Document:

J. Crew 2007 Associate Stock Purchase Plan

 Exhibit 10.4 
 

 
 2007 ASSOCIATE STOCK PURCHASE PLAN 
  

	1)	Purpose. The purpose of this J. Crew 2007 Associate Stock Purchase Plan (the “Plan”) is to provide associates of the Company and its Designated Subsidiaries
with an opportunity to purchase Common Stock of the Company through accumulated payroll deductions. It is the intention of the Company to have the Plan qualify as an “employee stock purchase plan” under Section 423 of the Internal
Revenue Code of 1986, as amended (the “Code”). Accordingly, the provisions of the Plan shall be construed in a manner consistent with the requirements of Section 423 of the Code. 

  

	2)	Definitions. 

  

	 	a)	“Affiliate” shall mean any parent corporation or subsidiary corporation, whether now or hereafter existing, as those terms are defined in Section 424 of the
Code. 

  

	 	b)	“Board” shall mean the board of directors of J. Crew Group, Inc. 

  

	 	c)	“Committee” shall mean the Compensation Committee of the Board, or the Board or such other persons as the Board or the Committee may appoint from time to time.

  

	 	d)	“Common Stock” shall mean the common stock of J. Crew Group, Inc. 

  

	 	e)	“Company” shall mean J. Crew Group, Inc., a Delaware corporation, and any Designated Subsidiary(ies) of J. Crew Group, Inc. 

  

	 	f)	“Compensation” shall mean regular compensation including salary, wages, overtime, shift differentials and commissions, but excluding (i) bonus payments,
(ii) relocation, expense, tuition or other reimbursements and (iii) income realized as a result of participation in any stock option, stock purchase, or similar plan of the Company. 

  

	 	g)	“Custodian” shall mean the custodian(s) appointed by the Committee pursuant to Section 3 hereof. 

  

	 	h)	“Designated Subsidiary” shall mean any Subsidiary that the Board may designate from time to time in its sole discretion as being eligible to have its employees
participate in the Plan. 

  

	 	i)	“Exercise Date” shall mean the last day of each Offering Period. 

  

	 	j)	 “Fair Market Value” shall mean, as of a specified day, (i) the average of the high and low sales prices on such day of a share of Common Stock
as reported on the principal 

  

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securities exchange on which shares of Common Stock are then listed or admitted to trading or (ii) if not so reported, the average of the closing bid
and ask prices on such day as reported on the National Association of Securities Dealers Automated Quotation System or (iii) if not so reported, as furnished by any member of the National Association of Securities Dealers, Inc. selected by the
Committee. The Fair Market Value of a share of Common Stock as of any such date on which the applicable exchange or inter-dealer quotation system through which trading in the Common Stock regularly occurs is closed shall be the Fair Market Value
determined pursuant to the preceding sentence as of the immediately preceding date on which the Common Stock is traded, a bid and ask price is reported or a trading price is reported by any member of NASD selected by the Committee. In the event that
the price of a share of Common Stock shall not be so reported or furnished, the Fair Market Value shall be determined by the Committee in good faith to reflect the fair market value of a share of Common Stock. 

  

	 	k)	“Grant Date” shall mean the first day of each Offering Period. 

  

	 	l)	“Law” shall mean all provisions of law, domestic or foreign, including, without limitation, the Securities Act of 1933 (as amended), the Securities Exchange Act of
1934 (as amended) and the Code, in each case together with the rules and regulations promulgated thereunder, and the requirements of any stock exchange upon which the Common Stock may then be listed. 

  

	 	m)	“Offering Period” shall mean a six-month period commencing on or about February 1 and August 1 of each year (or at such other period as the Committee may
determine in its discretion), provided that the Committee shall have the power to change the timing and duration of any Offering Period, and/or the frequency of Offering Periods, with respect to future offerings without stockholder approval
if such change is announced at least five (5) days prior to the Grant Date of any Offering Period to be affected thereby. 

  

	 	n)	“Participant” shall mean an individual who becomes a participant in the Plan pursuant to Section 5 hereof. 

  

	 	o)	“Purchase Price” shall mean an amount equal to eighty-five percent (85%) of the Fair Market Value of a share of Common Stock on either the Grant Date or the
Exercise Date, whichever is less. 

  

	 	p)	“Subsidiary” shall mean a corporation, domestic or foreign, of which the Company or a Subsidiary owns stock possessing at least fifty percent (50%) of the
combined voting power of all classes of stock, whether or not such corporation now exists or is hereafter organized or acquired by the Company or a Subsidiary. 

  

	 	3)	Administration. 

  

	 	a)	The Committee acting in its absolute discretion shall have the power to interpret this Plan and to take, or authorize one or more of its members or one or more of the Company’s
executive officers to take, such actions in the administration and operation of this Plan as are expressly called for in the Plan or as the Committee deems equitable under the circumstances, which actions shall to the fullest extent permitted by law
be final and binding on all parties. 

  

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	 	b)	The Committee may from time to time appoint one or more Custodians for the Plan to (i) hold all shares of Common Stock purchased under the Plan, (ii) maintain a separate
account in the name of each Participant (such Participant’s “Participant Account”), to which payroll deductions made for such Participant pursuant to Section 6 hereof and Common Stock purchased on such Participant’s
behalf pursuant to Section 8 hereof shall be credited, (iii) provide Participants, at least annually, with statements of their respective Participant Accounts and (iv) perform such other functions as the Committee shall specify.

  

	 	c)	No member of the Committee shall be liable for any action, omission or determination relating to the Plan, and the Company shall indemnify and hold harmless each member of the
Committee, and each other director or employee of the Company to whom any duty or power relating to the administration or interpretation of the Plan has been delegated, against any cost, expense (including reasonable attorneys’ fees) or
liability arising out of any action, omission or determination relating to the Plan, unless, in either case, such action, omission or determination was taken or made by such Committee member, director or employee in bad faith and without reasonable
belief that it was in the best interests of the Company. 

  

	4)	Eligibility. 

  

	 	a)	Individuals eligible to participate in the Plan (“Eligible Associates”) shall include all individuals who, as of a given Grant Date, are employees of the Company
for tax purposes, excluding: 

  

	 	i)	employees who have been employed with the Company for less than one (1) year prior to such Grant Date; 

  

	 	ii)	employees whose customary employment with the Company is twenty (20) hours or less per week; 

  

	 	iii)	employees whose customary employment with the Company is for not more than five (5) months in any calendar year; and 

  

	 	iv)	employees employed at a level of senior vice president or higher who constitute “highly compensated employees” within the meaning of Section 414(q) of the Code.

  

	 	b)	If any individual who the Company deems to be ineligible to participate in the Plan because such individual is classified by the Company as an independent contractor with respect to
the Company shall, prior to a given Grant Date, be reclassified by the Company as an employee of the Company for tax purposes, then as of such Grant Date such individual shall be eligible to participate in the Plan subject to Section 4(a)
hereof. 

  

	 	c)	 For purposes of Section 4(a), the employment relationship between the Company and an employee shall be treated as continuing intact while the employee is on
sick leave or 

  

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other leave of absence approved by the Company if either (i) the period of such leave does not exceed three months or (ii) the employee’s
right to reemployment is guaranteed either by statute or by contract. If an employee’s leave of absence exceeds three months in duration and he or she has no right to reemployment that is guaranteed either by statute or by contract, the
employment relationship between the Company and such individual shall be deemed to be terminated for purposes of Section 4(a) (and thus the individual shall be ineligible to participate in the Plan) as of the first day following the expiration
of such three-month period. 

  

	 	d)	If any individual whose employment is deemed to have terminated in accordance with Section 4(c) hereof is subsequently rehired as an employee of the Company, then upon
commencing his or her new period of employment with the Company such individual shall be eligible to participate in the Plan in accordance with Section 4(a) hereof; provided that for the purpose of determining the length of such
individual’s employment under Section 4(a)(i), if such individual commences his or her new period of employment with the Company (i) within twelve (12) months of the date his or her employment was deemed to have been terminated,
such individual shall receive credit for the period immediately prior to such deemed termination during which he or she was continuously employed by the Company or (ii) at any time following the twelve (12) month anniversary of the date
his or her employment was deemed to have been terminated, the one-year period described in Section 4(a)(i) shall be deemed to begin on the date such individual commences his or her new period of employment with the Company.

  

	5)	Participation. 

