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EXHIBIT 10.1
EMPLOYMENT AGREEMENT
THIS AGREEMENT made as of the 2nd day of June, 1998, by and among
ValueVision International, Inc., a Minnesota corporation ("Employer"), Xxxx
XxXxxxxxx ("Employee"), and Quantum Direct Corporation, a Delaware corporation
("Quantum Direct").
WITNESSETH:
WHEREAS, Employer, Employee and Quantum Direct previously entered into an
Employment Agreement dated March 30, 1998 (the "Original Agreement"), whereby
Employee was employed as Chief Executive Officer of Quantum Direct in
anticipation of the consummation of the transactions (the "Transactions")
contemplated by that certain Agreement and Plan of Reorganization and Merger
(the "Merger Agreement") dated as of January 5, 1998 by and among ValueVision,
National Media Corporation ("NMC") and X-X Holdings Corp. (subsequently renamed
"Quantum Direct Corporation"), whereby ValueVision and NMC were to become
wholly-owned subsidiaries of Quantum Direct;
WHEREAS, ValueVision and NMC mutually agreed to terminate the Merger
Agreement on June 1, 1998;
WHEREAS, pursuant to the Original Agreement, in the event the Merger
Agreement is terminated and the Transactions not consummated, Employer and
Employee agreed to enter into an employment agreement on substantially the same
terms and conditions as set forth in the Original Agreement;
WHEREAS, Employer and Employee have agreed that Employee will be employed
by Employer on the terms and conditions set forth herein which both parties
agree is on substantially the same terms and conditions as the Original
Agreement; and
WHEREAS, Quantum Direct is being made a party hereto only for purposes of
Section 14 of this Agreement to terminate the Original Agreement;
NOW, THEREFORE, in consideration of the premises and mutual promises
contained in this Agreement, the parties hereto agree as follows:
1. EMPLOYMENT. Employer hereby agrees to employ Employee, and Employee hereby
agrees to be employed by Employer, on the terms and conditions set forth
herein.
2. TERM. The term of Employee's employment hereunder shall commence on the
date of this Agreement and shall continue on a full-time basis for a period
of three (3) years from March 30, 1998 (such period, the "Term"), unless
earlier terminated as hereinafter provided. 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.
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3. DUTIES. Employee shall serve as the Chief Executive Officer of Employer and
be appointed to serve as a member of the Board of Directors of Employer
(the "Board") on the date hereof, and shall continue to be nominated by the
Board to serve as a member of the Board during the Term, which nomination
shall be subject to approval by the shareholders of Employer at its annual
meetings of shareholders held subsequent to the date hereof, provided that
if Employee's employment with Employer is earlier terminated in accordance
with the provisions herein, Employee shall immediately resign from the
Board upon request by Employer. Employee shall perform the duties as
assigned by the 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. As Chief
Executive Officer, Employee's duties shall include, without limitation,
making recommendations to the Compensation Committee of Employer with
respect to awards made under Employer's stock option and compensation
plans. The executive officers of Employer, including the President, shall
report directly to Employee, as Chief Executive Officer, provided that, if
at any time there is no person serving as President, Employee shall also
serve as President for such period until another person is appointed by the
Board to serve as President. 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 three (3) weeks during each year of the Term, or
such additional vacation allowance as may be granted to other senior
executives of Employer.
4. COMPENSATION. During the Employment Period, Employee's compensation for the
services performed under this Agreement shall be as follows:
a. Base Salary. Employee shall receive a base salary as follows: (i) Five
Hundred Thousand and no/100 Dollars ($500,000) for the twelve-month period
from March 30, 1998 through March 29, 1999 (a portion of which was paid
under the Original Agreement), (ii) Five Hundred Twenty Five Thousand and
no/100 Dollars ($525,000) for the twelve-month period from March 30, 1999
through March 29, 2000 and (iii) Five Hundred Fifty Thousand and no/100
Dollars ($550,000) for the twelve-month period from March 30, 2000 through
March 30, 2001, in each case, payable in accordance with Employer's normal
payment schedule for its executive employees (the "Base Salary").
b. Signing Bonus. Upon the execution of the Original Agreement, Employee
received a payment of One Hundred Thirty Thousand and no/100 Dollars
($130,000) (the "Signing Bonus"). If Employee's employment with Employer is
terminated prior to March 30, 1999 either by Employer for Cause (as defined
below) pursuant to Section 6.d herein or by Employee pursuant to Section
6.c herein, Employee shall return to Employer the pro rata portion of the
Signing Bonus (calculated as a percentage of the remaining portion of such
twelve-month period with respect to such twelve-month period).
