Document:

exv10w1

 

EXHIBIT 10.1

HOME INTERIORS & GIFTS, INC.

1649 Frankford Road West

Carrollton, Texas 75007-4605

March 4, 2005

CONFIDENTIAL

Mr. Kenneth J. Cichocki

5612 Templin Way

Plano, Texas 75093

Dear Ken:

          As we previously discussed, upon the earlier of your finding new employment or upon such time
as Home Interiors & Gifts, Inc. (the “Company”) employs a new chief financial officer, the
Company and you mutually agree that you will resign from all offices held by you in the Company and
its subsidiaries upon terms and conditions set forth in this letter agreement (this
“Agreement”).

          1. Continued Employment. Until your resignation date (the “Separation Date”),
you shall continue to serve the Company in your current capacity and, except as modified hereby,
you and the Company will remain subject to the terms and conditions, including without limitation
Section 2(a)(ii), of your Second Amended and Restated Employment Agreement, dated November 1, 2001
by and between you and the Company, as amended by that certain Amendment to Second Amended and
Restated Employment Agreement, dated November 15, 2002, as may be further amended or modified (the
“Employment Agreement”).

          2. Voluntary Resignation. Subject to your execution of the Mutual Release referred to
in Section 6 hereof (and the other provisions of such Section 6), in the event that you resign from
the Company prior to the Company’s employment of a new chief financial officer, the Company agrees
to pay you (a) all benefits to which you are entitled pursuant to Section 4(a) of the Employment
Agreement and (b) vacation time accrued to the Separation Date. In accordance with current
practices, the Company shall “gross-up” the payments made by the Company in connection with the
continued participation of you and your family in the Company’s Welfare Plans (as defined in the
Employment Agreement), in amounts necessary to satisfy the tax consequences associated with such
payments. In addition to the foregoing, the Company also agrees to provide you with (x) a
reference letter that you may provide to prospective employers (y) your current laptop computer and
(z) a clear title to your Company car. You will be responsible for any taxes, including, but not
limited to, income taxes, property taxes, sales taxes and transfer taxes, you may incur as a result
of the transfer of the Company car.

 

 

Mr. Kenneth J. Cichocki

March 4, 2005

Page 2

          3. Resignation Upon Request.

          (a) Subject to your execution of the Mutual Release referred to in Section 6 hereof
(and the other provisions of such Section 6), in the event that you resign from the Company
at the Company’s request because the Company has found a new chief financial officer, the
Company agrees to pay you all benefits to which you are entitled pursuant to Section 2
above, except that the Company agrees to pay you severance equal to eighteen (18) months of
your Base Salary (as opposed to twelve (12) months Base Salary). In addition to the
foregoing, the Company will provide you with voice mail and e-mail support for one hundred
twenty (120) days following the Separation Date, which support shall include the payment by
the Company for your Blackberry service, your cellular phone service, Internet service at
your Dallas home and lake house, and maintenance of your current office phone number and
e-mail address.

          (b) In addition, if you have not accepted a new position of employment within nine
months of the Separation Date, the Company will pay you, within five (5) business days
after the first anniversary of the Separation Date, an additional severance amount equal to
the product of (i) the quotient obtained by dividing (X) the number of months (to the
nearest 1/4 month) that have lapsed between the Separation Date and the date you commence
your new employment minus six, by (Y) two and (ii) $27,083. By way of example, if you do
not commence employment until such time that is eleven (11) months after the Separation
Date, the Company would pay you an amount equal to the following: (5÷2)*$27,083 =
$67,707.50. Notwithstanding the foregoing, in no event shall any payment under this
Section 3(b) be greater than $81,249.

          4. Cooperation. Following the Separation Date, you agree to make yourself available
at reasonable times and upon reasonable notice to assist the Company in its transition of your
duties to your successor. The Company agrees to indemnify you for any damages, liabilities, or
expenses (including reasonable fees and expenses of legal counsel) suffered or incurred by you as a
result of any threatened or pending action, suit, or proceeding that is brought or threatened to be
brought against you by reason of the fact that you were providing services to the Company pursuant
to the preceding sentence, except to the extent primarily resulting from your gross negligence or
willful misconduct. In addition, in connection with your resignation, you agree to execute and
deliver one or more resignation letters evidencing such resignation from the Company and from any
other positions that you hold with the Company or its subsidiaries at the time of your resignation
as may be reasonably requested by the Company.

