SEVERANCE AGREEMENT
Exhibit 10.103
This Severance Agreement (the “Agreement”) is made as of the Executive’s employment
commencement date (April 6, 2009), between The Talbots, Inc., a Delaware corporation (together with
its subsidiaries, the “Company”) and Xxxxxxxxx X. Xxxxxxxxx (the “Executive”). This Agreement sets
forth the agreement of the parties relating to the severance arrangements for the Executive under
certain circumstances. Capitalized terms used in this Agreement are defined in Section 7 hereof.
1. Severance Pay and Associated Benefits Upon a Qualified Termination.
(a) Severance Benefits. In the event of a Qualified Termination, and subject to the
terms of this Agreement, the Company will provide to the Executive the payments and benefits
described in this Section 1 (collectively, the “Severance Benefits”).
(b) Severance Pay. Subject to the terms of this Agreement, in the event of a
Qualified Termination, the Company will pay to the Executive severance pay in the gross amount
equal to 1.5 times the Executive’s annual base salary in effect immediately prior to such
termination (the “Severance Payment”), payable in equal installments in accordance with normal
Company payroll practices over a 18 month period beginning immediately following the Termination
Date (the “Severance Period”).
(c) Benefits Continuation. Subject to the terms of this Agreement, upon any such
Qualified Termination, the Company will also arrange for the Executive to continue to participate
(through COBRA or otherwise), on substantially the same terms and conditions as in effect for the
Executive (including any required employee contribution) immediately prior to such termination, in
the medical and dental programs provided to the Executive immediately prior to such termination
until the earlier of (i) the end of the Severance Period, or (ii) such time as the Executive is
eligible to be covered by comparable benefits of a subsequent employer. The Executive agrees to
notify the Company promptly if and when the Executive begins employment with another employer and
if and when the Executive becomes eligible to participate in any benefit or other welfare plans,
programs or arrangements of another employer. Executive agrees that any automobile/housing
allowance or other personal benefits provided by the Company to the Executive immediately prior to
such termination will cease as of the Termination Date. The Company, however, may choose to make
any separate arrangements with the Executive to assist with the transfer of any such benefits.
(d) Retirement Benefits. Nothing in this Agreement will modify or otherwise limit any
of the Executive’s rights and benefits as may exist under the terms of any qualified, nonqualified
or supplemental retirement, 401(k), savings or deferred compensation plans of the Company
(excluding any severance or severance compensation plans) (“Retirement Plans”), nor will any
benefits or amounts payable under any such Retirement Plans reduce or offset any Severance Benefits
afforded to the Executive under this Agreement.
(e) Equity Awards.
(i) If in the event of a Qualified Termination the Executive still holds one or more options
to purchase shares of Company stock which have not expired and have not been fully exercised, the
Executive (or his or her heirs or estate), at any time within 3 years after the Termination Date
(but in no event after the option has expired), may exercise any such options with respect to any
shares as to which the Executive could have exercised the options on the Termination Date.
(ii) The Executive agrees that until the expiration of 6 months from the Termination Date, the
Executive will not engage in the purchase or sale of the Company’s common stock (including without
limitation any “cashless exercise” of any stock options involving the sale of any Company common
stock as part of such option exercise) during any trading window “blackout” or “quiet period”
applicable to management level employees (“Quiet Period”); provided that in no event shall the
Executive be prohibited from making a purchase or sale of the Company’s stock or exercising stock
options for the Company’s stock if such sale, purchase or exercise is made pursuant to a written
plan for trading securities within the meaning of Rule 10b5-1 under the Securities Exchange Act of
1934, as amended (a “10b5-1 Trading Plan”), and such 10b5-1 Trading Plan is consistent with the
Company’s xxxxxxx xxxxxxx policy and has been approved by the Company. The Executive acknowledges
that the Company reserves the right to modify the Quiet Period from time to time in its sole and
absolute discretion. The Company will provide the Executive with notice of Quiet Periods and
changes thereto at the time it provides such notice to the Company’s management level employees.
In addition, the Executive agrees to notify the Company’s General Counsel prior to exercising any
options or trading in the Company’s common stock within such 6 month period following the
Termination Date to ascertain whether such transaction would violate any Quiet Period covered by
this subsection (e)(ii).
