EXHIBIT 10.3
CONSULTING AGREEMENT
This Consulting Agreement ("Consulting Agreement") is entered into as
of December 19, 1996 by and between Xxxxx XxXxxxx ("XxXxxxx") and National Media
Corporation, a Delaware corporation ("National Media").
WITNESSETH:
WHEREAS, XxXxxxx and National Media are parties to an employment
agreement made as of September 27, 1995 (the "Employment Agreement") pursuant to
which XxXxxxx is employed as Chairman of the Board of Directors of National
Media and Chairman of the Executive Committee of the Board of Directors of
National Media;
WHEREAS, XxXxxxx and National Media have mutually determined that it is
in the best interests of both parties that XxXxxxx resign his employment with
National Media and enter into this Consulting Agreement (the "Resignation"); and
WHEREAS, in connection with such Resignation and the execution and
delivery of this Consulting Agreement, the parties desire to terminate the
Employment Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound hereby, agree as follows:
1. Termination of Employment Agreement; Resignation.
(a) Termination of Employment Agreement. Effective as of the
date hereof, this Consulting Agreement shall supersede the Employment Agreement,
and the Employment Agreement shall terminate in its entirety and be of no
further force or effect.
(b) Resignation. XxXxxxx hereby resigns from the positions of
Chairman of the Board of Directors of National Media and Chairman of the
Executive Committee of the Board of Directors of National Media, such
resignations to become effective as of December 31, 1996 (the "Resignation
Date"). XxXxxxx shall not be deemed hereby to have resigned from his membership
on the Board of Directors of National Media.
2. Engagement as Consultant; Duties. For the period beginning January
1, 1997 and concluding December 31, 1998 (the "Term"), XxXxxxx agrees to provide
consulting services to National Media relating to the infomercial and direct
marketing industries, as reasonably requested from time to time by National
Media (the "Consulting Services"). XxXxxxx shall devote up to twenty (20) hours
per month of his time, energy and skill to the performance of the Consulting
Services at such time or times upon which the parties shall mutually agree.
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3. Compensation.
(a) Consulting Services. In consideration of the rendition of
the Consulting Services and subject to Section 10(a)(i) of this Consulting
Agreement, National Media shall pay XxXxxxx annual compensation of $100,000
during the Term, payable in semi-monthly installments and subject to applicable
withholding taxes and other legally required deductions.
(b) Payments in Consideration of Termination of Employment
Agreement. In consideration of the termination of the Employment Agreement and
subject to Section 10(a)(i) of this Consulting Agreement, National Media shall
make annual payments to XxXxxxx of $300,000 during the Term, payable in
semi-monthly installments and subject to applicable withholding taxes and other
legally required deductions.
4. Benefits.
(a) Generally. Subject to Section 10(a)(i) of this Consulting
Agreement, National Media shall maintain in effect during the Term, at National
Media's expense, such health insurance, dental insurance, short- and long-term
disability insurance and accidental death and dismemberment insurance benefits
as are in effect for XxXxxxx as of the date hereof (as such benefit plans may be
modified from time to time with respect to all National Media benefit
participants). Moreover, Subject to Section 10(a)(i) of this Consulting
Agreement, National Media shall maintain in effect at its expense during the
Term the life insurance provided to XxXxxxx pursuant to Section 4 of the
Employment Agreement.
(b) Exceptions. Notwithstanding anything to the contrary
contained herein, XxXxxxx shall not be entitled to a paid luncheon club
membership or automobile allowance, nor shall XxXxxxx be entitled to participate
in National Media's Management Incentive Plan or any successor plan.
(c) Outplacement Fees. Subject to Section 10(a)(i) hereof,
National Media shall reimburse up to a maximum of $50,000 in actual fees
incurred by XxXxxxx for outplacement services which are rendered to him by an
outplacement service provider of national or regional standing from the date
hereof through the shorter of (i) the expiration of the Term or (ii) the date on
which XxXxxxx secures new employment. XxXxxxx shall be solely responsible for
all such fees incurred by him in excess of $50,000 and for all incidental
expenses (such as travel, food and lodging) which he may incur in connection
therewith. National Media shall have no obligation to reimburse fees for
outplacement services rendered to XxXxxxx after he secures new employment, or,
if he does not secure new employment, after the expiration of the Term.
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5. Stock Options.
(a) Accelerated Vesting. Notwithstanding anything to the
contrary contained in the Employment Agreement, National Media's Amended and
Restated Stock Option Plan (the "Stock Option Plan") or any agreement between
the parties or other instrument pursuant to which XxXxxxx was granted options to
purchase National Media common stock, the following stock options granted to
XxXxxxx shall be deemed vested as of the Resignation Date: (i) stock options for
210,000 shares at an exercise price of $12.99 per share granted pursuant to the
Employment Agreement, (ii) stock options for 250,000 shares at an exercise price
of $16.375 per share approved by the shareholders of National Media on July 25,
1996, and (iii) stock options for 5,000 shares at an exercise price of $10.75
per share granted as of March 21, 1994 pursuant to the Stock Option Agreement
(collectively, "XxXxxxx' Stock Options").
