EXHIBIT 10.2
SALARY CONTINUATION AGREEMENT
THIS SALARY CONTINUATION AGREEMENT (this "Agreement") made as of the
2nd day of July, 2003, by and between ValueVision Media, Inc., a Minnesota
corporation (the "Company"), and_______________, a resident of Minnesota
("Employee").
BACKGROUND
A. The Company considers the establishment and maintenance of a sound
and vital management to be essential to protecting and enhancing the best
interests of the Company and its shareholders.
B. The Company wishes to provide Employee with severance arrangements
in the event of Employee's termination of employment under certain
circumstances, and to receive from Employee certain agreements and covenants, as
set forth in this Agreement.
C. In consideration of the premises and mutual promises contained in
this Agreement, the parties hereto agree as follows.
AGREEMENT
1. Termination of Employment.
(a) Termination Date. Employee's employment with the Company or
any affiliate of the Company may be terminated by the Company
or by Employee at any time for any reason. Employee's
employment will terminate immediately upon the death or
Disability of Employee. The date upon which Employee's
termination of employment is effective shall be the
"Termination Date."
(b) Termination By the Company For Cause or By Employee Without
Good Reason. If the Company terminates Employee's employment
for Cause, or if Employee terminates Employee's employment
without Good Reason, the Company will pay to Employee the base
salary and other compensation, if any, earned through the
Termination Date, in accordance with the regular policies and
practices of the Company. Employee will not be entitled to
receive any other salary or compensation from the Company
following the Termination Date.
(c) Termination By Employee for Good Reason or By Company Without
Cause.
(1) Payments. Subject to Section 18(a), if Employee gives
written notice of intention to terminate Employee's
active employment for Good Reason or if the Company
gives written notice of intention to terminate
Employee's active employment for any reason other
than Cause, death or Disability (the date of delivery
of such notice to the other party, the "Notice
Date"),
then Employee will continue as an inactive employee
on the Company's payroll during the Severance Period
(as defined below), and during the Severance Period
will provide the consultation services to the Company
pursuant to Section 19, and the Company will pay to
Employee the base salary and other compensation, if
any, earned through the Notice Date, in accordance
with the regular policies and practices of the
Company, and, subject to Section 2 below, will also:
(A) pay to Employee the actual bonus award,
under any bonus plan or program in which
Employee is a participant as of the Notice
Date, that Employee would have received for
the fiscal year in which the Notice Date
occurs, prorated for the number of days from
the beginning of the fiscal year until the
Notice Date, and payable at the time that
bonus payments for such fiscal year are paid
to other executive employees of the Company;
(B) pay to Employee, in a lump-sum payment
within 25 business days following the Notice
Date, an amount equal to the annual bonus
objective or target for such Employee for
the fiscal year in which the Notice Date
occurs;
(C) continue to pay to Employee as severance
pay, in accordance with the regular payroll
practices of the Company for a period of
twenty-four (24) months following the Notice
Date (the "Severance Period"), an amount
equal to Employee's base salary plus auto
allowance, at the rates in effect on the
Notice Date or at such higher rates, if any,
in effect during the one-year period
immediately preceding the Notice Date;
(D) if Employee is eligible for and elects
continuation coverage under the Company's
group medical, dental or life insurance
plans, pay on Employee's behalf or reimburse
Employee for (such payment method to be at
the Company's option) the premiums Employee
is required to pay to continue such coverage
from the Notice Date until the earlier of
(i) twenty-four (24) months following the
Notice Date, (ii) the date on which Employee
becomes eligible for other group medical,
dental or life insurance benefits from
another employer, and (iii) the date on
which such continuation coverage ends in
accordance with the terms of the applicable
plans and laws, provided that if the
Company's payments hereunder are taxable to
Employee the Company shall gross up such
premium payments to cover estimated federal,
state, and local taxes on such payments as
determined in good faith by the Company. For
the avoidance of doubt, Employee will not be
eligible to participate in the Company's
401(k) plan following the Notice Date; and
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(E) pay to Employee, in a lump sum in accordance
with the Company's regular policies and
practices, all accrued and unused vacation
time earned through the Notice Date.
