Employment Agreement – J. Crew

EMPLOYMENT AGREEMENT

EMPLOYMENT AGREEMENT, dated as of the 7^th day of March, 2011 (this
“Agreement“), among Chinos Holdings, Inc., a Delaware corporation
(“Parent“) and its subsidiary J. Crew Group, Inc. (collectively with
Parent, the “Company“), with offices at 770 Broadway, New York, New York
10003 and Millard S. Drexler (the “Executive“).

1. Prior Agreement; Purpose and Effective Date: Term; Position and
Responsibilities: Company Headquarters and Executive Work Location.

(a) Prior Agreement. The Executive is currently party to that certain
Third Amended and Restated Employment Agreement dated as of October 20, 2005
among J. Crew Group, Inc., J. Crew Operating Corp. and the Executive (the
“Prior Agreement“). Upon the effectiveness of this Agreement, except as
otherwise expressly provided in Section 14(c) of this Agreement, the Prior
Agreement shall terminate and be of no further force and effect.

(b) Purpose and Effective Date. This Agreement shall be effective as
of the Closing Date (as defined in that certain Agreement and Plan of Merger
between Parent, Chinos Acquisition Corporation and J. Crew Group, Inc. dated as
of November 23, 2010, as amended on January 18, 2011 (the “Merger
Agreement“)). The Closing Date is referred to in this Agreement as the
“Effective Date”. This Agreement is expressly conditioned upon the occurrence of
the Closing (as defined in the Merger Agreement); if the Closing does not occur,
this Agreement shall be void and of no force or effect.

(c) Term. Subject to earlier termination as hereinafter provided, the
Executive153s employment hereunder shall be for a term of four (4) years,
commencing on the Effective Date. This Agreement shall thereafter be deemed to
be automatically extended, upon the same terms and conditions, for successive
periods of one year each, unless either party, at least ninety (90) days prior
to the expiration of the term or any extended term, gives written notice to the
other of its intention not to renew such term (the term of this Agreement,
including any extensions thereof, being the “Term of Employment“).

(d) Position and Responsibilities. During the Term of Employment, the
Company shall continue to engage the Executive on the terms, and subject to the
conditions of this Agreement, and agrees to cause the Executive to be elected as
Chairman of Board of Directors of Parent (the “Board“) and to employ the
Executive as the Company153s Chief Executive Officer and in such other position or
positions with the Company as the Board and the Executive may agree from time to
time. During the Term of Employment, the Executive shall perform the duties and
responsibilities that are customarily assigned to individuals serving in such
position or positions and such other duties and responsibilities commensurate
with such positions as the Board may reasonably specify from time to time,
including but not limited to recruitment and retention of key personnel of the
Company, hiring and terminating senior executives of the Company, establishment
and execution of brand vision, and direct responsibility for assembling and
guiding product, merchandising and marketing functions, and oversight of and
accountability for the financial and strategic performance of the Company and
all of its subsidiaries, affiliates and business units. The Executive shall
report solely to the Board.

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(e) During the Term of Employment, excluding any periods of vacation to which
the Executive is entitled and periods of illness or disability, (i) the
Executive shall devote substantially all of his working time and attention to
the performance of his duties and responsibilities hereunder, and (ii) the
Executive may not, without the prior written consent of the Company, operate,
participate in the management, operations or control of, or act as an employee,
officer, consultant, agent or representative of, any type of business or service
(other than as Chairman of the Board and Chief Executive Officer of the
Company), provided that it shall not be a violation of the foregoing for the
Executive to (A) act or serve as a director, trustee, committee member or
principal of any type of business or civic or charitable organization, and (B)
manage his personal, financial and legal affairs (provided that the activities
described in clauses (A) and (B) do not interfere with the performance of the
Executive153s duties and responsibilities to the Company as provided hereunder).

(f) Company Headquarters; Principal Work Location. Unless otherwise
mutually agreed upon, the Company153s headquarters shall be the New York
metropolitan area. The Executive shall travel as reasonably required to carry
out his duties and obligations hereunder.

2. Compensation; Expenses; Benefits and Perquisites. As compensation
for the performance of duties and responsibilities hereunder, during the Term of
Employment, the Executive shall be entitled to the following compensation from
the Company:

(a) Base Salary. The Company shall pay the Executive, not less than
once a month pursuant to the Company153s normal and customary payroll procedures,
a base salary at the rate of $200,000 per annum (the “Base Salary“). The
Board or a committee thereof shall annually reevaluate the Executive153s Base
Salary and bonus opportunities for increase based on the Company153s performance
and the Executive153s contributions to the Company for the preceding fiscal year.

