Document:

Exhibit 10.13

 

 

Ms. Michele Parsons

 

Re:  Letter Agreement of Employment

 

Dear Michele:

 

This letter agreement (this “Agreement”) sets forth the terms and conditions of your employment, and your employment relationship, with Lerner New York, 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 EVP, Merchandising.  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 your Supervisor, the President, the Chief Executive Officer or the Board of Directors of the Company (or the designee of any of the foregoing).

 

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 $500,000 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, but not 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 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 17.5 percent 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 22.5 percent of your Base Salary; and for the annual bonus (relating to the Company’s results for the fiscal year) will be 10 percent of your Base Salary.  It should be noted that for Fall 2010 and Fiscal 2010 any bonus payments that you are eligible to receive will be prorated based on your date of hire.  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.  Upon your termination of employment by the Company and all Affiliates without Cause or by you for Good Reason (each, as defined below), but subject to your performance of all post employment obligations set forth in this Agreement, you will be entitled to receive a pro rata bonus with respect to the bonus period in which the termination occurs, such bonus (x) to be equal to the bonus which would have been payable under this Section 4 and the terms of the bonus plan for such bonus period had you continued to be an employee of the Company or its Affiliates during such bonus period, multiplied by a ratio, the numerator of which is the number of days in such bonus period during which you were an employee at the Company or its Affiliates and the denominator of which is the total number of days in such bonus period, and (y) to be payable when bonuses for such bonus period are paid to the Company’s employees generally;

 

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.  Upon your commencement of employment, you shall be entitled to a grant of stock appreciation rights for 100,000 shares of the Company’s common stock and a grant of a restricted stock award for 150,000 shares of the Company’s common stock, subject to such terms and conditions as are contained in the Company’s standard form of award agreement for such equity awards (the “Initial Equity Awards”).

 

6.                                                                                       Employee Benefits.

 

6.1.          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.

 

6.2.          Within two weeks following your commencement of employment with the Company, you shall be entitled to receive the sign-on bonus referenced in the offer letter previously provided to you from the Company consistent with the terms and conditions therein, subject to your continued employment with the Company and its Affiliates on the date of payment.  It is further agreed that you will have no reimbursement obligations regarding the sign-on bonus in the event you are terminated by the Company without cause, you terminate your employment for Good Reason or resign due to disability.

 

 

7.                                                                                       Severance Pay; Accelerated Equity Vesting.

 

7.1.          Upon your termination of employment by the Company and all Affiliates without Cause or by you for Good Reason (each, 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 the number of weekly payments coinciding with the length of the Severance Period (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 shall 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.  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 Severance Period.  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 termination date, as outlined above.  In addition, upon your termination of employment by the Company and all Affiliates without Cause or by you for Good Reason prior to the two year anniversary of this Agreement, but subject to your performance of all post employment obligations set forth in this Agreement, 50% of the unvested portion of the Initial Equity Awards shall immediately vest and shall remain subject to the otherwise applicable provisions set forth in the applicable award agreement and equity plan under which such awards were granted.

 

7.2.          For purposes of this Agreement, “Cause” means the occurrence of any of the following:  (i) your willful failure to substantially perform your duties to the Company (other than as a result of death or a physical or mental incapacity); (ii) your 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 willfull 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 willfull 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 a more senior executive of the Company; or (v) your material breach of any material term 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.  Any determination of Cause will be made in the good faith discretion of the Company, provided that no such determination may be made until you have been given written notice detailing the specific Cause event and a period of thirty (30) days following receipt of such notice to cure such event (if susceptible to cure) to the satisfaction of the Company.

 

7.3.          For purposes of this Agreement, “Good Reason” means the occurrence of any of the following: (i) a diminution in your title or a material diminution of your  duties or the assignment to you of duties which are materially inconsistent with your 

 

 

duties or which materially impair your ability to function as EVP - Merchandising of the Company; (ii) the Company’s material breach of any material term of this Agreement, or (iii) relocation of your primary work location outside of a fifty (50) mile radius from the New York City metropolitan area; provided that no Good Reason shall exist unless (A) you have given written notice to the Company within thirty (30) days of the initial existence of the Good Reason condition(s) or event(s), such notice to provide specific details of such condition(s) or events(s), and (B) the Company has failed to cure each such condition or event within thirty (30) days after receiving such notice.

 

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 unless legally required or 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. If you resign your employment without Good Reason, or if your employment is terminated with Cause, for a period of twelve (12) months following such employment termination, 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 of which the majority of the business operations are engaged in the retail business of moderate 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 passive, 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 a corporation engaged in a business that is in competition with the Company or any of its Affiliates shall not be a violation of this provision so long as you have no active participation in the business of such corporation.

 

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 15.  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 15 hereof, or (iii) a combination of the two (e.g., by simultaneously seeking arbitration under Section 15 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 12, 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.                                                                                 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.  No provision of this Agreement may be modified, waived or discharged unless agreed to in writing by you and the Company.

 

18.                                                                                 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 that would result in the application of the laws of any other jurisdiction.

 

19.                                                                                 Survival of Provisions.  Sections 7 through 18 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).

 

20.                                                                                 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.