(2) Options and Restricted Stock. Subject to Section
18(a), if Employee terminates Employee's employment
for Good Reason or if the Company terminates
Employee's employment for any reason other than
Cause, death or Disability, and if Employee has been
granted any stock options or restricted stock by the
Company, unless otherwise provided in any plan or
agreement applicable to any stock options or
restricted stock granted to Employee prior to the
date of this Agreement:
(A) the vesting of such options or stock which
have not yet vested will accelerate and vest
in full as of the last day of the Severance
Period; and
(B) Employee will have a period of 90 days from
the last day of the Severance Period in
which to exercise any stock options granted
by the Company, and after such date, any
stock options which have not been exercised
will be cancelled and be null and void.
(d) Termination Due to Disability. Employee's employment with the
Company or any affiliate of the Company will be deemed to
terminate immediately upon a Disability of Employee. If
Employee's employment terminates due to Disability, the
Company will pay to Employee the base salary and other
compensation, if any, earned through the Termination Date, in
accordance with the regular policies and practices of the
Company, and will also pay the actual bonus award, under any
bonus plan in which Employee is a participant as of the
Termination Date, that Employee would have received for the
fiscal year in which the Termination Date occurs, prorated for
the number of days from the beginning of the fiscal year until
the Termination Date, and payable at the time that bonus
payments for such fiscal year are paid to other executive
employees of the Company. Employee will not be entitled to
receive any other salary or compensation from the Company
following the Termination Date, but may receive long-term
disability benefits to the extent eligible in accordance with
the terms and conditions of any plan or program in which
Employee is a participant;
(e) Termination Due to Death. Employee's employment with the
Company or any affiliate of the Company will end immediately
upon Employee's death. If Employee's employment terminates due
to death, the Company will pay to Employee's estate the base
salary and other compensation, if any, earned through the
Termination Date, in accordance with the regular policies and
practices of the Company, and, subject to Section 2 below,
will also pay to Employee's estate the actual bonus award,
under any bonus plan in which Employee is a participant as of
the Termination Date, that Employee would have received for
the fiscal year in which the Termination Date occurs, prorated
for the number of days from the
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beginning of the fiscal year until the Termination Date, and
payable at the time that bonus payments for such fiscal year
are paid to other executive employees of the Company;
(f) Cause. "Cause" means:
(1) a material act or acts of fraud which result in or
are intended to result in Employee's personal
enrichment at the direct expense of the Company,
including without limitation, theft or embezzlement
from the Company;
(2) material violation by Employee of any written Company
policy, regulation or practice;
(3) conviction of Employee of a felony; or
(4) material breach by Employee of any provision of this
Agreement, of any employment agreement between
Employee and the Company, or of Employee's
obligations as an officer or employee of the Company.
(g) Good Reason. "Good Reason" means the occurrence of any one or
more of the following events without Employee's express
written consent:
(1) the Company reduces, diminishes or changes in an
adverse manner to the Employee the title or executive
duties and responsibilities of Employee, or reduces
the base salary, automobile allowance, bonus
objective, and/or benefits of Employee, except as
part of an across-the-board compensation reduction or
change in benefits or bonus plan applicable on the
same basis to all executives of the Company (provided
that any such reduction(s) or change(s) shall not in
the aggregate during the three (3) years following
the date of this Agreement exceed an amount equal to
ten percent (10%) of Employee's total cash
compensation during the 12 month period immediately
preceding the first such reduction or change);
(2) the Company materially breaches its obligations to
pay Employee, and such failure to pay is not a result
of a good faith dispute between the Company and
Employee; or
(3) the Company requires Employee to be based at any
office or location greater than 60 miles from the
location of Employee's primary work location as of
the date hereof;
provided, however, that such occurrences will not be deemed to
be Good Reason unless and until the Company has received from
Employee written notice of such occurrence stating the basis
for the Employee's determination that Good Reason for
termination exists, the Company has not cured such occurrence
within 30 days
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(ten days with regard to any occurrence described in Section
1(g)(2) above) following receipt by the Company of such
notice; and provided further that in the case of Section
1(g)(3) above, that Employee will be obligated to continue to
perform his duties at Employee's current location until
released by the Company.