(b) Annual Bonus. In addition to the Base Salary, the Executive shall
have an opportunity to earn an annual bonus (the “Bonus“) in respect of
each fiscal year in accordance with the terms of the annual bonus plan
established by the Company for its executives generally, as then existing for
such fiscal year, based on the achievement of performance objectives as may be
established from time to time by the Board or a committee thereof; provided,
however, that, except as otherwise provided herein, the Bonus for any fiscal
year shall be payable to the Executive only if the Executive is employed by the
Company on the date on which such Bonus is paid and in no event later than the
15th day of the third month following the close of the fiscal year to which the
Bonus relates. The Executive153s target annual bonus opportunity shall be
$1,200,000 (“Target Bonus“), based on the achievement of performance
objectives as determined by the Board or a committee thereof. The actual Bonus
payable may be greater or lesser than the Target Bonus and shall be determined
by the Board or a committee thereof, in its sole discretion, based on such
factors as it shall determine.

(c) Business Expenses. The Company shall promptly reimburse the
Executive for all reasonable business expenses incurred by the Executive in
connection with the performance of the Executive153s employment hereunder,
including without limitation airfare, upon the presentation of statements of
such expenses in accordance with the Company153s policies and procedures now in
force or as such policies and procedures may be modified with respect to all

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senior executive officers of the Company; provided that such reimbursement
shall occur no later than the last day of the calendar year following the
calendar year in which Executive incurred the reimbursable expense.

(d) Employee Benefits. The Executive shall be eligible to participate
in the employee benefit plans and programs maintained by the Company from time
to time and generally available to senior executives of the Company, including,
to the extent maintained by the Company, medical, dental, accidental and
disability insurance plans and profit sharing, pension, retirement, deferred
compensation and savings plans, to the extent permitted by and in accordance
with the terms and conditions of the applicable plan and applicable law in
effect from time to time. In addition, the Company shall pay or reimburse the
Executive for an amount of up to $50,000 per year for the cost of maintaining
the benefits provided under one or more concierge medical services arrangements
selected by the Executive from time to time.

(e) Vacation. The Executive shall be entitled to twenty-five days of
paid time off per annum pursuant to the Company153s Paid Time Off Policy, without
carryover accumulation, which may be taken at the Executive153s sole discretion.

3. Grant of Stock Options; Stockholders153 Agreement.

(a) Stock Option Grant. In accordance with the Chinos Holdings, Inc.
2011 Equity Incentive Plan (as amended from time to time, the “Plan“) to
be established in connection with the Closing, the Executive will be granted as
soon as practicable following the Closing (but in no event more than thirty (30)
days following the Closing) options to purchase that number of shares of Class A
common stock of Parent equal to thirty five percent (35%) of the shares of Class
A common stock available for issuance under the Plan, with an exercise price
equal to the fair market value of a share of Class A common stock on the date of
grant (the “Option“). The Option will be subject to the Plan, the terms
of the award agreement evidencing such Option, the terms of the Stockholders
Agreements (as defined below) and other restrictions and limitations generally
applicable to common stock of Parent or equity awards held by Company executives
or otherwise imposed by law.

(b) Stockholders153 Agreement. Unless otherwise specified in the
applicable Stockholders Agreement, all shares of Parent common stock and all
other securities issued in connection with this Agreement or acquired by the
Executive or any entity controlled by the Executive under this Agreement or
otherwise shall be subject to the Principal Investors Stockholders153 Agreement
dated as of March 7, 2011 among the Company, Chinos Acquisition Corporation and
certain stockholders, as amended or modified from time to time (the
“Principal Investors Stockholders Agreement“), and the Management
Stockholders Agreement dated as of March 7, 2011 among the Company, certain
stockholders and certain affiliates (the “Management Stockholders
Agreement” and together with the Principal Investors Stockholders Agreement,
the “Stockholders Agreements“).

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4.Termination of Employment.

The Term of Employment may be terminated prior to March 7, 2015 or any
extension of the term established pursuant to Section 1(b) hereof, upon the
earliest to occur of the following events (at which time the Executive153s
employment provided hereunder shall be terminated):

(a) Death. The Executive153s employment hereunder shall terminate upon
the Executive153s death.

(b) Disability. The Company shall be entitled to terminate the
Executive153s employment hereunder by reason of the Executive153s
“Disability” if, as a result of the Executive153s incapacity due to
physical or mental illness, the Executive shall have been unable to perform his
duties hereunder for a period of six (6) consecutive months or for 180 days
within any 365-day period, and within thirty (30) days after written Notice of
Termination (as defined below) for Disability is given following such 6-month or
180-day period, as the case may be, the Executive shall not have returned to the
performance of his duties in accordance with this Agreement.

