Exhibit 10.4
SEVERANCE AGREEMENT
THIS SEVERANCE AGREEMENT dated as of April 3, 2000, is made by and
between The J. Xxxx Group, Inc., a Delaware corporation ("J. Xxxx"; J. Xxxx and
its Subsidiaries being hereafter referred to as the "Company"), and Xxxx X.
Xxxxx (the "Executive").
WHEREAS the Company considers it essential to the best interests of its
stockholders to xxxxxx the continuous employment of key management personnel;
and
WHEREAS the Board of Directors of J. Xxxx recognizes that, as is the
case with many publicly held corporations, the possibility of a Change in
Control (as defined in the last Section hereof) exists and that such
possibility, and the uncertainty and questions which it may raise among
management, may result in the departure or distraction of management personnel
to the detriment of the Company and its stockholders; and
WHEREAS the Board has determined that appropriate steps should be taken
to reinforce and encourage the continued attention and dedication of members of
the Company's management, including the Executive, to their assigned duties
without distraction in the face of potentially disturbing circumstances arising
from the possibility of a Change in Control;
NOW THEREFORE, in consideration of the promises and the mutual
covenants herein contained, the Company and the Executive hereby agree as
follows:
1. DEFINED TERMS. The definition of capitalized terms used in
this Agreement is provided in the last Section hereof.
2. TERM OF AGREEMENT. This Agreement shall commence on the date
hereof and shall continue in effect through December 31, 2000; provided,
however, that commencing on January 1, 2001 and each January 1 thereafter, the
term of this Agreement shall automatically be extended for one additional year
unless, not later than December 1 of the preceding year, the Company or the
Executive shall have given notice not to extend this Agreement or a Change in
Control shall have occurred prior to such January 1; provided, however, if a
Change in Control shall have occurred during the term of this Agreement, this
Agreement shall continue in effect for a period of not less than twenty-four
(24) months beyond the month in which such Change in Control occurred.
3. COMPANY'S COVENANTS SUMMARIZED. In order to induce the
Executive to remain in the employ of the Company and in consideration of the
Executive's covenants set forth in Section 4 hereof, the Company agrees, under
the conditions described herein, to pay the Executive the Severance Payments and
the other payments and benefits described herein in the event the Executive's
employment with the Company is terminated following a Change in Control and
during the term of this Agreement. No amount or benefit shall be payable under
this Agreement unless there shall have been (or, under the terms hereof, there
shall be deemed to have been) a termination of the Executive's employment with
the Company following a Change in Control. This Agreement shall not be construed
as creating an express or implied contract of
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employment and, except as otherwise agreed in writing between the Executive and
the Company, the Executive shall not have any right to be retained in the employ
of the Company.
4. THE EXECUTIVE'S COVENANTS. The Executive agrees that, subject
to the terms and conditions of this Agreement, in the event of a Potential
Change in Control during the term of this Agreement, the Executive will remain
in the employ of the Company until the earliest of (i) a date which is six (6)
months from the date of such Potential Change of Control, (ii) the date of a
Change in Control, (iii) the date of termination by the Executive of the
Executive's employment for Good Reason (determined by treating the Potential
Change in Control as a Change in Control in applying the definition of Good
Reason), by reason of death, Disability or Retirement, or (iv) the termination
by the Company of the Executive's employment for any reason.
5. COMPENSATION OTHER THAN SEVERANCE PAYMENTS.
5.1 Following a Change in Control and during the term of this
Agreement, during any period that the Executive fails to perform the Executive's
full-time duties with the Company as a result of incapacity due to physical or
mental illness, the Company shall pay the Executive's full salary to the
Executive at the rate in effect at the commencement of any such period, together
with all compensation and benefits payable to the Executive under the terms of
any compensation or benefit plan, program or arrangement maintained by the
Company during such period, until the Executive's employment is terminated by
the Company for Disability.
5.2 If the Executive's employment shall be terminated for any
reason following a Change in Control and during the term of this Agreement, the
Company shall pay the Executive's full salary to the Executive through the Date
of Termination at the rate in effect at the time the Notice of Termination is
given, together with all compensation and benefits payable to the Executive
through the Date of Termination under the terms of any compensation or benefit
plan, program or arrangement maintained by the Company during such period.
