**Exhibit10.15**

 

**SECOND AMENDED AND RESTATEDEMPLOYMENT AGREEMENT**

 

THIS SECONDAMENDED AND RESTATED EMPLOYMENT AGREEMENT (the “Agreement”) is enteredinto on August 10. 2007 (the “Execution Date”), to be effective forall purposes as of August 2, 2007 (the “Effective Date”), by andbetween Linens ’n Things, Inc., a Delaware corporation (the “Company”)and wholly owned subsidiary of Linens Holding Co., a Delaware corporation (“Holding”),and Scott Silver (the “Executive”).

 

WHEREAS, theCompany and the Executive entered in an Employment Agreement on May 5,2006, effective as of April 3, 2006 (the “Original Employment Agreement”);

 

WHEREAS, theCompany and the Executive entered in an Amended and Restated EmploymentAgreement on January 20, 2007, effective as of January 1, 2007 (the “FirstAmended Employment Agreement”), to amend and restate the OriginalEmployment Agreement; and

 

WHEREAS, theCompany and the Executive now desire to amend certain provisions of the FirstAmended Employment Agreement and restate the First Amended EmploymentAgreement, as so amended, effective as of the Effective Date.

 

NOW,THEREFORE, in consideration of the mutual representations, warranties,covenants and agreements set forth herein, and for other good and valuableconsideration, the receipt and sufficiency of which are hereby acknowledged,the parties hereto, intending to be legally bound, agree as follows:

 

# **1.**                                      Employmentof Executive; Duties.

 

## **1.1****                               Title.**  During the Employment Period (as defined in **Section 2** hereof), the Executive shallserve as Executive Vice President, Merchandising of the Company and ofHolding.  The Executive shall have thenormal duties, responsibilities and authority commensurate with such positions.

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## **1.2****                               Duties.**  During the Employment Period, the Executive shalldo and perform all services and acts necessary or advisable to fulfill theduties and responsibilities of the Executive’s positions and shall render suchservices on the terms set forth herein. In addition, the Executive shall have such other executive andmanagerial powers and duties as may reasonably be assigned to the Executive,commensurate with the Executive serving as an Executive Vice President.  The Company may adjust the duties andresponsibilities of the Executive as an Executive Vice President,notwithstanding the specific title set forth in **Section 1.1** hereof, based upon the Company’s needs fromtime to time.  Except for sick leave,reasonable vacations and excused leaves of absence, the Executive shall,throughout the Employment Period, devote substantially all the Executive’sworking time, attention, knowledge and skills faithfully, and to the best ofthe Executive’s ability, to the duties and responsibilities of the Executive’spositions in furtherance of the business affairs and activities of the Companyand its subsidiaries and Affiliates (as defined in **Section 5.4(a) **hereof) and, except where the Companyprovides its written consent otherwise, shall maintain the Executive’sprincipal residence within 75 miles of the principal office of the Company asof the Effective Date.  The 

 

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## Executive shall at all times be subject to,comply with, observe and carry out (a) the Company’s rules, regulations,policies and codes of ethics and/or conduct applicable to its employeesgenerally and in effect from time to time and (b) such rules, regulations,policies, codes of ethics and/or conduct, directions and restrictions as theBoard of Directors of the Company (the “Board”) may from time to timereasonably establish or approve for senior executive officers of the Company.

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# **2.**                                      Termof Employment.

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## **2.1****                               EmploymentPeriod.**  The employment of theExecutive hereunder shall continue until December 31, 2008 (the “InitialEmployment Period”), unless terminated earlier in accordance with theprovisions of **Section 4** ofthis Agreement.

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## **2.2****                               Extension.**  Unless terminated earlier in accordance withthe provisions of **Section 4**of this Agreement, the employment of the Executive hereunder shall continueafter the end of the Initial Employment Period for additional one (1)-yearperiods (each an “Extension Period” and, together with the InitialEmployment Period, the “Employment Period”), unless the Company or theExecutive notifies the other in writing not less than one (1) year priorto the end of the Initial Employment Period, or the end of the applicableExtension Period, of its or the Executive’s election, in its or the Executive’ssole discretion, not to extend the Employment Period.

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# **3.**                                      Compensationand General Benefits.

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## **3.1****                               BaseSalary.**

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### (a)                                  Duringthe Employment Period, the Company agrees to pay to the Executive an annualbase salary in an amount equal to $400,000 (such base salary, as may beadjusted from time to time pursuant to **Section 3.1(b)**,is referred to herein as the “Base Salary”).  The Executive’s Base Salary, less amountsrequired to be withheld under applicable law, shall be payable in equalinstallments in accordance with the Company’s normal payroll practices andprocedures in effect from time to time for the payment of salaries to officersof the Company, but in no event less frequently than monthly.

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### (b)                                 TheBoard or the Compensation Committee established by the Board (the “CompensationCommittee”) shall review the Executive’s performance on an annual basisand, based on such review, may change the Base Salary, as it, acting in itssole discretion, shall determine to be reasonable and appropriate.

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## **3.2****                               Bonus.**  With respect to the 2007 calendar year andwith respect to each calendar year that commences during the Employment Period,the Executive shall be eligible to receive from the Company an annualperformance bonus (the “Annual Bonus”) on a basis and in an amount to bedetermined by the Board or the Compensation Committee in the exercise of itssole discretion for the applicable year. The target Annual Bonus, if any, will be 50% of the Base Salary.  Any Annual Bonus earned shall be payable infull as soon as reasonably practicable following the determination thereof, butin no event later than May 15 of the following year, and in accordancewith the Company’s normal payroll practices and procedures.  Except as otherwise expressly provided in **Section 4** hereof, any Annual Bonus (or

 

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## portion thereof) payable under this **Section 3.2** shall not be payableunless the Executive is employed by the Company on the last day of the periodto which such Annual Bonus relates.

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## **3.3****                               Expenses.**  During the Employment Period, in addition toany amounts to which the Executive may be entitled pursuant to the other provisionsof this **Section 3**orelsewhere herein, the Executive shall be entitled to receive reimbursement fromthe Company for all reasonable and necessary expenses incurred by the Executivein performing the Executive’s duties hereunder on behalf of the Company,subject to, and consistent with, the Company’s policies for expense payment andreimbursement, in effect from time to time.

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## **3.4****                               FringeBenefits.**  During the EmploymentPeriod, in addition to any amounts to which the Executive may be entitledpursuant to the other provisions of this **Section 3**or elsewhere herein, the Executive shall be entitled to participate in, and toreceive benefits under, (a) any benefit plans, arrangements or policiesmade available by the Company to its employees generally, subject to and on abasis consistent with the terms, conditions and overall administration of eachsuch plan, arrangement or policy and (b) without limiting the foregoing,the benefits set forth on **Exhibit B**attached hereto.

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## **3.5****                               StockOptions.**

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### (a)                                  TheCompany shall recommend to the Option Committee of Holding, as defined in theLinens Holding Co. Stock Option Plan (the “Plan”), that the Executive begranted additional nonqualified options under the Plan to purchase a total of10,000 shares of Common Stock, par value $0.01 per share, of Holding (the “CommonStock”) with a per share exercise price equal to the fair market value ofthe Common Stock on the date of grant as determined by the Option Committee(the “Options”).  The Options havea term of seven (7) years from the date of grant and are equally dividedbetween a “Time Option” and a “Performance Option.”  The Time Option shall become vested andexercisable in four equal annual installmentson each of the first four anniversaries of the date of grant, subject tothe Executive’s continued employment with the Company, and the PerformanceOption shall become vested and exercisable upon satisfaction of the performancecriteria set forth in the grant letter. Except as otherwise provided herein, the Options shall be subject to theterms and conditions of the Plan and the grant letter executed in respect ofthe Options.

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### (b)                                 Duringthe Employment Period and subject to the approval of the Option Committee, theExecutive shall be eligible to participate in and be granted additional stockoptions under the Plan.

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# **4.**                                      Termination.

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## **4.1****                               General.**  The employment of the Executive hereunder(and the Employment Period) shall terminate as provided in **Section 2** hereof, unless earlierterminated in accordance with the provisions of this **Section 4**.

