Document:

Exhibit 10.52

 

FINAL VERSION

 

DAVIDS TEA, INC.

SHORT-TERM INCENTIVE PLAN

 

This  Short-Term Incentive Plan (the “Plan”) has been established to advance the interests of DAVIDs TEA, Inc. (the “Company”) by providing for the grant of Awards to eligible employees of the Company and its subsidiaries, including Awards intended to qualify for the performance-based compensation exemption (“Exempt Awards”) under Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”) (Section 162(m) of the Code, together with the regulations thereunder, “Section 162(m)”), to the extent applicable.

 

I. ADMINISTRATION

 

The Plan will be administered by the Human Resources & Compensation Committee and its delegates (the Committee and its delegates, to the extent of such delegation, are referred to herein as the “Administrator”); provided, that all determinations and other actions of the Administrator required by the performance-based compensation provisions of Section 162(m) to be made or taken by a “compensation committee” (as defined in Section 162(m)) will be made or taken hereunder directly by the Committee, and all references to the Administrator herein are to be construed accordingly.  For purposes of the Plan, “Committee” means the Human Resources and Compensation Committee of the Board of Directors of the Company, except that if any member of the Human Resources Compensation Committee is not an “outside director” (as defined in Section 162(m)), “Committee” means a subcommittee of the Compensation Committee consisting solely of those Compensation Committee members who are “outside directors” as so defined.

 

The Administrator has the authority to interpret the Plan and Awards, to determine eligibility for Awards, to determine the terms of and the conditions applicable to any Award, and generally to do all things necessary to administer the Plan.  Any interpretation or decision by the Administrator with respect to the Plan or any Award will be final and conclusive as to all parties.

 

II. ELIGIBILITY; PARTICIPANTS

 

Executive officers and other key employees of the Company and its subsidiaries shall be eligible to participate in the Plan.  The Committee will select, from among those eligible, the persons who will from time to time participate in the Plan (each, a “Participant”).  Participation with respect to one Award under the Plan will not entitle an individual to participate with respect to a subsequent Award or Awards, if any.

 

III. GRANT OF AWARDS

 

The term “Award” as used in the Plan means an award opportunity that is granted to a Participant with respect to a specified performance period (consisting of the Company’s fiscal year or such other period as the Administrator may determine, each a “Performance Period”).  A Participant who is granted an Award will be entitled to a payment, if any, under the Award only if all conditions to payment have been satisfied in accordance with the Plan and the terms of the Award.  By accepting (or, under such rules as the Committee may prescribe, being deemed to have accepted) an Award, the Participant agrees (or will be deemed to agree) to the

 

 

terms of the Award and the Plan.  For each Award, the Administrator shall establish the following:

 

a)    the Performance Criteria (as defined in Section IV below) applicable to the Award;

b)    the amount or amounts that will be payable (subject to adjustment in accordance with Section V) if the Performance Criteria are achieved; and

c)     such other terms and conditions as the Administrator deems appropriate, subject in each case to the terms of the Plan.

 

For Exempt Awards, (i) such terms shall be established by the Committee not later than (A) the ninetieth (90th) day after the beginning of the Performance Period, in the case of a Performance Period of 360 days or longer, or (B) the end of the period constituting the first quarter of the Performance Period, in the case of a Performance Period of less than 360 days, and (ii) once the Committee has established the terms of such Award in accordance with the foregoing, it shall not thereafter adjust such terms, except to reduce payments, if any, under the Award in accordance with Section V or as otherwise permitted in accordance with the requirements of Section 162(m).

