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Exhibit 10.48
EMPLOYMENT AGREEMENT
THIS AGREEMENT made as of the 30th day of April, 2000, by and between
ValueVision International, Inc., a Minnesota corporation (hereinafter referred
to as "Employer"), and Xxxxxx Xxxxx (hereinafter referred to as "Employee").
WITNESSETH:
WHEREAS, Employer desires to obtain the services of Employee and Employee
desires to be employed by Employer as an employee on the terms and conditions
set forth below;
NOW, THEREFORE, in consideration of the premises and mutual promises
contained in this Agreement, the parties hereto agree as follows:
1. Employment. Employer agrees to employ Employee and Employee agrees to
be employed by Employer on the terms and conditions set forth in this
Agreement.
2. Term. The term of Employee's employment hereunder shall commence on
the date hereof and shall continue on a full-time basis until the
third anniversary of the date hereof (the "Term"), provided that
Employee shall not commence working or receive any compensation until
May 1, 2000. The "Employment Period" for purposes of this Agreement
shall be the period beginning on the date hereof and ending at the
time Employee shall cease to act as an employee of Employer.
3. Duties. Employee shall serve as Senior Vice President and General
Counsel of Employer reporting to Employer's Chairman and Chief
Executive Officer 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 four (4)
weeks during each year of the Term except for two (2) weeks during
calendar year 2000, or such additional vacation allowance as may be
granted in the sole discretion of Employer. Employer's Chairman and
Chief Executive Officer shall provide Employee with a performance
review at least annually.
4. Compensation. Employee's compensation for the services performed under
this Agreement shall be as follows:
a. Base Salary. Employee shall receive a base salary of at least Two
Hundred Thousand and No/100 Dollars ($200,000.00) per year for
the Term of this Agreement ("Base Salary").
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b. Bonus Salary. Employee shall receive bonus salary ("Bonus
Salary") within 90 days after each of Employers' fiscal years
during the Term of this Agreement of up to $100,000 based on the
following calculation: $25,000 if ValueVision obtains an
operating profit equal to at least 1% of net sales, an additional
$25,000 if ValueVision obtains a net operating profit of at least
2% of net sales, an additional $25,000 if ValueVision obtains a
net operating profit of at least 3% of net sales and an
additional $25,000 if ValueVision obtains a net operating profit
of at least 4% of net sales, unless prior to such date,
Employee's employment shall be terminated pursuant to Sections
6.c. or 6.d. hereof. Employer may in its discretion pay Employee
bonus amounts greater than the Bonus Salary as calculated above
in any fiscal year.
c. Automobile Allowance. Employer shall pay Employee a monthly
automobile allowance of $550.00 per month ("Auto Allowance").
d. Moving Expenses. Employer shall pay for the normal household
moving expenses associated with Employee's move to Minneapolis
from California ("Moving Expenses") in accordance with Employer's
relocation expense policy previously provided to Employee.
5. Other Benefits During the Employment Period.
a. 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.
b. 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.
c. 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.
6. Termination of Employment.
a. 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, except that, Employee shall receive Bonus Salary
prorated for the number of months to date of death.
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b. 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
except that, Employee shall receive Bonus Salary prorated for the
number of months to date of disability; 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.
c. 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. In addition, Employee shall repay
Employer on a pro-rata basis (calculated based on the remaining
months in the Term), the Moving Expenses.
d. 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. In addition, Employee shall repay Employer
on a pro-rata basis (calculated based on the remaining months in
the Term), the Moving Expenses. 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. In addition, Employee
shall repay Employer on a pro-rata basis (calculated based on the
remaining months in the Term), the Moving Expenses.
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)
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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
(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 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.
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 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.
7. 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
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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.
8. 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.
9. Noncompete and Related Agreements.
a. 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 and infomercial business, any mail order or internet
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 or internet sites 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 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
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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 date of this Agreement 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.
b. 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.
c. 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.
d. Employee represents and warrants to Employer that he is not
subject to any existing noncompetition or confidentiality
agreements which would in any way limit him from working in the
television home shopping, catalog, infomercial or internet
businesses, or from performing his duties hereunder or subject
Employer to any liability as a result of his employment
hereunder. Employee agrees to indemnify and hold Employer and its
affiliates harmless from and against any and all claims,
liabilities, losses, costs, damages and expenses (including
reasonable attorneys' fees) arising as a result of any noncompete
or confidentiality agreements applicable to Employee.
10. Termination of Existing Agreements. This Agreement 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.
11. 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
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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.
12. Sale, Consolidation or Merger. In the event of a sale of the stock, or
substantially all of the stock, of Employer, or consolidation or
merger of Employer with or into another corporation or entity, or the
sale of substantially all of the operating assets of Employer to
another corporation, entity or individual, Employer may assign its
rights and 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.
13. Stock Options. Employee is being granted non-qualified stock options
for 200,000 shares of ValueVision International, Inc. common stock
("Stock Options") with an exercise price of $19.9375 per share (being
the per share closing price of Employer's common stock on the last
trading day immediately preceding the date hereof), subject to the
provisions of and exercisable at the time or times established by the
stock option agreement representing the Stock Options (the "Stock
Option Agreement"). The Stock Options vest in equal amounts as
follows: one-third on the date of grant, one-third on the first
anniversary of the date of grant, and one-third on the second
anniversary of the date of grant. 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.).
14. 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.
15. 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.
16. 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.
17. 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.
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18. 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.
19. Amendment. This Agreement may be amended only by an agreement in
writing signed by the parties hereto.
20. 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.
21. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of Minnesota.
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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/ Xxxx XxXxxxxxx
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Its: Chief Executive Officer
EMPLOYEE: /s/ Xxxxxx Xxxxx
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Xxxxxx Xxxxx
