of
revocation to Lerner or to Holdings within such seven day period.  This Agreement will not become effective until
the revocation period has expired without revocation of this Agreement by
Executive (the Effective Date); provided
that revocation of this Agreement shall not affect the resignation of Executive
in Section 1 above.  3.Separation
Benefits.  Subject to (i) the
execution and delivery of this Agreement, and the expiration of the applicable
revocation period without this Agreement being revoked by Executive, in each
case by December 11, 2008, and in full discharge of all obligations owed
to Executive by the Companies and their Subsidiaries under the Employment
Agreement, and (ii) continued observance by Executive in all material
respects of the covenants contained in Section 11 of the Employment
Agreement (as modified herein), Executive shall be entitled to the following
benefits:  (a)On or before November 30,
2008, and without regard to whether Executive complies with Section 2 of
this Agreement, Holdings shall pay Executive (i) the Accrued Compensation
(as defined in Section 9(a) of the Employment Agreement, without
regard to clause (iii) thereof), which shall include three days of unused
paid time off and (ii) reimbursement in accordance with Section 7(b) of
all expenses reasonably incurred by Executive in connection with the
performance of his duties under the Employment Agreement or for promoting,
pursuing or otherwise furthering the business or interests of Holdings or its
Subsidiaries incurred through the Separation Date and presented to Holdings for
reimbursement.  (b)Holdings
shall pay Executive a Bonus (as defined in Section 4(a) of the
Employment Agreement) in an amount equal to (i) the product of (A) Fall
Bonus (as defined in Section 4(b) of the Employment Agreement) that
would otherwise have been payable to Executive for the period ending on January 31,
2009, (had Executive continued to be an employee of Holdings through the end of
such period) determined based on the actual performance of the Companies and
their Subsidiaries through such date and (B) 50% (the Pro Rata Fall Bonus)
and (ii) the product of (A) Full Year Bonus (as defined in Section 4(b) of
the Employment Agreement) that would otherwise have been payable to Executive
for the period ending January 31, 2009, (had Executive continued to be an
employee of Holdings through the end of such period) determined based on the
actual performance of the Companies and their Subsidiaries through such date
and (B) 75% (the Pro
Rata Full Year Bonus). 
If such bonuses become due, the Pro Rata Fall Bonus and Pro Rata Full
Year Bonus shall each be paid to Executive when similar fall and annual
bonuses, respectively, are paid to Lerners employees generally, but in any
event, on or after April 24, 2009 and prior to May 8, 2009.  (c)As consideration for
the continued observance by Executive in all material respects of the covenants
contained in Section 11(b) of the Employment Agreement (as modified
herein), Holdings shall continue Executives Base Salary (as defined in Section 3
of the Employment Agreement) of $600,000 from the date immediately following
the Separation Date to the second anniversary of the Separation Date (the Salary Continuation Period).  Payments during the Salary Continuation
Period (the Salary
Continuation Payments) shall be made on a weekly basis, the
gross amount of each such weekly payment being $11,538.46, with the first such
payment being made on the first day of the seventh month following the
Separation Date in respect of the Salary Continuation Payments that otherwise
would have been made to Executive during the period  2