(f) Withholdings. The Company may deduct from the Executive’s Severance Payment and
any other payments otherwise due to the Executive, such withholding taxes and similar governmental
payments and charges as may be required.
(g) Timing for Payment; Section 409A Restrictions. Notwithstanding anything in this
Agreement to the contrary, it is the intention of the parties that this Agreement comply with
Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), and any regulations or
other guidance issued thereunder, and this Agreement and the payments of any benefits hereunder
will be operated and administered accordingly. Specifically, but not by limitation, the Executive
agrees that if, at the time of termination of employment, the Company is considered to be publicly
traded and the Executive is considered to be a specified employee, as defined in Section 409A of
the Code (and as determined as of December 31 preceding the Executive’s termination of employment,
unless the Executive’s termination of employment occurs prior to April 30, in which case the
determination will be made as of the second preceding December 31), then some or all of such
payments to be made under this Agreement as a result of the Executive’s termination of employment
will be deferred for no more than 6 months following such termination of employment, if and to the
extent the delay in such payments is necessary in order to comply with the requirements of Section
409A of the Code after utilizing the short-term deferral and involuntary separation pay plan
regulations. Upon expiration of such 6 month
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period (or, if earlier, the Executive’s death), any payments so withheld hereunder from the
Executive hereunder will be distributed to the Executive, with a payment of interest thereon
credited at a rate of prime plus 1% (with such prime rate to be determined as of the actual payment
date). Notwithstanding anything contained in this Agreement to the contrary, the Company
acknowledges that, for purposes of Section 409A of the Code, each and every payment made under this
Agreement shall be deemed a separate payment and not a series of payments.
2. Release and Waiver.
The Company’s obligation to make the payments and provide the benefits to the Executive as set
forth in Section 1 above will be conditioned upon and subject to the Executive having delivered to
the Company an executed full and unconditional release (which will be effective when such release
is no longer subject to revocation) of any and all claims against the Company, its parent entities,
affiliates, employee benefit plans and fiduciaries (to the extent permissible under ERISA), and
their respective officers, employees, directors, agents and representatives satisfactory in form
and content to the Company’s counsel.
3. Cooperation.
In connection with a Qualified Termination or any other termination of the Executive’s
employment, the Executive agrees to reasonably cooperate with the Company prior to and in the 60
day period immediately following the Termination Date, subject to the Executive’s other
commitments, in promptly transitioning the Executive’s duties and activities within the Company to
the person or persons designated by the Company to receive them.
4. Nondisparagement; Non-Solicitation; Confidentiality.
(a) Nondisparagement. In connection with a Qualified Termination or any other
termination of the Executive’s employment, Executive agrees not to take action or make any
statement, written or oral, in the 1 year period following the Termination Date which is intended
to materially disparage the Company or its business.
(b) Non-Solicitation. The Executive agrees that, during the 1 year period following a
Qualified Termination or any other termination of the Executive’s employment, the Executive will
not directly or indirectly solicit, attempt to hire, or hire any employee of the Company (or any
person who may have been employed by the Company during the last year of the term of the
Executive’s employment with the Company), or actively assist in such hiring by any other person or
business entity or encourage, induce or attempt to induce any such employee to terminate his or her
employment with the Company. This non-solicitation does not apply to your administrative assistant
or to any person who was involuntarily terminated by the Company more than thirty (30) days prior
to any such solicitation.
(c) Confidentiality. The Executive will not in any manner following a Qualified
Termination or any other termination of the Executive’s employment, directly or indirectly, without
the express prior written consent of the Company, disclose or use any Confidential Information of
the Company. “Confidential Information” will include all information concerning the Company or any
parent, subsidiary, affiliate, employee, customer or
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supplier or other business associate of the Company or any affiliate (including but not limited to
any trade secrets or other confidential, proprietary or private matters), which has been or is
received by the Executive from the Company, or from any parent, subsidiary, affiliate or customer
or supplier or other business associate of the Company, or is otherwise in the possession of the
Executive and which is not known or generally available to the public, but will not include any
information that (i) was generally known to the public prior to its disclosure to the Executive;
(ii) becomes generally known to the public subsequent to disclosure to the Executive through no
wrongful act of the Executive or any representative of the Executive; (iii) the Executive is
required to disclose by applicable law, regulation or legal process (provided that the
Executive provides the Company with prior notice of the contemplated disclosure and cooperates with
the Company at its expense in seeking a protective order or other appropriate protection of such
information); or (iv) is disclosed to the Executive’s spouse, attorney and/or the Executive’s
personal tax and financial advisors as reasonably necessary or appropriate to advance the
Executive’s tax, financial and other personal planning and who keeps such information confidential
on terms no less favorable to the Company than the terms of this confidentiality obligation above
and provided that you will be responsible for any breach of confidentiality by such person.