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c. Bonus Salary. Employee may receive bonus salary with respect to any year
in an aggregate amount not to exceed 100% of the Base Salary applicable
with respect to such year (the "Bonus Salary"). The Bonus Salary shall be
calculated as follows:
(i) Up to 50% of the applicable Base Salary (the "50% Goal"), if
Employer's Operating Income (as defined below) equals 1% of Employer's Net
Sales (as defined below), then Employee shall receive a bonus payment equal
to 25% of the 50% Goal, which payment shall increase on a pro rata basis to
100% of the 50% Goal if the Operating Income equals or exceeds 3% of
Employer's Net Sales (the "Operating Income Bonus"). As used in this
Agreement, "Operating Income" shall mean earnings before interest, taxes
and unusual items, and "Net Sales" shall mean gross sales, net of returns
and related reserves, and excludes shipping, handling, sales taxes and
insurance revenues, each as determined with respect to any fiscal year and
pursuant to generally accepted accounting principles by Employer,
consistently applied.
(ii) Up to 30% of the applicable Base Salary (the "30% Goal") if the
Average Price (defined as the greater of (a) the average closing price of
Employer's common stock for 20 consecutive trading days immediately prior
to the last day of Employer's fiscal year or (b) the average daily closing
price for the final four months of Employer's fiscal year) meets the
following target prices (the "Stock Price Bonus"):
If (A) the Average Price increases at least 25% but not 50% over the
Base Price (defined as $3.375, the closing price of Employer's common
stock on the date of the Original Agreement, which Base Price shall be
adjusted at the end of each fiscal year to the Average Price with
respect to such fiscal year, provided that in no event shall the Base
Price, as adjusted, exceed 133% of the Base Price of the previous
fiscal year), the Stock Price Bonus shall be equal to 25% of the 30%
Goal, (B) the Average Price increases at least 50% but not 75% over
the Base Price, the Stock Price Bonus shall be equal to one-half of
the 30% Goal, (C) the Average Price increases at least 75% but not
100% over the Base Price, the Stock Price Bonus shall be equal to
three-quarters of the 30% Goal, and (D) the Average Price increases
100% or more over the Base Price, the Stock Price Bonus shall be equal
to 100% of the 30% Goal.
(iii) Up to 20% of the applicable Base Salary (the "20% Goal"), if
Employer has positive Operating Income and Employer's Net Sales (exclusive
of sales of any acquisitions during the then current fiscal year) increases
over the prior fiscal year's Net Sales ("Base Sales") as follows (the
"Sales Bonus"):
If (A) Employer's Net Sales for any fiscal year increase at least 4%
but less than 5% over the Base Sales, the Sales Bonus shall be equal
to one-quarter of the 20% Goal, (B) Employer's Net Sales increase at
least 5% but not 6% over the Base Sales, the Sales Bonus shall be
equal to one-half of the 20% Goal, (C) Employer's net sales increase
at least 6% but not 7% over the Base Sales, the Sales Bonus shall be
equal
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to three-quarters of the 20% Goal, and (D) Employer's Net Sales
increase at least 7% over the Base Sales, the Sales Bonus shall be
equal to 100% of the 20% Goal.