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## **4.2****                               Deathor Disability of the Executive.**

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### (a)                                  Theemployment of the Executive hereunder (and the Employment Period) shallterminate upon (i) the death of the Executive and (ii) at the optionof 

 

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### the Company, upon not less than fifteen (15)days’ prior written notice to the Executive or the Executive’s personalrepresentative or guardian, if the Executive suffers a “Total Disability” (asdefined in **Section 4.2(b) **hereof).  Upon termination for death or TotalDisability, subject to reduction by any benefits paid or payable to theExecutive, the Executive’s beneficiaries or estate under any Company-sponsoreddisability benefit plan program or policy for the period following such date oftermination, (A) the Company shall pay to the Executive, guardian orpersonal representative, as the case may be, the Executive’s current BaseSalary for the remainder of the Employment Period in effect immediately priorto the date of termination and (B) subject further to the sole discretionof the Board or the Compensation Committee, the Company may also pay to theExecutive, guardian or personal representative, as the case may be, a proratedshare of the Annual Bonus pursuant to **Section 3.2**hereof (based on the period of actual employment) that the Executive would havebeen entitled to had the Executive worked the full year during which thetermination occurred, provided that bonus targets are met for the year of suchtermination.  Any bonus shall be payableas soon as reasonably practicable following the determination thereof, but inno event later than May 15 of the following year, and in accordance withthe Company’s normal payroll practices and procedures.

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### (b)                                 Forpurposes of this Agreement, “Total Disability” shall mean (i) ifthe Executive is subject to a legal decree of incompetency (the date of suchdecree being deemed the date on which such disability occurred), (ii) thewritten determination by a physician selected by the Company that, because of amedically determinable disease, injury or other physical or mental disability,the Executive is unable substantially to perform, with or without reasonableaccommodation, the material duties of the Executive required hereby, and thatsuch disability has lasted for ninety (90) consecutive days or any one hundredtwenty (120) days during the immediately preceding twelve (12)-month period oris, as of the date of determination, reasonably expected to last six (6) monthsor longer after the date of determination, in each case based upon medicallyavailable reliable information or (iii) Executive’s qualifying forbenefits under the Company’s long-term disability coverage, if any.  In conjunction with determining mental and/orphysical disability for purposes of this Agreement, the Executive herebyconsents to (x) any examinations that the Board or the CompensationCommittee determines are relevant to a determination of whether the Executiveis mentally and/or physically disabled or are required by the Company physician,(y) furnish such medical information as may be reasonably requested and (z) waiveany applicable physician patient privilege that may arise because of suchexamination.

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### (c)                                  Withrespect to outstanding stock options and other equity-based awards held by theExecutive as of the date of termination pursuant to this **Section 4.2**, (i) any such optionsthat are not vested or exercisable as of such date of termination shallimmediately expire and any such equity-based awards that are not vested as ofsuch date of termination shall immediately be forfeited and (ii) any suchoptions that are vested and exercisable as of such date of termination shallexpire immediately following the expiration of the one hundred eighty (180)-dayperiod following such date of termination.

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### (d)                                 Withrespect to any shares of Common Stock held by the Executive that are vested asof the date of termination pursuant to this **Section 4.2**(or issued pursuant to the exercise of options following such date oftermination pursuant to **Section 4.2(c) **hereof),for the two hundred seventy (270)-day period following such date oftermination, the 

 

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### Company (or its designee) shall have theright to purchase from the Executive or the Executive’s beneficiary, asapplicable, and the Executive or the Executive’s beneficiary hereby agrees tosell any or all such shares to the Company (or the Company’s designee) for anamount equal to the product of (i) the per share current fair market valueof a share of Common Stock (as determined by the Board in good faith) and (ii) thenumber of shares so purchased.

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## **4.3****                               Terminationby the Company Without Cause or Resignation by the Executive For Good Reason.**

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### (a)                                  TheCompany may terminate the Executive’s employment without “Cause” (as defined in**Section 4.3(g)**), and therebyterminate the Executive’s employment (and the Employment Period) under thisAgreement at any time with no requirement for notice to the Executive.

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### (b)                                 TheExecutive may resign, and thereby terminate the Executive’s employment (and theEmployment Period), at any time for “Good Reason” (as defined in **Section 4.3(f) **hereof), upon notless than sixty (60) days’ prior written notice to the Company specifying inreasonable detail the reason therefore; provided, however, thatthe Company shall have a reasonable opportunity to cure any such Good Reason(to the extent possible) within sixty (60) days after the Company’s receipt ofsuch notice; and provided further that, if the Company is not seeking tocure, the Company shall not be obligated to allow the Executive to continueworking during such period and may, in its sole discretion, accelerate suchtermination of employment (and the Employment Period) to any date during suchperiod.

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#### (i)                                     Executivemay not terminate employment under this Agreement for Good Reason regarding anyof the Company’s acts or omissions of which Executive had actual notice forsixty (60) days or more prior to giving notice of termination for Good Reason.

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#### (ii)                                  Adetermination of whether the Executive legitimately has Good Reason fortermination of the Executive’s employment under this Agreement, and of whetherthe Company has effectively cured and thus eliminated the grounds for such GoodReason, shall be made only by the Chief Executive Officer of the Company (the “ChiefExecutive Officer”), within the Chief Executive Officer’s sole judgment anddiscretion, acting in good faith after having met with the Company’s SeniorVice President of Human Resources.

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### (c)                                  Inthe event the Executive’s employment is terminated pursuant to this **Section 4.3**, then, subject to **Section 4.3(d) **hereof, thefollowing provisions shall apply:

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#### (i)                                     TheCompany shall continue to pay the Executive the Base Salary to which theExecutive would have been entitled pursuant to **Section 3.1** hereof (at the Base Salary rate during theyear of termination) had the Executive remained in the employ of the Companyuntil the expiration of the Employment Period in effect immediately prior tothe date of termination, with all such amounts payable in accordance with theCompany’s normal payroll practices 

 

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#### and procedures in the same manner and at the same time as though theExecutive remained employed by the Company.

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#### (ii)                                  Ifsuch termination occurs upon or within six (6) months following a Changeof Control (as defined in **Exhibit A**attached hereto), the Company shall continue to pay the Executive the BaseSalary to which the Executive would have been entitled pursuant to **Section 3.1** hereof (at the Base Salaryrate during the year of termination) for the greater of (A) the period setforth in **Section 4.3(c)(i) **hereofor (B) a two (2)-year period following such date of termination, with allsuch amounts payable in accordance with the Company’s normal payroll practicesand procedures in the same manner and at the same time as though the Executiveremained employed by the Company.

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#### (iii)                               Inthe event the Executive’s employment is terminated pursuant to this **Section 4.3** without Cause, and if theCompany has previously effected reductions in the Executive’s Base Salary andthe base salary of all executives at the same level as the Executive, whichreductions were substantially similar, then the Base Salary rate for purposesof **Section 4.3(c)(i) **or **(ii) **hereof shall be the Base Salaryrate in effect immediately prior to such reductions.

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#### (iv)                              Subjectto the sole discretion of the Board or the Compensation Committee, the Companymay pay to the Executive a prorated share of the Annual Bonus pursuant to **Section 3.2** hereof (based on theperiod of actual employment) that the Executive would have been entitled to hadthe Executive worked the full year during which the termination occurred,provided that bonus targets are met for the year of such termination.  The bonus shall be payable as soon asreasonably practicable following the determination thereof, but in no eventlater than May 15 of the following year, and in accordance with theCompany’s normal payroll practices and procedures.

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#### (v)                                 Withrespect to outstanding options and other equity-based awards held by theExecutive as of the date of termination pursuant to this **Section 4.3**, (A) any such optionsthat are not vested or exercisable as of such date of termination shallimmediately expire and any such equity-based awards that are not vested as ofsuch date of termination shall immediately be forfeited and (B) any suchoptions that are vested and exercisable as of such date of termination shallexpire immediately following the expiration of the ninety (90)-day periodfollowing such date of termination.

