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Settlement And Separation Agreement

This is an actual contract by CD Warehouse.

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Sectors: Specialty Retail
Governing Law: Oklahoma, View Oklahoma State Laws
Effective Date: October 18, 2001
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EXHIBIT 10.1


SETTLEMENT AND SEPARATION AGREEMENT
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This Settlement and Separation Agreement ("Agreement"), executed on the 18th day of October, 2001, between CD Warehouse, Inc., (the "Company") and Jerry W. Grizzle ("Grizzle"), is effective as of October 5, 2001 ("Effective Date"), and is intended to effect the settlement and extinguishment of disputes, differences, claims and obligations as herein designated, provide for the separation of Grizzle from the employment of the Company, and establish the severance compensation and benefits from the Company to Grizzle.


RECITALS
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1. Disputes and differences have arisen between the parties with respect to the matters, duties, and obligations in connection with that certain Employment Agreement dated October 26, 1996, as amended by the First Addendum To The Grizzle Employment Agreement dated August 30, 2000 (sometimes collectively referred to herein as the "Employment Agreements"), between the Company and Grizzle.


2. The parties have agreed to execute this Agreement in settlement of such disputes and differences in connection with the Employment Agreements, and by the execution of this Agreement the parties intend to effect the cancellation of the Employment Agreements, provide for certain continuing duties and obligations between the parties, and set forth the severance compensation and benefits from the Company to Grizzle.


3. The signatories hereof represent that they are authorized and empowered to execute this Agreement on behalf of their respective parties.


In consideration of the mutual covenants contained herein, the Company and Grizzle agree as follows:


COVENANTS OF THE COMPANY


4. The Company will pay to Grizzle bi-monthly severance compensation payments (the "Severance Compensation Payments") for thirty (30) months (the "Severance Period") salary at the annualized rate of $120,000.00, minus all taxes and withholdings required by law (the "Severance Pay"). The Severance Compensation Payments shall commence on October, 19, 2001, the first normal pay period following the Effective Date; and shall be made in the ordinary course of the Company's payroll without exception or special consideration to Grizzle.


5. The Company will pay on behalf of Grizzle, for a period of eighteen (18) months from the Effective Date, his Cobra payments for continuation coverage for the group life, hospitalization, medical, dental, health, accident or disability insurance ("Group Insurance") the Company provides to its then current Officers during the first eighteen (18) months of the Severance Period. Grizzle shall not be entitled to any benefits, expenses, other "perks" or pay that Grizzle previously enjoyed as an employee of the Company, other than the Severance Pay and Cobra payments to be made on behalf of Grizzle for Group Insurance.


6. Indemnification. (a) Right to Indemnification. During the Severance Period, the Company will indemnify Grizzle and hold him harmless from and against any claim, loss or cause of action arising from or out of Grizzle's performance as an officer, director, or employee of the Company or its subsidiaries, if any, or in any other capacity, including any fiduciary capacity, in which Grizzle served at the request of the Company to the maximum extent permitted by the Delaware General Corporation Act and the Company's Certificate of Incorporation and By Laws ("Governing Documents"), provided that in no event will the protection afforded to Grizzle hereunder be less than that afforded under the Governing Documents as in effect on the Effective Date of this Agreement.


(b) Culpable Action:


(i) Notwithstanding the provisions of Paragraph 6(a), Grizzle will not be
entitled to indemnification if (A) the Company is prohibited from paying
such indemnification under applicable law, or (B) Grizzle's actions or
omissions involved intentional misconduct or knowing violation of law (any
existence or occurrence described in the foregoing clauses (A) and (B),
individually, is a "Culpable Action").


(ii) The existence or occurrence of a Culpable Action will be conclusively
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