Document:

teffner2019may1conform

                      May 1, 2019   VIA EMAIL  Carrie W. Teffner   Dear Carrie:   In  connection  with  your  appointment,  effective May  1, 2019 (the  “Appointment  Date”),  as  Interim  Executive  Chair (“Interim Chair”) of  the  Board of Directors (the  “Board”) of Ascena  Retail  Group,  Inc.  (“Ascena” or the “Company”), I am pleased to confirm the terms of your employment by the Company as  Interim Chair.    Duties and Responsibilities: As  Interim  Chair,  you  will  perform  the  customary  duties  and                          responsibilities  of  such  position,  as  well  as  such  other  duties                          commensurate with such position that you and the Board determine are                          appropriate for you to undertake.   As Interim Chair, it is expected that                          you  will  devote substantially  all of  your working  time,  attention  and                          energies to the business of Ascena, its subsidiaries and affiliated entities.                           You agree not to engage in any other business or employment without                          the  written  consent  of  the  Board except  as  otherwise  specifically                          provided herein, provided that you may continue to serve as a member                          of  the  board  of  directors  of  GameStop  Corp.  In  addition,  you  may                          perform uncompensated  services  in  connection  with  either  the                          management  of personal  investments  or  with  charitable  or  civic                          organizations,  provided that  such  activities  do  not  interfere  with  your                          duties and responsibilities.                           Effective  as  of  the  Appointment  Date,  you  will continue  to  serve  as  a                          member of the Board, subject to the requirement that you stand for re-                         election  to  the  Board  when  your  term  on  the  Board  would  otherwise                          expire.                              You will determine in good faith which of the Company’s offices you will                          work from based on the Company’s business needs.   Base Salary and Benefits: Effective  as  of  the  Appointment  Date  and  while  you  serve  as  Interim                          Chair,  your  base  salary  will  be  at  an  annualized  rate  of  $1,000,000,                          payable in accordance with the Company’s normal payroll practices.                           Effective as of the Appointment Date, you will be eligible to participate in                          the  retirement,  health,  life  insurance  and  fringe  benefit  plans  and                          programs Ascena makes available to its senior executives generally from                          time to time in accordance with the terms of such plans.   Incentive Compensation: As  of  the  Appointment  Date,  you  will  be  eligible  to  participate  in  the    107530253v5  

 

                              Company’s seasonal incentive compensation (“IC”) program at a target                          level  of  150%  of  your  base  salary.   Your  annual  target  level  (100%                          performance)  is  $1,500,000.   Maximum  annual  payout  is  double  your                          target level (i.e., 200% of target), or $3,000,000.  Your IC for the season                          in which the Appointment Date occurs will be pro-rated based on the                          number of days you are employed from the Appointment Date through                          the end of the season.  If earned, payments shall be made in the same                          form and timing as made to other senior executives of Ascena. The IC                          program  is governed  by  the  terms  and  conditions of  the  Ascena  2016                          Omnibus Incentive Plan, as amended (or any successor plan) (the “2016                          Plan”).   Long Term Incentives:   Simultaneously with the execution of this letter, the Compensation and                          Stock  Incentive  Committee  of  the  Board  (the  “Compensation                          Committee”) has approved and shall grant on the Appointment Date a                          one-time long-term incentive award appointment grant of performance                          based equity (subject to applicable award limitations in the 2016 Plan,                          approximately 60% will be granted as Restricted Stock Units (“RSUs”) and                          approximately  40%  will  be  granted  as  Non-Qualified  Stock  Options                          (“NQSOs”)) equal to a value of $1,050,000 on the Appointment Date (the                          “Appointment Grant”).  The  number  of  RSUs  granted  pursuant  to  the                          Appointment Grant will be determined based on the closing price of the                          Company’s common stock on the date of grant and the number of NQSOs                          granted pursuant to the Appointment Grant will be determined using the                          Black-Scholes value of the NQSOs (as determined by the Company) as of                          the date of grant.  The Appointment Grant will vest as follows, subject to                          your continued employment as Interim Chair or service as a member of                          the  Board,  as  applicable, from  the  grant date  through  the  applicable                          vesting date: 25% of each of the RSUs and NQSOs 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 each                          of the RSUs and NQSOs 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 each of the RSUs                          and NQSOs 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                          Appointment Date, the portion of the RSUs and Options related to the                          achievement  of  the  $3  Hurdle,  $5  Hurdle  and/or  $7  Hurdle  that  was                          actually  achieved  prior to the second  anniversary  of  the  Appointment                          Date will  vest  on  the second  anniversary  of  the Appointment  Date,                          subject to your continued employment as Interim Chair or service as a                          member  of  the  Board from  the  grant  date  through such  second                          anniversary date, except as expressly provided herein.  If the $3 Hurdle,                          $5  Hurdle  and/or  $7  Hurdle  is  not actually  achieved  by  the  third     107530253v5  

 

