EXHIBIT 10.1
Employment Agreement, dated as of June 2, 1998, between the Company and Xxxx
Xxxxxxxx
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is dated as of June 2, 1998 and
is between NATIONAL MEDIA CORPORATION, a Delaware corporation (the "Company"),
and Xxxx X. Xxxxxxxx (the "Executive").
The Company desires to employ the Executive as an executive of the
Company, and the Executive desires to accept such employment, all on the terms
and conditions set forth herein. Accordingly, in consideration of the mutual
covenants and agreements set forth herein, and intending to be legally bound
hereby, the Company and the Executive agree as follows:
1. Employment.
(a) Duties. The Company shall employ the Executive, on the
terms set forth in this Agreement, as a Senior Vice President. The Executive
accepts such employment with the Company and shall perform and fulfill such
duties as are reasonably assigned to the Executive hereunder by the the Board of
Directors of the Company (the "Board"), or such senior officer as the Board
shall appoint, devoting the Executive's best efforts and professional time and
attention to the performance and fulfillment of the Executive's duties and to
the advancement of the interests of the Company, subject only to the direction,
approval, control and directives of the Board or its designee. Nothing contained
herein shall be construed, however, to prevent the Executive from investing,
trading in or managing, for the Executive's own account and benefit, stocks,
bonds, securities, real estate, commodities or other forms of investments
(subject to law and Company policy with respect to trading in Company
securities), or serving on noncompetitive corporate boards.
(b) Place of Performance. In connection with the Executive's
employment by the Company, the Executive shall be based in the Philadelphia, PA
metropolitan area, except for required travel on Company business. The Company
shall furnish the Executive with office space, secretarial assistance and such
other facilities and services as shall be suitable to the Executive's position
and reasonably sufficient and reasonably satisfactory to the Executive for the
performance of the Executive's duties as contemplated hereby.
2. Term. The Executive's employment under this Agreement shall be
deemed to have commenced as of the date hereof (the "Commencement Date") and
shall, unless sooner terminated in accordance with the provisions hereof,
continue uninterrupted through the eight (8) month anniversary of the Company's
written notice that the Agreement will terminate, effective on such eight (8)
month anniversary. As used herein, the "Term" shall refer to the period expiring
on such eight (8) month anniversary.
3. Compensation.
(a) Salary. During the Term, the Executive shall be paid an
annual salary (the "Base Salary") payable in installments at such times as the
Company customarily pays its other executive employees (but in any event no less
often than monthly). The Base Salary during the Term hereof shall be paid at the
minimum annual rate of two hundred ten thousand ($210,000) US dollars. The Base
Salary may be increased from time to time. Compensation of the Executive by Base
Salary payments shall not be deemed exclusive and shall not prevent the
Executive from participating in any other compensation or benefit plan of the
Company. The Base Salary payments hereunder shall
not in any way limit or reduce any other obligation of the Company hereunder,
and no other compensation, benefit or payment hereunder shall in any way limit
or reduce the obligation of the Company to pay the Base Salary to the Executive.
(b) Management Incentive Plan. In addition to the Base Salary
provided for hereunder, the Executive shall participate in such plan of bonus,
incentive or additional compensation as the Company may implement. The level of
such participation shall be at a level commensurate with other Senior Vice
Presidents of the Company, allocated as seen fit by the Compensation Committee,
from time to time in accordance with the terms of such plan. All amounts payable
under this Section 3(b) shall be paid at the customary time and in the customary
manner for payments under each such plan of incentive, bonus or additional
compensation. Executive shall have the right to receive a prorata portion of a
full year bonus for any partial plan year during the Term hereof.
(c) Stock Options. The Company may (but shall not be obligated
to) grant to the Executive options ("Options") to purchase shares of the
Company's common stock pursuant to one or more separate additional stock option
agreements made under and subject to the terms of the Company's 1991 Stock
Option Plan, as amended (the "Stock Option Plan"), or any successor plan.
(d) Health Insurance and Other Benefits. During the Term, the
Executive shall receive all employee benefits offered by the Company to its
employees, including, without limitation, all pension, profit sharing,
retirement, salary continuation, deferred compensation, disability insurance,
hospitalization insurance, major medical insurance, medical reimbursement,
survivor income, life insurance and any other benefit plan or arrangement
established and maintained by the Company, subject to the rules and regulations
then in effect regarding participation therein. Unless such change is required
by federal, state or local law, the Company shall not make any changes in any
employee benefit plan or arrangement that would result in a disproportionately
greater reduction in the rights of, or benefits to, the Executive compared with
any other senior executive of the Company.
(e) Withholding. The Company may withhold from any
compensation, bonus or benefits payable or otherwise conferred by this Agreement
all federal, state, city or other taxes as shall be required pursuant to any law
or governmental regulation or ruling.
4. Life Insurance.
(a) Generally. At the Executive's option, the Executive may
obtain up to $1,000,000 in face amount of term life insurance to be carried on
the Executive's life. During the Term the Company shall reimburse, on a semi
annual basis, the premiums paid by the Executive for periods covered by the Term
for such insurance upon presentation of invoices duly reflecting such premiums
(subject, however, to the limitations on reimbursement set forth in Section 4(b)
hereof). The Executive shall be the owner of such life insurance policy and
shall have the absolute right to designate the beneficiaries thereunder. The
Executive shall be solely responsible for procuring any such life insurance. The
Company shall have no independent obligation to procure such life insurance or
any other insurance on the life of the Executive (excepting only such insurance
as the Company may offer to its executives and key management employees as part
of its standard benefit package).
(b) Limitation on Reimbursement Obligation. Notwithstanding
anything to the contrary contained herein, the Company shall not be obligated to
reimburse premium payments under Section 4(a) hereof or otherwise to the extent
that such payments exceed the rates which would be obtainable for such insurance
on persons of similar age and position who are nonsmokers and otherwise in good
health.
5. Reimbursement of Expenses. The Executive shall be reimbursed for all
items of travel, entertainment and miscellaneous expenses which the Executive
reasonably incurs in connection with the performance of the Executive's duties
hereunder, provided that the Executive shall submit to the Company such
statements and other evidence supporting said expenses as the Company may
reasonably require.
6. Automobile Allowance. During the Term, the Company shall pay the
Executive a monthly automobile allowance of seven hundred ($700) US dollars (the
"Automobile Allowance").
7. Vacations. The Executive shall be entitled to the number of paid
vacation days in each calendar year determined by the Company from time to time
for its senior executive officers, but not less than three (3) weeks in any
calendar year (prorated in any calendar year during which the Executive is
employed hereunder for less than the entire year in accordance with the number
of days in such calendar year during which the Executive is so employed). The
Executive shall also be entitled to all paid holidays given by the Company to
its executive officers.
8. Termination of Employment.
(a) Death or "Total Disability".
(1) Generally. If the Executive should die
during the Term, this Agreement shall terminate as of the date of the
Executive's death, and the Company shall have no further obligations hereunder,
except to the extent specifically provided in this Section 8(a). In the event of
the Total Disability (as that term is defined below) of the Executive for one
hundred eighty (180) days in the aggregate during any consecutive nine (9) month
period during the Term, the Company shall have the right to terminate this
Agreement by giving the Executive thirty (30) days prior written notice thereof,
and upon the expiration of such notice period, the Executive's employment under
this Agreement shall terminate. If the Executive shall resume his duties within
thirty (30) days after receipt of such a notice of termination and continue to
perform such duties for four (4) consecutive weeks thereafter, this Agreement
shall continue in full force and effect, without any reduction in Base Salary,
other compensation and other benefits, and the notice of termination shall be
considered null and void and of no effect. Upon termination of this Agreement
under this Section 8(a), the Company shall have no further obligations or
liabilities under this Agreement, except to pay to the Executive's estate or the
Executive, as the case may be, the portion, if any, that remains unpaid of the
Base Salary for the period prior to termination.
(2) "Total Disability" Defined. The term "Total
Disability," as used herein, shall mean a mental or physical condition which, in
the reasonable opinion of an independent, qualified medical doctor selected by
the Company, renders the Executive unable or incompetent to carry out the
material duties and responsibilities of the Executive under this Agreement at
the time the disabling condition was incurred. Notwithstanding the foregoing, if
the Executive is covered under any policy of disability insurance provided under
this Agreement, under no circumstances shall the definition of Total Disability
be different from the definition of that term in such policy.
(b) Dismissal for "Cause".
(1) Generally. Subject to the notice requirements
set forth in this Section 8(b), the Company may dismiss the Executive for Cause
and thereby terminate this Agreement. The Executive shall not be deemed to have
been dismissed for Cause unless and until the Executive has received thirty (30)
days prior written notice of such dismissal and termination of this Agreement
("Notice of Dismissal"). If the Executive does not dispute such determination
within thirty (30) days after receipt of Notice of Dismissal, the Executive
shall not have the remedies provided pursuant to Section 8(f) of this Agreement.
(2) "Cause" Defined. For purposes of this
Agreement, the Company shall have "Cause" to terminate this Agreement if the
Executive, in the reasonable judgment of the Company, (i) materially breaches
any of the Executive's agreements, duties or obligations under this Agreement
(including, but not limited to, material failure to perform job duties) and has
not cured or commenced in good faith to cure such breach within thirty (30) days
after receipt of Notice of Dismissal; (ii) embezzles or converts to the
Executive's own use any funds or other material property of the Company (iii)
unreasonably destroys any material property of the Company; (iv) appropriates or
usurps any client, customer, employee or opportunity of the Company; (v) is
convicted of a felony; (vi) is adjudicated as mentally incompetent; or (vii) is
habitually intoxicated or is diagnosed by an independent medical doctor to be
addicted to any unlawful drug, or to any controlled substance which negatively
impacts upon his ability to perform his duties hereunder.
(c) Resignation for "Good Reason".
(1) Generally. Subject to the notice requirements
set forth in this Section 8(c), the Executive may resign for Good Reason and
thereby terminate this Agreement. Except as provided in Section 8(e) of
this Agreement, any such termination shall be without liability of either party
to the other. The Executive shall not be deemed to have resigned for Good Reason
unless and until the Company has received thirty (30) days prior written notice
of such resignation and termination of this Agreement ("Notice of Resignation
for Good Reason"). If the Company does not dispute such determination within
thirty (30) days after receipt of Notice of Resignation for Good Reason, the
Company shall not have the remedies provided pursuant to Section 8(f) of this
Agreement.
(2) "Good Reason" Defined. For purposes of this
Agreement, the Executive shall have "Good Reason" to resign and terminate this
Agreement upon (i) the failure by the Company to comply with any material
provision of this Agreement which is not cured within thirty (30) days after
receipt of Notice of Resignation for Good Reason, or (ii) any act or omission on
the part of the Company which is intended to be unreasonably prejudicial to the
business or professional reputation or standing of the Executive, unless the
Company reverses such act or omission and rectifies such prejudice to the
Executive's reasonable satisfaction within thirty (30) days after receipt of
Notice of Resignation for Good Reason.
(d) Consequences of Termination without Cause or Resignation
for Good Reason.
(1) Severance Pay. If the Company terminates this
Agreement without Cause, effective other than at the expiration of the Term, or
the Executive resigns and terminates this Agreement for Good Reason, then the
Company shall pay the Executive, in lieu of other damages, except as
specifically provided herein, an amount equal to his Base Salary (calculated at
the annual rate in effect as of the effective date of termination) for the
remainder of the Term in effect as of the date of termination. Such amount shall
be payable in installments, the amount and frequency of which shall be identical
to the periodic payments of Base Salary then payable to the Executive hereunder,
until such amount is paid in full.
(2) Continuation of Benefits. If the Company
terminates this Agreement without Cause, effective other than at the expiration
of the Term, or the Executive resigns and terminates this Agreement for Good
Reason, then the Company shall maintain in full force and effect for the
continued benefit of the Executive, for the remaining Term, all employee benefit
plans and programs in which the Executive was entitled to participate
immediately prior to the effective date of such termination, provided that the
Executive's continued participation is permissible under the terms and
conditions of such benefit plans and programs. If the Executive's participation
in any benefit plan or program (excluding the Stock Option Plan, the Management
Incentive Plan and any successor plans) is not permissible under the terms
thereof, the Company shall arrange to provide the Executive with benefits
substantially similar to those which the Executive is entitled to receive under
such plans and programs. At the end of the period of coverage, the Executive
shall have the option to have assigned to the Executive at no cost and with no
apportionment of prepaid premiums any assignable insurance policy owned by the
Company which relates specifically to the Executive. Notwithstanding anything to
the contrary contained in this Agreement, following the effective date of any
such termination (i) the Executive shall no longer be entitled to receive the
Automobile Allowance, (ii) Options unvested as of the date of such termination
shall expire, and (iii) the Executive's continued eligibility to participate in
the Management Incentive Plan (or any successor plan) shall be subject to the
terms and conditions of such plan.
(e) Consequences of Resignation Without Good Reason. If
Executive resigns, and thereby terminates this Agreement, without Good Reason,
the Company shall have no obligation to Executive hereunder subsequent to the
effective date of such resignation.
(f) Arbitration. If the Executive disputes that Cause exists
for the Executive's dismissal and termination of this Agreement or if the
Company disputes that Good Reason exists for the Executive's resignation and
termination of this Agreement, the disputing party shall serve the other with
written notice of such dispute (a "Dispute Notice") within thirty (30) days
after receipt of the Notice of Dismissal or Notice of Resignation for Good
Reason, as the case may be. Within fifteen (15) days thereafter, the disputing
party shall, in accordance with the Rules of the American Arbitration
Association ("AAA"), file a petition with the AAA for arbitration of the
dispute. Such proceeding shall also determine all other disputes between the
parties relating to the Executive's employment. The parties covenant and agree
that the decision of the AAA shall be final and binding and hereby waive their
rights to appeal therefrom. The costs of such proceeding shall be shared equally
by the Executive and the Company unless an order of the AAA provides otherwise.
Except as otherwise provided in Section 11(a) hereof, each party shall be
responsible for its legal fees incurred in such proceeding.
9. No Mitigation. The Executive shall not be required to mitigate the
amount of any payment or benefit provided for in this Agreement by seeking other
employment or otherwise nor, except as provided herein, shall the amount of any
payment provided for in this Agreement be reduced by any compensation earned by
the Executive as the result of the Executive's employment by another employer.
10. Restrictive Covenants.
(a) Nonsolicitation. During the Covenant Period (as defined
below), the Executive will not solicit for employment any employee or consultant
of the Company or any of its subsidiaries. For purposes of this Agreement, the
"Covenant Period" shall consist of the Term and the one-year period following
the expiration of the Term, but in no event shall the Covenant Period extend for
a period greater than one (1) year following the cessation of any payments
pursuant to Section 3(a) or Section 8 hereof.
(b) Confidential Information.
(1) Duty of Care. The Executive shall not,
directly or indirectly, disclose to any person or entity for any reason or use
for the Executive's own personal benefit any Confidential Information (as
defined in Section 10(b)(3) hereof) either during the Term or thereafter,
despite any early termination of this Agreement, and shall at all times take all
precautions reasonably necessary to protect Confidential Information from loss
or disclosure to third parties.
(2) Return of Confidential Information. Upon the
expiration or earlier termination of this Agreement, the Executive shall
promptly return to the Company all documents and other tangible property in the
Executive's possession or control which constitute, contain or incorporate
Confidential Information, whether prepared by the Executive or others.
(3) "Confidential Information" Defined. For
purposes of this Agreement, "Confidential Information" shall mean all
information, whether in written, electronic or oral form, disclosed or known to
the Executive in the course of the Executive's employment by the Company,
concerning the operations or business of the Company or any of its subsidiaries,
including, without limitation, (i) marketing and promotional plans and
strategies, (ii) information relating to products conceived, developed in the
process of development, (iii) information, including names and addresses,
relating to with licensors, suppliers, producers performers and program
providers, (iv) information relating to the purchase and placement of media,
results of media deployment or media monitoring and tracking systems, (v)
information relating to rates, costs and facilities for telemarketing, order
processing, fulfillment or credit card processing services, (vi) financial
information beyond that which is publicly reported by the Company, and (vii) all
other proprietary and competitively sensitive information. Notwithstanding the
foregoing, Confidential Information shall not include any information which (a)
is or becomes within the public domain through no act of the Executive in breach
of this Agreement, (b) was lawfully in the possession of the Executive without
any restriction on use or disclosure prior to its disclosure hereunder, (c) is
lawfully received from another source subsequent to the date of this Agreement
without any restriction on use or disclosure, (d) is deemed in writing by the
Company no longer to be Confidential Information, or (e) is required to be
disclosed by order of any court of competent jurisdiction or other governmental
authority.
(d) Injunctive Relief. The parties hereto agree that any
breach by the Executive of the provisions of Sections 10(a) or (b) hereof will
result in irreparable and continuing damage to the Company (or one or more of
its subsidiaries or successors and assigns) for which there will be no adequate
remedy at law. Accordingly, in the event of any such breach, the Company (or its
subsidiaries, successors or assigns, as the case may be) shall be entitled to
injunctive relief and/or an order for specific performance, without bond, with
respect to such breach. The Executive shall not oppose such relief on the
grounds that there is an adequate remedy at law, and such right shall be
cumulative and in addition to any other remedies at law or in equity (including
monetary damages) which the Company (or its subsidiaries, successors or assigns)
may have on account of such breach.
11. Counsel Fees and Indemnification.
(a) Counsel Fees. If it shall be necessary or desirable for
the Executive to retain legal counsel and/or incur other costs and expenses in
connection with the enforcement of any or all of the Executive's rights under
this Agreement, including participation in any proceeding contesting the
validity or enforceability of this Agreement and any arbitration proceeding
conducted pursuant to Section 8(f) of this Agreement, the Executive shall be
entitled to recover from the Company the Executive's reasonable attorney's fees
and costs and expenses in connection with the enforcement of the Executive's
rights. No such fees or costs shall be payable, however, if the Company is
successful on the merits.
(b) Indemnification. The Company shall indemnify and hold the
Executive harmless to the maximum extent permitted by law against judgments,
fines, amounts paid in settlement and reasonable expenses, including attorneys'
fees incurred by the Executive, in connection with the defense of, or as a
result of, any action or proceeding (or any appeal from any action or
proceeding) in which the Executive is made or is threatened to be made a party
by reason of any act or omission of the Executive in the Executive's capacity as
an officer, director or employee of the Company, regardless of whether such
action or proceeding is one brought by or in the right of the Company, to
procure a judgment in its favor. Expenses (including attorneys' fees) incurred
by the Executive in defending any civil, criminal, administrative, or
investigative action, suit or proceeding shall be paid by the Company in advance
of the final disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of the Executive to repay such amount if it shall
ultimately be determined that the Executive is not entitled to be indemnified by
the Company as authorized in this Section 11(b).
12. Miscellaneous.
(a) Notices. All notices, requests, instructions, consents and
other communications to be given pursuant to this 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 the Company:
National Media Corporation
Eleven Penn Center
0000 Xxxxxx Xxxxxx - Xxxxx 0000
Xxxxxxxxxxxx, XX 00000
Attention: Vice Chairman
FAX: 215/000-0000
If to the Executive:
Xxxx X. Xxxxxxxx
000 Xxxxxx Xxxx Xxxxx
Xxxxxxxxxxx, XX 00000
The foregoing addresses may be changed at any time by notice given in the manner
herein provided.
(b) Entire Agreement. This Agreement contains the entire
understanding of the parties with respect to the subject matter hereof and
thereof and supersedes all prior negotiations, understandings and agreements,
whether oral or written, between them with respect to such subject matter. Each
party has executed this 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 Agreement; (ii) it has
had 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; (iv) it has
conducted such investigation, review and analysis as it has deemed necessary to
understand the provisions of this Agreement and the transactions contemplated
hereby; and (v) it has executed this Agreement of its own free will.
(c) Amendment. No amendment of this Agreement shall be
effective unless embodied in a written instrument executed by the Executive and
a duly authorized officer of the Company.
(d) Waiver of Breach. The failure of either party hereto at
any time enforce any of the provisions of this 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 Agreement or any provisions hereof or the right of any party
hereto to thereafter enforce each and every provision of this Agreement. No
waiver of any breach of any of the provisions of this 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 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 the Executive
may not assign this Agreement or any rights hereunder to any person or entity,
other than by the laws of descent and distribution.
(f) Governing Law. This 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.
(g) Severability. All of the provisions of this Agreement are
intended to be distinct and severable. If any provision of this 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 Agreement.
(i) Counterparts. This 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 Agreement. This Agreement may
be executed and delivered via electronic facsimile transmission with the same
force and effect as if it were executed and delivered by the parties
simultaneously in the presence of one another.
IN WITNESS WHEREOF, this Agreement has been executed by the Executive
and on behalf of the Company by its duly authorized officer as of the date first
above written.
Attest: NATIONAL MEDIA CORPORATION
By:
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Chairman, Compensation Committee Xxxxxxxxx Xxxxxx,
Chairman of the Board
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Xxxx X. Xxxxxxxx