  

	 	a)	An Eligible Associate may become a Participant by completing and submitting a subscription agreement in such form and manner as the Committee may prescribe (a “Subscription
Agreement”) authorizing the Company to make payroll deductions as provided herein. 

  

	 	b)	Each Subscription Agreement completed and submitted by a Participant pursuant to Section 5(a), 6(d) or 12(b) hereof shall remain in effect for successive Offering Periods, and
payroll deductions authorized thereby shall continue to be made, until either the Participant duly completes and submits a new Subscription Agreement or the Participant’s participation is terminated as provided in Section 10, 11 or 13
hereof. 

  

	6)	Payroll Deductions. 

  

	 	a)	In his or her Subscription Agreement, each Participant shall elect to have payroll deductions made (subject to Section 6(b) hereof) on each pay day during the Offering Period
in an amount, designated in whole percentages, not exceeding fifteen percent (15%) of the Compensation which he or she receives on each such pay day. 

  

	 	b)	 Payroll deductions for each Participant shall commence on the first payroll following the applicable Grant Date and shall be made as specified by the Participant in
his or her Subscription Agreement then in effect, provided that the amount deducted from any Participant’s Compensation in any calendar year shall not exceed the amount equal to 

  

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eighty five percent (85%) of the maximum dollar value of Common Stock which the Participant is permitted to purchase in such calendar year under
Section 423 of the Code, and provided further that the Company may reduce a Participant’s payroll deductions to zero percent (0%) at any time during an Offering Period in order to prevent the amount deducted from the
Participant’s Compensation from exceeding (i) the maximum amount that may be deducted pursuant to this Section 6(b) or (ii) the amount that may be used to purchase stock on the Participant’s behalf on the Exercise Date of
such Offering Period pursuant to Section 7(b) hereof and Section 423 of the Code. Unless earlier terminated pursuant to Section 10, 11 or 13 hereof, payroll deductions shall recommence at the rate provided in such Participant’s
Subscription Agreement then in effect at the beginning of the first Offering Period with respect to which the Company determines that a decrease in payroll deductions pursuant to this Section 6(b) is no longer required.

  

	 	c)	All payroll deductions made for a Participant under the Plan shall be credited to his or her Participant Account. No interest shall accrue on the amounts credited to a
Participant’s Participant Account under the Plan. A Participant may not make or arrange to be made any additional payments into his or her Participant Account. 

  

	 	d)	A Participant may elect to decrease the rate of his or her payroll deductions during the Offering Period by completing and submitting a new Subscription Agreement authorizing a
change in payroll deduction rate. The Committee shall have the power to limit the number of payroll deduction rate changes during any Offering Period. Any change in payroll deduction rate requested by a Participant shall take effect as of the first
payroll period commencing at least five (5) business days after the Company’s receipt of the Participant’s new Subscription Agreement (unless the Company in its discretion elects to process a particular request more quickly) and shall
remain in effect in accordance with Section 5(b) hereof. 

  

	7)	Grant of Options. 

  

	 	a)	Subject to Section 7(b), and subject to adjustment pursuant to Section 16, on the Grant Date of each Offering Period, each Participant shall be granted an option to
purchase at the applicable Purchase Price on the Exercise Date of such Offering Period the number of shares of Common Stock determined by dividing (i) the amount credited to such Participant’s Participant Account pursuant to Section 6
hereof as of the Exercise Date by (ii) the applicable Purchase Price for such option. 

  

	 	b)	Notwithstanding the foregoing, the maximum number of shares of Common Stock that may be purchased pursuant to any option shall be the lowest of (i) five thousand
(5,000) shares, (ii) the number determined by dividing (x) the amount equal to the maximum dollar value of Common Stock which a Participant is permitted to purchase under the Plan pursuant to Section 423 of the Code in the
calendar year in which the Exercise Date for such option will occur less the total Fair Market Value of all shares purchased by the Participant under the Plan (measured as of the Grant Date on which the option to purchase such shares was granted)
during such calendar year by (y) the Fair Market Value of a share of the Common Stock underlying such option as of the Grant Date on which the option is granted, and (iii) the number permitted under Section 7(c) hereof and
Section 423 of the Code. 

  

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	 	c)	Notwithstanding any other provision of the Plan to the contrary, no individual shall be granted any option under the Plan to the extent that, immediately after the grant,

  

	 	i)	such individual (or any other person whose stock would be attributed to such individual pursuant to Section 424(d) of the Code) would own capital stock of the Company or an
Affiliate, or hold outstanding options to purchase such stock, possessing five percent (5%) or more of the total combined voting power or value of all classes of the capital stock of the Company or of any Affiliate or 

 

	 	ii)	such individual’s rights to purchase stock under the Plan and any other plans of the Company or its Affiliates which constitute “employee stock purchase plans” within
the meaning of Section 423 of the Code would accrue at a rate which exceeds twenty-five thousand dollars ($25,000) worth of stock (or, if Section 423(b)(8) of the Code is hereafter amended, such other maximum dollar value of Common Stock
as may be specified therein), determined at the Fair Market Value of the shares on the date the option to purchase such shares is granted, for each calendar year in which such option is outstanding at any time. 

  

	8)	Exercise of Option. 

  

	 	a)	Unless a Participant’s participation in the Plan is terminated as provided in Section 10, 11 or 13 hereof, his or her option shall be automatically exercised on the
Exercise Date of the Offering Period in which such option was granted. Upon exercise, the monies accumulated in the Participant’s Participant Account as of the Exercise Date shall be applied to purchase for Participant at the applicable
Purchase Price the maximum number of whole shares subject to such option (as determined pursuant to Section 7 hereof). No fractional shares of Common Stock shall be purchased under the Plan. Shares purchased on a Participant’s behalf
pursuant to this Section 8(a) shall be registered either in the name of the Participant or in the name of the Participant and his or her spouse, as specified by the Participant in his or her Subscription Agreement then in effect.

  

	 	b)	As soon as practicable following the Exercise Date on which a Participant’s option is exercised, the shares of Common Stock purchased on such Participant’s behalf pursuant
to such exercise shall be credited to his or her Participant Account. Any payroll deductions remaining in a Participant’s Participant Account following the Exercise Date which were insufficient to purchase a whole share of Common Stock shall be
held in the Participant Account and, unless the Participant’s participation in the Plan is terminated as provided in Section 10, 11 or 13 hereof, shall be applied to purchase shares of Common Stock on the Participant’s behalf on the
following Exercise Date, provided that the Committee may determine to distribute to a Participant any payroll deductions remaining in the Participant’s Participant Account following any Exercise Date which were not used to purchase
shares on such Exercise Date. 

  

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	 	c)	During a Participant’s lifetime, any options granted to a Participant under the Plan shall be exercisable only by such Participant. 

  

	 	d)	At the time the option is exercised, or at the time some or all of the Common Stock purchased under the Plan is disposed of, the Participant must make adequate provision for the
Company’s federal, state or other tax withholding obligations, if any, which arise upon such exercise or disposition. At any time, the Company may, but shall not be obligated to, withhold from the Participant’s Compensation the amount
necessary to satisfy any applicable withholding obligations, including any withholding required to make available to the Company any tax deductions or benefits attributable to sale or early disposition of Common Stock by the Participant.

  

	9)	Rights as a Stockholder. 

  

	 	a)	Prior to the Exercise Date on which shares of Common Stock are purchased on behalf of a Participant under the Plan, such Participant shall not have any rights as a stockholder of
the Company with respect to such shares. 

  

	 	b)	From and after the Exercise Date on which shares of Common Stock are purchased on behalf of a Participant under the Plan, such Participant (or, in the case of the Participant’s
death, the person(s) entitled thereto under Section 12) shall have all of the rights and privileges of a stockholder of the Company with respect to such shares, provided that shares held in a Participant’s Participant Account must
remain in the Participant Account until such time as the Participant (or, in the case of the Participant’s death, the person(s) entitled to do so under Section 12) directs the sale of such shares in accordance with this Section 9(b).
Subject to the Company’s policies then in effect (including without limitation its policies regarding insider trading and trading windows then in effect) and subject to applicable Law, a Participant (or, in the case of the Participant’s
death, the person(s) entitled thereto under Section 12) shall be entitled at any time, upon the payment of a customary brokerage fee, to direct the Custodian to sell all or any portion of the shares then held in such Participant Account. Shares
held in a Participant’s Participant Account shall be sold in the order in which they were purchased on such Participant’s behalf under the Plan. 

  

	10)	Withdrawal. 

