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EXHIBIT 10.5(a)
AMENDMENT
TO
EMPLOYMENT AGREEMENT
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AGREEMENT made this 30 day of June 1994 by and between VALASSIS
COMMUNICATIONS, INC., a Delaware corporation whose principal place of business
is located at 00000 Xxxxxxxxxxx Xxxx, Xxxxxxx, Xxxxxxxx 00000 ("VCI") and
Xxxxxxx X. Xxxxxxx (the "Sales Executive");
WHEREAS, VCI entered into an Employment Agreement with the Sales
Executive, with a term commencing on January 17, 1994 and ending on the close of
business on June 30, 1997 (the "Employment Agreement"); and
WHEREAS, the Sales Executive has been promoted to the position of Vice
President, Midwest Sales Division; and
WHEREAS, the parties desire to enter into this Agreement to modify the
language of the Employment Agreement to be consistent with the new position of
the Sales Executive and to confirm all terms and provisions of the Employment
Agreement except as specifically amended herein;
NOW THEREFORE, in consideration of the mutual promises, convenants,
and agreements set forth below, it is hereby agreed as follows:
1. Section 2.(a) shall be amended to read as follows:
(a) Position. During the Employment Period, the Sales Executive shall
serve as Vice President, Midwest Sales Division.
2. Section 3. Compensation shall be amended to read as follows:
3. Compensation.
The Sales Executive shall receive the following compensation for his
services hereunder to the Corporation:
(a) Salary. The Sales Executive's annual base salary ("Annual Base
Salary"), payable not less often than biweekly, shall be at the annual rate of
not less than $175,000 commencing on the Effective Date. Subject to customary
oversight by the Board, and consistent with the authorities, duties and
responsibilities of the Chief Executive Officer of the Corporation as of January
1, 1992 the Chief Executive Officer of the Corporation may from time to time
direct such upward adjustments in Annual Base Salary as the Chief Executive
Officer of the Corporation deems to be necessary or desirable as a result of the
Sales Executive's performance, including without limitation adjustments in order
to reflect increases in the cost of living.
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(b) Annual Cash Bonus. With respect to each of VCI's 1995, 1996 and
1997 fiscal years, the Sales Executive shall be paid a cash bonus of up to 100%
of Annual Base Salary in accordance with Attachment A hereto and the targets set
by the Board provided, however, that 50% of any bonus payable hereunder, to the
extent to be paid for each fiscal year, shall be paid automatically and without
additional approval and the remaining 50% thereof shall be paid only if, and to
the extent, recommended and approved by the Chief Executive Officer of the
Corporation. (Should VCI change its present fiscal year [July 1 to June 30] to a
calendar fiscal year [January 1 to December 31], the Sales Executive shall be
entitled to a total of only 50% of the full bonus that is earned for calendar
year 1997.)
(c) Retirement, Incentive and Welfare Benefit Plans. During the
Employment Period and so long as the Sales Executive is employed by the
Corporation, he shall be eligible to participate in all incentive, savings,
retirement and welfare plans, practices, policies and programs including,
without limitation, Valassis Employees' Profit Sharing Plan, its 401(k)
Retirement Savings Plan, its Flex Plan, its death benefit plans, its disability
benefit plans, and its medical, dental and health and welfare plans (the
"Plans") applicable generally to employees and/or other executives of the
Corporation.
(d) Fringe Benefits. During the Employment Period and so long as the
Sales Executive is employed by the Corporation, the Corporation shall furnish an
automobile to the Sales Executive and pay all of the related expenses for
gasoline, insurance, maintenance and repairs, in each case on a basis
substantially equivalent to such fringe benefit provided to the Sales Executive
in the past.
(e) Expenses. The Corporation agrees to reimburse the Sales Executive
for all expenses, including those for travel and entertainment, properly
incurred by him in the performance of his duties hereunder in accordance with
policies established from time to time by the Board, and the Sales Executive
shall account to the Corporation for such expenses.
(f) Vacation and Other Absences. During the Employment Period and so
long as the Sales Executive is employed by the Corporation, he shall be entitled
to paid vacation and such other paid absences whether for holidays, illness,
personal time or any similar purposes, in accordance with the plans, policies,
programs and practices of the Corporation in effect from time to time.