5.3 If the Executive's employment shall be terminated for any
reason following a Change in Control and during the term of this Agreement, the
Company shall pay to the Executive any such post-termination compensation and
benefits as is due to the Executive under any applicable separation or
employment agreement between the Company and the Executive ("Post-Termination
Payments") as such payments become due; provided that in no event shall any
Post-Termination Payments be paid if the Executive is entitled to the Severance
Payments as a result of such termination.
6. SEVERANCE PAYMENTS.
6.1 The Company shall pay the Executive the payments described in
this Section 6.1 (the "Severance Payments") upon the termination of the
Executive's employment following a Change in Control and during the term of this
Agreement, in addition to the payments and benefits described in Section 5
hereof, unless such termination is (i) by the Company for Cause, (ii) by reason
of death or Disability or (iii) by the Executive without Good Reason. The
Executive's employment shall be deemed to have been terminated following a
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Change in Control by the Company without Cause or by the Executive with Good
Reason if the Executive's employment is terminated prior to a Change in Control
without Cause at the direction of a Person who has entered into an agreement
with the Company the consummation of which will constitute a Change in Control
or if the Executive terminates his employment with Good Reason prior to a Change
in Control (determined by treating a Potential Change in Control as a Change in
Control in applying the definition of Good Reason) if the circumstance or event
which constitutes Good Reason occurs at the direction of such Person.
(A) Provided that the Executive has been in the employ of the
Company for at least one year, in lieu of any further salary payments to the
Executive for periods subsequent to the Date of Termination and in lieu of any
severance benefit otherwise payable to the Executive, the Company shall pay to
the Executive a lump sum severance payment, in cash, equal to two (2) times the
sum of (i) the Executive's annual base salary as approved by the Compensation
Committee of the Board to be paid to the Executive (or, if the Executive's
annual base salary is not presented for approval at the Compensation Committee
level, then as otherwise established by J. Xxxx or one of its Subsidiaries) with
respect to the year in which the Date of Termination occurs, plus (ii) an amount
equal to a fraction, the numerator of which is the sum of the amounts paid or
payable to the Executive under any Bonus Plan with respect to the two fiscal
years immediately prior to the year in which Date of Termination occurs, and the
denominator of which is two (2).
(B) Notwithstanding any provision of any Bonus Plan, the
Company shall pay to the Executive a lump sum amount, in cash, equal to the sum
of (i) any incentive compensation which has been allocated or awarded to the
Executive for a completed year or other measuring period preceding the Date of
Termination under any such Bonus Plan but has not yet been paid (pursuant to
Section 5.2 hereof or otherwise), and (ii) a pro rata portion to the Date of
Termination of the aggregate value of all contingent incentive compensation
awards to the Executive for all uncompleted periods under any such Bonus Plan
calculated as to each such award by multiplying such aggregate value, assuming
any and all performance goals for the full period with respect to which such
awards have been made have been met, by a fraction the numerator of which is the
number of days in such period which elapsed to the Date of Termination and the
denominator of which is the number of days in such period.
(C) For a twenty-four (24) month period after the Date of
Termination, the Company shall arrange to provide the Executive with life,
disability, accident and health insurance benefits substantially similar to the
standard group life, disability, accident and health insurance benefits which
the Executive is receiving immediately prior to the Notice of Termination
(without giving effect to any reduction in such benefits subsequent to a Change
in Control which reduction constitutes Good Reason). Benefits otherwise
receivable by the Executive pursuant to this Section 6.1(C) shall be reduced to
the extent comparable benefits are actually received by or made available to the
Executive without cost during the twenty-four (24) month period following the
Executive's termination of employment (and any such benefits actually received
by the Executive shall be reported to the Company by the Executive).
6.2 The payments provided for in Section 6.1 (other than Section
6.1(C)) hereof shall be made not later than the fifth (5th) day following the
Date of Termination.
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7. TERMINATION PROCEDURES AND COMPENSATION DURING DISPUTE.
7.1 NOTICE OF TERMINATION. After a Change in Control and during
the term of this Agreement, any purported termination of the Executive's
employment (other than by reason of death) shall be communicated by written
Notice of Termination from one party hereto to the other party hereto in
accordance with Section 10 hereof. For purposes of this Agreement, a "Notice of
Termination" shall mean a notice which indicates the specific termination
provision in this Agreement relied upon and sets forth in reasonable detail the
facts and circumstances claimed to provide a basis for termination of the
Executive's employment under the provision so indicated. Further, a Notice of
Termination for Cause must include a copy of a resolution duly adopted by the
affirmative vote of not less than two-thirds of the entire membership of the
Board at a meeting of the Board which was called and held for the purpose of
considering such termination (after reasonable notice to the Executive and an
opportunity for the Executive, together with the Executive's counsel, to be
heard before the Board) finding that, in the good faith opinion of the Board,
the Executive was guilty of conduct set forth in clause (i) or (ii) of the
definition of Cause herein, and specifying the particulars thereof in detail.