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#### (vi)                              Withrespect to any shares of Common Stock held by the Executive that are vested asof the date of termination pursuant to this **Section 4.3**(or issued pursuant to the exercise of options following such date oftermination pursuant to **Section 4.3(c)(v) **hereof),for the one hundred eighty (180)-day period following such date of termination,the Company (or its designee) shall have the right to purchase from theExecutive, and the Executive hereby agrees to sell any or all such shares tothe Company (or the Company’s 

 

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#### designee), for an amount equal to the productof (A) the per share current fair market value of a share of Common Stock(as determined by the Board in good faith) and (B) the number of shares sopurchased.

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### (d)                                 Asa condition precedent to the Executive’s right to receive the benefits setforth in **Section 4.3(c) **hereof,the Executive agrees to execute a release of the Company and its respectiveAffiliates, officers, directors, stockholders, employees, agents, insurers,representatives and successors from and against any and all claims that theExecutive may have against any such Person (as defined in **Section 5.4(f) **hereof) relatingto the Executive’s employment by the Company and the termination thereof, suchrelease to be in form and substance reasonably satisfactory to the Company.

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### (e)                                  Anythingin this Agreement to the contrary notwithstanding, if it shall be determinedthat any payment, vesting, distribution or transfer by the Company or anysuccessor, or any Affiliate of the foregoing or by any other Person or that anyother event occurring with respect to the Executive and the Company for theExecutive’s benefit, whether paid or payable or distributed or distributableunder the terms of this Agreement or otherwise (including under any employeebenefit plan) (a “Payment”) would be subject to or result in theimposition of the excise tax imposed by Section 4999 of the Internal RevenueCode of 1986, as amended (the “Code”) (and any regulations or guidancepromulgated or issued thereunder, any successor provision, and any similarprovision of state or local income tax law) (collectively, the “Excise Tax”),then the amount of the Payment shall be reduced to the highest amount that maybe paid by the Company or other entity without subjecting any such Payment tothe Excise Tax (the “Payment Reduction”).  The Executive shall have the right todesignate those payments or benefits that shall be reduced or eliminated underthe Payment Reduction to avoid the imposition of the Excise Tax, subject to theconfirmation of the Accounting Firm (as defined herein) with respect to theintended effect thereof.

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#### (i)                                     Subjectto the provisions of **Section 4.3(e)(ii)**,all determinations required to be made under this **Section 4.3(e)**, including whether and when a Payment issubject to Section 4999 and the assumptions to be utilized in arriving atsuch determination and in determining an appropriate Payment Reduction, shallbe made by KPMG LLP, or any other nationally recognized accounting firm thatshall be the Company’s outside auditors at the time of such determination (the “AccountingFirm”), which Accounting Firm shall provide detailed supporting calculationsto the Executive and the Company within fifteen (15) business days of thereceipt of notice from the Company or the Executive that there will be aPayment that the Person giving notice believes may be subject to the ExciseTax.  All fees and expenses of theAccounting Firm shall be borne by the Company. Any determination by the Accounting Firm shall be binding upon theCompany and the Executive in determining whether a Payment Reduction isrequired and the amount thereof (subject to **Sections 4.3(e)(ii) **and**(iii)**), in the absence of materialmathematical or legal error.

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#### (ii)                                  Asa result of uncertainty in the application of Section 4999 that may existat the time of the initial determination by the Accounting Firm, it may bepossible that in making the calculations required to be 

 

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#### made hereunder, the Accounting Firm shalldetermine that a Payment Reduction need not be made that properly should bemade (an “Overpayment”) or that a Payment Reduction not properly neededto be made should be made (an “Underpayment”).  If, within seventy-five (75) days after theAccounting Firm’s initial determination under **Section 4.3(e)(i)**,the Accounting Firm shall determine that an Overpayment was made, any suchOverpayment shall be treated for all purposes, to the extent practicable andsubject to applicable law, as a loan to the Executive with interest at theapplicable Federal rate provided for in Section 1274(d) of the Codeand shall be repaid by the Executive to the Company within thirty-five (35)days after the Executive receives notice of the Accounting Firm’sdetermination; provided, however, that the amount to be repaid bythe Executive to the Company either as a loan or otherwise as a lump sumpayment (where a loan is not practicable or permitted by law) shall be reducedto the extent that any portion of the Overpayment to be repaid will not beoffset by a corresponding reduction in tax by reason of such repayment of theOverpayment.  If the Accounting Firmshall determine that an Underpayment was made, any such Underpayment shall bedue and payable by the Company to the Executive within thirty-five (35) daysafter the Company receives notice of the Accounting Firm’s determination.

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#### (iii)                               TheExecutive shall give written notice to the Company of any claim by the InternalRevenue Service that, if successful, would require the payment by the Executiveof an Excise Tax, such notice to be provided within fifteen (15) days after theExecutive shall have received written notice of such claim.  The Executive shall cooperate with theCompany in determining whether to contest or pay such claim and shall not paysuch claim without the written consent of the Company, which shall not be unreasonablywithheld, conditioned or delayed.

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#### (iv)                              This**Section 4.3(e) **shallremain in full force and effect following the termination of the Executive’semployment for any reason until the expiration of the statute of limitations onthe assessment of taxes applicable to the Executive for all periods in whichthe Executive may incur a liability for taxes (including Excise Taxes),interest or penalties arising out of the operation of this Agreement.

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### (f)                                    Forpurposes of this Agreement, the Executive would be entitled to terminate theExecutive’s employment for “Good Reason” if without the Executive’sprior written consent:

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#### (i)                                     theCompany fails to comply with any material obligation imposed by this Agreement;

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#### (ii)                                  theCompany changes the Executive’s position from that of an Executive Vice President;provided, however, that (A) a change in the Executive’sduties or responsibilities without a change in the Executive’s position as anExecutive Vice President shall not constitute Good Reason and (B) nothing 

 

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#### herein shall prohibit the Company fromchanging the Executive’s specific title as an Executive Vice President,notwithstanding the specific title set forth in **Section 1.1** hereof, based upon the Company’s needs fromtime to time; or

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#### (iii)                               theCompany effects a reduction in the Executive’s Base Salary, unless allexecutives at the same level as the Executive receive a substantially similarreduction in base salary.

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### (g)                                 Forpurposes of this Agreement, “Cause” means the occurrence of any one ormore of the following events, and the Company shall have the sole discretion todetermine the existence of Cause:

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#### (i)                                     afailure by the Executive to comply with any obligation under this Agreement;

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#### (ii)                                  theExecutive’s being indicted for (A) any felony or (B) any misdemeanorthat causes or is likely to cause harm or embarrassment to the Company or anyof its Affiliates, in the reasonable judgment of the Board;

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#### (iii)                               theft,embezzlement or fraud by the Executive in connection with the performance ofthe Executive’s duties hereunder;

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#### (iv)                              theExecutive’s engaging in any activity that gives rise to a material conflictwith the Company or any of its Affiliates;

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#### (v)                                 themisappropriation by the Executive of any material business opportunity of theCompany or any of its Affiliates;

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#### (vi)                              anyfailure to comply with, observe or carry out the Company’s rules, regulations,policies and codes of ethics and/or conduct applicable to its employeesgenerally and in effect from time to time, including (without limitation) thoseregarding conflicts, potential conflicts of interest or the appearance of aconflict of interest;

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#### (vii)                           anyfailure to comply with, observe or carry out the rules, regulations, policies,directions, codes of ethics and/or conduct and restrictions established orapproved by the Board from time to time for senior executive officers of theCompany, including (without limitation) those regarding conflicts, potentialconflicts of interest or the appearance of a conflict of interest;

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#### (viii)                        substanceabuse or use of illegal drugs that, in the reasonable judgment of the Board, (A) impairsthe Executive’s performance of the Executive’s duties hereunder or (B) causesor is likely to cause harm or embarrassment to the Company or any of itsAffiliates; and

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#### (ix)                                engagementin conduct that Executive knows or should know is injurious to the Company orany of its Affiliates.