  

	 	a)	During any Offering Period, a Participant may withdraw all, but not less than all, of the monies credited to his or her Participant Account under the Plan by giving written notice
to the Company, in such form and manner as the Committee may prescribe, prior to the Exercise Date of such Offering Period. 

  

	 	b)	 As soon as reasonably practicable after the Company receives notice of a Participant’s withdrawal from any Offering Period, (i) the Company shall cause to
be distributed to such Participant any monies credited to his or her Participant Account, (ii) such Participant’s option for the Offering Period during which such Participant withdraws shall be automatically terminated and (iii) no
further payroll deductions for such Participant shall be made under the Plan for the remainder of such Offering Period. Any 

  

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shares of Common Stock held in the Participant’s Participant Account as of the date of his or her withdrawal shall remain in the Participant Account in
accordance with Section 9(b). 
  

	 	c)	If a Participant withdraws from an Offering Period, payroll deductions shall not resume at the beginning of the succeeding Offering Period unless the Participant completes and
submits a new Subscription Agreement. 

  

	 	d)	A Participant’s withdrawal from an Offering Period shall not in any way affect his or her eligibility to participate in the Plan during any Offering Periods that commence after
the expiration of the Offering Period from which the Participant withdraws or in any similar plan that the Company may hereafter adopt. 

  

	11)	Termination of Employment. Upon termination of a Participant’s employment for any reason, such Participant shall be deemed to have elected to withdraw from the Plan and
the provisions of Section 10(b) hereof shall apply. In the case of termination due to a Participant’s death, the distribution described in Section 10(b)(i) shall be made to the person(s) entitled thereto under Section 12.

  

	12)	Designation of Beneficiary. 

  

	 	a)	In his or her Subscription Agreement, a Participant may designate a beneficiary or beneficiaries who, in the event of such Participant’s death, shall be entitled to
(i) receive any monies credited to the Participant’s Participant Account and not yet applied to purchase shares of Common Stock under the Plan as of the date of the Participant’s death and/or (ii) have transferred into his or her
name the Participant’s Participant Account and any shares of Common Stock held therein as of the date of the Participant’s death, which shares shall remain in the Participant Account in accordance with Section 9(b).

  

	 	b)	A Participant may change his or her designated beneficiary(ies) at any time by completing and submitting a new Subscription Agreement indicating such change.

  

	 	c)	If a Participant is married and any designated beneficiary is not the Participant’s spouse, the consent of the Participant’s spouse shall be required for such designation
to be effective. 

  

	 	d)	In the event of the death of a Participant who has not validly designated a beneficiary under the Plan, or whose designated beneficiary predeceases the Participant, the rights and
entitlements described in Section 12(a) shall pass to the executor or administrator of the Participant’s estate, or if to the knowledge of the Company no such executor or administrator has been appointed, to the Participant’s spouse
or to any one or more dependents or relatives of the Participant as determined by the Company in its discretion, or if no spouse, dependent or relative is known to the Company, then to such other person as the Company may designate.

  

	13)	 Transferability. Neither payroll deductions credited to a Participant’s Participant Account nor any rights with regard to the exercise of an option or
to receive shares under the Plan may be assigned, transferred, pledged or otherwise disposed of in any way (other than by will, 

  

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under the laws of descent and distribution, or as provided in Section 12 hereof) by the Participant. Any attempt to make any such assignment, transfer,
pledge or other disposition shall be without effect, except that the Company in its discretion may treat such act as an election to withdraw from the Plan, in which case the provisions of Section 10(b) hereof shall apply. 
  

	14)	Use of Funds. Each Participant shall be a general unsecured creditor of the Company with respect to any amounts deducted from such Participant’s Compensation under the
Plan during the period prior to the Exercise Date on which such amounts are applied to the purchase of Common Stock for the Participant. The Company shall not be obligated to segregate from other assets of the Company any funds accumulated through
payroll deductions made for Participants under the Plan, and may use such funds for any corporate purpose. 

  

	15)	Common Stock Reserved for the Plan. 

  

	 	a)	Subject to adjustment pursuant to Section 16 hereof, the maximum number of shares of the Common Stock that shall be available for purchase under the Plan shall be five hundred
thousand (500,000) shares. 

  

	 	b)	If the number of shares to be purchased pursuant to outstanding options on any Exercise Date exceeds the number of shares then available to be purchased under the Plan, the
Committee shall (i) allocate the shares available to be purchased under the Plan among Participants in as uniform and equitable a manner as the Committee in its discretion shall determine to be practicable and (ii) return to Participants
any monies remaining in such Participants’ respective Participant Accounts after such Exercise Date. 

  

	16)	Adjustments Upon Changes in Capitalization, Dissolution, Liquidation, Merger or Asset Sale. 

  

	 	a)	Changes in Capitalization. Subject to any action required by law to be taken by the stockholders of J. Crew Group, Inc., in the event of any increase or decrease in the
number of shares of Common Stock effected without receipt of consideration by J. Crew Group, Inc. (including, without limitation, changes resulting from a stock split, reverse stock split, stock dividend, combination or reclassification of the
Common Stock) the maximum number or class(es) of shares that may be purchased under the Plan and under any options outstanding under the Plan shall be proportionately adjusted; provided, however, that conversion of any convertible securities
of J. Crew Group, Inc. shall not be deemed to have been “effected without receipt of consideration.” Such adjustment shall be made by the Committee, whose determination in that respect shall be final, binding and conclusive.

  

	 	b)	 Merger, Asset Sale, Dissolution or Liquidation. In the event of a proposed sale of all or substantially all of the assets of J. Crew Group, Inc., or the
proposed merger of J. Crew Group, Inc. with or into another corporation, arrangements shall be made for each outstanding option to be assumed or an equivalent option substituted by the successor corporation or an Affiliate of the successor
corporation. In the event that such a 

  

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successor corporation refuses to assume or substitute for the options, or in the event of the proposed dissolution or liquidation of J. Crew Group, Inc., in
each case unless provided otherwise by the Committee, the Offering Period then in progress shall be shortened by setting a new Exercise Date (the “New Exercise Date”), which shall be before the date of the proposed merger, asset
sale, dissolution or liquidation. The Committee shall notify each Participant in writing, at least ten (10) business days prior to the New Exercise Date, that the Exercise Date for the Participant’s option has been changed to the New
Exercise Date and that the Participant’s option shall be exercised automatically on the New Exercise Date unless prior to such date the Participant has withdrawn from the Offering Period pursuant to Section 10, 11 or 13 hereof. 

 

	17)	Amendment or Termination. 

  

	 	a)	The Committee may at any time and for any reason terminate or amend the Plan in any manner permitted by applicable Law, provided that, except as otherwise provided herein, no
amendment shall make any change to any outstanding option that adversely affects the rights of any Participant. To the extent required by applicable Law, J. Crew Group, Inc. shall obtain stockholder approval of changes to the Plan in such a manner
and to such a degree as so required. 

  

	 	b)	In the event the Plan is terminated by the Committee, payroll deductions accumulated in a Participant’s Participant Account and not yet applied to purchase shares of Common
Stock as of the date of termination shall be paid to such Participant. Any shares of Common Stock held in the Participant’s Participant Account as of the date of such termination shall remain in the Participant Account in accordance with
Section 9(b). 

  

	 	c)	Without stockholder consent and without regard to whether any Participant’s rights may be considered to have been “adversely affected,” the Committee shall be
entitled to terminate the Plan at any time, change the Offering Periods, limit the frequency and/or number of changes to payroll deductions that Participants may make during an Offering Period, establish the exchange ratio applicable to amounts
deducted from the payroll in a currency other than U.S. dollars (if applicable), permit payroll deductions in excess of the amount designated by a Participant in order to adjust for delays or mistakes in the Company’s processing of properly
completed payroll deduction elections, establish reasonable waiting and adjustment periods and/or accounting and crediting procedures to ensure that amounts applied toward the purchase of Common Stock for each Participant properly correspond with
amounts deducted from the Participant’s Compensation, and establish such other limitations or procedures as the Committee in its sole discretion determines to be advisable and consistent with the Plan. 

  

	18)	Notices. All notices or other communications by a Participant to the Company under or in connection with the Plan shall be deemed to have been duly given when received in the
form specified by the Company at the location, or by the person, designated by the Company for the receipt thereof. 