          5. Options. All vested options held by you for the purchase of common stock of the
Company will remain vested and exercisable in accordance with their terms until expiration under
the respective stock option agreements under which they were granted, at which time they will lapse
and be of no further force or effect, except to the extent previously exercised; provided,
however, that, notwithstanding the terms and conditions of your employment agreement, you
shall have thirty (30) days after the Separation Date within which to exercise your options.

 

 

Mr. Kenneth J. Cichocki

March 4, 2005

Page 3

          6. Release; Payment of Benefits. Concurrently with your resignation as contemplated
hereby, you and the Company agree to execute and deliver, effective as of the Separation Date, the
Mutual Release in the form attached hereto as Exhibit A. You shall be entitled to receive
the benefits set forth in Section 2 or Section 3 of this Agreement, as applicable, on the day that
falls eight (8) days after the date of the execution and delivery to the Company by you of the
Mutual Release; provided that you have not revoked such Mutual Release prior to such time pursuant
to Section 3 thereof (in which event you will forfeit your right to such benefits).

          7. Non-Disparagement.

          (a) You shall not, directly or indirectly, make or cause to be made any disparaging,
denigrating, derogatory or other negative, misleading or false statement orally or in writing to
any person or entity, including, without limitation, members of the investment community, press,
suppliers, customers, competitors, lenders and advisors to the Company or its subsidiaries or
affiliates, about the Company or its subsidiaries or affiliates, officers, directors, principals,
members, or the business strategy or plans, policies, practices or operations of the Company or its
subsidiaries or affiliates.

          (b) The Company shall not make or cause to be made any disparaging, denigrating, derogatory or
other negative, misleading or false statement orally or in writing to any person or entity about
you. For purposes hereof, statements made by any executive officer or director of the Company
shall be attributed to the Company.

          8. Survival of Employment Agreement Provisions. The provisions of Sections 6
and 9 of the Employment Agreement are incorporated herein by reference, shall survive after
the Separation Date and expiration of the Employment Agreement and shall continue in full force and
effect as though expressly set forth in this Agreement, provided, however, that Section 9(b)(i) of
the Employment Agreement shall be amended to state, in its entirety “engage in any business that
competes with the Company, by utilizing a direct sales or multi-level marketing sales format to
sell consumer products in the continental United States”.

          9. Reimbursement of Legal Expenses. The Company shall reimburse you for up to $5,000
of your costs, expert fees, attorneys’ fees, expenses, and other fees incurred in connection with
this Agreement. Should it become necessary for you to pursue litigation to enforce the terms of
this Agreement, and if it is determined that the Company breached the terms of this Agreement, the
Company agrees to reimburse you for any reasonable attorneys’ fees you expended as a result of
enforcing the terms of this Agreement. Otherwise, the parties hereto shall
each bear their own costs, expert fees, attorneys’ fees, expenses, and other fees incurred in
connection with this Agreement.

          10. Certain Acknowledgments. You acknowledge that before entering into this Agreement
you have had the opportunity to consult with any attorney or other advisor of your choice, and have
done so, and have not relied in connection herewith on legal counsel for the Company. You
acknowledge that you have entered into this Agreement of your own free will,

 

 

Mr. Kenneth J. Cichocki

March 4, 2005

Page 4

that no promises or
representations have been made to you by any person to induce you to enter into this Agreement
other than the terms expressly set forth herein.

          11. Prior Agreements. THERE ARE NO UNWRITTEN, ORAL, OR VERBAL UNDERSTANDINGS,
AGREEMENTS, OR REPRESENTATIONS OF ANY SORT WHATSOEVER, IT BEING STIPULATED THAT, EFFECTIVE AS OF
THE SEPARATION DATE, THE RIGHTS OF THE PARTIES SHALL BE GOVERNED EXCLUSIVELY BY THIS AGREEMENT.

          12. Modification. This Agreement may not be modified or amended except in writing
signed by the parties. No term or condition of this Agreement will be deemed to have been waived
except in writing by the party charged with waiver. A waiver shall operate only as to the specific
term or condition waived and will not constitute a waiver for the future or act on anything other
than that which is specifically waived.