3. Section 4.(b) Termination of Employment shall be amended to read as
follows:
(b) By the Corporation for Cause. The Corporation may terminate the
Sales Executive's employment during the Employment Period for Cause. For
purposes of this Agreement, "Cause" shall mean (i) the conviction of the Sales
Executive for the commission of a felony; (ii) action by the Sales Executive
involving willful
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malfeasance or gross negligence or failure to act by the Sales Executive
involving material nonfeasance, which, at the time of such willful malfeasance
or gross negligence or material nonfeasance, has a materially adverse effect on
the Corporation; or (iii) the failure by the Sales Executive to follow
directives of the Chief Executive Officer of the Corporation and/or the
Executive Vice President, Sales and Marketing or the failure to meet reasonable
performance standards established by such executives of the Corporation.
4. Section 5. Obligations of the Corporation Upon Termination shall be
amended to read as follows:
(a) Termination Other Than for Cause. During the Employment Period, if
the Corporation shall terminate the Sales Executive's employment (other than in
the case of a termination for Cause) or the Sales Executive's employment shall
terminate by reason of death or Disability (termination in any such case
referred to as "Termination"):
(i) the Corporation shall pay to the Sales Executive in a lump sum in
cash the sum of (1) the Sales Executive's Annual Base Salary through the
Date of Termination to the extent not theretofore paid and (2) any
compensation previously deferred by the Sales Executive (together with any
accrued interest or earnings thereon) and any accrued vacation pay, in each
case to the extent not theretofore paid (the sum of the amounts described
in clauses (1) and (2) shall be hereinafter referred to as the "Accrued
Obligations"). The amounts specified in this Section 5(a)(i) shall be paid
within 30 days after the Date of Termination; and
(ii) in the event of Termination other than by reason of the Sales
Executive's death or Disability, then beginning on the biweekly payment
date next following the Termination and on each biweekly payment date
thereafter until the end of the Employment Period (the period from such
Date of Termination until the end of the Employment Period herein called
the "Severance Period"), the Corporation shall pay to the Sales Executive
an amount equal to the biweekly installment of the Sales Executive's rate
of Annual Base Salary in effect as of such Date of Termination; and
(iii) in the event of Termination other than by reason of the Sales
Executive's death or Disability, the Corporation shall pay to the Sales
Executive in a lump sum in cash within 30 days after the date of
Termination a bonus in an amount equal to 100% of the maximum Annual Cash
Bonus for the fiscal year in which the event of Termination occurred,
whether or not earned; and
(iv) in the event of Termination other than by reason of the Sales
Executive's death or Disability, then, during the Severance Period, the
Corporation shall continue medical and welfare benefits to the Sales
Executive and/or the Sales
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Executive's family at least equal to those which would have been provided
if the Sales Executive's employment had not been terminated, such benefits
to be in accordance with the most favorable medical and welfare benefit
plans, practices, programs or policies (the "M&W Plans") of the Corporation
as in effect and applicable generally to other senior executives of the
Corporation and their families during the 90-day period immediately
preceding the Date of Termination or, if more favorable to the Sales
Executive, as in effect generally at any time thereafter with respect to
other executives of the Corporation (but on a prospective basis only
unless, and then only to the extent, such more favorable M&W Plans are by
their terms retroactive), provided, however, that if the Sales Executive
becomes reemployed with another employer and is eligible to receive medical
or other welfare benefits under another employer-provided plan, the
benefits under the M&W Plans shall be reduced as provided in Section 6 of
this Agreement. For purposes of determining eligibility of the Sales
Executive for benefits under the M&W Plans, the Sales Executive shall be
considered to have remained employed until the end of the Severance Period.
(b) Termination by the Corporation for Cause. Subject to the
provisions of Section 6 of this Agreement, if the Sales Executive's employment
shall be terminated for Cause during the Employment Period, the Corporation
shall have no further obligations to the Sales Executive under this Agreement
other than the obligation to pay to the Sales Executive Annual Base Salary
through the Date of Termination plus the amount of any compensation previously
deferred by the Sales Executive, in each case to the extent theretofore unpaid.
