EXHIBIT 10.1
WAIVER AGREEMENT
This Agreement is made between National Media Corporation (the
"Company") and Xxxxxxxxxxxx X. Xxxxxxxx (the "Executive") on August 12, 1998.
WHEREAS, the Company and the Executive are parties to an Employment
Agreement dated April 28, 1997, as amended from time to time (the "Employment
Agreement").
WHEREAS, from time to time, the Executive has been granted options to
purchase common stock of the Company.
WHEREAS, in connection with the proposed equity Investment in the
Company by NM Acquisition Co., LLC, a Delaware Limited Liability Company
pursuant to a Stock Purchase Agreement dated as of August 11, 1998 between the
Company and NM Acquisition Co., LLC. (the "Purchase Agreement"), the Company and
the Executive wish to modify certain provisions of the Employment Agreement
(which modifications will be null and void if the transactions contemplated by
the Purchase Agreement are not consummated) and certain terms of certain of the
options held by Executive.
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein and for other good and valuable consideration the receipt and
adequacy of which are hereby acknowledged, the parties hereto agree as follows:
A. Amendments to the Employment Agreement
1. Duties. Effective at the Closing Date (as defined in the
Purchase Agreement), the first two sentences of Section 2(a) of the Employment
Agreement shall be amended by deleting such sentences entirely and replacing
them with the following:
"The Executive's duties shall be to render such executive
management consultation services as shall be reasonably
assigned from time to time by the Company. The Executive shall
provide these services on a full-time basis. The Executive
will not be the Vice Chairman or an executive officer of the
Company."
2. Term. Effective at the Closing Date, Section 3 of the
Employment Agreement shall be amended by deleting its contents entirely and
replacing them with the following:
"The term of this agreement shall be ninety calendar days from
the Closing Date (as defined in the Stock Purchase Agreement
dated as of August 11, 1998 between the Company and NM
Acquisition Co., LLC), unless sooner terminated in accordance
with the provisions hereof."
3. Additional Consultation Services. Effective at the
Closing Date, a new Section 3 A will be deemed to have been added to the
Employment Agreement as follows:
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"3A. Additional Consultation Services.
(a) For a period of twenty one (21) months
after the end of the Term provided for in Section 3 (the
"Consulting Term"), the Executive shall be retained as a
consultant to the Company, and shall, on a non-exclusive
basis, provide mutually agreeable executive management
consultation services with respect to the business and affairs
of the Company as reasonably requested from time to time by
the Company; provided however, that such consulting services
shall not, in the sole discretion of the Executive, materially
detract from or otherwise interfere with the Executive's other
employment, charitable, social or personal activities. The
Executive will not be an officer or employee of the Company.
There will be no minimum amount of consultation required, and
the Executive's services will be on an as-needed basis. For
such services, the Company will pay the Executive a consulting
fee of $443,750 (the "Consulting Fee"), payable at such time
as the Company customarily pays its senior executives and (i)
with respect to the first nine (9) months of the Consulting
Term (the "Initial Consulting Term"), in installments based
upon an annual rate of $325,000, and (ii) with respect to the
remaining twelve (12) months of the Consulting Term (the
"Remaining Consulting Term"), in installments based upon an
annual rate of $200,000. The Company will provide the
Executive with all perquisites, benefits, allowances, etc.
described in this Agreement for the Initial Consulting Term,
and the Company will provide the Executive with all
hospitalization insurance, major medical insurance, medical
reimbursement and other medical or hospitalization benefits
described in this Agreement for the Remaining Consulting Term.
The Company will provide the Executive with reasonable office
facilities and stenographic and other support services in the
event consulting services are actually requested by the
Company hereunder.
(b) In the event of the death or Total
Disability (as defined in Section 9(b) of this Agreement) of
the Executive prior to the expiration of the Consulting Term,
the Company shall have no further obligations or liabilities
under this Agreement, except to, as soon as is practicable,
pay the Executive's estate or the Executive, as the case may
be, the portion, if any, of the Consulting Fee not previously
paid under this Agreement. The Company shall, as soon as is
practicable, pay such unpaid portion of the Consulting Fee to
the Executive's estate or the Executive, as the case may be,
notwithstanding the fact that due to such death or Total
Disability the Executive shall no longer provide the
consulting services set forth in section 3A(a) for the
remainder of the Consulting Term."
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4. Indemnification. Effective at the Closing Date, Section
13 of the Employment Agreement shall be amended by deleting its contents
entirely and replacing them with the following:
"13. Counsel Fees and Indemnification.
(a) In the event that it shall be necessary
or desirable for the Executive to retain legal counsel and/or
incur other costs and expenses in connection with the
enforcement of any and all of his rights (including his right
to payment of the Consulting Fee) under this Agreement,
including participation in any proceeding contesting the
validity or enforceability of this Agreement and any
arbitration proceeding pursuant to Section 9(e) of this
Agreement, the Executive shall be entitled to recover from the
Company his reasonable attorney's fees and costs and expenses
in connection with the enforcement of his rights. No fees
shall be payable if the Company is successful on the merits.