          13. Counterparts. This Agreement may be executed in any number of counterparts, each
of which shall be an original, but all of which together shall constitute one and the same
instrument. Any counterpart of this Agreement that has attached to it separate signature pages
which together contain the signature of all parties hereto shall for all purposes be deemed a fully
executed original. Facsimile signatures shall constitute original signatures.

          14. Successors and Assigns. All the terms and provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and to their respective successors and
permitted assigns. Neither this Agreement nor any rights or obligations hereunder may be assigned
by you, other than by will or the laws of descent or distribution.

          15. Severability. All provisions of this Agreement are intended to be severable. In
the event any provision or restriction contained herein is held to be invalid or unenforceable in
any respect, in whole or in part, such finding shall in no way affect the validity or
enforceability of any other provision of this Agreement. The parties hereto further agree that any
such invalid or unenforceable provision shall be deemed modified so that it shall be enforced to
the greatest extent permissible under law, and to the extent that any court or arbitrator of
competent jurisdiction determines any restriction herein to be unreasonable in any respect, such
court or arbitrator may limit this Agreement to render it reasonable in the light of the
circumstances in which it was entered into and specifically enforce this Agreement as limited.

          16. Choice of Law. This Agreement and all other matters related to or arising from
this Agreement shall be governed by and construed in accordance with the laws of
the State of Texas, regardless of the laws that might otherwise govern under applicable
principles of conflict of laws thereof.

          17. Construction. The parties agree that this Agreement was negotiated by the parties
and shall not be construed against any party.

 

 

Mr. Kenneth J. Cichocki

March 4, 2005

Page 5

	 	 	 	 	 
	 	 	We wish you the best in all of your future endeavors.
	 
	 	 	 	 
	

	 	 	 	Sincerely,
	 
	 	 	 	 
	

	 	 	 	/s/ MICHAEL D. LOHNER
	

	 	 	 	 
	 
	 	 	 	 
	

	 	 	 	Name: Michael D. Lohner

	 	 	 	 	 
	AGREED TO AND ACCEPTED:
	 	 	 	 
	 
	 	 	 	 
	/s/ KENNETH J. CICHOCKI
	 	 	 	 
	

	 	 	 	 
	 
	 	 	 	 
	Name: Kenneth J. Cichocki
	 	 	 	 

 

 

EXHIBIT A

MUTUAL RELEASE

          This Mutual Release (this “Release”) dated as of ___, 200___(the “Separation
Date”) among Kenneth J. Cichocki (“Executive”) and Home Interiors & Gifts, Inc., a
Texas corporation (the “Company”).

          WHEREAS, the parties hereto entered in that certain letter agreement dated as of March 4, 2005
(the “Letter Agreement”);

          WHEREAS, pursuant to Section 6 of the Letter Agreement, it is a condition precedent to the
Company’s obligation to make the payment in Section 2 or 3 therein, as applicable, that Executive
execute and deliver this Release.

          NOW THEREFORE, for good and valuable consideration, the receipt of which is hereby
acknowledged, the parties hereto agree as follows:

          1. Definitions. All capitalized terms not defined herein shall have the meanings
given them in the Letter Agreement.

          2. Mutual Release.

          (a) THE EXECUTIVE, ON BEHALF OF HIMSELF, HIS ATTORNEYS, HEIRS, EXECUTORS, ADMINISTRATORS AND
ASSIGNS (TOGETHER THE “EXECUTIVE PARTIES”), HEREBY GENERALLY RELEASES AND FOREVER
DISCHARGES THE COMPANY AND ITS RESPECTIVE PREDECESSORS, SUCCESSORS, ASSIGNS, PARENTS, SUBSIDIARIES
AND AFFILIATES AND ITS RESPECTIVE PAST AND PRESENT SHAREHOLDERS, DIRECTORS, OFFICERS, EMPLOYEES,
AGENTS, REPRESENTATIVES, PRINCIPALS, INSURERS AND ATTORNEYS (TOGETHER THE “COMPANY
PARTIES”) FROM ANY AND ALL CLAIMS, DEMANDS, LIABILITIES, SUITS, DAMAGES, LOSSES, EXPENSES,
ATTORNEYS’ FEES, OBLIGATIONS OR CAUSES OF ACTION, KNOWN OR UNKNOWN OF ANY KIND AND EVERY NATURE
WHATSOEVER, AND WHETHER OR NOT ACCRUED OR MATURED, WHICH ANY OF THEM MAY HAVE, ARISING OUT OF OR
RELATING TO ANY TRANSACTION, DEALING, RELATIONSHIP, CONDUCT, ACT OR OMISSION, OR ANY OTHER MATTERS
OR THINGS OCCURRING OR EXISTING AT ANY TIME PRIOR TO AND INCLUDING THE SEPARATION DATE (INCLUDING
BUT NOT LIMITED TO ANY CLAIM AGAINST THE COMPANY PARTIES BASED ON, RELATING TO OR ARISING UNDER
WRONGFUL DISCHARGE, BREACH OF CONTRACT (WHETHER ORAL OR WRITTEN), TORT, FRAUD, DEFAMATION,
NEGLIGENCE, PROMISSORY ESTOPPEL, TITLE VII OF THE CIVIL RIGHTS ACT OF 1964, AS AMENDED, ANY OTHER
CIVIL OR HUMAN RIGHTS LAW, THE AGE DISCRIMINATION IN EMPLOYMENT ACT OF 1967, AMERICANS WITH
DISABILITIES ACT, EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED, OR ANY OTHER
FEDERAL, STATE OR LOCAL LAW RELATING TO EMPLOYMENT OR DISCRIMINATION IN EMPLOYMENT) IN ALL CASES
ARISING OUT OF OR RELATING TO EXECUTIVE’S EMPLOYMENT BY THE COMPANY OR INVESTMENT IN THE COMPANY OR
HIS SERVICES AS AN OFFICER OR EMPLOYEE OF THE COMPANY OR ITS SUBSIDIARIES, OR OTHERWISE RELATING TO
THE TERMINATION OF SUCH EMPLOYMENT OR SERVICES; PROVIDED, HOWEVER, THAT SUCH
GENERAL RELEASE WILL NOT LIMIT OR RELEASE (I) ANY OF THE COMPANY PARTIES FROM ANY OF THEIR
RESPECTIVE

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OBLIGATIONS UNDER THE LETTER AGREEMENT, (II) ANY OF THE COMPANY PARTIES’ RESPECTIVE
OBLIGATIONS TO INDEMNIFY THE EXECUTIVE FROM THE COMPANY IN RESPECT OF HIS SERVICES AS AN OFFICER OR
DIRECTOR OF THE COMPANY OR ANY OF ITS SUBSIDIARIES AS PROVIDED BY LAW OR THE CERTIFICATES OF
INCORPORATION OR BY-LAWS (OR LIKE CONSTITUTIVE DOCUMENTS) OF THE COMPANY OR ANY SUBSIDIARY THEREOF,
(III) ANY OF THE COMPANY PARTIES’ RESPECTIVE OBLIGATIONS UNDER ANY STOCK OPTION AGREEMENT THAT IS
IN EFFECT WITH RESPECT TO STOCK OPTIONS THAT HAVE BEEN GRANTED TO EXECUTIVE PRIOR TO THE SEPARATION
DATE OR (IV) CLAIMS ARISING SOLELY AFTER THE SEPARATION DATE. THE EXECUTIVE , ON BEHALF OF HIMSELF
AND THE EXECUTIVE PARTIES, HEREBY COVENANT FOREVER NOT TO ASSERT, FILE, PROSECUTE, MAINTAIN,
COMMENCE, INSTITUTE (OR SPONSOR OR PURPOSELY FACILITATE ANY PERSON IN CONNECTION WITH THE
FOREGOING), ANY COMPLAINT OR LAWSUIT OR ANY LEGAL, EQUITABLE OR ADMINISTRATIVE PROCEEDING OF ANY
NATURE, AGAINST ANY OF THE COMPANY PARTIES IN CONNECTION WITH ANY MATTER RELEASED IN THIS RELEASE,
AND REPRESENT AND WARRANT THAT NO OTHER PERSON OR ENTITY HAS INITIATED OR, TO THE EXTENT WITHIN HIS
CONTROL, WILL INITIATE ANY SUCH PROCEEDING ON HIS BEHALF.