 

IV. PERFORMANCE CRITERIA

 

As used in the Plan, “Performance Criteria” means specified criteria, other than the mere continuation of employment or the mere passage of time, the satisfaction of which is a condition for the vesting, payment or full enjoyment of an Award.  A Performance Criterion and any targets with respect thereto determined by the Committee need not be based upon an increase, a positive or improved result or avoidance of loss and may be applied to a Participant or Participants on an individual basis, a business unit or division, or the Company as a whole.  For Exempt Awards, a Performance Criterion will mean an objectively determinable measure or objectively determinable measures of performance relating to any or any combination of the following (measured either absolutely or by reference to an index or indices and determined either on a consolidated basis or, as the context permits, on a divisional, subsidiary, line of business, project or geographical basis or in combinations thereof):  sales; revenues; assets; expenses; comparable sales growth; net promoter and other customer ratings scores; key hires; earnings before or after deduction for all or any portion of interest, taxes, depreciation, amortization or equity expense, whether or not on a continuing operations or an aggregate or per share basis; return on equity, investment, capital, capital employed or assets; one or more operating ratios; operating income or profit, including on an after-tax basis; net income; borrowing levels, leverage ratios or credit rating; market share; capital expenditures; cash flow; stock price; stockholder return; sales of particular products or services; customer acquisition or retention; acquisitions and divestitures (in whole or in part); joint ventures, strategic alliances, licenses or collaborations; spin-offs, split-ups and the like; reorganizations; recapitalizations, restructurings, financings (issuance of debt or equity) or refinancings; or manufacturing or process development.  To the extent consistent with the requirements of Section 162(m), the Committee may establish that, in the case of any Exempt Award, one or more of the Performance Criteria applicable to such Award will be adjusted in an objectively determinable manner to reflect events (for example, the impact of charges for restructurings, discontinued operations, mergers, acquisitions, extraordinary items, and other unusual or non-recurring items, and the cumulative effects of tax or accounting changes, each as defined by U.S. generally accepted

 

 

accounting principles) occurring during the Performance Period that affect the applicable Performance Criterion or Criteria.

 

V. CERTIFICATION OF PERFORMANCE; AMOUNT PAYABLE UNDER AWARDS

 

As soon as practicable after the close of a Performance Period, the Administrator will determine whether and to what extent, if at all, the Performance Criterion or Criteria applicable to each Award granted for the Performance Period have been satisfied and, in the case of Exempt Awards, will take such steps as it determines to be sufficient to satisfy the certification requirement under Section 162(m) as to such performance results.  The Administrator shall then determine the actual payment, if any, under each Award.  No amount may be paid under any Exempt Award unless such certification requirement has been satisfied as set forth above, except as provided by the Administrator consistent with the requirements of Section 162(m).  The Administrator may, in its sole and absolute discretion and with or without specifying its reasons for doing so, after determining the amount that would otherwise be payable under any Award for a Performance Period, reduce (including to zero) the actual payment, if any, to be made under such Award or, in the case of Awards other than Exempt Awards, otherwise adjust the amount payable under such Award.  The Administrator may exercise the discretion described in the immediately preceding sentence either in individual cases or in ways that affect more than one Participant.  The actual payment under an Exempt Award may be less than (but in no event more than) the amount indicated by the certified level of achievement under the Award.  The actual payment under an Award other than an Exempt Award may be more or less than the amount indicated by the level of achievement under the Award.  In each case, the Administrator’s discretionary determination, which may affect different Awards differently, will be binding on all parties.

 

VI. PAYMENT UNDER AWARDS

 

Except as otherwise determined by the Administrator or as otherwise provided in this Section VI, all payments under the Plan will be made, if at all, not later than March 15th of the calendar year following the calendar year in which the Performance Period ends; provided, however, that the Administrator may authorize elective deferrals of any Award payments in accordance with the deferral rules of Section 409A of the Code and the regulations thereunder (“Section 409A”).  The Administrator may, but need not, provide that an Award payment will not be made unless the Participant has remained employed with the Company and its subsidiaries through the date of payment.  Any deferrals with respect to an Exempt Award will be subject to adjustment for notional interest or other notional earnings on a basis, determined by the Administrator, that is consistent with qualification of the Award as exempt performance-based compensation under Section 162(m).  Awards under the Plan are intended either to qualify for exemption from, or to comply with the requirements of, Section 409A.

 

VII. PAYMENT LIMITS

 

The maximum amount payable to any person in any fiscal year of the Company under Exempt Awards will be $1,000,000, which limitation, with respect to any such Awards for

 

 

which payment is deferred in accordance with Section VI above, shall be applied without regard to such deferral.

