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EXHIBIT 10
AMENDMENT TO EMPLOYMENT AGREEMENT
AND
NON-QUALIFIED STOCK OPTION AGREEMENTS
THIS AGREEMENT, entered into as of the 2nd day of June,
1998, by and between XXXXX X. XXXXXXX (hereinafter "Xx.
Xxxxxxx" or the "Executive") and VALASSIS COMMUNICATIONS,
INC., a Delaware corporation (hereinafter the "Corporation").
WHEREAS, Xx. Xxxxxxx has been employed by the Corporation as
its President and Chief Executive Officer pursuant to an
employment agreement dated March 18, 1992, as amended on June 18,
1993, July 9, 1995 and December 22, 1995, respectively
(collectively referred to herein as the "Employment Agreement")
and is a party to a Non-Qualified Stock Option Agreement with the
Corporation dated March 18, 1992, as amended on June 18, 1993 and
July 9, 1995 and a Non-Qualified Stock Option Agreement dated
December 8, 1997 (each of such option agreements collectively
referred to herein as the "Option Agreement") and has rendered
valuable services
to the Corporation; and
WHEREAS, it is the desire of Xx. Xxxxxxx that he relinquish
certain of his duties under the Employment Agreement, to amend
the Employment Agreement and the Option Agreement in various
respects and to resolve all matters arising out of or related to
Xx. Xxxxxxx'x employment with the Corporation and the change in
his duties with the Corporation;
NOW, THEREFORE, for and in consideration of the mutual
covenants and promises contained herein, the parties hereby agree
as follows:
1. VOLUNTARY RESIGNATION AND TERMINATION OF EMPLOYMENT. Xx.
Xxxxxxx hereby voluntarily resigns as President and Chief
Executive Officer of the Corporation. Xx. Xxxxxxx hereby agrees
to continue to serve as Chairman of the Board of the Corporation
until December 31, 1998 in a non-executive capacity at which
point he will resign his positions as Chairman of the Board and a
director of the Corporation.
2. AMENDMENTS TO AGREEMENTS. The Employment Agreement and
Option Agreement are hereby amended in the following respects:
(i) Section 1(b) of the Employment Agreement is hereby
amended to provide that the Employment Period will
terminate on December 31, 1998. The segment of the
Employment Period between July 1, 1998 and December 31,
1998 shall be referred to as the "Transition Period".
Notwithstanding any provision to the contrary, the
Executive's resignation of his position as President
and Chief Executive Officer of the Corporation shall be
considered an event under Section 5(a) of the
Employment Agreement, and the provisions of Section
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5(a), subject to amendments thereto contained in the
June 2, 1998 Amendment to Employment Agreement and Non-
Qualified Stock Option Agreements, shall apply.
Further, the Executive's resignation of his position as
Chairman of the Board and a director of the Corporation
shall be considered an Expiration of the Employment
Period under Section 5(a) of the Agreement, and the
provisions of Section 5(a), subject to amendments
thereto contained in the June 2, 1998 Amendment to
Employment Agreement and Non-Qualified Stock Option
Agreements, shall apply. After the Expiration of the
Employment Period, the Executive shall not be deemed to
be employed by the Corporation, and the provisions
pertaining to the Consulting Period shall apply.
(ii) Section 2(a) of the Employment Agreement is hereby
amended to read in its entirety as follows:
"Effective immediately, the Executive shall serve
as Chairman of the Board of Directors in a
non-executive capacity with such authorities,
duties and responsibilities as shall be
reasonably determined by the Board of
Directors from time to time. The Executive
shall preside at Board meetings but shall have
no executive duties and shall not be
considered an employee of the Corporation.
The Executive shall no longer be obligated to
serve as a director of any of the
Corporation's subsidiaries or affiliates."
(iii) Sections 2(b) and 2(c) of the Employment
Agreement are hereby deleted.
(iv) Section 2(d) of the Employment Agreement is hereby
amended to read in its entirety as follows:
"During any severance period (as hereinafter
defined) and for a period of ten years
thereafter or for a period of ten years
following the Expiration of the Employment
Period or at the option of the Corporation for
a period of ten years following the voluntary
termination of employment by the Executive
during the Employment Period (excluding a
termination for Good Reason), the Executive
shall serve as a Consultant to the Corporation
(the "Consulting Period") on the terms
hereinafter set forth. During the Consulting
Period, the Executive shall not be required to
serve as a Consultant to the Corporation
during any period in which, as a result of any
public office held by the Executive at that
time, the Executive, in his sole discretion,
determines that such consulting or service
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would be unethical or inappropriate. During
the Consulting Period, the Executive shall
furnish at the request of the Corporation
advisory and consulting services. The
Executive shall not be obligated to consult
with the Corporation more than 48 hours in any
one calendar quarter. During the Consulting
Period, the Executive shall be free to accept
other employment and engage in other business
endeavors, subject in all respects to the
other provisions of this Agreement, including,
without limitation, the provisions of Section
8 hereof."
