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EXHIBIT 10.34
EMPLOYMENT AGREEMENT
THIS AGREEMENT made as of the 5th day of January, 1998, by and between
ValueVision International, Inc., a Minnesota corporation (hereinafter referred
to as "Employer"), and Xxxxx X. Xxxxxxxx (hereinafter referred to as
"Employee").
WITNESSETH:
WHEREAS, Employee and Employer have agreed that Employee shall continue
as an employee of Employer following consummation of the transactions (the
"Transactions"), contemplated by that certain Agreement and Plan of
Reorganization and Merger (the "Merger Agreement") dated of even date herewith,
by and among Employer, National Media Corporation ("NMC") and X-X Holdings,
Corp. ("Holdings Corp."), whereby Employer and NMC shall each become
wholly-owned subsidiaries of Holdings Corp.;
WHEREAS, Employer desires to assure itself of the services of Employee
following consummation of the Transactions and Employee desires to continue to
be employed by Employer as an employee following consummation of the
transactions on the terms and conditions set forth below, which Employee
acknowledges to constitute an increase in Employee's existing compensation
package; and
WHEREAS, Employer and Employee agree that the terms of this Agreement
shall only become effective immediately preceding consummation of the
Transactions.
NOW, THEREFORE, in consideration of the premises and mutual promises
contained in this Agreement, the parties hereto agree as follows:
A. EMPLOYMENT. Employer agrees, following consummation of the
Transactions, to continue to employ Employee and Employee agrees,
following consummation of the Transactions, to continue his employment
with Employer on the terms and conditions set forth in this Agreement.
B. TERM. The term of Employee's employment hereunder shall commence on,
the Closing Date (as defined in the Merger Agreement), and shall
continue on a full-time basis for a period of twenty-four (24) months
(the "Term"). The "Employment Period" for purposes of this Agreement
shall be the period beginning on the Closing Date and ending at the
time Employee shall cease to act as an employee of Employer. In the
event the Transactions are not consummated, this Agreement shall be of
no further force or effect.
C. DUTIES. Employee shall serve as Vice President Administration of
Employer and shall perform the duties as assigned by Employer, from
time to time, and shall faithfully, and to the best of his ability,
perform such reasonable duties and services of an active, executive,
administrative and managerial nature as shall be specified and
designated, from time to time, by Employer. Employee agrees to devote
his full time and skills to such employment while he is so employed,
subject to a vacation allowance of not less than three (3) weeks during
each year of the term, or such additional vacation allowance as may be
granted in the sole discretion of Employer. Employer's Chief Executive
Officer shall provide Employee with a performance review at least
annually.
D. COMPENSATION. Employee's compensation for the services performed under
this Agreement shall be as follows:
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1. Base Salary. Employee shall receive a base salary of at least
One Hundred Seventy Thousand and No/100 Dollars ($170,000.00) per year for
the term of this Agreement ("Base Salary").
2. Bonus Salary. Employee may receive bonus salary ("Bonus
Salary"), from time to time, based upon Employee's job performance.
Employer's Chief Executive Officer and Employee shall establish job
performance criteria for Employee at least annually, which shall be the
basis of such Bonus Salary.
c. Automobile Allowance. Employer shall pay Employee a monthly
automobile allowance of $450.00 per month ("Auto Allowance").
E. OTHER BENEFITS DURING THE EMPLOYMENT PERIOD.
1. Employee shall receive all other benefits made available to
executive officers of Employer, from time to time, at its discretion
("Benefits"). It is understood and agreed that Employer may terminate such
Benefits or change any benefit programs at its sole discretion, as they
are not contractual for the term hereof.
2. Employer shall reimburse Employee for all reasonable and
necessary out-of-pocket business expenses incurred during the regular
performance of services for Employer, including, but not limited to,
entertainment and related expenses so long as Employer has received proper
documentation of such expenses from Employee.
3. Employer shall furnish Employee with such working facilities and
other services as are suitable to Employee's position with Employer and
adequate to the performance of his duties under this Agreement.