(c) Cause. The Company may terminate the Executive153s employment
hereunder for Cause. For purposes of this Agreement, the term “Cause”
shall mean: (i) the willful and continued failure of the Executive substantially
to perform the Executive153s duties under this Agreement (other than as a result
of physical or mental illness or injury), after the Board delivers to the
Executive a written demand for substantial performance that specifically
identifies the manner in which the Board believes that the Executive has not
substantially performed the Executive153s duties; (ii) the willful engaging by the
Executive in illegal conduct or gross misconduct which is materially and
demonstrably injurious to the Company; and (iii) a breach of any of the
obligations under Sections 8, 9 and 10 or any of the representations and
covenants contained in Section 12 hereof. Any act or failure to act that is
based upon authority given pursuant to a resolution duly adopted by the Board,
or the advice of counsel for the Company, shall not constitute Cause. Cause
shall not exist unless and until the Company has delivered to the Executive a
copy of a resolution duly adopted by a majority of the Board at a meeting of the
Board called and held for such purpose (after reasonable but in no event less
than thirty (30) days153 notice to the Executive and an opportunity for the
Executive, together with his counsel, to be heard before the Board), finding
that, in the good faith opinion of the Board, the Executive was guilty of the
conduct set forth above and specifying the particulars thereof in detail. This
Section 4(c) shall not prevent the Executive from challenging in any court of
competent jurisdiction the Board153s determination that Cause exists or that the
Executive has failed to cure any act (or failure to act) that purportedly formed
the basis for the Board153s determination.

(d) Good Reason. The Executive may terminate his employment hereunder
for “Good Reason,” for any of the following reasons enumerated in this
Section 4(d): (i) the diminution of, or appointment of anyone other than the
Executive to serve in or handle, the Executive153s positions, authority, duties or
responsibilities from the positions, authority, duties or responsibilities set
forth in Section 1 of this Agreement without the Executive153s consent; (ii) any
purported termination of the Term of Employment by the Company for a reason or
in a manner not expressly permitted by this Agreement; (iii) relocation of the
Executive153s principal work location to more than fifty (50) miles from the
Executive153s principal work location, (iv) any failure by the Company to comply
with Sections 2 or 3 of this Agreement, or any other material

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breach of this Agreement, including without limitation Section 14(e)(ii), or
(v) the removal of the Executive from his position as a member of the Board.
Termination pursuant to this Section 4(d) shall not be effective until the
following conditions are satisfied: (x) the Executive delivers to the Board a
written notice specifically identifying the conduct of the Company which he
believes constitutes a reason enumerated in this Section 4(d) within a period
not to exceed ninety (90) days of the initial existence of such conduct, (y) the
Executive provides the Board at least thirty (30) days to remedy such conduct
and (z) the Executive then provides an additional Notice of Termination within
thirty (30) days of after the cure period referred to in subclause (y) has
expired in the event the Company does not cure such conduct.

(e) Without Cause. The Company may terminate the Executive153s
employment hereunder without Cause.

(f) Without Good Reason. The Executive may terminate his employment
hereunder without Good Reason, provided that the Executive provides the Company
with notice of intent to terminate without Good Reason at least three (3) months
in advance of the Date of Termination. The Executive and the Company shall
mutually agree on the time, method and content of any public announcement
regarding the termination of Executive153s employment hereunder and neither the
Executive nor the Company shall make any public statements which are
inconsistent with the information mutually agreed upon by the Company and the
Executive and the parties hereto shall cooperate with each other in refuting any
public statements made by other persons, which are inconsistent with the
information mutually agreed upon between the Executive and Company as described
above.

5. Termination Procedure.

(a) Notice of Termination. Any termination of the Executive153s
employment hereunder by the Company or by the Executive during the Term of
Employment (other than termination pursuant to Section 4(a)) shall be
communicated by written notice of termination (“Notice of Termination“)
to the other party hereto in accordance with Section 14(a).

(b) Date of Termination. “Date of Termination” shall mean (i)
if the Executive153s employment is terminated by reason of the Executive153s death,
the date of his death, (ii) if the Executive153s employment is terminated pursuant
to Section 4(b), thirty (30) days after Notice of Termination (provided that the
Executive shall not have returned to the substantial performance of his duties
in accordance with this Agreement during such thirty (30) day period), (iii) if
the Executive153s employment is terminated pursuant to Section 4(f), a date
specified in the Notice of Termination which is at least three (3) months from
the date of such notice as specified in such Section 4(f); and (iv) if the
Executive153s employment is terminated for any other reason, the date on which a
Notice of Termination is given or any later date (within thirty (30) days (or
any alternative time period agreed upon by the parties) after the giving of such
notice) set forth in such Notice of Termination.

6. Termination Payments.

(a) Without Cause or for Good Reason. In the event of the termination
of the Executive153s employment during the Term of Employment by the Company
without Cause or by