  

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	19)	Conditions Upon Issuance of Shares. Shares shall not be issued with respect to any option unless: 

  

	 	a)	the Plan is approved by J. Crew Group, Inc.’s stockholders prior to the date such option will be exercised, 

  

	 	b)	the exercise of such option and the issuance and delivery of such shares pursuant thereto shall comply with all applicable Law and, if required by the Company in its discretion,
shall be approved by counsel for the Company with respect to such compliance, and 

  

	 	c)	if required or desirable in the opinion of counsel for the Company in order to ensure compliance with applicable Law, the Participant has represented and warranted at the time such
option is being exercised that (a) such shares are being purchased only for investment and without any present intention to sell or distribute such shares and/or (b) any disposition of such shares will be made in accordance with the
Company’s policies then in effect (including without limitation its policies regarding insider trading and trading windows then in effect) and applicable Law. 

  

	20)	Government and Other Regulations. The Plan and the purchase of Common Stock hereunder shall be subject to (a) all applicable Law and (b) all rules and regulations
promulgated by the Committee regarding the Plan and purchases and sales of Common Stock hereunder. 

  

	21)	Risk of Participants. Each Participant assumes all risks associated with any decrease in the value of any securities in the Participant’s Participant Account and agrees
that his or her Participant Account will be the sole source of payments under the Plan and that the Company will not be responsible for the payment of any benefits under the Plan. The establishment and operation of this Plan by the Company does not
constitute a recommendation that any person purchase Common Stock or any other securities. The Common Stock available for purchase under the Plan may or may not be a suitable investment for Eligible Associates, and each Eligible Associate should
therefore make an independent investigation into the merits of each investment. Each Participant, by becoming a Participant, agrees that the Participant is in no way relying on the Company or the Custodian for information or advice concerning the
Participant’s investment decisions and that the Company and the Custodian are under no obligation to inform the Participant of any information which the Company or the Custodian may possess at any time which is or may be material to the
investment decision of the Participant. 

  

	22)	Tax Effects. Each Participant, by completing a Subscription Agreement, acknowledges that the Participant is not relying on advice by any person associated with the Company
that favorable tax effects will result from participation in the Plan and that the Participant has been given sufficient opportunity to consult with the Participant’s own tax advisors concerning participation in the Plan.

  

	23)	Term of Plan. Upon approval of the Plan by J. Crew Group, Inc.’s stockholders, the Plan shall be deemed to have become effective upon the date of its adoption by the
Board and, unless earlier terminated under Section 17 hereof, shall continue in effect until the earlier of (i) the date on which no Common Stock remains reserved for issuance under the Plan and (ii) the tenth anniversary of the date
the Plan became effective pursuant to this Section 23. In the event the Plan is not approved by J. Crew Group, Inc.’s stockholders, it shall be of no force and effect and each Participant shall be treated as though he or she withdrew from
the Plan in accordance with Section 10 hereof. 

  

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	 	24)	No Employment Rights. The establishment and operation of the Plan shall not confer any legal rights upon any Participant or other person for a continuation of employment, nor
shall it interfere with the rights of the Company to discharge any employee and to treat him or her without regard to the effect which that treatment might have upon him or her as a Participant or potential Participant under the Plan.

  

	 	25)	Severability of Provisions. If any provisions of the Plan shall be held invalid or unenforceable, such invalidity or unenforceability shall not affect any other provisions
hereof, and the Plan shall be construed and enforced as if such provisions had not been included. 

  

	 	26)	Construction. The headings and captions herein are provided for reference and convenience only, and shall not be considered part of the Plan or employed in the construction
of the Plan. 

  

 E-15Employment Agreement - Joseph A. Charlson

 Exhibit 10.01 
 EMPLOYMENT AGREEMENT 
 EMPLOYMENT AGREEMENT, dated as of December 7, 2006 (the
“Employment Agreement”), by and between Education Management LLC, a Delaware limited liability company (together with its successors and assigns, the “Company”), and Joseph A. Charlson (the
“Executive”) (each of the Executive and the Company, a “Party,” and collectively, the “Parties”). 
 WHEREAS, the Company desires to employ the Executive and utilize his management services as indicated herein, and the Executive desires to be employed by the Company, all on the terms and conditions set forth in this
Employment Agreement; and 
 WHEREAS, the Executive and Education Management Corporation, indirect parent of the Company (the
“Parent”), were parties to an Employment Agreement, dated September 9, 2005 (the “Original Employment Agreement”), under the terms of which the Executive served as the Parent’s Senior Vice President and Chief Marketing
Officer. 
 NOW, THEREFORE, in consideration of the mutual covenants contained herein and other valid consideration the sufficiency of which
is acknowledged, the Parties agree as follows: 
 Section 1. Employment. 
 1.1. Term. The Company agrees to employ the Executive, and the Executive agrees to be employed by the Company, in each case pursuant to this
Employment Agreement, for a period commencing on the date hereof (the “Effective Date”) and ending on the third (3rd) anniversary of the Effective Date (the “Initial Term”); provided, however, that the term of
this Employment Agreement and the Executive’s employment hereunder shall renew automatically for successive one (1) year periods (each, a “Renewal Term”), unless at least one hundred eighty (180) days prior to the end
of the Initial Term or any subsequent anniversary of the Effective Date, either party shall have given notice to the other party that this Employment Agreement shall terminate on that anniversary date (the Initial Term, together with any Renewal
Terms, the “Term”). Notwithstanding the foregoing, the Executive’s employment shall be subject to earlier termination in accordance with Section 3 hereof. 
 1.2. Duties. During the Term, the Executive shall serve as the Company’s Senior Vice President and Chief Marketing Officer, and such other
positions as officer or director of the Company and its affiliates as the Executive and the Board of Directors of the Parent (the “Parent Board”) shall mutually agree from time to time. In such positions, the Executive shall perform
such duties, functions and responsibilities during the Term commensurate with the Executive’s positions. The Executive shall have all authorities, duties and responsibilities customarily exercised by an individual serving in the foregoing
positions at an entity of the size and nature of the Company; shall be assigned no duties or responsibilities that are materially inconsistent with, or that materially impair his ability to discharge, the foregoing duties and responsibilities; shall
have such additional duties and responsibilities, consistent with the foregoing, as may be from time to time assigned to him; and in his capacity as Senior Vice President and Chief Marketing Officer shall report to the Chief Executive Officer of the
Company or any other officer determined from time to time by the Chief Executive Officer. 

 1.3. Exclusivity. During the Term, the Executive shall devote his full business time and
attention to the business and affairs of the Company, shall faithfully serve the Company, and shall in all material respects conform to and comply with such lawful and reasonable directions and instructions given to him as are consistent with
Sections 1.2 and 1.3 hereof. During the Term, the Executive shall use his reasonable best efforts to promote and serve the interests of the Company and shall not engage in any other business activity, whether or not such activity shall be engaged in
for pecuniary profit. Notwithstanding the foregoing provisions of this Section 1.3, but subject to the other provisions of this Employment Agreement, the Executive may (i) engage in charitable activities and community affairs,
(ii) serve, with the prior approval of the Company’s Chief Executive Officer, on the boards of a reasonable number of business entities, trade associations and charitable organization, (iii) accept and fulfill a reasonable number of
speaking engagements, and (iv) manage his personal investments and affairs; provided that such activities do not either individually or in the aggregate materially interfere with the performance of his duties hereunder. 
 Section 2. Compensation. 
 2.1. Salary. As compensation for the performance of the Executive’s services hereunder, during the Term, the Company shall pay to the Executive a salary at an annual rate of Two Hundred Seventy Five Thousand dollars ($275,000),
payable in accordance with the Company’s standard payroll policies (the “Base Salary”), with such salary effective as of September 1, 2006. The Base Salary will be reviewed annually and may be adjusted upward by the Board
of Directors of the Company (the “Board”) (or a committee thereof) in its discretion. 
 2.2. Annual Bonus. The
Executive will be eligible for an annual incentive bonus (the “Annual Bonus”) for each complete fiscal year occurring during the Term. The Executive’s target bonus will be eighty percent (80%) of the Base Salary. The
actual Annual Bonus paid for any year will depend on meeting Company and individual performance standards established by the Board. The Annual Bonus will be paid in cash within seventy-five (75) days of the end of the fiscal year. 

2.3. Equity. The Executive will be eligible for grants of stock options pursuant to the Company’s 2006 Stock Option Plan as determined by
the Parent Board or a committee thereof. 
 2.4. Employee Benefits. During the Term, the Executive shall be eligible to participate
in such health and other group insurance, retirement and other employee benefit plans and programs of the Company as in effect from time to time on the same basis as similarly situated executives of the Company. 
 2.5. Vacation. During the Term, the Executive shall be entitled to paid vacation in accordance with the Company’s vacation policy as in
effect from time to time. 
  