(b) Exercise Deadline. Notwithstanding anything to the
contrary contained in the Employment Agreement, the Stock Option Plan, or any
agreement between the parties or other instrument pursuant to which XxXxxxx was
granted XxXxxxx' Stock Options, and subject to Section 10(a)(i) of this
Consulting Agreement, XxXxxxx' right to exercise XxXxxxx' Stock Options shall
absolutely expire at the close of business December 31, 1998.
6. Release.
(a) By XxXxxxx. In consideration of the payments and
arrangements set forth in this Consulting Agreement, XxXxxxx, for himself and on
behalf of each of his heirs, executors, administrators, legal representatives
and assigns, does hereby remise, release and forever discharge National Media
and each and every of the predecessors, parents, subsidiaries, affiliates,
assigns, directors, officers, shareholders, employees and agents of National
Media, both current and former (hereinafter, the "National Media Released
Parties") of and from every claim, demand, right of action and cause of action
whatsoever, and from all debts, obligations, costs (including, without
limitation, attorney's fees), expenses, damages, losses and liabilities
whatsoever (collectively, "Claims"), whether known or unknown, that XxXxxxx ever
had, now has, or hereafter may have against the National Media Released Parties
(or any of them) arising out of or relating to (i) any matter, thing or event
occurring up to and including the date of this Consulting Agreement, (ii) the
Employment Agreement or XxXxxxx' employment by or service to National Media and
its subsidiaries, or (iii) XxXxxxx' separation or his status as an officer or
director of National Media, including, without limitation, claims arising under
the Older Workers Benefit Protection Act and all other federal, state and local
statutes, ordinances, rules, regulations and common law principles.
Notwithstanding the preceding sentence, nothing in this Consulting Agreement is
intended to diminish any right to indemnification that XxXxxxx may have as a
director or former officer under National Media's Certificate of Incorporation
and Bylaws. If, notwithstanding the foregoing, XxXxxxx makes any claim against
National Media or any of its subsidiaries with respect to the matters covered by
this section, National Media shall be entitled to forfeit XxXxxxx' right to any
further payments hereunder.
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(b) By National Media. In consideration of the payments and
arrangements set forth in this Consulting Agreement, National Media, for itself
and on behalf of its successors and assign, does hereby remise, release and
forever discharge XxXxxxx and his heirs, executors, administrators, legal
representatives and assigns (hereinafter, the "XxXxxxx Released Parties") of and
from every Claim, whether known or unknown, that National Media ever had, now
has or hereafter may have against the XxXxxxx Released Parties arising out of or
relating to (i) any matter, thing or event occurring up to and including the
date of this Consulting Agreement, (ii) the Employment Agreement or XxXxxxx'
employment by National Media and its subsidiaries, or (iii) XxXxxxx' separation
or his status as an officer or director of National Media, including, without
limitation, Claims arising under all federal, state and local statutes,
ordinances, rules, regulations and common law principles; provided, however,
that there shall be excepted from the foregoing release any and all Claims for
or relating to any breach by XxXxxxx of his fiduciary duties to National Media
and/or its shareholders.
7. Older Workers Benefit Protection Act.
(a) Waiver of Claims Under Act. XxXxxxx acknowledges that any
and every right or claim for discrimination which he may have under the Age
Discrimination in Employment Act, the Older Workers Benefit Protection Act, the
Pennsylvania Human Relations Act or any other federal, state or local law,
whether such claim is known or unknown, arising out of XxXxxxx' hire, employment
or termination of employment with National Media up to and including the
Resignation Date, is hereby released and waived. XxXxxxx further acknowledges
that he is receiving consideration which is in addition to anything of value to
which he would otherwise be entitled.
(b) Time Allowed to Review Agreement. XxXxxxx acknowledges
that he was given the opportunity to consult with an attorney of his choice
before signing this Consulting Agreement, and that National Media advised
XxXxxxx that he had twenty-one (21) calendar days within which to consider the
terms of this Consulting Agreement prior to its execution.
