dlofferltrfinal25jul19






                                                                                        July 25, 2019   Dan Lamadrid     Dear Dan:  On behalf of the Board of Directors (the “Board”) of Ascena Retail Group Inc. (“Ascena” or the  “Company”), I am excited to offer you a promotion to Executive Vice President and Chief Financial  Officer of the Company.     Effective as of August 4, 2019 (the “Effective Date”), this letter sets forth the terms and conditions of  your continued employment with Ascena and supersedes and replaces in their entirety all letters,  agreements and understandings (whether written or oral) regarding all aspects of your employment,  compensation and benefits, including without limitation, the letter agreement between you and Ascena  dated August 23, 2017, but excluding the retention letter between the Company and you, dated as of  May 1, 2019 (the “Retention Letter”), the Confidentiality, Non-Solicitation and Non-Competition  Agreement executed by you on August 23, 2017 and as amended by this letter (the “Restrictive  Covenant Agreement”), the Indemnification Agreement between you and the Company dated as of  August 28, 2017, and your outstanding equity or other long-term incentive award agreements under the  2016 Plan (as defined below) or any other incentive plan granted prior to the Effective Date.    Job Title:            Executive Vice President and Chief Financial Officer                          Reporting To:         Chief Executive Officer of Ascena                          Location:             Mahwah, NJ                          Annualized Base Pay:  $600,000                                                Future base pay adjustments would be based on your performance,                        business results, economic and competitive factors, and approval from                        the Stock and Incentive Compensation Committee of the Board (the                        “Compensation Committee”).                          Incentive Compensation: Following the Effective Date, you will be eligible for participation in the                        Incentive Compensation (“IC”) program at a target level of 75% of your                        annualized base pay.  Maximum annual payout is double your target                        level (i.e., 200%), or $900,000 (based on your current annualized base                        pay).  Payments shall be made in the same form and timing as made to                        other senior executives of Ascena. The IC program is governed by and                        subject to the terms and conditions of the Ascena 2016 Omnibus                        Incentive Plan, as amended (or any successor plan) (the “2016 Plan”).                                              





 






                      You must be employed by the Company at the time an IC payment is                        made in order to receive it.                            Long Term Incentives: You will continue to be eligible for an annual long-term incentive award                        under the 2016 Plan or any other applicable incentive plan.                                                In or about October 2019, subject to approval by the Compensation                        Committee and your continued employment, you will be granted an                        award of 100,000 non-qualified stock options under the 2016 Plan (the                        “Time-Based Options”).  The Time-Based Options will vest, subject to                        your continued employment, in equal installments on the first and                        second anniversaries of the grant date.                                                  In addition, in or about October 2019, subject to approval by the                        Compensation Committee and your continued employment, you will be                        granted an award of 50,000 non-qualified stock options under the 2016                        Plan (the “Performance-Based Options”).  The Performance-Based                        Options will vest as follows, subject to your continued employment from                        the grant date through the applicable vesting date:  25% of the                        Performance-Based Options will be eligible to vest if the closing price of                        the Company’s common stock equals or exceeds $3 per share for a 20-                       consecutive trading day period on or prior to the third anniversary of the                        grant date (the “$3 Hurdle”); an additional 25% of the Performance-                       Based Options will be eligible to vest if the closing price of the                        Company’s common stock equals or exceeds $5 per share for a 20-                       consecutive trading day period on or prior to the third anniversary of the                        grant date (the “$5 Hurdle”); and the remaining 50% of the Performance-                       Based Options will be eligible to vest if the closing price of the                        Company’s common stock equals or exceeds $7 per share for a 20-                       consecutive trading day period on or prior to the third anniversary of the                        grant date (the “$7 Hurdle” and together with the $3 Hurdle and $5                        Hurdle, the “Hurdles”); provided, however, if the $3 Hurdle, $5 Hurdle                        and/or the $7 Hurdle is actually achieved prior to the second anniversary                        of the grant date, the portion of the Performance-Based Options related                        to the achievement of the $3 Hurdle, $5 Hurdle and/or $7 Hurdle that                        was actually achieved prior to the second anniversary will vest on the                        second anniversary of the grant date, subject to your continued                        employment from the grant date through the second anniversary of the                        grant date, except as expressly provided herein.  If the $3 Hurdle, $5                        Hurdle and/or $7 Hurdle is not actually achieved by the third anniversary                        of the grant date, all Performance-Based Options that did not vest as of                        the third anniversary will be forfeited for no consideration.  All grants,                        including the Time-Based Options and the Performance Based Options,                        are subject to the terms and conditions of the 2016 Plan, applicable                        Award Agreements and Plan Description/ Prospectus and are                        conditioned upon your compliance with the Restrictive Covenant                        Agreement (as amended by this letter).                                                                 2  