7.2 DATE OF TERMINATION. "Date of Termination," with respect to
any purported termination of the Executive's employment after a Change in
Control and during the term of this Agreement, shall mean (i) if the Executive's
employment is terminated for Disability, thirty (30) days after Notice of
Termination is given (provided that the Executive shall not have returned to the
full-time performance of the Executive's duties during such thirty (30) day
period), and (ii) if the Executive's employment is terminated for any other
reason, the date specified in the Notice of Termination (which, in the case of a
termination by the Company, shall not be less than thirty (30) days (except in
the case of a termination for Cause) and, in the case of a termination by the
Executive, shall not be less than fifteen (15) days nor more than sixty (60)
days, respectively, from the date such Notice of Termination is given).
7.3 DISPUTE CONCERNING TERMINATION. If prior to the Date of
Termination (as determined without regard to this Section 7.3), the party
receiving a Notice of Termination notifies the other party that a dispute exists
concerning the termination, the Date of Termination shall be the date on which
the dispute is finally resolved, either by mutual written agreement of the
parties or by a final judgment, order or decree (which is not appealable or with
respect to which the time for appeal therefrom has expired and no appeal has
been perfected) of a court of competent jurisdiction; provided, however, that
the Date of Termination shall be extended by a notice of dispute only if such
notice is given in good faith and the party giving such notice pursues the
resolution of such dispute with reasonable diligence.
7.4 COMPENSATION DURING DISPUTE. If a purported termination
occurs following a Change in Control and during the term of this Agreement, and
such termination is disputed in accordance with Section 7.3 hereof, the Company
shall continue to pay the Executive the full compensation in effect when the
notice giving rise to the dispute was given (including, but not limited to,
salary) and continue the Executive as a participant in all compensation, benefit
and insurance plans in which the Executive was participating when the notice
giving rise to the dispute was given, until the dispute is finally resolved in
accordance with Section 7.3 hereof.
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Amounts paid under this Section 7.4 are in addition to all other amounts due
under this Agreement (other than those due under Section 5.2 hereof) and shall
not be offset against or reduce any other amounts due under this Agreement.
8. NO MITIGATION. The Company agrees that, if the Executive's
employment by the Company is terminated during the term of this Agreement, the
Executive is not required to seek other employment or to attempt in any way to
reduce any amounts payable to the Executive by the Company pursuant to Section 6
or Section 7.4 hereof. Further, the amount of any payment or benefit provided
for in Section 6 (other than Section 6.1(C)) or Section 7.4 hereof shall not be
reduced by any compensation earned by the Executive as the result of employment
by another employer, by retirement benefits, by offset against any amount
claimed to be owed by the Executive to the Company, or otherwise.
9. SUCCESSORS; BINDING AGREEMENT.
9.1 In addition to any obligations imposed by law upon any
successor to J. Xxxx, J. Xxxx will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business or assets of J. Xxxx to expressly assume and
agree to perform this Agreement in the same manner and to the same extent that
J. Xxxx would be required to perform it if no such succession had taken place.
Failure of J. Xxxx to obtain such assumption and agreement prior to the
effectiveness of any such succession shall be a breach of this Agreement and
shall entitle the Executive to compensation in the same amount and on the same
terms as the Executive would be entitled to hereunder if the Executive were to
terminate the Executive's employment for Good Reason after a Change in Control,
except that, for purposes of implementing the foregoing, the date on which any
such succession becomes effective shall be deemed the Date of Termination.
9.2 This Agreement shall inure to the benefit of and be
enforceable by the Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees. If the
Executive shall die while any amount would still be payable to the Executive
hereunder (other than amounts which, by their terms, terminate upon the death of
the Executive) if the Executive had continued to live, all such amounts, unless
otherwise provided herein, shall be paid in accordance with the terms of this
Agreement to the executors, personal representatives or administrators of the
Executive's estate.
10. 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 J. Xxxx Group, Inc.
0 Xxxxxxxxxxxx Xxxx
Xxxxxx, Xxxxxxxxxxxxx 00000-0000
Attention: Chief Financial Officer
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WITH A COPY TO:
Xxxxx X. Xxxxxxx, Esq.