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 2.6. Business Expenses. The Company shall pay or reimburse the Executive for all commercially
reasonable business out-of-pocket expenses that the Executive incurs during the Term in performing his duties under this Employment Agreement upon presentation of documentation and in accordance with the expense reimbursement policy of the Company
as approved by the Board (or a committee thereof) and in effect from time to time. 
 Section 3. Employment Termination.

 3.1. Termination of Employment. The Company may terminate the Executive’s employment hereunder for any reason during the Term,
and the Executive may voluntarily terminate his employment hereunder for any reason during the Term, in each case (other than a termination by the Company for Cause) at any time upon not less than thirty (30) days’ notice to the other
Party. Upon any termination of the Executive’s employment hereunder for any reason during the Term, the Executive shall be entitled to (i) any Base Salary earned but unpaid through the date of termination; (ii) any other payment or
benefit to which he is entitled under the applicable terms of any applicable plan, program, agreement or arrangement of the Company or its affiliates (each, a “Company Arrangement”), including the plans, programs, agreements and
arrangements referred to in Sections 2.2 through 2.6 and 8.1 ((i) and (ii) being, collectively, the “Accrued Amounts”); provided, however, that if the Executive’s employment hereunder is terminated (x) by the
Company for Cause, or (y) by the Executive voluntarily without Good Reason and not for death or Disability, then any Annual Bonus earned pursuant to Section 2.2 in respect of a prior fiscal year, but not yet paid or due to be paid, shall
be forfeited. 
 3.2. Certain Terminations. 
 (a) Termination by the Company Other than for Cause; Termination by the Executive for Good Reason. If the Executive’s employment hereunder is terminated by the Company during the Term other than for Cause,
or by the Executive with Good Reason, in addition to the Accrued Amounts the Executive shall be entitled to: 
  

	 	(i)	a cash payment in each of the twelve (12) months following the Executive’s termination of employment equal to one-twelfth (1/12) of the sum of the Executive’s
Base Salary and target Annual Bonus; provided, however, that if the Executive’s termination of employment pursuant to this Section 3.2(a) occurs within two (2) years following a “Change in Control” (as defined in the
Company’s 2006 Stock Option Plan)) or the Executive reasonably demonstrates that the termination was In Anticipation Of a Change in Control, the Executive shall be entitled to a lump sum equal to two (2) times the sum of his Base Salary
and target Annual Bonus (amounts paid pursuant to this clause (i) herein referred to as the “Severance Payment”); 

  

	 	(ii)	the Accrued Amounts and a pro-rata Annual Bonus (determined by multiplying the target Annual Bonus for the year of termination by a fraction, the numerator of which is

  

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 the number of days he was employed by the Company during such fiscal year and the denominator of which
is the number of days in such fiscal year) (the “Pro-Rata Annual Bonus Payment”); 
  

	 	(iii)	the continuation of all welfare benefits, including (to the extent applicable) medical, dental, vision, life and disability benefits pursuant to plans maintained by the Company
under which the Executive and/or the Executive’s family is eligible to receive benefits and/or coverage, for the twelve (12)-month period following the date of the Executive’s termination, with such benefits provided to the Executive at no
less than the same coverage level as in effect as of the date of termination and the Executive shall pay any portion of such cost as was required to be borne by key executives of the Company generally on the date of termination; provided, however,
that, notwithstanding the foregoing, the benefits described in this sentence may be discontinued prior to the end of the twelve (12)-month period to the extent, but only to the extent, that the Executive receives substantially similar benefits from
a subsequent employer; and 

  

	 	(iv)	key executive outplacement services, in accordance with Company policies for senior executives as in effect on the date of termination (or, at the request of the Executive, a lump
sum payment in lieu thereof, in an amount determined by the Company to be equal to the estimated cost of those services). 

 The Company’s obligations to make the Payments and provide the benefits described in this Section 3.2(a) shall be conditioned upon the Executive’s execution, delivery and non-revocation of a valid and enforceable general
release of claims substantially in the form attached hereto as Exhibit A (the “Release”). 
 (b)
Termination Due to Disability. Upon a determination that the Executive is Disabled, the Company may give notice to the Executive that it intends to replace him. If the Executive does not return to the performance of his duties on essentially
a full-time basis within thirty (30) days after receiving such notice, the Company may replace the Executive without breaching this Agreement; provided, however, that this Agreement shall not terminate until the anniversary date of this
Agreement next following the date that the Executive is determined to be Disabled. For the period from the date the Executive is determined to be Disabled through the earlier of such anniversary date or the date of the Executive’s death (the
“Disability Period”), the Company shall continue to provide the Executive all compensation and benefits provided for in Section 2; provided, however, that the Company’s obligation to pay the Executive’s Base Salary shall be
reduced by the amounts paid to the Executive under any long- 
  

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 term disability insurance plan sponsored or otherwise maintained by the Company (if any) and that in no event shall the
total annual obligation of the Company under this Agreement to make Base Salary payments to the Executive during the Disability Period be greater than an amount equal to two-thirds (2/3) of the Executive’s Base Salary, computed on a pro
rata basis beginning with the date that the Executive is replaced in accordance with this Section 3.2(b) and continuing until the expiration of the Disability Period. 
 (c) Termination Due to Death. If the Executive’s employment hereunder is terminated by reason of his death, the Company shall continue to
pay the Executive’s Base Salary at the rate in effect at the time of his death to such person or persons as the Executive shall have designated for that purpose in a notice filed with the Company, or, if no such person shall have been so
designated, to his estate, for a period of six (6) months after the Executive’s date of death. The Company also shall pay to such person(s) or estate (i) the amount of the Accrued Amounts and a Pro Rata Annual Bonus Payment for the
year of termination and (ii) an amount equal to one-twelfth (1/12) of the Executive’s average annual Bonus paid or payable to the Executive with respect to the most recent three (3) full fiscal years or, if greater, the most
recent twelve (12)-month period (in each case, determined by annualizing the bonus paid or payable with respect to any partial fiscal year) that amount being payable in each of the six (6) months following the date of termination. Any amounts
payable under this Section 3.2(c) shall be exclusive of and in addition to any payments which the Executive’s widow, beneficiaries or estate may be entitled to receive pursuant to any pension plan, profit sharing plan, employee benefit
plan, or life insurance policy maintained by the Company. 
 (d) Termination at Expiration of the Term at the Company’s Request.
If the Executive’s employment hereunder is terminated solely as a result of the Company’s electing under Section 1.1 not to renew the Employment Agreement at the expiration of the then current Term by giving notice thereof to the
Executive, and the Executive terminates his employment within thirty (30) days after the end of the Term, then such termination of employment shall be considered a termination without Cause hereunder. 
 (e) Definitions. For purposes of this Section 3.2, the following terms shall have the following meanings: 
 (1) “Good Reason” shall mean the occurrence of any of the following events without either the Executive’s prior written consent or
full cure within thirty (30) days after he gives written notice to the Company describing the event and requesting cure: (i) the reassignment of the Executive to a position that is not a corporate officer level position or the assignment
to the Executive of duties that are not consistent with such corporate officer level position; (ii) any relocation of the Executive’s principal place of employment to a location more than fifty (50) miles from his current principal
place of employment; (iii) any material breach by the Company or any of its affiliates of any material obligation to the Executive; or (iv) any failure of the Company to obtain the assumption in writing of its obligation to perform this
Employment Agreement by any successor to all or substantially all of the assets of the Company within fifteen (15) days after any merger, consolidation, sale or similar transaction, except where such assumption occurs by operation of law. If
the Company fails to cure a Good Reason event during the thirty (30) day cure period, the Executive must terminate his employment within sixty (60) days after the expiration of such thirty (30) day period if such termination is to be
treated as for Good Reason based on such uncured Good Reason event. 
  

