Document:

Exhibit 10.1

 

 

Re:  Letter
Agreement of Employment

 

Dear
Greg:

 

This
letter agreement (this “Agreement”) sets forth the terms and conditions
of your employment, and your employment relationship, with New York &
Company, Inc. (the “Company”). 
Your execution of this Agreement will represent your acceptance of all
of the terms set forth below.

 

1.                             Nature of Agreement and Relationship.  This Agreement does not
represent an employment contract for any specified term.  Your employment relationship thus will remain
“at will,” meaning that, subject to the terms hereof, either party to this
Agreement may terminate the employment relationship at any time for any lawful
reason.

 

2.                             Job Title and Duties.  Your job title will be President.  We understand that prior to accepting the
position of President, you have a limited commitment to complete a project for
HSN (as defined in your letter to Richard P. Crystal dated April 27, 2010
(copy attached). After completion of this project, you will be expected to
devote all of your full time efforts to the performance of the duties and
responsibilities normally associated with this position, including those from
time to time that may be assigned to you by the Chief Executive Officer or the
Board of Directors of the Company (or the designee of any of the
foregoing).  In addition, you will become
a member of the Board of Directors.  For
so long as you hold the position of President, you shall be a Director on the
Board.  Your start date will be June 1,
2010.

 

3.                             Salary.  For the 12 month period ending on the last
Saturday of each January (the last day of the fiscal year), you will
receive a base salary at the rate of $750,000 per annum (“Base Salary”),
subject to the remaining provisions of this Section.  For the remainder of the current fiscal year
starting on the date of this Agreement, your Base Salary will be pro rated
based on the number of days remaining in such fiscal year divided by 365.  At the Company’s sole discretion, your Base
Salary may be increased or decreased based on your performance and the
performance of the business.  You will be
paid in accordance with the Company’s normal payroll policies and practices,
with all applicable deductions being withheld from your paychecks.

 

4.                             Bonus.  You will be eligible to participate in the
Company’s then current bonus plan, in accordance with its terms and conditions,
and to receive performance based bonuses pursuant to any formula that may be
established.  For the Company’s current
fiscal year, your bonus target for the spring bonus (relating to the Company’s
results for the first and second fiscal quarters of each fiscal year) will be
28% of your Base Salary; for the fall bonus (relating to the Company’s results
for the third and fourth fiscal quarters of each fiscal year) will be 36% of
your 

 

 

Base Salary; and for the annual bonus (relating to
the Company’s results for the fiscal year) will be 16% of your Base
Salary.  Any amount payable in respect of
the spring bonus will be paid in the calendar month immediately following the
end of the applicable performance period to which that bonus relates.  Any amount payable in respect of the fall or
the annual bonus will be paid within two and one half months following the end
of the applicable performance period to which that bonus relates.  All bonuses are determined at the Company’s
sole discretion, and the Company has the sole discretion to modify or terminate
any bonus plan and that plan will govern your right, if any, to a bonus payment
upon termination of your employment.

 

5.                             SARs and Other Long Term Incentives.  You will be eligible to receive awards under
SARs, restricted stock or other equity based long term incentive plans
established by the Company (or an Affiliate) that cover executive officers of
the Company.  The term “Affiliate”
means any corporation, partnership, limited liability company or other entity
(other than the Company) that controls or is controlled by the Company, whether
directly or indirectly, such as a parent company or subsidiary.  All equity awards described in this paragraph
are determined at the Company’s sole discretion, and the Company has the sole
discretion to modify or terminate any SARs, restricted stock or other equity
based long term incentive plan and that plan will govern your rights, if any, relating
to any equity award(s) you have received, or may be entitled to receive,
upon termination of your employment.

 

6.                             Employee Benefits.  You will be entitled to participate in all
employee benefits plans, practices and programs maintained by the Company and
made available to senior executives generally and as may be in effect from time
to time (the “Benefits Plans”). 
Your participation in the Benefits Plans will be on the same basis and
terms as are applicable to senior executives of the Company generally.  Benefits Plans include, but are not limited
to, savings and retirement plans, deferred compensation, health and
prescription drug benefits, disability benefits, other insurance programs,
vacation and other leave, merchandise discounts and business expense
procedures.  Plan documents setting forth
terms of certain of the Benefits Plans are available upon request, which plan
documents control all questions of interpretation concerning applicable
Benefits Plans, including your rights, if any, upon termination of your
employment.  The Benefits Plans are
subject to modification or termination by the Company at any time, at its sole
discretion, in accordance with their terms.

 

7.                             Severance Pay.  Upon either your voluntary resignation or
termination of employment by the Company and all Affiliates without Cause (as
defined below), but subject to your performance of all post employment
obligations set forth in this Agreement, you will be entitled to receive
severance pay for  twelve (12) months (“Severance
Period”) at your final Base Salary (“Severance Pay”), beginning the first pay
period following your separation date and ending upon the earlier of:  (i)  your receipt of fifty two (52) such
payments (such number of payments to be adjusted if any change is made to the
frequency of regularly scheduled payroll dates) or (ii) your first day of
employment with another employer, whichever is earlier.  The Severance Pay for voluntary resignation
and termination without Cause shall be conditioned upon the requirements set
forth in Section 11 (Non-Compete) of this Agreement.  In addition, the Severance Pay for
termination without Cause shall also be conditioned upon your execution and
delivery to the Company of a general release of claims in favor of the Company
in a form reasonably satisfactory to the Company.  Such release shall be executed and delivered
(and no longer subject to revocation, if applicable) within sixty (60) days
following your termination of employment. 
If you fail to execute such release as provided above, you shall forfeit
all of your rights to receive the Severance Pay.  In the event of either voluntary resignation
or termination without Cause, if you obtain employment at an annual salary that
is lower than your final Base Salary, you will continue to receive the
differential between the two rates of pay for the balance of the fifty two (52)
weeks.  This Severance Pay, which will be
subject to applicable deductions required by law, will be paid on the Company’s
regular payroll dates as in effect on the date of each such payment for the
balance of the “Severance Period” following your separation date, as outlined
above.  For purposes of this Agreement, “Cause”
means the occurrence of any of the following: 
(i) your willful failure to perform your duties to the Company
(other than as a result of 