 

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## **4.4****                               TerminationFor Cause, Voluntary Resignation Other Than For Good Reason or Election Not toExtend the Employment Period.**

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### (a)                                  (i) TheCompany may, upon action of the Board, terminate the employment of theExecutive (and the Employment Period) at any time for “Cause,” (ii) theExecutive may voluntarily resign other than for Good Reason and therebyterminate the Executive’s employment (and the Employment Period) under thisAgreement at any time upon not less than thirty (30)-days’ prior written noticeor (iii) either the Company or the Executive may elect not to extend orfurther extend the Employment Period pursuant to **Section 2.2** hereof.

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### (b)                                 Thefollowing provisions shall apply upon termination by the Company for Cause, bythe Executive as the result of resignation for other than for Good Reason, orby the Company or the Executive at the end of the Employment Period as theresult of an election not to extend or further extend the Employment Period:

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#### (i)                                     TheExecutive shall be entitled to receive all amounts of earned but unpaid BaseSalary and benefits accrued through the date of such termination.  Except as provided below, all other rights ofthe Executive (and all obligations of the Company) hereunder shall terminate asof the date of such termination.

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#### (ii)                                  Withrespect to outstanding options and other equity-based awards held by theExecutive as of the date of termination pursuant to this **Section 4.4**, (A) any such optionsthat are not vested or exercisable as of such date of termination shallimmediately expire and any such equity-based awards that are not vested as ofsuch date of termination shall immediately be forfeited and (B) any suchoptions that are vested and exercisable as of such date of termination shallexpire immediately following the expiration of the ninety (90)-day periodfollowing such date of termination.

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#### (iii)                               Withrespect to any shares of Common Stock held by the Executive that are vested asof the date of termination pursuant to this **Section 4.4**(or issued pursuant to the exercise of options following such date oftermination pursuant to **Section 4.4(b)(ii) **hereof),for the one hundred eighty (180)-day period following such date of termination,the Company (or its designee) shall have the right to purchase from theExecutive and the Executive hereby agrees to sell any or all such shares to theCompany (or the Company’s designee) for an amount equal to the product of (A) theper share current fair market value of a share of Common Stock (as determinedby the Board in good faith) and (B) the number of shares so purchased.

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## **4.5****                               Resignationfrom Officer Positions.**  Upon thetermination of the Executive’s employment for any reason (unless otherwiseagreed in writing by the Company and the Executive), the Executive will bedeemed to have resigned, without any further action by the Executive, from anyand all officer and/or director positions that the Executive, immediately priorto such termination, (a) held with the Company or any of its Affiliatesand (b) held with any other entities at the direction of, or as a resultof the Executive’s affiliation with, the 

 

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## Company or any of itsAffiliates.  If for any reason this **Section 4.5** is deemed to beinsufficient to effectuate such resignations, then Executive will, upon theCompany’s request, execute any documents or instruments that the Company maydeem necessary or desirable to effectuate such resignations.  In addition, the Executive hereby designatesthe Secretary or any Assistant Secretary of the Company and of any Affiliate toexecute any such documents or instruments as the Executive’s attorney-in-factto effectuate such resignations if execution by the Secretary or any AssistantSecretary of the Company or Affiliate is deemed by the Company or the Affiliateto be a more expedient means to effectuate such resignation or resignations.

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## **4.6****                               Section 409Aof the Code.**  Notwithstandinganything to the contrary in this Agreement, the parties mutually desire toavoid adverse tax consequences associated with the application of Section 409Aof the Code to this Agreement and agree to cooperate fully and take appropriatereasonable actions to avoid any such consequences under Section 409A ofthe Code, including delaying payments and reforming the form of the Agreementif such action would reduce or eliminate taxes and/or interest payable as a resultof Section 409A of the Code. In this regard, notwithstanding anything tothe contrary in this **Section 4**,to the extent necessary to comply with Section 409A of the Code, anypayment required under this **Section 4**shall be deferred for a period of six (6) months, regardless of thecircumstances giving rise to or the basis for such payment.

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# **5.**                                      Confidentiality,Work Product and Non-Competition and Non-Solicitation.

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## **5.1****                               Confidentiality.**

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### (a)                                  Inconnection with the Executive’s employment with the Company, the Companypromises to provide the Executive with access to “Confidential Information” (asdefined in **Section 5.4(d) **hereof)in support of the Executive’s employment duties.  The Executive recognizes that the Company’sbusiness interests require a confidential relationship between the Company andthe Executive and the fullest practical protection and confidential treatmentof all Confidential Information.  At alltimes, both during and after the Employment Period, the Executive shall notdirectly or indirectly:  (i) appropriate,download, print, copy, remove, use, disclose, divulge, communicate or otherwise“Misappropriate” (as defined in **Section 5.4(e) **hereof)any Confidential Information, including, without limitation, originals orcopies of any Confidential Information, in any media or format, exceptfor the Company’s benefit within the course and scope of the Executive’semployment or with the prior written consent of the Chief Executive Officer; or(ii) take or encourage any action that would circumvent, interfere with orotherwise diminish the value or benefit of the Confidential Information to anyof the Company Parties (as defined in **Section 5.4(b) **hereof).

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### (b)                                 AllConfidential Information, and all other information and property affecting orrelating to the business of the Company Parties within the Executive’spossession, custody or control, regardless of form or format, shall remain, atall times, the property of the respective Company Parties, the appropriation,use and/or disclosure of which is governed and restricted by this Agreement.

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### (c)                                  TheExecutive acknowledges and agrees that:

 

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#### (i)                                     theExecutive occupies a unique position within the Company, and the Executive isand will be intimately involved in the development and/or implementation ofConfidential Information;

####  

#### (ii)                                  inthe event the Executive breaches this **Section 5.1**with respect to any Confidential Information, such breach shall be deemed to bea Misappropriation of such Confidential Information; and

####  

#### (iii)                               anyMisappropriation of Confidential Information will result in immediate andirreparable harm to the Company.

####  

### (d)                                 Uponreceipt of any formal or informal request, by legal process or otherwise,seeking the Executive’s direct or indirect disclosure or production of anyConfidential Information to any Person, the Executive shall promptly and timelynotify the Company and provide a description and, if applicable, hand deliver acopy of such request to the Company.  TheExecutive irrevocably nominates and appoints the Company as the Executive’strue and lawful attorney-in-fact to act in the Executive’s name, place andstead to perform any act that the Executive might perform to defend and protectagainst any disclosure of Confidential Information.

###  

### (e)                                  Atany time the Company may request, during or after the Employment Period, theExecutive shall deliver to the Company all originals and copies of ConfidentialInformation and all other information and property affecting or relating to thebusiness of the Company Parties within the Executive’s possession, custody orcontrol, regardless of form or format, including, without limitation anyConfidential Information produced by the Executive.  Both during and after the Employment Period,the Company shall have the right of reasonable access to review, inspect, copyand/or confiscate any Confidential Information within the Executive’spossession, custody or control.

###  

### (f)                                    Upontermination or expiration of this Agreement, the Executive shall immediatelyreturn to the Company all Confidential Information, and all other informationand property affecting or relating to the business of the Company Parties,within the Executive’s possession, custody or control, regardless of form orformat, without the necessity of a prior Company request.

###  

### (g)                                 Duringthe Employment Period, the Executive represents and agrees that the Executivewill not use or disclose any confidential or proprietary information or tradesecrets of others, including but not limited to former employers, and that theExecutive will not bring onto the premises of the Company or access suchconfidential or proprietary information or trade secrets of such others, unlessconsented to in writing by said others, and then only with the prior writtenauthorization of the Company.

###  

## **5.2****                               WorkProduct/Intellectual Property.**

##  

### (a)                                  Assignment.  The Executive hereby assigns to the Companyall right, title and interest to all “Work Product” (as defined in **Section 5.4(h) **hereof) that (i) relatesto any of the Company Parties’ actual or anticipated business, research anddevelopment or existing or future products or services, or (ii)  isconceived, reduced to practice, 

 

12

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###  

### developed or made using any equipment, supplies,facilities, assets, information or resources of any of the Company Parties(including, without limitation, any intellectual property rights).