 5 

 (2) “Cause” shall mean (i) the Executive’s willful and continued failure to
use his best efforts to perform his reasonably assigned duties (other than on account of Disability); (ii) the Executive is indicted for, convicted of, or enters a plea of guilty or nolo contendere to, (x) a felony or (y) a
misdemeanor involving moral turpitude; (iii) the Executive engages in (x) gross negligence causing material harm to the Parent, the Company, or its or their business or reputation, (y) willful and material misconduct, or
(z) willful and material breach of fiduciary duty; or (iv) the Executive willfully and materially breaches (x) the restrictive covenants described in Section 4 of this Employment Agreement or (y) any of the material written
policies listed on Exhibit B, as in effect on the Effective Date. 
 (3) “Disability” shall mean the
Executive is entitled to receive long-term disability benefits under the long-term disability plan of the Company in which Executive participates, or, if there is no such plan, the Executive’s inability, due to physical or mental incapacity, to
substantially perform his duties and responsibilities under this Employment Agreement for one hundred eighty (180) days out of any consecutive 365 day period. 
 (4) “In Anticipation Of” shall mean that the termination (i) was at the request of a third party that has taken steps reasonably calculated to effect a Change in Control or (ii) otherwise
arose in connection with a Change in Control that has been proposed, so long as in either case such Change in Control shall actually have occurred. 
 (f) Section 409A. If the Executive is a “specified employee” for purposes of Section 409A of the United States Internal Revenue Code of 1986, as amended, and the regulations thereunder
(“Section 409A”), any Severance Payment required to be made pursuant to Section 3.2 which is subject to Section 409A shall not be paid until one day after the date which is six (6) months from the date of termination.

 3.3. Exclusive Remedy. The foregoing payments upon termination of the Executive’s employment shall constitute the exclusive
severance payments due the Executive upon a termination of his employment under this Employment Agreement. 
 3.4. Resignation from All
Positions. Upon the termination of the Executive’s employment with the Company for any reason, the Executive shall be deemed to have resigned, as of the date of such termination, from all positions he then holds as an officer, director,
employee and member of the board (and any committee thereof) of the Company and any of its subsidiaries and affiliates. 
 3.5.
Cooperation. Following the termination of the Executive’s employment with the Company for any reason, the Executive agrees to reasonably cooperate with the Company upon reasonable request of the Board and to be reasonably available to
the Company with respect to matters arising out of the Executive’s services to the Company and its subsidiaries and affiliates. The Company shall reimburse the Executive for expenses reasonably incurred in connection with such matters as agreed
by the Executive and the Board and, to the extent the Executive is required to spend substantial time on such matters, the Company shall compensate the Executive at an hourly rate based on the Executive’s most recent Base Salary. 
  

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 Section 4. Unauthorized Disclosure; Non-Solicitation; Non-Competition; Proprietary
Rights. 
 4.1. Unauthorized Disclosure. The Executive agrees and understands that in the Executive’s position with the
Company, the Executive has been and will be exposed to and has and will receive non-public information relating to the confidential affairs of the Company and its affiliates, including, without limitation, technical information, intellectual
property, business and marketing plans, strategies, customer information, software, other information concerning the products, promotions, development, financing, expansion plans, business policies and practices of the Company and its affiliates and
other non-public forms of information considered by the Company and its affiliates to be confidential and in the nature of trade secrets (including, without limitation, ideas, research and development, know-how, technical data, customer and supplier
lists, pricing and cost information and business and marketing plans and proposals) (collectively, the “Confidential Information”). The Executive agrees that at all times during the Executive’s employment with the Company,
except as may be required for the Executive to discharge his duties as an officer of the Company, and thereafter, the Executive shall not disclose such Confidential Information, either directly or indirectly, to any individual, corporation,
partnership, limited liability company, association, trust or other entity or organization, including a government or political subdivision or an agency or instrumentality thereof (each a “Person”) without the prior written consent
of the Company and shall not use or attempt to use any such information in any manner other than in connection with his employment with the Company, unless required by law to disclose such information, in which case the Executive shall provide the
Company with written notice of such requirement as far in advance of such anticipated disclosure as possible. This confidentiality covenant has no temporal, geographical or territorial restriction. Upon termination of the Executive’s employment
with the Company, the Executive shall promptly supply to the Company (or destroy, at the Company’s option) all property, keys, notes, memoranda, writings, lists, files, reports, customer lists, correspondence, tapes, disks, cards, surveys,
maps, logs, machines, technical data and any other tangible product or document which has been produced by, received by or otherwise submitted to the Executive during or prior to the Executive’s employment with the Company, and any copies
thereof in his (or capable of being reduced to his) possession; provided that nothing in this Employment Agreement or elsewhere shall prevent the Executive from retaining and utilizing: documents relating to his personal benefits,
entitlements and obligations; documents relating to his personal tax obligations; his desk calendar, rolodex, and the like; and such other records and documents as may reasonably be approved by the Company. 
 4.2. Non-Competition. By and in consideration of the Company’s entering into this Employment Agreement and the payments to be made and
benefits to be provided by the Company hereunder, and in further consideration of the Executive’s exposure to the Confidential Information of the Company and its affiliates, the Executive agrees that the Executive shall not, during the
Executive’s employment with the Company (whether during the Term or thereafter) and for a period of twelve (12) months thereafter (the “Restriction Period”), directly or indirectly (other than in connection with carrying
out his responsibilities for the Company and its affiliates), own, manage, operate, join, control, be employed by, or participate 
  

 7 

 in the ownership, management, operation or control of, or be connected in any manner with, including, without limitation,
holding any position as a stockholder, director, officer, consultant, independent contractor, employee, partner, or investor in, any Restricted Enterprise (as defined below); provided, that in no event shall ownership of three percent
(3%) or less of the outstanding securities of any class of any issuer whose securities are registered under the Securities Exchange Act of 1934, as amended, standing alone, be prohibited by this Section 4.2, so long as the Executive does
not have, or exercise, any rights to manage or operate the business of such issuer other than rights as a stockholder thereof. For purposes of this paragraph, “Restricted Enterprise” shall mean any Person that is actively engaged in
any geographic area in which the Parent, the Company, or any of their respective subsidiaries (the “Company Group”) operates or markets in any business which is in material competition with the business of any member of the Company
Group (i) conducted during the preceding twelve (12) months (or following the Executive’s termination of employment, the twelve (12) months preceding the date of termination of the Executive’s employment with the Company) or
(ii) proposed to be conducted by any member of the Company Group in its business plan as in effect at that time (or following the Executive’s termination of employment, the business plan as in effect as of the date of termination of the
Executive’s employment with the Company). During the Restriction Period, upon request of the Company, the Executive shall notify the Company of the Executive’s then-current employment status. 
 4.3. Non-Solicitation of Employees. During the Restriction Period (other than in connection with carrying out his responsibilities for the
Company and its affiliates), the Executive shall not directly or indirectly contact, induce or solicit (or assist any Person to contact, induce or solicit) for employment any person who is, or within six (6) months prior to the date of such
solicitation was, an employee of any member of the Company Group. 
 4.4. Interference with Business Relationships. During the
Restriction Period (other than in connection with carrying out his responsibilities for the Company and its affiliates), the Executive shall not directly or indirectly contact, induce or solicit (or assist any Person to contact, induce or solicit)
any customer or client of any member of the Company Group to terminate its relationship or otherwise cease doing business in whole or in part with any member of the Company Group, or directly or indirectly interfere with (or assist any Person to
interfere with) any material relationship between any member of the Company Group and any of its or their customers or clients so as to cause harm to the Parent or its affiliates. 
 4.5. Extension of Restriction Period. The Restriction Period shall be tolled for any period during which the Executive is in breach of any of
Sections 4.2, 4.3 or 4.4 hereof. 
 4.6. Proprietary Rights. The Executive shall disclose promptly to the Company any and all
inventions, discoveries, and improvements (whether or not patentable or registrable under copyright or similar statutes), and all patentable or copyrightable works, initiated, conceived, discovered, reduced to practice, or made by him, either alone
or in conjunction with others, during the Executive’s employment with the Company and related to the business or activities of the Company and its affiliates (the “Developments”). Except to the extent any rights in any
Developments constitute a work made for hire under the U.S. Copyright Act, 17 U.S.C. § 101 et seq. that are owned ab initio by the Company and/or its applicable 
  