beginning on the first
day of the Salary Continuation Period and ending on April 24, 2009.  Payments following this initial payment shall
be made on a weekly basis, the gross amount of each such weekly payment being
$11,538.46, through the duration of the Salary Continuation Period.  (d)As consideration for
the continued observance by Executive in all material respects of the covenants
contained in Section 11(b) of the Employment Agreement (as modified
herein), Holdings shall pay Executive an amount equal to (i) Executives
Spring Target Bonus ($157,500) (as defined in Section 4(b) of the
Employment Agreement) for the six-month period commencing on each of February 1,
2009 and January 31, 2010, with each such payment to be made at the time
Spring Target Bonuses are paid to other executives, but in any event prior to August 31,
2009 (in the case of the first payment) and on or after January 1, 2010,
but in any event prior to August 31, 2010 (in the case of the second
payment), (ii) Executives Fall Target Bonus ($202,500) (as defined in Section 4(b) of
the Employment Agreement) for the six-month period commencing on each of August 2,
2009 and August 1, 2010, with each such payment to be made at the time
Fall Target Bonuses are paid to other executives, but in any event on or after January 1,
2010 and prior to March 31, 2010 (in the case of the first payment) and on
or after January 1, 2011 and prior to March 31, 2011 (in the case of
the second payment), and (iii) Executives Full-Year Target Bonus
($90,000) (as defined in Section 4(b) of the Employment Agreement)
for the twelve-month period commencing on each of February 1, 2009 and January 31,
2010, with each such payment to be made at the time Full-Year Target Bonuses
are paid to other executives, but in any event on or after January 1, 2010
and prior to March 31, 2010 (in the case of the first payment) and on or
after January 1, 2011 and prior to March 31, 2011 (in the case of the
second payment).  No payment under this Section 3(d) shall
be made prior to April 24, 2009.  (e)Holdings shall take
such actions as may be necessary to immediately vest Executives unvested stock
option or other unvested long-term incentive awards that, by their terms, would
have vested during the calendar year in which Executives employment was
terminated.  Since there are no unvested
stock options or long-term incentive awards held by Executive that, by their
terms, vest during 2008, Executive is not entitled to additional vesting of any
outstanding equity awards and all equity awards held by or through Executive
shall continue to be subject to the terms and conditions applicable to such
equity awards.  (f)During the Salary
Continuation Period, Holdings shall, at its expense, provide to Executive and
Executives covered dependents medical and dental benefits substantially
similar in the aggregate to those provided to Executive and Executives covered
dependents immediately prior to the Separation Date, including benefits
provided under the New York & Company Executive Medical Plan (the Executive Medical Plan).  Holdings shall (i) provide Executive
with a monthly cash reimbursement equal to the total monthly premium payment
(employee and employer portion) paid for coverage of Executive and Executives
covered dependents, such payment to be made within one month of Executives
payment of the applicable premium, and (ii) provide a monthly cash
reimbursement to Executive of amounts not covered under such continued medical
coverage, to the extent permitted by the Executive Medical Plan, such monthly
reimbursement to be made as soon as administratively practicable after
submission of the documents required for reimbursement.  The amount of expenses eligible for
reimbursement under this Section 4(f) during one taxable year of the
Executive shall not affect the expenses eligible for reimbursement in any other
taxable year of the Executive.  The
Executives right to reimbursement under this Section 4(f) shall not
be subject to  3


liquidation or exchange
for another benefit.  Notwithstanding the
foregoing provisions of this Section 4(f), Holdings obligation with
respect to coverage under this Section 4(f) shall be eliminated to
the extent that Executive or Executives covered dependents, as applicable,
obtain, during the Salary Continuation Period, equivalent or substantially
similar benefits pursuant to a subsequent employers benefit plans.  Holdings hereby acknowledges and agrees that
Executives termination of employment with the Companies as of the Separation
Date shall not be treated as a qualifying event within the meaning of the
Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (COBRA), and that,
upon the cessation of coverage under this Section 4(f), Executive and
Executives covered dependents shall have all rights to which they are entitled
under COBRA.  Thereafter, Holdings
obligation with respect to such coverage shall be eliminated to the extent that
such coverage terminates in accordance with COBRA.  (g)Holdings will provide
Executive with Holdings executive level outplacement services through Lee
Hecht Harrison; provided that Executive begins using such service no later than
January 31, 2009.  (h)Holdings shall cause its legal counsel to render any number of opinions
(but not more than two opinions in any 45 day period and not more than 15
opinions in the aggregate) to its transfer agent to permit the sale of Executives
shares of Holdings common stock pursuant to Rule 144 under the Securities
Act of 1933, as amended, within ten business days of receiving all
documentation reasonably requested from Executive, including any certificates
from third parties, as being necessary for legal counsel to render such
opinions.  Holdings or its counsel shall
provide appropriate instruction to Executive regarding documentation necessary
in order to render such opinions.  (i)Holdings shall, at its expense, assist Executive
in compliance with Executives obligations under Section 16(a) of the
Securities Exchange Act of 1934, as amended (the Exchange Act), including, but not
limited to, preparation and filing of any Forms 4 required to be filed by
Executive; provided, however, that Executive shall provide Holdings with
appropriate notice of any transactions required to reported under Section 16(a) of
the Exchange Act, either prior to the time such transactions are effected or
contemporaneously with such transactions if prior notice is impractical, so
that Holdings will have adequate time to prepare any necessary filings on a
timely basis.  (j)Each weekly or monthly installment payment made
pursuant to this Section 3 shall be treated by the Companies and Executive
as a separate payment for all purposes of the Final Treasury Regulations under Section 409A
(409A)
issued on April 17, 2007 (the Regulations).  (k)For purposes of
determining whether Executive has incurred a separation from service under
the Regulations, the Companies agree that the default rule should be applied
for purposes of defining service recipient and employer under the
Regulations.  (l)The parties
acknowledge and agree that Executive is not entitled to any further payment
under the Employment Agreement, including Section 9 thereof, and that any
of the Companies payment obligations contained in the Employment Agreement
(other than those set forth in Section 23 of the Employment Agreement)
shall become null and void upon the Effective Date.  4


