Exhibit 10.1
SEPARATION
AGREEMENT
This Separation Agreement (“
Agreement ”) is made effective as of January 9,
2009, between bebe stores, inc., a California corporation (the
“ Company ”), and Gregory Scott (“
Executive ”).
RECITALS
A.
Executive serves as the
Company’s Chief Executive Officer, and his employment with
the Company will terminate effective as of January 9, 2009
(the “ Termination Date ”).
B.
The parties wish to enter into this
Agreement to set forth the terms and conditions related to
Executive’s termination of employment with the
Company.
AGREEMENT
NOW, THEREFORE, in consideration of
good and valuable consideration the receipt of which is hereby
acknowledged, the parties hereby agree as follows:
1.
Termination; Accrued
Obligations .
Executive acknowledges that his employment with the Company will
end effective as of the Termination Date. The Company shall
pay Executive, within three days after the Termination Date, all
accrued but unpaid salary, and all accrued and unused vacation
earned through the Termination Date, subject to any applicable
withholding required under federal, state or local law.
Executive is entitled to these amounts regardless of whether
Executive revokes this Agreement (as described in
Section 5(e) below).
2.
Severance Benefits
. The Company agrees that
Executive shall be entitled to receive the following benefits,
provided that Executive does not revoke the Agreement as described
in Section 5(e) below:
(a)
Severance Payments
. The Company shall provide
Executive with severance payments in an aggregate amount equal to
$600,000, which is Executive’s current annual base
salary. The severance payments shall be paid in equal
increments over the twelve (12) month period following the
Termination Date (the “ Salary Continuation Period
”) in accordance with the Company’s normal payroll
procedures.
(b)
Continued Health Care
Benefits . The
Company shall maintain in full force and effect for the continued
benefit of Executive during the Salary Continuation Period, medical
and dental insurance (including coverage for Executive’s
dependents to the extent dependent coverage is provided by the
Company for its employees generally) under such plans and programs
in which Executive was entitled to participate immediately prior to
the Termination Date, provided that Executive’s continued
participation is possible under the general terms and provisions of
such plans and programs. In the event that participation in
any such plan or program is not permitted, the Company shall
arrange to provide Executive with medical and dental insurance
benefits at the Company’s expense during the Salary
Continuation Period substantially similar to those which Executive
would otherwise have been entitled to receive
1
under such plans and programs from which his
continued participation is barred.
(c)
Stock Option
. As of the Termination Date,
Executive shall (i) become fully vested with respect to any
previously unvested portion of the option to purchase 100,000
shares of the Company’s common stock which was previously
granted to Executive on September 8, 2008 (the “
Stock Option ”), and (ii) the Stock Option shall
remain exercisable until the date occurring one year after the
Termination Date.
(d)
Withholding
. Executive understands and
agrees that all payments under Section 2 of this Agreement
will be subject to any applicable withholding required under
federal, state or local law.
3.
Section 409A
. This Agreement shall be
administered and interpreted to maximize the short-term deferral
exception to Section 409A of the Internal Revenue Code of
1986, as amended (the “ Code ”), and Executive
shall not, directly or indirectly, designate the taxable year of a
payment made under this Agreement. Any payment under this
Agreement that is paid within the short-term deferral period
(within the meaning of Code Section 409A and Treas. Reg.
§1.409A-1(b)(4)) shall be treated as a short term deferral and
not aggregated with other plans or payments.
4.
General Release
. In exchange for the
severance payments and benefits provided for in Section 2,
Executive releases and forever discharges the Company and each of
its subsidiaries, affiliates, officers, directors, employees, and
agents and all of their predecessors and successors (“
Releasees ”) from any and all claims that legally can
be released that Executive may have against the Releasees, whether
known or unknown, arising out of Executive’s employment with
the Company or the