 8 

 affiliate, the Executive assigns all of his right, title and interest in all Developments (including all intellectual
property rights therein) to the Company or its nominee without further compensation, including all rights or benefits therefor, including, without limitation, the right to sue and recover for past and future infringement. The Executive acknowledges
that any rights in any developments constituting a work made for hire under the U.S. Copyright Act, 17 U.S.C § 101 et seq. are owned upon creation by the Company and/or its applicable affiliate as the Executive’s employer. Whenever
requested to do so by the Company, the Executive shall execute any and all applications, assignments or other instruments which the Company shall deem necessary to apply for and obtain trademarks, patents or copyrights of the United States or any
foreign country or otherwise protect the interests of the Company and its affiliates therein. These obligations shall continue beyond the end of the Executive’s employment with the Company with respect to inventions, discoveries, improvements
or copyrightable works initiated, conceived or made by the Executive while employed by the Company, and shall be binding upon the Executive’s employers, assigns, executors, administrators and other legal representatives. In connection with his
execution of this Employment Agreement, the Executive has informed the Company in writing of any interest in any inventions or intellectual property rights that he holds as of the date hereof. If the Company is unable for any reason, after
reasonable effort, to obtain the Executive’s signature on any document needed in connection with the actions described in this Section 4.6, the Executive hereby irrevocably designates and appoints the Company and its duly authorized
officers and agents as the Executive’s agent and attorney in fact to act for and in the Executive’s behalf to execute, verify and file any such documents and to do all other lawfully permitted acts to further the purposes of this
Section 4.6 with the same legal force and effect as if executed by the Executive. 
 4.7. Confidentiality of Agreement. The
Parties agree not to disclose the terms of this Employment Agreement to any Person (other than in connection with carrying out his responsibilities for the Company and its affiliates); provided that (i) the Executive may disclose this
Employment Agreement and/or any of its terms to the Executive’s immediate family, financial advisors and attorneys, so long as every such Person to whom the Executive makes such disclosure agrees, in writing, not to disclose the terms of this
Employment Agreement further and (ii) the Company may disclose the terms of this Employment Agreement in confidence to its creditors, professional advisors and attorneys, and otherwise when required by law, subpoena, court order or the like.

 4.8. Remedies. The Executive agrees that any breach of the terms of this Section 4 would result in irreparable injury and
damage to the Parent and the Company for which the Parent or the Company, as applicable, would have no adequate remedy at law; the Executive therefore also agrees that in the event of said breach or any threat of breach, the Parent or the Company
shall be entitled to an immediate injunction and restraining order, from any court with jurisdiction over the Executive and the matter, to prevent such breach and/or threatened breach and/or continued breach by the Executive and/or any and all
Persons acting for and/or with the Executive, without having to prove damages, in addition to any other remedies to which the Parent or the Company may be entitled at law or in equity, including, without limitation, damages and/or relief pursuant to
the last sentence of this Section 4.8. The terms of this Section 4.8 shall not prevent the Parent or the Company from pursuing any other available remedies for any breach or threatened breach hereof, including, without limitation, the
recovery 
  

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 of damages from the Executive. The Executive and the Company further agree that the provisions of the covenants contained
in this Section 4 are reasonable and necessary to protect the businesses of the Company and its affiliates because of the Executive’s access to Confidential Information and his material participation in the operation of such businesses. In
the event that the Executive willfully and materially breaches any of the covenants set forth in this Section 4, then in addition to any injunctive relief, the Executive will promptly return to the Company a pro-rata portion of (i) any
Severance Payment (or if the Severance Payment is being paid in installments, no further installments will be made) and (ii) any Pro-Rata Annual Bonus Payment that the Company has paid to the Executive, in each case equal to the product of
(x) the amount of the Severance Payment (which will be zero if the Severance Payment is being paid in installments) or Pro-Rata Annual Bonus Payment, as applicable, and (y) a fraction, the numerator of which is the number of days from the
date of such breach through the 365th day following the date the Executive’s employment hereunder terminates,
and the denominator of which is 365. 
 Section 5. Representations. 
 Each Party represents and warrants (i) that such Party is not subject to any contract, arrangement, agreement, policy or understanding, or to any
statute, governmental rule or regulation, that in any way limits such Party’s ability to enter into and fully perform such Party’s obligations under this Employment Agreement (including, for avoidance of doubt, the agreements of which
forms are appended hereto); (ii) that such Party is not otherwise unable to enter into and fully perform such Party’s obligations under this Employment Agreement (including the agreements of which forms are appended hereto); and
(iii) that, upon the execution and delivery of this Employment Agreement by both Parties, this Employment Agreement shall be such Party’s valid and binding obligation, enforceable against such Party in accordance with its terms, except to
the extent that enforceability may be limited by applicable bankruptcy, insolvency or similar laws affecting the enforcement of creditors’ rights generally. 
 Section 6. Non-Disparagement. 
 From and after the Effective Date and following
termination of the Executive’s employment with the Company, the Executive and the Company agree not to make any statement (other than statements made by the Executive in connection with carrying out his responsibilities for the Company and its
affiliates) that is intended to become public, or that should reasonably be expected to become public, and that criticizes, ridicules, disparages or is otherwise derogatory of the other Party or, in the case of statements about the Company, any of
its subsidiaries, affiliates, employees, officers, directors or stockholders. For such purposes, statements by “the Company” shall mean only (i) the Company by press release or other formally released announcement and (ii) the
executive officers and directors thereof and not any other employee. 
 Section 7. Taxes. 
 7.1. All amounts paid to the Executive under this Employment Agreement during or following the Term shall be subject to withholding and other employment
taxes imposed by applicable law. 
  

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 7.2. If (i) the aggregate of all amounts and benefits due to the Executive under this Employment
Agreement or under any other Company Arrangement would, if received by the Executive in full and valued under Section 280G of the Internal Revenue Code of 1986, as from time to time amended (the “Code”), constitute
“parachute payments” as defined in and under Section 280G of the Code (collectively, “280G Benefits”), and if (ii) such aggregate would, if reduced by all federal, state and local taxes applicable thereto,
including the excise tax imposed pursuant to Section 4999 of the Code, be less than the amount the Executive would receive, after all taxes, if the Executive received aggregate 280G Benefits equal (as valued under Section 280G of the Code)
to only three times the Executive’s “base amount” as defined in and under Section 280G of the Code, less $1.00, then (iii) such 280G Benefits payable in cash, and/or such benefits under performance-vesting options, if any,
in either case as the Executive shall select shall (to the extent that the reduction of such 280G Benefits can achieve the intended result) be reduced or eliminated to the extent necessary so that the aggregate 280G Benefits received by the
Executive will not constitute parachute payments. The determinations with respect to this Section 7.2 shall be made by an independent auditor (the “Auditor”) paid by the Company. The Auditor shall be the Company’s regular
independent auditor unless the Executive reasonably objects to the use of that firm, in which event the Auditor will be a nationally recognized United States public accounting firm chosen by the Parties. 
 7.3. It is possible that after the determinations and selections made pursuant to Section 7.2 the Executive will receive 280G Benefits that are, in
the aggregate, either more or less than the amount provided under Section 7.2 (hereafter referred to as an “Excess Payment” or “Underpayment,” respectively). If it is established, pursuant to a final
determination of a court or an Internal Revenue Service proceeding that has been finally and conclusively resolved, that an Excess Payment has been made, then the Executive shall promptly pay an amount equal to the Excess Payment to the Company,
together with interest on such amount at the applicable federal rate (as defined in and under Section 1274(d) of the Code) from the date of the Executive’s receipt of such Excess Payment until the date of such payment. In the event that it
is determined (x) by arbitration pursuant to Section 8.6, (y) by a court or (z) by the Auditor upon request by a Party, that an Underpayment has occurred, the Company shall promptly pay an amount equal to the Underpayment to the
Executive, together with interest on such amount at the applicable federal rate from the date such amount would have been paid to the Executive had the provisions of Section 7.2 not been applied until the date of such payment. 
 7.4. Notwithstanding the foregoing, if it appears that any amount or benefit that is to be paid to the Executive under this Employment Agreement or any
other plan, program, agreement, or arrangement of the Company or any of its affiliates may constitute a “parachute payment” under Section 280G(b)(2) of the Code, the Company shall use its best reasonable efforts to obtain shareholder
approval of such payments for purposes of Section 280G(b)(5) of the Code. 
 Section 8. Miscellaneous. 
 8.1. Indemnification. The Company shall indemnify the Executive to the fullest extent provided under the Company’s limited liability company
agreement and By-Laws, on the same terms and conditions as such indemnification is generally provided to the Company’s officers and directors, in the event that he was or is a party or is threatened to be 
  

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 made a party to any threatened, pending or completed action, suit or proceeding, by reason of the fact that the Executive
is or was a director, officer, employee or agent of the Company or any of its affiliates; provided, however, that the Executive shall not be entitled to indemnification under this Section 8.1 relating to claims, actions, suits or
proceedings arising from his breach of this Employment Agreement. The Executive shall be covered under any directors and officers insurance coverage maintained by the Company with respect to its executive officers for periods following the Effective
Date. 
 8.2. Amendments and Waivers. This Employment Agreement and any of the provisions hereof may be amended, waived
(either generally or in a particular instance and either retroactively or prospectively), modified or supplemented, in whole or in part, only by written agreement signed by the Parties that specifically identifies the provisions affected;
provided, that the observance of any provision of this Employment Agreement may be waived, but only in a writing specifically identifying the provision to be so waived, by the Party that will lose the benefit of such provision as a result of
such waiver. The waiver by either Party of a breach of any provision of this Employment Agreement shall not operate or be construed as a further or continuing waiver of such breach or as a waiver of any other or subsequent breach, except as
otherwise explicitly provided for in such waiver. Except as otherwise expressly provided herein, no failure on the part of either Party to exercise, and no delay in exercising, any right, power or remedy hereunder, or otherwise available in respect
hereof at law or in equity, shall operate as a waiver thereof, nor shall any single or partial exercise of such right, power or remedy by such Party preclude any other or further exercise thereof or the exercise of any other right, power or remedy.