###  

### (b)                                 Disclosure.  The Executive shall promptly disclose WorkProduct to the Chief Executive Officer and perform all actions reasonablyrequested by the Company (whether during or after the Employment Period) toestablish and confirm the ownership and proprietary interest of any of theCompany Parties in any Work Product (including, without limitation, the executionof assignments, consents, powers of attorney, applications and otherinstruments).  The Executive shall notfile any patent or copyright applications related to any Work Product exceptwith the written consent of the Chief Executive Officer.

###  

## **5.3****                               Non-Competitionand Non-Solicitation.**

##  

### (a)                                  Inconsideration of the Confidential Information being provided to the Executiveas stated in **Section 5.1**hereof, and other good and valuable new consideration as stated in thisAgreement, including, without limitation, employment and/or continuedemployment with the Company, and the business relationships, Company goodwill,work experience, client, customer and/or vendor relationships and other fruitsof employment that the Executive will have the opportunity to obtain, use anddevelop under this Agreement, the Executive agrees to the restrictive covenantsstated in this **Section 5.3**.

###  

### (b)                                 Duringthe Employment Period and until the end of the Restricted Period (as defined in**Section 5.4(g) **hereof),the Executive agrees that the Executive will not, directly or indirectly, onthe Executive’s own behalf or on the behalf of any other Person, within theUnited States of America or in any other country or territory in which thebusinesses of the Company are conducted:

###  

#### (i)                                     engagein a Competing Business (as defined in **Section 5.4(c) **hereof),including, without limitation, by owning, managing, operating, controlling,being employed by, providing services as a consultant or independent contractorto or participating in the ownership, management, operation or control of anyCompeting Business;

####  

#### (ii)                                  induceor attempt to induce any customer, vendor, supplier, licensor or other Personin a business relationship with any Company Party, for or with which theExecutive or employees working under the Executive’s supervision had any director indirect responsibility or contact during the Employment Period, (A) todo business with a Competing Business or (B) to cease, restrict, terminateor otherwise reduce business with the Company for the benefit of a CompetingBusiness, regardless of whether the Executive initiates contact; or

####  

#### (iii)                               (A) solicit,recruit, persuade, influence or induce, or attempt to solicit, recruit,persuade, influence or induce anyone employed or otherwise retained by any ofthe Company Parties (including any independent contractor or consultant), tocease or leave their employment or contractual or 

 

13

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####  

#### consulting relationship with any CompanyParty, regardless of whether the Executive initiates contact for such purposesor (B) hire, employ or otherwise attempt to establish, for any Person, anyemployment, agency, consulting, independent contractor or other businessrelationship with any Person who is or was employed or otherwise retained byany of the Company Parties (including any independent contractor orconsultant).

####  

### (c)                                  Theparties hereto acknowledge and agree that, notwithstanding anything in **Section 5.3(b)(i) **hereof, (i) theExecutive may own or hold, solely as passive investments, securities of Personsengaged in any business that would otherwise be included in **Section 5.3(b)(i)**, as long as withrespect to each such investment the securities held by the Executive do notexceed five percent (5%) of the outstanding securities of such Person and suchsecurities are publicly traded and registered under Section 12 of theSecurities Exchange Act of 1934, as amended (the “Exchange Act”), and (ii) theExecutive may serve on the board of directors (or other comparable position) oras an officer of any entity at the request of the Board; provided, however,that in the case of investments otherwise permitted under clause (i) above,the Executive shall not be permitted to, directly or indirectly, participatein, or attempt to influence, the management, direction or policies of (otherthan through the exercise of any voting rights held by the Executive inconnection with such securities), or lend the Executive’s name to, any suchPerson.

###  

### (d)                                 TheExecutive acknowledges and agrees that, for purposes of this **Section 5.3**, indirect acts by theExecutive shall include, without limitation, an act by the Executive’s spouse,ancestor, lineal descendant, lineal descendant’s spouse, sibling or othermember of the Executive’s immediate family.

###  

### (e)                                  TheExecutive acknowledges that (i) the restrictive covenants contained inthis **Section 5.3** hereof areancillary to and part of an otherwise enforceable agreement, such being theagreements concerning Confidential Information and other consideration asstated in this Agreement, (ii) at the time that these restrictivecovenants are made, the limitations as to time, geographic scope and activityto be restrained, as described herein, are reasonable and do not impose agreater restraint than necessary to protect the good will and other legitimatebusiness interests of the Company, including without limitation, ConfidentialInformation (including trade secrets), client, customer and/or vendorrelationships, client and/or customer goodwill and business productivity, (iii) inthe event of termination of the Executive’s employment, the Executive’sexperiences and capabilities are such that the Executive can obtain gainfulemployment without violating this Agreement and without the Executive incurringundue hardship, (iv) based on the relevant benefits and other newconsideration provided for in this Agreement, including, without limitation,the disclosure and use of Confidential Information, the restrictive covenantsof this **Section 5.3**, asapplicable according to their terms, shall remain in full force and effect evenin the event of the Executive’s involuntary termination from employment, withor without Cause and (v) the Executive has carefully read this Agreementand has given careful consideration to the restraints imposed upon theExecutive by this Agreement and consents to the terms of the restrictivecovenants in this **Section 5.3**,with the knowledge that this Agreement may be terminated at any time inaccordance with the provisions hereof.

 

14

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## **5.4****          Definitions.**  For purposes of this Agreement, the followingterms shall have the following meanings:

##  

### (a)**          **An “Affiliate” of any specifiedPerson means any other Person, whether now or hereafter existing, directly orindirectly controlling or controlled by, or under direct or indirect commoncontrol with, such specified Person. For purposes hereof, “control” or anyother form thereof, when used with respect to any Person, means the power todirect the management and policies of such Person, directly or indirectly,whether through the ownership of voting securities, by contract or otherwise;and the terms “controlling” and “controlled” shall have meanings correlative tothe foregoing.

###  

### (b)**          **“Company Parties” means theCompany, and its direct and indirect parents, subsidiaries and Affiliates, andtheir successors in interest.

###  

### (c)**          **“Competing Business” means anybusiness that competes with any of the Company Parties, including, withoutlimitation, any enterprise that engages in, owns or operates businesses thatmarket, sell, distribute, manufacture or otherwise are involved in the hometextile, housewares or home accessories industries.

###  

### (d)**          **Confidential Information.

###  

#### (i)**           **Definition. “ConfidentialInformation” means any and all material, information, ideas, inventions,formulae, patterns, compilations, programs, devices, methods, techniques,processes, know how, plans (marketing, business, strategic, technical orotherwise), arrangements, pricing and other data of or relating to any of theCompany Parties (as well as their customers and/or vendors) that isconfidential, proprietary or trade secret (A) by its nature, (B) basedon how it is treated or designated by a Company Party, (C) because thedisclosure of which would have a material adverse effect on the business orplanned business of any of the Company Parties and/or (D) as a matter oflaw.

####  

#### (ii)**          **Exclusions.  Confidential Information does not includematerial, data, and/or information (A) that any Company Party hasvoluntarily placed in the public domain, (B) that has been lawfully andindependently developed and publicly disclosed by third parties, (C) thatconstitutes the general non-specialized knowledge and skills gained by theExecutive during the Employment Period or (D) that otherwise enters thepublic domain through lawful means; provided, however, that theunauthorized appropriation, use or disclosure of Confidential Information bythe Executive, directly or indirectly, shall not affect the protection andrelief afforded by this Agreement regarding such information.