 

 

death or a physical or mental incapacity); (ii) your
commission of, indictment for, conviction of, or plea of guilty or nolo contendere to, a felony (regardless of
the nature of the felony) or any other crime involving dishonesty, fraud or
moral turpitude; (iii) your gross negligence or willful misconduct
(including, but not limited to, acts of fraud, criminal activity, professional
misconduct, dishonesty, or breach of trust or other fiduciary duty) in connection
with the performance of your duties and responsibilities to the Company or with
regard to the Company or its assets; (iv) your failure to comply with the rules and
policies of the Company governing employee conduct or with the lawful
directives of the Board of Directors of the Company or Chief Executive Officer
of the Company; or (v) your breach of this Agreement or any obligation
under any non disclosure, non solicitation, non competition or other
restrictive covenant, employment or any other agreement with the Company (such
as your letter to Richard P. Crystal dated April 27, 2010).  Any determination of Cause will be made in
the good faith discretion of the Company.

 

8.                             Code Section 409A Compliance.

 

8.1.          It is the Company’s intent
that compensation and benefits to which you are entitled under this Agreement not be treated as “nonqualified deferred
compensation” under Section 409A of the Internal Revenue Code of 1986, as
amended, and the treasury regulations and other official guidance promulgated
thereunder (“Code Section 409A”), and that any ambiguities in the
construction of this Agreement be interpreted in order to effectuate such
intent.  In the event that the Company
determines, in its sole discretion, that any compensation or benefits to which
you are entitled under this Agreement could be treated as “nonqualified
deferred compensation” under Code Section 409A unless this Agreement is
amended or modified, the Company may, in its sole discretion, amend or modify
this Agreement without obtaining any additional consent from you, so long as
such amendment or modification does not materially affect the net present value
of the compensation or benefits to which you otherwise would be entitled under
this Agreement.

 

8.2.          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 benefits 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 you are 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 provision of any benefit that is
considered “nonqualified deferred compensation” under Code Section 409A
payable on account of a “separation from service,” such payment or benefit
shall be made or provided at the date which is the earlier of (a) the
expiration of the six (6) month period measured from the date of your “separation
from service,” and (b) the date of your death (the “Delay Period”).  Upon the expiration of the Delay Period, all
payments and benefits delayed pursuant to this Section (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 you in a lump sum, 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.

 

8.3.          If a general release of
claims, as contemplated under Section 7 hereof, is executed and delivered
(and no longer subject to revocation) in the manner provided in said
Section 7, then the following shall apply:

 

 

(a)           To the extent that the
Severance Pay is not “nonqualified deferred compensation” for purposes of Code Section 409A,
then the Severance Pay shall commence upon the first scheduled payment date
immediately following the date that the release is executed, delivered and no
longer subject to revocation (the “Release Effective Date”).  The first such cash payment shall include
payment of all amounts that otherwise would have been due prior to the Release
Effective Date under the terms of this Agreement applied as though such
payments commenced immediately upon your termination of employment, and any
payments made thereafter shall continue as provided herein.

 

(b)           To the extent that the
Severance Pay is “nonqualified deferred compensation” for purposes of Code Section 409A,
then such payments or benefits shall be made or commence upon the sixtieth
(60th) day following your termination of employment.  The first such cash payment shall include
payment of all amounts that otherwise would have been due prior thereto under
the terms of this Agreement had such payments commenced immediately upon your
termination of employment, and any payments made thereafter shall continue as
provided herein.

 

8.4.          For purposes of compliance
with Code Section 409A, (a) all expenses or other reimbursements
hereunder shall be made on or prior to the last day of the taxable year
following the taxable year in which such expenses were incurred by you, (b) any
right to reimbursement or in kind benefits is not subject to liquidation or
exchange for another benefit, and (c) no such reimbursement, expenses
eligible for reimbursement, or in kind benefits provided in any taxable year
shall in any way affect the expenses eligible for reimbursement, or in kind
benefits to be provided, in any other taxable year.

 

8.5.          For purposes of Code Section 409A,
your right to receive any installment payments pursuant to this Agreement shall
be treated as a right to receive a series of separate and distinct payments.

 

8.6.          In no event shall any
payment under this Agreement that constitutes “nonqualified deferred
compensation” for purposes of Code Section 409A be subject to offset by
any other amount unless otherwise permitted by Code Section 409A.

 

8.7.          In no event whatsoever shall
the Company be liable for any additional tax, interest or penalty that may be
imposed on you by Code Section 409A or damages for failing to comply with
Code Section 409A.