5. Remedies.
The Executive acknowledges and affirms that money damages cannot adequately compensate the
Company for any breach by the Executive of Section 4 of this Agreement and that the Company is
entitled to seek equitable relief (without posting any bond) in any federal or state court in
Massachusetts or other court of competent jurisdiction to prevent or otherwise restrain any actual
or threatened breach of the provisions of said Section and/or compel specific performance of, or
other compliance with, the terms thereof.
6. Miscellaneous.
(a) At-Will Employment. This Agreement is not a contract to employ the Executive for
a definite time period, and is not intended to be and does not constitute a contract or part of a
contractual agreement for continued employment, either express or implied, between the Company and
the Executive, it being acknowledged that the Executive’s employment is “at will” and that either
the Executive or the Company may terminate the employment relationship at any time, for any or no
reason, with or without Cause and with or without prior notice, but subject to the Executive’s
rights to Severance Benefits under the terms provided hereunder.
(b) Successors and Assigns. This Agreement and all of the provisions hereof shall be
binding upon, and inure to the benefit of, the parties hereto and their successors (including
successors by merger, consolidation, sale or similar transaction, permitted assigns, executors,
administrators, personal representatives, heirs and distributees). This Agreement is personal in
nature and the rights and obligations of the Executive under this Agreement shall not be assigned
or transferred by the Executive.
(c) Attorneys Fees. Each party shall bear his or her or its own attorney’s fees and
expenses.
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(d) Governing Law. This Agreement shall be interpreted in accordance with the
substantive laws of The Commonwealth of Massachusetts and without regard to any conflict of laws
provisions.
(e) Effect on Other Agreements; Modification. This Agreement constitutes the entire
agreement between the Executive and the Company with respect to the subject matter of this
Agreement. This Agreement may be modified only in a writing signed by both parties. For as long
as this Agreement is in effect, to the degree there is any conflict between the severance payments
and benefit provisions to which the Executive is then entitled under this Agreement and those of
any other written agreement which continues to be in effect between the Company and the Executive,
such conflict shall be resolved by the Company in good faith by affording the Executive the more
favorable severance payments and benefits contained in any such agreement. Notwithstanding the
foregoing, nothing herein relieves the Executive from the obligation to comply with the restrictive
covenants of all such agreements or from the consequences of noncompliance therewith regardless
under which agreement the severance payments and severance benefits may be deemed to have been
made. Furthermore, for purposes of clarification only, if an Executive receives severance pay and
benefits under one agreement, the Executive shall not be entitled to severance pay or benefits
under any other agreement, plan or arrangement.
(f) Execution. This Agreement may be executed in one or more counterparts, each of
which when so executed shall be deemed to be an original, and all such counterparts together shall
constitute but one and the same instrument.
(g) Term of Agreement. This Agreement shall be effective upon execution and shall
remain in effect at all times during the Executive’s employment with the Company, unless expressly
amended or superseded in writing by the parties hereto.
(h) Notices. For the purpose of this Agreement, notices and all other communications
provided for in this Agreement shall be in writing and shall be deemed to have been duly given when
delivered or when mailed by United States registered mail, return receipt requested, postage
prepaid, addressed to the respective addresses set forth below, or to such other address as either
party may have furnished to the other in writing in accordance herewith, except that notice of
change of address shall be effective only upon actual receipt:
To the Company:
The Talbots, Inc.
Xxx Xxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxxxxxxx 00000
Attention: Executive Vice President/Human Resources and Administration
Xxx Xxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxxxxxxx 00000
Attention: Executive Vice President/Human Resources and Administration
with a copy to:
The Talbots, Inc.