####  

#### (iii)**         **Inclusions. ConfidentialInformation includes, without limitation, the following information (includingwithout limitation, compilations or collections of information) relating orbelonging to any Company Party (as well as their clients, customers and/orvendors) and created, prepared, accessed, used or reviewed by the Executiveduring or after the Employment

 

15

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#### Period: (1) **product and manufacturing information,** such as ingredients,combinations of ingredients and manufacturing processes; (2) **scientific and technical information,** suchas research and development, tests and test results, formulae and formulations,studies and analysis; (3) **financial andcost information,** such as operating and production costs, costs ofgoods sold, costs of supplies and manufacturing materials, non-public financialstatements and reports, profit and loss information, margin information andfinancial performance information; (4) **customerrelated information,** such as customer related contracts, engagementand scope of work letters, proposals and presentations, customer-relatedcontacts, lists, identities and prospects, practices, plans, histories,requirements and needs, price information and formulae and informationconcerning client or customer products, services, businesses or equipmentspecifications; (5) **vendor and supplierrelated information,** such as the identities, practices, history orservices of any vendors or suppliers and vendor or supplier contacts; (6) **sales, marketing and price information,**such as marketing and sales programs and related data, sales and marketingstrategies and plans, sales and marketing procedures and processes, pricingmethods, practices and techniques and pricing schedules and lists; (7) **database, software and other computer relatedinformation,** such as computer programs, data, compilations ofinformation and records, software and computer files, presentation software andcomputer-stored or backed-up information including, but not limited to,e-mails, databases, word processed documents, spreadsheets, notes, schedules,task lists, images and video; (8) **employee-relatedinformation,** such as lists or directories identifying employees,representatives and contractors, and information regarding the competencies(knowledge, skill, experience), compensation and needs of employees,representatives and contractors and training methods; and (9) **business- and operation-related information,**such as operating methods, procedures, techniques, practices and processes,information about acquisitions, corporate or business opportunities,information about partners and potential investors, strategies, projections andrelated documents, contracts and licenses and business records, files, equipment,notebooks, documents, memoranda, reports, notes, sample books, correspondence,lists and other written and graphic business records.

####  

### (e)**          **“Misappropriate”, or any formthereof, means:

###  

#### (i)**           **the acquisition of any ConfidentialInformation by a Person who knows or has reason to know that the ConfidentialInformation was acquired by theft, bribery, misrepresentation, breach orinducement of a breach of a duty to maintain secrecy or espionage throughelectronic or other means (each, an “Improper Means”); or

####  

#### (ii)**          **the disclosure or use of anyConfidential Information without the express consent of the Company by a Personwho (A) used Improper Means to acquire knowledge of the ConfidentialInformation, (B) at the time of disclosure or use, knew or had reason toknow that his or her knowledge of the Confidential Information was (x) derivedfrom or through a

 

16

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#### Person who had utilized Improper Means toacquire it, (y) acquired under circumstances giving rise to a duty tomaintain its secrecy or limit its use or (z) derived from or through aPerson who owed a duty to the Company to maintain its secrecy or limit its useor (C) before a material change of his or her position, knew or had reasonto know that it was Confidential Information and that knowledge of it had beenacquired by accident or mistake.

####  

### (f)**           **“Person” means any individual,corporation, partnership, limited liability company, joint venture,association, business trust, joint-stock company, estate, trust, unincorporatedorganization, government or other agency or political subdivision thereof orany other legal or commercial entity.

###  

### (g)**          **“Restricted Period” means thelonger of (i) twelve (12) months after the date of termination ofemployment (the Executive’s last day of work for the Company) or (ii) theperiod during which the Executive is receiving payments from the Companypursuant to **Section 4**hereof.

###  

### (h)**          **“Work Product” means all patentsand patent applications, all inventions, innovations, improvements,developments, methods, designs, analyses, drawings, reports, creative works,discoveries, software, computer programs, modifications, enhancements,know-how, formulations, concepts and ideas, and all similar or relatedinformation (in each case whether or not patentable), all copyrights andcopyrightable works, all trade secrets, confidential information, and all otherintellectual property and intellectual property rights that are conceived,reduced to practice, developed or made by the Executive either alone or withothers in the course of employment with the Company (including employment priorto the date of this Agreement).

###  

## **5.5****          Remedies.**  Because the Executive’s services are uniqueand because the Executive has access to Confidential Information, the Executiveacknowledges and agrees that if the Executive breaches any of the provisions of**Section 5** hereof, the Companymay suffer immediate and irreparable harm for which monetary damages alone willnot be a sufficient remedy. The restrictive covenants stated in **Section 5** hereof are without prejudiceto the Company’s rights and causes of action at law.

##  

## **5.6****          Interpretation; Severability.**

##  

### (a)**          **The Executive has carefully consideredthe possible effects on the Executive of the covenants not to compete, theconfidentiality provisions and the other obligations contained in thisAgreement, and the Executive recognizes that the Company has made every effortto limit the restrictions placed upon the Executive to those that arereasonable and necessary to protect the Company’s legitimate businessinterests.

###  

### (b)**          **The Executive acknowledges and agreesthat the restrictive covenants set forth in this Agreement are reasonable andnecessary in order to protect the Company’s valid business interests. It is theintention of the parties hereto that the covenants, provisions and agreementscontained herein shall be enforceable to the fullest extent allowed by law. Ifany covenant, provision or agreement contained herein is found by a courthaving jurisdiction to be unreasonable in duration, scope or character ofrestrictions, or otherwise to be

 

17

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### unenforceable, such covenant,provision or agreement shall not be rendered unenforceable thereby, but ratherthe duration, scope or character of restrictions of such covenant, provision oragreement shall be deemed reduced or modified with retroactive effect to rendersuch covenant, provision or agreement reasonable or otherwise enforceable (asthe case may be), and such covenant, provision or agreement shall be enforcedas modified. If the court having jurisdiction will not review the covenant,provision or agreement, the parties hereto shall mutually agree to a revisionhaving an effect as close as permitted by applicable law to the provisiondeclared unenforceable. The parties hereto agree that if a court havingjurisdiction determines, despite the express intent of the parties hereto, thatany portion of the covenants, provisions or agreements contained herein are notenforceable, the remaining covenants, provisions and agreements herein shall bevalid and enforceable. Moreover, to the extent that any provision is declaredunenforceable, the Company shall have any and all rights under applicablestatutes or common law to enforce its rights with respect to any and allConfidential Information or unfair competition by the Executive.

###  

# **6.**             Miscellaneous.

# ** **

## **6.1****          Public Statements.**

##  

### (a)**          **Media Nondisclosure.  The Executive agrees that during theEmployment Period or at any time thereafter, except as may be authorized inwriting by the Company, the Executive will not directly or indirectly discloseor release to the Media any information concerning or relating to any aspect ofthe Executive’s employment or termination from employment with the Companyand/or any aspect of any dispute that is the subject of this Agreement. For thepurposes of this Agreement, the term “Media” includes, withoutlimitation, any news organization, station, publication, show, website, web log(blog), bulletin board, chat room and/or program (past, present and/or future),whether published through the means of print, radio, television and/or theInternet or otherwise, and any member, representative, agent and/or employee ofthe same.

###  

### (b)**          **Non-Disparagement.  The Executive agrees that during theEmployment Period or at any time thereafter, the Executive will not make anystatements, comments or communications in any form, oral, written or electronicto any Media or any customer, client or supplier of the Company or any of itsAffiliates, which would constitute libel, slander or disparagement of theCompany or any of its Affiliates, including, without limitation, any suchstatements, comments or communications that criticize, ridicule or arederogatory to the Company or any of its Affiliates; provided, however,that the terms of this **Section 6.1(b) **shallnot apply to communications between the Executive and, as applicable, theExecutive’s attorneys or other persons with whom communications would besubject to a claim of privilege existing under common law, statute or rule ofprocedure. The Executive further agrees that the Executive will not in any waysolicit any such statements, comments or communications from others.

###  

## **6.2****          ARBITRATION.  SUBJECT TO THE RIGHTS UNDER SECTION 6.3HEREOF TO SEEK INJUNCTIVE OR OTHER EQUITABLE RELIEF, BINDING ARBITRATION SHALLBE THE EXCLUSIVE REMEDY FOR ANY AND ALL DISPUTES, CLAIMS OR CONTROVERSIES,WHETHER STATUTORY, CONTRACTUAL OR OTHERWISE, BETWEEN THE PARTIES HERETO ARISING**

 

18

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##  

## **UNDEROR RELATING TO THIS AGREEMENT OR THE EXECUTIVE’S EMPLOYMENT BY OR TERMINATIONFROM THE COMPANY (INCLUDING, BUT NOT LIMITED TO, THE AMOUNT OF DAMAGES, OR THECALCULATION OF ANY BONUS OR OTHER AMOUNT OR BENEFIT DUE) (COLLECTIVELY, “DISPUTES”).THE PARTIES EACH WAIVE THE RIGHT TO A JURY TRIAL AND WAIVE THE RIGHT TOADJUDICATE THEIR DISPUTES UNDER THIS AGREEMENT OUTSIDE THE ARBITRATION FORUMPROVIDED FOR IN THIS AGREEMENT, EXCEPT AS OTHERWISE PROVIDED IN THISAGREEMENT.**In the event either party provides a noticeof arbitration of any dispute to the other party, the parties agree to submitthat dispute to a single arbitrator selected from a panel of arbitrators ofJAMS located in greater New York City-Southern New Jersey area. The arbitrationwill be governed by the JAMS Comprehensive Arbitration Rules andProcedures in effect at the time the arbitration is commenced. If for anyreason JAMS cannot serve as the arbitration administrator, the Company mayselect an alternative arbitration administrator such as the AmericanArbitration Association, to serve under the terms of this Agreement.