 

9.                             Confidential Information, Intellectual Property.

 

9.1.          Confidentiality.  You agree not to disclose, distribute,
publish, communicate or in any way cause to be disclosed, distributed,
published, or communicated in any way or at any time, Confidential Information
(as defined herein), or any part of Confidential Information, to any person,
firm, corporation, association, or any other operation or entity except on
behalf of the Company in performance of your duties and responsibilities for
the Company, and then only in a fashion consistent with protecting the
Confidential Information from unauthorized use or disclosure, except as
otherwise approved by the Company.  You
further agree not to use or permit the reproduction of any Confidential
Information except on behalf of the Company in your capacity as an employee of
the Company.  You agree to take all
reasonable care to avoid the unauthorized disclosure or use of any Confidential
Information.  You assume responsibility
for and agree to indemnify and hold harmless the Company from and against 

 

 

any disclosure or use of the
Confidential Information in violation of this Agreement.

 

9.2.          Confidential Information.  For the purpose of this Agreement, “Confidential
Information” shall mean any written or unwritten information which relates to
or is used in the Company’s business (including, without limitation,
information related to the names, addresses, buying habits and other special
information regarding past, present and potential customers, employees and
suppliers of the Company; customer and supplier contracts and transactions or
price lists of the Company and suppliers; all agreements, files, books, logs,
charts, records, studies, reports, processes, schedules and statistical
information relating to the Company; all products, services, programs and
processes sold, and all computer software licensed or developed by the Company;
data, plans and specifications related to present or future development
projects of the Company; financial or marketing data respecting the conduct of
the present or future phases of business of the Company; computer programs,
computer  or web based training programs,
systems or software; ideas, inventions, trademarks, business information, know
how, processes, techniques, improvements, designs, redesigns, creations,
discoveries and developments of the Company; and finances and financial
information of the Company) which the Company deems confidential and
proprietary, which is generally not known to others outside the Company, or
which gives or tends to give the Company a competitive advantage over persons
who do not possess such information or the secrecy of which is otherwise of
value to the Company in the conduct of its business regardless of when and by
whom such information was developed or acquired, and regardless of whether any
of these are described in writing, copyrightable or considered copyrightable,
patentable or considered patentable.  “Confidential
Information” shall not include general industry information or information
which is publicly available or otherwise known to those persons outside the
Company working in the area of the business of the Company or is otherwise in
the public domain without breach of this Agreement or information which you
have lawfully acquired without an obligation to maintain the information in
confidence from a source other than the Company.  “Confidential Information” specifically
includes information received by the Company from others, including the Company’s
clients, that the Company has an obligation to treat as confidential and also
includes any confidential information acquired or obtained by you while in the
employment of any Affiliate.

 

9.3.          Invention Ownership.  With respect to information, inventions and
discoveries developed, made or conceived by you, either alone or with others,
at any time during your employment by the Company and whether or not within
normal working hours, arising out of such employment or pertinent to any field
of business or research in which, during such employment, the Company is
engaged or (if such is known to or ascertainable by you) is considering
engaging, you agree:

 

(a)           that all such information,
inventions and discoveries, whether or not patented or patentable, shall be and
remain the sole property of the Company;

 

(b)           to disclose promptly to an
authorized representative of the Company all such information, inventions and
discoveries and all information in your possession as to possible applications
and uses thereof;

 

 

(c)           not to file any patent
applications relating to any such invention or discovery except with the prior
consent of an authorized representative of the Company; and

 

(d)           at the request of the
Company, and without expense or additional compensation to you, to execute such
documents and perform such other acts as the Company deems necessary, to obtain
patents on such inventions in a jurisdiction or jurisdictions designated by the
Company, and to assign to the Company or its designee such inventions and all
patent applications and patents relating thereto.

 

Both
the Company and you intend that all original works of authorship within the
purview of the copyright laws of the United States authored or created by you
in the course of your employment with the Company will be works for hire within
the meaning of such copyright laws.

 

9.4.          Confidentiality of
Inventions; Return of Materials and Confidential Information.  With respect to the information, inventions
and discoveries referred to in Section 9.3, and also with respect to all other
information, whatever its nature and form and whether obtained orally, by
observation, from graphic materials, or otherwise (except such as is generally
available through publication) obtained by you during or as a result of your
employment by the Company and relating to any product, service, process, or
apparatus or to any use of any of them, or to materials, tolerances,
specifications, costs (including manufacturing costs), prices, or to any plans
of the Company, you agree:

 

(a)           to hold all such information,
inventions and discoveries in strict confidence and not to publish or otherwise
disclose any portion thereof except with the prior consent of an authorized
representative of the Company;

 

(b)           to take all reasonable
precautions to ensure that all such information, inventions, and discoveries
are properly protected from access by unauthorized persons;

 

(c)           to make no use of any such
information, invention, or discovery except as required or permitted in the
performance of your duties and responsibilities for the Company; and

 

(d)           upon termination of your
employment by the Company, or at any time upon request of the Company, to
deliver to the Company all graphic materials and all substances, models,
prototypes and the like containing or relating to Confidential Information or
any such information, invention, or discovery, all of which graphic materials
and other things shall be and remain the sole property of the Company.  The term “graphic materials” includes
letters, memoranda, reports, notes, notebooks, books of account, drawings,
prints, specifications, formulae, data printouts, microfilms, magnetic tapes
and disks and other documents and recordings, together with all copies thereof.

