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Exhibit 10.60
SEVERANCE RIGHTS AGREEMENT
This Severance Rights Agreement dated as of December 19,
2008 (as amended and otherwise modified, the " Agreement "),
is entered into by and between Bare Escentuals Beauty, Inc. (the "
Company "), a Delaware corporation, and Myles McCormick (the
" Executive ").
RECITALS
WHEREAS, the Company and Executive are parties to that certain
that certain offer letter dated December 8, 2004, between
Executive and the Company (the " Prior Agreement "); and
WHEREAS, the Company and Executive desire to amend the Prior
Agreement on the terms and conditions set forth herein.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing premises and
the mutual promises, terms, provisions and conditions set forth in
this Agreement, the parties hereby agree:
1. Severance Benefits
.
(a) Termination By the
Company Other than for Cause . In the event of a termination of
Executive’s employment by the Company without Cause other
than as a result of Executive’s death or disability:
(i) The Company shall pay
Executive (A) his accrued but unpaid base salary through the
date of termination, (B) accrued but unused vacation through
the date of termination plus (C) unreimbursed expenses for
which documentation is properly submitted in accordance with the
Company’s expense reimbursement policy (collectively, the "
Accrued Rights ").
(ii) Provided (A) such
termination constitutes a "separation from service" with the
Company (as defined under Treasury Regulation
Section 1.409A-1(h)) (a "Separation from Service"),
(B) Executive executes, and allows to become effective, a
general release of all claims in substantially the form attached
hereto as Exhibit A (the " Release ") within 30 days
after his Separation from Service (or such longer period as
mandated by applicable law), and (C) Executive remains in
compliance with his obligations under any confidentiality,
assignment of inventions or other agreement between Executive and
the Company (each an " Employee Agreement "), then the
Company will pay Executive, as severance, a lump sum cash payment
equal to 12 months of Executive’s then current base salary
(the " Severance Amount "). Subject to Section 1(g),
the Severance Amount shall be paid on the 30 th day following the date of
Executive’s termination. Payment by the Company of the
Accrued Rights and the Severance Amount shall constitute the entire
obligation of the Company to Executive in the event of
Executive’s termination of employment by the Company without
Cause.
(b) Other
Terminations . In the event of a termination of
Executive’s employment by the Company for Cause, any
voluntary resignation by Executive or a termination of
Executive’s employment as a result of Executive’s death
or disability, the Company shall pay the Accrued Rights and shall
not have any other or further obligations to Executive under this
Agreement (including any financial obligations).
(c) Termination Following
a Change in Control . In the event of a termination of
Executive’s employment by the Company other
than for Cause or by Executive for Good Reason, in each case within
twelve (12) months after a Change in Control:
(i) The Company shall pay
Executive the Accrued Rights.
(ii) Provided (A) such
termination constitutes a Separation from Service,
(B) Executive executes, and allows to become effective, the
Release within 30 days after his Separation from Service (or such
longer period as mandated by applicable law), and
(C) Executive remains in compliance with his obligations under
any Employee Agreement and returns all Company property to the
Company upon such termination, then the Company will pay Executive,
as severance, (1) a lump sum cash payment equal to the sum of
12 months of Executive’s then current base salary and 100% of
Executive’s cash bonus earned for the year prior to the year
in which the termination of employment occurs and (2) provided
Executive makes a timely and accurate election for continued
covered under the Company’s medical, dental and vision
insurance plans under COBRA for Executive and his eligible
dependents, payment of the premiums for such COBRA coverage for up
to 12 months (or such earlier date as he and his dependents cease
to be eligible for such coverage), less the applicable active
employee contribution for such coverage in an amount not to exceed
the premium paid by Executive immediately prior to his termination
date (which amount Executive will be required to pay directly)
(collectively, the " Change in Control Severance Amount ").
Subject to Section 1(g), item (1) of the Change in
Control Severance Amount shall be paid on the 30 th day following the date of
Executive’s termination.
(iii) Executive will be fully
vested in all stock options, restricted stock, restricted stock
units and all other equity awards then held by Executive.
