Exhibit 99.2
AGREEMENT
THIS AGREEMENT is made by and among (i) XXXXX X. XXXX ("Xxxx"), (ii) XXX XXXXXXX
("Xxxxxxx") (Xxxx and Xxxxxxx are hereinafter together referred to as the
"Shareholders"), and (iii) XXXX XXXXXX ("Xxxxxx").
RECITALS:
A. The Shareholders desire to induce Xxxxxx to enter into an Employment
Agreement dated on or about the date hereof (the "Employment Agreement") with
Value America, Inc. (the "Company"). The Shareholders own a significant
percentage of the outstanding and issued shares of the Company.
B. The Shareholders have agreed to make an additional payment to Xxxxxx in
the event Xxxxxx' employment by the Company is terminated by the Company other
than for death, "Disability," or "Due Cause" (as such terms are defined in
Section 4(d) and Section 4(e) of the Employment Agreement) and provided that an
election not to renew the term of the Employment Agreement shall not be deemed a
termination of employment by the Company, which termination takes place during
the period beginning one (1) year prior to a "Change of Control" and ending on
the 5th anniversary of Xxxxxx' employment (such a termination within such time
period being a "Triggering Termination"). For purposes hereof, "Change of
Control" has the meaning set forth in Section 2(f) of the Company's 1997 Stock
Incentive Plan, as amended, except that in subparagraph (i) thereof, the
percentage "50%" shall be changed to "67%" and in subparagraph (ii) thereof, the
introductory clause "Approval by the shareholders of the Company of" shall be
changed to "Consummation by the Company of."
For good and valuable consideration (including, without limitation, the
benefits to the Shareholders as shareholders of the Company), the parties
hereto, intending to be legally bound, do hereby agree as follows:
1. Terms used herein and not otherwise defined shall have the meanings
attributed to them in the Employment Agreement and the agreements related
thereto.
2. Each of Xxxx and Xxxxxxx, severally, but not jointly, agrees to pay to
Xxxxxx, fifty percent (50%) of any "Loss Amount" (as hereinafter defined) if
there is a Triggering Termination of Xxxxxx' employment by the Company.
3. Loss Amount shall mean the lesser of (i) $10,000,000 and (ii) the
product of (A) the aggregate number of unvested Option Shares on the day after
the date (the "Termination Date") of the Triggering Termination under the
Non-Qualified Stock Option Agreement granted pursuant to the Notice of Grant
dated March 26, 1999 and under the Incentive Stock Option Agreement granted
pursuant to the Notice of Grant dated March 26, 1999 and (B) the excess, if any,
of (x) the Fair Market Value (as defined in Section 2(m) of the Company's 1997
Stock Incentive Plan, as amended) of an Option Share on the Termination Date
over (y) Five Dollars ($5.00) (subject to appropriate pro rata adjustment in the
event of a stock split, subdivision or other similar capital event) per share
less than the exercise price per Option Share on the Termination Date.
4. Each of Xxxx and Xxxxxxx shall pay 50% of the Loss Amount to Xxxxxx
within 30 days after the later of the date of Change of Control or Termination
Date. Such payment shall either be in cash or in the form of the consideration
received by Xxxx and Xxxxxxx in the Change of Control, as determined by Xxxx and
Xxxxxxx in their sole, individual and absolute discretion. In the event any
payment hereunder would adversely effect or prohibit a pooling of interest
treatment for such Change of Control Xxxxxx agrees that such payment may be
delayed, but not more than 18 months, to the earliest date that it can be made
without adversely affecting or prohibiting a pooling of interest treatment. If,
as a result of the operation of the preceding sentence, payment to Xxxxxx is
delayed, Xxxxxx shall be entitled to interest on the amount to which he is
entitled from the due date thereof until paid at the rate of eight percent (8%)
per annum.
5. In the event either Shareholder fails to pay any amount due hereunder on
the date such sum is due and payable and such failure continues for fifteen (15)
days after written notice thereof by Xxxxxx to such Shareholder, Xxxxxx shall be
entitled to collect interest at the rate of ten percent (10%) per annum on such
defaulted payment until paid, together with all reasonable costs of collection,
including reasonable attorneys' fees and expenses.
6. No party may assign this Agreement or any rights or obligations
hereunder without the consent of all other parties. Notwithstanding the
foregoing, this Agreement shall inure to the benefit of the heirs and estate of
Xxxxxx. This Agreement contains the entire agreement among the parties with
respect to the subject matter hereof and supersedes all prior and
contemporaneous oral or written agreements or understandings among the parties
with respect to such subject matter. This Agreement is in addition to the
Employment Agreement and all other agreements between the Company and Xxxxxx.
Xxxxxx' rights hereunder are in no way limited by any provision of the
Employment Agreement or its related agreements. This Agreement may only be
amended in a writing signed by all parties hereto.
Counsel This Agreement has been prepared by XxXxxxx Xxxx, A Professional
Corporation, as counsel to the Company ("Counsel"), after full disclosure of its
representation of the Company, and with the consent and direction of the
Shareholders and Xxxxxx. Shareholders and Xxxxxx have reviewed the contents of
this Agreement and fully understand its terms. Shareholders and Xxxxxx
acknowledge that they are fully aware of their right to the advice of counsel
independent from that of Company, that Counsel has advised Shareholders and
Xxxxxx of such rights and has disclosed to Shareholders and Xxxxxx the risks in
not seeking such independent advice, and they understand the potentially adverse
interests of the parties with respect to this Agreement. Shareholders and Xxxxxx
further acknowledge that no representations have been made to them with respect
to the tax or other consequences of this Agreement and that they have been
advised of the importance of seeking independent counsel with respect to such
consequences. By executing this Agreement, Shareholders and Xxxxxx represent
that after being advised of the potential conflicts between the Company, the
Shareholders and Xxxxxx with respect to future consequences of this Agreement.
Shareholders and Xxxxxx have either consulted independent counsel or elected not
to consult with independent legal counsel, notwithstanding the advisability of
seeking independent legal counsel.
IN WITNESS WHEREOF, each of the parties has executed and delivered this
Agreement as of March 15, 1999.
/s/ Xxxxx X. Xxxx (SEAL)
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Xxxxx X. Xxxx
/s/ Xxx Xxxxxxx (SEAL)
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Xxx Xxxxxxx
/s/ Xxxx Xxxxxx (SEAL)
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Xxxx Xxxxxx