F. TERMINATION OF EMPLOYMENT.
1. Death. In the event of Employee's death, this Agreement shall
terminate and Employee shall cease to receive Base Salary, Bonus Salary,
Auto Allowance, and Benefits as of the date on which his death occurs.
2. Disability. If Employee becomes disabled such that Employee
cannot perform the essential functions of his job, and the disability
shall have continued for a period of more than one hundred twenty (120)
consecutive days, then Employer may, in its sole discretion, terminate
this Agreement and Employee shall then cease to receive Base Salary, Bonus
Salary, Auto Allowance, and all other Benefits, on the date this Agreement
is so terminated; provided however, Employee shall then be entitled to
such disability, medical, life insurance, and other benefits as may be
provided generally for disabled employees of Employer when payments and
benefits hereunder ceases.
3. Voluntary Termination. In the event that Employee voluntarily
terminates his employment, he shall cease to receive Base Salary, Bonus
Salary, Auto Allowance, and all other Benefits as of the date of such
termination.
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4. TERMINATION WITH CAUSE. Employer shall be entitled to terminate
this Agreement and Employee's employment hereunder for Cause (as herein
defined), and in the event that Employer elects to do so, Employee shall
cease to receive Base Salary, Bonus Salary, Auto Allowance, and Benefits
as of the date of such termination specified by Employer. For purposes of
this Agreement, "Cause" shall mean: (i) a material act or act of fraud
which results in or is intended to result in Employee's personal
enrichment at the direct expense of Employer, including without
limitation, theft or embezzlement from Employer; (ii) public conduct by
Employee substantially detrimental to the reputation of Employer, (iii)
material violation by Employee of any Employer policy, regulation or
practice; (iv) conviction of a felony; or (v) habitual intoxication, drug
use or chemical substance use by any intoxicating or chemical substance.
Notwithstanding the forgoing, Employee shall not be deemed to have been
terminated for Cause unless and until Employee has received thirty (30)
days prior written notice (a "Dismissal Notice") of such termination. In
the event Employee does not dispute such determination within thirty (30)
days after receipt of the Dismissal Notice, Employee shall not have the
remedies provided pursuant to Section 6.g. of this Agreement.
e. By Employee for Employer Cause. Employee may terminate this
Agreement upon thirty (30) days written notice to Employer (the "Employee
Notice") upon the occurrences without Employee's express written consent,
of any one or more of the following events, provided, however, that
Employee shall not have the right to terminate this Agreement if Employer
is able to cure such event within thirty (30) days (ten (10) days with
regard to Subsection (ii) hereof) following delivery of such notice:
(i) Employer substantially diminishes Employee's duties such
that they are no longer of an executive nature as contemplated by Section
3 hereof or Employer requires Employee to relocate his offices and perform
his duties hereunder more than 25 miles from Employer's current corporate
offices located at 0000 Xxxxx Xxx Xxxx, Xxxx Xxxxxxx, Xxxxxxxxx 00000 or
(ii) Employer materially breaches its obligations to pay
Employee as provided for herein and such failure to pay is not a result of
a good faith dispute between Employer and Employee.
f. Other. If Employer terminates this Agreement for any reason
other than as set forth in Sections 6.a, 6.b., 6.c or 6.d. above, or if
Employee terminates this Agreement pursuant to Section 6.e. above,
Employer shall immediately pay Employee in a lump sum payment, an amount
equal to Base Salary, Bonus Salary and Auto Allowance and which would
otherwise be payable until the end of the Term (collectively, the
"Severance Payment"). In addition, Employer shall continue to provide
Employee with Benefits until the end of the Term. For purposes of
calculating Bonus Salary payable pursuant to this Section 6.f., Employee
shall receive Bonus Salary equal to the last Bonus Salary actually paid
the Employee, prorated for the number of months to be covered by the
Severance Payment. Notwithstanding the foregoing, following a Change of
Control (as hereinafter defined), the number of months upon which the
calculation of the Severance Payment shall be based and for which Employer
shall be obligated to provide Employee with the Benefits pursuant to this
Section 6.f. shall be the greater of (i) the remaining number of months
left in the Term and (ii) eight (8) months.
g. Arbitration. In the event that Employee disputes a determination
that Cause exists for terminating his employment pursuant to Section 6.d.