(m)Notwithstanding anything in this Agreement to the contrary, Lerner shall
be jointly and severally liable for the obligations to Executive under this
Agreement, including, but not limited to, the obligations of Holdings under Section 3
of this Agreement.  (n)In the event of
Executives death prior to the end of the Salary Continuation Period, Holdings
shall pay to Executives estate, or as may be directed by the legal
representatives of such estate, the benefits due pursuant to (a)-(f) of
this Section 3, at the time and in the same form that such payments are
due to the Executive thereunder.  (o)Section 11(b) of
the Employment Agreement is hereby modified so that only Competitive Activity
for any of the entities listed on Exhibit A hereto, including their
Subsidiaries and successors and assigns by reason of merger, consolidation,
reorganization or otherwise, will be considered restricted by such Section 11(b) of
the Employment Agreement.  4.Unconditional
and Full General Release of All Claims. 
Executive on his behalf and on behalf of his agents, heirs,
administrators, executors, attorneys and assigns, and anyone acting or claiming
on each of their respective behalves, hereby covenants never to sue, releases,
waives, acquits, and forever discharges the Companies, their divisions,
Subsidiaries, affiliates, parents, members, related entities, and their
respective past or present employees, officers, directors, stockholders,
partners, investors, executives, managers, agents, attorneys, representatives,
successors and assigns, and anyone acting on their joint or several behalf
(collectively, the Releasees), from any and all
claims, actions, causes of action, demands, damages, suits in equity, costs,
expenses, liabilities, or other losses, of any kind whatsoever, whether known
or unknown, which exist or may exist from the beginning of time up to and
including the date of Executives execution of this Agreement or which in any
way arise from, grow out of, or are related to events or circumstances that
occurred on or prior to the date of Executives execution of this Agreement,
including but not limited to any matter related to Executives employment with
the Companies and their Subsidiaries or the termination thereof.  By way of example only and without limiting
the immediately preceding sentence, as used herein the terms claims, causes
of action and demands shall include, and Executive agrees that neither
Executive nor Executives representative(s) shall file, or cause to be
filed, a charge, complaint, lawsuit, or any other claim against the Releasees
with respect to, (a) any federal, state, or local employment law or
statute, including, but not limited to Title VII of the Civil Rights Act of
1964, as amended, the Civil Rights Act of 1991, the Americans with Disabilities
Act, the Age Discrimination in Employment Act of 1967, as amended (including
the Older Workers Benefit Protection Act), the Family and Medical Leave Act of
1993, the Worker Adjustment Retraining and Notification Act or the Employee
Retirement Income Security Act, or (b) any claim based on the existence or
breach of oral or written contracts of employment, the negligence of any
Releasee, negligent or intentional misrepresentations, promissory estoppel, interference
with contract or employment, defamation or damage to business or personal
reputation, assault and battery, negligent or intentional infliction of
emotional distress, unlawful discharge in violation of public policy,
discrimination, retaliation, wrongful discharge, sexual harassment,
whistleblowing, breach of implied covenant of good faith, fraud, stock fraud,
equity, tort, intellectual property, personal injury, spoliation of evidence,
wage and hour law, statute or common law, claims for severance pay, claims
related to equity compensation and/or fringe benefits, claims for attorneys
fees, vacation pay, debts, accounts, compensatory damages, punitive or
exemplary damages or liquidated damages. 
Notwithstanding the foregoing, Executive shall not be deemed to have
released any of the following  5


