Severance Agreement - J Crew Operating Corp. and Scott Formby
March 14, 2000
Scott Formby
15 Barrow Road
New York, NY 10014
Dear Scott,
This letter confirms our severance agreement. We are extending this
consideration to better align your interests and those of the Company.
If the Company terminates your employment for any reason other than death
disability, or "cause" (cause shall include breach of this agreement,
dishonesty, theft, embezzlement, material dereliction in the performance of your
duties, insobriety or drug use while performing duties, and conviction of a
crime other than traffic violations or minor misdemeanors), the Company will
continue your base salary and cover your Cobra expenses for a period of 12
months (as per the Company's standard payroll schedule); provided that you are
in compliance with the restrictive covenants provided in this letter and that
you execute a general release and waiver, waiving all claims you may have
against the Company. During such period, salary continuation and Cobra
reimbursements will be paid provided that you exercise good faith efforts to
promptly obtain new employment. The Company shall have the right to terminate
salary continuation payments and Cobra reimbursements when you obtain new
employment and to offset your base pay continuation by the amount of
compensation that you earn during such twelve-month period from such new
employment. If, however, you resign, become disabled, die or are terminated for
cause, no salary and Cobra reimbursement will be paid. Your relationship with
the Company is one of employment at will and the payments described in this
paragraph are the only payments to which you will be entitled as a result of the
termination of your employment.
As consideration for the Company entering into this agreement and agreeing to
make the salary continuation payments described above, you agree that during (1)
your employment by the Company and for a period of twelve (12) months after the
later of the date on which any employment or consulting relationship is
terminated or the date on which the last salary, salary continuation, bonus, or
other payment is made, you shall not directly or indirectly solicit, hire, or
attempt to solicit or influence any employee of the Company to leave the
Company's employ or otherwise perform services on behalf of any person or
entity; and (2) while employed and thereafter, you will hold in strict
confidence any proprietary or confidential information or material related to
the Company. Confidential information includes but is not limited to customer
lists, trade practices, marketing techniques, pricing structures and practices,
research, trade secrets, processes, systems, programs, methods, software,
merchandising, planning, inventory and financial control, store design,
staffing, etc. You also agree that breach of the confidentiality or employee
non-solicitation provisions previously noted would cause the Company to suffer
irreparable harm for which money damages would not be an adequate remedy and
therefore, the Company would be entitled to temporary and permanent injunctive
relief in any court of competent jurisdiction (without the need to post any
bond).
This agreement shall inure to the benefit of and be an obligation of the
Company's assigns and successors; however you may not assign your duties and
obligations hereunder to any other party.
You agree not to disclose any information regarding the existence or substance
of this agreement, except to an attorney with whom you choose to consult
regarding your consideration of this agreement or to your spouse or tax advisor;
provided that you notify such individuals that they are strictly bound by the
non-disclosure restrictions. Further, you agree not to directly or indirectly,
disparage or defame the Company or any director, officer, or employee of the
Company.
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No provisions of this agreement may be amended or waived unless such amendment
or waiver is specifically agreed to in writing and signed by you and an officer
of the Company duly authorized to execute such amendment.
This agreement and all amendments thereof shall, in all respects, be governed by
and construed and enforced in accordance with the internal laws (without regard
to principles of conflicts of law) of the state of New York. Each party hereto
hereby agrees to and accepts the exclusive jurisdiction of any court in New York
County or the U.S. District Court for the Southern District of New York in that
County in respect of any action or proceeding relating to the subject matter
hereof, expressly waiving any defense relating to jurisdiction or forum non
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conveniens, and consents to service of process by U.S. certified or registered
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mail in any action or proceeding with respect to this agreement.
If the terms of this amended agreement meet with your approval, please sign and
return one copy to me.
Sincerely,
/s/ MARK SARVARY
Mark Sarvary
CEO
Acknowledged and Accepted:
/s/ SCOTT FORMBY 3/20/00
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Scott Formby Date