          (b) THE COMPANY, ON ITS OWN BEHALF AND ON BEHALF OF ITS SUBSIDIARIES AND AFFILIATES, HEREBY
GENERALLY RELEASES AND FOREVER DISCHARGES THE EXECUTIVE PARTIES FROM ANY AND ALL CLAIMS, DEMANDS,
LIABILITIES, SUITS, DAMAGES, LOSSES, EXPENSES, ATTORNEYS’ FEES, OBLIGATIONS OR CAUSES OF ACTION,
KNOWN OR UNKNOWN OF ANY KIND AND EVERY NATURE WHATSOEVER, AND WHETHER OR NOT ACCRUED OR MATURED,
WHICH ANY OF THEM MAY HAVE, ARISING OUT OF OR RELATING TO ANY TRANSACTION, DEALING, RELATIONSHIP,
CONDUCT, ACT OR OMISSION, OR ANY OTHER MATTERS OR THINGS OCCURRING OR EXISTING AT ANY TIME PRIOR TO
AND INCLUDING THE SEPARATION DATE (INCLUDING BUT NOT LIMITED TO ANY CLAIM BASED ON, RELATING TO OR
ARISING UNDER BREACH OF CONTRACT, TORT, FRAUD, DEFAMATION, ANY OTHER CIVIL OR HUMAN RIGHTS LAW, OR
ANY OTHER FEDERAL, STATE OR LOCAL LAW RELATING TO EMPLOYMENT OR DISCRIMINATION IN EMPLOYMENT) IN
ALL CASES ARISING OUT OF OR RELATING TO THE EXECUTIVE’S EMPLOYMENT BY THE COMPANY OR INVESTMENT IN
THE COMPANY OR HIS SERVICES AS AN OFFICER OR EMPLOYEE OF THE COMPANY OR ITS SUBSIDIARIES, OR
OTHERWISE RELATING TO THE TERMINATION OF SUCH EMPLOYMENT OR SERVICES; PROVIDED,
HOWEVER, THAT SUCH GENERAL RELEASE WILL NOT LIMIT OR RELEASE (I) THE EXECUTIVE’S
OBLIGATIONS UNDER THE LETTER AGREEMENT AND THE PROVISIONS OF THE EMPLOYMENT AGREEMENT INCORPORATED
THEREIN, (II) THE EXECUTIVE’S OBLIGATIONS WITH RESPECT TO ANY FRAUDULENT OR CRIMINAL ACTIVITY OF
THE EXECUTIVE, (III) THE EXECUTIVE’S OBLIGATIONS UNDER ANY STOCK OPTION AGREEMENT THAT IS IN EFFECT
WITH RESPECT TO STOCK OPTIONS THAT HAVE BEEN GRANTED TO EXECUTIVE PRIOR TO THE SEPARATION DATE
(EXCEPT AS PROVIDED HEREIN) OR (IV) CLAIMS ARISING SOLELY AFTER THE SEPARATION DATE. THE COMPANY,
ON BEHALF OF ITSELF AND THE COMPANY PARTIES, HEREBY COVENANTS FOREVER NOT TO ASSERT, FILE,
PROSECUTE, MAINTAIN, COMMENCE, INSTITUTE (OR SPONSOR OR PURPOSELY FACILITATE ANY PERSON IN
CONNECTION WITH THE FOREGOING), ANY COMPLAINT OR LAWSUIT OR ANY LEGAL, EQUITABLE OR ADMINISTRATIVE
PROCEEDING OF ANY NATURE, AGAINST ANY OF THE

A-2

 

EXECUTIVE PARTIES IN CONNECTION WITH ANY MATTER RELEASED IN THIS RELEASE, AND REPRESENTS AND
WARRANTS THAT NO OTHER PERSON OR ENTITY HAS INITIATED OR, TO THE EXTENT WITHIN ITS CONTROL, WILL
INITIATE ANY SUCH PROCEEDING ON ITS BEHALF.