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the Executive for Good Reason, the Executive shall be entitled to (i) a
payment, within ten (10) days following the Date of Termination, of Base Salary
through the Date of Termination (to the extent not theretofore paid), for any
accrued vacation pay, and any unreimbursed expenses under Sections 2(c) and (d)
hereof, (collectively, the “Accrued Obligations“) and (ii) subject to the
effectiveness, within sixty (60) days following the Date of Termination, of the
Executive153s execution of a general release and waiver of all claims against the
Company, its affiliates and their respective officers and directors related to
the Executive153s employment, in the form annexed as Exhibit A (but excluding (1)
his rights to receive the benefits provided under this Agreement or under any
and all equity agreements entered into in connection herewith and, to the extent
then in effect, the Stockholders153 Agreement, (2) his rights with respect to
related investments in the Company and (3) his rights to be indemnified in
accordance with the provisions of the Company153s charter and bylaws and to
receive any benefits to which he is entitled under the Company153s directors153 and
officers153 liability insurance policies, all in accordance with Section 7 hereof
(collectively, the “Excluded Obligations“)), and subject to the
Executive153s compliance with the terms and conditions contained in this
Agreement, (A) a payment equal to one year153s Base Salary and Target Bonus,
one-half of such payment will be paid on the first business day that is six (6)
months and one day following the Date of Termination and the remaining one-half
of such payment will be paid in six (6) equal monthly installments commencing on
the first business day of the seventh calendar month following the Date of
Termination; (B) a payment equal to the product of (x) the Bonus, if any, that
the Executive would have earned based on the actual achievement of applicable
performance objectives in the performance year in which the Date of Termination
occurs had Executive153s employment with the Company not been terminated, and (y)
a fraction, the numerator of which is the number of days from the beginning of
such year through the Date of Termination, and the denominator of which is 365,
which will be paid when annual bonuses are generally paid to employees of the
Company, but in no event later than the date that is 2.5 months following the
end of the year in which the Date of Termination occurs; and (C) the immediate
vesting of all equity awards previously granted to the Executive, including,
without limitation, the Option, to the extent outstanding as of the Date of
Termination. The Company shall have no additional obligations under this
Agreement, but the Executive shall retain all rights with respect to the
Excluded Obligations in accordance with the terms of the agreements under which
such obligations are provided.

In no event shall the Executive be obligated to seek other employment or take
any other action by way of mitigation of the amounts payable to the Executive
under any of the provisions of this Agreement, and such amounts shall not be
reduced, regardless of whether the Executive obtains other employment or is
engaged to perform other services.

(b) Cause. Death, Disability, Without Good Reason, Failure to Renew.
If the Executive153s employment is terminated during the Term of Employment by the
Company for Cause, by the Executive without Good Reason, by either party serving
a notice not to renew pursuant to Section 1(b) herein, or as a result of the
Executive153s death or Disability, the Company shall pay the Accrued Obligations
to the Executive within thirty (30) days following the Date of Termination. The
Company shall have no additional obligations under this Agreement, but the
Executive shall retain all rights with respect to the Excluded Obligations in
accordance with the terms of the agreements under which such obligations are
provided.

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(c) Other Rights and Benefits. In the event of the termination of the
Term of Employment for any reason, the Executive shall retain his rights under
all employee benefit plans, including the Equity Plan, in accordance with the
terms and conditions of such plans, provided that in no event will the Executive
be entitled to any payments in the nature of severance or termination payments
except as specifically provided herein.

7. Indemnification.

The Company agrees that if the Executive is made a party or threatened to be
made a party to any action, suit or proceeding, whether civil, criminal,
administrative or investigative (a “Proceeding“), other than any
Proceeding initiated by the Executive or the Company related to any contest or
dispute between the Executive and the Company or any of its affiliates with
respect to this Agreement or the employment of the Executive hereunder, by
reason of the fact that the Executive is or was a director or officer of the
Company, or any subsidiary of the Company or is or was serving at the request of
the Company, as a director, officer, member, employee or agent of another
corporation or a partnership, joint venture, trust or other enterprise, the
Executive shall be indemnified and held harmless by the Company to the fullest
extent authorized by applicable law from and against any and all liabilities,
costs, claims and expenses, including all costs and expenses incurred in defense
of any Proceeding (including attorneys153 fees). Costs and expenses incurred by
the Executive in defense of such Proceeding (including attorneys153 fees) shall be
paid by the Company in advance of the final disposition of such litigation upon
receipt by the Company of (a) a written request for payment, (b) appropriate
documentation evidencing the incurrence, amount and nature of the costs and
expenses for which payment is being sought, and (c) an undertaking adequate
under applicable law made by or on behalf of the Executive to repay the amounts
so paid if it shall ultimately be determined that the Executive is not entitled
to be indemnified by the Company under this Agreement. The Company and the
Executive will consult in good faith with respect to the conduct of any
Proceeding. If the Company or any of its successors or assigns consolidates with
or merges into any other entity or transfers all or substantially all of its
properties or assets, then in each such case, proper provisions shall be made so
that the successors or assigns of the Company shall assume all of the
obligations set forth in this Section 7.

During the Term of Employment and for a term of six (6) years thereafter, the
Company, or any successor to the Company shall purchase and maintain, at its own
expense, directors and officers liability insurance providing coverage for
Executive in the same amount as the other executive officers and directors of
the Company.

During the Term of Employment and for a term of six (6) years thereafter, the
Company shall provide Executive with copies of all binders and policies issued
in connection with any directors and officers liability insurance affording
coverage to Executive, within thirty (30) days following the Executive153s request
for such documents.

