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EXHIBIT 10.51
EMPLOYMENT AGREEMENT
THIS AGREEMENT made as of the 1st day of February, 1997, by and
between ValueVision International, Inc., a Minnesota corporation (hereinafter
referred to as "Employer"), and Xxxxx X. Xxxxxx (hereinafter referred to as
"Employee").
WITNESSETH:
WHEREAS, Employee and Employer have agreed that Employee will become
an employee of Employer; and
WHEREAS, Employer desires to assure itself of 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 hereby employs Employee and Employee hereby
accepts employment with Employer on the terms and conditions set
forth in this Agreement.
2. TERM. The term of Employee's employment hereunder shall commence on
February 1, 1997 ("Commencement Date"), and shall continue on a
full-time basis for a period of twenty-four (24) months. The
"Employment Period" for purposes of this Agreement shall be the
period beginning on the Commencement Date and ending at the time
Employee shall cease to act as an employee of Employer.
3. DUTIES. Employee shall serve as Vice President, General Counsel and
Secretary of Employer 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 three (3)
weeks during each year of the term, or such additional vacation
allowance as may be granted in the sole discretion of the Employer.
Employer's 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 One Hundred Forty Thousand and No/100 Dollars ($140,000.00)
per year for the term of this Agreement ("Base Salary").
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b. Bonus Compensation. Employee may receive bonus pay
("Bonus Pay"), from time to time, based upon Employee's job
performance. Employer's Chief Executive Officer and Employee shall
establish job performance criteria for Employee at least annually,
which shall be the basis of such Bonus Pay.
c. Automobile Allowance. Employer shall pay Employee a
monthly automobile allowance of $450.00 per month.
d. Bar and Continuing Legal Education. Employer shall pay
all of Employee's bar fees and memberships, and all of Employee's
continuing legal education fees and expenses, up to $5,000 annually.
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,
rights to any Bonus Pay and Benefits as of the date on which his death
occurs.
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 sixty (60)
consecutive days, then Employer may, in its sole discretion, terminate
this Agreement and Employee shall then cease to receive Base Salary,
rights to any Bonus Pay 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.
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c. Voluntary Termination. In the event that Employee
voluntarily terminates his employment, he shall cease to receive
Base Salary, rights to any Bonus Pay and all other Benefits as of the
date of such termination.
d. Termination With Cause. The Employer shall be entitled
to terminate this Agreement and Employee's employment hereunder for
Cause (as herein defined), and in the event that the Employer elects
to do so, Employee shall cease to receive Base Salary, Bonus Pay and
Benefits as of the date of such termination specified by the Employer.
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 the Employer,
including without limitation, theft or embezzlement of Employer; (ii)
public conduct by Employee substantially detrimental to the reputation
of the Employer, (iii) material violation by Employee of any Employer
policy, regulation or practice; (iv) conviction of a felony; (v)
habitual intoxication, drug use or chemical substance use by any
intoxicating or chemical substance; (vi) failure to perform under the
terms of this Agreement as determined by the Board in its sole
discretion which shall continue without cure for thirty (30) days
after notice to Employee by Employer, provided, however, that if this
Agreement is terminated as a result of this Section 6.d.(vi) hereof,
Employer shall pay Employee a severance payment (the "Severence
Payment") equal to (y) six (6) months of the Base Salary hereunder or
(z) if such termination occurs after a Change of Control (as defined
herein), twelve (12) months of the Base Salary hereunder. For
purposes of this Agreement, a "Change of Control" shall mean a sale,
consolidation or merger as set forth in Section 12 hereof or if the
Chief Executive Officer or Chairman of the Board of Employer shall no
longer be Xxxxxx X. Xxxxxxxx.
e. By Employee for Employer Cause. Employee may
terminate this Agreement upon thirty (30) days written notice to the
Employer upon the occurrences without Employee's express written
consent, of any one or more of the following events, provided that the
Employee shall not have the right to terminate this Agreement if the
Employer is able to cure such event within thirty (30) days (ten (10)
days with regard to Subsection i. hereof) following delivery of such
notice:
(i) The Employer substantially diminishes Employee's
duties such that they are no longer of an executive nature as
contemplated by Section 3 hereof or Employer requires Employee to
relocate his offices and perform his duties hereunder more than 25
miles from Employer's current corporate offices located at 0000 Xxxxx
Xxx Xxxx, Xxxx Xxxxxx, Xxxxxxxxx 00000 or
(ii) The 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 the Employer and Employee.
f. Other. If Employer shall terminate this Agreement
for any reason other than those set forth in Sections 6.a, 6.b., 6.c
and 6.d. above, or if Employee terminates this Agreement pursuant to
Section 6.e. above, Employee shall continue to receive from
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Employer the Base Salary, Bonus Pay and Benefits until the end of the
Term, provided however, that the Base Salary payable pursuant to this
Section 6.f. shall in no event be less than the Severance Payment
Employee would be entitled to receive pursuant to Section 6.d.(vi)(y)
or (z) hereof as would be applicable regarding a Change of Control.
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 the Employer, or any entity related thereto, are the property of
the 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 the 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 the Employer and perform all actions
reasonably requested by the Employer to establish and confirm such
ownership.
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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; provided
however, that the parties hereto agree that this provision may not be
used to prohibit employee for working for a law firm which so provides
such services, so long as Employee does not specifically provide legal
services to a Restricted Business as defined herein) for any other
person or entity engaged in the television home shopping business or
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 the Employer's or its affiliates'
catalogs during the term of this Agreement (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 participation in the management or conduct
of business of such corporation), (iii) induce or attempt to induce
any employee of the Employer or any entity related to Employer to
leave his, her or their employ, or in any other way interfere with the
relationship between the 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 the
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 the Employer or any entity related to
Employer, without the prior written consent of the Employer. For
purposes of this Agreement, "Noncompetition Period" shall mean the
period commencing as of the Commencement Date 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.
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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 shall 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 the Employer to
another corporation, entity or individual, the 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 the
Employer hereunder.
13. STOCK OPTIONS. Employee shall be granted incentive stock options in
accordance with the Second Amended 1990 Stock Option Pland of
Employerfor 50,000 shares of ValueVision International, Inc.
common stock ("Stock Options") subject to the provisions thereof and
exercisable at the time or times established by the Stock Option
Agreement. The Stock Options shall vest in equal amounts, one-fifth
each, for the next successive five (5) years as measured from the
anniversary of the Commencement Date, or such earlier date in the sole
discretion of the Employer's Chief Executive Officer.
14. 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.
15. ATTORNEY'S FEES. In the event of any action for breach of, to
enforce the provisions of, or otherwise arising out of or in
conncetion 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.
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16. 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 the
Employer's principal business office; and (ii) in the case of
Employee, to his address appearing on the records of the Employer, or
to such other address as he may designate in writing to the Employer.
17. 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.
18. AMENDMENT. This Agreement may be amended only by an agreement in
writing signed by the parties hereto.
19. 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.
20. 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/ Xxxxxx X. Xxxxxxxx
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Xxxxxx X. Xxxxxxxx
Its: Chief Executive Officer
EMPLOYEE: /s/ Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx
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