 8.3. Assignment. No rights or obligations of the Company under this Employment Agreement may be assigned or transferred by the
Company except that such rights and obligations may be assigned or transferred pursuant to a merger or consolidation, or the sale or liquidation of all or substantially all of the business and assets of the Company, provided that the assignee or
transferee is the successor to all or substantially all of the business and assets of the Company and such assignee or transferee assumes the liabilities, obligations and duties of the Company, as contained in this Employment Agreement, either
contractually or as a matter of law. In the event of any merger, consolidation, other combination, sale of business and assets, or liquidation as described in the preceding sentence, the Company shall use its best reasonable efforts to cause such
assignee or transferee to promptly and expressly assume the liabilities, obligations and duties of the Company hereunder. The duties and covenants of Executive under this Employment Agreement, being personal, may not be assigned or delegated. All
amounts that become payable to the Executive hereunder shall, in the event of the Executive’s death, be paid to his beneficiary or beneficiaries designated hereunder. The Executive shall be entitled, to the extent permitted under applicable
law, to select and change a beneficiary or beneficiaries to receive any compensation or benefit hereunder following the Executive’s death by giving written notice thereof to the Company. 
 8.4. Notices. All notices, requests, demands, claims and other communications provided for under the terms of this Employment Agreement shall be
in writing. Any notice, request, demand, claim or other communication hereunder shall be sent by (i) personal delivery (including receipted courier service) or overnight delivery service, (ii) facsimile during normal business hours, with
confirmation of receipt, to the number indicated, 
  

 12 

 (iii) reputable commercial overnight delivery service courier or (iv) registered or certified mail, return
receipt requested, postage prepaid and addressed to the intended recipient as set forth below: 
  

			
	If to the Company:	 	c/o Goldman Sachs Capital Partners
		 	85 Broad Street
		 	New York, NY 10004
		 	Attention: Adrian Jones
		 	Facsimile: 212-357-5505
		
		 	c/o Providence Equity Partners
		 	50 Kennedy Plaza, 18th Floor
		 	Providence, RI 02903
		 	Attention: Peter Wilde
		 	Facsimile: 401-751-1790
		
		 	Education Management LLC
		 	210 Sixth Avenue, 33rd Floor
		 	Pittsburgh, PA 15222
		 	Attention: General Counsel
		
	with a copy to:	 	Fried, Frank, Harris, Shriver & Jacobson, LLP
		 	One New York Plaza
		 	New York, NY 10004
		 	Attention: Donald P. Carleen, Esq.
		 	Facsimile: 212-859-4000
		
	If to the Executive:	 	Joseph A. Charlson, at his principal office at the Company (during the Term), and at all times to his principal residence as reflected in the records of the Company.

 All such notices, requests, consents and other communications shall be deemed to have been given when received.
Either Party may change the facsimile numbers or addresses to which notices, requests, demands, claims and other communications to such Party are to be delivered by giving the other Party notice in the manner then set forth. 
 8.5. Governing Law. Except as otherwise required by federal law, this Employment Agreement shall be construed and enforced in accordance with,
and the rights and obligations of the Parties shall be governed by, the laws of the State of New York, without giving effect to the conflicts of law principles thereof. 
 8.6. Arbitration. Other than with respect to provisions under Section 4 of this Employment Agreement, in the event of any dispute, controversy or claim between the Parties that arises out of or relates to
this Employment Agreement, the Executive’s employment with the Company, or any termination of such employment, then either Party may, by written notice to the other, require that such dispute, controversy or claim be submitted to arbitration in
accordance with the Commercial Arbitration Rules of the American Arbitration Association (the 
  

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 “AAA”). The arbitrator or arbitrators shall be selected by agreement of the Parties or, if they do not
agree on an arbitrator or arbitrators within thirty (30) days after one Party has notified the other of his or its desire to have the matter settled by arbitration, then the arbitrator or arbitrators shall be selected by the AAA in New York,
New York. The determination reached in such arbitration shall be final and binding on the Parties without any right of appeal or further dispute, except as otherwise required by applicable law. Unless otherwise agreed by the Parties, any such
arbitration shall take place in New York, New York. 
 8.7. Severability. Whenever possible, each provision or portion of any
provision of this Employment Agreement, including those contained in Section 4 hereof, will be interpreted in such manner as to be effective and valid under applicable law but the invalidity or unenforceability of any provision or portion of
any provision of this Employment Agreement in any jurisdiction shall not affect the validity or enforceability of the remainder of this Employment Agreement in that jurisdiction or the validity or enforceability of this Employment Agreement,
including that provision or portion of any provision, in any other jurisdiction. In addition, should a court or arbitrator determine that any provision or portion of any provision of this Employment Agreement, including those contained in
Section 4 hereof, is not reasonable or valid, either in period of time, geographical area, or otherwise, the Parties agree that such provision should be interpreted and enforced to the maximum extent which such court or arbitrator deems
reasonable or valid. 
 8.8. Entire Agreement. From and after the date hereof, this Employment Agreement, and the other
agreements being executed in connection herewith, constitute the entire agreement between the Parties, and supersede all prior representations, agreements and understandings (including any prior course of dealings), both written and oral, between
the Parties with respect to the subject matter hereof, including, without limitation, the Original Employment Agreement, except with respect to rights accrued as of the Effective Date (e.g., unpaid salary, unreimbursed business expenses, etc.). The
terms of this Employment Agreement, and of the agreements of which forms are attached hereto, shall control over those of any inconsistent Company Arrangements with respect to the subject matter hereof. 
 8.9. Counterparts. This Employment Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all
such counterparts shall together constitute one and the same instrument. Signatures delivered by facsimile shall be effective for all purposes. 
 8.10. Binding Effect. This Employment Agreement shall inure to the benefit of, and be binding on, the successors and assigns of each of the Parties, to the extent provided herein. In the event of the Executive’s death or a
judicial determination of his incompetence, references in this Employment Agreement to the Executive shall be deemed, as appropriate, to be references to his estate, beneficiaries, or legal representatives. 
 8.11. General Interpretive Principles. The name assigned this Employment Agreement and headings of the sections, paragraphs, subparagraphs,
clauses and subclauses of this Employment Agreement are for convenience of reference only and shall not in any way affect the meaning or interpretation of any of the provisions hereof. Words of inclusion shall not be construed as terms of limitation
herein, so that references to “include,” “includes” 
  

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 and “including” shall not be limiting and shall be regarded as references to non-exclusive and
non-characterizing illustrations. Any reference to a Section of the Code shall be deemed to include any successor to such Section. 
 8.12.
Mitigation/Offset. The Executive shall be under no obligation to seek other employment or to otherwise mitigate the obligations of the Company under this Employment Agreement, and there shall be no offset against amounts or benefits due
Executive under this Employment Agreement or otherwise on account of any claim (other than any preexisting debts then due in accordance with their terms) the Company or its affiliates may have against him or any remuneration or other benefit earned
or received by Executive after such termination. 
 IN WITNESS WHEREOF, the Parties have executed this Employment Agreement as of the date
first written above. 
  

							
		 		 	EDUCATION MANAGEMENT LLC
				
		 		 	By:	 	 /s/ Edward H. West

	 /s/ Joseph A. Charlson
	 		 	Name:	 	Edward H. West
	JOSEPH A. CHARLSON, Individually	 		 	Title:	 	Chief Financial Officer

  

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