(v) Section 3(a) of the Employment Agreement is hereby
amended to read in its entirety as follows:
"From the date hereof until June 30, 1998, the
Executive shall be paid a salary at a rate of
$1,000,000 per year. During the Transition
Period, the Executive shall be paid an
aggregate fee of $500,000 for his services as
Chairman of the Board of the Corporation. The
Corporation shall pay such amounts to the
Executive on a biweekly basis. All other
terms and provisions of Section 3(a) are
hereby deleted."
(vi) Section 3(b) of the Employment Agreement shall be
amended to read in its entirety as follows:
"With respect to the semi-annual period ending
June 30, 1998, the Executive shall be entitled
to receive a semi-annual cash bonus of up to
$500,000 in accordance with the Valassis
Communications, Inc. Senior Executives Annual
Bonus Plan, as amended by Amendment 1 thereto.
In addition, the Executive shall receive
15,000 shares of the Corporation's Common
Stock under the Executive Restricted Stock
Plan. The restrictions on such 15,000 shares
shall be waived as of June 30, 1998."
(vii) Section 3(e) of the Employment Agreement is
hereby amended to read in its entirety as follows:
"During the Transition Period segment of the
Employment Period, the Executive shall be entitled
to participate in the Corporation's medical, dental
and prescription drug plans (the "Health Benefit
Plans"), as well as the Corporation's disability
and life insurance plans. During the Consulting
Period, the Executive shall be entitled to
participate in the Corporation's Health Benefit
Plans. Such Health Benefit Plans shall be equal to
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the health benefit plans the Corporation generally
provides to employees and/or other senior
executives of the Corporation."
(viii) Section 3(f) of the Employment Agreement shall
be amended in its entirety to provide that the
Executive shall be reimbursed for all reasonable
expenses properly incurred by him in connection with
the performance of his duties as Chairman of the Board,
and the Executive shall account to the Corporation for
such expenses.
(ix) Section 3(h) of the Employment Agreement shall be
amended in its entirety to provide that the Executive
shall vacate his office at the Corporation's
headquarters no later than July 31, 1998, and the
Corporation shall have no obligation after such date to
provide the Executive with office and support staff.
(x) Section 3(i) of the Employment Agreement shall be
hereby modified to provide that the Executive's use of
the corporate plane for both business and non-business
reasons (provided that the Executive shall reimburse
the Corporation as the Corporation may direct for the
direct costs of any such non-business related use)
shall extend only until June 30, 1998.
(xi) The Executive shall be entitled to the vacation
and other benefits provided in Section 3(j) until June
30, 1998 at which time such benefits shall cease.
(xii) Section 5 of the Employment Agreement is hereby
amended to provide that all references to the
Executive's Annual Base Salary shall mean salary at a
rate of $1,000,000 per year and all references to the
Executive's Annual Cash Bonus shall be to the $500,000
bonus that the Executive is eligible to receive under
Section 3(b); provided, however, that the date of
termination is prior to June 30, 1998. In addition,
Section 5(a)(iv)(b) shall be deleted in its entirety.
The last two sentences of Section 5(b) shall be amended
to read as follows:
"Notwithstanding the foregoing, if the Corporation
exercises its option under Section 2(d) for a
Consulting Period or if the Consulting Period
otherwise applies (provided, however, that in no
circumstance will the Executive be entitled to
receive compensation under this section and
Section 5(a)(iii)), the Corporation shall pay to
the Executive for the duration of any such
Consulting Period as follows: For the first three
years of any such Consulting Period, the
Corporation shall pay to the Executive an amount
equal to the biweekly installment of the
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Executive's rate of Annual Base Salary in effect
as of the date the Executive terminates
employment. If the Consulting Period continues
thereafter, the Corporation shall pay to the
Executive at the same frequency an amount equal to
one-half of such biweekly installment for the
balance of the term of the Consulting Period."
(xiii) Section 11(b) of the Employment Agreement is
hereby amended to change the addresses of the parties
as follows:
If to the Executive:
Xxxxx X. Xxxxxxx
00000 Xxxxxxx Xxxxx Xxxxx
Xxxxxxxx, XX 00000
If to the Corporation:
c/o Valassis Communications, Inc.
00000 Xxxxxx Xxxxxxx
Xxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxxx, Esq.
The reference to CPH shall be hereby deleted.
(xiv) Section 14 of the Employment Agreement shall be
deleted in its entirety.
3. AMENDMENTS TO THE OPTION AGREEMENT. The Non-Qualified
Stock Option Agreement dated as of December 8, 1997, between
the Executive and the Corporation (the "December Option
Agreement") is hereby amended in the following respects:
(i) Section 2 of the December Option Agreement is
hereby amended to provide that the Option shall be
exercisable for 100% of the Common Shares which are
subject to the Option as of the date hereof.
(ii) Section 3 of the December Option Agreement is
hereby amended to add a new subsection (c) to read as
follows:
"The Option shall be exercisable by you until
June 30, 1999."
4. UNAMENDED TERMS; EFFECTIVENESS. All other terms of the
Employment Agreement and the Option Agreement shall remain in
full force and effect. The amendments to the Employment
Agreement and the Option Agreement contained in this Agreement
shall be effective from and after the date of this Agreement.
