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AMENDMENT
TO
EMPLOYMENT AGREEMENT
AND
NON-QUALIFIED STOCK OPTION AGREEMENTS
This AMENDMENT TO EMPLOYMENT AGREEMENT (the "Amendment")
is made September 15, 1998 by and between Valassis
Communications, Inc. (the "Corporation") and Xxxx X. Xxxxxxx
(the "Executive).
WHEREAS, the Corporation and the Executive entered into
that certain Employment Agreement effective March 18, 1992, as
amended January 3, 1995 and December 19, 1995 (the "Employment
Agreement"); and
WHEREAS, the Corporation entered into a NON-QUALIFIED
STOCK OPTION AGREEMENT with the Executive effective March 18,
1992, May 10, 1994 and December 8, 1997 (the "Option
Agreements"); and
WHEREAS, the Corporation and the Executive desire to amend
the Employment Agreement and the Option Agreements to extend the
term of employment under the Employment Agreement and conform the
Employment Agreement to certain revised terms as specifically
amended herein.
NOW THEREFORE, in consideration of the mutual covenants
and promises contained herein, the parties hereby agree as
follows:
1. Section 1.(b) of the Employment Agreement shall be
amended to read in its entirety as follows:
"The Employment Period shall commence as of the
consummation date (the "Effective Date") of the
initial public offering of the common stock of the
Corporation (the "IPO") and shall continue until the
close of business on December 31, 2003."
2. The first sentence of Section 3.(a) of the Employment
Agreement shall be amended to read as follows:
"SALARY. The Executive's Annual Base Salary
("Annual Base Salary"), payable on a biweekly basis,
shall be at the annual rate of not less than $550,000
effective September 15, 1998."
3. Section 3. of the Employment Agreement shall be amended
to insert a new sub-section (h) to read in its entirety as
follows:
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"The Executive shall be eligible to receive for Fiscal
Year (calendar) 1999 and for each fiscal year thereafter during
the Employment Period up to 15,000 shares of the Corporation's
Common Stock (the "Performance Restricted Stock Award") under
the Valassis Communications, Inc. Executive Restricted Stock Plan
adopted July 10, 1995 (the "Executive Restricted Stock Plan")
on the following basis: (i) If the Compensation/Stock Option
Committee (the "Committee") determines that eighty percent
(80%) or more of the applicable performance targets set by the
Board of Directors for such fiscal year have been met, the
Executive shall receive 7,500 shares; and (ii) if the Committee
determines that one hundred fifteen percent (115%) or more of the
applicable performance targets set by the Board of Directors for
such fiscal year have been met, the Executive shall receive an
additional 7,500 shares. The disposition of such shares by the
Executive shall be restricted for a period of one year and no
longer. Each Performance Restricted Stock Award shall be awarded
to the Executive promptly after the end of the applicable fiscal
year as soon as the Committee has determined that the applicable
targets have been met but in no event later than sixty (60) days
after the end of the applicable fiscal year."
4. Section 8.(b) of the Employment Agreement shall be
amended to read in its entirety as follows:
"COVENANT NOT TO COMPETE OR SOLICIT. During the
Employment Period, the Executive shall not offer or sell any
products or services, including without limitation a free-
standing insert business directly competitive in any market with
the business of the Corporation, nor shall he render services to
any firm, person or corporation so competing with the
Corporation, nor shall he have any interest, direct or indirect,
in any business that is so competing with the business of the
Corporation; provided, however, that ownership of five percent
(5%) or less of any class of debt or equity securities which are
publicly-traded security shall not be a violation of this
covenant. The foregoing provisions of this Section 8.(b) shall
apply during the Severance Period, if any, so long as the
Corporation fulfills its obligations to the Executive Section 5.
and shall extend for an additional period of seven years (the
"Mandatory Non-Competition Period") after the expiration of the
Employment Period or the Severance Period, as the case may be,
and the Corporation shall pay an amount to the Executive equal to
Annual Base Salary in biweekly installments during each of the
first three years of such Mandatory Non-Competition Period and an
amount equal to one-half of Annual Base Salary during each of the
last four years of such Mandatory Non-Competition Period. So
long as the Executive is employed hereunder and for any
additional period of time described in the preceding sentences,
the Executive shall not, directly or indirectly, (i) solicit any
employee of the Corporation with a view to inducing or
encouraging such employee to leave the employ of the Corporation
for the purpose of being hired by the Executive or any employer
affiliated with the Executive; or (ii) solicit, take away,
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attempt to take away, or otherwise interfere with the
Corporation's business relationships with any of its respective
customers."
5. Section 2.(a) of the Employment Agreement shall be
amended to read in its entirety as follows:
"(a) POSITION; LOCATION. During the Employment Period,
the Executive shall serve as the President and Chief Executive
Officer of the Corporation and shall continue to have such
authority, duties and responsibilities which shall be at least
commensurate in all material respects with those held and
exercised as of September 15, 1998 with the Corporation. During
the Employment Period, the Executive shall, without compensation
other than that herein provided, also serve and continue to
serve, if and when elected and re-elected as an officer or
director, or both, of any subsidiary, affiliate or division of
the Corporation. The Executive's services shall be performed at
the location where the Executive is currently employed or any
office which is the headquarters of the Corporation and is not
more than twenty-five miles from such location unless such
requirement is waived by the Executive."
6. All other terms of the Employment Agreement and the
Option Agreements shall remain in full force and effect.
IN WITNESS WHEREOF, the Executive and the Corporation have caused
this Agreement to be executed as of the day and year first above
written.
VALASSIS COMMUNICATIONS, INC.
By:\s\ Xxxxx X. Xxxxxxx
________________________________
Name: Xxxxx X. Xxxxxxx
______________________________
Title: Secretary
______________________________
\s\Xxxx X. Xxxxxxx
____________________________________
Xxxx X. Xxxxxxx
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