(h) Disability. "Disability" means a continuing condition of
Employee that has been determined to meet the criteria set
forth in the Company's Long Term Disability Plan, or similar
successor long-term disability insurance plan, to render a
participant eligible for long-term disability benefits under
such plan, whether or not Employee is in fact covered by such
plan. The determination shall be made by the insurer of the
plan or, if Employee is not covered by the plan, by the
Company in its sole discretion.
(i) Company Obligations. In the event of termination of Employee's
employment, the sole obligation of the Company hereunder is
its obligation to make the payments called for by this Section
1, as applicable, and to honor the terms of existing stock
option and restricted stock agreements, together with
applicable plans, including any accelerated vesting thereof as
provided in this Agreement, and the Company will have no other
obligation to Employee or to Employee's beneficiary or
Employee's estate, except as otherwise provided by law, under
the terms of any other applicable agreement between Employee
and the Company, or under the terms of any employee benefit
plans or programs then maintained by the Company in which
Employee participates.
(j) Tax Withholding. All payments made to Employee or on
Employee's behalf under this Agreement shall be subject to
withholding for all applicable federal, state and other taxes
and other withholdings required by law.
2. Conditions for Receipt of Severance. Notwithstanding the foregoing
provisions of this Agreement, the Company is not obligated to make any
payments to Employee under Sections 1(c), or pay the bonus amounts
referred to in Sections 1(d) or 1(e), as the case may be, unless and
until Employee or, if applicable, the legal representative on behalf of
Employee's estate, signs a release of claims in favor of the Company
and its affiliates in a form to be prescribed by the Company, all
applicable consideration and rescission periods provided by law shall
have expired, and Employee is in strict compliance with the terms of
this Agreement as of the dates of such payments.
3. Confidential Information. Employee acknowledges that the confidential
information and data obtained by Employee during the course of
Employee's employment by the Company or any affiliate of the Company
concerning the business or affairs of the Company or any affiliate is
the property of the Company and will be confidential to the Company.
Such confidential information may include, but is not limited to,
customer data or lists, vendor data or lists, contracts with vendors or
other third parties, business plans, prospects or opportunities,
software codes or development work, financial information, including
the financial terms with or performance of vendors, and trade secrets,
but does not include Employee's general business or direct marketing
knowledge
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(the "Confidential Information"). All the Confidential Information
shall remain the property of the Company and Employee agrees that
Employee will not disclose to any unauthorized persons or use for
Employee's own account or for the benefit of any third party any of the
Confidential Information without the Company's written consent.
Employee agrees to deliver to the Company at the termination of
employment, all memoranda, notes, plans, records, reports, video and
audio tapes and any and all other documentation (and copies thereof),
whether in electronic, written, photographic or video form, relating to
the business of the Company or any affiliate, which Employee may then
possess or have under Employee's direct or indirect control.
Notwithstanding any provision herein to the contrary, Confidential
Information does not include 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 the
Company to permit the Company to seek a protective order; or
information disclosed by Employee to Employee's attorney regarding
litigation with the Company.
4. Inventions and Patents.
(a) Assignment of Rights. Employee agrees that all inventions,
innovations or improvements in the method of conducting the
Company's business or otherwise related to the Company's
business (including new contributions, improvements, ideas and
discoveries, whether patentable or not) ("Inventions")
conceived or made by Employee during Employee's employment
with the Company or any affiliate of the Company. Employee
will promptly disclose any and all Inventions to the Company,
assign to the Company Employee's entire right, title and
interest in and to any and all Inventions and any and all
letters patent filed or issued in connection with such
Inventions, and perform all actions reasonably requested by
the Company to establish and confirm such ownership.