of this Agreement, or Employer disputes the determination that cause
exists for Employee's termination of his employment pursuant to Section
6.e
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of this Agreement, either such disputing party may, in accordance with the
Rules of the American Arbitration Association ("AAA"), and within 30 days
of receiving a Dismissal Notice or Employee Notice, as applicable, file a
petition with the AAA for arbitration of the dispute, the costs thereof
(including legal fees and expenses) to be shared equally by the Employer
and Employee unless an order of the AAA provides otherwise. Such
proceeding shall also determine all other items then in dispute between
the parties relating to this Agreement, and the parties covenant and agree
that the decision of the AAA shall be final and binding and hereby waive
their rights to appeal thereof.
G. CONFIDENTIAL INFORMATION. Employee acknowledges that the confidential
information and data obtained by him during the course of his performance
under this Agreement concerning the business or affairs of Employer, or
any entity related thereto, are the property of Employer and will be
confidential to Employer. Such confidential information may include, but
is not limited to, specifications, designs, and processes, product
formulae, manufacturing, distributing, marketing or selling processes,
systems, procedures, plans, know-how, services or material, trade secrets,
devices (whether or not patented or patentable), customer or supplier
lists, price lists, financial information including, without limitation,
costs of materials, manufacturing processes and distribution costs,
business plans, prospects or opportunities, and software and development
or research work, but does not include Employee's general business or
direct marketing knowledge (the "Confidential Information"). All the
Confidential Information shall remain the property of Employer and
Employee agrees that he will not disclose to any unauthorized persons or
use for his own account or for the benefit of any third party any of the
Confidential Information without Employer's written consent. Employee
agrees to deliver to Employer at the termination of this employment, all
memoranda, notes, plans, records, reports, video and audio tapes and any
and all other documentation (and copies thereof) relating to the business
of Employer, or any entity related thereto, which he may then possess or
have under his direct or indirect control. Notwithstanding any provision
herein to the contrary, the Confidential Information shall specifically
exclude information which is publicly available to Employee and others by
proper means, readily ascertainable from public sources known to Employee
at the time the information was disclosed or which is rightfully obtained
from a third party, information required to be disclosed by law provided
Employee provides notice to Employer to seek a protective order, or
information disclosed by Employee to his attorney regarding litigation
with Employer.
H. INVENTIONS AND PATENTS. Employee agrees that all inventions, innovations
or improvements in the method of conducting Employer's business or
otherwise related to Employer's business (including new contributions,
improvements, ideas and discoveries, whether patentable or not) conceived
or made by him during the Employment Period belong to Employer. Employee
will promptly disclose such inventions, innovations and improvements to
Employer and perform all actions reasonably requested by Employer to
establish and confirm such ownership.
I. NONCOMPETE AND RELATED AGREEMENTS.
1. Employee agrees that during the Noncompetition Period (as herein
defined), he will not: (i) directly or indirectly own, manage, control,
participate in, lend his name to, act as consultant or advisor to or
render services alone or in association with any other person, firm,
corporation or other business organization for any other person or entity
engaged in the television home shopping business, any mail order business
that directly competes with Employer or any of its affiliates by selling
merchandise primarily of the type offered in and using a similar theme as
any of Employer's or its affiliates' catalogs during the term of this
Agreement or any business which Employer (upon authorization of its board
of directors) has invested significant research and development funds or
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resources and contemplates entering into during the next twelve (12)
months (the "Restricted Business"), anywhere that Employer or any of its
affiliates operates during the term of this Agreement within the
continental United States (the "Restricted Area"); (ii) have any interest
directly or indirectly in any business engaged in the Restricted Business
in the Restricted Area other than Employer (provided that nothing herein
will prevent Employee from owning in the aggregate not more than one
percent (1%) of the outstanding stock of any class of a corporation
engaged in the Restricted Business in the Restricted Area which is
publicly traded, so long as Employee has no participation in the
management or conduct of business of such corporation), (iii) induce or
attempt to induce any employee of Employer or any entity related to
Employer to leave his, her or their employ, or in any other way interfere
with the relationship between Employer or any entity related to Employer
and any other employee of Employer or any entity related to Employer, or
(iv) induce or attempt to induce any customer, supplier, franchisee,
licensee, other business relation of any member of Employer or any entity
related to Employer to cease doing business with Employer or any entity
related to Employer, or in any way interfere with the relationship between
any customer, franchisee or other business relation and Employer or any
entity related to Employer, without the prior written consent of Employer.