 

10.                           Non
Solicitation.  Regardless of whether you are eligible to receive
Severance Pay, you agree that, if your employment with the Company ends for any
reason, you will not, for a period of twelve (12) months following such
termination of employment, (i) directly or indirectly, either for yourself
or for any other person, business, company or entity, hire from the Company or
any Affiliate, or attempt to hire, divert or take away from the Company or any
Affiliate, any of the then current officers or employees of the Company or any
Affiliate, (ii) interfere with or harm, or attempt to interfere with or
harm, the relationship of the Company or any Affiliate with any person who at
any time was an employee, customer or supplier of the Company or any Affiliate
or 

 

 

otherwise had a business relationship with the
Company or any Affiliate, or (iii) unless compelled by law to do so,
directly or indirectly, knowingly make any statement or other communication
that impugns or attacks the reputation or character of the Company or any
Affiliate, or damages the goodwill of the Company or any Affiliate, or
knowingly take any action, directly or indirectly, that would interfere with
any contractual or customer or supplier relationships of the Company or any
Affiliate.

 

11.                           Non
Competition. 
During the Non-Competition Period described
below you may not and will not, within the United States of America,
directly or indirectly, without the prior written consent of the Company’s
Chief Executive Officer or its Board of Directors (which may be given or
withheld in its sole discretion), own, manage, operate, join, control, be
employed by, consult with or participate in the ownership, management,
operation or control of, or be connected with (as a stockholder, partner or
otherwise) any business, partnership, firm, company, corporation or other entity
engaged in the retail business of women’s fashion apparel, accessories and
related products or any other product sold or intended to be sold by the
Company or an Affiliate during your employment with the Company.  Notwithstanding the foregoing, your beneficial
ownership after your termination of employment with the Company, either
individually or as a member of a group, of not more than two percent (2%) of
the voting stock of any publicly held corporation shall not be a violation of
this provision.

 

The
“Non-Competition Period” means the period you are employed by the Company, plus
the longer of (a) one (1) year from your Separation Date or (b) the
period during which you receive Severance Pay as described in Section 7
above. If however, at the Company’s discretion, you are released from the one (1) year
“Non-Competition Period”, you will no longer be eligible for Severance Pay.

 

12.                           Remedies.  You acknowledge that money will not
adequately compensate the Company for the substantial damages that will arise
upon the breach of any provision of Sections 9, 10 and 11 of this
Agreement and that the Company would have no adequate remedy at law.  For this reason, any claim the Company may
make that you have breached or are threatening to breach Sections 9, 10 or
11 is not subject to mandatory arbitration under Section 05.  Instead, if you breach or threaten to breach
any provision of Sections 9, 10 or 11, the Company will be entitled, in
addition to other rights and remedies, to specific performance, injunctive relief
and other equitable relief to prevent or restrain any breach or threatened
breach of Sections 9, 10 or 11.  The
Company may obtain such relief from (i) any court of competent
jurisdiction, (ii) an arbitrator acting pursuant to Section 0 hereof,
or (iii) a combination of the two (e.g., by simultaneously seeking
arbitration under Section 05 and a temporary injunction from a court
pending the outcome of the arbitration). 
It shall be the Company’s sole and exclusive right to elect which
approach to use to vindicate its rights. 
You also agree that in the event of a breach (or any threat of breach)
the Company shall be entitled to obtain an immediate injunction and restraining
order to prevent such breach or threatened breach or continued breach, without
having to prove damages, and to obtain all costs and expenses, including
reasonable attorneys’ fees and costs.  In
addition, the existence of any claim or cause of action by you against the
Company, whether predicated on this Agreement or otherwise, shall not
constitute a defense to the enforcement by the Company of the restrictive
covenants of this Agreement.

 

13.                           Acknowledgment of Reasonableness.  You and the Company specifically agree that
the provisions of the restrictive covenants contained in this Agreement,
including the post employment covenants regarding non solicitation and non
competition, are reasonable and that the Company would not have entered into
this Agreement but for the inclusion of such covenants.  You understand that the Company’s business is
nationwide, and, therefore, a nationwide restrictive covenant is
reasonable.  If a court or arbitrator
determines that any provision of any such restrictive covenant is unreasonable,
whether in period of time, geographical area, or otherwise, you and the Company
agree that the covenant shall be interpreted and enforced to the maximum extent
which a court or arbitrator deems reasonable. 
In 

 

 

addition, you and the Company authorize any such
court or arbitrator to reform these restrictions to the minimum extent
necessary.

 

14.                           Company Property.  Upon your termination of employment for any
reason, you will promptly return to the Company all Company related documents
and Company property within your possession or control.