(c) Revocation. The waiver and release of claims and rights
which XxXxxxx may have under the Older Workers Benefit Protection Act is
revocable and does not become enforceable until seven (7) calendar days after
this Consulting Agreement is executed. If the seventh day is a weekend or
national holiday, XxXxxxx shall have until the next business day to exercise his
right of revocation. XxXxxxx may effectuate such revocation and thereby revoke
this Consulting Agreement in its entirety by submitting written notice of
revocation to Xxxxxxxx Xxxxxxxx, Esq., National Media Corporation, 0000 Xxxxxx
Xxxxxx, Xxxxxxxxxxxx, XX 00000. If XxXxxxx signs this Consulting Agreement and
does not revoke it, this Consulting Agreement will become binding, irrevocable
and enforceable at the expiration of such seven (7) day revocation period, and
any rights which XxXxxxx may have under any applicable statute will be waived.
XxXxxxx is not obliged to sign this
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Consulting Agreement, and refusal to do so will not jeopardize XxXxxxx' right to
any benefits to which he is already entitled.
8. Confidentiality. Neither National Media nor XxXxxxx will issue any
press release, publish any public document, file this Consulting Agreement with
any governmental or regulatory body or disclose the contents hereof, or
otherwise make any public statement relating to or connected with or arising out
of any matters relating to his employment by National Media or its termination
or any matters contained in this Consulting Agreement without the prior written
consent of the other as to its contents and the manner of its presentation and
publication, except as may be required by law or regulation (including, without
limitation, except as may be legally required in the opinion of counsel to
National Media). Except as set forth in this section, the contents of the
Consulting Agreement shall remain entirely confidential, except that each party
may disclose it to the Internal Revenue Service and to its respective
professional advisors.
9. Voluntary Agreement; Representation of No Filings.
(a) Voluntary Agreement. XxXxxxx hereby acknowledges that he
fully understands the terms of this Consulting Agreement, including the release
of claims contained herein, and that he enters into it voluntarily and without
coercion on the part of any person. XxXxxxx further acknowledges that he was
given adequate time to consider all implications of this Consulting Agreement
and to freely and fully consult with and seek the advice of whomever he deemed
appropriate in connection with his review of this Consulting Agreement.
(b) Representation of No Filings. XxXxxxx represents that he
has filed no suits, charges, claims or the like regarding his employment and/or
its termination, and he agrees that he will not do so at any time hereafter.
Further, during all times hereafter, XxXxxxx shall do nothing to damage the good
name of National Media, and National Media shall do nothing to damage the good
name of XxXxxxx.
10. Restrictive Covenants.
(a) Competition.
(i) XxXxxxx undertakes and agrees that he will not
compete, directly or indirectly, or participate as a director, officer,
employee, consultant, agent, representative or otherwise, or as a stockholder,
partner or joint venturer, or have any direct or indirect financial interest,
including, without limitation, the interest of a creditor, in any business
competing directly with the infomercial direct response business of National
Media or any of its subsidiaries within any geographical area in which the
business of National Media or its subsidiaries is being conducted during the
Term. In the event that XxXxxxx breaches the foregoing covenant, then National
Media shall have no further obligation from the date of such breach to make any
payments under Section 3(a) or 3(b) hereof or to
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continue providing the benefits described in Section 4(a) hereof or reimburse
outplacement fees under Section 4(c) hereof, and all of XxXxxxx' Stock Options
which are unexercised as of the date of such breach shall immediately terminate
and no longer be exercisable.
(ii) XxXxxxx further undertakes and agrees that
during the Term he will not, directly or indirectly, employ, cause to be
employed or solicit for employment any employees of National Media or any of its
subsidiaries.
(b) Trade Secrets. During and after the Term, XxXxxxx shall
not disclose, divulge, copy or otherwise use any trade secret of National Media
or any of its subsidiaries other than any knowledge or information already known
to XxXxxxx prior to the commencement of his service to National Media, it being
acknowledged that all information and materials compiled or obtained by or
disclosed to XxXxxxx while in the service of National Media as a director, while
employed by XxXxxxx under the Employment Agreement or while retained by National
Media under this Consulting Agreement are confidential and the exclusive
property of National Media or its subsidiaries, as the case may be.
(c) Injunctive Relief. The parties agree that the remedy at
law for any breach of the provisions of this Section 10 will be inadequate and
that National Media and its subsidiaries (and their respective successors and
assigns) shall be entitled to injunctive relief with respect thereto without
bond. Such injunctive relief shall not be exclusive, but shall be in addition to
any other rights and remedies which National Media and its subsidiaries (and
their respective successors and assigns) may have with respect to such breach.
(d) Scope of Covenant. Should the duration, geographic area or
range of proscribed activities in Section 10(a) of this Consulting Agreement be
held unreasonable by any court of competent jurisdiction, then such duration,
geographical area or range of proscribed activities shall be modified to such
degree as to make it or them reasonable and enforceable.
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11. Miscellaneous.
