PAGE NUMBERS REFER TO PAPER DOCUMENT ONLY) SETTLEMENT AND RELEASE AGREEMENT
(PAGE
NUMBERS REFER TO PAPER DOCUMENT ONLY)
EXHIBIT
10.67
SETTLEMENT
AND RELEASE AGREEMENT
THIS SETTLEMENT AND RELEASE AGREEMENT
by and between CONSUMER PROGRAMS INCORPORATED (the “Corporation”) and XXXX X.
XXXXXX (the “Executive”) is entered into as of this 31st day of December,
2008.
WHEREAS, the Corporation and Executive
entered into that certain Employment Agreement dated as of February 6, 2000 and
executed the First Amendment to Employment Agreement as of July 3, 2007 (as
amended, the “Employment Agreement”);
WHEREAS, Subsections 5(g)(relating to
death benefits), 5(h)(relating to disability benefits), 5(i)(relating to
supplemental retirement benefits), and 5(j)(relating to survivability of death
and supplemental retirement benefits) of the Employment Agreement provides
Executive with certain Death Benefits, Disability Benefits and Supplemental
Retirement Benefits (collectively referred to herein as the “SERP Benefits”)
that provides for monthly payments to Executive or her beneficiaries for a
period of at least two hundred forty (240) months in the event of death or
retirement and for disability payments until the earlier of death or Executive
reaches age 65 if Executive’s employment terminates as a result of
disability;
WHEREAS, Executive is 100% vested in
her SERP Benefits;
WHEREAS,
the Corporation and the Executive have agreed to a lump sum payment of the SERP
Benefits at a negotiated discount in exchange for Executive’s release of the
Corporation from all future obligations to pay Executive SERP
Benefits;
WHEREAS,
the Corporation and the Executive have agreed to terminate the Employment
Agreement and enter into a new agreement relating to Executive’s
employment.
NOW, THEREFORE, in consideration of the
covenants set forth herein and for other good and valuable consideration, the
Corporation and Executive hereby agree as follows:
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1.
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In consideration of the Corporation’s payment to Executive of the gross amount of Three Hundred Seventy-five Thousand Dollars ($375,000.00) (the “Accelerated Payment”), between January 5, 2009 and January 9, 2009, Subsections 5(g) relating to death benefits, 5(h) relating to disability benefits, 5(i) relating to supplemental retirement benefits and 5(j) relating to survivability of death and supplemental retirement benefits, of the Employment Agreement are hereby satisfied in their entirety and fully discharged. Executive and the Corporation further agree that the Accelerated Payment is being made pursuant to the transitional rules relating to Code Section 409A, as set out in Internal Revenue Service Notice 2007-86. |
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2.
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In
consideration of the payment by the Corporation to Executive of the amount
set forth in Section 1 of this Agreement and the execution and
delivery of a new employment agreement in the form attached hereto as
Exhibit A, Executive, on her own behalf and on behalf of her heirs and
legal representatives, does hereby release the Corporation, its affiliated
corporations, and their respective directors, officers, employees and
agents of and from any and all claims and causes of action for money or
other damages or relief of any kind whatsoever from Corporation, arising
out of or related to the Employment Agreement. Executive hereby
acknowledges that she has read this release and has been advised to
consult an attorney with respect to the terms hereof, and that she fully
understands and voluntarily accepts such terms. Nothing
contained herein shall be deemed to waive any of Executive’s rights with
respect to benefit plans of the Corporation in which she is entitled to
participate, including without limitation, medical, vision, dental,
disability and life insurance benefit plans, the 401(k) plan, the
retirement plan or the Supplemental Retirement Benefit dated as of June
28, 2006, provided that Executive’s rights shall be subject to the terms
of the applicable plans.
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1
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3.
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The
Employment Agreement shall terminate upon Executive’s receipt of the
amount to be paid pursuant to Section 1 of this Agreement and the
execution and delivery of a new employment agreement in the form attached
hereto as Exhibit A.
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4.
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Executive
agrees and acknowledges that the Accelerated Payment shall be net of any
taxes that the Corporation is required to withhold thereon, including but
not limited to federal and state income and employment
taxes.
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5.
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This
Agreement and all actions taken in connection herewith shall be governed
and construed in accordance with the substantive laws of the State of
Missouri.
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REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK
2
IN WITNESS WHEREOF, the parties have
executed this Agreement as of the date first written above.
| CONSUMER PROGRAMS INCORPORATED | |||
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By:
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/s/ Xxxxxx Xxxxxxx | |
| Its: | Chief Executive Officer, President | ||
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the "Corporation"
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| /s/Xxxx X. Xxxxxx | |||
| Executive | |||
Exhibit
A
December
31, 2008
Xx. Xxxx
X. Xxxxxx
0000
Xxxxxxx Xxxxxxxx Xxxxx
Xx.
Xxxxx, XX 00000
RE:
Employment
Dear
Xxxx:
I am
pleased to confirm your continuing full-time employment with Consumer Programs
Incorporated (the “Company”) as General Counsel on the following terms and
conditions:
1. Title;Duties. Under the
direction of the Company’s Chief Executive Officer, your duties and
responsibilities will be that of General Counsel and a lead executive of the
Company including helping plan, implement and achieve the strategies and goals
of the Company as reviewed and established by the Board of
Directors.
2. Base Cash
Salary. Your base cash salary will be
$210,000 annually. Your base cash salary will be reviewed with you no
less than annually and may be increased from time to time by the Compensation
Committee of the Board of Directors.
3. Annual
Bonus. You will be eligible to
participate in the Omnibus Incentive Plan
of the Company as a
key executive of the Company. It is anticipated that any payment due
you under this plan will be paid substantially in Restricted Shares with annual
vesting as determined by the Compensation Committee of the Board.
4. Access, Equipment and
Expenses. CPI will provide access to its computer equipment
and systems and will reimburse you for expenses incurred in the course of
performing your duties, subject to your submission of invoices or other
customary proof of expense.
5. Other
Benefits. As a CPI executive, you will generally be entitled
to continue participating in other active benefit plans and programs on the same
terms as the other executives in the Company. These benefits
currently include:
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a.
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401(k)
Plan: This qualified plan allows employees to contribute up to
25% of base salary annually. The company matches 50% of
employee contributions up to a maximum of 5% of salary in common
stock.
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b.
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Health/Disability: The
Company's benefit plan provides for competitive health care coverage and
short-term disability insurance. Employee premiums are adjusted
annually. Long-term
disability insurance is also
available.
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c.
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Life
Insurance: Key managers of the Company are eligible for life
insurance equal to two times annual base salary to a maximum benefit of
$400,000. Once per year, the key managers are offered an option
to convert group term insurance in excess of $50,000 to a permanent cash
value policy. Contributions that the Company would have paid on
the term life premiums are paid towards the permanent insurance premium,
and the key manager pays the
balance.
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d.
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Vacation: You will be entitled to five weeks of paid vacation per year. |
6. Termination and
Severance. If your employment is terminated by the Company
without Cause, you shall be entitled to a severance amount equal to one year’s
base salary, payable in a lump sum, provided you execute and deliver a release
of all claims arising from or related to your employment and the termination of
your employment in a form satisfactory to the Company. If your
employment is terminated for any other reason (including retirement, death or
disability), you will be entitled to no benefits, except as provided by law or
under the specific terms of the Company’s benefit programs in which you are then
participating. “Cause” as used herein shall mean any of the following
acts by or other circumstances: (i) an act committed, after the date
of this Agreement, in bad faith and to the detriment of the Company or any of
its affiliates, (ii) refusal or failure to act in substantial accordance with
any written material direction or order of the Company, (iii) repeated unfitness
or unavailability for service, disregard of the Company’s rules or policies
after reasonable notice and opportunity to cure, or misconduct, but not
incapacity, (iv) entry of a final order of judgment affirming the conviction of
a crime involving dishonesty, breach of trust, or physical or emotional harm to
any person, (v) any breach or threatened breach of Sections 7, 8, 9 or 10 of
this Agreement, or (vi) material breach or violation of any other provision of
this Agreement or of any other contractual obligation to the Company or any of
its affiliates.
7. Insider
Status. As a key executive of the Company, you will be
considered an “insider” subject to SEC reporting of all stock transactions and
to pre-clearance of all transactions through the Company’s Chief Financial
Officer.
8. Confidentiality. You
will maintain in confidence all non-public information you learn about the
Company and its business, including strategies, plans, prospects and financial,
employee, vendor and customer information. You will not use, copy or
disclose any such information except as necessary to perform the functions of
your job or with the prior consent of the Company.
9. Non-Compete and
Non-Solicitation. It is agreed that you will not be employed
directly by or act in an advisory role for any direct competitor of the Company
during the period of your employment and for a period of one year from the date
of termination.
10. Work for
Hire. As an employee, you agree that your ideas, concepts,
graphics, creative or other products of your work will be
owned by the Company, and you agree to acknowledge the Company’s ownership in
writing upon request from the Company.
11. Termination of Prior
Employment Agreement. Subject to the Company’s performance of
that certain Settlement and Release Agreement between you and the Company, dated
as of December 31, 2008, your Employment Agreement with the Company, dated as of
February 6, 2000, as amended on July 3, 2007, is hereby terminated.
12. Withholding. The
Company may withhold from any amounts payable under this agreement such federal,
state or local taxes as shall be required to be withheld pursuant to any
applicable law or regulation.
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Please
acknowledge your agreement to the terms set forth above by signing one copy of
this letter in the space provided below and returning a signed original to
me.
Sincerely,
/s/Xxxxxx Xxxxxxx
______________________________
Xxxxxx Xxxxxxx
President
& Chief Executive Officer
Accepted
this 31st day of December, 2008
/s/Xxxx
X. Xxxxxx
__________________________________
Xxxx X.
Xxxxxx