(b) The Company shall indemnify and hold
Executive harmless to the maximum extent permitted by law
against judgments, fines, amounts paid in settlement and
reasonable expenses, including reasonable attorneys' fees
incurred by Executive, in connection with the defense of, or
as a result of, any action or proceeding (or any appeal from
any action or, proceeding) in which Executive is made or is
threatened to be made a party by reason of any act or omission
of Executive in his capacity as an officer, director,
consultant or employee of the Company, regardless of whether
such action or proceeding is one brought by or in the right of
the Company and whether such action related to circumstances
prior to the effective date of this Agreement (or during the
Consulting Term), to procure a judgment in its favor. Expenses
(including reasonable attorneys' fees) incurred by the
Executive in defending any civil, criminal, administrative, or
investigative action, suit or proceeding shall be paid by the
Company in advance of the final disposition of such action,
suit or proceeding upon receipt of an undertaking by or on
behalf of the Executive to repay such amount if it shall
ultimately be determined that he is not entitled to be
indemnified by the Company as authorized in this Section
13(b)."
5. Change in Control. Effective at the Closing Date, Section
10 of the Employment Agreement shall be deleted and will have no further force
or effect. Furthermore, Executive agrees that a "change in control" (as defined
in the Employment Agreement) does not include any of the transactions
contemplated by, or taken in connection with, the Purchase Agreement.
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6. Cash Bonus. On the Closing Date, the Company will pay
the Executive a bonus of $180,000.
7. Mutual Release. Effective on the Closing Date, subject to
the provisions of this Agreement and the Executive's continuing right to defense
and indemnification by the Company pursuant to Delaware law or the Employment
Agreement, each, of the parties hereby unconditionally releases and forever
discharges the other party, in the case of the Company, including its
subsidiaries, affiliated or related business entities, shareholders, officers,
directors, committee members, attorneys, employees, agents, successors and
assigns, from and against any and all contractual rights, claims, actions,
causes of action, rights, demands, attorneys' fees, penalties, debts or damages
of every kind or nature whatsoever, whether known or unknown, which arise out of
the Employment Agreement or otherwise in connection with Executive's employment
or relationship with the Company before the Closing Date.
B. Changes to Outstanding Options
1. Reduction in Option Price. Effective on the date hereof, the
exercise price of 50,000 options to purchase the Company's common stock held by
the Executive shall be reduced from $7.00 per share to $2.00 per share.
Executive shall promptly deliver the option document held by him to the Company,
and the Company will deliver to Executive a new option document with the same
terms and conditions as the option document tendered except for the exercise
price, and the Company will deliver to Executive an option document on the same
term for the balance of the shares. Such options shall not be exercisable until
the earlier of consummation of the Purchase Agreement or the termination of the
Purchase Agreement.
2. Change in Terms of Options. The provisions with respect to the
duration of options following termination of service contained in all options to
purchase Common Stock of the Company held by Executive shall be extended for a
one-year period from the date they would otherwise expire. The Company
acknowledges that by previous action of the Board of Directors of the Company,
the time for exercisability of all of Executive's options has previously been
fixed at two years after termination of service. By this agreement, such period
for exercise will be three years after termination of service.
3. Delivery. Promptly after delivery of option document held by
Executive to the Company, the Company will prepare and deliver to the Executive
new option document with the changes provided for herein.
C. Repayment of Indebtedness.
Within 2 business days after the Closing Date, Executive shall repay
the Company the amount of $180,000, which shall constitute all the principal and
interest due under that certain Note to the Company dated December 31, 1997.
D. Other Provisions.
1. Entire Agreement. The Employment Agreement, as amended by
this Agreement, constitutes the entire agreement between the parties pertaining
to the subject matter hereof and
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fully supersedes any and all prior or contemporaneous agreements or
understandings between the parties hereto pertaining to the subject matter
hereof, subject to paragraph 3 below.
2. Full Force and Effect. Except as expressly amended in this
Agreement, the Employment Agreement shall remain in full force and effect,
subject to paragraph 3 below.
3. Termination of the Agreement. Notwithstanding anything to the
contrary herein, the provisions of Part A. and Parts B.2., B.3., and Part C of
this Agreement shall immediately and automatically terminate and shall have no
further force and effect upon the termination or expiration of the Purchase
Agreement, in accordance with the provisions thereunder. In the event of any
such termination of these parts, the Employment Agreement shall remain in full
force and effect, without the changes provided for herein.
4. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
NATIONAL MEDIA CORPORATION
By: ---------------------------------
Name: Xxxxx X. Xxxxx
Title: Senior Vice President
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XXXXXXXXXXXX X. XXXXXXXX
APPROVED:
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By: ------------------------
Xxx X. Xxxxxx XX, Director
Chairman of the Compensation Committee
of the Board of Directors
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