8. Non-Solicitation.

During the Term of Employment and for a period of two years following the
Date of Termination, the Executive hereby agrees not to, directly or indirectly,
for his own account or for the account of any other person or entity, (i)
solicit or hire or assist any other person or entity in

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soliciting or hiring any employee of the Company or any of its subsidiaries
or affiliates to perform any services for any entity (other than the Company or
their respective subsidiaries or affiliates), attempt to induce any such
employee to leave the employ of the Company or any affiliates of the Company, or
otherwise interfere with or adversely modify such employee153s relationship with
the Company or any of its subsidiaries or affiliates, or (ii) induce any
employee of the Company who is a member of management to engage in any activity
which the Executive is prohibited from engaging in under any of Sections 8, 9 or
10 of this Agreement. For purposes of this Agreement, “employee” shall mean any
natural person anywhere in the world who is employed by or otherwise engaged to
perform services for the Company or any of its affiliates on the Date of
Termination or during the one-year period preceding the Date of Termination.

9. Non-Compete.

In connection with the employment of the Executive under this Agreement and
in recognition that the Executive shall be a significant stockholder in the
Company as a result of the conversion of a significant ownership interest of the
Executive in J. Crew Group, Inc. into an ownership interest in Parent in the
Merger (as such term is defined in the Merger Agreement), and except as
specifically provided in Section 1(d) above, the Executive hereby agrees that,
during the Term of Employment and for the one-year period following any
termination of the Executive153s employment, the Executive shall not become
associated with any entity, whether as a principal, partner, employee,
consultant or shareholder (other than as a holder of a passive investment of not
in excess of 5% of the outstanding voting shares of any publicly traded
company), that is actively engaged in retail apparel business in any geographic
area in which the Company or any of its subsidiaries or affiliates are engaged
in such business.

10. Confidentiality; Non-Disclosure.

(a) The Executive hereby agrees that, during the Term of Employment and
thereafter, he will hold in strict confidence any proprietary or Confidential
Information related to the Company and its affiliates. For purposes of this
Agreement, the term “Confidential Information” shall mean all information
of the Company or any of its affiliates (in whatever form) which is not
generally known to the public, including without limitation any inventions,
processes, methods of distribution or customers153 or trade secrets.

(b) The Executive hereby agrees that, upon the termination of the Term of
Employment, he shall not take, without the prior written consent of the Company,
any drawing, blueprint, specification or other document (in whatever form) of
the Company or its affiliates, which is of a confidential nature relating to the
Company or its affiliates, or, without limitation, relating to its or their
methods of distribution, or any description of any formulas or secret processes
and will return any such information (in whatever form) then in his possession.

11. Injunctive Relief

It is impossible to measure in money the damages that will accrue to the
Company in the event that the Executive breaches any of the restrictive
covenants provided in Sections 8, 9 or 10 hereof. In the event that the
Executive breaches any such restrictive covenant, the Company shall be entitled
to an injunction restraining the Executive from violating such restrictive

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covenant. If the Company shall institute any action or proceeding to enforce
any such restrictive covenant, the Executive hereby waives the claim or defense
that the Company has an adequate remedy at law and agrees not to assert in any
such action or proceeding the claim or defense that the Company has an adequate
remedy at law. The foregoing shall not prejudice the Company153s right to require
the Executive to account for and pay over to the Company, and the Executive
hereby agrees to account for and pay over, the compensation, profits, monies,
accruals or other benefits derived or received by the Executive, directly or
indirectly, as a result of any transaction constituting a breach of any of the
restrictive covenants provided in Sections 8, 9 or 10 of this Agreement.

12. Representations and Covenants; Certain Reimbursements.

(a) The Executive and the Company hereby represent to each other that they
have full power and authority to enter into this Agreement on behalf of
themselves and that the execution of, and performance of duties or obligations
under, this Agreement shall not constitute a breach of or otherwise violate any
other agreement to which the Executive or the Company, as applicable, is a
party.

(b) The Executive hereby represents and covenants to the Company that he will
not utility or disclose any confidential information obtained by the Executive
in connection with his former employment with respect to his duties and
responsibilities hereunder and the Company, and the Company covenants that it
will not ask the Executive to do so.

13. Additional Payments.

In the event that following a Change in Control IPO (as defined below) that
occurs after the Effective Date, any payment, right or benefit made or provided
to the Executive under this Agreement and under any other plan, program or
agreement of the Company or any of its affiliates (collectively, the
“Aggregate Payment“) become subject to any tax (the “Excise Tax“)
imposed under Section 4999 of the Internal Revenue Code of 1986, as amended (the
“Code“), the Company shall pay to the Executive an additional amount (the
“Excise Tax Payment“) such that the net amount retained by the Executive
with respect to the Aggregate Payment, after deduction of any Excise Tax on the
Aggregate Payment and any Federal, state and local income and employment tax and
Excise Tax on the Excise Tax Payment (and any interest and penalties thereon),
but before deduction for any Federal, state or local income or employment tax
withholding on such Aggregate Payment, shall be equal to the amount of the
Aggregate Payment. The Company shall pay the Excise Tax Payment to the Executive
no later than the end of Executive153s taxable year next following Executive153s
taxable year in which the Excise Tax (and any income or other related taxes or
interest or penalties thereon) on the Aggregate Payment are remitted to the
Internal Revenue Service or any other applicable taxing authority.