(b) Exception. This Section 4 does not apply to any invention for
which no equipment, supplies, facilities, confidential,
proprietary or secret knowledge or information, or other trade
secret information of the Company was used and that was
developed entirely on Employee's own time, and (i) that does
not relate (A) directly to the business of the Company or any
affiliate of the Company, or (B) to the Company's or any
affiliate's actual or demonstrably anticipated research or
development, or (ii) that does not result from any work
performed by Employee for the Company or any affiliate of the
Company.
5. Noncompete and Related Agreements.
(a) Covenants of Employee. Employee agrees that during the
Noncompetition Period (as herein defined), Employee will not:
(i) directly or indirectly own, manage, control, participate
in, lend Employee's name to, act as consultant or advisor to
or render services for, alone or in association with any other
person, firm, corporation or other business organization, any
other person or entity engaged as a
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competitor to the Company or any of its affiliates in the live
television home shopping business or an ecommerce business
affiliated with a live television home shopping business (the
"Restricted Business"), anywhere within the United States that
the Company or any of its affiliates operates during
Employee's employment (the "Restricted Area"); (ii) have any
interest directly or indirectly in any business engaged in the
Restricted Business in the Restricted Area other than the
Company (provided that nothing herein will prevent Employee
from owning in the aggregate not more than 1.0% 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 participation in the
management or conduct of business of such corporation); (iii)
induce or attempt to induce any employee of the Company or of
any affiliate of the Company to leave his or her employ, or in
any other way interfere with the relationship between the
Company or any affiliate of the Company and any other
employee; or (iv) induce or attempt to induce any customer,
supplier, franchisee, licensee, other business relation of the
Company or any affiliate of the Company to cease doing
business with the Company or any affiliate of the Company, or
in any way interfere with the relationship between any
customer, franchisee or other business relation and the
Company or any affiliate of the Company, without the prior
written consent of the Company. For purposes of this
Agreement, the "Noncompetition Period" shall mean the period
commencing as of the date of this Agreement and ending on the
date that is 180 days following the later of the Termination
Date or the last day of the Severance Period.
(b) Acknowledgement. Employee acknowledges that the provisions of
this Section 5 are reasonable and necessary to protect the
legitimate interests of the Company. If, at the time of
enforcement of any provisions of this Section 5, a court of
competent jurisdiction holds that the restrictions stated
herein are unreasonable and not enforceable under applicable
law, such provision shall be construed to cover only that
duration, scope or activity that is determined to be valid and
enforceable. The parties hereto agree that the duration, scope
and activities reasonable under such circumstances will be
substituted for any unenforceable provisions.
6. Termination of Existing Agreements. Except as specifically provided
herein, this Agreement supersedes and replaces in their entirety any
and all prior understandings, employment or other agreements or
representations, written or oral, by or between Employee and the
Company or any affiliate of the Company, relating to the payment of or
containing any provisions regarding any severance or termination
benefits to or for Employee upon the termination of the employment
relationship, and as of the date of this Agreement, all such
understandings, agreements and representations shall terminate and
shall be of no further force or effect. Notwithstanding the preceding
sentence, nothing in this Agreement shall be construed or interpreted
as terminating or canceling (i) any written stock option or restricted
stock agreement signed by the Company and Employee in effect as of the
date of this Agreement, or (ii) the terms of any stock option or
restricted stock granted to Employee by the Company prior to the date
of this Agreement.
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7. Dispute Resolution. If Employee disputes any determination made by the
Company regarding Employee's eligibility for any payments under this
Agreement, the amount or terms of any payment under this Agreement, or
the Company's application of any provision of this Agreement, then
Employee will, before pursuing any other remedies that may be available
to Employee, seek to resolve such dispute by submitting a written claim
notice to the Company. The notice by Employee shall explain the
specific reasons for Employee's claim and all bases therefor. The Board
of Directors of the Company or its Compensation Committee will review
such claim and the Company will notify Employee in writing of its
response within 60 days of the date on which Employee's notice of claim
was given. The notice responding to Employee's claim will explain the
specific reasons for the decision. Employee agrees to submit a written
claim hereunder and will not pursue any other process for resolution of
such claim until Employee receives the Company's response to such
claim, provided that if Employee does not receive a response to such
claim within 70 days after giving notice to the Company of the claim,
Employee may pursue any other process for resolution of such claim.