(iv) Payments under this
Section 1(c) shall be made without regard to whether the
deductibility of such payments (or any other payments to or for the
benefit of Executive) would be limited or precluded by
Section 280G of the Internal Revenue Code of 1986, as amended
(the " Code ") and without regard to whether such payments
(or any other payments) would subject Executive to the federal
excise tax levied on certain "excess parachute payments" under
Section 4999 of the Code; provided, that if the total of all
payments to or for the benefit of Executive, after reduction for
all federal taxes (including the tax described in Section 4999
of the Code, if applicable) with respect to such payments ("
Executives total after-tax payments "), would be increased
by the limitation or elimination of any payment under this
Section 1(c), amounts payable under this Section 1(c)
shall be reduced to the extent, and only to the extent, necessary
to maximize Executive’s total after-tax payments (the "
required reduction amount "). The determination as to
whether and to what extent payments under this Section 1(c)
are required to be reduced in accordance with the preceding
sentence shall be made at the Company’s expense by the
Company’s independent accountants (the "Outside Firm"). In
the event of any mistaken underpayment or overpayment under this
Section 1(c), as determined by the Outside Firm, the amount of
such underpayment or overpayment shall forthwith be paid to
Executive or refunded to the Company, as the case may be, with
interest at 120% of the applicable Federal rate provided for in
Section 7872(f)(2) of the Code. Any reduction in payments
required by this Section 1(c)(iv) shall be applied as follows:
First out of the cash components of the Change in Control Severance
Amount, second out of COBRA premium component of the Change in
Control Severance Amount, and lastly out of the vesting of equity
awards.
(v) Payments and benefits due
Executive under this Section 1(c) shall constitute the entire
obligation of the Company to Executive in event of
Executive’s termination of employment by the Company without
Cause or by Executive for Good Reason, in each within 12 months
after a Change in Control.
(d) Effect of
Termination . The provisions of this Section 1(d) shall
apply in the
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event of any termination of Executive’s
employment.
(i) Benefits shall terminate
pursuant to the terms of the applicable benefit plans based on the
date of termination of Executive’s employment without regard
to any continuation of base salary or other payment to Executive
following such date of termination.
(ii) The provisions of this
Agreement shall survive any termination if so provided herein or if
necessary or desirable to accomplish the purposes of other
surviving provisions. The obligation of the Company to make
payments to or on behalf of Executive under Sections 1(a) and 1(c)
hereof is expressly conditioned upon Executive’s continued
full performance of Executive’s obligations under any
Employee Agreement. Executive recognizes that, except as expressly
provided in Sections 1(a) and 1(c), no compensation is earned after
termination of employment.
(e) Mitigation .
Executive shall not be required to mitigate damages with respect to
the termination of his employment under this Agreement by seeking
other employment or otherwise, and there shall be no offset against
amounts due to Executive under this Agreement on account of
subsequent employment. Additionally, amounts owed to Executive
under this Agreement shall not be offset by any claims the Company
may have against Executive, and the Company’s obligation to
make the payments provided for in this Agreement, and otherwise to
perform its obligations hereunder, shall not, except as otherwise
provided in Section 1(f), be affected by any other
circumstances, including, without limitation, any counterclaim,
recoupment, defense or other right which the Company may have
against Executive or others.
(f) Severance Offset
. The Company’s obligation to pay the Severance Amount or the
Change in Control Severance Amount, as the case may be, shall be
reduced by (i) severance benefits to which Executive is
entitled under any other plan, agreement or arrangement with the
Company or its Affiliates and (ii) notice pay required to be
paid to Executive under applicable legal requirements, including,
without limitation, the Worker Adjustment and Retraining
Notification Act.
(g) Required Delay for
Certain Deferred Compensation . Notwithstanding any other
provision of this Agreement, to the extent any payments to
Executive pursuant to this Agreement are treated as non-qualified
deferred compensation subject to Section 409A of the Code
(together, with any state law of similar effect, " Section
409A "), then if Executive, at the time of his Separation from
Service, is determined by the Company to be a "specified employee"
for purposes of Section 409A(a)(2)(B)(i) of the Code and the
Company determines that delayed commencement of any portion of the
termination benefits payable to Executive pursuant to this
Agreement is required in order to avoid a prohibited distribution
under Section 409A(a)(2)(B)(i) of the Code (any such delayed
commencement, a " Payment Delay "), then such portion of
Executive’s termination benefits shall not be provided to
Executive prior to the earliest of (A) the expiration of the
six-month period measured from the date of Executive’s
Separation from Serv
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