 

21.                                                                                 No Assignments.  This Agreement is personal to each of the parties hereto.  Except as provided in this Section 21 hereof, no party may assign or delegate any rights or obligations hereunder without first obtaining the written consent of the other party hereto.  The Company may assign this Agreement to any successor to all or substantially all of the business and/or assets of the Company, provided that the Company shall require such successor to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

 

Sincerely,

 

 

	
By:   
    	
/s/   Gregory Scott
    	
 
    	
Dated:   
    	
November 12,   2010
    
	
 
    	
Gregory   Scott
    	
 
    	
 
    	
 
    
	
 
    	
President
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
By:   
    	
/s/   Michele Parsons
    	
 
    	
Dated:   
    	
November 14,   2010
    
	
 
    	
Michele   Parsons
    	
 
    	
 
    	
 
    
	
 
    	
EVP, MerchandisingExhibit 10.22

 

SIXTH AMENDMENT TO TRANSITION SERVICES AGREEMENT

 

This SIXTH AMENDMENT TO TRANSITION SERVICES AGREEMENT (“Amendment”), dated September 14, 2010 and deemed effective as of August 1, 2010, is made and entered into by and between Limited Brands, Inc. (“Limited Brands”) and Lerner New York Holding, Inc. and New York & Company, Inc., successor in interest to New York & Co. Group, Inc. (collectively, “Buyer” and/or “Lerner”).  Defined terms that are used but not defined herein shall be as defined in the Transition Services Agreement dated November 27, 2002, as amended (“TSA”), between Limited Brands and Lerner.  The parties wish to amend the TSA and Schedules as described below.  It is therefore agreed as follows:

 

1.                                       Schedule III, Section 1.13 shall be amended by replacing the language contained in the Fourth Amendment to Transition Services Agreement dated April 6, 2009 (“Fourth Amendment”), with the following provision:

 

“Section 1.13.  In addition to any other fees as stated herein, Lerner shall pay a Management Fee to Limited Brands, without offset or deduction, in the amount of 0.2% of net revenues on Lerner products distributed through Limited Brands’ facilities, determined in accordance with United States generally accepted accounting principles (“Management Fee”), but in no event shall the Management Fee be less than $2,000,000.00 in any Fiscal Year (“Minimum Fee Amount”).  Lerner agrees that substantially all products intended for sale in Lerner’s stores in the United States of America shall be distributed through Limited Brands’ facilities during the term of the TSA, unless Limited Brands shall consent, in its sole discretion, to the distribution of any such products by Lerner or a third party.  Lerner shall pay the Management Fee to Limited Brands on a monthly basis, in accordance with the monthly invoice payment process described below.  Monthly invoices shall be based upon an estimate of net revenues provided by Lerner prior to the commencement of each quarter of each Fiscal Year.  Within thirty (30) days following the end of each quarter of each Fiscal Year, Lerner shall reconcile the amount paid on the estimated net revenues to the actual net revenues, and shall notify Limited Brands of any overpayment or underpayment.  Any such overpayment or underpayment shall be deducted from or added to, as the case may be, the subsequent monthly invoice.  In the event that the Management Fee monthly payments shall be less than the Minimum Fee Amount for any Fiscal Year, a final reconciliation and payment shall be performed by Lerner within thirty (30) days following the end of such Fiscal Year to ensure that the Minimum Fee Amount is paid by Lerner.  For any partial Fiscal Year at the end of the term, the Management Fee and Minimum Fee Amount shall be reduced in proportion to the number of months in such Fiscal Year that this Agreement shall be effective.”

 

The parties acknowledge that regardless of the fact that Lerner has been paying a Management Fee based on the Management Fee Payment Schedule

 

 

outlined in the Fourth Amendment, this Section is to be effective retroactive to February 1, 2010.  To effectuate such intent, Lerner shall continue paying based on the existing Management Fee Payment Schedule through July 31, 2010.  Commencing August 1, 2010, Lerner shall commence paying the Management Fee based on the provisions of this Amendment.  Within thirty (30) days following the receipt by both parties of a fully-executed counterpart of this Amendment, Lerner shall provide Limited Brands with sufficient detail to demonstrate the amount of any overpayment of the Management Fee through July 31, 2010 based on the new Management Fee effectuated by this Amendment.  Any such overpayment shall be recouped by Lerner in equal monthly credits spread over the future Management Fee payments to be made by Lerner from August 1, 2010 through and including January 31, 2011.

 

2.                                       Section 5.02 (a)(v) of the TSA shall be modified by replacing “February 1, 2011” with “February 1, 2014”.

 

3.                                       Section 5.02(c) of the TSA shall be modified by replacing “February 1, 2011” with “February 1, 2014”.

 

4.                                       Schedule III, Section 1.1 of the TSA shall be modified by replacing “February 1, 2011” with “February 1, 2014”.

 

5.                                       This Amendment is supplementary to and modifies the TSA.  This Amendment shall be incorporated as part of the TSA.  The terms of this Amendment supersede the provisions in the TSA only to the extent that the terms of this Amendment and the TSA expressly conflict.  However, nothing in this Amendment should be interpreted as invalidating the TSA, and provisions of the TSA will continue to cover relations between the parties insofar as they do not expressly conflict with this Amendment.

 

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

 

	
LERNER NEW YORK   HOLDING, INC.
    	
 
    	
LIMITED BRANDS, INC.
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/ Sheamus Toal
    	
 
    	
By:
    	
/s/ Rick Jackson
    
	
Name:
    	
Sheamus Toal
    	
 
    	
Name:
    	
Rick Jackson
    
	
Title:
    	
EVP, Chief Financial Officer
    	
 
    	
Title:
    	
EVP, LLS
    
	
Date:
    	
September 8, 2010
    	
 
    	
Date:
    	
September 14, 2010
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
NEW   YORK & COMPANY, INC.
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/ Sheamus Toal
    	
 
    	
 
    	
 
    
	
Name:
    	
Sheamus Toal
    	
 
    	
 
    	
 
    
	
Title:
    	
EVP, Chief Financial Officer
    	
 
    	
 
    	
 
    
	
Date:
    	
September 8, 2010

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