 

VIII. TAX WITHHOLDING; LIMITATION ON LIABILITY

 

All payments under the Plan will be subject to reduction for applicable tax and other legally or contractually required withholdings.

 

Neither the Company nor any affiliate, nor the Administrator, nor any person acting on behalf of the Company, any affiliate, or the Administrator, will be liable for any adverse tax or other consequences to any Participant or to the estate or beneficiary of any Participant or to any other holder of an Award that may arise or otherwise be asserted with respect to an Award, including, but not limited to, by reason of the application of Section X below or any acceleration of income or any additional tax (including any interest and penalties) asserted by reason of the failure of an Award to satisfy the requirements of Section 409A or by reason of Section 4999 of the Code.

 

IX. AMENDMENT AND TERMINATION

 

The Committee may amend the Plan at any time and from time to time; provided, however, that, with respect to Exempt Awards, no amendment for which Section 162(m) would require shareholder approval in order to preserve the eligibility of such Awards as exempt performance-based compensation shall be effective unless approved by the shareholders of the Company in a manner consistent with the requirements of Section 162(m).  The Committee may at any time terminate the Plan.

 

X. MISCELLANEOUS

 

Awards held by a Participant are subject to forfeiture, termination and rescission, and a Participant will be obligated to return to the Company payments received with respect to Awards, in each case (a) to the extent provided by the Administrator in connection with (i) a breach by the Participant of an Award agreement or the Plan, or any non-competition, non-solicitation, confidentiality or similar covenant or agreement with the Company or any of its affiliates or (ii) an overpayment to the Participant of incentive compensation due to inaccurate financial data, (b) in accordance with any applicable Company clawback or recoupment policy, as such policy may be amended and in effect from time to time, or (c) as otherwise required by law or applicable stock exchange listing standards, including, without limitation, Section 10D of the Securities Exchange Act of 1934, as amended.  Each Participant, by accepting an Award pursuant to the Plan, agrees to return the full amount required under this Section X at such time and in such manner as the Administrator shall determine in its sole discretion.

 

No person shall have any claim or right to be granted an Award, nor shall the selection for participation in the Plan for any Performance Period be construed as giving a Participant the right to be retained in the employ or service of the Company or its affiliates for that Performance Period or for any other period.  The loss of an Award will not constitute an element of damages in the event of termination of employment for any reason, even if the termination is in violation of an obligation of the Company or any affiliate to the Participant.

 

 

In the case of any Exempt Award, the Plan and such Award will be construed and administered to the maximum extent permitted by law in a manner consistent with qualifying the Award for the exemption for performance-based compensation under Section 162(m), notwithstanding anything to the contrary in the Plan.  Awards will not be required to comply with the provisions of the Plan applicable to Exempt Awards (including, without limitation, the composition of the Committee as set forth in Section I above) if and to the extent they are eligible (as determined by the Committee) for exemption from such limitations by reason of the transition relief set forth in Treas. Regs. § 1.162-27(f).

 

The Plan shall be effective upon adoption of the Plan by the Board of Directors of the Company (the “Effective Date”) and shall supersede and replace the Company’s annual cash bonus program with respect to Awards granted to eligible executive officers and employees for fiscal years beginning after the Effective Date.

 

The Plan will be governed and administered by the laws of the Province of Quebec and the federal laws of Canada.Exhibit 10.53

 

RELEASE AND DISCHARGE

 

WHEREAS DAVIDsTEA (USA) Inc. (the “Corporation”) and the undersigned, Jevin Eagle, are parties to an executive employment agreement dated April 9, 2012 (the “Employment Agreement”);

 

WHEREAS my employment with the Corporation as well as all other positions as an officer or director of the Corporation or of any of its affiliates terminated effective on April 30, 2014 (the “Termination Date”), including without limitation, my position as Chief Executive Officer of DAVIDsTEA Inc. (“DAVIDsTEA”);

 

