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Amended And Restated Severance Agreement

This is an actual contract by Carters.

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Sectors: Consumer Products (Non-Durables)
Governing Law: Massachusetts, View Massachusetts State Laws
Effective Date: March 02, 2011
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EXHIBIT 10.6







AMENDED AND RESTATED SEVERANCE AGREEMENTnone




This Amended and Restated Severance Agreement (" Agreement" ) is made as of March 2, 2011 (the " Effective Date" ), by and between The William Carter Company (the " Company" ) and Brian J. Lynch (the " Executive" ). Except as otherwise provided in Section 14(b) hereof, this Agreement shall replace in its entirety the letter agreement between Executive and the Company dated as of June 6, 2008, as amended from time to time (the " Prior Agreement" ) and the Severance Agreement between the Executive and the Company dated as of August 25, 2010 (the " Severance Agreement" ).




WHEREAS, the Company has determined that given the key nature of the Executive' s position, the interests of the Company will be best served by entering into an amended and restated agreement with respect to certain aspects of the employment relationship and by providing the Executive the assurance of severance pay and benefits in the event that the Executive' s employment is terminated in specified circumstances.




NOW, THEREFORE, in consideration of the premises and mutual covenants herein and for other good and valuable consideration, the parties agree as follows:




1. Position and Duties . During employment, the Executive shall serve as the Company' s Executive Vice President & Brand Leader of Carter' s and shall have the normal duties, responsibilities and authority of such position, subject to any limitations imposed by the bylaws of the Company and to the power of the boards of directors and other senior officers of the Company or its Company Affiliates to expand or limit such duties, responsibilities and authority and to override actions of Executive. Executive shall devote Executive' s best efforts and Executive 217;s full business time and attention (except for permitted vacation periods and reasonable periods of illness or other incapacity) to the business and affairs of the Company. Executive shall perform Executive' s duties and responsibilities to the best of Executive' s abilities in a diligent, trustworthy, businesslike and efficient manner.







2. Base Salary and Bonus Opportunity . During the term of Executive's employment hereunder, Executive's base salary shall be at an annual rate no less than the annual rate of base salary that was paid to the Executive during 2010. The Company's Board of Directors may, in its discretion, increase Executive's base salary at such times and in such amounts as it determines but at no time shall Executive's base salary, in effect from time to time, be decreased. Base salary shall be payable by the Company in regular installments in accordance with the Company's general pay roll practices. During the term of Executive's employment hereunder, Executive shall participate in the Company's Amended and Restated Annual Incentive Compensation Plan (the "Bonus Plan"), as in effect from time to time, in accordance with the terms of such Bonus Plan. Executive's target bonus shall be equivalent to a percentage of base salary that is no less than the percentage of base salary that was set as the Executive's target bonus for fiscal year 2010.







3. Term and Termination . The Executive's employment hereunder shall continue until terminated in accordance with this Section 3.











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(a) The Executive's employment shall terminate automatically in the event of the Executive' s death.







(b) The Company may terminate the Executive' s employment hereunder, upon notice to the Executive, in the event that the Executive becomes disabled during the Executive' s employment hereunder through any illness, injury, accident or condition of either a physical or psychological nature and, as a result, is unable to perform substantially all of the Executive' s duties and responsibilities hereunder (notwithstanding the provision of any reasonable accommodation) for one hundred eighty (180) days during any period of three hundred and sixty-five (365) consecutive calendar days. The Board may designate another employee to act in the Executive's place during any period of the Executive's disability (and such d esignation shall not constitute Good Reason, as such term is defined in Section 12). If any question shall arise as to whether during any period the Executive is disabled, the Executive may, and at the request of the Company shall, submit to a medical examination by a physician selected by the Company to determine whether the Executive is so disabled and such determination shall for the purposes of this Agreement be conclusive. If such question shall arise and the Executive shall fail to submit to such medical examination, the Company's determination of the issue shall be binding on the Executive.







(c) The Company may terminate the Executive's employment hereunder (i) for Cause (as defined in Section 12) at any time upon notice to the Executive setting forth in reasonable detail the nature of such Cause, or (ii) at any time, without Cause, upon notice to the Executive.







