(PAGE NUMBERS REFER TO PAPER DOCUMENT ONLY)
EXHIBIT 10.61
RETIREMENT AND RELEASE AGREEMENT
THIS RETIREMENT AND RELEASE AGREEMENT is made and
entered into as of October 4, 2002, by and between XXXXX XXXXXX,
an individual (hereinafter referred to as "Xxxxxx"), and
Consumer Programs Incorporated, a Missouri Corporation, on
behalf of itself and its affiliated corporations (hereinafter
referred to, alternatively and collectively referred to as "CPI").
WHEREAS, Xxxxxx has served as an executive officer of CPI
for more than thirty years, including as Executive Vice President,
Finance/Chief Financial Officer for ten years and most recently
as Executive Vice President, Administration; and
WHEREAS, Xxxxxx has decided to retire; and
WHEREAS, Xxxxxx is entitled to certain benefits under
his Employment Agreement with CPI dated as of February 8, 1998
(the "Employment Agreement") and under various benefit plans of
CPI; and
WHEREAS, CPI and Xxxxxx desire that Arthur's benefits be
valued and paid out in accordance with the terms set forth in
this Agreement; and
WHEREAS, CPI desires to award to Xxxxxx certain benefits
in addition to any to which he may be entitled under the
Employment Agreement and the various benefit plans of CPI
(hereinafter, the "Special Retirement Benefits");
NOW, THEREFORE, in consideration of the premises and
of the mutual covenants and agreements contained herein,
the parties hereby agree as follows:
1. RETIREMEMT/RESIGNATION OF XXXXXX. Xxxxxx shall
retire from employment with CPI and shall resign from all
officer positions he holds with CPI Corp. and its affiliated
corporations
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as of October 4, 2002 (the "Retirement Date").
2. SPECIAL RETIREMENT BENEFITS.
(a) CPI shall pay to Xxxxxx the gross amount of
One Hundred Ninety-six Thousand Dollars ($196,000.00),
payable twenty-six equal bi-weekly commencing with the
regular date of payment for CPI employees after the Retirement
Date and continuing thereafter until the entire amount due
under this subsection 2(a) is paid.
(b) Xxxxxx may continue to participate in CPI's group
health plan at the rates paid by active employees until he
attains age sixty-five.
(c) Subject to approval of the Stock Option Committee,
the exercise period for certain options granted to Xxxxxx to
purchase shares of common stock of the Corporation that would
have expired on the first anniversary of the Retirement Date
shall be extended until the earlier of their original
expiration date or the second anniversary of the Retirement
Date. A schedule of all options held by Xxxxxx and the terms
of exercise is attached hereto as Exhibit A and incorporated
herein. By execution hereof, the parties agree that the terms
of all option agreements under which Xxxxxx holds options shall
remain in full force and effect except that the applicable
expiration dates for such options shall be as set forth in
Exhibit A.
(d) CPI will continue to pay the employer's portion
of the premium on Arthur's General American life insurance
policy for a period of two years after the Retirement Date.
(e) Xxxxxx is entitled to death or supplemental
retirement benefits pursuant to subsections 5(g), 5(i)
and 5(j) of the Employment Agreement in the annual gross
amount of Seventy-eight Thousand Four Hundred Dollars
($78,400.00), payable in equal monthly installments for
two hundred forty months, commencing on the earlier of the
month after (i) Arthur's death or (ii) the date on which
Xxxxxx attains sixty-five years of age. In lieu thereof, CPI
shall pay or cause to be paid to Xxxxxx, the gross amount of
Six Hundred Three Thousand Four Hundred Fifty Dollars
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and Fourteen Cents ($603,450.14), payable in a lump sum on
January 2, 2003. The payment made by CPI pursuant to this
subsection (e) shall be in full and complete satisfaction of
Arthur's death and supplemental retirement benefits provided
under subsections 5(g), 5(i) and 5(j) of the Employment
Agreement.
3. OTHER BENEFITS. CPI shall also pay or provide to
Xxxxxx (or in the event of his death prior to payment, to
his beneficiaries) the following benefits in accordance
with the Employment Agreement or other CPI benefit plans
and programs:
(a) Base salary through the Retirement Date, based on
the annual rate of One Hundred Ninety-six Thousand Dollars
($196,000.00);
(b) Any cash bonus earned by Xxxxxx for CPI's full
fiscal year 2002, without proration;
(c) All of Arthur's vested and accrued benefits
under the CPI Retirement Plan andTrust (the "Pension Plan")
in accordance with the terms of the Pension Plan;
(d) All of Arthur's vested and accrued benefits under
the CPI Corp. Employees' Profit Sharing Plan and Trust (the
"Profit Sharing Plan"), in accordance with the terms of the
Profit Sharing Plan; and
(e) All of Arthur's vested and accrued benefits under
the Corporation's deferred compensation programs, if any.
