SEPARATION AGREEMENT AND GENERAL RELEASE

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Exhibit 10.16

SEPARATION AGREEMENT
AND GENERAL RELEASE

        This Separation Agreement and General Release (" Agreement ") is entered into on April 10, 2006 (the " Execution Date "), to be effective for all purposes as of March 24, 2006, by and between Jane Gilmartin (" Executive "), and Linens 'n Things, Inc., a Delaware corporation (the " Company "). (The Executive and the Company are referred to collectively herein as the " Parties ").

RECITALS

        WHEREAS, the Executive has been employed by the Company as a Senior Executive pursuant to an Employment Agreement, dated as of July 20, 2005, by and between the Company and Executive (the " Employment Agreement "); and

        WHEREAS, the Company terminated Executive's employment without Cause following a Change in Control (as such terms are defined in the Employment Agreement), effective March 24, 2006 (the " Separation Date "), and, in connection with such termination, the Parties have agreed to settle any and all related agreements between the Parties and their affiliates in the manner set forth herein;

        NOW THEREFORE, in consideration of the promises and mutual covenants contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are expressly acknowledged, the Parties agree and promise as follows:

        1.     TERMINATION. To the extent not already effected, the Parties hereby confirm Executive's termination from all director, officer and/or other positions, as applicable, with the Company and each of its affiliates, as of the Separation Date.

        2.     BENEFITS. With respect to any benefits or rights that Executive has accrued or earned as of the Separation Date under any of the Company's employee benefit plans, Executive shall be entitled to such benefits pursuant to the terms of such plans, if any.

        3.     TERMINATION BENEFITS.

        In consideration of Executive's release of claims and Executive's other covenants and agreements contained herein and provided that Executive has not exercised any revocation rights as provided in Section 5 below, the Company shall compensate the Executive with severance pay and benefits as follows (" Severance Compensation "), effective within fourteen (14) days after the Executive's execution of this Agreement:

        (a)   The Company shall pay the Executive her remaining base salary for 2006 (if any remains to be paid), pro rata through the Separation Date, minus deductions authorized by Executive and/or required by law, paid in accordance with the Company's normal payroll system and practices.

        (b)   The Company shall pay the Executive the single, aggregate lump sum amount of One Million, Fifty Thousand Dollars and No/100 ($1,050,000.00), minus deductions authorized by Executive and/or required by law, which sum is equal to two times Executive's most recent base salary. This lump sum amount shall be payable in accordance with the Company's normal payroll system and practices.

        (c)   The Company shall pay the Executive the single, aggregate lump sum amount of Four Hundred and Seventy-Two Thousand, Five Hundred Dollars and No/100 ($472,500.00), minus deductions authorized by Executive and/or required by law, which sum is equal to two times 45% of Executive's most recent base salary. This lump sum amount shall be payable in accordance with the Company's normal payroll system and practices.

        (d)   The Company shall pay the Executive the single, aggregate lump sum amount of Fifty-Nine Thousand, Sixty-Two Dollars, and 50/100 ($59,062.50), minus deductions authorized by Executive and/or required by law, which sum is equal to Executive's pro rata incentive bonus for 2006, based on an award (as deemed by the Employment Agreement) equal to 45% of base salary. This lump sum amount shall be payable in accordance with the Company's normal payroll system and practices.

        (e)   The Parties acknowledge and agree that they are subject to the terms and conditions of the provisions set forth in Section 10(e)(ix) (including subparts (A) and (B)) of the Employment Agreement and agree to continue to be bound by those terms and conditions in accordance therewith.

        (f)    Section 18 of the Employment Agreement shall survive Executive's termination from employment, to the extent it is applicable.

        4.     GENERAL RELEASE BY EXECUTIVE.

        (a)   Executive, individually, and on behalf of, as applicable, Executive's current, former, and successor attorneys, representatives, guardians, heirs, assigns, successors, executors, administrators, insurers, servants, agents, employees, affiliates, and entities does hereby irrevocably GENERALLY RELEASE, ACQUIT, AND DISCHARGE the Company and the Other Released Parties (as defined in 4(b) below), from any and all Claims and Controversies (as defined in 4(c) below); provided, however , that nothing in this Agreement will be considered a release of Executive's claims, if any, for (i) vested employment benefits pursuant to the Employee Retirement Income Security Act of 1974 as amended, (ii) worker's compensation insurance coverage, (iii) unemployment insurance coverage, (iv) Executive's right to enforce this Agreement, (v) indemnification as an officer, director or employee of the Company pursuant to the Company's Certificate of Incorporation, By-laws, or applicable state law, or (vi) coverage under the Company's directors' and officers' liability insurance, if any.