WHEREAS the Corporation undertakes to pay me the amount which is set forth at Section 4.3 of the Employment Agreement, namely an amount equal to six (6) months of my base salary, payable in six (6) installments based on my monthly base salary rate, less applicable deductions, as set forth in the Employment Agreement, the whole subject to my signature of the present Release and Discharge Agreement (the “Agreement”) and of a resignation letter;

 

WHEREAS it is understood that the options to purchase common shares in the capital of DAVIDsTEA which were granted to me will be dealt with in accordance with the terms and conditions set forth in the Equity Participation Agreement and in the Amended and Restated Equity Incentive Plan;

 

In consideration of, and subject to, the receipt of the amounts described above, I hereby release and forever discharge the Corporation, DAVIDsTEA, their affiliates, subsidiaries and related entities and each of their respective current and former partners, shareholders, successors, directors, officers, employees, agents, insurers, plan administrators, fiduciaries, representatives and assigns (each in their individual and institutional capacities) (the “Released Parties”) from any and all claims, actions, causes of action charges, complaints or any other liability of any nature whatsoever, past, present or future, including but not limited to those being directly or indirectly related to my employment or the termination thereof, including but not limited to;

 

a)                                     All claims for wrongful discharge, wages, notice, pay in lieu of notice, termination pay, severance pay and benefits or breach of contract;

 

b)                                     All claims or complaints under the Employment Agreement, the Civil Code of Quebec, the Charier of Human Rights and Freedoms, the Industrial Accidents and Occupational Diseases Act or any other applicable law, contract or program;

 

c)                                      All claims under Title VII of the Civil Rights Act of 1964, 42 U.S.C § 2000e et  seq., the Age Discrimination in Employment Act, 29 U.S.C. § 621 et seq., the Americans With Disabilities Act of 1990, 42 U.S.C. § 12101 et seq., the Genetic Information Nondiscrimination Act of 2008, 42 U.S.C. § 2000ff et  seq., the Family and Medical Leave Act, 29 U.S.C, § 2601 et  seq., the Worker Adjustment and Retraining Notification Act (“WARN”), 29 U.S.C. § 2101 et seq., the Fair Credit Reporting Act, 15 U.S.C. § 1681 et  seq. the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1001 et  seq., the Massachusetts Fair Employment Practices Act, M.G.L. c. 15IB, § 1 et  seq., the Massachusetts Civil Rights Act, M.G.L. c. 12, §§ 11H and 111, the Massachusetts Equal Rights Act,

 

 

M.G.L. c. 93, § 102 and M.G.L. c. 214, § 1C, the Massachusetts Labor and Industries Act, M.G.L. c. 149, § 1 et  seq., the Massachusetts Wage Payment Act, M.G.L. c. 149, § 148 et  seq. (the Massachusetts law regarding payment of wages and overtime), the Massachusetts Privacy Act, M.G.L. c. 214, § IB, and the Massachusetts Maternity Leave Act, M.G.L. c. 149, § 105D, all as amended; and

 

d)                                     Any claim or damage arising out of my employment with and/or separation from the Corporation (including a claim for retaliation) under any common law theory or any foreign, federal, state or local law not expressly referenced above.

 

Without limiting the generality of the foregoing, I recognize that, subject to the payment of the amounts described above, I have received all amounts for salary (except for the paycheck covering the salary period during which the termination of my employment occurred), vacation pay, bonus, equity interest, commissions, overtime pay, payment in lieu of notice, severance pay and any other amounts to which I may be entitled pursuant to the Employment Agreement, the Civil Code of Quebec, the Charter of Human Rights and Freedoms, the Industrial Accidents and Occupational Diseases Act, the Massachusetts Wage Payment Act, M.G.L. c. 149, § 148 et  seq. or any other applicable foreign or local law, contract or program.

 

The above-mentioned payments will be made without prejudice and in no way constitute an admission of liability on the part of the Released Parties.