 

15.                           Arbitration of Disputes.  Except as set forth in Section 02, any
dispute, claim or difference arising out of or in relation to your employment
will be settled exclusively by binding arbitration administered by the American
Arbitration Association under its National Rules for the Resolution of
Employment Disputes before a single arbitrator. 
You expressly understand and agree that claims subject to arbitration
under this section include asserted violations of the Employee Retirement and
Income Security Act of 1974; the Age Discrimination in Employment Act; the
Older Worker’s Benefit Protection Act; the Americans with Disabilities Act;
Title VII of the Civil Rights Act of 1964 (as amended); the Family and Medical
Leave Act; and any law prohibiting discrimination, harassment or retaliation in
employment, whether based on federal, state or local law; any claim of breach
of contract, tort, promissory estoppel or detrimental reliance, defamation,
intentional infliction of emotional distress; or the public policy of any
state, or any other federal, state or local law.  The arbitration will be held in New York, New
York unless you and the Company (each a “Party,” and jointly, the “Parties”)
mutually agree otherwise.  To the extent
permitted by law, each Party will bear its own costs and fees of the
arbitration, and other fees and expenses of the arbitrator will be borne
equally by the Parties; provided,
however, that the arbitrator will
be empowered to require any one or more of the Parties to bear all or any
portion of fees and expenses of the Parties or the fees and expenses of the
arbitrator in the event that the arbitrator determines such Party has acted in
bad faith.  The arbitrator will have the
authority to award any remedy or relief that a court of the State of New York
could order or grant.  The decision and
award of the arbitrator will be binding on all Parties.  Either Party to the arbitration may seek to
have the ruling of the arbitrator entered in any court having jurisdiction
thereof.  Each Party agrees that it will
not file suit, motion, petition or otherwise commence any legal action or
proceeding for any matter which is required to be submitted to arbitration as
contemplated herein, except in connection with the enforcement of an award
rendered by an arbitrator and except to seek the issuance of an injunction or
temporary restraining order pending a final determination by the arbitrator.

 

16.                           Post Termination Cooperation.  As is required of you during employment, you
agree that during and after employment with the Company you will, without
expense or additional compensation to you, cooperate with the Company or any
Affiliate in the following areas:

 

16.1         Cooperation With the Company.  You agree [a]
to be reasonably available to answer questions for the Company’s (or any
Affiliate’s) officers regarding any matter, project, initiative or effort for
which you were responsible while employed by the Company and [b] to cooperate with the Company (and with
any Affiliate) during the course of all third party proceedings arising out of
the Company’s (or any Affiliate’s) business about which you have knowledge or
information.  For purposes of this
Agreement, [c] “proceedings”
includes internal investigations, administrative investigations or proceedings
and lawsuits (including pre trial discovery and trial testimony) and [d] “cooperation” includes [i] your being reasonably available for
interviews, meetings, depositions, hearings or trials without the need for
subpoena or assurances by the Company (or any Affiliate), [ii] providing any and all documents
in your possession that relate to the proceeding, and [iii] providing assistance in locating
any and all relevant notes and documents.

 

16.2         Cooperation With Media.  You agree not to communicate with, or give
statements to, any member of the media (including print, television or radio
media) relating to any matter (including pending or threatened lawsuits or
administrative 

 

 

investigations) about which you have knowledge or
information (other than knowledge or information that is not Confidential Information
as defined in Section 9.3) as a result of employment with the
Company.  You also agree to notify the
Chief Executive Officer or his designee immediately after being contacted by
any member of the media with respect to any matter affected by this section.

 

17.                           Post
Termination Board of Directors Participation.  Upon termination of your employment, you
shall resign your position as Director on the Board.

 

18.                           Entire Agreement.  This Agreement constitutes your entire
agreement with the Company relating to the subject mater hereof, and supersedes
in its entirety any and all prior agreements, understandings or arrangements
with the Company.

 

19.                           Governing Law.  All issues and questions concerning the
construction, validity, enforcement and interpretation of this Agreement shall
be governed by, and construed in accordance with, the laws of the State of New
York, without regard to the choice of law principles thereof.

 

20.                           Survival of Provisions.  Sections 8 through 19 will survive the
termination of your employment for any reason and shall not be affected by any
transfer(s) between the Company and its Affiliate(s).

 

21.                           Understandings and Representations.  You should not sign this Agreement until you
understand its terms and conditions. 
Your execution of this Agreement represents your acknowledgement that
you have take all steps you believe necessary, including consultation with
financial and legal advisors of your choice, to understand this Agreement.

 

 

	
  Sincerely,

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Richard P. Crystal

  	
   

  	
  Dated:
  

  	
  April 27,
  2010

  
	
   

  	
  Richard
  P. Crystal

  	
   

  	
   

  	
   

  
	
   

  	
  Chairman &
  Chief Executive Officer

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Gregory Scott

  	
   

  	
  Dated:
  

  	
  April 28,
  2010

  
	
   

  	
  Gregory
  Scott

  	
   

  	
   

  
	
   

  	
  Presidentexhibit10237.htm

Exhibit 10.237

PERFORMANCE UNITS GRANT AGREEMENT

 

THIS PERFORMANCE UNITS GRANT AGREEMENT (this “Agreement”) is made effective as of the ____ day of ___________, 20___ (the “Effective Date”), between Dollar Thrifty Automotive Group, Inc., a Delaware corporation (“Company”) and «Name» (the “Employee”).

 

RECITALS:

 

A.  The Company’s Amended and Restated Long-Term Incentive Plan and Director Equity Plan, as amended and restated through and including the date hereof, (the “Plan”), provides for the grant of  Awards to certain eligible employees of the Company or its Subsidiaries and others pursuant to the terms of the Plan and this Agreement.

 

B.  The Board, pursuant to the Plan, encourages eligible employees to achieve the Management Objectives established by the Human Resources and Compensation Committee of the Board (the “Committee”).

 

C.  The Committee adopted the Management Objective set forth below for the Performance Period (as defined below) on _______________.

 

NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereby agree as follows:

 

	
  

	
1.