                              anniversary of the grant date, all RSUs and NQSOs that did not vest as of                          the  third  anniversary  will  be  forfeited  for  no  consideration.   The                          Appointment Grant shall be subject to the terms and conditions of the                          2016  Plan,  applicable  Award  Agreements  thereunder  and  Plan                          Description/Prospectus and is conditioned on your timely execution of                          the Company’s  standard  Confidentiality,  Non-Solicitation  and  Non-                         Competition Agreement.                                                     If your employment as Interim Chair ends due to the appointment of a                          Non-Executive Chair and you continue to serve as a member of the Board                          thereafter, the RSUs and NQSOs granted pursuant to the Appointment                          Grant will remain outstanding and eligible to vest in accordance with and                          subject to the terms and conditions of this letter.                                                    In the event (x) the Company terminates your employment as Interim                          Chair  without Cause (as  defined  in  the 2016  Plan) and  you do  not                          continue  to  serve  on  the  Board after  such  termination or (y) of your                          Termination of Directorship (as defined in the 2016 Plan) other than due                          to (i) your resignation or (ii) your removal for “cause” under Delaware law                          while serving on the Board after your employment as Interim Chair ends                          due to the appointment of a Non-Executive Chair, in either case prior to                          a Change  in  Control  (as  defined  in  the  2016  Plan) (a  “Qualifying                          Termination”), the Appointment Grant will be treated as follows, subject                          to  your  timely  execution  and  non-revocation  of the  Company’s                          customary form of release of claims in favor of the Company and related                          parties (the “Release Condition”):                                                          You will become vested in a pro rata portion of any outstanding                                and unvested RSUs and NQSOs 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 RSUs and NQSOs 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 Appointment Grant  until  the  termination  date  and  the                                denominator of which is 1,095.  NQSOs 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 of your termination as Interim Chair or as a member of the                          Board due to your death or Disability (as defined in the 2016 Plan) prior                          to the second anniversary of the grant date of the Appointment Grant,                          then  subject  to  your  (or  your  estate’s  or  legal  representative’s)                          satisfaction of the Release Condition, the portion of the RSUs and NQSOs                          for  which the applicable  Hurdle(s)  were actually  achieved  prior to  the                          date of such termination will become immediately vested.  NQSOs 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.      107530253v5  

 

                              In the event, upon a Change in Control (as defined in the 2016 Plan), (x)                          your employment as Interim Chair is terminated by the Company without                          Cause (as defined in the 2016 Plan) and you do not continue to serve as                          a  member  of  the Board or  (y) of your Termination of Directorship  (as                          defined in the 2016 Plan) other than due to (i) your resignation or (ii) your                          removal for “cause” under Delaware law, in either case while serving on                          the  Board  after  your  employment  as  Interim  Chair  ends  due  to  the                          appointment  of  a  Non-Executive  Chair ((x)  or  (y),  each a  “Change  in                          Control Termination”), and provided that, on or prior to such Change in                          Control Termination the $3 Hurdle has been satisfied, you will become                          vested in a portion of the RSUs and NQSOs 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  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 RSUs and NQSOs 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 Change in Control Termination and (ii) an additional 50% of the                          tranche of the NQSOs and RSUs that would vest upon actual achievement                          of the $5 Hurdle (i.e., an additional 12.5% of the RSUs and NQSOs granted                          pursuant to the Appointment Grant).  If the Appointment Grant remains                          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  RSUs  and  NQSOs  granted  pursuant  to  the                          Appointment  Grant  that  do  not  vest  based  on  this  paragraph  will  be                          forfeited  for  no  consideration  on  the  date  of  your  Change  in  Control                          Termination.                             If you resign (x) as Interim Chair and do not continue to serve on the                          Board or (y) from the Board after your employment as Interim Chair ends                          due to the appointment of a Non-Executive Chair, all outstanding and                          unvested  RSUs  and  NQSOs  subject  to  the  Appointment  Grant  will  be                          forfeited for no consideration as of the date of your resignation.                            While you serve as Interim Chair, long term incentive awards granted to                          you under the 2016 Plan prior to the Appointment Date in connection                          with  your  service  as  a  member  of  the Board  will  continue  to  vest  in                          accordance  with  the  terms and  conditions of  the  applicable  Award                          Agreements and the 2016 Plan.     No Board Compensation:  Effective  as  of  the  Appointment  Date  and  for  so  long  as  you  serve  as                          Interim Chair, you will not be entitled to any additional compensation,                          whether cash or equity, with respect to your service as a member of the                          Board.  If you remain a member of the Board after you cease serving as                          Interim Chair, you will be eligible to receive compensation for such Board                          service  in  accordance  with  the  Company’s  non-employee  director                          compensation  program  then  in  effect  (subject  to  pro  ration  as     107530253v5  

 