##  

### (a)**           VENUE.  THE PARTIES STIPULATE AND AGREE THAT THEEXCLUSIVE VENUE OF ANY SUCH ARBITRATION PROCEEDING (AND OF ANY OTHERPROCEEDING, INCLUDING ANY COURT PROCEEDING, UNDER THIS AGREEMENT) SHALL BEPASSAIC COUNTY, NEW JERSEY (THE “AGREED VENUE”).**

###  

### (b)**          **Authority and Decision.  The arbitrator shall have the authority toaward the same damages and other relief that a court could award. The arbitratorshall issue a reasoned award explaining the decision and any damages awarded. Thearbitrator’s decision will be final and binding upon the parties andenforceable by a court of competent jurisdiction. The parties will abide by andperform any award rendered by the arbitrator. In rendering the award, thearbitrator shall state the reasons therefor, including (without limitation) anycomputations of actual damages or offsets, if applicable.

###  

### (c)**          **Fees and Costs.  In the event of arbitration under the termsof this Agreement, the fees charged by JAMS or other arbitration administratorand the arbitrator shall be borne by the parties as determined by thearbitrator, except for any initial registration fee, which the parties shallbear equally. Otherwise, the parties shall each bear their own costs, expensesand attorneys’ fees incurred in arbitration; provided, however,that the prevailing party shall be entitled to recover and have awarded itsattorneys’ fees, court costs, arbitration expenses, and its portion of the feesand costs charged by JAMS or other arbitration administrator, regardless ofwhich party initiated the proceedings, in addition to any other relief to whichit may be entitled.

###  

### (d)**          **Limited Scope.  The following are excluded from binding arbitrationunder this Agreement: claims for workers’ compensation benefits or unemploymentbenefits; replevin; and claims for which a binding arbitration agreement isinvalid as a matter of law.

###  

## **6.3****          Injunctive Relief.**  The parties hereto may seek injunctive reliefin arbitration; provided, however, that as an exception to thearbitration agreement set forth in

 

19

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## **Section 6.2**hereof, the parties, in addition to all other available remedies, shall eachhave the right to initiate an action in any court of competent jurisdiction inorder to request injunctive or other equitable relief regarding the terms of **Sections 5** or **6.2** hereof. The exclusive venue of any suchproceeding shall be in the Agreed Venue. The parties agree (a) to submitto the jurisdiction of any competent court in the Agreed Venue, (b) towaive any and all defenses the Executive may have on the grounds of lack ofjurisdiction of such court and (c) that neither party shall be required topost any bond, undertaking or other financial deposit or guarantee in seekingor obtaining such equitable relief. Evidence adduced in any such proceeding foran injunction may be used in arbitration as well. The existence of this rightshall not preclude or otherwise limit the applicability or exercise of anyother rights and remedies that a party hereto may have at law or in equity.

##  

## **6.4****          Settlement of Existing Rights.**  In exchange for the other terms of thisAgreement, the Executive acknowledges and agrees that: (a) the Executive’sentry into this Agreement is a condition of employment and/or continuedemployment with the Company, as applicable; (b) except as otherwiseprovided herein, this Agreement will replace any existing employment agreementbetween the parties and thereby act as a novation, if applicable; (c) theExecutive is being provided with access to Confidential Information, including,without limitation, proprietary trade secrets of one or more Company Parties,to which the Executive has not previously had access; (d) all Companyinventions and intellectual property developed by the Executive during any pastemployment with the Company and all goodwill developed with the Company’sclients, customers and other business contacts by the Executive during any pastemployment with Company, as applicable, is the exclusive property of theCompany; and (e) all Confidential Information and/or specialized trainingaccessed, created, received or utilized by the Executive during any pastemployment with Company, as applicable, will be subject to the restrictions onConfidential Information described in this Agreement, whether previously soagreed or not.

##  

## **6.5****          Entire Agreement; Waiver.**  This Agreement contains the entire agreementbetween the Executive and the Company with respect to the subject matterhereof, and supersedes any and all prior understandings or agreements, whetherwritten or oral. No modification or addition hereto or waiver or cancellationof any provision hereof shall be valid except by a writing signed by the partyto be charged therewith. No delay on the part of any party to this Agreement inexercising any right or privilege provided hereunder or by law shall impair,prejudice or constitute a waiver of such right or privilege.

##  

## **6.6****          Governing Law.**  This Agreement shall be governed by andconstrued in accordance with the laws of the State of New Jersey, withoutregard to principles of conflict of laws.

##  

## **6.7****          Successors and Assigns; Binding Agreement.**  The rights and obligations of the partiesunder this Agreement shall be binding upon and inure to the benefit of theparties hereto and their heirs, personal representatives, successors andpermitted assigns. This Agreement is a personal contract, and, except asspecifically set forth herein, the rights and interests of the Executive hereinmay not be sold, transferred, assigned, pledged or hypothecated by any partywithout the prior written consent of the others. As used herein, the term “successor”as it relates to the Company, shall include, but not be limited to, anysuccessor by

 

20

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## way of merger, consolidation orsale of all or substantially all of such Person’s assets or equity interests.

##  

## **6.8****          Representation by Counsel; IndependentJudgment.**  Each of the partieshereto acknowledges that (a) it or the Executive has read this Agreementin its entirety and understands all of its terms and conditions, (b) it orthe Executive has had the opportunity to consult with any individuals of its orthe Executive’s choice regarding its or the Executive’s agreement to theprovisions contained herein, including legal counsel of its or the Executive’schoice, and any decision not to was the Executive’s or its alone and (c) itor the Executive is entering into this Agreement of its or the Executive’s ownfree will, without coercion from any source, based upon its or the Executive’sown independent judgment.

##  

## **6.9****          Interpretation.**  The parties and their respective legalcounsel actively participated in the negotiation and drafting of thisAgreement, and in the event of any ambiguity or mistake herein, or any disputeamong the parties with respect to the provisions hereto, no provision of thisAgreement shall be construed unfavorably against any of the parties on theground that the Executive, it, or the Executive’s or its counsel was thedrafter thereof.

##  

## **6.10****        Survival.**  The provisions of **Sections 4.3(e), 5** and **6**hereof shall survive the termination of this Agreement.

##  

## **6.11****        Notices.**  All notices and communications hereundershall be in writing and shall be deemed properly given and effective whenreceived, if sent by facsimile or telecopy, or by postage prepaid by registeredor certified mail, return receipt requested, or by other delivery service whichprovides evidence of delivery, as follows:

##  

If to the Company, to:

 

Linens ’n Things, Inc.

6 Brighton Road

Clifton, New Jersey 07015

Attention: General Counsel

 

with a copy (which shall notconstitute notice) to:

 

Gardere Wynne Sewell LLP

1601 Elm Street, Suite 3000

Dallas, Texas 75201-4761

Attention: Ronald M. Gaswirth, Esq.

Telephone: (214) 999-4601

Facsimile: (214) 999-3601

E-mail: rgaswirth@gardere.com

 

21

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If to the Executive, to:

 

Scott Silver

At the most recent address ofthe Executive on filewith the Company

 

or to such other address as oneparty may provide in writing to the other party from time to time.