        (b)   For the purposes of this Agreement, the term " Other Released Parties " means, as applicable, the Company's related and affiliated entities (including corporations, limited liability companies, firms, associations, partnerships, and joint ventures), and with respect to the Company and its related and affiliated entities, each of their respective predecessors and successors, and each of their past, present and future employees, officers, directors, stockholders, trustees, owners, partners, members, representatives, administrators, assigns, attorneys, agents, servants, assigns, insurers, employee benefit programs (and the trustees, administrators, fiduciaries, and insurers of such programs), specifically including, but not limited to, Linens Investors, LLC, Apollo Management V, LP, Apollo Investment Fund V, LP, and their affiliates.

        (c)   For the purposes of this Agreement, the term " Claims and Controversies " means any and all claims, debts, damages, demands, liabilities, benefits, suits in equity, complaints, grievances, obligations, promises, agreements, rights, controversies, costs, losses, remedies, attorneys' fees and expenses, back pay, front pay, severance pay, percentage recovery, injunctive relief, lost profits, emotional distress, mental anguish, personal injuries, liquidated damages, punitive damages, disability benefits, interest, expert fees and expenses, reinstatement, other compensation, suits, appeals, actions, and causes of action, of whatever kind or character, including without limitation, any dispute, claim, charge, or cause of action arising under the Civil Rights Act of 1964, Title VII, 42 U.S.C. §§ 2000e et seq., as amended (including the Civil Rights Act of 1991), the Civil Rights Act of 1866, 42 U.S.C. §§ 1981 et seq., as amended, the Equal Pay Act of 1963 (EPA), 29 U.S.C. §§ 201 et seq., as amended, the Age Discrimination in Employment Act of 1967, 29 U.S.C. §§ 621 et seq., as amended, the Americans with Disabilities Act of 1990 (ADA), 42 U.S.C. §§ 12101 et seq., as amended, the Rehabilitation Act of 1973, 29 U.S.C. §§ 794 et seq., as amended, the Employee Retirement Income Security Act (ERISA), 29 U.S.C. §§ 1001 et seq., as amended, the

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Consolidated Budget and Reconciliation Act of 1985 (COBRA), §§ 1161 et seq., as amended, the Fair Labor Standards Act (FLSA), 29 U.S.C. §§ 201 et seq., as amended, the Family and Medical Leave Act (FMLA), 29 U.S.C. §§ 2601 et seq., as amended, the Labor Management Relations Act (LMRA), 29 U.S.C. §§ 141 et seq., as amended, the Employee Polygraph Protection Act, 29 U.S.C. §§ 2001 et seq., as amended, the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. §§ 1961 et seq., as amended, the Occupational Safety and Health Act (OSHA), 29 U.S.C. §§ 651 et seq., as amended, the Electronic Communications Privacy Act, 18 U.S.C. 2510 et seq., and 2701 et seq., as amended, the Uniform Services Employment and Re-Employment Rights Act, 38 U.S.C. §§ 4301 et seq., as amended, the Sarbanes-Oxley Act, 18 U.S.C. § 1514A, as amended, all other applicable state and federal fair employment laws, state and federal equal employment opportunity laws, and state and federal labor statutes and regulations, and all other constitutional, federal, state, local, and municipal law claims, whether statutory, regulatory, common law (including without limitation, breach of the Employment Agreement, other breach of express or implied contract, wrongful discharge in violation of public policy, breach of covenant of good faith and fair dealing, promissory estoppel, quantum meruit, fraud, fraud in the inducement, fraud in the factum, statutory fraud, negligent misrepresentation, defamation, libel, slander, slander per se, retaliation, tortious interference with prospective contract, tortious interference with business relationship, tortious interference with contract, invasion of privacy, intentional infliction of emotional distress, and any other common law theory of recovery, whether legal or equitable, negligent or intentional), or otherwise, whether known or unknown to the Parties, foreseen or unforeseen, fixed or contingent, liquidated or unliquidated, directly or indirectly arising out of or relating to any and all disputes now existing between Executive on the one hand, and the Company on the other hand, whether related to or in any way growing out of, resulting from or to result from Executive's employment with and/or termination from the Company, for or because of any matter or thing done, omitted, or allowed to be done by the Company or the Other Released Parties, as applicable, for any incidents, including those past and present, which existed or may have existed at any time prior to and/or contemporaneously with the execution of this Agreement, including all past, present, and future damages, injuries, costs, expenses, attorney's fees, other fees, effects and results in any way related to or connected with such incidents.

        (d)   Executive understands tha