                              applicable).   Committee Memberships:  Effective  as  of  the  Appointment  Date  and  for  so  long  as  you  serve  as                          Interim Chair, your membership on all standing committees of the Board                          and any committees requiring director independence under Nasdaq or                          SEC rules shall be suspended.  Subject to Nasdaq and SEC independence                          rules and provided you remain a member of the Board, when you cease                          serving as Interim Chair, you will be permitted to resume membership on                          the  standing  committees  of  the  Board  of  which  you  were  a  member                          immediately prior to the Appointment Date.    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.     Governing Law:          This  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.   While serving as Interim Chair, you will not be eligible to participate in any Company-sponsored severance  plan,  including  the  Company’s  Executive  Severance  Plan.   Upon  termination  of  your  employment  as  Interim  Chair,  you  will  not  be  entitled  to  any  severance  payments  or  termination  benefits except  as  expressly provided herein with respect to the Appointment Grant.   This letter sets forth the entire agreement and understanding between you and the Company regarding  your service as Interim Chair, and supersedes any and all other agreements or understandings, whether  written or oral, between you and the Company regarding the subject matter hereof, excluding Award  Agreements under the 2016 Plan relating to awards granted to you prior to the Appointment Date.   All  pay  and  benefits  otherwise remain  subject  to  the  terms  and conditions of  the  applicable  plans,  programs and policies.   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/ Kate Buggeln              /s/ Carrie W. Teffner  Kate Buggeln                  Carrie W. Teffner   Lead Independent Director     5/1/19                        5/1/19  Date                          Date       107530253v5rgretentionoffermay12019

                                                      May 1, 2019    VIA EMAIL    Re: Robb Giammatteo Retention Offer    Dear Robb:    In recognition of your valued contributions and the desire of Ascena Retail Group, Inc. (the “Company”)  to  ensure  your  continued  service  with  the  Company as  the  Company  completes Project  Viking and  explores and, if applicable, completes Projects Robin, Venus, and Iris, the Company is pleased to offer to  you an opportunity to earn a Retention Bonus on the terms and conditions set forth in this letter (the  “Agreement”).      I.    Amount and Payment Schedule for Retention Bonus    The maximum possible amount of the Retention Bonus is $700,000, less applicable taxes and deductions.   The  Retention  Bonus  will  be  paid  in equal installments  as  described  below,  as  soon  as reasonably  practicable following each of the dates set forth below, but in no event later than 30 days following each  of the dates set forth below.  You must be continuously employed by the Company from the date of this  Agreement  through the payment date  of  the  particular  installment  payment in  order to  receive  the  installment payment.         Retention Bonus Installment Payment Amount Trigger or Date for Installment Payment                  $350,000                            August 31, 2019                  $350,000                            August 31, 2020    II.   Repayment of Retention Bonus    In the event that, before the August 31, 2020 installment payment is paid to you as provided in Section I,  you resign your employment for any reason whatsoever, or your employment is terminated due to: (i) a  violation of company policy, (ii) conduct giving rise to immediate discharge, and/or (iii) “Cause” (as defined  in the Company’s Executive Severance Plan, as may be amended from time to time (the “ESP”)) (clauses  (i) through (iii), a “Company Termination”), then you will be responsible for repaying the Company (A) the  net after-tax amount of the Retention Bonus paid to you prior to your resignation or (B) the gross amount  of the Retention Bonus paid to you prior to your Company Termination.  Any amount required to be repaid  to  the Company  pursuant to  this  Section  II  must  be paid  in  a  cash lump  sum within 90 days of  your  resignation or Company Termination, as applicable.        107501795v4  

 

  III.   Severance Benefits    Effective as of the date of this Agreement, 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. In addition, effective as of the date of this Agreement, 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 by this Agreement) 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.        IV.   No Guarantee of Employment    Your employment with the Company remains at will, and this Agreement does not constitute a contract  of employment or guarantee or imply any right to continued employment for any period.      V.    Governing Law    The Parties agree that this Agreement shall be construed in accordance with New York law, without regard  to conflicts of laws principles.  Any dispute arising out of, or relating to this Agreement, shall be subject to  the exclusive jurisdiction of the state or federal courts of New York located in New York County.      VI.   Return of Agreement    If you wish to be eligible to receive the Retention Bonus and the ESP modifications set forth herein, please  sign and return the Agreement to Heidi Mader no later than five business days from the date you received  this Agreement.  If you do not return the signed Agreement within this timeframe, this Agreement will be  deemed revoked and of no effect, and you will not have any entitlement to the Retention Bonus or the  ESP modifications set forth herein.    VII.   Taxes    Any payments or benefits to be made or provided to you pursuant to this Agreement 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 Agreement 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  (“Section  409A”),  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.  The  Company shall have no liability to you or otherwise if the Retention Bonus is subject to Section 409A.                                          2  107501795v4  

 

Payments and benefits that may be provided to you under the ESP shall be subject to Section 7.8 of the  ESP.                                                                    3  107501795v4  

 

Thank  you  for  your  continued  work  and  dedication  to  the  Company  in  support  of  these  important  initiatives.      Best Regards,    /s/ Gary Muto    Gary Muto  CEO, Ascena Retail Group, Inc.        Accepted by:    /s/ Robb Giammatteo  __________________________________  Robb Giammatteo    May 1, 2019  __________________________________  Date                                                        4  107501795v4

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