Exhibit 10.1
October 4, 2016
Brian Lynch
288 Chestnut Hill Road
Wilton, CT 6897
Dear Brian:
Congratulations on your promotion to
COO, Ascena Retail
Group
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The following are the terms and conditions of our job offer
to you and replace any and all previous offers or discussions concerning your employment.
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Job Title:
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COO, Ascena Retail Group
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Reporting To:
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David Jaffe
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Effective Date:
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October 4, 2016
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Annual Pay Rate:
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$950,000
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In addition, you may be considered for an annual performance
evaluation in the Fall of 2017. Any corresponding pay adjustments would be based on your performance, business results, economic
& competitive factors, and approval from the Board of Directors.
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Incentive Compensation:
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Beginning with the Fiscal Fall 2017 Season, you will be
eligible to participate in the Incentive Compensation (IC) program at a target level of 110% of your annual base salary. Your
initial annual target level (100%) is $1,045,000. Maximum annual payout is double your target level (200%) ($2,090,000 at maximum).
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Your annual bonus will be tied
to the performance of ascena. Your bonus allocation will be as follows: Seasonal Incentive Compensation will be based on 100% Ascena
Cumulative (paid 50% in each Fall and Spring Season).
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Long Term Incentives (LTI):
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You will continue to be eligible for an Annual Grant effective
in September 2017. All stock grants are contingent upon the approval from the Board of Directors. All grants are subject to the
Plan Description/Prospectus.
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Additional FY17 LTI Awards:
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In addition, as a result of your individual change you
are being recommended for the LTI awards as listed below. This LTI award valued at $183,500 is in addition to the LTI awarded
to you on September 21, 2016 as described in your Total Rewards Statement.
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You will be recommended to receive a value of $20,700
in non-qualified stock options of Ascena Common Stock (symbol ASNA). This recommendation will be made at the next, regularly scheduled,
quarterly Compensation Committee Meeting of the Board of Directors. As of the date of this approval, these options will be granted
and the number of options will be determined. Vesting will begin on the one-year anniversary of the approval date, and these will
vest over 3 years (33%/33%/34%).
You will be
recommended to receive a value of $100,700 in restricted stock units (RSUs) of Ascena Common Stock (symbol ASNA). This
recommendation will be made at the next, regularly scheduled, quarterly Compensation Committee Meeting of the Board of
Directors. As of the date of this approval, these units will be granted and the number of units will be determined. For the
first $20,700 in value, the associated units will begin vesting on the one-year anniversary of the approval date, and will
vest over 3 years (33%/33%/34%). For the remaining $80,000 in value, the associated units will begin vesting on the one-year
anniversary of the approval date, and will vest over 2 years (50%/50%).
You will be recommended for participation
in the 2019 3yr Stock-Settled Long Term Incentive Plan (Stock-LTIP) under the 2016 Omnibus Plan. Your target opportunity will be
$62,100. This plan awards stock at the end of a 3-year performance period based on the level of achievement of company financial
goals established at the beginning of the performance period. The Stock-LTIP will be paid out upon Compensation Committee approval
of the results at the conclusion of the 3-year performance period.
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Relocation Benefits:
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In the event you are terminated for any reason other than
for “cause” (as defined in Section 1.5 of the Ascena Executive Severance Plan (Executive Severance Plan), you will
be eligible only for the relocation benefits under the “Movement of Household Goods” provision of Tier 1 of the Relocation
Policy (enclosed). The Company will also reimburse a lease
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cancellation charge up to an amount equal to two months’
rent, if applicable.
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Material Diminution of Duties:
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In the event, prior to a Change in Control (as defined
in the Executive Severance Plan), you terminate your employment following a material adverse change in your duties and responsibilities
that occurs without your consent, such termination of employment by you shall constitute a “Non-Change in Control Termination”
solely for purposes of your eligibility to receive severance benefits under the Executive Severance Plan, subject to all of the
other terms and conditions thereof; provided that, prior to such termination, (i) you provide the Company written notice of your
intention to terminate within fifteen (15) days following the first occurrence of the event you believe constitutes a material
adverse change in your duties and responsibilities, (ii) the Company fails to remedy such event within thirty (30) days following
receipt of the written notice (Cure Period) from you, and (iii) you voluntarily terminate your employment within ten (10) days
following the end of the Cure Period
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All above reflects the only changes being made to existing
pay and benefits program.
Please sign both copies of this letter, keep one for your records
and return one to Donna VanCourt, VP Corporate Compensation and HRIS.
All job information, as well as the pay and benefit programs
outlined in this letter and the enclosed materials are subject to change periodically based on business needs. At Ascena an employment
at-will relationship prevails and the employment relationship can be terminated with or without cause and with or without notice,
at any time, by either the employee or the employer.
Once again, congratulations on your new position.
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Sincerely,
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I accept your offer as specified above.
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/s/ Brian Lynch
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10/4/16
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David Jaffe
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Brian Lynch
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Date
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CEO, Ascena Retail Group
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Exhibit 99.1
News Release
ASCENA RETAIL GROUP, INC. ANNOUNCES ‘CHANGE
FOR GROWTH’
PROFIT ENHANCEMENT PROGRAM, AND RELATED ORGANIZATIONAL
CHANGES
-- EXPECTS ADDITIONAL $100 - $150 MILLION
IN COST SAVINGS BY FISCAL 2019--
-- RESCHEDULES INVESTOR DAY TO JANUARY 18,
2017 --
MAHWAH, NJ – October 4, 2016 –
After more than
six months of extensive planning, ascena retail group, inc.