(d) The Executive may terminate employment hereunder (i) for Good Reason (as defined and in accordance with the timing and procedural requirements set forth in Section 12) or (ii) without Good Reason at any time upon sixty (60) days' prior written notice, which notice period (or any portion thereof) may be waived by the Company without any further payment to the Executive.







4. Payments and Benefits Upon Termination.







(a) In the event of termination of employment, however so caused, the Company will pay the Executive (i) any base salary earned but not paid during the final payroll period of Executive's employment through the date of termination of employment (the "Separation Date"); (ii) pay for any vacation time earned but not used through the Separation Date, as reflected in Company records; and (iii) any business expenses incurred by the Executive but unreimbursed on the Separation Date, provided that such expenses and any required substantiation are submitted consistent with the terms of Company policy and that such expenses are reimbursable under Company policy (clauses (i), (ii) and (iii) together, " Final Compensation" ).  60;Other than business expenses described in Section 4(a)(iii) (which shall be paid in accordance with Company policy), Final Compensation shall be paid to the Executive (or the Executive' s designated beneficiary or estate) within thirty (30) days following the Separation Date. The Company shall not have any further obligations to the Executive, except as set forth in Section 4(b) below.







(b) In the event that the Company terminates the Executive' s employment other than for Cause (as defined in Section 12), or the Executive terminates employment for Good Reason (as defined in Section 12), in addition to Final Compensation, the Company will provide the Executive the following (clauses (i) through (iv), in the aggregate, the "Severance Benefits"), provided that the Executive meets all eligibility requirements for such Severance Benefits as set forth in this Agreement:











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(i) the Company will continue to pay the Executive base salary, at the same rate as was in effect on the Separation Date, for the period of twelve (12) months following the Separation Date. Subject to Sections 5 and 6 below, such payments shall be in the form of salary continuation, payable in accordance with the normal payroll practices of the Company for its executives, with the first payment, which shall be retroactive to the day immediately following the Separation Date, being due and payable on the Company's next regular payday for executives that follows the expiration of sixty (60) calendar days from the date the Executive's employment terminates.







(ii) the Company will pay the Executive a pro-rata bonus for the fiscal year in which the Separation Date occurs, determined following the end of the fiscal year in which the Separation Date occurs. The amount of any such bonus shall be determined by multiplying the amount of the bonus that would have been paid to the Executive pursuant to the Company's Bonus Plan had the Executive remained employed for the full fiscal year (which determination shall disregard any individual performance goals which may have been set for Executive pursuant to the Company's Bonus Plan, and shall be based solely on the extent to which Company performance goals have been met) by a fraction, the numerator of which is the number of days the Exe cutive was employed during the fiscal year in which the Separation Date occurs and the denominator of which is 365 (the " Pro-Rata Bonus" ). The Pro-Rata Bonus will be payable at the time provided for, and in accordance with the provisions of, the Bonus Plan, but in no event earlier than January 1st or later than December 31st of the year following the year in which the Separation Date occurs.







(iii) provided that the Executive and the Executive' s dependents are eligible to continue participation in the Company' s group health and dental plans following the date the Executive' s employment terminates under the federal law commonly known as " COBRA" and elect to do so in a timely manner, then, until the earlier of (A) twelve (12) months following the Separation Date, (B) the date the Executive becomes eligible for coverage under the health and/or dental plans of another employer, or (C) the date the Executive otherwise ceases to be eligible to continue participation in the Company' s health and dental plans under COBRA, the Company will pay to the Executive each month within the period set fo rth above, within ten (10) days after the first day of each such month, an amount equal to the full monthly COBRA premium for such month minus the monthly cost for such health and dental plan coverage that is paid by active executives, provided, however, that to the extent that it would not violate applicable law, result in any penalty, fine or tax to the Company, or result in the Company failing to comply with Section 105(h) or any similar provision of the Code or Section 409A of the Code, then, subject to the Executive meeting the eligibility requirements as set forth above, the Company, rather than paying the monthly premiums described above to the Executive, may in its discretion, instead contribute the same amount directly to its group health and dental plans at the same time it otherwise would have paid the monthly premiums to the Executive. To the extent that the payment of the monthly premiums described above would result in the imposition of any additional tax on the Executive, the C ompany will pay to the Executive each such month, within ten (10) days after the first day of such month, an additional amount, as determined by the Company, equal to the federal, state and local income taxes that the Executive is reasonably expected to be obligated to pay as a result of the payments of the monthly premiums described above. No additional amount shall be paid to the Executive pursuant to the preceding sentence in the event that the amount of the federal, state and local income taxes that the Executive ultimately owes to the relevant taxing authority is greater than the amount paid to the Executive pursuant to the preceding sentence. In the event that the Executive becomes eligible for coverage under the health and/or dental plans of another employer, the Executive shall inform the Company within ten (10) days of such occurrence.











