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Exhibit 10.3
AMENDMENT TO EMPLOYMENT AGREEMENT
This AMENDMENT ("Amendment") to the EMPLOYMENT AGREEMENT by and between
VALUEVISION INTERNATIONAL, INC., a Minnesota corporation (hereinafter referred
to as "Employer") and XXXXXXXX X. XXXXXXX (hereinafter referred to as
"Employee"), dated September 1, 1993 ("Employment Agreement"), is made this 5th
day of January, 1998.
WHEREAS, in connection with the proposed merger between the
Employer and National Media Corporation, a Delaware corporation ("NMC"),
pursuant to the Agreement and Plan of Reorganization of Merger ("Merger
Agreement"), dated as of the date hereof between the Employer, NMC and X-X
HOLDINGS CORP., a Delaware Corporation ("Parent"), the Employer and the Employee
wish to modify certain provisions of the Employment Agreement effective as of
the Effective Time, as defined in the Merger Agreement, ("Effective Time"); and
WHEREAS, the Employer and Employee further wish to amend the
Employment Agreement to reflect the changes to Employee's incentive
compensation, as provided in the Employment Agreement, that were previously
approved pursuant to resolutions adopted by the unanimous written consent of the
Board of Directors of the Employer effective July 1, 1995.
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:
1. The first sentence of Paragraph 3 of the Employment
Agreement is amended to read as follows effective as of the Effective Time:
"Employee shall serve as President and Chief Operating Officer
of the Employer and the Parent and perform such other duties
as assigned by the Board of Directors of Employer ("Board")
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 the
Board so long as such duties are consistent with
responsibilities of executives with similar positions in the
consumer product, retail or direct marketing businesses with
total sales in excess of $100,000,000 annually."
2. Paragraph 4(c) of the Employment Agreement shall be amended
to read in its entirety effective July 1, 1995, as follows:
"c. As incentive compensation to Employee ("Incentive
Compensation"), Employer shall grant to Employee, pursuant to
the Valuevision International, Inc.
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1994 Executive Stock Option and Compensation Plan ("Executive
Plan"), two series of Employee Stock Options to purchase its
Class A Common Stock (collectively "Options"), the first to be
known as the "$8.50 Options" to be granted to Employee with an
exercise price of $8.50 each, for a total number of 375,000
shares on terms set forth below, with an exercise period of
seven years from January 31, 1995, and the second series to be
known as the "$10.50 Options" to be granted to Employee with
an exercise price of $10.50 each, for a total number of
375,000 shares on terms set forth below, with an exercise
period of ten years from January 1, 1995. Options shall become
exercisable by Employee on the earlier to occur of (i) January
1, 2002, and (ii) should net income before taxes of Employer,
as calculated in accordance with generally accepted accounting
principles by the outside auditor regularly engaged by
Employer ("Net Income"), exceed the following amounts during
each fiscal year of Employer during the term hereof, the first
day of the following fiscal year thereof:
"(i) For the first fiscal year ended January 31,
1995, if Net Income is $2,000,000 or greater, Employee shall
be entitled to exercise 75,000 $8.50 Options and 75,000 $10.50
Options.
"(ii) For the second fiscal year ended January 31,
1996, if Net Income is $5,250,000 or greater, Employee shall
be entitled to exercise 75,000 $8.50 Options and 75,000 $10.50
Options.
"(iii) For third fiscal year ended January 31, 1997,
if Net Income is $8,500,000 or greater, Employee shall be
entitled to exercise 75,000 $8.50 Options and 75,000 $10.50
Options.
"(iv) For the fourth fiscal year ended January 31,
1998, if Net Income is $11,750,000 or greater, Employee shall
be entitled to exercise 75,000 $8.50 Options and 75,000 $10.50
Options.
"(v) For the fifth fiscal year ended January 31,
1999, if Net Income is $15,000,000 or greater, Employee shall
be entitled to exercise 75,000 $8.50 Options and 75,000 $10.50
Options.
"(vi) In the event that the Company fails to achieve
a Net Income Goal in any years, Employee will be able to
exercise the options attributable to such "missed" year if in
a subsequent year the Company's Net Income is greater than or
equal to such subsequent year's Net Income Goal plus the Net
Income Goal for the missed year. For example, in the event Net
Income for the fiscal year ended January 31, 1997, is
$10,500,000, Employee shall not be able to exercise Options
available for the fiscal year January 31, 1995 (if Options
were not earned or purchased for the fiscal year ended January
31, 1995); however, if Net Income exceeds $13,750,000 in the
fiscal year ended January 31, 1997, Employee will be able to
exercise Options if they were not previously purchased during
the immediately preceding fiscal year ended January 31, 1996.
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"(vii) Notwithstanding anything to the contrary set
forth hereinabove, the grant of the Options to Employee is
expressly subject to and contingent upon the Employer
obtaining shareholder approval of the Executive Plan pursuant
to Section 16(b)(3) of the Securities Exchange Act of 1934, as
amended. Employer shall take all actions reasonably necessary
to obtain such approval. If the Executive Plan is not approved
by the shareholders of the Employer on or before the next
annual meeting, this Employment Agreement shall be null and
void and of no effect whatsoever."
3. The following Paragraph 4(e) shall be added to the
Employment Agreement:
"(e) Stock Options. Effective immediately prior to the
Effective Time, Employer shall grant to Employee pursuant to
the Executive Plan, Stock Options to purchase 250,000 shares
of the Employer's Common Stock. The exercise price of each
share subject to any such Stock Option shall be equal to the
fair market value of such share as of the date the Stock
Option is granted. Such Stock Options shall become exercisable
to the extent of, and in installments of, one-third of such
Stock Options, commencing on January 31, 1999 and on every
anniversary date thereafter. Such installments shall be
cumulative and shall continue to vest so long as the Employee
shall continue to be employed by the Employer hereunder.
Notwithstanding the foregoing, if prior to January 31, 1999,
the average trading price of the common stock of the Parent
for any ten (10) consecutive day period exceeds an amount
equal to $8.00 per share, all of such Stock Options shall
accelerate and become immediately exercisable on the tenth day
of such period."
4. Indemnification. The Employer shall indemnify and hold
harmless the Employee, his executors, administrators or assigns, against any
costs or expenses (including attorneys' fees), judgments, fines, losses, claims,
damages, liabilities or amounts paid in settlement incurred in connection with
any claim, action, suit, proceeding or investigation, whether civil, criminal,
administrative or investigative, to the fullest extent permitted under
applicable law and shall also advance expenses as incurred to the fullest extent
permitted under applicable law, provided that the Employee provides an
undertaking to repay such advances if it is ultimately determinated that he is
not entitled to such indemnification.
5. Except to the extent expressly modified by this Amendment,
the Employment Agreement shall remain in full force and effect in accordance
with its original terms. The Employment Agreement, as amended by this Amendment,
constitutes the entire agreement between the parties pertaining to the subject
matter hereof and fully supersedes any and all prior or contemporaneous
agreements or understandings between the parties hereto pertaining to the
subject matter hereof.
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IN WITNESS WHEREOF, the parties have executed this Amendment
as of the date first above written.
EMPLOYER: VALUEVISION INTERNATIONAL, INC.
a Minnesota corporation
By: /s/ Xxxxx Xxxxxx
Its: Vice President and General Counsel
EMPLOYEE:
/s/ Xxxxxxxx X. Xxxxxxx
Xxxxxxxx X. Xxxxxxx
APPROVED:
/s/ Xxxx X. Xxxxxxx
Director, Compensation Committee Member
On Behalf of ValueVision International, Inc.
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