Xxxxx, Xxxx & Xxxxx LLP
Xxx Xxxx Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000-0000
To the Executive:
Xxxx X. Xxxxx
00 Xxxxx Xxxxx, #000
Xxxxxxxx, Xxxxxxxxxxxxx 00000
11. MISCELLANEOUS. No provision of this Agreement may be
modified, waived or discharged unless such waiver, modification or discharge is
agreed to in writing and signed by the Executive and such officer as may be
specifically designated by the Board. No waiver by either party hereto at any
time of any breach by the other party hereto of, or compliance with, any
condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of similar or dissimilar provisions or conditions at
the same or at any prior or subsequent time. No agreements or representations,
oral or otherwise, express or implied, with respect to the subject matter hereof
have been made by either party which are not expressly set forth in this
Agreement. The validity, interpretation, construction and performance of this
Agreement shall be governed by the laws of the Commonwealth of Massachusetts,
without regard to its principles of conflicts of laws. All references to
sections of the Exchange Act shall be deemed also to refer to any successor
provisions to such sections. Any payments provided for hereunder shall be paid
net of any applicable withholding required under federal, state or local law and
any additional withholding to which the Executive has agreed. The obligations of
the Company and the Executive under Sections 6 and 7 hereof shall survive the
expiration of the term of this Agreement.
12. VALIDITY. The invalidity or unenforceability or any provision
of this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.
13. COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
14. SETTLEMENT OF DISPUTES; ARBITRATION. All claims by the
Executive for benefits under this Agreement shall be directed to and determined
by the Board and shall be in writing. Any denial by the Board of a claim for
benefits under this Agreement shall be delivered to the Executive in writing and
shall set forth the specific reasons for the denial and the specific provisions
of this Agreement relied upon. The Board shall afford a reasonable opportunity
to the
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Executive for a review of the decision denying a claim and shall further allow
the Executive to appeal to the Board a decision of the Board within sixty (60)
days after notification by the Board that the Executive's claim has been denied.
Any further dispute or controversy arising under or in connection with this
Agreement shall be settled exclusively by arbitration in Boston, Massachusetts,
in accordance with the rules of the American Arbitration Association then in
effect. Judgment may be entered on the arbitrator's award in any court having
jurisdiction; provided, however, that the Executive shall be entitled to seek
specific performance of the Executive's right to be paid until the Date of
Termination during the pendency of any dispute or controversy arising under or
in connection with this Agreement.
15. DEFINITIONS. For purposes of this Agreement, the following
terms shall have the meanings indicated below:
(A) "BENEFICIAL OWNER" shall have the meaning defined in Rule
13d-3 under the Exchange Act.
(B) "BOARD" shall mean the Board of Directors of J. Xxxx.
(C) "BONUS PLAN" shall mean a J. Xxxx Incentive Compensation
Plan or other supplementary compensation plan or bonus plan or arrangement, or
any similar successor plan or arrangement, applicable to the Executive.
(D) "CAUSE" for termination by the Company of the Executive's
employment, after any Change in Control, shall mean (i) the willful and
continued failure by the Executive to substantially perform the Executive's
duties with the Company (other than any such failure resulting from the
Executive's incapacity due to physical or mental illness or any such actual or
anticipated failure after the issuance of a Notice of Termination for Good
Reason by the Executive pursuant to Section 7.1 hereof) after a written demand
for substantial performance is delivered to the Executive by the Board, which
demand specifically identifies the manner in which the Board believes that the
Executive has not substantially performed the Executive's duties, or (ii) the
willful engaging by the Executive in conduct which is demonstrably and
materially injurious to the Company, monetarily or otherwise. For purposes of
clauses (i) and (ii) of this definition, no act, or failure to act, on the
Executive's part shall be deemed "willful" unless done, or omitted to be done,
by the Executive not in good faith and without reasonable belief that the
Executive's act, or failure to act, was in the best interest of the Company.
(E) A "CHANGE IN CONTROL" shall be deemed to have occurred if
the conditions set forth in any one of the following paragraphs shall have been
satisfied:
(I) any Person becomes the Beneficial Owner, directly or
indirectly, of securities of J. Xxxx (not including in the securities
beneficially owned by such Person any securities acquired directly from J. Xxxx
or its affiliates) representing 50% or more of the combined voting power of J.