Notwithstanding anything to the contrary herein, if the aggregate
compensation payable to Employee under this Agreement exceeds the amount
that is deductible under Section 162(m) of the Internal Revenue Code of
1986, as amended (the "Code"), then any such excess amount shall be
deferred and credited by Employer to an account for the benefit of
Employee, which shall be paid to Employee, with interest at a per annum
rate equal to 1.5% plus the prime rate (as announced by Employer's primary
financial lender from time to time), compounded annually, at such time
within five (5) days after the first date on which Employee no longer
constitutes a "covered employee" within the meaning of Section 162(m) of
the Code.
d. Automobile Allowance. Employer shall pay Employee a monthly automobile
allowance of $600.00 per month ("Auto Allowance").
e. Stock Options. As of the date hereof, Employer shall grant to Employee,
employee stock options to purchase an aggregate of 800,000 shares of the
common stock, par value $.01 per share (the "Common Stock") of Employer
(collectively, the "Options"). The Options shall be granted under an option
agreement between Employer and Employee dated as of the date hereof, which
option agreement shall be on terms consistent with the terms of this
Agreement. One-half of the Options shall have a term of five years (the
"Five Year Options") and one-half of the Options shall have a term of ten
years (the "Ten Year Options"), provided that upon the termination of
Employee's employment with Employer, Employee shall have six months from
the date of such termination to exercise any vested Options. The Options
shall have a per share exercise price equal to $3.375, the closing price of
one share of common stock of Employer as of the date of the Original
Agreement. The Options shall vest, in equal amounts of Five Year Options
and Ten Year Options, as follows: (i) Options for 200,000 shares of Common
Stock shall vest in pro rata amounts on a monthly basis over the Term of
this Agreement (the "Pro Rata Options"), and (ii) Options for 600,000
shares of Common Stock shall vest on the earlier of (A) the fifth
anniversary of the date of this Agreement (provided that Employee is still
an employee of Employer) or (B) in equal installments of options to
purchase 120,000 shares of Common Stock, based upon the attainment of an
average closing price of Employer's common stock for any 20 consecutive
trading day period at $5.00, $6.00, $7.00, $8.00 and $9.00, respectively.
All of the Options shall automatically vest upon a termination of
Employee's employment with Employer prior to the end of the Term (unless
pursuant to Sections 6.c or 6.d.) or upon a Change of Control (as defined
below), provided that a Potential Change of Control (as defined below)
which results in such Change of Control first occurred ninety (90) days or
more after the date of the Original Agreement. If such Change of Control is
a result of a Potential Change of Control which first occurred less than
ninety (90) days after the date of the Original Agreement, only the Pro
Rata Options shall immediately vest upon the occurrence of such Change of
Control.
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"Potential Change of Control" shall mean any of the following events: (i)
the authorization by the Board for Employer to enter into a letter of
intent, an agreement in principle or any other written agreement with
respect to a transaction or transactions that, if consummated, would result
in a Change of Control, (ii) the commencement of a tender offer for the
Common Stock of Employer in connection with a transaction not authorized or
approved by the Board, or (iii) the commencement of a proxy contest with
respect to the election of directors to the Board.
5. OTHER BENEFITS DURING THE EMPLOYMENT PERIOD. During the Employment Period,
Employer shall provide Employee with the following benefits:
a. Employee shall receive all 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, the Employment Period 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.
Employer shall provide Employee with a term life insurance policy (of which
Employee shall be the owner) for $1.0 million at standard rates, provided
that Employee shall be responsible for any premiums in excess of the
standard rates applicable to a person of Employee's age who is in good
health at the time of application for such a policy. In addition,
Employee's estate shall be entitled to receive any payments or Benefits
provided herein that have accrued (but have not been paid) prior to the
date of Employee's death (including the acceleration of any unvested
Options pursuant to Section 4.e).
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 the Employment
Period, provided that a physician to be selected by Employer, subject to
the reasonable satisfaction of Employee, shall have determined the
existence of
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such disability. Upon the date of such termination, Employee shall then
cease to receive Base Salary, Bonus Salary, Auto Allowance, and all other
Benefits, on the date this Agreement is so terminated; 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. In
addition, Employee shall be entitled to receive any payments or Benefits
provided in this Agreement that have accrued (but have not been paid) prior
to the date of such termination (including the acceleration of any unvested
Options pursuant to Section 4.e).
c. Voluntary Termination. In the event that Employee voluntarily terminates
his employment other than pursuant to Section 6.e, the Employment Period
shall terminate and Employee shall cease to receive Base Salary, Bonus
Salary, Auto Allowance, and all other Benefits as of the date of such
termination. Employee shall be entitled to receive any payments or Benefits
provided herein that have accrued (but have not been paid) prior to the
date of such termination (but no unvested Options shall accelerate as a
result of such termination).