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(iv) for the twelve (12) month period following the Separation Date, subject to applicable plan terms and applicable law, the Company shall provide the Executive with continued monthly employer contributions toward the premium cost of the Executive' s basic life insurance coverage, in the same percentage and amount as if the Executive remained employed (subject to such insurance coverage not having terminated), such employer contributions to be made on a monthly basis at the same time and on the same schedule as employer contributions are made for active employees of the Company. For the avoidance of doubt, as of the Separation Date, the Executive shall be solely responsible for any costs associated with supplemental life insurance coverage and the Company shall have no continuing obligation or liability with respect thereto.







(c) In the event that within two (2) years following a Change of Control (as defined in Section 12), the Company terminates the Executive' s employment other than for Cause (as defined in Section 12), or the Executive terminates employment for Good Reason (as defined in Section 12) (such termination, a " Qualifying Termination" ) in addition to Final Compensation and the Severance Benefits provided pursuant to Section 4(b) of this Agreement, the Company will provide the Executive the following benefits (" Additional Severance Benefits" ), provided that the Executive meets all eligibility requirements for such Additional Severance Benefits as set forth in this Agreement:







(i) the Company will continue to pay the Executive' s base salary, at the same rate as was in effect on the Separation Date, for an additional period of twelve (12) months, following the completion of the salary continuation payments provided for in Section 4(b)(i) above. Subject to Sections 5 and 6 below, such payments shall be in the form of salary continuation, payable in accordance with the normal payroll practices of the Company for its executives;







(ii) subject to the conditions set forth in Section 4(b)(iii) above having initially been satisfied, in the event that, following the expiration of the twelve (12) month anniversary of such Qualifying Termination, the Executive has not yet become eligible for coverage under the health and/or dental plans of another employer, within ten (10) days after the first day of each such month, the Company will, for an additional six (6) month period, pay to the Executive each month within the period set forth above an amount equal to the COBRA Amount, provided, however, that for the period until the eighteen (18) month anniversary of such Qualifying Termination, to the extent that it would not violate applicable law, result in any penalty, f ine or tax to the Company, or result in the Company failing to comply with Section 105(h) or any similar provision of the Code or Section 409A of the Code, then, subject to the Executive meeting the eligibility requirements as set forth above, the Company, rather than paying the monthly premiums described above to the Executive, may in its discretion, instead contribute the same amount directly to its group health and dental plans at the same time it otherwise would have paid the monthly premiums to the Executive. To the extent that the payment of the monthly premiums described above would result in the imposition of any additional tax on the Executive, the Company will pay to the Executive each such month, within ten (10) days after the first day of such month, any Additional Amount that may be due with respect to such payments. Upon the eighteen (18) anniversary of the Qualifying Termination, if the Executive has not yet become eligible for coverage under the health and/or dental plans of another employer, then for the six (6) month period thereafter (or, if earlier, until the date the Executive becomes eligible for coverage under the health and/or dental plans of another employer), the Company will pay to the Executive each month within such period, within ten (10) days after the first day of such month, an amount equal to COBRA Amount, as calculated at the end of the eighteen (18) month period following the Qualifying Termination, together with any Additional Amount that may be due to the Executive with respect to such payments. In the event that the Executive becomes eligible for coverage under the health and/or dental plans of another employer, the Executive shall inform the Company within ten (10) days of such occurrence; and











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(iii) following a Qualifying Termination, the Company shall, in addition to providing for life insurance premium contributions pursuant to Section 4(b)(iv) for twelve (12) months, shall provide for such payment for an additional period of twelve (12) months, which payments shall be made in accordance with the terms set forth in Section 4(b)(iv) a
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