 






In the event of your termination by the Company without “Cause” prior  to a “Change in Control” (each as defined in the Company’s Executive  Severance Plan as in effect from time to time (the “ESP”)) (a “Qualifying  Termination”), the Performance-Based Options will be treated as  follows, subject to your timely execution and non-revocation of a release  used in connection with the ESP (the “Release Condition”):         You will become vested in a pro rata portion of any outstanding        and  unvested  Performance-Based  Options  for  which  the        applicable  Hurdle(s)  were  actually  achieved  prior  to  your        Qualifying Termination.  Such pro rata portion will be calculated        by multiplying the number of Performance-Based Options eligible        to vest based on the actual achievement of the applicable Hurdle        by a fraction, the numerator of which is the number of days from        the  grant  date of  the  Performance-Based  Options until  the        termination  date  and  the  denominator  of  which  is 1,095.         Performance-Based  Options  that  become  vested  on  your        Qualifying Termination will remain exercisable for 6 months but        in no event later than the expiration date.   In the event that your employment with the Company terminates due to  your death or Disability (as defined in the 2016 Plan) prior to the second  anniversary of the grant date of the Performance-Based Options, then  subject to your (or your estate’s or legal representative’s) satisfaction of  the Release Condition, the portion of the Performance-Based Options for  which the applicable Hurdle(s) were actually achieved prior to the date  of termination will become immediately vested.  Performance-Based  Options that become vested on your termination due to death or  Disability will remain exercisable for 6 months but in no event later than  the expiration date.    In the event of your “Change in Control Related Termination” (as defined  in the ESP) and notwithstanding Section 2.2(c) of the ESP, the  Performance-Based Options will be treated as follows:         In the event of your Post-Change in Control Termination (as        defined in the ESP), and provided that, on or prior to such Post-       Change in Control Termination the $3 Hurdle has been satisfied,        you will become vested in a portion of the Performance-Based        Options based on linear interpolation (rounded to the nearest        one-hundredth) between the (x) closing price of the Company’s        common stock for the 20-consecutive trading day period        immediately preceding the Post-Change in Control Termination        (the “Termination Date Price”) and (y) the Hurdles between        which the Termination Date Price falls (i.e., between the $3        Hurdle and $5 Hurdle or between $5 Hurdle and $7 Hurdle).  By        way of example only, if the Termination Date Price is $4, you will        become vested in (i) the portion of the Performance-Based                   3  





 






      Options that vest based on the achievement of the $3 Hurdle to        the extent not vested in accordance with this letter prior to the        date of your Post-Change in Control Termination and (ii) an        additional 50% of the tranche of the Performance-Based Options        that would vest upon actual achievement of the $5 Hurdle (i.e.,        an additional 12.5% of the Performance-Based Options granted        pursuant to you).  If the Performance-Based Options remain        outstanding following the Change in Control, the Hurdles shall be        reasonably adjusted to account for the impact of the Change in        Control.  Any portion of the Performance-Based Options that do        not vest based on this paragraph will be forfeited for no        consideration on the date of your Post-Change in Control        Termination.               In the event of your Pre-Change in Control Termination (as        defined in the ESP), and provided that, on or prior to the date        that the Change in Control is consummated the $3 Hurdle has        been satisfied, the cash payment you will receive pursuant to        Section 2.2(c) of the ESP, will include payment in respect of a        portion of the Performance-Based Options based on linear        interpolation (rounded to the nearest one-hundredth) between        the (x) closing price of the Company’s common stock for the 20-       consecutive trading day period immediately preceding the        Change in Control (the “CIC Closing Date Price”) and (y) the        Hurdles between which the CIC Closing Date Price falls (i.e.,        between the $3 Hurdle and $5 Hurdle or between $5 Hurdle and        $7 Hurdle).  By way of example only, if the CIC Closing Date Price        is $4, the cash payment you will receive pursuant to Section        2.2(c) of the ESP, will include payment in respect of (i) the        portion of the Performance-Based Options that vest based on        the achievement of the $3 Hurdle to the extent not vested in        accordance with this letter prior to the date of your Pre-Change        in Control Termination and (ii) an additional 50% of the tranche        of the Performance-Based Options that would vest upon actual        achievement of the $5 Hurdle (i.e., an additional 12.5% of the        Performance-Based Options).  You will receive no payment        under Section 2.2(c) of the ESP for any portion of the        Performance-Based Options that do not vest based on this        paragraph will be forfeited for no consideration on the date the        Change in Control is consummated.    All awards are contingent upon and subject to the approval of the Board  or the Compensation Committee under the 2016 Plan or the Ascena  Retail Group, Inc. 2012 Cash Incentive Plan. All awards are subject to the  terms and conditions of the 2016 Plan or any other applicable plan and  any award agreements thereunder.  Awards granted to you prior to the  Effective Date will remain in effect, subject to, and in accordance, with  their terms and conditions.                   4  





