EXHIBIT 10.60
EMPLOYMENT AGREEMENT
THIS AGREEMENT made as of August 7, 2001, by and between ValueVision
International, Inc., a Minnesota corporation (hereinafter referred to as
"Employer"), and Xxxx Xxxx (hereinafter referred to as "Employee").
WITNESSETH:
WHEREAS, Employer desires to obtain 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 agrees to employ Employee and Employee agrees to
be employed by Employer on the terms and conditions set forth in this
Agreement.
2. Term. The term of Employee's employment hereunder shall commence on
August 7, 2001 ("Commencement Date") and shall continue on a full-time
basis until and including the date that is six (6) months from the
Commencement Date (the "Term"). 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.
3. Duties. Employee shall serve as Executive Vice President--Licensing
and Entertainment of Employer reporting to the Chairman and Chief
Executive Officer 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. Employer and Employee
shall mutually discuss and consider, prior to the end of the Term, the
desirability of extending the employment relationship on a longer-term
basis, on the general terms as set forth in Section 22 of this
Agreement. It is agreed and understood that there is no obligation or
commitment by either party to enter into such longer-term employment
relationship, unless and until the Employer and Employee enter into a
written employment agreement in such regard.
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
Twenty-Five Thousand and No/100 Dollars ($25,000.00) per month
for the Term of this Agreement ("Base Salary").
b) Bonus Salary. Employee shall not be entitled to receive any bonus
salary with respect to the Term of this Agreement.
c) Housing, Automobile and Travel to Minnesota. Employer shall
provide Employee with an automobile and temporary housing to use
in Minnesota during the Term ("Housing and Auto Allowance"). In
addition, Employer shall reimburse Employee for travel expenses
to and from his home to Minnesota, and Employee agrees to
endeavor to schedule such travel so as to obtain the best fares
on a reasonably convenient basis.
5. Other Benefits During the Employment Period.
a) Employee shall receive all other benefits made available to
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 and
Housing and Auto Allowance, 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 thirty
(30) consecutive days, then Employer may, in its sole discretion,
terminate this Agreement and Employee shall then cease to receive
Base Salary, Housing and 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.
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c) Voluntary Termination. In the event that Employee voluntarily
terminates his employment, he shall cease to receive Base Salary,
Housing and Auto Allowance, and all other Benefits as of the date
of such termination
d) Termination With Cause. Employer shall be entitled to terminate
this Agreement and Employee's employment hereunder for Cause (as
herein defined), and in the event that Employer elects to do so,
Employee shall cease to receive Base Salary, Housing and 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 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) public conduct by Employee
substantially detrimental to the reputation of Employer, (iii)
material violation by Employee of any Employer policy, regulation
or practice; (iv) conviction of a felony; or (v) habitual
intoxication, drug use or chemical substance use by any
intoxicating or chemical substance. Notwithstanding the forgoing,
Employee shall not be deemed to have been terminated for Cause
unless and until Employee has received thirty (30) days' prior
written notice (a "Dismissal Notice") of such termination. 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.
e) By Employee for Employer Cause. Employee may terminate this
Agreement 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 this Agreement 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:
(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.
f) Other. If Employer terminates this Agreement for any reason other
than as set forth in Sections 6.a, 6.b., 6.c or 6.d. above, or if
Employee terminates this Agreement pursuant to Section 6.e.
above, Employer shall immediately pay Employee in a lump sum
payment, an amount equal all Base Salary which would otherwise be
payable until the end of the Term (collectively, the "Severance
Payment"). In addition, Employer shall continue to provide
Employee with Benefits until the end of the Term.
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g) 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 for arbitration of the dispute, the costs
thereof (including legal fees and expenses) to be shared equally
by the 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,
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 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 his
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 Employer and perform all actions
reasonably requested by 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
for any other person or entity engaged in the television home
shopping and infomercial business, any mail order or internet
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 or internet sites 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 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 member 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, "Noncompetition Period" shall mean the period
commencing as of the date of this Agreement and ending on either
(i) the date on which Employee ceases to be employed, if no
Severance is paid (except in the case of a voluntary departure by
Employee), or (ii) the last day of the third (3rd) month
following either the date on which the Employee voluntarily
departs or the date on which Employee is terminated during the
Term of this Agreement if Severance is paid.
