AMENDMENT TO EMPLOYMENT AGREEMENT --------------------------------- This Amendment (this "Amendment") is entered into as of June 1, 2001, by and between AnnTaylor Stores Corporation (the "Company") and Barry Erdos (the "Executive"), and amends the Employment Agreement, dated as of March 7, 2001, between the Company and the Executive (the "Original Agreement"). For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the parties, the Company and the Executive agree as follows: 1. All capitalized terms used and not defined herein shall have the meanings ascribed to them in the Original Agreement. 2. Section 6(e)(ii) of the Original Agreement is hereby amended to read as follows: (ii) (A) unless clause (B) below applies, then following the Date of Termination and for the longer of twelve (12) months thereafter or the balance of the Term, the Company shall pay to the Executive monthly an amount, ("Severance Payments") equal to the quotient of the Executive's annual base salary at the rate in effect as of the Date of Termination (the "Base Salary"), divided by the number twelve (12) (minus any amounts payable to the Executive during any such month as a disability benefit under a Company paid plan), or (B) in the event the Date of Termination occurs on or following a Change in Control, then, within five (5) days after the Date of Termination, the Company shall pay to the Executive in a lump sum an amount equal to the product of (X) the sum of the Executive's Base Salary and the average of the total bonuses earned by the Executive, including bonuses paid under the Company's Management Performance Compensation Plan and the Company's Long Term Incentive Cash Compensation Plan, in the three fiscal years of the Company ended immediately prior to the Date of Termination (or, if higher, in the three fiscal years of the Company ended immediately prior to the Change in Control) multiplied by (Y) two and one-half (2-1/2). For purposes of this subsection (ii): (I) if the Date of Termination occurs prior to the occurrence of a Change in Control but during the pendency of a Potential Change in Control (as hereinafter defined), such Date of Termination shall be deemed to have occurred following a Change in Control and (II) a ================================================================================ "Potential Change in Control" shall be deemed to have occurred if the event set forth in any one of the following clauses shall have occurred: 3. Section 6(e)(iv) of the Original Agreement is hereby amended to read as follows: (iv) Executive shall continue to be provided for the duration of the Severance Period with the same medical and life insurance coverage as existed immediately prior to the Notice of Termination; provided, -------- however, that benefits otherwise receivable by ------- the Executive pursuant to this Section 6(e)(iv) shall be reduced to the extent that benefits of the same type are received by or made available to the Executive during the Severance Period (and any such benefits received by or made available to the Executive shall be reported to the Company by the Executive). For the purpose of medical and life insurance coverage referred to in this subparagraph, the term "Severance Period" shall include the period following the Date of Termination and for the longer of twelve (12) months thereafter or the balance of the Term; 4. From and after the date hereof, the term "Agreement" as used in the Original Agreement, shall mean the Original Agreement as amended by this Amendment; and the Original Agreement, as so amended, shall continue in full force and effect. 5. The remaining terms of the Original Agreement are hereby made a part of, and are incorporated by this reference, into this Amendment. In WITNESS WHEREOF, the parties have executed this Amendment as of the date first written above. ANN TAYLOR STORES CORPORATION By: /s/J. Patrick Spainhour /s/ Barry Erdos ------------------------------- ------------------------ BARRY ERDOS
Employment Agreement - AnnTaylor Stores Corp. and Barry Erdos
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