	
Defined Terms.  Defined terms used in this Agreement shall have the same meaning as those terms defined and used in the Plan, unless otherwise indicated in this Agreement.

 

	
  

	
2.

	
Grant of Performance Units.  The Company hereby grants _________ performance units (the “Performance Units”) to Employee as of the Effective Date for the one-year performance period from _________________ to _________________ (the “Performance Period”), subject to the restrictions set forth herein.  Each Performance Unit relates to one Common Share of the Company.

 

	
  

	
3.

	
Performance-Based Vesting Conditions.  The Committee has determined that the management objective for the Performance Period shall be _________________ (the “____ Management Objective”).  Within seventy-five (75) days following the conclusion of the Performance Period, the Committee shall determine whether the ____ Management Objective has been met or exceeded and shall provide written certification of such determination.  In the event the Committee certifies that the ____ Management Objective has been met or exceeded, all Performance Units shall remain outstanding and subject to the time-based vesting and forfeiture conditions set forth below.  Except as expressly provided below in Section 7, if the Company does not meet or exceed the _____ Management Objective for the Performance Period, all Performance Units granted hereunder shall immediately be cancelled and forfeited, no Common Shares shall be distributed to Employee in respect of such Performance Units and Employee shall have no further rights or entitlements under this Agreement.

 

	
  

	
4.

	
Time-Based Vesting Conditions.  Except as otherwise provided herein, if the Company meets or exceeds the _____ Management Objective for the Performance Period, 25% of the Performance Units shall vest on ________________ and the remaining 75% of the Performance Units shall vest on ______________ (each, a “Vesting Date”), in each case subject to Employee’s continued employment with the Company or its Subsidiaries through the applicable Vesting Date.

 

  

  

  

 

	
  

	
5.

	
Distribution.  Except as otherwise provided herein, the Common Shares to be distributed hereunder upon the vesting of any Performance Units, shall be distributed as soon as practicable following the applicable Vesting Date and in no event later than March 15th of the calendar year following the year in which the Vesting Date occurs.  Notwithstanding the foregoing, if Employee is eligible to separate from service for Retirement as of the Effective Date or could become eligible for Retirement after the Effective Date but prior to the last Vesting Date set out above (in each case, a “Retirement Eligible Employee”), the Common Shares to be distributed in respect of a Performance Unit held by such Employee shall be distributed on the earlier of (a) no later than ninety (90) days following the applicable Vesting Date and (b) no later than ninety (90) days following Employee’s separation from service, if and to the extent the corresponding Performance Units are not forfeited on, prior to or in connection with such separation from service.  For purposes of this Agreement, a Retirement Eligible Employee may only separate from service  for “Retirement” at or after the date upon which such Employee has reached the age of sixty-two (62) years or older and has performed at least five (5) or more years of service for the Company or its Subsidiaries.  In no event will Employee have the right to designate the taxable year of any distribution of the Common Shares hereunder.

 

	
  

	
6.

	
Separation from Service.

 

	
  

	
a.

	
Separation from Service Prior to the Completion of the Performance Period. Except as otherwise provided in Section 7, upon Employee’s separation from service with the Company and its Subsidiaries for any reason prior to the completion of the Performance Period, Employee shall forfeit all Performance Units and no Common Shares will be issued or distributed to Employee hereunder.

 

	
  

	
b.

	
Separation from Service Following the Completion of the Performance Period.

 

	
  

	
i.

	
Involuntary With Cause. Upon the separation from service of Employee from the employ of the Company and its Subsidiaries by the Company or its Subsidiaries with Cause, Employee shall immediately forfeit all vested and unvested then-outstanding Performance Units and no Common Shares will be distributed to Employee in respect of such Performance Units.  For purposes of this Agreement, “Cause” shall have the same meaning as “Termination for Cause” set forth in Section 2(j)(v) of the Plan.

 

	
  

	
ii.

	

Involuntary Without Cause. Upon the separation from service of Employee from the employ of the Company and its Subsidiaries by the Company without Cause following the completion of the Performance Period, (a) Common Shares that relate to Performance Units whose Vesting Date occurred prior to such separation from service but were not previously distributed shall be distributed pursuant to Section 5 of this Agreement, and (b)  a pro-rata portion of all other then-outstanding Performance Units will immediately vest based on the number of days that Employee remained in continuous employ of the Company or any Subsidiary from the first date of the Performance Period through the separation of service and the related Common Shares shall be distributed as soon as practicable following such separation from service and in no event later than March 15th of the calendar year following the year in which the separation from service occurs.  Notwithstanding the foregoing, if Employee is a Retirement Eligible Employee, the Common Shares relating to his or her then-outstanding Performance Units will be distributed at the time specified in Section 5.

 

	
  

	
iii.

	

Voluntary.  Upon the voluntary separation from service (except for Retirement, as hereinafter defined) by Employee from the employ of the Company and its Subsidiaries following the completion of the Performance Period, all Common Shares that relate to Performance Units whose Vesting Date occurred prior to such termination but were not distributed prior to such termination shall be distributed as provided in Section 5 and Employee shall immediately forfeit all other then-outstanding Performance Units.

 

  

  

  

 

	
  

	
iv.

