Exhibit 10.69
SEVERANCE AGREEMENT
This Severance Agreement (the
“Agreement”) is made as of the later of
December 17, 2007 and the Executive’s employment
commencement date, between The Talbots, Inc., a Delaware
corporation (together with its subsidiaries, the
“Company”) and Basha Cohen (the
“Executive”). This Agreement sets forth the agreement
of the parties relating to the severance arrangements for the
Executive under certain circumstances. Capitalized terms used in
this Agreement are defined in Section 7 hereof.
1. Severance Pay and
Associated Benefits Upon a Qualified Termination .
(a)
Severance Benefits . In the event of a Qualified
Termination, and subject to the terms of this Agreement, the
Company will provide to the Executive the payments and benefits
described in this Section 1 (collectively, the
“Severance Benefits”).
(b)
Severance Pay . Subject to the terms of this Agreement, in
the event of a Qualified Termination, the Company will pay to the
Executive severance pay in the gross amount equal to 1.5 times the
Executive’s annual base salary in effect immediately prior to
such termination (the “Severance Payment”), payable in
equal installments in accordance with normal Company payroll
practices over a 18 month period beginning immediately
following the Termination Date (the “Severance
Period”).
(c)
Benefits Continuation . Subject to the terms of this
Agreement, upon any such Qualified Termination, the Company will
also arrange for the Executive to continue to participate (through
COBRA or otherwise), on substantially the same terms and conditions
as in effect for the Executive (including any required employee
contribution) immediately prior to such termination, in the medical
and dental programs provided to the Executive immediately prior to
such termination until the earlier of (i) the end of the
Severance Period, or (ii) such time as the Executive is
eligible to be covered by comparable benefits of a subsequent
employer. The Executive agrees to notify the Company promptly if
and when the Executive begins employment with another employer and
if and when the Executive becomes eligible to participate in any
benefit or other welfare plans, programs or arrangements of another
employer. Executive agrees that any automobile/housing allowance or
other personal benefits provided by the Company to the Executive
immediately prior to such termination will cease as of the
Termination Date. The Company, however, may choose to make any
separate arrangements with the Executive to assist with the
transfer of any such benefits.
(d)
Retirement Benefits . Nothing in this Agreement will modify
or otherwise limit any of the Executive’s rights and benefits
as may exist under the terms of any qualified, nonqualified or
supplemental retirement, 401(k), savings or deferred compensation
plans of the Company (excluding any severance or severance
compensation plans) (“Retirement Plans”), nor will any
benefits or amounts payable under any such Retirement Plans reduce
or offset any Severance Benefits afforded to the Executive under
this Agreement.
(e)
Equity Awards .
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(i) If
in the event of a Qualified Termination the Executive still holds
one or more options to purchase shares of Company stock which have
not expired and have not been fully exercised, the Executive, at
any time within 3 years after the Termination Date (but in no
event after the option has expired), may exercise any such options
with respect to any shares as to which the Executive could have
exercised the options on the Termination Date.
(ii) The
Executive agrees that until the expiration of 6 months from
the Termination Date, the Executive will not engage in the purchase
or sale of the Company’s common stock (including without
limitation any “cashless exercise” of any stock options
involving the sale of any Company common stock as part of such
option exercise) during any trading window “blackout”
or “quiet period” applicable to management level
employees (“Quiet Period”). The Executive acknowledges
that the Company reserves the right to modify the Quiet Period from
time to time in its sole and absolute discretion. The Company will
provide the Executive with notice of Quiet Periods and changes
thereto at the time it provides such notice to the Company’s
management level employees. In addition, the Executive agrees to
notify the Company’s General Counsel prior to exercising any
options or trading in the Company’s common stock within such
6 month period following the Termination Date to ascertain
whether such transaction would violate any Quiet Period covered by
this subsection (e)(ii).
(iii) Except
as otherwise expressly set forth in any agreement between the
Executive and the Company relating to any restricted stock or
performance accelerated restricted stock award, in the event of a
Qualified Termination or other termination of employment, the
Executive agrees that the Company will be deemed to have exercised
its repurchase option with respect to any shares of unvested
restricted stock or performance accelerated restricted stock of the
Company held by the Executive as of the Termination Date, and the
Company will promptly pay the Executive $.01 for each share.
(f)
Withholdings . The Company may deduct from the
Executive’s Severance Payment and any other payments
otherwise due to the Executive, such withholding taxes and similar
governmental payments and charges as may be required.
(g)
Timing for Payment; Section 409A Restrictions .
Notwithstanding anything in this Agreement to the contrary, it is
the intention of the parties that this Agreement comply with
Section 409A of the Internal Revenue Code of 1986, as amended
(the “Code”), and any regulations or other guidance
issued thereunder, and this Agreement and the payments of any
benefits hereunder will be operated and administered accordingly.
Specifically, but not by limitation, the Executive agrees that if,
at the time of termination of employment, the Company is considered
to be publicly traded and the Executive is considered to be a
specified employee, as defined in Section 409A (and as
determined as of December 31 preceding the Executive’s
termination of employment, unless the Executive’s termination
of employment occurs prior to April 30, in which case the
determination will be made as of the second preceding
December 31), then some or all of such payments to be made
under this Agreement as a result of the Executive’s
termination of employment will be deferred for no more than
6 months following such termination of employment, if and to
the extent the delay in such payments is necessary in order to
comply with the requirements of Section 409A of the Code. Upon
expiration of such 6 month period (or, if earlier, the
Executive’s death), any payments so withheld hereunder from
the Executive hereunder will be distributed to the Executive, with
a payment of interest thereon
2
credited
at a rate of prime plus 1% (with such prime rate to be determined
as of the actual payment date).
2. Release and Waiver
.
The Company’s obligation to
make the payments and provide the benefits to the Executive as set
forth in Section 1 above will be conditioned upon and subject
to the Executive having delivered to the Company an
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