 

## **6.12****        Counterparts.**  This Agreement may be executed in one or morecounterparts, each of which shall be deemed an original and all of whichtogether shall constitute one and the same instrument. Facsimile transmissionof any signed original document or retransmission of any signed facsimiletransmission will be deemed the same as delivery of an original. At the requestof any party, the parties will confirm facsimile transmission by signing aduplicate original document.

##  

## **6.13****        Captions.**  Paragraph headings are for convenience onlyand shall not be considered a part of this Agreement.

##  

## **6.14****        No Third Party Beneficiary Rights.**  Except as otherwise provided in thisAgreement, no entity shall have any right to enforce any provision of thisAgreement, even if indirectly benefited by it.

##  

## **6.15****        Withholding.**  Any payments provided for hereunder shall bepaid net of any applicable withholding required under Federal, state or locallaw and any additional withholding to which Executive has agreed.

##  

**[REMAINDER OF PAGE INTENTIONALLYLEFT BLANK]**

 

22

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IN WITNESSWHEREOF, the parties have duly executed this Agreement, intending it as adocument under seal, on the Execution Date to be effective for all purposes asof the Effective Date.

 
|   | ****LINENS ’N  THINGS, INC.**** |
|--------|--------------------------------------|
|   |                                 |
|   |                                 |
|   | By:                                  |   /s/  ROBERT J. DINICOLA |
|   |                                 | Robert J. DiNicola |
|   |                                 | Chairman of the Board and |
|   |                                 | Chief Executive  Officer |
|   |                                 |
|   | ****EXECUTIVE****                    |
|   |                                 |
|   |                                 |
|   |   /s/  SCOTT SILVER        |
|   | Name: Scott Silver                   |

 

----

 

**EXHIBIT A**

 

**Definition of Change of Control**

 

“Change ofControl” means:

 

(1)**          **any event occursthe result of which is that any “Person,” as such term is used inSections 13(d) and 14(d) of the Exchange Act, other than one ormore Permitted Holders or their Related Parties, becomes the beneficial owner,as defined in Rules l3d-3 and l3d-5 under the Exchange Act (except that aPerson shall be deemed to have “beneficial ownership” of all shares that anysuch Person has the right to acquire within one year) directly or indirectly,of more than 50% of the Voting Stock of Holding or any successor company,including, without limitation, through a merger or consolidation or purchase ofVoting Stock of Holding; *provided* thatnone of the Permitted Holders or their Related Parties have the right orability by voting power, contract or otherwise to elect or designate forelection a majority of the Board; *provided further*that the transfer of 100% of the Voting Stock of Holding to a Person that hasan ownership structure identical to that of Holding prior to such transfer,such that Holding becomes a wholly owned Subsidiary of such Person, shall notbe treated as a Change of Control;

 

(2)**          **after an initialpublic offering of Capital Stock of Holding, during any period of two (2) consecutiveyears, individuals who at the beginning of such period constituted the Board,together with any new directors whose election by such Board or whose nominationfor election by the stockholders of Holding was approved by a vote of amajority of the directors of Holding then still in office who were eitherdirectors at the beginning of such period or whose election or nomination forelection was previously so approved, cease for any reason to constitute amajority of the Board then in office;

 

(3)**          **the sale, lease,transfer, conveyance or other disposition, in one or a series of relatedtransactions other than a merger or consolidation, of all or substantially allof the assets of Holding and its Subsidiaries taken as a whole to any Person orgroup of related Persons other than a Permitted Holder or a Related Party of aPermitted Holder; or

 

(4)**          **the adoption of aplan relating to the liquidation or dissolution of Holding.

 

For purposesof this definition, the following terms shall have the meanings set forthbelow:

 

An *“Affiliate”* of any specified Person means any other Person,whether now or hereafter existing, directly or indirectly controlling orcontrolled by, or under direct or indirect common control with, such specifiedPerson. For purposes hereof, “control” or any other form thereof, when usedwith respect to any Person, means the power to direct the management andpolicies of such Person, directly or indirectly, whether through the ownershipof voting securities, by contract or otherwise; and the terms “controlling” and“controlled” shall have meanings correlative to the foregoing.

 

*“Apollo”*means Apollo Management V, L.P. and its Affiliates or any entity controlledthereby or any of the partners thereof.

 

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*“Board”*means the Board of Directors of Holding or any committee thereof dulyauthorized to act on behalf of such Board of Directors.

 

*“CapitalStock”* of any Person means any and all shares,interests, rights to purchase, warrants, options, participations or otherequivalents of or interests in, however designated, equity of such Person,including any Preferred Stock, but excluding any debt securities convertibleinto such equity.

 

*“ExchangeAct”* means the Securities Exchange Act of 1934, asamended.

 

*“Holding”*means Linens Holding Co., a Delaware corporation.

 

*“PermittedHolder”* means any of Apollo, NRDC Real EstateAdvisors I, LLC or Silver Point Capital Fund Investments, LLC.

 

*“Person”*means any individual, corporation, partnership, limited liability company,joint venture, association, business trust, joint-stock company, estate, trust,unincorporated organization, government or other agency or politicalsubdivision thereof or any other legal or commercial entity.

 

*“PreferredStock”* as applied to the Capital Stock of anycorporation means Capital Stock of any class or classes, however designated,that is preferred as to the payment of dividends, or as to the distribution ofassets upon any voluntary or involuntary liquidation or dissolution of suchcorporation, over shares of Capital Stock of any other class of suchcorporation.

 

*“RelatedParty”* means:

 

(1)**          **anycontrolling stockholder, 50% (or more) owned Subsidiary, or immediate familymember (in the case of an individual) of any Permitted Holder; or

 

(2)**          **anytrust, corporation, partnership, limited liability company or other entity, thebeneficiaries, stockholders, partners, members, owners or Persons beneficiallyholding an 50% or more controlling interest of which consist of any one or morePermitted Holders and/or such other Persons referred to in the immediatelypreceding clause (1).

 

*“Subsidiary”*means, with respect to any specified Person:

 

(1)**          **anycorporation, association or other business entity of which more than 50% of thetotal voting power of shares of Capital Stock entitled (without regard to theoccurrence of any contingency and after giving effect to any voting agreementor stockholders’ agreement that effectively transfers voting power) to vote inthe election of directors, managers or trustees of the corporation, associationor other business entity is at the time owned or controlled, directly orindirectly, by that Person or one or more of the other Subsidiaries of thatPerson (or a combination thereof); and

 

(2)**          **anypartnership (a) the sole general partner or the managing general partnerof which is such Person or a Subsidiary of such Person or (b) the onlygeneral

 

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partners of which are thatPerson or one or more Subsidiaries of that Person (or any combination thereof).

 

*“Voting Stock”* of an entity means allclasses of Capital Stock of such entity then outstanding andnormally entitled to vote in the election of directors or all interests in suchentity with the ability to control the management or actions of such entity.

 

Notwithstandinganything to the contrary in this Exhibit A, the definition of Change ofControl shall be interpreted consistently with the definition of “Change ofControl” contained in Section 409A of the Internal Revenue Code of 1986,as amended (the “Code”), and regulations and guidance issued by theInternal Revenue Service under Section 409A of the Code, including IRSNotice 2005-1.

 

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**EXHIBIT B**

 

**Fringe Benefits**

 

1.**            **Healthinsurance in accordance with the Company’s health insurance plan or program ineffect from time to time.

 

2.**            **Prescriptiondrug coverage in accordance with the Company’s health insurance plan orprogram, or separate prescription drug coverage plan or program, in effect fromtime to time.

 

3.**            **Dentalinsurance in accordance with the Company’s dental insurance plan or program ineffect from time to time.

 

4.**            **Long-termdisability insurance in accordance with the Company’s long-term disabilityinsurance plan or program in effect from time to time.

 

5.**            **Eligibilityfor life insurance coverage in such amount as the Company makes available toits employees or executives, subject to a bi-weekly payroll deduction for thepremium and completion by the Executive of any authorization documentation.

 

6.**            **Cellulartelephone and service.

 

7.**            **Annualfinancial planning services through Joel Isaacson Company, or a reasonablesubstitute therefor, as may be determined by the Company from time to time.

 

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