 

For greater certainty, I recognize that I will not be eligible to receive any bonus for the current year or for any subsequent years.  I recognize that my participation in any incentive or benefit plans, including without limitation the group insurance and life insurance plans, ended on the Termination Date.  Consequently, my coverage for medical and health benefits terminated on the Termination Date; provided, however, that nothing in this Agreement affects my right to elect to continue receiving group medical insurance pursuant to applicable law, provided that all premiums costs for such continuation coverage shall be paid by me on a monthly basis for as long as, and to the extent that, I remain eligible for such continuation coverage.

 

I hereby undertake not to file any complaint, claim or lawsuit against the Released Parties.  Notwithstanding the foregoing, I understand that nothing in this Agreement prevents me from filing, cooperating with, or participating in any proceeding before the EEOC or a state Fair Employment Practices Agency (except that I acknowledge that I may not be able to recover any monetary benefits in connection with any such claim, charge or proceeding).  In addition, I hereby renounce to being ever reinstated in my employment.

 

Any term of this Agreement to the contrary notwithstanding, nothing in this Agreement shall release or otherwise affect (i) my entitlement to be indemnified and held harmless, and to coverage as an insured under applicable directors and officers liability insurance, as provided in Section 3.7 of the Employment Agreement and in the indemnity agreement dated as of April 30, 2012 between DAVIDsTEA and me or (ii) my right to full vesting of all unvested stock options, pursuant to Section 2.03(a) of the equity participation agreement dated as of February 22, 2013 between DAVIDsTEA and me in the event of a Trigger Event (as defined in DAVIDsTEA’s Amended and Restated Equity Incentive Plan) occurring on or before July 29, 2014.

 

2

 

I hereby undertake to comply with the terms of the Confidentiality, Non-Competition and Non-Solicitation Agreement that I have signed in connection with my employment by the Corporation.

 

I represent that I have returned to the Corporation, in good condition, all objects, equipment, documents and confidential information belonging to the Corporation, that were in my possession or under my control.

 

I agree that I have been afforded a reasonable opportunity to consider the meaning and effects of this Agreement and that this Agreement has been fully explained to me.  I further agree that I have carefully considered the general release set forth herein and understand that this Agreement settles, bars and waives any and all claims that I have, may have or could possibly have against the Released Parties.

 

I acknowledge that I have been given at least twenty-one (21) days to consider this Agreement and that the Corporation advised me to consult with an attorney of my own choosing prior to signing this Agreement.  I understand that I may revoke this Agreement for a period of seven (7) days after I sign this Agreement, and the Agreement shall not be effective or enforceable until the expiration of this seven (7) day revocation period.  I understand and agree that by entering into this Agreement, I am waiving any and all rights or claims I might have under The Age Discrimination in Employment Act, as amended by The Older Workers Benefit Protection Act, and that I have received consideration beyond that to which I was previously entitled.

 

I recognize and accept that the terms and conditions which are contained in this Agreement must remain confidential and that I cannot divulge the said terms and conditions to anyone, except to my legal or financial advisors or as required by law.

 

This Agreement constitutes a transaction between me, the Corporation and DAVlDsTEA,

 

(Signature page follows)

 

3

 

This Agreement shall be governed and interpreted in accordance with the laws of the Commonwealth of Massachusetts,

 

AND 1 HAVE SIGNED,

 

At Needham, MA, day 9th of May 2014.

 

 

	
 
    	
/s/ Jevin Eagle
    
	
 
    	
Jevin Eagle
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
/s/ Witness
    
	
 
    	
Witness
    

 

4

 

RESIGNATION AS DIRECTOR AND/OR OFFICER

 

	
TO:
    	
DAVIDsTEA (USA) INC. (the “Corporation”)
    
	
 
    	
 
    
	
 
    	
DAVIDsTEA, INC. (“DAVIDsTEA”)
    

 

I hereby resign from all positions as director and officer of the Corporation, DAVIDsTEA and any of their affiliates, effective on April 30, 2014.

 

	
5/9/14
    	
 
    	
/s/ Jevin Eagle
    
	
 
    	
 
    	
 
    
	
Date
    	
 
    	
Jevin Eagle

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