d. Termination With Cause. Employer shall be entitled to terminate the
Employment Period and Employee's employment hereunder for Cause (as defined
below), 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. For purposes of this
Agreement, "Cause" shall mean: (i) a material improper 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) material violation by Employee of any
material policy, regulation or practice or Employer; (iii) conviction of a
felony; or (iv) habitual intoxication, drug use or chemical substance abuse
by any intoxicating or chemical substance. Notwithstanding the forgoing,
Employee shall not be deemed to have been terminated for Cause unless and
until (A) Employee has received thirty (30) days' prior written notice (a
"Dismissal Notice") of such termination and (B) if such "Cause" event is
capable of being cured, Employee has not cured such "Cause" event within
ten (10) days following delivery of such notice. 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. Employee shall be entitled to receive any
payments or Benefits provided herein that have accrued (but have not been
paid) prior to the date of such termination (but no unvested Options shall
accelerate as a result of such termination).
e. By Employee for Employer Cause. Employee may terminate the Employment
Period 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 the Employment Period if
Employer is able to cure such event within thirty (30) days (ten (10) days
with regard to Subsection (ii) hereof) following delivery of such notice:
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(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.
(iii) Any purported termination of this Agreement by Employer not
effected in accordance with the provisions set forth herein, provided that
Employee has delivered thirty (30) days' prior written notice of such
termination and Employer has not cured such event within thirty (30) days
following delivery of such notice by Employee.
In the event of a termination of Employee's employment with Employer under
this Section 6.e, Employee shall be entitled to receive the payments and
Benefits as set forth in Section 6.g.
f. Termination After Change of Control. If Employee is terminated by
Employer without Cause within one year after the consummation of a
transaction constituting a Change of Control, Employee shall receive (i) a
payment in an amount equal to one year's Base Salary at the rate in effect
at the time of such termination, if a Potential Change of Control (which
results in such Change of Control) occurs less than ninety (90) days after
the date of the Original Agreement, or (ii) a payment in an amount equal to
Base Salary and Bonus Salary (based upon the last paid Bonus Salary
received or accrued for in the previous year, if any, and pro rated for the
number of remaining months until the end of the Term) which would otherwise
be payable until the end of the Term, if a Potential Change of Control
(which results in such Change of Control) occurs ninety (90) days or more
after the date of the Original Agreement. Any payments made by Employer to
Employee under this Section 6.f shall be paid on a pro rata basis over the
Non-Competition Period (as defined below). In addition, during the 30 day
period immediately following the six month anniversary of the consummation
of a transaction constituting a Change of Control, Employee may terminate
this Agreement for any reason by providing written notice to Employer and
receive the benefits provided in clauses (i) or (ii) of the immediately
preceding sentence, as applicable, provided that any such termination by
Employee under this Section 6.f shall not also be deemed to be a
termination by Employee under Section 6.c. In the event that Employee's
employment with Employer is terminated by either Employer or Employee
pursuant to this Section 6.f, Employee shall be entitled to any payments or
Benefits provided in this Agreement that have accrued (but have not been
paid) prior to the date of such termination, provided that any acceleration
of any unvested Options shall be in accordance with the provisions of
Section 4.e).
g. Other Termination. Employer reserves the right to terminate the
Employment Period and Employee's employment hereunder at any time (and
without Cause), in its sole and absolute discretion. If Employer terminates
the Employment Period under this Section 6.g or if Employee terminates this
Agreement pursuant to Section 6.e. above, Employer shall
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immediately pay Employee in a lump sum payment an amount equal to Base
Salary which would otherwise be payable until the end of the Term (the
"Severance Payment"), provided that if such remaining Term exceeds 12
months, the Severance Payment attributable to the last twelve months of the
Term shall not be included in the lump sum payment and instead shall be
paid over the Noncompetition Period (as defined below) on a pro rata basis
in accordance with Employer's normal payment schedule for its executive
employees. In addition, Employer shall continue to provide Employee with
Benefits until the end of the Term. Employee shall be entitled to receive
any payments or Benefits provided herein that have accrued (but have not
been paid) prior to the date of such termination (including the
acceleration of any unvested Options pursuant to Section 4.e).
