Exhibit 10.23
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT made and entered into as of the Effective Date as
hereinafter defined, by and among VALASSIS COMMUNICATIONS, INC. ("VCI"),
VALASSIS INSERTS, INC., a Delaware corporation whose principal place of business
is located at 00000 Xxxxxxxxxxx Xxxx, Xxxxxxx, Xxxxxxxx 00000 ("Valassis") (VCI
and Valassis sometimes collectively referred to as the "Corporations"), and
Xxxxxxx X. Xxxx (the "Executive").
IN CONSIDERATION of the mutual promises, covenants and agreements set forth
below, it is hereby agreed as follows:
Employment and Term.
-------------------
(a) The Corporations agree to employ the Executive, and the Executive
agrees to remain in the employ of the Corporations, in accordance with the terms
and provisions of this Agreement for the period set forth below (the "Employment
Period").
(b) The Employment Period shall commence as of the consummation date
(the "Effective Date") of the initial public offering of the common stock of VCI
(the "IPO") and shall continue until the close of business on March 31, 1996;
provided, however, that if the IPO has not been consummated prior to July 1,
1992, then this Agreement shall be deemed cancelled and of no force or effect.
Duties and Powers of Executive.
------------------------------
(c) Position. During the Employment Period, the Executive shall serve
as a Vice President of the Corporations.
(d) Duties. During the Employment Period, and excluding any periods of
vacation and sick leave to which the Executive is entitled, the Executive agrees
to devote substantially his full business time and attention during normal
business hours to the business and affairs of the Corporations and to the
discharge of his duties hereunder. The Executive shall perform his duties
hereunder subject to the customary oversight by the Chief Executive Officer and
the Boards of Directors of the Corporations (sometimes individually referred to
as the "Board" and collectively referred to as the "Boards").
Compensation.
------------
The Executive shall receive the following compensation for his services
hereunder to both Corporations:
(e) Salary. The Executive's annual base salary ("Annual Base Salary"),
payable not less often than biweekly, shall be at the annual rate of not less
than $171,990 commencing on the Effective Date. Subject, to customary oversight
by the Boards, and consistent with the authorities, duties and responsibilities
of the Chief
Executive Officer of the Corporations as of January 1, 1992, the Chief Executive
Officer of the Corporations may from time to time direct such upward adjustments
in Annual Base Salary as the Chief Executive Officer of the Corporations deems
to be necessary or desirable as a result of the Executive's performance,
including without limitation adjustments in order to reflect increases in the
cost of living.
(f) Annual Cash Bonus. With respect to each of Valassis' 1992, 1993,
1994, 1995 and 1996 fiscal years, the Executive shall be paid by the
Corporations a cash bonus of up to 100% of Annual Base Salary in accordance with
Schedule 1 hereto and the targets set forth therein or in the case of fiscal
years 1995 and 1996 as set by the Board provided, however, that for fiscal year
1996 the Executive shall receive only 75% of the full bonus that is earned for
such year; further provided, however, that 50% of any bonus payable hereunder,
to the extent to be paid for each fiscal year, shall be paid automatically and
without additional approval and the remaining 50% thereof shall be paid only if,
and to the extent, recommended and approved by the Chief Executive Officer of
the Corporations.
(g) Retirement, Incentive and Welfare Benefit Plans. During the
Employment Period and so long as the Executive is employed by the Corporations,
he shall be eligible to participate in all incentive, savings, retirement and
welfare plans, practices, policies and programs including, without limitation,
Valassis Employees' Profit Sharing Plan, its 401(k) Retirement Savings Plan, its
Flex Plan and the 1992 Long-Term Incentive Plan of VCI (the "Incentive Plan"),
Valassis' death benefit plans, its disability benefit plans, and its medical,
dental and health and welfare plans (the "Plans") applicable generally to
employees and/or other executives of the Corporations.
(h) Expenses. The Corporations agree to reimburse the Executive for
all expenses, including those for travel and entertainment, properly incurred by
him in the performance of his duties hereunder in accordance with policies
established from time to time by each Board and the Executive shall account to
the Corporations for such expenses.
(i) Fringe Benefits. During the Employment Period and so long as the
Executive is employed by the Corporations, the Corporations shall furnish an
automobile to the Executive and pay all of the related expenses for gasoline,
insurance, maintenance and repairs, in each case on a basis substantially
equivalent to such fringe benefit provided to the Executive in the past.
(j) Vacation and Other Absences. During the Employment Period and so
long as the Executive is employed by the Corporations, he shall be entitled to
paid vacation and such other paid absences whether for holidays, illness,
personal time or any similar purposes, in accordance with the plans, policies,
programs and practices of the Corporations in effect from time to time.
Termination of Employment.
-------------------------
(k) Death or Disability. The Executive's employment shall terminate
automatically upon the Executive's death during the Employment Period. If the
Corporations determine in good faith that Disability (as defined below) of the
Executive has occurred during the Employment Period, they may give to the
Executive written notice in accordance with Section 1(w) of this Agreement of
their intention to terminate the Executive's employment. In such event, the
Executive's employment with the Corporations shall terminate effective on the
30th day after receipt of such notice by the Executive (the "Disability
Effective Date"), provided, that within the 30 days after such receipt, the
Executive shall not have returned to full-time performance of the Executive's
duties. For purposes of this Agreement, "Disability" shall mean the absence of
the Executive from the Executive's duties with the Corporations for a period of
at least 180 days during any 12 month period as a result of incapacity due to
mental or physical illness.
(l) By the Corporations for Cause. The Corporations may terminate the
Executive's employment during the Employment Period for Cause. For purposes of
this Agreement, "Cause" shall mean (i) the conviction of the Executive for the
commission of a felony, (ii) action by the Executive involving willful
malfeasance or gross negligence or failure to act by the Executive involving
material nonfeasance, which, at the time of such willful malfeasance or gross
negligence or material nonfeasance, has a materially adverse effect on the
Corporations or (iii) the failure by the Executive to follow directives of the
Boards (to the extent permitted by applicable law) or the Chief Executive
Officer of the Corporations or the failure to meet reasonable performance
standards established by the Chief Executive Officer of the Corporations.
(m) Notice of Termination. Any, termination by the Corporations for
Cause shall be communicated by Notice of Termination to the Executive in
accordance with Section 1(w) of this Agreement. For purposes of this Agreement,
a "Notice of Termination," means a written notice which (i) indicates the
specific termination provision in this Agreement relied upon, (ii) to the extent
applicable, sets forth in reasonable detail the facts and circumstances claimed
to provide a basis for termination of the Executive's employment under the
provision so indicated and (iii) if the Date of Termination (as defined in
Section 1(n)) is other than the date of receipt of such notice, specifies the
termination date (which date shall be not more than 30 days after the giving of
such notice). The failure by the Corporations to set forth in the Notice of
Termination any fact or circumstance which contributes to a showing of Cause
shall not waive any right of the Corporations hereunder or preclude the
Corporations from asserting such fact or circumstance in enforcing the
Corporations' rights hereunder.
(n) Date of Termination. "Date of Termination" means (i) if the
Executive's employment is terminated by the Corporations for Cause, the date of
receipt of the Notice of Termination or any later date specified therein, as the
case may be, (ii) if the Executive's employment is terminated by the
Corporations other than for Cause or Disability, the Date of Termination shall
be the date on which the Corporations notify the Executive of such termination
and (iii) if the Executive's employment is terminated by
reason of death or Disability, the Date of Termination shall be the date of
death of the Executive or the Disability Effective Date, as the case may be.
Obligations of the Corporations upon Termination.
------------------------------------------------
(o) Termination Other Than for Cause. During the Employment Period, if
the Corporation shall terminate the Executive's employment (other than in the
case of a termination for Cause) or the Executive's employment shall terminate
by reason of death or Disability (termination in any such case referred to as
"Termination"):
(i) the Corporations shall pay to the Executive in a lump
sum in cash the sum of (1) the Executive's Annual Base Salary through the
Date of Termination to the extent not theretofore paid and (2) any
compensation previously deferred by the Executive (together with any
accrued interest or earnings thereon) and any accrued vacation pay, in each
case to the extent not theretofore paid (the sum of the amounts described
in clauses (1) and (2) shall be hereinafter referred to as the "Accrued
Obligations"). The amounts specified in this Section 1(o)(i) shall be paid
within 30 days after the Date of Termination; and
(ii) in the event of Termination other than by reason of
the Executive's death or Disability, then beginning on the biweekly payment
date next following the Termination and on each biweekly payment date
thereafter until the end of the Employment Period (the period from such
Date of Termination until the end of the Employment Period herein called
the "Severance Period"), the Corporations shall pay to the Executive an
amount equal to the biweekly installment of the Executive's rate of Annual
Base Salary in effect as of such Date of Termination; and
(iii) in the event of Termination other than by reason of
the Executive's death or Disability, the Corporations shall pay to the
Executive in a lump sum in cash within 30 days after the date of
Termination a bonus in an amount equal to 100% of the maximum Annual Cash
Bonus for the fiscal year in which the event of Termination occurred,
whether or not earned; and
(iv) in the event of Termination other than by reason of the
Executive's death or Disability, then, during the Severance Period, the
Corporations shall continue medical and welfare benefits to the Executive
and/or the Executive's family at least equal to those which would have been
provided if the Executive's employment had not been terminated, such
benefits to be in accordance with the most favorable medical and welfare
benefit plans, practices, programs or policies (the "M&W Plans") of the
Corporations as in effect and applicable generally to other senior
executives of the Corporations and their families during the 90-day period
immediately preceding the Date of Termination or, if more favorable to the
Executive, as in effect generally at any time thereafter with respect to
other senior executives of the Corporations (but on a prospective basis
only unless, and then only to the extent, such more favorable M&W Plans are
by their terms retroactive), provided, however, that if the Executive
becomes
reemployed with another employer and is eligible to receive medical or
other welfare benefits under another employer-provided plan, the benefits
under the M&W Plans shall be reduced as provided in Section 0 of this
Agreement. For purposes of determining eligibility of the Executive for
benefits under the M&W Plans, the Executive shall be considered to have
remained employed until the end of the Severance Period.
(p) Termination by the Corporations for Cause. Subject to the
provisions of Section 0 of this Agreement, if the Executive's employment shall
be terminated for Cause during the Employment Period, the Corporations shall
have no further obligations to the Executive under this Agreement other than the
obligation to pay to the Executive Annual Base Salary through the Date of
Termination plus the amount of any compensation previously deferred by the
Executive, in each case to the extent theretofore unpaid.
Full Settlement; Mitigation.
---------------------------
The Executive shall make reasonable efforts to mitigate damages by seeking other
comparable employment. To the extent that the Executive shall receive
compensation or benefits from such other employment, the payments to be made and
the benefits to be provided by the Corporations as provided in this Agreement
shall be correspondingly reduced. If the Executive shall fail to make reasonable
efforts to mitigate damages by seeking other comparable employment, the
Corporations' obligations under this Agreement shall cease until such time as
the Executive commences to make such efforts. If the Executive finally prevails
with respect to any dispute among the Corporations, the Executive or others as
to the interpretation, terms, validity or enforceability of (including any
dispute about the amount of any payment pursuant to) this Agreement, the
Corporations agree to pay all legal fees and expenses which the Executive may
reasonably incur as a result of any such dispute; provided, however, that if the
Executive is not entitled to recover such legal fees and expenses pursuant to
the foregoing provisions of this Section 0, the Executive shall not be entitled
to recover any such legal fees or expenses, and he hereby waives any rights to
such recovery, under any provision of the By-laws (now or hereafter in effect)
of either of the Corporations which provide for indemnification of or payment to
the Executive of legal fees and expenses.
Confidential Information and Competitive Conduct.
------------------------------------------------
(q) Confidential Information. The Executive shall hold in a fiduciary
capacity for the benefit of the Corporations all secret, confidential
information, knowledge or data relating to the Corporations or any of their
affiliated companies, and their respective businesses, which shall have been
obtained by the Executive during the Executive's employment by the Corporations
or any of their affiliated companies and which shall not have been or now or
hereafter have become public knowledge (other than by acts by the Executive or
representatives of the Executive in violation of this
Agreement). During the Employment Period and for a period of 5 years thereafter,
the Executive shall not, without the prior written consent of the Corporations
or as may otherwise be required by law or legal process, communicate or divulge
any such information, knowledge or data to anyone other than the Corporations
and those designated by them.
(r) Covenant Not to Compete or Solicit. During the Employment Period,
the Executive shall not offer or sell any products or services, including
without limitation a free standing insert business, directly competitive in any
market with the business of the Corporations, nor shall he render services to
any firm, person or corporation so competing with the Corporations, nor shall he
have any interest, direct or indirect, in any business that is so competing with
the business of the Corporations; provided however, that ownership of 5% or less
of any class of debt or equity securities which are publicly-traded securities
shall not be a violation of this covenant. The foregoing provisions of this
Section 1(r) shall be extended for a period of one year after the end of the
Employment Period. So long as the Executive is employed hereunder, and for any
additional period of time described in the preceding sentence, the Executive
shall not, directly or indirectly, (i) solicit any employee of either of the
Corporations with a view to inducing or encouraging such employee to leave the
employ of either of the Corporations for the purpose of being hired by the
Executive or any employer affiliated with the Executive or (ii) solicit, take
away, attempt to take away, or otherwise interfere with the Corporations'
business relationship with any of their respective customers.
(s) In the event of a breach or threatened breach of this Section 0,
the Executive agrees that the Corporations shall be entitled to injunctive
relief in a court of appropriate jurisdiction to remedy any such breach or
threatened breach, the Executive acknowledging that damages would be inadequate
and insufficient.
Successors.
----------
(t) This Agreement is personal to the Executive and without the prior
written consent of the Corporations shall not be assignable by the Executive
otherwise than by will or the laws of descent and distribution. This Agreement
shall inure to the benefit of and be enforceable by the Executive's legal
representatives.
(u) This Agreement shall inure to the benefit of and be binding upon
the Corporations and their successors and assigns.
Miscellaneous.
-------------
(v) This Agreement shall be governed by and construed in accordance
with the laws of the State of New York, without reference to principles of
conflict of laws. The captions of this Agreement are not part of the provisions
hereof and shall have no force or effect. This Agreement may not be amended,
modified, repealed, waived, extended or discharged except by an agreement in
writing signed by the party against whom enforcement of such amendment,
modification, repeal, waiver, extension or discharge is sought. No person, other
than pursuant to a resolution of the Boards or a
committee thereof, shall have authority on behalf of the Corporations to agree
to amend, modify, repeal, waive, extend or discharge any provision of this
Agreement or anything in reference thereto.
(w) All notices and other communications hereunder shall be in writing
and shall be given by hand delivery to the other party or by registered or
certified mail, return receipt requested, postage prepaid, addressed as follows:
If to the Executive:
-------------------
Xxxxxxx X. Xxxx
c/o Valassis Inserts, Inc.
00000 Xxxxxxxxxxx Xxxx
Xxxxxxx, XX 00000
if to the Corporations:
----------------------
c/o Valassis Inserts, Inc.
00000 Xxxxxxxxxxx Xxxx
Xxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxx, Esq.
(x) The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement.
(y) The Corporations may withhold from any amounts payable under this
Agreement such Federal, state or local taxes as shall be required to be withheld
pursuant to any applicable law or regulation.
(z) This instrument contains the entire agreement of the Executive and
the Corporations with respect to the subject matter hereof and all promises,
representations, understandings, arrangements and prior agreements are merged
herein and superseded hereby.
IN WITNESS WHEREOF, the Executive and, pursuant to due authorization from their
respective Boards of Directors, each of the Corporations has caused this
Agreement to be executed as of the day and year first above written.
VALASSIS COMMUNICATIONS, INC.
By: /s/ Xxxxx X. Xxxxxxx
--------------------------
Name: Xxxxx X. Xxxxxxx
Title: President & CEO
VALASSIS INSERTS, INC.
By: /s/ Xxxxx X. Xxxxxxx
-------------------------
Name: Xxxxx X. Xxxxxxx
Title: Secretary
/s/
-------------------------
Xxxxxxx X. Xxxx