          3. ADEA Release. EXECUTIVE HEREBY ACKNOWLEDGES THAT, PURSUANT TO SECTION 2(a) HEREOF,
HE IS WAIVING AND RELEASING ANY RIGHTS HE MAY HAVE AGAINST THE COMPANY PARTIES UNDER THE AGE
DISCRIMINATION IN EMPLOYMENT ACT OF 1967 AND THAT THIS WAIVER AND RELEASE IS KNOWING AND VOLUNTARY.
EXECUTIVE ACKNOWLEDGES THAT THE CONSIDERATION GIVEN FOR THIS WAIVER AND RELEASE IS IN ADDITION TO
ANYTHING OF VALUE TO WHICH EXECUTIVE WAS ALREADY ENTITLED. EXECUTIVE FURTHER ACKNOWLEDGES THAT (A)
HE HAS BEEN ADVISED THAT HE SHOULD CONSULT WITH AN ATTORNEY PRIOR TO EXECUTING THIS
AGREEMENT; (B) HE HAS BEEN GIVEN TWENTY-ONE (21) DAYS WITHIN WHICH TO CONSIDER THIS AGREEMENT
BEFORE EXECUTING IT; AND (C) HE HAS BEEN GIVEN AT LEAST SEVEN (7) DAYS FOLLOWING THE EXECUTION DATE
TO REVOKE THE RELEASE AS IT RELATES TO THE AGE DISCRIMINATION IN EMPLOYMENT ACT OF 1967.

          4. Indemnification: EXECUTIVE AGREES, WARRANTS, AND REPRESENTS TO THE COMPANY THAT
EXECUTIVE HAS FULL EXPRESS AUTHORITY TO SETTLE ALL CLAIMS AND DEMANDS THAT ARE THE SUBJECT OF THIS
RELEASE AND THAT EXECUTIVE HAS NOT GIVEN OR MADE ANY ASSIGNMENT TO ANYONE, INCLUDING EXECUTIVE’S
FAMILY, OF ANY CLAIMS AGAINST ANY PERSON OR ENTITY ASSOCIATED WITH THE COMPANY OR ANY COMPANY
PARTIES. TO THE EXTENT THAT ANY CLAIM RELATED TO THIS RELEASE MAY BE BROUGHT BY PERSONS OR
ENTITIES CLAIMING BY, THROUGH, OR UNDER EXECUTIVE, HIS HEIRS, SUCCESSORS, OR ASSIGNS, THEN
EXECUTIVE FURTHER AGREES TO INDEMNIFY, DEFEND, AND HOLD HARMLESS THE COMPANY OR ANY COMPANY PARTY,
ITS AGENTS, AND ITS SUCCESSORS FROM ANY LAWSUIT, JUDGMENT, OR SETTLEMENT ARISING FROM SUCH CLAIMS.

          5. Modification: This Release may not be modified or amended except in writing signed
by the parties. No term or condition of this Release will be deemed to have been waived except in
writing by the party charged with waiver. A waiver shall operate only as to the specific term or
condition waived and will not constitute a waiver for the future or act on anything other than that
which is specifically waived.

          6. Counterparts: This Release may be executed in any number of counterparts, each of
which shall be an original, but all of which, together shall constitute one and the same
instrument. Any counterpart of this Release that has attached to it separate signature pages which
together contain the signature of all parties hereto shall for all purposes be deemed a fully
executed original. Facsimile signatures shall constitute original signatures.

          7. Successors and Assigns: All the terms and provisions of this Release shall be
binding upon and inure to the benefit of the parties hereto and to their respective successors and
permitted assigns. Neither this Release nor any rights or obligations hereunder may be assigned by
the Executive, other than by will or the laws of descent or distribution.

A-3

 

          8. Severability: All provisions of this Release are intended to be severable. In the
event any provision or restriction contained herein is held to be invalid or unenforceable in any
respect, in whole or in part, such finding shall in no way affect the validity or enforceability of
any other provision of this Release. The parties hereto further agree that any such invalid or
unenforceable provision shall be deemed modified so that it shall be enforced to the greatest
extent permissible under law, and to the extent that any court or arbitrator of competent
jurisdiction determines any restriction herein to be unreasonable in any respect, such court or
arbitrator may limit this Release to render it reasonable in the light of the circumstances in
which it was entered into and specifically enforce this Release as limited.

          9. Construction: The parties agree that this Release was negotiated by the parties
and shall not be construed against any party.

[The Remainder of this Page is Intentionally Left Blank]

A-4

 

          IN WITNESS WHEREOF, the Company has caused this Release to be executed in its corporate name
by an officer thereof thereunto duly authorized, and Executive has hereunto set his hands, as of
the day and year first above written.