The determination of whether the Aggregate Payment will be subject to the
Excise Tax and, if so, the amount to be paid to the Executive and the time of
payment pursuant to this Section 13 shall be made by the Auditor (as defined
below), subject to a different determination by the Internal Revenue Service.
All fees and expenses of the Auditor shall be borne solely by the Company.

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For purposes of determining the amount of any additional payments hereunder,
the Executive shall be deemed to pay: (i) Federal income taxes at the highest
applicable marginal rate of Federal income taxation for the calendar year in
which such payments are to be made, and, (ii) any applicable state and local
income taxes at the highest applicable marginal rate of taxation for the
calendar year in which such payments are to be made, net of the maximum
reduction in Federal incomes taxes that could be obtained from the deduction of
such state or local taxes if paid in such year.

For purposes of this Agreement, the following definitions shall have the
following meanings:

(a) “Auditor” shall mean a nationally recognized United States public
accounting firm, jointly selected by the Company and the Executive, which has
not, during the two years preceding the date of its selection, acted in any way
on behalf of the Company. If the Executive and the Company cannot agree on the
firm to serve as the Auditor, then the Executive and the Company shall each
select one accounting firm and those two firms shall jointly select the
accounting firm to serve as the Auditor.

(b) “Change in Control IPO” shall mean a change in control of the Company
that occurs when the Company (or any affiliate of the Company that would be
treated, together with the Company, as a single corporation under Section 280G
of the Code and the regulations thereunder) has stock that is readily tradable
on an established securities market or otherwise within the meaning of Q&A 6
of Treasury Regulation 1.280G-1.

In the event that the Company undergoes a change in control prior to the time
that it (or any affiliate of the Company that would be treated, together with
the Company, as a single corporation under Section 280G of the Code and the
regulations thereunder) has stock that is readily tradeable on an established
securities market (within the meaning of the Section 280G of the Code and the
regulations thereunder), the Company and the Executive shall use their
reasonable best efforts to seek the requisite approval by the Company153s
shareholders of any payments, rights or benefits proposed to be made or provided
to the Executive under this Agreement and under any other plan, program or
agreement of the Company or any of its affiliates in connection with such change
in control by taking all administrative steps necessary to prevent having the
payments, rights or benefits or any portion thereof characterized as “parachute
payments” under Sections 280G and 4999 of the Code. The Company153s actions
pursuant to this provision are not intended to bind, nor shall be construed as
binding, the shareholders of the Company. In connection with the obtaining of
such approval, if so requested, the Executive agrees to undertake any such
waivers that may be required in order for the Company to validly seek the
approval of its shareholders.

14. Miscellaneous.

(a) Any notice or other communication required or permitted under this
Agreement shall be effective only if it is in writing and delivered personally
or sent by registered or certified mail, postage prepaid, addressed as follows
(or if it is sent through any other method agreed upon by the parties):

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If to Parent:

Chinos Holdings, Inc.

c/o TPG Capital, L.P.

345 California Street

Suite 3300

Attention: General Counsel

Fax: 415-743-1500

with an additional copy (which will not constitute notice) to:

Ropes & Gray LLP

The Prudential Tower

800 Boylston Street

Boston, Massachusetts 02119

Attention: Loretta R. Richard, Esq.

Renata J. Ferrari, Esq.

Fax: 617-951-7050

If to the Company:

J. Crew Group, Inc.

770 Broadway

New York, NY 10003

Attention: Board of Directors and Secretary

with a copy to:

Paul Shim, Esq.

Cleary, Gottlieb, Steen & Hamilton One liberty Plaza

New York, NY 10006

If to the Executive:

To the address on file with the Company, with a copy to:

David Rubinsky, Esq.

Willkie Farr & Gallagher LLP 787 Seventh Avenue

New York, NY 10019-6099

or to such other address as any party hereto may designate by notice to the
others, and shall be deemed to have been given upon receipt.

(b) The Company shall reimburse the Executive for reasonable legal fees
incurred by the Executive in connection with the negotiation of this Agreement
and any related agreements.

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(c) This Agreement constitutes the entire agreement among the parties hereto
with respect to the employment of the Executive and supersedes and terminates
all prior communications, agreements and understandings, written or oral, with
respect to the terms and conditions of the Executive153s employment with the
Company, including, but not limited to the Prior Agreement. Notwithstanding the
foregoing, Section 14 of the Prior Agreement shall survive and continue in
accordance with its terms solely with respect to any payments or benefits that
may become payable to the Executive in connection with the transactions
contemplated by the Merger Agreement.

(d) This Agreement may be amended only by an instrument in writing signed by
the parties hereto, and any provision hereof may be waived only by an instrument
in writing signed by the party or parties against whom or which enforcement of
such waiver is sought. The failure of any party hereto at any time to require
the performance by any other party hereto of any provision hereof shall in no
way affect the full right to require such performance at any time thereafter,
nor shall the waiver by any party hereto of a breach of any provision hereof be
taken or held to be a waiver of any succeeding breach of such provision or a
waiver of the provision itself or a waiver of any other provision of this
Agreement.