000 Xxxxx Xxxxx Xxxxxx
Xxx Xxxxx, Xxx Xxxx 00000
000 Xxxxx Xxxxx Xxxxxx
Xxx Xxxxx, Xxx Xxxx 00000
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Attn: General Counsel
To the Executive:
Xxxxxxxxx X. Xxxxxxxxx
[Home Address]
[Home Address]
with a copy to:
Xxxxxxx Xxxxxxx, Esq.
Xxxxxx Price P.C.
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxx Price P.C.
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
7. Definitions.
For purposes of this Agreement, the following terms shall have the meanings indicated below:
(a) “Cause” for termination by the Company of the Executive’s employment shall mean
(i) any material breach by the Executive of this Agreement or any other agreement to which the
Executive and the Company are both parties (which is not cured within 45 days following written
notice from the Company), (ii) any act or omission to act by the Executive which may have a
material and adverse effect on the Company’s business or on the Executive’s ability to perform
services for the Company, including, without limitation, the commission of any crime involving
moral turpitude or any felony, or (iii) any material misconduct or material neglect of duties by
the Executive in connection with the business or affairs of the Company.
(b) “Code” shall have the meaning given that term in Section 1(g) hereof.
(c) “Disability” shall mean the Executive’s inability, because of physical or mental
illness or injury, substantially to perform his or her duties of his or her position as a result of
physical incapacity for a continuous period of at least six (6) months. Any dispute at to the
Executive’s incapacitation shall be resolved by an independent physician selected by the Company’s
Board of Directors and reasonably acceptable to the Executive or his or her legal representative,
whose determination shall be final and binding upon both the Executive and the Company.
(d) “Executive” shall mean the individual named in the first paragraph of this
Agreement.
(e) “Good Reason” for termination by the Executive of the Executive’s employment shall
be a termination based on one or more of the following events occurring without the Executive’s
express written consent: (a) a substantial adverse reduction in the Executive’s overall
responsibilities as an executive, other than during any period of illness or incapacity, such that
the Executive no longer has the title of, or serves as, a senior executive of the Company; (b) a
material reduction by the Company in the Executive’s annual base salary as in effect on the date
hereof or as the same may be increased from time to time; or (c) the Company’s requiring that the
Executive’s principal place of business be at an office located more
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than 35 miles from the site of the Executive’s then principal place of business, except for
relocation to the Company’s then principal headquarters location or to the New York metropolitan
area or for required travel on the Company’s business, including regular travel to and from the
Company’s corporate headquarters and its other locations; which, with respect to subsections (a)
through (c) above, is not remedied by the Company within 45 days of receipt of written notice of
such event delivered by the Executive to the Company; provided, that the Executive may only
exercise his or her right to terminate employment for Good Reason within the 90 day period
immediately following the occurrence of any of the events described in subsections (a) through (c)
above.
(f) “Qualified Termination” shall mean the Executive’s employment by the Company is
terminated, (i) by the Executive for Good Reason or (ii) by the Company for any reason other than
for Cause, death, Disability, or retirement at or after age 65.
(g) “Quiet Period” shall have the meaning given that term in Section 1(e)(ii) hereof.
(h) “Retirement Plans” shall have the meaning given that term in Section 1(d) hereof.
(i) “Severance Benefits” shall have the meaning given that term in Section 1(a)
hereof.
(j) “Severance Payment” shall have the meaning given that term in Section 1(b) hereof.
(k) “Severance Period” shall have the meaning given that term in Section 1(b) hereof.
(l) “Termination Date” shall mean the date that the Executive’s employment with the
Company terminates for any reason or no reason.
[signature page follows]
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IN WITNESS WHEREOF, the parties have executed this Severance Agreement as of the date first
above written.
| THE TALBOTS, INC. |
||||
| By: | /s/ Xxxxxxx Xxxxxx | |||
| Duly Authorized | ||||
| EXECUTIVE |
||||
| /s/ Xxxxxxxxx X. Xxxxxxxxx | ||||
| Xxxxxxxxx X. Xxxxxxxxx | ||||
| EVP/Finance | ||||
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