4. RELEASE. In consideration of the payment by CPI
to Xxxxxx of the Special Retirement Benefits described in
Section 2 above, Xxxxxx does hereby release and forever
discharge CPI, its affiliated corporations, and their
respective directors, officers, employees and agents,
from any and all claims, causes of action, liabilities
and obligations, of any kind whatsoever (except those
arising under this Agreement), whether known or unknown,
arising directly or indirectly out of Arthur's employment
by CPI, the termination thereof, or the Employment Agreement,
including, but not limited to, any claims arising or in
connection with the Americans with Disabilities Act, the
Family and Medical Leave Act,
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Title VII of the Civil Rights Act of 1964, the Age
Discrimination in Employment Act, the Equal Pay Act,
the Fair Labor Standards Act, the Occupational Safety and
Health Act, the Employee Retirement Income Security Act,
the Older Workers Benefit Protection Act, 42 U.S.C. Sections
1981, 1983 and 1985, the Missouri Workers' Compensation Law,
the Missouri Human Rights Act, the Missouri Service Letter Law
(all such statutes as amended), and any regulations under such
authorities, or common law of the state of Missouri, torts,
breach of express or implied employment agreement, wrongful
discharge, constructive discharge, infliction of emotional
distress, defamation, or tortious interference with contractual
relations. The purpose of the release set forth herein is to
make full, final and complete settlement of all claims, known
or unknown, arising directly or indirectly out of Arthur's
employment by CPI, the termination thereof, or the Employment
Agreement (except those arising under this Agreement and
Section 13 of the Employment Agreement).
5. SURVIVAL OF COVENANTS. Xxxxxx acknowledges and
agrees that the covenants and agreements contained in
Section 13 of the Employment Agreement, attached hereto
as Exhibit B and incorporated herein, shall survive the
execution and delivery of this Agreement and shall remain
in full force and effect in accordance with their terms,
and Xxxxxx hereby affirms those covenants and agreements.
All other terms and conditions of the Employment Agreement
shall terminate on the effective date of this Agreement.
6. WITHHOLDING TAXES. CPI shall have the right to
withhold from all payments due Xxxxxx hereunder to the extent
required by law or regulation, all federal, state and local
income and other taxes applicable to such payments.
7. MODIFICATION AND WAIVER. No modification, amendment
or waiver of any of the provisions of this Agreement shall
be effective unless made in writing specifically referring to
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this Agreement, and signed by both parties. The failure to
enforce at any time any of the provisions of this Agreement
shall in no way be construed to be a waiver of such provisions.
8. SEVERABILITY. The invalidity or unenforceability of
any particular provision of this Agreement shall not affect
the other provisions hereof, and this Agreement shall be
construed in all respects as if such invalid or unenforceable
provision were omitted.
9. BINDING EFFECT. This Agreement shall be binding upon
and shall inure to the benefit of the parties hereto and their
respective successors, assigns, heirs and legal representatives.
10. GOVERNING LAW. This Agreement shall be governed by,
and construed in accordance with, the laws of the State of
Missouri.
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IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date
first written above.
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NOTICE TO XX. XXXXXX: THIS AGREEMENT INCLUDES A WAIVER OF
CERTAIN RIGHTS OR CLAIMS ARISING PRIOR TO THE DATE THIS AGREEMENT
IS EXECUTED, INCLUDING, BUT NOT LIMITED TO, THOSE RIGHTS OR CLAIMS
ARISING UNDER THE AGE DISCRIMINATION IN EMPLOYMENT ACT. YOU ARE
ADVISED TO CONSULT WITH AN ATTORNEY PRIOR TO EXECUTING THIS AGREEMENT.
CPI'S OFFER TO ENTER INTO THIS AGREEMENT WITH YOU WILL REMAIN OPEN
AND EFFECTIVE FOR TWENTY-ONE DAYS FROM THE DATE FIRST WRITTEN ABOVE.
YOU MAY ELECT TO ACCEPT OR REJECT THIS OFFER WITHIN THAT TIME PERIOD.
IF YOU DO NOTHING WITHIN THE TWENTY-ONE DAY PERIOD, THE OFFER WILL BE
CONSIDERED WITHDRAWN BY CPI.
IF YOU DECIDE TO SIGN THIS AGREEMENT AND RELEASE CPI PURSUANT
TO SECTION 4 OF THIS AGREEMENT, YOU WILL HAVE SEVEN DAYS FOLLOWING
THE RETURN OF THE SIGNED DOCUMENT TO CHANGE YOUR MIND AND REVOKE
THE AGREEMENT. IF YOU DESIRE TO REVOKE THE AGREEMENT AND RELEASE,
PLEASE DELIVER NOTICE OF SUCH REVOCATION IN WRITING TO
XXXX X. XXXXXX, CPI CORP., LEGAL DEPARTMENT, 0000 XXXXXXXXXX
XXXXXX, XX. XXXXX, XXXXXXXX 00000, ON OR BEFORE THE CLOSE OF
BUSINESS ON THE SEVENTH DAY FOLLOWING YOUR EXECUTION AND
DELIVERY OF THE AGREEMENT. CONSEQUENTLY, THIS AGREEMENT WILL
NOT BE IN EFFECT UNTIL SEVEN DAYS HAVE PASSED FOLLOWING YOUR
SIGNING AND DELIVERY OF THE AGREEMENT.
Date: October 4, 2002 By: /s/ Xxxxx Xxxxxx
------------------------------
Xxxxx Xxxxxx, Individually
CONSUMER PROGRAMS INCORPORATED, a
Missouri corporation, on behalf of
itself and its affiliated
corporations
Date: October 4, 2002 By: /s/ J. Xxxxx Xxxxxxx
------------------------------
J. Xxxxx Xxxxxxx
EXHIBIT A
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Grant Date Number of Vesting Exercise Expiration
Options Date Price Date
---------- --------- ------- -------- ----------
2/2/92 20,000 2/2/96 $30.00 2/2/03
2/2/92 20,000 2/2/97 $35.00 2/2/04
2/7/98 3,440 2/2/02 $23.94 2/7/04
5/7/98 3,451 5/7/02 $25.94 10/4/04
2/6/99 3,300 10/4/02 $27.13 10/4/04
2/3/01 1,839 10/4/02 $20.45 10/4/04
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