5. RESTRICTED STOCK. The Corporation confirms to the
Executive that as of June 30, 1998, the one-year restriction
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lapses with respect to (i) the 30,000 shares of restricted
stock issued to the Executive for Fiscal Year 1997 pursuant to
the Employment Agreement and (ii) all outstanding matches of
restricted stock issued to Xx. Xxxxxxx pursuant to the
Corporation's Employee and Director Restricted Stock Award
Plan.
6. SETTLEMENT PROVISIONS. The Executive shall promptly
settle all matters relating to travel and entertainment
expenses incurred prior to the date hereof.
7. NON-DISCLOSURE OF THIS AGREEMENT. The Corporation and
the Executive agree to keep confidential and not disclose or
divulge the terms and conditions of this Agreement to any third
party, except:
(a) in connection with any actions or proceedings
to enforce the terms and conditions of this
Agreement;
(b) as compelled by a court of competent
jurisdiction;
(c) to their respective accountants and lawyers;
(d) reporting the income payable to the Executive
under this Agreement to the Internal Revenue
Service; and/or
(e) in accordance with the Corporation's
disclosure policies and as may be required by
applicable securities laws or stock exchange
rules; and/or
(f) the Company and the Executive shall mutually
agree on the text of a press release to be
issued immediately following the execution of
this Agreement.
8. MUTUAL RELEASE.
8.1. BY THE CORPORATION. The Corporation, for itself, its
successors and its assigns, hereby releases and forever
discharges the Executive and his successors and assigns from
any and all claims, actions, suits, proceedings, agreements,
debts, promises, judgments and demands whatsoever, known or
unknown, which the Corporation ever had, now has or hereafter
can, shall or may have, from the beginning of time through the
date of this Agreement, from whatever source arising,
including, but not limited to, any claims which the Corporation
may have under any contract or policy, whether such contract or
policy is written or oral, express or implied, and any claims
which the Corporation may have based upon any federal, state or
local statutes, orders or regulations concerning discrimination
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on any account or claims of libel, slander, defamation or
damage to professional reputation.
8.2. BY THE EXECUTIVE. The Executive, for himself, his
successors and his assigns hereby releases and forever
discharges the Corporation, its subsidiaries and each of their
respective directors, officers and employees from any and all
claims, actions, suits, proceedings, agreements, debts,
promises, judgments and demands whatsoever, known or unknown,
which the Executive ever had, now has or hereafter can, shall
or may have, from the beginning of time through the date of
this Agreement, from whatever source arising, including, but
not limited to, any claims which the Executive may have under
any contract or policy, whether such contract or policy is
written or oral, express or implied, and any claims which the
Executive may have based upon any federal, state or local
statutes, orders or regulations concerning discrimination on
account of race, color, creed or religion, sex, national
origin, age, handicap or disability, marital status, height,
weight, sexual preference or sexual orientation, equal pay or
any other category protected by law, including the Federal Age
Discrimination in Employment Act; any claim relating to claims
of libel, slander, defamation or damage to professional
reputation; and any vacation pay, sick leave, health insurance,
life insurance, disability benefits, severance or unemployment
insurance benefits, retirement or social security benefits,
workers' compensation or any other form of fringe, welfare, or
retirement benefits paid or given to the Executive prior to the
date of this Agreement.
8.3. EFFECT. The releases set forth in Sections 8.1 and
8.2 shall not release any claim, demand, right, or cause of
action of any kind that either the Executive or the Corporation
may have on account of or in any way arising out of or related
to a breach of the terms and provisions of this Agreement or
any breach of the terms and provisions of the Employment
Agreement and the Option Agreement arising after the date
hereof.
9. ACKNOWLEDGEMENT. The Executive understands and agrees
that he:
(a) has carefully read and understands all of the
provisions of this Agreement;
(b) is by this Agreement releasing the Corporation
from any and all claims he may have against
it;
(c) knowingly and voluntarily agrees to all of the
terms set forth in this Agreement;
(d) knowingly and voluntarily intends to be
legally bound by the same;
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(e) has been separately represented by his
respective legal counsel prior to executing
this Agreement.
10. MISCELLANEOUS.
10.1. NOTICES. The provisions regarding notices in the
Employment Agreement are hereby incorporated in this Agreement
as though set forth in full herein.
10.2. ENTIRE AGREEMENT. This instrument, together with
the Employment Agreement and the Option Agreement, contains the
entire agreement of the parties with respect to the subject
matter hereof. The provisions of this Agreement may not be
amended, modified or waived orally but only by an instrument in
writing signed by the party to be charged.
10.3. SEVERABILITY. In case any one or more of the terms
or provisions contained in this Agreement shall for any reason
be held invalid, illegal or unenforceable, such invalidity,
illegality or unenforceability shall not affect any other terms
or provisions hereof, but such term or provision shall be
deemed modified or deleted as or to the extent required by
applicable law, and such modification or deletion shall not
affect the validity of the other terms or provisions of this
Agreement.
IN WITNESS WHEREOF, the parties hereto have duly executed
this Agreement as of the day and year first above written.
VALASSIS COMMUNICATIONS, INC.
By: _________________________________
_____________________________________
Xxxxx X. Xxxxxxx
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