Exhibit 10.1


 


SEPARATION AGREEMENT


 


This
Separation Agreement (“Agreement”) is made effective as of January 9,
2009, between bebe stores, inc., a California corporation (the “Company”),
and Gregory Scott (“Executive”).


 


RECITALS


 


A.                                   Executive
serves as the Company’s Chief Executive Officer, and his employment with the
Company will terminate effective as of January 9, 2009 (the “Termination
Date”).


 


B.                                     The
parties wish to enter into this Agreement to set forth the terms and conditions
related to Executive’s termination of employment with the Company.


 


AGREEMENT


 


NOW,
THEREFORE, in consideration of good and valuable consideration the receipt of
which is hereby acknowledged, the parties hereby agree as follows:


 


1.                                       Termination;
Accrued Obligations.  Executive acknowledges
that his employment with the Company will end effective as of the Termination
Date.  The Company shall pay Executive,
within three days after the Termination Date, all accrued but unpaid salary,
and all accrued and unused vacation earned through the Termination Date,
subject to any applicable withholding required under federal, state or local
law.  Executive is entitled to these
amounts regardless of whether Executive revokes this Agreement (as described in
Section 5(e) below).


 


2.                                       Severance Benefits.  The Company agrees that Executive shall be
entitled to receive the following benefits, provided that Executive does not
revoke the Agreement as described in Section 5(e) below:


 


(a)                                  Severance Payments.  The Company shall provide Executive with severance
payments in an aggregate amount equal to $600,000, which is Executive’s current
annual base salary.  The severance
payments shall be paid in equal increments over the twelve (12) month period
following the Termination Date (the “Salary Continuation Period”) in
accordance with the Company’s normal payroll procedures.


 


(b)                                 Continued Health
Care Benefits.  The Company shall
maintain in full force and effect for the continued benefit of Executive during
the Salary Continuation Period, medical and dental insurance (including
coverage for Executive’s dependents to the extent dependent coverage is
provided by the Company for its employees generally) under such plans and
programs in which Executive was entitled to participate immediately prior to
the Termination Date, provided that Executive’s continued participation is
possible under the general terms and provisions of such plans and
programs.  In the event that
participation in any such plan or program is not permitted, the Company shall
arrange to provide Executive with medical and dental insurance benefits at the
Company’s expense during the Salary Continuation Period substantially similar
to those which Executive would otherwise have been entitled to receive


 


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under such plans and programs from which his continued participation is
barred.


 


(c)                                  Stock
Option.  As of the Termination Date,
Executive shall (i) become fully vested with respect to any previously
unvested portion of the option to purchase 100,000 shares of the Company’s
common stock which was previously granted to Executive on September 8,
2008 (the “Stock Option”), and (ii) the Stock Option shall remain
exercisable until the date occurring one year after the Termination Date.


 


(d)                                 Withholding.  Executive understands and agrees that all
payments under Section 2 of this Agreement will be subject to any
applicable withholding required under federal, state or local law.


 


3.                                       Section 409A.  This Agreement shall be administered and
interpreted to maximize the short-term deferral exception to Section 409A
of the Internal Revenue Code of 1986, as amended (the “Code”), and
Executive shall not, directly or indirectly, designate the taxable year of a
payment made under this Agreement.  Any
payment under this Agreement that is paid within the short-term deferral period
(within the meaning of Code Section 409A and Treas. Reg. §1.409A-1(b)(4))
shall be treated as a short term deferral and not aggregated with other plans
or payments.


 


4.                                       General
Release.  In exchange for the
severance payments and benefits provided for in Section 2, Executive
releases and forever discharges the Company and each of its subsidiaries,
affiliates, officers, directors, employees, and agents and all of their
predecessors and successors (“Releasees”) from any and all claims that
legally can be released that Executive may have against the Releasees, whether
known or unknown, arising out of Executive’s employment with the Company or the
termination of that employment.  This
waiver and release of claims is full and complete, and includes, without
limitation, any claim of constructive discharge, harassment, or wrongful
termination, any claims under Title VII of the 1964 Civil Rights Act, the
Americans With Disabilities Act, the Age Discrimination in Employment Act, the
Family and Medical Leave Act, the California Fair Employment and Housing Act,
the California Family Rights Act, the Employee Retirement Income Security Act,
the state and federal Worker Adjustment Retraining and Notification Acts, or any
other applicable federal, state, or local law, rule, regulation or order,
claims for breach of contract or covenant, whether express or implied,
negligent or intentional infliction of emotional distress, misrepresentation,
fraud, breach of statute or public policy, defamation, or any claims alleging
tort or other wrongful conduct under common law, as well as any claim for
additional compensation in any form, including salary, bonus or incentive
compensation, sick leave benefits, vacation benefits, compensatory time,
severance pay,  or otherwise and all
other claims of any kind arising out of my employment, including claims for
attorney’s fees and costs.  The matters
that are the subject of the release referred to in this Section shall be
referred to collectively as the “Released Matters”.