claims: (i) claims for indemnity or contribution or claims for
coverage under any D&O insurance policies maintained by the Companies or
their Subsidiaries, in each case, in respect of claims asserted against
Executive in his capacity as an employee, director or officer of the Companies
or their Subsidiaries, (ii) claims for vested retirement benefits or
continued welfare coverage pursuant to COBRA, (iii) claims based on events
occurring after this agreement is executed by Executive or (iv) payments
required to be made under this Agreement . 
Except as provided herein and Section 23 of the Employment
Agreement (which shall apply in accordance with its terms), Executive
acknowledges and agrees that the Companies and their Subsidiaries have no
further obligations or commitments to Executive under the Employment Agreement.  5.Continuing
Covenants.  In consideration of
Holdings promise to provide the benefits set forth in Section 3(b)-3(i),
Executive hereby agrees to comply with and be subject to Section 11 of the
Employment Agreement (as modified herein) and that Section 11(e) of
the Employment Agreement shall apply to any violation of this Section 5 or
Section 11 of the Employment Agreement (as modified herein).  Executive hereby acknowledges that the
enforcement of the provisions of this Section 5 and Section 11 of the
Employment Agreement (as modified herein) may potentially interfere with
Executives ability to pursue a proper livelihood.  Executive recognizes and agrees that the
enforcement of this Agreement is necessary to ensure the preservation,
protection and continuity of the business, trade secrets and goodwill of Holdings
and Lerner.  Executive agrees that, due
to the proprietary nature of Holdings business, the restrictions set forth in
this Agreement are reasonable as to time and scope.  Executive hereby acknowledges that he has
been advised to consult with an attorney before executing this Agreement and
that he has done so or, after careful reading and consideration, he has chosen
not to do so of his own volition.  6.Future
Cooperation.  (a)  Executive agrees to fully and
completely cooperate with the Companies, their advisors, and their legal
counsel with respect to any litigation that is pending against either or both
of the Companies and any claim or action that may be filed against either or
both of the Companies in the future, in each case, to the extent Executive has
knowledge relevant to such action.  Such
cooperation shall include making Executive available at reasonable times and
places, taking into account Executives personal and business schedule, for
interviews, reviewing documents, testifying in a deposition or a legal or
administrative proceeding, and providing advice to either or both of the
Companies in preparing defenses to any pending or potential future claims
against either or both of the Companies.  (b)  If Executive is legally required to
appear or participate in any proceeding that involves or is brought against
either or both of the Companies, Executive agrees to disclose to the Companies
no later than ten business days prior to the date that such disclosure is to be
made, unless compelled by law or the written advice of engaged legal counsel to
do otherwise, what Executive plans to say or produce and to otherwise cooperate
fully with the Companies.  (c)  Executive agrees to reasonably
cooperate with Holdings as necessary for Holdings to comply with its public
disclosure requirements.  6


(d)  Executive shall be entitled to be
reimbursed by the Companies for all reasonable and necessary out-of-pocket
expenses actually incurred by him during the period beginning on the first day
of the Salary Continuation Period and ending on the last date with respect to
which Executive discharges his obligations under (a), (b) or (c) of
this Section 6 as a result of the performance of his obligations under Section 6
of this Agreement; provided that such expenses over U.S. $100 must be
pre-approved by the Companies.  7.Nondisparagement;
No Communication Regarding the Companies. 
Executive agrees that he shall not make any malicious, disparaging, or
defamatory statements regarding the Companies, their Subsidiaries, any of their
affiliates, directors, stockholders, members, officers or employees, or any of
their businesses or products, or any aspect of Executives prior employment
therewith; provided that Holdings shall not withhold any payments or benefits
required to be made under this Agreement because of a violation of this Section 7
unless Executive materially or intentionally violates this Section 7 and
such violation results in demonstrable damage to Holdings or its
Subsidiaries.  Nothing herein shall prevent Executive from making truthful statements
required to be made pursuant to applicable law.  8.No
Admission of Wrongful Conduct. 
Executive hereby acknowledges and agrees that, by the Companies
entering into this Agreement, neither the Companies nor the Releasees are
admitting any unlawful or otherwise wrongful conduct or liability to Executive
or Executives heirs, executors, administrators, assigns, agents, or other
representatives.  9.Executive
Acknowledgment.  EXECUTIVE
UNDERSTANDS AND AGREES THAT EXECUTIVE MAY BE WAIVING SIGNIFICANT LEGAL
RIGHTS BY SIGNING THIS AGREEMENT, AND ACKNOWLEDGES THAT EXECUTIVE IS EXECUTING
THIS AGREEMENT VOLUNTARILY AND OF EXECUTIVES OWN FREE WILL AND THAT EXECUTIVE
FULLY UNDERSTANDS THE TERMS OF THIS AGREEMENT. 
Further, Executive acknowledges that Executive has had an opportunity to
review this Agreement fully and to discuss its terms with legal counsel or any
other advisor of Executives choice prior to its execution.  10.Ownership
of Claims; No Filing of Claims. 
Executive represents, warrants and agrees that Executive has not
heretofore assigned or transferred, or purported to assign or transfer, to any
person, any claim or portion thereof or interest therein.  Executive further represents and warrants
that Executive does not presently have on file any claims, charges, grievances
or complaints against any of the Releasees in or with any administrative,
state, federal or governmental entity, agency, board or court, or before any
other tribunal or panel or arbitrators, public or private, based upon any
actions or omissions by the Releasees occurring prior to the Effective Date.  11.No
Attorneys Fees or Costs.  Executive
and the Companies acknowledge and agree that the parties to this Agreement
shall not be required to pay any attorneys fees or any other costs incurred by
any other party to this Agreement in connection with the negotiation and
execution of this Agreement.  12.Arbitration.  Any dispute regarding any aspect of this
Agreement, including its formation, or any act which would violate any
provision in this Agreement (other than disputes with respect to alleged
violations of the Covenants and Sections 5, 6 and 7 of this Agreement, which
shall  7


