EXHIBIT 10.20

CPI Card Group Inc.

2019 Executive Retention Agreement

Personal and Confidential

 

October 30, 2018

Re:       Retention Bonus

Dear <<Name>>:

 

On behalf of CPI Card Group Inc. (the “Company”), I am pleased to offer you the
opportunity to receive a retention bonus if you agree to the terms and
conditions contained in this letter agreement (this “Agreement”), which shall be
effective as of the date you execute and return a copy of this Agreement (such
date, the “Effective Date”).

1.         Retention Bonus.  Subject to the terms and conditions set forth
herein, you will receive a cash lump sum payment in the amount of $<<X>> (the
“Retention Bonus”) on the next regularly scheduled administratively feasible
payroll following the Effective Date.  The Retention Bonus will vest and become
non-forfeitable on the earlier of March 13, 2020 and a Change of Control (the
“Vesting Date”). You agree that in the event your employment with the Company
terminates for any reason other than a Qualifying Termination (a “Termination”)
before the Vesting Date, you will be required to repay to the Company within ten
(10) business days of such termination 100% of the After-Tax Value of the
Retention Bonus.  Notwithstanding anything to the contrary contained herein, in
the event of your Qualifying Termination before the Vesting Date and if you
execute and do not revoke a customary release of claims in a form reasonably
satisfactory to the Company, you will not be required to repay any portion of
the Retention Bonus.

2.         Definitions.  For purposes of this Agreement:

“After-Tax Value of the Retention Bonus” means the aggregate amount of the
Retention Bonus net of any taxes you are required to pay in respect thereof and
determined taking into account any tax benefit that may be available in respect
of such repayment.  The Company shall determine in good faith the After-Tax
Value of the Retention Bonus, which determination shall be conclusive and
binding.

“Cause” means your (i) material breach of your duties and responsibilities,
including but not limited to your refusal or neglect to substantially perform
your employment related duties, which is not remedied promptly after the Company
gives you written notice specifying such breach, (ii) commission of a felony,
(iii) commission of or engaging in any act of fraud, embezzlement, theft, a
material breach of trust or any material act of dishonesty, incompetence, or
willful misconduct involving the Company or its subsidiaries, (iv) significant
violation of the code of conduct of the Company or its subsidiaries or of any
statutory or common law duty of loyalty to the Company or its subsidiaries, or
(v) your material breach of any written covenant or agreement with the Company
or its subsidiaries not to disclose any confidential information related to the
Company or its subsidiaries, or not to compete or interfere with the Company or
its

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subsidiaries, which, in each case that, if susceptible to remedy, is not
remedied within thirty (30) days after the Company gives the Participant written
notice specifying such breach.

“Change of Control” shall have the meaning set forth in the Company’s current
Omnibus Incentive Plan, as amended and restated effective September 25, 2017.

“Disability” means your inability, due to physical or mental incapacity, to
perform the essential functions of your job, for one hundred eighty (180)
consecutive days.

“Good Reason” means any of the following, in each case, without your consent:
(i) a change in your title or any material diminution of your responsibilities
or authority or the assignment of any duties inconsistent with your position, in
each case, compared to what was in effect as of the Effective Date; (ii) a
reduction of your annual base salary and/or target bonus as in effect on the
Effective Date; or (iii) a relocation of your principal office location more
than fifty (50) miles from the Company’s offices at which you are based as of
the Effective Date (except for required travel on the Company’s business to an
extent substantially consistent with your business travel obligations as of the
Effective Date).  Notwithstanding the foregoing, the occurrence of an event that
would otherwise constitute Good Reason will cease to be an event constituting
Good Reason upon any of the following: (x) your failure to provide written
notice to the Company within thirty (30) days of the first occurrence of such
event; (y) substantial correction of such occurrence by the Company within
thirty (30) days following receipt of your written notice described in (x); or
(z) your failure to actually terminate employment within the ten (10) day period
following the expiration of the Company’s thirty (30)-day cure period.

“Qualifying Termination” means the termination of your employment (i) by the
Company for a reason other than Cause, (ii) by you for Good Reason, or (iii) due
to your death or Disability.

3.         Release.  As a condition to receiving the Retention Bonus, you hereby
agree to release any and all Claims (as defined below) against the Company, its
affiliates and their respective directors, officers and employees.  “Claims”
means claims, charges or complaints for, or related to, any breach of contract,
violation of any statute or law, or tortious conduct occurring, or based on
events occurring, on or before the date of this Amendment; provided that Claims
do not include, and you are not releasing: (a) any claims that may not be
released as a matter of law, (b) any claims or rights that arise after you sign
this Agreement (including claims based on an event occurring after the date you
sign this Agreement), (c) any claims or rights with respect to accrued
compensation or benefits, (d) any claims or rights for indemnification,
advancement of defense costs or other fees and expenses and related matters,
arising as a matter of law or under the organizational documents of the Company
or its affiliates or under any applicable insurance policy with respect to your
liability as an employee, director, manager or officer of the Company or its
affiliates; and (e) any claims or rights under the directors and officers and
other insurance policies of the Company and its affiliates.

4.         Withholding Taxes. The Company may withhold from any and all amounts
payable to you hereunder such federal, state and local taxes as the Company
determines in its sole discretion may be required to be withheld pursuant to any
applicable law or regulation.

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5.         No Right to Continued Employment.  Nothing in this Agreement will
confer upon you any right to continued employment with the Company (or its
subsidiaries or their respective successors) or to interfere in any way with the
right of the Company (or its subsidiaries or their respective successors) to
terminate your employment at any time.  You hereby acknowledge and agree that
you will provide the Company with at least sixty  (60) days advance written
notice of your intent to terminate your employment with the Company for any
reason.

6.         Other Benefits.  The Retention Bonus is a special payment to you and
will not be taken into account in computing the amount of salary or compensation
for purposes of determining any bonus, incentive, pension, retirement, death or
other benefit under any other bonus, incentive, pension, retirement, insurance
or other employee benefit plan of the Company, unless such plan or agreement
expressly provides otherwise.

7.         Governing Law.  This Agreement will be governed by, and construed
under and in accordance with, the internal laws of the State of Colorado,
without reference to rules relating to conflicts of laws.

8.         Counterparts.  This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together shall constitute one and the same instrument.

9.         Entire Agreement; Amendment.  This Agreement constitutes the entire
agreement between you and the Company with respect to the Retention Bonus and
supersedes any and all prior agreements or understandings between you and the
Company with respect to the Retention Bonus, whether written or oral.  This
Agreement may be amended or modified only by a written instrument executed by
you and the Company.

10.       Section 409A Compliance.  Although the Company does not guarantee the
tax treatment of the Retention Bonus, the intent of the parties is that the
Retention Bonus be exempt from the requirements of Section 409A of the Internal
Revenue Code of 1986, as amended and the regulations and guidance promulgated
thereunder, and accordingly, to the maximum extent permitted, this Agreement
shall be interpreted in a manner consistent therewith.

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This Agreement is intended to be a binding obligation on you and the
Company.  If this Agreement accurately reflects your understanding as to the
terms and conditions of the Retention Bonus, please sign, date, and return to me
one copy of this Agreement.  You should make a copy of the executed Agreement
for your records.

 

Very truly yours,

 

 

 

 

 

Scott Scheirman

 

 

 

President and CEO CPI Card Group Inc.

 

The above terms and conditions accurately reflect our understanding regarding
the terms and conditions of the Retention Bonus, and I hereby confirm my
agreement to the same.

 

NAME

 

 

 

 

 

SIGNATURE

 

 

 

 

 

DATE

 

 

Signature Page to Agreement

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