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Exhibit 10.61
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 Michael Dadario (the
" Executive ").
RECITALS
WHEREAS, the Company and Executive are parties to that certain
that certain offer letter dated May 18, 2008, 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 event of any termination of
Executive’s employment.
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(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 Service, (B) the date of Executive’s
death or (C) such earlier date as is permitted under
Section 409A. Upon the expiration of the applicable Code
Section 409A(a)(2)(B)(i) deferral period, all payments
deferred pursuant to a Payment Delay shall be paid in a lump sum to
Executive upon such expirat
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