	 	 	 	 	 
	 	 	HOME INTERIORS & GIFTS, INC.
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	 
	

	 	Name:	 	 
	

	 	 	 	 
	

	 	Title:	 	 
	

	 	 	 	 

Accepted and Agreed to:

I ACKNOWLEDGE THAT I HAVE CAREFULLY READ THE FOREGOING AGREEMENT, THAT I UNDERSTAND ALL OF ITS
TERMS, AND THAT I AM ENTERING INTO IT VOLUNTARILY. I FURTHER ACKNOWLEDGE THAT I AM AWARE OF MY
RIGHTS TO REVIEW AND CONSIDER THIS AGREEMENT FOR 21 DAYS AND TO CONSULT WITH AN ATTORNEY ABOUT IT,
AND STATE THAT BEFORE SIGNING THIS AGREEMENT, I HAVE EXERCISED THESE RIGHTS TO THE FULL EXTENT THAT
I DESIRED.

	 	 	 	 	 
	 
	 	 	 	 
	KENNETH J. CICHOCKI

	 	 	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	Date Signed
	 	 	 	 

	 	 	 	 	 	 	 
	STATE OF
	 	)	 	 	 	 
	

	 	)	 	 	 	 
	COUNTY OF

	 	)	 	 	 	 

          On this ___day of ___, 2005, personally appeared before me, a Notary Public,
Kenneth J. Cichocki, known (or proved) to me to be the person whose name is subscribed to the above
instrument who acknowledged that Kenneth J. Cichocki executed the instrument.

	 	 	 	 	 
	 :
	 	 	 	 
	Expiration:
	 	 	 	 

A-5<PAGE>
                                                                    EXHIBIT 10.1

             COMPENSATION ARRANGEMENTS FOR NAMED EXECUTIVE OFFICERS

Set forth is a summary of fiscal 2005 compensation arrangements between Synovis
Life Technologies, Inc. (the "Company") and certain of its executive officers
who are expected to constitute the Company's "named executive officers" (defined
in Regulation S-K Item 402(a)(3)) for the year. All of the Company's executive
officers are at-will employees whose compensation and employment status may be
changed at any time at the discretion of the Company's Board of Directors,
subject only to the terms of the Management Change in Control Agreements between
the Company and these executive officers (the forms of which have been filed as
exhibits to the Company's annual report on Form 10-K).

BASE SALARY

Effective November 1, 2004, the named executive officers are scheduled to
receive the following annual base salaries in their current positions:

<TABLE>
<CAPTION>
Name and Current Position                                                       Base Salary

<S>                                                                             <C>
Karen Gilles Larson                                                             $   350,000
(President and Chief Executive Officer)

Richard W. Kramp                                                                $   200,000
(President and Chief Operating Officer of Synovis Interventional Solutions)

David A. Buche                                                                  $   180,000
(Vice President and Chief Operating Officer of Synovis Surgical Innovations)

Connie L. Magnuson                                                              $   172,500
(Vice President of Finance, Chief Financial Officer and Corporate Secretary)

B. Nicholas Oray, Ph.D.                                                         $   166,500
(Vice President of Research and Development)
</TABLE>

ANNUAL CASH INCENTIVE COMPENSATION

The Company's executive officers are eligible to receive annual cash incentive
compensation based upon a subjective evaluation by the Company's Compensation
Committee of the Board of Directors of the individual executive officer's
performance and achievement of specific individual objectives during the period.
Additional cash incentive compensation is evaluated based upon the Company's
financial performance relative to its annual planned profitability.

STOCK OPTIONS

On November 1, 2004, options to purchase shares of common stock listed below, at
an exercise price of $10.49 per share (the closing price of a share of common
stock on the date of the grant), were awarded to each named executive officer
under the Company's 1995 Stock Incentive Plan:

<TABLE>
<CAPTION>
                  Name                               Options Granted
<S>               <C>                                <C>
                  Karen Gilles Larson                         3,337
                  Richard W. Kramp                            1,907
                  David A. Buche                              1,716
                  Connie L. Magnuson                          1,644
                  B. Nicholas Oray, Ph.D.                     1,587
</TABLE>

BENEFITS

The Company provides medical, dental and life and disability insurance benefits
as well as a 401(k) retirement plan and a stock purchase plan to its executive
officers. The same benefits are available to all Company employees.

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