EXHIBIT 10.37
THIS DOCUMENT PERTAINS TO THE SETTLEMENT OF AN EXISTING CONTROVERSY AND IS
INTENDED TO QUALIFY FOR ALL EVIDENTIARY AND OTHER PRIVILEGES APPLICABLE TO
SETTLEMENT DISCUSSIONS. IT IS BEING TRANSMITTED IN THAT CONTEXT.
This CONSENT, WAIVER, AND AMENDMENT (the
"Agreement") dated as of August 26, 2002,
by and among LPA HOLDING CORP., a Delaware
corporation ("Holding"), LA PETITE ACADEMY,
INC., a Delaware corporation ("LPA") and
XXXXXX X. XXXXXX (the "Executive").
WHEREAS, Holding, LPA and the Executive have entered into an
Employment Agreement dated as of January 1, 2000 (the "Employment Agreement")
setting forth the terms and provisions regarding the Executive's employment by
the Company as LPA's Chief Executive Officer and President.
WHEREAS, LPA desires to employ Xxxx X. Xxxxxx (the
"Candidate") as its Chief Operating Officer and President, and such employment
may conflict with certain terms of the Employment Agreement.
NOW, THEREFORE, for valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the undersigned parties hereby
agree as follows:
1. Consent and Waiver.
(a) Executive hereby (i) consents to the employment of the
Candidate as Chief Operating Officer and President of LPA, (ii) consents to
LPA's assignment of duties and responsibilities to the Candidate that are
consistent with such offices and any reduction in Executive's duties or
responsibilities resulting from such assignment, and (iii) waives any claim that
such employment, assignment, and reduction constitutes "Good Reason" as defined
in Section 6(a)(ii) of the Employment Agreement.
2. Amendment.
(a) The Employment Agreement is hereby amended to delete the
phrases "and President", "of presidents", and "or President" wherever such
phrases shall appear in the Employment Agreement.
(b) Section 3(e) of the Employment Agreement is deleted in its
entirety and the following inserted in lieu thereof:
"Options. Holdings agrees to cause to be granted to the
Executive options to purchase 270,381 shares of common
stock of LPA Holdings at an exercise price of $0.01 per
share. One forty-eighth of the options will vest and become
exercisable on the commencement date and the remaining
options will vest and become exercisable at a rate of one
forty-eighth per month on the 19th day of each month
following the Commencement Date for a 47 month period
thereafter. Such vesting will be accelerated upon the
earlier of the consummation of a Change-in-Control (as
defined in LPA Holdings' 1998 Stock Option Plan) or the
consummation of an underwritten registered public offering
of Common Stock of LPA Holdings. Such options and the
underlying shares will be issued pursuant to an agreement
that contains repurchase rights, tag-along rights, drag
along rights and other provisions substantially equivalent
to those set forth in LPA Holdings' 1998 Stock Option
Plan."
(c) Section (6)(a)(ii) of the Employment Agreement is hereby
amended to (i) delete the word "or" at the end of Section (C) thereof, (ii)
delete the "." at the end of Section (D) thereof and insert "; or" in lieu
thereof, and (iii) add a new Section (E) thereto immediately after Section (D)
as follows:
"(E) the failure of Executive to be elected or appointed as
Chairman of the Company upon the earlier of (i) the
Company's election of Xxxx X. Xxxxxx as its President, or
(ii) January 15, 2003."
(d) Except as expressly provided in this Agreement, each of
the terms and provisions of the Employment Agreement shall remain in full force
and effect in accordance with their terms. Whenever the Employment Agreement is
referred to herein in any other agreements, documents and instruments, such
reference shall be to the Employment Agreement as amended hereby.
3. Forfeiture.
(a) Any and all options to purchase capital stock of LPA or
Holding owned by Executive are hereby forfeited without any consideration being
paid therefore. In return for the grant of new options to purchase common stock
of Holding as set forth in Section 2(b) above, Executive shall deliver to
Holding and/or LPA for cancellation all agreements related to such forfeited
options.
4. Fees. LPA agrees to pay the actual, reasonable out-of-pocket
costs and expenses incurred by Executive in connection ---- with the
preparation, negotiation, execution and delivery of this Agreement.
5. General
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(a) This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same and shall become
effective when one or more counterparts have been signed by each of the parties
and delivered (by facsimile or otherwise) to the other party, it being
understood that all parties need not sign the same counterpart. Any counterpart
or other signature hereupon delivered by facsimile shall be deemed for all
purposes as constituting good and valid execution and delivery of this Agreement
by such party.
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IN WITNESS WHEREOF, this Agreement shall be effective as of
the date first written above.
LA PETITE ACADEMY, INC.
By: /s/ Xxxxxx XxXxxxx
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Name: Xxxxxx XxXxxxx
Title: Vice President
LPA HOLDING CORP.
By: /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
Title: Chief Executive Officer and President
/s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx
