Exhibit 10.34
AGREEMENT
This AGREEMENT ("Agreement"), dated as of February 1, 1996, is
entered into by and among Xxxxxxx X. Xxxxxxxx ("Xxxxxxxx"), Big Flower Press
Holdings, Inc. ("Big Flower") and Treasure Chest Advertising Company, Inc. (the
"Company"). Capitalized terms used and not otherwise defined herein shall have
the respective meanings set forth in the Management Subscription Agreement,
dated as of November 1, 1993 (as may be amended from time to time, the
"Management Subscription Agreement"), by and among Big Flower, Xxxxxxxx Xxxxx
and Xxxxxxxx.
WHEREAS, in March 1995 Big Flower and the Company agreed to provide
certain benefits to Xxxxxxxx upon his voluntary termination from the Company;
WHEREAS, in connection therewith, Xxxxxxxx agreed to serve as a
consultant to the Company, on the terms and conditions provided herein;
WHEREAS, Big Flower, the Company and Xxxxxxxx desire to memorialize
the terms of their March 1995 agreement as set forth below; and
NOW, THEREFORE, in consideration of the premises and the mutual
promises and agreements contained herein, and intending to be legally bound
hereby, the parties hereto agree as follows:
1. Options to Purchase Class C Common Stock. As of March 8, 1995,
Xxxxxxxx held Incentive Stock Options (as defined in the Internal Revenue Code
of 1986, as amended) to purchase 50,322.53 shares of Class C Common Stock of Big
Flower ("Shares"), with an exercise price of $4.66 per share. These options were
granted on November 1, 1993 and vest at the rate of 33-1/3% on the first three
anniversary dates following the date of grant. As of the date of Xxxxxxxx'x
voluntary termination from the Company, Big Flower agreed (i) to waive the
automatic cancellation of all Unvested Options and (ii) that, subject to the
approval of the Compensation Committee of the Board of Directors of Big Flower,
all such options will become fully exercisable and vested on March 1, 1996. As
of March 8, 1995, the Per Share Option Price was $1.77 and the number of
Unvested Options held by Xxxxxxxx was 33,548.35.
2. Severance Benefit Agreement. On the date of Xxxxxxxx'x voluntary
termination from the Company, Xxxxxxxx received a lump sum severance payment of
$435,000 which was equal to Xxxxxxxx'x annual base salary in effect as of the
date of his termination of employment with the Company. Xxxxxxxx hereby
acknowledges receipt of this payment.
3. Shares of Class C Stock Common Stock Owned. As of March 8, 1995,
Xxxxxxxx held 86,762.98 Shares of Big Flower. Big Flower and Xxxxxxxx hereby
acknowledge that none of these Shares is subject to (i) a "put" by Xxxxxxxx
pursuant to Section 5.1 of the Management Subscription Agreement or (ii) a
"call" by Big Flower pursuant to Section 5.2 of the Management Subscription
Agreement in the event of a voluntary termination from the Company.
4. Agreement for Consulting Services and Retirement Benefit.
(a) Commencing on the Date of Termination, as defined in such
agreement, Xxxxxxxx shall make himself available two days per month to consult
with the Company regarding the printing business and receive in consideration
therefor consulting fees equal to $6,417 per month for a period of 15 years;
provided, however, if Xxxxxxxx becomes permanently disabled, as determined in
good faith by the Board of Directors of the Company, prior to the expiration of
such 15-year period, he shall continue to receive consulting fees for the
remainder of such fifteen year period.
(b) Commencing on the Date of Termination, Xxxxxxxx shall receive a
Retirement Benefit, as defined in such agreement, of $6,084 per month for a
period of 15 years, net of the amounts payable under the Treasure Chest Profit
Sharing Plan.
(c) Commencing on the Date of Termination until Xxxxxxxx attains age
65, Xxxxxxxx shall remain eligible to participate in the Company's existing
medical and dental plan subject to his satisfaction of the conditions set forth
therein, including the payment of premiums through payroll deductions.