Jill's then outstanding securities; or
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(II) during any period of two (2) consecutive years (not
including any period prior to the execution of this Agreement), individuals who
at the beginning of such period constitute the Board and any new director (other
than a director designated by a Person who has entered into an agreement with J.
Xxxx to effect a transaction described in clause (I), (III) or (IV) of this
paragraph) whose election by the Board or nomination for election by J. Jill's
stockholders was approved by a vote of at least two-thirds (2/3) of the
directors then still in office who either were directors at the beginning of the
period or whose election or nomination for election was previously so approved
(a "Continuing Director"), cease for any reason to constitute a majority
thereof; or
(III) the stockholders of J. Xxxx approve a merger or
consolidation of J. Xxxx with any other corporation, other than (i) a merger or
consolidation which would result in the voting securities of J. Xxxx outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving
entity) at least 50% of the combined voting power of the voting securities of J.
Xxxx or such surviving entity outstanding immediately after such merger or
consolidation, or (ii) a merger or consolidation effected to implement a
recapitalization of J. Xxxx (or similar transaction) in which no Person acquires
more than 50% of the combined voting power of the Company's then outstanding
securities; or
(IV) the stockholders of J. Xxxx approve a plan of
complete liquidation of J. Xxxx or an agreement for the sale or disposition by
J. Xxxx of all or substantially all J. Jill's assets.
The foregoing to the contrary notwithstanding, a Change in Control
shall not be deemed to have occurred with respect to the Executive if the
Executive is "part of a purchasing group" which consummates the Change in
Control transaction. The Executive shall be deemed "part of a purchasing group"
for purposes of the preceding sentence if the Executive is an equity participant
or has agreed to become an equity participant in the purchasing company or group
(except for (i) passive ownership of less than 5% of the stock of the purchasing
company or (ii) ownership of equity participation in the purchasing company or
group which is otherwise not deemed to be significant, as determined prior to
the Change in Control by a majority of the nonemployee Continuing Directors).
(F) "COMPANY" shall mean J. Xxxx and its Subsidiaries.
(G) "DATE OF TERMINATION" shall have the meaning stated in
Section 7.2 hereof.
(H) "DISABILITY" shall be deemed the reason for the termination
by the Company of the Executive's employment, if, as a result of the Executive's
incapacity due to physical or mental illness, the Executive shall have been
absent from the full-time performance of the Executive's duties with the Company
for a period of six (6) consecutive months, the Company shall have given the
Executive a Notice of Termination for Disability, and, within thirty (30) days
after such Notice of Termination is given, the Executive shall not have returned
to the full-time performance of the Executive's duties.
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(I) "EXCHANGE ACT" shall mean the Securities Exchange Act of
1934, as amended from time to time.
(J) "EXECUTIVE" shall mean the individual named in the first
paragraph of this Agreement.
(K) "GOOD REASON" for termination by the Executive of the
Executive's employment shall mean the occurrence (without the Executive's
express written consent) of any one of the following acts by the Company, or
failures by the Company to act, unless, in the case of any act or failure to act
described in paragraph (I), (V), (VI), (VII), or (VIII) below, such act or
failure to act is corrected prior to the Date of Termination specified in the
Notice of Termination given in respect thereof:
(I) the assignment to the Executive of any duties
inconsistent with the Executive's status as a senior officer of the Company or a
substantial adverse alteration in the nature or status of the Executive's
responsibilities from those in effect immediately prior to the Change in
Control;
(II) a 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;
(III) the Company's requiring that the Executive's principal
place of business be at an office located more than 25 miles from (i) the site
of the Executive's principal place of business immediately prior to the Change
in Control or (ii) Weymouth, Massachusetts, except for required travel on the
Company's business to an extent substantially consistent with the Executive's
present business travel obligations;
(IV) the failure by the Company, without the Executive's
consent, to pay to the Executive any portion of the Executive's current
compensation, or to pay to the Executive any portion of an installment of
deferred compensation under any deferred compensation program of the Company,
within seven (7) days of the date such compensation is due;
(V) the failure by the Company to continue in effect any
compensation plan in which the Executive participates immediately prior to the
Change in Control which is material to the Executive's total compensation,
unless an equitable arrangement (embodied in an ongoing substitute or
alternative plan) has been made with respect to such plan, or the failure by the
Company to continue the Executive's participation therein (or in such substitute
or alternative plan) on a basis not materially less favorable, both in terms of
the amount of benefits provided and the level of the Executive's participation
relative to other participants, as existed at the time of the Change in Control;
(VI) the failure by the Company to continue to provide the
Executive with benefits substantially similar to those enjoyed by the Executive
under any of the Company's pension, life insurance, medical, health and
accident, or disability plans in which the
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Executive was participating at the time of the Change in Control, the taking of
any action by the Company which would directly or indirectly materially reduce
any of such benefits or deprive the Executive of any material fringe benefit
enjoyed by the Executive at the time of the Change in Control, or the failure by
the Company to provide the Executive with the number of paid vacation days to
which the Executive is entitled on the basis of years of service with the
Company in accordance with the Company's normal vacation policy in effect at the
time of the Change in Control; or
(VII) any purported termination of the Executive's employment
which is not effected pursuant to a Notice of Termination satisfying the
requirements of Section 9.01 hereof; for purposes of this Agreement, no such
purported termination shall be effective.