	

Retirement. Upon the separation from service of Employee from the employ of the Company and its Subsidiaries due to the Retirement of Employee following the completion of the Performance Period, all then-outstanding Performance Units shall immediately vest in full and the related Common Shares will be distributed in accordance with Section 5.  Once Employee meets the Retirement criteria set forth in Section 5, any separation from service of Employee from the employ of the Company and its Subsidiaries (including due to Employee’s death or Disability) other than a termination by the Company or its Subsidiaries with Cause shall be treated as a Retirement.

 

	
  

	
v.

	

Disability or Death.  Upon the separation from service of Employee from the employ of the Company and its Subsidiaries on account of Employee’s Disability or death following the completion of the Performance Period, (except for Retirement), (a) Common Shares that relate to Performance Units whose Vesting Date occurred prior to such separation from service but were not previously distributed shall be distributed pursuant to Section 5 of this Agreement, (b) a prorated portion of all other then-outstanding Performance Units will immediately vest based on the number of days that Employee remained in the continuous employ of the Company or one of its Subsidiaries from the first date of the Performance Period through the separation from service and the related Common Shares shall be distributed as soon as practicable following such separation from service and in no event later than March 15th of the calendar year following the year in which Employee’s separation from service occurs and (c) the remainder of the Performance Units held by Employee will be forfeited and no Common Shares will be distributed in respect of such Performance Units.  Notwithstanding the foregoing, if Employee is a Retirement Eligible Employee who has not yet met the criteria for Retirement at the time of such separation from service due to death or Disability, the Common Shares relating to Employee’s then-outstanding Performance Units that become distributable in accordance with this paragraph will be distributed in accordance with Section 5.

 

	
  

	
7.

	
Change in Control.  Notwithstanding anything to the contrary in this Agreement or in Section 13 of the Plan, in the event of a Change in Control of the Company while any Performance Units granted hereunder remain outstanding, the following provisions shall apply:

 

	
  

	
a.

	
Change in Control Prior to the Completion of the Performance Period.  In the event of a Change in Control prior to the Completion of the Performance Period, the Performance Period will be deemed to have been completed for all purposes of this Agreement effective as of the Change in Control, the _____ Management Objective shall be deemed to have been met in full effective as of the Change in Control and the Performance Units shall remain outstanding and continue to vest in accordance with the terms of this Agreement.  Distribution of Common Shares, or their equivalent, will be in accordance with Sections 5 and 6, as applicable.1

 

__________________________

1 CEO grant will incorporate accelerated vesting and distribution of the Common Shares on a Change in Control.

 

  

  

  

 

	
  

	
b.

	
Separation from Service without Cause on or following a Change in Control.  Upon the separation from service of Employee from the employ of the Company and its Subsidiaries by the Company without Cause on or following a Change in Control, all then-outstanding Performance Units held by Employee will immediately vest and the related Common Shares will be distributed as set forth in Section 6(b)(ii).

 

	
  

	
c.

	
Certain Separations from Service Pursuant to Employee Continuation Plan.  If at the time of the Change in Control Employee is a participant in the Company’s Employee Continuation Plan (the “Continuation Plan”), then if Employee has a separation from service from the employ of the Company and its Subsidiaries pursuant to Section 4(c) or (d) of such Continuation Plan, as applicable, all then-outstanding Performance Units held by Employee will immediately vest and the related Common Shares will be distributed as set forth in Section 6(b)(ii) as though Employee had a separation from service by the Company and its Subsidiaries without Cause.

 

	
  

	
d.

	
Separation from Service with Cause Following the Change in Control Date.  Upon the involuntary separation from service of Employee from the employ of the Company and its Subsidiaries by the Company or its Subsidiaries with Cause following a Change in Control, Employee shall immediately forfeit all unvested then-outstanding Performance Units. Common Shares that relate to Performance Units whose Vesting Date occurred prior to such separation from service but were not previously distributed shall be distributed pursuant to Section 5 of this Agreement.  For purposes of this Section 7(d), if Employee is a participant in the Continuation Plan, such Employee will only be deemed to have had a separation from service with Cause if his separation from service would be so treated pursuant to the Continuation Plan.

 

	
  

	
8.

	
Assignability.  The Performance Shares, including any interest therein, shall not be transferable or assignable, except as permitted in accordance with Section 11 of the Plan.

 

	
  

	
9.

	
Securities Laws Requirements.  This grant has not been registered under the Securities Act of 1933, as amended, or any applicable state securities laws and no transfer or assignment of this grant may be made in the absence of an effective registration statement under such laws or the availability of an exemption from the registration provisions thereof in respect of such transfer or assignment.

 

	
  

	
10.

	
Detrimental Activity.  Notwithstanding anything in this Agreement or the Plan to the contrary, if Employee, either during employment by the Company or a Subsidiary or within six (6) months after termination of such employment, shall engage in any Detrimental Activity, and the Board shall so find, forthwith upon notice of such finding, Employee shall:

 

	
  

	
a.

	
return to the Company, in exchange for payment by the Company of any amount actually paid therefore by Employee, all Common Shares that Employee has not disposed of that were issued pursuant to this Agreement within a period of one (1) year prior to the date of the commencement of such Detrimental Activity, and

 

	
  

	
b.

	
with respect to any Common Shares so acquired that Employee has disposed of, pay to the Company in cash the difference between:

 

  

  

  

 

	
  

	
i.

	

any amount actually paid therefore by Employee pursuant to this Agreement, and

 

	
  

	
ii.

	

the Market Value Per Share of the Common Shares on the date of such acquisition.