be governed by Section 11(e) of the Employment Agreement)
shall be resolved in accordance with Section 18 of the Employment
Agreement.  13.No
Representations.  The parties hereto
represent and warrant that they are not relying on statements, representations
or promises made by the other party or its agent(s) except as specifically
set forth herein.  14.Successors.  This Agreement shall be binding upon, inure
to the benefit of, and be enforceable by the parties hereto and their
respective successors and assigns.  15.Governing
Law; Jurisdiction.  This Agreement is
made and entered into in the State of New York, and shall in all respects be
interpreted, enforced and governed by and under the internal laws of the State
of New York, and Holdings and Lerner shall require any successor or assign to
expressly assume and agree to perform this Agreement in the same manner and to
the same extent that Holdings and/or Lerner, as applicable, would be required
to perform it if no such succession or assignment had taken place.  16.Counterparts
and Facsimile Execution.  This
Agreement may be executed and delivered (a) in one or more counterparts,
each of which shall be deemed to be an original, but all of which together
shall constitute one and the same instrument, and/or (b) by facsimile, in
which case (i) the instrument so executed and delivered shall be binding
and effective and deemed an original for all purposes, and (ii) the
parties shall nevertheless exchange substitute hard copies of such facsimile
instruments as soon thereafter as practicable (but the failure to do so shall
not affect the validity of the instruments executed and delivered by
facsimile).  17.Entire
Agreement.  This Agreement
constitutes the entire agreement among the Companies and Executive and this
Agreement shall supersede any prior written or oral agreements, understandings,
or arrangements between the parties regarding any of the items addressed in the
sections above, except for the terms of the Employment Agreement, which
agreement shall remain in full force and effect, and any benefit plan document
that shall continue to be governed by the terms and conditions of said
document, including, without limitation, any medical or dental insurance plan,
any stock option plan or any other vested retirement benefits or continued
welfare coverage.  Any modifications to
this Agreement must be done in writing and signed by Executive and Holdings.  18.Miscellaneous.  (a)  Should any provision of this Agreement
be declared or determined by any court to be illegal or invalid, the validity
of the remaining parts, terms, or provisions shall not be affected thereby and
said illegal or invalid part, terms, or provisions shall be deemed not to be a
part of this Agreement.  (b)  As used in this Agreement, the
masculine, feminine or neuter gender, and the singular or plural number, shall
be deemed to include the others whenever the context so indicates or requires.  8


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INTENTIONALLY LEFT BLANK.]  9


IN
WITNESS WHEREOF, Executive and duly authorized representatives of Holdings and
Lerner hereby certify that they have read this Agreement in its entirety and
voluntarily executed it in the presence of competent witnesses, as of the date
set forth under their respective signatures.    EMPLOYEE
  
  NEW YORK & COMPANY, INC./s/ Ronald W. Ristau
  
  /s/ Sandra Brooslin VivianoRonald W. Ristau
  
  Sandra Brooslin VivianoExecutive Vice President, Human ResourcesNovember 19, 2008
  
  November 19, 2008Date
  
  DateLERNER NEW YORK, INC./s/ Sandra Brooslin VivianoSandra Brooslin VivianoExecutive Vice President, Human ResourcesNovember 19, 2008Date


EXHIBIT A  Ann
Taylor Stores Corporation Ashley
Stewart Ltd. Cato
Corp. Cache, Inc. Charming
Shoppes, Inc. Chicos
FAS, Inc. Christopher &
Banks Corporation Coldwater
Creek Inc. Deb
Shops, Inc. The
Dress Barn, Inc. Express
LLC Forever
21, Inc. The
Gap, Inc. J.
C. Penney Company, Inc. J.
Crew Group, Inc. The
J. Jill Group, Inc. Liz
Claiborne, Inc. Macys, Inc. Mothers
Work, Inc. Sears
Holdings Corporation The
Talbots, Inc. Target
Corporation The
TJX Companies, Inc. Zara
International, Inc.