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.
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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.
d) Employee represents and warrants to Employer that he is not
subject to any existing noncompetition or confidentiality
agreements which would in any way limit him from working in the
television home shopping, catalog, infomercial or internet
businesses, or from performing his duties hereunder or subject
Employer to any liability as a result of his employment
hereunder. Employee agrees to indemnify and hold Employer and its
affiliates harmless from and against any and all claims,
liabilities, losses, costs, damages and expenses (including
reasonable attorneys' fees) arising as a result of any noncompete
or confidentiality agreements applicable to Employee.
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, 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. Stock Options. Employee is being granted stock options in accordance
with the 2001 Omnibus Stock Option Plan of Employer (the "Plan") for
250,000 shares of ValueVision International, Inc. common stock at an
exercise price of $16.41 per share ("Stock Options"), subject to the
provisions thereof and exercisable at the time or times established by
the stock option agreement representing the Stock Options (the "Stock
Option Agreement"). The Stock Options shall vest as follows: 83,333 on
the date that is twelve (12) months from the Commencement Date; 83,333
on the date that is twenty-four (24) months from the Commencement
Date; and 83,334 on the date that is thirty-six (36) months from the
Commencement Date, so long as, on each applicable vesting date,
Employee shall be employed by Employer. If, as of the final day of the
Term, Employer and Employee have not entered
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into a new employment agreement or agreed in writing to extend the
term of this Agreement, then Stock Options representing 41,667 shares
shall vest on the last day of the Term (unless this Agreement has been
terminated prior to such time pursuant to Sections 6.c. or 6.d.
hereof), and shall be exercisable for a period of five (5) years from
the date of vesting, and all other Stock Options shall immediately be
cancelled.
14. 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.
15. 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.
16. 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, 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.
17. 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
address appearing on the records of Employer, or to such other address
as he may designate in writing to Employer.
18. 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.
19. Amendment. This Agreement may be amended only by an agreement in
writing signed by the parties hereto.
20. 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.
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21. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of Minnesota.
22. General Terms of Extended Employment Relationship. If Employer and
Employee mutually agree to enter into an extended employment
relationship prior to the end of the Term, then the terms of such
extended relationship shall be set forth in a new employment agreement
("New Agreement") having the general terms as outlined below, unless
as otherwise agreed by the parties:
a) Duties and Term. The duties and title of the position, and the
term of the New Agreement, shall be as mutually agreed and as set
forth in the New Agreement.
b) Base Salary. Employee would receive a base salary of at least
Three Hundred Thousand Dollars ($300,000) per annum for the term
of the New Agreement.
c) Automobile Allowance. Employer would pay Employee a monthly
automobile allowance of $550.00 per month ("Auto Allowance").
d) Moving Expenses. Employer would pay for the normal household
moving expenses associated with Employee's move to Minneapolis
("Moving Expenses") in accordance with Employer's relocation
expense policy for senior executives.
e) Bonus. Employee would receive bonus salary ("Bonus Salary")
within 90 days after the end of each of Employer's fiscal years
during the term of the New Agreement of up to $200,000 (pro-rated
based on the number of months in the applicable year in which
Employee is employed by Employer) based upon criteria to be set
forth in the New Agreement; and provided, that Employee would not
be entitled to receive a bonus if prior to the date of payment,
Employee's employment shall be terminated pursuant to Sections
6.c. or 6.d. of the New Agreement.
f) Stock Options. The Employee would continue to receive the
benefits of the Stock Options granted in Section 13 hereof, under
the terms of the Stock Option Agreement.
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/ Xxxx XxXxxxxxx
---------------------------------
Xxxx XxXxxxxxx
President and Chief Executive Officer
EMPLOYEE:
By: /s/ Xxxx Xxxx
-------------------------------------
Xxxx Xxxx
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