Taking a peek in J. Crew’s 10-Q…

You know how those ornately painted matryoshka dolls open to reveal hidden dolls inside? That image came to mind after we discovered a newsworthy nugget in the eighth exhibit to the 10-Q that J. Crew Group, Inc. (JCG) filed with the SEC at 4:10 p.m. last Friday. Pre-holiday weekend filings often make for the juiciest reading, and J. Crew’s didn’t disappoint on that front.

The document in question is simply titled —Amended and Restated Employment Agreement, dated July 15, 2010. (Despite its execution date, the agreement wasn’t filed until now.) Read on and you—ll learn the agreement is with J. Crew’s star designer, Jenna Lyons Mazeau, who is generally referred to as —Jenna Lyons.

Per the new agreement, J. Crew agreed to pay Lyons —a one-time cash contract supplement of $2 million by August 15th. The money is hers to keep so long as she stays with the company through July 15, 2012, but she may have to repay half of it if she leaves before mid-July, 2014. (If you’re feeling a sense of dâŸjâ¯-vu, footnoted readers, you may recall that Lyons got another million-dollar bonus on October 27, 2009.)

The company also promised to give Lyons 50,000 restricted shares of Common Stock. No restrictions are prescribed for half of the shares, but the agreement provides that the other half will vest on the fourth and fifth anniversaries of the grant date if the company can meet certain goals for “total shareholder return.”

Now, to the salary issue—. This employment agreement states that Lyons— annual base salary will be $675,000 and that she has the opportunity to earn a target bonus worth another 50% to 100% of her salary if performance objectives are met. But that number ($675,000) doesn—t square with the one that J. Crew reported in an 8-K filed July 14, 2010, when it announced Lyons— promotion and other changes within the executive ranks:

—In connection with these organizational changes and the related increase in responsibilities, the Compensation Committee of the Board of Directors approved base salary increases for Ms. Lyons, Mr. Scully and Ms. Wadle on July 12, 2010. Effective immediately their base salaries are as follows: Ms. Lyons — $1,000,000;—.

No explanation is given for why two documents dated one day apart contain such disparate numbers. However, if the company can beat its recently-lowered sales outlook and coax its stock price back up (earlier in the year, it traded at more than $40 per share), shareholders may not care how much money Lyons gets.

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