 


Notwithstanding the foregoing, Executive does
not release the following claims and rights: 
(a) Executive’s rights under this Agreement; (b) any claims
for unemployment compensation or any state disability insurance benefits
pursuant to the terms of applicable state law; (c) Executive’s right, if
any, to indemnity pursuant to the California Labor Code; or (d) any other
claims determined by law to be non-waivable.


 


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5.                                       Acknowledgements
Related to ADEA.  Executive
understands and acknowledges that:


 


(a)                                  This Agreement
constitutes a voluntary waiver of any and all rights and claims he has against
the Company as of the date of the execution of this Agreement, including rights
or claims arising under the federal Age Discrimination in Employment Act, 29
U.S.C. 621, et seq.


 


(b)                                 He has waived rights
or claims pursuant to this Agreement and in exchange for consideration, the
value of which exceeds payment or remuneration to which Executive was already
entitled.


 


(c)                                  He is hereby advised
that he may consult with an attorney of his choosing concerning this Agreement
prior to executing it.


 


(d)                                 He has been afforded a
period of at least twenty one (21) days to consider the terms of this Agreement,
and in the event he should decide to execute this Agreement in fewer than
twenty one (21) days, he has done so with the express understanding that he has
been given and declined the opportunity to consider this Agreement for a full
twenty one (21) days, and waives the balance of the twenty-one (21) day period.


 


(e)                                  He may revoke this
Agreement at any time during the seven (7) days following the date of
execution of this Agreement by providing written notice to an authorized
representative of the Company, and this Agreement shall not become effective or
enforceable until such revocation period has expired.  Executive understands that if he revokes this
Agreement, he shall not be entitled to any of the benefits provided by this Section 2
of this Agreement.


 


6.                                       California Section 1542
Waiver.  Executive acknowledges that
he has read the provisions of California Civil Code Section 1542, which
provides as follows:


 


A general release does not extend to claims
which the creditor does not know or suspect to exist in his or her favor at the
time of executing the release, which if known to him or her must have
materially affected his or her settlement with the debtor.


 


and that he expressly waives, relinquishes and forfeits all rights and
benefits accorded by the provisions of California Civil Code Section 1542
with respect to the Released Matters.


 


7.                                       Executive
Representations.  Executive warrants
and represents that (a) he has not initiated any adversarial proceedings
of any kind against the Company or any other Releasee, (b) he has been
paid all compensation, wages, bonuses, commissions, and/or benefits to which he
may be entitled and no other compensation, wages, bonuses, commissions and/or
benefits are due to him, except as described in this Agreement, and (c) he
has no known workplace injuries


 


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or occupational diseases and has been provided and/or has not been
denied any leave requested under the Family and Medical Leave Act or the
California Family Rights Act.


 


8.                                       Non-Solicitation
of Employees.  Executive agrees that,
for the period beginning on the Termination Date and ending one year
thereafter, Executive will not, in any capacity, either directly or indirectly,
recruit, solicit, or induce, or attempt to induce any employee of Company or
any of its affiliates to terminate his or her employment with Company or such
affiliate and will not assist any third party in undertaking any of the
foregoing; provided, however, that  a
general advertisement to which an employee of the Company (or an affiliate of
the Company) responds shall in no event be deemed to result in a breach of this
Section.


 


9.                                       Successors.  This Agreement establishes contract rights
which shall be binding upon, and shall inure to the benefit of, the successors,
assigns, heirs and legal representatives of the parties hereto.


 


10.                                 Severability.  Should any provision of this Agreement, or
any clause hereof, be held to be invalid, illegal or unenforceable, in whole or
in part, the remaining provisions and clauses of this Agreement shall remain
fully enforceable and binding on the parties.


 


11.                                 Modification
and Waiver.  No supplement,
modification or amendment of this Agreement shall be binding unless executed in
writing by both of the parties hereto. 
No waiver of any of the provisions of this Agreement shall be deemed or
shall constitute a waiver of any other provisions hereof (whether of not
similar) nor shall such waiver constitute a continuing waiver.


 


12.                                 Choice
of Law.  This Agreement will be deemed
to have been entered into and will be construed and enforced in accordance with
the laws of the State of California without regard to conflicts of law
principles.


 


13.                                 Entire
Agreement.  This Agreement
constitutes the entire agreement of the parties hereto with respect to the
subject matter hereof and shall supersede all prior or contemporaneous written
or oral agreements concerning such subject matter.


 


[Signature page follows]


 


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IN WITNESS
WHEREOF, the parties have executed this Agreement effective as of the day and
year first written above.


 


	
   

  	
  bebe stores, inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Barbara Bass

  
	
   

  	
   

  
	
   

  	
  Its:

  	
  Director and Compensation Committee Chair

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  EXECUTIVE:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Gregory Scott

  
	
   

  	
  Gregory Scott

  
				



 


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