For purposes of this Agreement, "Noncompetition Period" shall mean the
period commencing as of the Closing Date and ending on the last day of the
sixth (6th) month following the date on which Employee is terminated
during the term of this Agreement.
2. If, at the time of enforcement of any provisions of Section 9, a
court of competent jurisdiction holds that the restrictions stated therein
are unreasonable under circumstances then existing, the parties hereto
agree that the maximum period, scope or geographical area reasonable under
such circumstances will be substituted for the stated period, scope or
area.
3. Employee agrees that the covenants made in this Section 9 shall
be construed as an agreement independent of any other provision of this
Agreement and shall survive the termination of this Agreement.
J. TERMINATION OF EXISTING AGREEMENTS. This Agreement, effective on the
Closing Date and upon consummation of the Transactions, supersedes and
preempts any prior understandings, agreements or representations, written
or oral, by or between Employee and Employer, which may have related to
the employment of Employee, Employee's Agreement Not to Compete with
Employer, or the payment of salary or other compensation by Employer to
Employee, and upon this Agreement becoming effective, all such
understandings, agreements and representations shall terminate and shall
be of no further force or effect.
K. SPECIFIC PERFORMANCE. Employee and Employer acknowledge that in the event
of a breach of this Agreement by either party, money damages would be
inadequate and the nonbreaching party would have no adequate remedy at
law. Accordingly, in the event of any controversy concerning the rights or
obligations under this Agreement, such rights or obligations shall be
enforceable in a court of equity by a decree of specific performance. Such
remedy, however, shall be cumulative and nonexclusive and shall be in
addition to any other remedy to which the parties may be entitled.
L. SALE, CONSOLIDATION OR MERGER. In the event of a sale of the stock, or
substantially all of the stock, of Employer or Holdings Corp., or
consolidation or merger of Employer or Holdings Corp. with or into another
corporation or entity, or the sale of substantially all of the operating
assets of Employer or Holdings Corp. to another corporation, entity or
individual, Employer may assign its rights and
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obligations under this Agreement to its successor-in-interest and such
successor-in-interest shall be deemed to have acquired all rights and
assumed all obligations of Employer hereunder.
M. STOCK OPTIONS. Immediately preceding the Closing, (as defined in the
Merger Agreement) Employee shall be granted incentive stock options in
accordance with the Second Amended 1990 Stock Option Plan of Employer (the
"Plan") for 20,000 shares of ValueVision International, Inc. common stock
("Stock Options") subject to the provisions thereof and exercisable at the
time or times established by the Stock Option Agreement. The Stock Options
shall vest in equal amounts, one-third each, for the next successive three
(3) years as measured from the anniversary of the Closing Date, or such
earlier date in the sole discretion of the Employer's Chief Executive
Officer. All such Stock Options shall automatically vest upon a
termination of this Agreement prior to the end of the Term (unless
pursuant to Sections 6.c or 6.d.) or upon a Change of Control.
Notwithstanding the forgoing or anything contained in the Plan or the
Stock Option Agreement, the consummation of the Transactions shall not be
deemed a Change of Control for purposes of vesting of the Stock Options,
although any transaction in the future similar to the Transactions
involving either Employer or Holdings Corp. shall constitute a Change of
Control. In the event the Transactions are not consummated, the Stock
Options shall terminate.