(d) On or after Xxxxxxxx attains age 65, the Company shall reimburse
Xxxxxxxx for the differential cost of a Medicare supplement, at a rate
equivalent to his out-of-pocket medical insurance costs prior to attaining age
65. This cost is projected to be approximately $3972 per year, adjusted for
inflation. This benefit shall be capped at $1000 per month and shall not include
the cost of dental
2
coverage after Xxxxxxxx attains age 65, which shall be Xxxxxxxx'x sole
responsibility.
(e) If Xxxxxxxx dies prior to the expiration of the 15-year term
under (a) or (b) above, his surviving spouse, if any, shall receive a death
benefit equal to $12,500 per month for the balance of the 15-year term.
5. Supplemental Executive Retirement Plan. Pursuant to the Agreement for
Consulting Services and a Non-Qualified Retirement Benefit, dated May 3, 1993,
Xxxxxxxx acknowledges that he has given up any and all claims under his
non-qualified professional retirement income supplement.
6. Profit Sharing (ESOP) and Retirement Income Plan. Commencing on the
Date of Termination, as defined in such plan, Xxxxxxxx shall be entitled to
receive an amount equal to Xxxxxxxx'x account balance, which shall be payable
over five years, assuming a Profit Sharing, as defined in such plan, beginning
balance of $119,883.60 as of December 31, 1993 plus $7699.11 in the Retirement
Income Plan as of December 31, 1994 appreciating at a rate of 6.5% per year for
15 years.
7. Deferred Compensation Plan. Commencing on the Date of Termination,
Xxxxxxxx shall receive a termination benefit equal to his account balance
payable in a lump sum within 60 days.
8. Leased Automobile. Commencing on the Date of Termination, Xxxxxxxx
shall have use of a leased Mercedes 500 SEL, the lease of which expires October
20, 1996. Such lease cost is $1575.01 per month. At the expiration of such
lease, Xxxxxxxx shall have the option to purchase this vehicle for the value
established in the lease document.
9. Office Lease and Support Staff. Commencing on the Date of Termination,
the Company shall pay for office space, furniture leasing, and secretarial
support in Florida through September 1, 1997. The cost for office and temporary
secretarial support shall not exceed $1000 per month.
10. Release of Claims. In consideration of the foregoing,
(a) Xxxxxxxx hereby forever releases and discharges Big Flower, the
Company, its past and present directors, managers, officers, stockholders,
3
employees, agents, attorneys, servants, subsidiaries, divisions, parent
corporations, affiliates, successors and assigns (collectively, "Releasees")
from any and all claims, charges, complaints, liens, demands, causes of action,
obligations, damages and liabilities, known or unknown that he had, now has, or
may hereafter claim to have against the Releasees arising out of or relating in
any way to Xxxxxxxx'x employment with or termination from the Company.
(b) Xxxxxxxx expressly waives all rights afforded by section 1542 of
the Civil Code of the Sate of California ("Section 1542"). Section 1542 states
as follows:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT
KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE
RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS
SETTLEMENT WITH THE DEBTOR.
Thus, notwithstanding the provisions of Section 1542, and for the
purpose of implementing a full and complete release, Xxxxxxxx understands and
agrees that this Agreement is intended to include all claims, if any, which
Xxxxxxxx may have and does not know or suspect to exist in Xxxxxxxx'x favor and
that this Agreement extinguishes those claims.
11. Governing Law. This Agreement and the legal relations thus created
between the parties hereto shall be governed by and construed under and in
accordance with the laws of the State of California.
4
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date and year first above written.
BIG FLOWER PRESS HOLDINGS, INC.
By: /s/ Xxxx X. Xxxxxxxx
------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Executive Vice President
TREASURE CHEST ADVERTISING
COMPANY, INC.
By: /s/ Xxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: President and CEO
XXXXXXX X. XXXXXXXX
/s/ Xxxxxxx X. Xxxxxxxx
------------------------------------
5