 

	
  

	
c.

	
To the extent that such amounts are not paid to the Company, the Company may set off the amounts so payable to it against any amounts that may be owing from time to time by the Company or a Subsidiary to Employee, whether as wages, deferred compensation or vacation pay or in the form of any other benefit or for any other reason, except that the Company may not offset any amounts if and to the extent it would cause an Impermissible deferral or acceleration of the time of payment of an amount subject to Section 409A of the Code. The Company shall not enforce remedies upon occurrence of a Detrimental Activity against Employee in excess of or beyond restrictions or limitations under applicable law.

 

	
  

	
11.

	
Clawback.  Notwithstanding anything in this Agreement to the contrary, Employee acknowledges that the Company may be entitled or required by law or Company policy to recoup compensation of whatever kind paid by the Company or any of its Subsidiaries at any time to Employee, and Employee agrees to comply with any Company request or demand for recoupment.

 

	
  

	
12.

	
Withholding Taxes.  To the extent that the Company is required to withhold federal, state, local or foreign taxes in connection with any payment made or benefit realized by Employee or other person under this Agreement, and the amounts available to the Company for such withholding are insufficient, it will be a condition to the receipt of such payment or the realization of such benefit that Employee or such other person make arrangements satisfactory to the Company for payment of the balance of such taxes required to be withheld, which arrangements (in the discretion of the Board) may include relinquishment of a portion of such benefit.

 

	
  

	
13.

	
No Right to Employment.  The Plan and this Agreement will not confer upon Employee any right with respect to the continuance of employment or other service with the Company or any Subsidiary and will not interfere in any way with any right that the Company or any Subsidiary would otherwise have to terminate any employment or other service of Employee at any time. For purposes of this Agreement, the continuous employ of Employee with the Company or a Subsidiary shall not be deemed interrupted, and Employee shall not be deemed to have ceased to be an employee of the Company or any Subsidiary and to have had a separation from service by reason of (a) the transfer of his or her employment among the Company and its Subsidiaries or (b) an approved leave of absence, except as may otherwise be required by Section 409A of the Code.

 

	
  

	
14.

	
Relation to Other Benefits.  Any economic or other benefit to Employee under this Agreement or the Plan will not be taken into account in determining any benefits to which Employee may be entitled under any profit-sharing, retirement or other benefit or compensation plan maintained by the Company or a Subsidiary and will not affect the amount of any life insurance coverage available to any beneficiary under any life insurance plan covering employees of the Company or a Subsidiary.

 

	
  

	
15.

	
Integrated Agreement.  This Agreement shall consist of its terms and those terms of the Plan which are relevant to this Agreement and both shall be read together.

 

  

  

  

 

	
  

	
16.

	
Weekends, Holidays.  If the last or appointed day for the taking of any action required or the expiration of any right granted herein shall be a Sunday, or a Saturday or shall be a legal holiday or a day on which banking institutions in Tulsa, Oklahoma, are authorized or required by law to remain closed, then such action may be taken or right may be exercised on the next succeeding day which is not a Sunday, a Saturday or a legal holiday and not a day on which banking institutions in Tulsa, Oklahoma, are authorized or required by law to remain closed.

 

	
  

	
17.

	
Amendments.  Any amendment to the Plan will be deemed to be an amendment to this Agreement to the extent that the amendment is applicable hereto; provided, however, that no amendment will adversely affect the rights of Employee under this Agreement without Employee’s consent.

 

	
  

	
18.

	
Severability.  In the event that one or more of the provisions of this Agreement is invalidated for any reason by a court of competent jurisdiction, any provision so invalidated will be deemed to be separable from the other provisions hereof, and the remaining provisions hereof will continue to be valid and fully enforceable.

 

	
  

	
19.

	
Compliance with Section 409A of the Code.  This Agreement is intended to comply with Section 409A of the Code and the grant hereunder and the terms of this Agreement shall be administered in a manner that is intended to comply with Section 409A of the Code and shall be construed and interpreted in accordance with such intent.  To the extent that the grant is subject to Section 409A of the Code, it shall be granted and issued in a manner that will comply with Section 409A of the Code, including any Guidance.  Notwithstanding anything herein or in to the contrary, to the extent that any award subject to Section 409A is payable in connection with Employee’s separation from service and at the time of the separation from service the Participant is a “specified employee” (within the meaning of Section 409A(2)(B) of the Code) then such payment shall be made on the first business day of the first calendar month that begins after the six-month anniversary of the separation from service or, if earlier, on the date of Employee’s death. Any provision of this Agreement that would cause the grant or issuance to fail to satisfy Section 409A of the Code shall have no force and effect until amended to comply with Code Section 409A (which amendment may be retroactive to the extent permitted by the Guidance).

 

	
  

	
20.

	
Compliance with Law.  Notwithstanding any other provision of this Agreement, the Company will not be obligated to issue any Common Shares in payment of any vested Performance Shares pursuant to this Agreement if the issuance thereof would result in a violation of any laws. The Company will make reasonable efforts to comply with all applicable federal and state securities laws.

 

	
  

	
21.

	
Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware.

 

  

  

  

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective as of the day and year above written.

 

	  	
DOLLAR THRIFTY AUTOMOTIVE GROUP, INC.

	
Attest:

	  
	  	
By: _________________________________

	
______________________________

 

	  
	  	  
	  	
_________________________________

«Name», Employee

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