The Executive's right to terminate the Executive's employment for Good
Reason shall not be affected by the Executive's incapacity due to physical or
mental illness. The Executive's continued employment shall not constitute
consent to, or a waiver of rights with respect to, any act or failure to act
constituting Good Reason hereunder.
(L) "J. XXXX" shall mean The J. Xxxx Group, Inc. and any
successor to its business or assets which assumes and agrees to perform this
Agreement by operation of law, or otherwise (except in determining, under
Section 15(E) hereof, whether or not any Change in Control of J. Xxxx has
occurred in connection with such succession).
(M) "NOTICE OF TERMINATION" shall have the meaning stated in
Section 7.1 hereof.
(N) "PERSON" shall have the meaning given in Section 3(a)(9) of
the Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof;
provided, however, that a Person shall not include (i) J. Xxxx or any of its
Subsidiaries, (ii) a trustee or other fiduciary holding securities under an
employee benefit plan of the Company, (iii) an underwriter temporarily holding
securities pursuant to an offering of such securities, or (iv) a corporation
owned, directly or indirectly, by the stockholders of J. Xxxx in substantially
the same proportions, as their ownership of stock of
(O) "POST-TERMINATION PAYMENTS" shall have the meaning stated in
Section 5.3 hereof.
(P) A "POTENTIAL CHANGE IN CONTROL" shall be deemed to have
occurred if the conditions set forth in any one of the following paragraphs
shall have been satisfied:
(I) J. Xxxx enters into an agreement, the consummation of
which would result in the occurrence of a Change in Control;
(II) J. Xxxx or any Person publicly announces an intention to
take or to consider taking actions which, if consummated, would constitute a
Change in Control;
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(III) any Person who is or becomes the Beneficial Owner,
directly or indirectly, of securities of J. Xxxx representing at least 20% or
more of the combined voting power of J. Jill's then outstanding securities
increases such Person's beneficial ownership of such securities by 5% or more
over the percentage so owned by such Person on the date hereof; or
(IV) the Board adopts a resolution to the effect that, for
purposes of this Agreement, a Potential Change in Control has occurred.
The foregoing to the contrary notwithstanding, a Potential Change in
Control shall not be deemed to have occurred with respect to the Executive if
(i) the event first giving rise to the Potential Change in Control involves a
publicly announced transaction or publicly announced proposed transaction which
at the time of the announcement has not been previously approved by the Board
and (ii) the Executive is "part of a purchasing group" proposing the
transaction. The Executive shall be deemed "part of a purchasing group" for
purposes of the preceding sentence if the Executive is an equity participant or
has agreed to become an equity participant in the purchasing company or group
(except for (i) passive ownership of less than 5% of the stock of the purchasing
company or (ii) ownership of equity participation in the purchasing company or
group which is otherwise not deemed to be significant, as determined prior to
the Potential Change in Control by a majority of the nonemployee Continuing
Directors).
(Q) "SEVERANCE PAYMENTS" shall mean those payments described in
Section 6.01 hereof.
(R) "SUBSIDIARY" shall mean any corporation, partnership or other
entity, at least a majority of the outstanding voting shares or controlling
interest of which is at the time directly or indirectly owned or controlled
(either alone or through Subsidiaries or together with Subsidiaries) by J. Xxxx
or another Subsidiary.
IN WITNESS WHEREOF, the parties have executed this Severance Agreement
as of the date first above written.
THE J. XXXX GROUP, INC.
By /s/ Xxxx X. Xxxxxx
---------------------------------
Authorized Officer
/s/ Xxxx X. Xxxxx
---------------------------------
Xxxx X. Xxxxx
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