 






                        Benefits:             You will continue to be eligible to participate in the Company’s benefit                        plans and programs on the same terms and conditions as in effect                        immediately prior to the Effective Date.  The Company reserves the right,                        in its sole discretion, to amend, change or discontinue, in whole or in                        part, any and all of its benefits and/or benefit plans and programs, at any                        time for any reason.                           Executive Severance   You will continue to be eligible under the ESP as in effect from time to  Plan:                 time.  In accordance with the terms of the Retention Letter, your                        participation in the ESP shall be modified as follows:                                                      in the event of your “Non-Change in Control Termination” (as                              defined in the ESP), your cash severance level under Section                              2.2(a)(i) of the ESP will be 24 months of your then-current base                              salary; and                                                           in the event of your “Change in Control Related Termination” (as                              defined in the ESP), the multiple for your cash severance amount                              under Section 2.2(a)(ii) of the ESP shall be two times (2x) rather                              than one and one-half times (1.5x).                                                      Pursuant to Section 2.4 of the ESP, you will have no duty to mitigate                        severance payments that you may become eligible to receive under the                        ESP (as modified herein) and the Company will not reduce its obligation                        to pay any such severance by any amount that you may earn as base                        salary from a new employer.  Your eligibility to receive severance                        benefits under the ESP is subject in all respects to the terms, conditions                        and restrictions of the ESP. If you resign your employment for any reason                        or your employment is terminated by the Company for any reason other                        than due to a Non-Change in Control Termination or a Change in Control                        Related Termination, you will not be eligible for any severance payments                        from the Company under this Agreement, the ESP or otherwise.                         Notwithstanding anything to the contrary, in no event shall there be any                        duplication of severance payments or benefits under any plan, program                        or policy, or under this letter, the Retention Letter or the Restrictive                        Covenant Agreement.                          Restrictive Covenants From and after the Effective Date, (i) the post-termination “Non-                       Compete Period” (as defined in the Restrictive Covenant Agreement)                        applicable to you will be one year following your termination for any                        reason, (ii) the post-termination “Non-Solicit Period” (as defined in the                        Restrictive Covenants Agreement) applicable to you will be two years                        following your termination for any reason, and (iii) such restrictions shall                        apply without any requirement of the Company to make any additional                        payments to you in the event of your termination by the Company                        without Cause and if you are receiving severance payments and benefits                        under the ESP as provided under this letter.                                         5  





 






At the Company, an employment at-will relationship prevails and the employment relationship can be  terminated with or without notice, at any time, by either you or Ascena.   Taxes:  Any payments or benefits to be made or provided to you pursuant to this letter shall be subject  to any withholding tax (including social security contributions and federal income taxes) as shall be  required by federal, state and local withholding tax laws.  This letter is intended to be exempt from, or  comply with, the requirements of Section 409A of the Internal Revenue Code of 1986 and the guidance  promulgated thereunder, and will be interpreted, administered and operated in a manner consistent  with that intent.  Each payment to you shall be treated as a separate payment, and any right to a series  of installment payments is to be treated as a right to a series of separate payments.  Payments and  benefits that may be provided to you under the ESP shall be subject to Section 7.8 of the ESP.   Entire Agreement:  This letter sets forth the entire agreement and understanding between you and the  Company relating to the subject matter hereof and supersedes any and all prior agreements,  arrangements and understandings, written and oral, relating to the subject matter hereof, including the  letter between you and the Company dated as of August 23, 2017, but excluding your award  agreements under the 2016 Plan, the Retention Letter, and the Restrictive Covenants Agreement.    This offer letter shall be governed by and construed and enforced in accordance with the laws of the  State of New York, without regard to conflicts of laws principles.   Waiver and Release:  In consideration of the terms, conditions and benefits, monetary and otherwise,  set forth in this letter agreement, you hereby release and waive any and all legal and contractual claims  and claims of entitlement, know or unknown, that you have or may have against Ascena and/or its  affiliates, directors, officers or employees, based on any facts, events or circumstances occurring  through the date you sign this letter, other than with respect to any outstanding equity awards or  vested, accrued benefits you may have under the terms and conditions of any applicable plan or  agreement.  You hereby acknowledge that you are not aware of any claims you may currently have  against Ascena and/or its affiliates, directors, officers or employees.   Please sign both copies of this letter, keep one for your records and return one to me.   Once again, congratulations on your new position.   Sincerely,                                I accept your offer as specified above.    /s/ Gary Muto                             /s/ Dan Lamadrid                Gary Muto                                 Dan Lamadrid  Chief Executive Officer                   Date: July 25, 2019                                           6