N. CHANGE OF CONTROL. For purposes of this Agreement, a "Change of Control"
shall mean an event as a result of which: (i) any "person" (as such term
is used in Sections 13(d) and 14(d) of the Securities and Exchange Act of
1934 (the "Exchange Act")), is or becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act, except that a person shall
be deemed to have "beneficial ownership" of all securities that such
person has a right to acquire, whether such right is exercisable
immediately or only after the passage of time), directly or indirectly, of
more than 20% of the total voting power of the voting stock of either
Employer or Holdings Corp. (or their successors and assigns); (ii)
Employer or Holdings Corp. consolidates with, or merges with or into
another corporation or sells, assigns, conveys, transfers, leases or
otherwise disposes of all or substantially all of its assets to any
person, or any corporation consolidates with, or merges with or into,
Employer or Holdings Corp., in any such event pursuant to a transaction in
which the outstanding voting stock of Employer or Holdings Corp. is
changed into or exchanged for cash, securities or other property, other
than any such transaction where (A) the outstanding voting stock of
Employer or Holdings Corp. is changed into or exchanged for (x) voting
stock of the surviving or transferee corporation or (y) cash, securities
(whether or not including voting stock) or other property, and (B) the
holders of the voting stock of Employer or Holdings Corp. immediately
prior to such transaction own, directly or indirectly, not less than 80%
of the voting power of the voting stock of the surviving corporation
immediately after such transaction; or (iii) during any period of two
consecutive years, individuals who at the beginning of such period
constituted the Board of Directors of Employer or Holdings Corp. (together
with any new directors whose election by such Board or whose nomination
for election by the stockholders of Employer or Holdings Corp. was
approved by a vote of 66-2/3% of the directors then still in office who
were either directors at the beginning of such period or whose election ro
nomination for election was previously so approved) cease for any reason
to constitute a majority of the Board of Employer or Holdings Corp.,
respectively, then in office, or (iv) Employer or Holdings Corp. is
liquidated or dissolved or adopts a plan of liquidation.
O. NO OFFSET - NO MITIGATION. Employee shall not be required to mitigate
damages under this Agreement by seeking other comparable employment. The
amount of any payment or benefit provided for in this Agreement, including
welfare benefits, shall not be reduced by any compensation or benefits
earned by or provided to Employee as the result of employment by another
employer.
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P. WAIVER. The failure of either party to insist, in any one or more
instances, upon performance of the terms or conditions of this Agreement
shall not be construed as a waiver or relinquishment of any right granted
hereunder or of the future performance of any such term, covenant or
condition.
Q. ATTORNEY'S FEES. In the event of any action for breach of, to enforce the
provisions of, or otherwise arising out of or in connection with this
Agreement, the prevailing party in such action, as determined by a court
of competent jurisdiction in such action, shall be entitled to receive its
reasonable attorney fees and costs from the other party. If a party
voluntarily dismisses an action it has brought hereunder, it shall pay to
the other party its reasonable attorney fees and costs.
R. NOTICES. Any notice to be given hereunder shall be deemed sufficient if
addressed in writing, and delivered by registered or certified mail or
delivered personally: (i) in the case of Employer, to Employer's principal
business office; and (ii) in the case of Employee, to his address
appearing on the records of Employer, or to such other address as he may
designate in writing to Employer.
S. SEVERABILITY. In the event that any provision shall be held to be invalid
or unenforceable for any reason whatsoever, it is agreed such invalidity
or unenforceability shall not affect any other provision of this Agreement
and the remaining covenants, restrictions and provisions hereof shall
remain in full force and effect and any court of competent jurisdiction
may so modify the objectionable provisions as to make it valid, reasonable
and enforceable.
T. AMENDMENT. This Agreement may be amended only by an agreement in writing
signed by the parties hereto.
U. BENEFIT. This Agreement shall be binding upon and inure to the benefit of
and shall be enforceable by and against Employee's heirs, beneficiaries
and legal representatives. It is agreed that the rights and obligations of
Employee may not be delegated or assigned except as specifically set forth
in this Agreement.
V. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of Minnesota.
IN WITNESS WHEREOF, the parties hereto have executed or caused this
Agreement to be executed as of the day, month and year first above written.
EMPLOYER: VALUEVISION INTERNATIONAL, INC.
By /s/ Xxxxxx X.Xxxxxxxx
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Xxxxxx X. Xxxxxxxx
Its: Chief Executive Officer
EMPLOYEE: /s/ Xxxxx X. Xxxxxxxxx
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Xxxxx X. Xxxxxxxxx
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