(a) Notices. All notices, requests, instructions, consents and
other communications to be given pursuant to this Consulting Agreement shall be
in writing and shall be deemed received (i) on the same day if delivered in
person, by same-day courier or by telegraph, telex or facsimile transmission,
(ii) on the next day if delivered by overnight mail or courier, or (iii) on the
date indicated on the return receipt, or if there is no such receipt, on the
third calendar day (excluding Sundays) if delivered by certified or registered
mail, postage prepaid, to the party for whom intended to the following
addresses:
If to National Media:
National Media Corporation
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attention: General Counsel
FAX: 215/000-0000
If to XxXxxxx:
Xxxxx XxXxxxx
000 Xxxxx Xxxxxx
Xxxx Xxxxxx, XX 00000
The foregoing addresses may be changed at any time by notice given in the manner
herein provided.
(b) Entire Agreement. This Consulting Agreement contains the
entire understanding of the parties with respect to the subject matter hereof
and supersedes all prior negotiations, understandings and agreements, whether
oral or written, between them with respect to such subject matter (including,
without limitation, the Employment Agreement) and with respect to XxXxxxx'
service as a director of National Media. Each party has executed this Consulting
Agreement without reliance upon any promise, representation or warranty other
than those expressly set forth herein. Each party acknowledges that (i) it has
carefully read this Consulting Agreement; (ii) it has had the opportunity to
have the assistance of legal counsel of its choosing (and such other
professionals and advisors as it has deemed necessary) in the review and
execution hereof; (iii) the meaning and effect of the various terms and
provisions hereof have been fully explained to it by such counsel, if any; (iv)
it has conducted such investigation, review and analysis as it has deemed
necessary to understand the provisions of this Consulting Agreement and the
transactions contemplated hereby; and (v) it has executed this Consulting
Agreement of its own free will.
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(c) Amendment. No amendment of this Consulting Agreement shall
be effective unless embodied in a written instrument executed by XxXxxxx and a
duly authorized officer of National Media.
(d) Waiver of Breach. The failure of either party hereto at
any time to enforce any of the provisions of this Consulting Agreement shall not
be deemed or construed to be a waiver of any such provision, nor in any way to
affect the validity of this Consulting Agreement or any provisions hereof or the
right of any party hereto to thereafter enforce each and every provision of this
Consulting Agreement. No waiver of any breach of any of the provisions of this
Consulting Agreement shall be effective unless set forth in a written instrument
executed by the party against whom or which enforcement of such waiver is
sought; and no waiver of any such breach shall be construed or deemed to be a
waiver of any other or subsequent breach.
(e) Assignability. This Consulting Agreement shall be binding
on and inure to the benefit of the parties hereto and their respective heirs,
representatives, successors and assigns, provided, however, that XxXxxxx may not
assign this Consulting Agreement or any rights hereunder to any person or
entity.
(f) Governing Law. This Consulting Agreement shall be governed
by and construed in accordance with the internal laws of the Commonwealth of
Pennsylvania without regard to conflict of laws principles. Each of the parties
agrees that it shall deal fairly and in good faith with the other party in
performing, observing and complying with the covenants, promises, duties,
obligations, terms and conditions to be performed, observed or complied with by
it hereunder, and this Consulting Agreement shall be interpreted, construed and
enforced in accordance with the foregoing covenant, notwithstanding any law to
the contrary.
(g) Severability. All of the provisions of this Consulting
Agreement are intended to be distinct and severable. If any provision of this
Consulting Agreement is or is declared to be invalid or unenforceable in any
jurisdiction, it shall be ineffective in such jurisdiction only to the extent of
such invalidity or unenforceability. Such invalidity or unenforceability shall
not affect either the balance of such provision, to the extent it is not invalid
or unenforceable, or the remaining provisions hereof, nor render invalid or
unenforceable such provision in any other jurisdiction.
(h) Headings. The headings of sections and subsections have
been included for convenience only and shall not be considered in interpreting
this Consulting Agreement.
(i) Counterparts. This Consulting Agreement may be executed in
one or more counterparts, each of which shall be deemed to be an original, and
all of which together shall constitute one and the same Consulting Agreement.
This Consulting Agreement may be executed and delivered via electronic facsimile
transmission with the same force and
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effect as if it were executed and delivered by the parties simultaneously in the
presence of one another.
IN WITNESS WHEREOF, this Consulting Agreement has been executed by
XxXxxxx and on behalf of National Media by its duly authorized officer as of the
date first above written.
NATIONAL MEDIA CORPORATION
By: /s/
----------------------------------------
Xxxx X. Xxxxxxxxx,
President and Chief Executive Officer
/s/
-----------------------------------------
Xxxxx XxXxxxx
APPROVED:
COMPENSATION COMMITTEE
By: /s/
-----------------------------------------
Xxx X. Xxxxxx, XX, Director
Chairman of the Compensation Committee
of the Board of Directors of National Media Corporation
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