(NASDAQ: ASNA)
(the “Company”) today begins the
execution phase of its major enterprise transformation plan. In addition to the ongoing implementation of its $235 million cost-savings
initiative associated with its integration of ANN INC., the Company expects its new Change for Growth program will deliver an incremental
$100 - $150 million of cost savings by fiscal 2019. The Change for Growth program will refine ascena’s operating model to
increase its focus on key customer segments, improve its time-to-market, reduce working capital, and enhance its ability to serve
its customer on any purchasing platform, all while better leveraging the Company’s powerful shared services platform.
The Company is making significant organizational changes as part
of its accelerated execution plan, and has restructured its business into four operating segments. Reporting of future results
will be based on this new segment structure:
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Premium Fashion
- Ann Taylor, LOFT, and Lou &
Grey
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Plus Fashion
- Lane Bryant and Catherines
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Value Fashion
- maurices and dressbarn
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The Company also announced the creation of its new ascena Brand
Services (aBS) team, which will assume the responsibilities for its existing centralized Shared Services Group functions, including
supply chain, logistics, sourcing, and IT, as well as additional brand support functions to be developed through its Change for
Growth program.
David Jaffe, President and CEO of ascena retail group commented,
“Our leadership team has maintained its focus on long-term value creation for our shareholders by ensuring ascena has a strong
combination of attractive brands and leading supply chain capabilities. After more than six months of intense development work,
today we begin our comprehensive Change for Growth program to ensure that the Company is effectively positioned to compete in a
rapidly and profoundly changing retail and consumer environment. Over the past few years we have made substantial investments in
our brand portfolio, supply chain and logistics capabilities, and shared service platform, and we believe we are well positioned
to leverage these investments to deliver value for our customers and shareholders. We are ahead of plan with the synergy and cost
savings workstreams that will deliver $235 million of cost savings associated with our integration of ANN INC., and the time is
right for us to explore additional opportunities to fully exploit the advantages we’ve developed with our comprehensive shared
services platform. Our Change for Growth program is designed to ensure ascena is lean, agile and playing to win. Through this transformation
work, we expect to deliver incremental cost savings of $100 to $150 million by fiscal 2019. We will continue to work aggressively
on
customer-facing capability and operating efficiencies to drive benefits
on both the margin and cost side of our financials, and we believe there is additional opportunity beyond what we have highlighted
today as we continue our transformation work with Accenture.”
Jaffe concluded, “We would like to discuss the Change for
Growth program in the depth our investors have come to expect, and given the acceleration and the major scope of this overall program,
we have decided to postpone our Investor Day until January 18, 2017.”
The Company is pleased to announce that Brian Lynch, most recently
President and CEO of the Company’s Justice brand, will assume direct responsibility for ascena Brand Services in his new
role as ascena’s Chief Operating Officer. Mr. Lynch commented, “I'm excited to take on this broader role. I believe
applying the customer lens I use as a brand leader to my new role will enable strong partnerships between our shared operational
functions and our brand segment leaders. It is this aligned partnership that will help us better develop and deliver new capabilities
to serve our customers.” David Jaffe added, “I am very excited to have Brian step into the role as ascena’s Chief
Operating Officer. He is uniquely qualified for this role, having prior President and COO experience, and senior roles in ecom
operations, retail operations, and field leadership across leading companies including The Walt Disney Company, Gap Inc., and most
recently, ANN INC. ”
Gary Muto, President and CEO of the Company’s ANN brands,
will retain responsibility for the Ann Taylor, LOFT, and Lou & Grey brands, which now comprise the Company’s Premium
Fashion segment. Linda Heasley, most recently President and CEO of Lane Bryant, has been appointed President and CEO of the Company’s
Plus Fashion segment. George Goldfarb, most recently President and CEO of maurices has been appointed President and CEO of the
Company’s Value Fashion segment. Lece Lohr, most recently head of merchandising at Justice succeeds Mr. Lynch as the new
President of the Company’s Kids Segment.
The aforementioned restructuring has been accompanied by a number
of executive departures to eliminate organizational overlap, which will result in a pre-tax charge of approximately $10 to $12
million in the first quarter. These changes were not included in the Company’s guidance, but the Company expects to recover
the majority of this charge in the form of reduced operational expenses over the course of fiscal 2017. Additional charges are
expected in the future related to ongoing transformation work.
About ascena retail group, inc.
ascena retail group, inc. (
NASDAQ: ASNA
) is a leading national specialty
retailer offering apparel, shoes, and accessories for women under the Ann Taylor, LOFT, Lou & Grey, Lane Bryant, maurices,
dressbarn and Catherines brands, and for tween girls under the Justice brand. ascena retail group, inc. operates ecommerce
websites and approximately 4,900 stores throughout the United States, Canada and Puerto Rico.
For more information about ascena retail group, inc. visit:
ascenaretail.com, AnnTaylor.com, LOFT.com, louandgrey.com, lanebryant.com, cacique.com, maurices.com, dressbarn.com, Catherines.com,
and shopjustice.com.
Forward-Looking Statements
Certain statements made within this press release may constitute
“forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking
statements are subject to certain risks and uncertainties that could cause actual results to differ materially. The Company does
not undertake to publicly update or review its forward-looking statements even if experience or future changes make it clear that
our projected results expressed or implied will not be achieved. Detailed information concerning a number of factors that could
cause actual results to differ materially from the information contained herein is readily available in the Company’s most
recent Annual Report on Form 10-K.
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CONTACT:
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For investors:
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For media:
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ascena retail group, inc.
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ascena retail group, inc.
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Stacy Turnof
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Sue Ross
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Vice President of Investor Relations
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Executive Vice President, ascena Corporate Affairs Communications Officer
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(551) 777-6928
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(218) 491-2110
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stacy.turnof@ascenaretail.com
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sue.ross@ascenaretail.com
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ICR, Inc.
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James Palczynski
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Partner
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(203) 682-8229
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jp@icrinc.com
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