h. 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 in any city in which Employer's corporate executive
offices are located for arbitration of the dispute, the costs thereof
(including legal fees and expenses) to be shared equally by 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, except with respect to enforcement of the
agreements contained in Sections 7 and 9 if either party seeks injunctive
relief, 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 and the Original 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 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
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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, 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 (a) the television
home shopping business, (b) any mail order 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 during the term of this Agreement or (c) 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"), in any country that Employer or any of its affiliates operates
during the term of this Agreement (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 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 affiliate 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, the "Noncompetition Period" shall commence as of the date hereof
and end on the last day
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of the period that is equal to twelve (12) months following the date on
which Employee's employment is terminated under this Agreement for any
reason. Notwithstanding anything to the contrary herein, Employee shall not
be bound by the provisions of this Section 9 if, and only if, (x) a
Potential Change of Control (resulting in a Change of Control) occurs less
than ninety (90) days after the date of the Original Agreement and (y) the
Employment Period is terminated following the consummation of a transaction
constituting such Change of Control pursuant to Section 6.f.
b. If, at the time of enforcement of any provisions of this Section 9, a
court of competent jurisdiction holds that the restrictions stated herein
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.
10. TERMINATION OF EXISTING AGREEMENTS. This Agreement, effective as of the
date hereof, supersedes and preempts any prior understandings, agreements
or representations, written or oral, by or between Employee and Employer,
including but not limited to the Original Agreement, 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 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. CHANGE OF CONTROL. For purposes of this Agreement, a "Change of Control"
shall mean an event as a result of which: (i) any "person" (as such term is
used in Sections 13(d) and 14(d) of the Securities and Exchange Act of 1934
(the "Exchange Act")), is or becomes the
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"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act, except
that a person shall be deemed to have "beneficial ownership" of all
securities that such person has a right to acquire, whether such right is
exercisable immediately or only after the passage of time), directly or
indirectly, of more than 20% of the total voting power of the voting stock
of Employer (or their successors and assigns); (ii) Employer consolidates
with, or merges with or into another corporation or sells, assigns,
conveys, transfers, leases or otherwise disposes of all or substantially
all of its assets to any person, or any corporation consolidates with, or
merges with or into, Employer, in any such event pursuant to a transaction
in which the outstanding voting stock of Employer is changed into or
exchanged for cash, securities or other property, other than any such
transaction where (A) the outstanding voting stock of Employer is changed
into or exchanged for (x) voting stock of the surviving or transferee
corporation or (y) cash, securities (whether or not including voting stock)
or other property, and (B) the holders of the voting stock of Employer
immediately prior to such transaction own, directly or indirectly, not less
than 80% of the voting power of the voting stock of the surviving
corporation immediately after such transaction; or (iii) during any period
of two consecutive years, individuals who at the beginning of such period
constituted the Board of Directors of Employer (together with any new
directors whose election by such Board or whose nomination for election by
the stockholders of Employer was approved by a vote of 66-2/3% of the
directors then still in office who were either directors at the beginning
of such period or whose election or nomination for election was previously
so approved) cease for any reason to constitute a majority of the Board of
Employer then in office, or (iv) Employer is liquidated or dissolved or
adopts a plan of liquidation.
14. TERMINATION OF THE ORIGINAL AGREEMENT. Employer, Quantum Direct and
Employee hereby terminate the Original Agreement.
15. 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.
16. 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.
17. INDEMNIFICATION. Employee shall be entitled to indemnification to the
fullest extent permitted under the laws of the State of Minnesota.
18. 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
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address appearing on the records of Employer, or to such other address as
he may designate in writing to Employer.
19. 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.
20. AMENDMENT. This Agreement may be amended only by an agreement in writing
signed by the parties hereto.
21. 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.
22. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of Minnesota.
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/ Xxxxxxxx X. Xxxxxxx
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Its: President
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EMPLOYEE: /s/ Xxxx XxXxxxxxx
--------------------------------
XXXX XXXXXXXXX
QUANTUM DIRECT CORPORATION
By: /s/ Xxxxxx X. Xxxxxxxxx
--------------------------------
Its: Chief Finanacial Officer
--------------------------------
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