This Section 7 does not otherwise affect any rights that Employee or
the Company may have in law or equity to seek any right or benefit
under this Agreement.
8. Remedies. Employee acknowledges that a breach of this Agreement by
Employee will cause substantial and irreparable harm to the Company and
money damages would be inadequate to fully compensate the Company.
Accordingly, in the event of any actual breach or threatened breach of
Employee's obligations under this Agreement, the Company will be
entitled to injunctive and other equitable relief without the necessity
of proving actual monetary damages. Such equitable remedies, however,
will be cumulative and nonexclusive and will be in addition to any
other remedy to which the Company may be entitled.
9. Sale, Consolidation or Merger. In the event of a sale of all or
substantially all of the stock of the Company, or consolidation or
merger of the Company with or into another corporation or entity, or
the sale of all or substantially all of the operating assets of the
Company to another corporation, entity or individual, the Company may
assign its rights and obligations under this Agreement to its
successor-in-interest and such successor-in-interest will be deemed to
have acquired all rights and assumed all obligations of the Company
hereunder.
10. 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 provided for in this Agreement shall not be
reduced by any compensation or benefits earned by or provided to
Employee as the result of employment by another employer.
11. Waiver. The failure of either party to insist, in any one or more
instances, upon performance of the terms or conditions of this
Agreement will 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.
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12. 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, will be entitled to
receive its reasonable attorney fees and costs from the other party.
13. Notices. Any notice to be given hereunder shall be deemed sufficient if
given in writing and delivered personally or delivered by registered or
certified mail: (i) in the case of the Company, to the Company's
principal business office with attention to the General Counsel, and
(ii) in the case of Employee, to Employee's last known address
appearing on the records of the Company, or to such other address as
such party may designate in writing to the other party.
14. Severability. In the event that any provision of this Agreement is held
to be invalid or unenforceable for any reason whatsoever, the parties
agree that such invalidity or unenforceability will not affect any
other provision of this Agreement and the remaining covenants,
restrictions and provisions hereof will remain in full force and effect
and any court of competent jurisdiction may modify any objectionable
provision to make it valid, reasonable and enforceable.
15. Amendment. This Agreement may be amended only by an agreement in
writing signed by both parties.
16. Benefit. This Agreement is binding upon and inures to the benefit of
and is enforceable by and against Employee's heirs, beneficiaries and
legal representatives. The rights and obligations of Employee may not
be delegated or assigned except as specifically set forth in this
Agreement.
17. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of Minnesota.
18. Term of Certain Obligations. Unless extended by mutual written
agreement of the parties prior to or upon the third anniversary of the
date of this Agreement: (a) the Company's obligations to make the
payments or provide the benefits set forth in Sections 1(c)(1)(A)
through 1(c)(1)(D) of this Agreement or to pay the bonus amounts
referred to in Section 1(d) and 1(e), and any acceleration of vesting
of stock option or restricted stock grants authorized pursuant to
Section 1(c)(2)(A) of this Agreement, shall only be effective and
enforceable with respect to terminations of employment where the
Termination Date, or the Notice Date with respect to terminations by
Employee for Good Reason or by Company without Cause, is prior to or
upon the third (3rd) anniversary of the date of this Agreement; and (b)
the Employee's obligations pursuant to Section 5 of this Agreement
shall terminate on the Termination Date, notwithstanding Section 5(a)
of this Agreement, with respect of terminations of employment where the
Termination Date is subsequent to the third (3rd) anniversary of the
date of this Agreement.
19. Consultation Services. Employee agrees that, during the Severance
Period, the Company may from time to time seek Employee's advice or
consult with Employee, at reasonable
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times mutually agreed by the parties, with respect to matters that
Employee handled or issues with which Employee has particular knowledge
or expertise.
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.
COMPANY: VALUEVISION MEDIA, INC.
By :
Name:
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Its:
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EMPLOYEE:
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