5. Section 7.(b) Confidential Information and Competitive Conduct
shall be amended to read as follows:
(b) Covenant Not to Compete or Solicit. During the Employment
Period, the Sales Executive shall not offer or sell any products or services
that compete for sales promotion dollars in any market with the business of VCI,
nor shall he render services to any firm, person or corporation so competing
with VCI, nor shall he have any interest, direct or indirect, in any business
that is so competing with the business of VCI, provided, however, that ownership
of 5% or less of any class of debt or equity securities which are publicly
traded securities shall not be a violation of this covenant. The foregoing
provisions of this Section 7(b) shall be extended, at the option of VCI for up
to two additional years after the end of the Employment Period so long as VCI
shall pay to the Sales Executive with respect to each year as to which it has
exercised its option an amount equal to the Annual Base salary in biweekly
installments during such year. The first year of such extension shall be
exercised at the option of VCI upon written notice to the Sales Executive not
later than 60 days prior to the
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end of the Employment Period. The second year of such extension shall be
exercised at the option of VCI upon written notice to the Sales Executive not
later than 60 days prior to the end of the exercised first year of such
extension. So long as the Sales Executive is employed hereunder, and for any
additional period of time described in the preceding sentences, the Sales
Executive shall not, directly or indirectly, (i) solicit any employee of VCI
with a view to inducing or encouraging such employee to leave the employ of VCI
for the purpose of being hired by the Sales Executive or any employer affiliated
with the Sales Executive or (ii) solicit, take away, attempt to take away, or
otherwise interfere with VCI's business relationship with any of its respective
customers.
6. All Other Terms Shall Remain in Full Force and Effect.
All other terms of the Employment Agreement shall remain in full force
and effect. This instrument, together with the Employment Agreement, contains
the entire agreement of the parties with respect to the subject matter thereof.
The amendments to the Employment Agreement contained in this Agreement shall be
effective as of May 9, 1994.
7. Relocation
The Sales Executive, in conjunction with his relocation assignment
from California to Illinois, shall receive the VCI Standard Relocation Package,
including but not limited to one month's Annual Base Salary ($14,584) and
$60,000 toward all real estate related costs in selling the Sales Executive's
present home in California and purchasing a new home in Illinois.
8. Commissions
The Sales Executive shall receive sales commissions on all outstanding
orders that have been sold and contracted by the Sales Executive dropped before
April 30, 1994 per VCI standard sales compensation policy.
IN WITNESS WHEREOF, the Sales Executive and VCI have caused this
Agreement to be executed as of the day and year first above written.
VALASSIS COMMUNICATIONS, INC.
By: Xxxxx X. Xxxxxxx
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Name: Xxxxx X. Xxxxxxx, Esq.
Secretary
Xxxxxxx X. Xxxxxxx
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Xxxxxxx X. Xxxxxxx
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ATTACHMENT A
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ANNUAL CASH BONUS
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Pursuant to Section 3(b) of Employment Agreement
1. "Cash Flow" shall mean (i) the gross operating revenues of the
company for such fiscal year derived in the ordinary course of its business from
continuing operations minus (ii) all operating expenses, which are defined as
the total cost of goods sold plus sales, general and administrative expenses,
but excluding (iii) depreciation, amortization, taxes paid or provided for,
interest expense, management fees, Annual Cash Bonus, Special Bonus, charges on
account of the exercise of stock options granted pursuant to the Stock Option
Plan, dividends, acquisition costs, other non-cash charges, other amounts paid
to any affiliate of the Company, all of the foregoing otherwise being determined
in accordance with generally accepted accounting principles. Interest income,
extraordinary items and gains or losses on sales or dispositions of property,
shall be excluded from the calculation of Cash Flow. Further, Cash Flow shall be
reduced by the amount of capital expenditures during such period.
2. The "Company" for the purposes of this agreement shall mean
Valassis Communications, Inc. and its subsidiaries.
3. Terms defined in the Employment Agreement entered into as of the
Effective Date among Xxxxxx Xxxxxxx and the Corporation unless otherwise defined
in this Attachment are used in this Attachment as so defined.