(e)(i) This Agreement is binding on and is for the benefit of the parties
hereto and their respective successors, heirs, executors, administrators and
other legal representatives. Neither this Agreement nor any right or obligation
hereunder may be assigned by the Company or the Executive.

(ii) The Company shall require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the
business and/or assets of the Company expressly to assume and agree to perform
this Agreement in the same manner and to the same extent that the Company would
have been required to perform it if no such succession had taken place. As used
in the Agreement, the “Company” shall mean both the Company as defined
above and any such successor that assumes and agrees to perform this Agreement,
by operation of law or otherwise.

(f) If any provision of this Agreement or portion thereof is so broad, in
scope or duration, so as to be unenforceable, such provision or portion thereof
shall be interpreted to be only as broad as is enforceable.

(g) The Company may withhold from any amounts payable to the Executive
hereunder all federal, state, city or other taxes that the Company may
reasonably determine are required to be withheld pursuant to any applicable law
or regulation.

(h) This Agreement shall be governed by and construed in accordance with the
laws of the State of NEW YORK, without reference to its principles of conflicts
of law.

(i) Any disagreement, dispute, controversy or claim arising out of or
relating to this Agreement or the interpretation hereof or any agreements
relating hereto or contemplated herein or the interpretation, breach,
termination, validity or invalidity hereof shall be settled exclusively and
finally by arbitration; provided that the Company shall not be required
to submit claims for injunctive relief to enforce the covenants contained in
Sections 8, 9 or 10 of this Agreement to

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arbitration. The arbitration shall be conducted in accordance with the
Commercial Arbitration Rules (the “Rules“) of the American Arbitration
Association, except as amplified or otherwise varied hereby. The Company and the
Executive jointly shall appoint one individual to act as arbitrator within
thirty (30) days of initiation of the arbitration. If the parties shall fail to
appoint such arbitrator as provided above, such arbitrator shall be appointed by
the President of the Association of the Bar of the City of New York and shall be
a person who maintains his or her Executive place of business in the New York
metropolitan area and shall be an attorney, accountant or other professional
licensed to practice by the State of New York who has substantial experience in
employment and executive compensation matters. All fees and expenses of such
arbitrator shall be shared equally by the Company and the Executive. The situs
of the arbitration shall be New York City. Any decision or award of the arbitral
tribunal shall be final and binding upon the parties to the arbitration
proceeding. The parties hereto hereby waive to the extent permitted by law any
rights to appeal or to seek review of such award by any court or tribunal. The
arbitration award shall be paid within thirty (30) days after the award has been
made. Judgment upon the award may be entered in any federal or state court
having jurisdiction over the parties and shall be final and binding. Each party
shall be required to keep all proceedings related to any such arbitration and
the final award and judgment strictly confidential; provided that either
party may disclose such award as necessary to enter the award in a court of
competent jurisdiction or to enforce the award, and to the extent required by
law, court order, regulation or similar order.

(j) This Agreement may be executed in several counterparts, each of which
shall be deemed an original, but all of which shall constitute one and the same
instrument.

(k) The headings in this Agreement are inserted for convenience of reference
only and shall not be a part of or control or affect the meaning of any
provision hereof.

(l) Notwithstanding anything in this Agreement to the contrary, (i) all
reimbursement and in-kind benefits provided under this Agreement shall be made
or provided in accordance with the requirements of Section 409A of the Code to
the extent that such reimbursements or in-kind benefits are subject to Section
409A of the Code; (ii) all expenses or other reimbursements paid pursuant to
this Agreement that are taxable income to the Executive shall in no event be
paid later than the end of the calendar year next following the calendar year in
which the Executive incurs such expense or pays such related tax; and (iii) with
regard to any provision in this Agreement that provides for reimbursement of
costs and expenses or provision of in-kind benefits, except as permitted by
Section 409A of the Code, (A) the right to reimbursement or in-kind benefits
shall not be subject to liquidation or exchange for another benefit and (B) the
amount of expenses eligible for reimbursement, or in-kind benefits provided,
during any taxable year shall not affect the expenses eligible for
reimbursement, or in-kind benefits to be provided, in any other taxable year.

(m) This Agreement is intended to comply with Section 409A of the Code. In
determining the time for payment of any amounts which are treated as
nonqualified deferred compensation, the Agreement shall be interpreted so that
all references therein to a “termination”, or a “termination of employment”, or
like terms are treated as instead referring to a “separation from service”, as
such term is defined in Section 409A of the Code. All provisions of the
Agreement are meant to be exempt from compliance with Section 409A of the Code,
to

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the maximum extent permitted, and otherwise to comply with Section 409A of
the Code. Accordingly, all provisions of the Agreement shall be construed in a
manner consistent with avoiding taxes or penalties under Section 409A of the
Code.

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IN WITNESS WHEREOF, Chinos Holdings, Inc. and J. Crew Group, Inc. have each
caused their respective names to be ascribed to this Agreement by a duly
authorized representative and the undersigned, Millard S. Drexler, has executed
this Agreement, on or before this 7th day of March, 2011.

CHINOS HOLDINGS, INC.

/s/ Ronald Cami

Name: Ronald Cami

Title: Vice President and Secretary

J. CREW GROUP, INC.

/s/ James Scully

Name: James Scully

Title: Chief Administrative Officer &

Chief Financial Officer

/s/ Millard S. Drexler

Millard S. Drexler

[Signature Page to Millard S. Drexler Employment
Agreement]

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Execution Version

EXHIBIT A

FORM OF GENERAL RELEASE

GENERAL RELEASE OF CLAIMS

1. Millard S. Drexler (the “Executive“), for himself and his family,
heirs, executors, administrators, legal representatives and their respective
successors and assigns, in exchange for the consideration contained in Section
5(a)(ii) of the Employment Agreement to which this release is attached as
Exhibit A (the “Employment Agreement“), which the Executive acknowledges
is in addition to any amounts to which he would have otherwise been entitled but
for the Employment Agreement and execution of this General Release of Claims,
does hereby release and forever discharge Chinos Holdings, Inc.
(“Parent“) and its subsidiary J. Crew Group, Inc. (together with Parent,
the “Company“) and their respective subsidiaries or affiliated companies,
and their respective current or former directors, officers, employees,
shareholders or agents in such capacities (collectively with the Company, the
“Released Parties“) from any and all actions, causes of action, suits,
controversies, claims and demands whatsoever, for or by reason of any matter,
cause or thing whatsoever, whether known or unknown, arising under or in
connection with the Executive153s employment or the termination of such employment
with the Company, whether for tort, breach of express or implied employment
contract, wrongful discharge, intentional infliction of emotional distress, or
defamation or injuries incurred on the job or incurred as a result of the
termination of the employment. The Executive acknowledges that the Company
encouraged him to consult with an attorney of his choosing, and through this
General Release of Claims encourages him to consult with his attorney with
respect to possible claims under the Age Discrimination in Employment Act
(“ADEA“) and that he understands that the ADEA is a Federal statute that,
among other things, prohibits discrimination on the basis of age in employment
and employee benefits and benefit plans. Without limiting the generality of the
release provided above, the Executive expressly waives any and all claims under
ADEA that he may have as of the date hereof. The Executive further understand
that by signing this General Release of Claims he is in fact waiving, releasing
and forever giving up any claim under the ADEA as well as all other laws within
the scope of this paragraph 1 that may have existed on or prior to the date
hereof. Notwithstanding anything in this paragraph 1 to the contrary, this
General Release of Claims shall not apply to (i) any actions to enforce rights
arising under, or any claim for benefits that may be due the Executive pursuant
to any vested benefits under any employee benefit plan, or vested rights under
any and all equity agreements entered into in connection with the Employment
Agreement and, to the extent in effect, the Stockholders153 Agreement, (ii) any
actions to enforce the Executive153s rights with respect to his related
investments in the Company, and (iii) any indemnification rights the Executive
may have as a former officer or director of the Company or its subsidiaries or
affiliated companies in accordance with the Company153s charter and bylaws and any
claims to receive any benefits to which he is entitled under the Company153s
directors153 and officers153 liability policies, all in accordance with Section 7 of
the Employment Agreement.

2. The Executive represents that he has not filed against the Released
Parties any complaints, charges, or lawsuits arising out of his employment, or
any other matter arising on or

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prior to the date of this General Release of Claims, and covenants and agrees
that he will never individually or with any person to file, or commence the
filing of, any charges, lawsuits, complaints or proceedings with any
governmental agency, or against the Released Parties with respect to any of the
matters released by the Executive pursuant to paragraph 1 hereof.

3. The Executive hereby acknowledges that the Company has informed him that
he has up to twenty-one (21) days to sign this General Release of Claims and he
may knowingly and voluntarily waive that twenty-one (21) day period by signing
this General Release of Claims earlier. The Executive also understands that he
shall have seven (7) days following the date on which he signs this General
Release of Claims within which to revoke it by providing a written notice of his
revocation to the Company.

4. The Executive acknowledges that this General Release of Claims will be
governed by and construed and enforced in accordance with the internal laws of
the State of NEW YORK applicable to contracts made and to be performed entirely
within such State.

5. The Executive acknowledges that he has read this General Release of
Claims, that he has been advised that he should consult with an attorney before
he executes this general release of claims, and that he understands all of its
terms and executes it voluntarily and with full knowledge of its significance
and the consequences thereof.

6. This General Release of Claims shall take effect on the eighth day
following the Executive153s execution of this General Release of Claims unless the
Executive153s written revocation is delivered to the Company within seven (7) days
after such execution.

Millard S. Drexler

, 20

The parties understand and agree that the release of claims provided
in this form of general release shall be entered into by the parties to the
Employment Agreement in connection with termination of the Executive153s
employment pursuant to a separation agreement or arrangement, which shall state,
among other things, the consideration the Executive is entitled to receive in
connection with such termination.

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