EXHIBIT 99.1
RETENTION AND NONCOMPETITION AGREEMENT
THIS RETENTION AND NONCOMPETITION AGREEMENT (this "Agreement"), dated as of
October 23, 1995, is by and between DIMAC Corporation, a Delaware corporation
(the "Company"), Heritage Media Corporation, an Iowa corporation ("Parent"), and
Xxxxxxx X. XxXxxxxxx ("Executive").
WHEREAS, Executive is the Chairman and Chief Executive Officer of the
Company; and
WHEREAS, concurrently herewith, each of Parent and the Company has executed
and delivered an Agreement and Plan of Merger, dated as of the date hereof (the
"Merger Agreement"); and
WHEREAS, capitalized terms not otherwise defined herein shall have the
respective meanings set forth in the Merger Agreement; and
WHEREAS, in order to provide reasonable assurances to Parent to enter into
the Merger Agreement, the Executive is willing to enter into this Agreement upon
the terms and conditions set forth herein; and
WHEREAS, the Company wishes to continue to retain Executive in its employ,
to receive Executive's assistance in the consummation of the Merger and to
provide continuity of management of the Company before and after the Merger; and
WHEREAS, Executive has agreed to continue his employment with the Company,
to assist in the consummation of the Merger and to participate in the management
of the Company before and after the Merger, provided that the Company and Parent
enter into this Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, and certain other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. TERM OF AGREEMENT.
(a) This Agreement shall become effective on the Effective Date and shall
continue until the earliest of:
(i) the date Company terminates it for "Cause;"
(ii) the death or total disability of Executive,
(iii) the date Executive terminates it for any reason other than a breach
of this Agreement by Company, or
(iv) December 31, 1998.
(b) For purposes of this Agreement, the term "Cause" shall mean (i)
Executive's conviction for any action constituting a criminal felony (other than
automobile related violations); (ii) Executive's willful and continued refusal
to follow reasonable instructions of the Board of Directors of the Company which
are material to the Company's operations or prospects and only after the Board
of Directors of the Company provides written notice to the Executive which
identifies with reasonable specificity the manner in which the Executive refused
to follow such instructions and Executive has been provided a reasonable
opportunity to cure such deficiency; (iii) at any time prior to July 1, 1997,
Executive devoting less than substantially all of his full time during normal
business hours to the Company and which is not promptly cured after written
notice from the Board of Directors of the Company to the Executive; or (iv) at
any time on and after July 1, 1997, Executive devoting materially less than the
scheduled amount of his time during normal business hours to the Company (the
scheduling of which will be at the discretion of the Company upon reasonable
advance notice to the Executive, but which will be in increments of not less
than one full day and not to exceed 10 days in any calendar month) and which is
not promptly cured after written notice from the Board of Directors of the
Company to the Executive.
(c) It is contemplated that, prior to July 1, 1997, Executive shall remain
located in the metropolitan area in which the Company's corporate headquarters
are currently located; provided, however, Executive may from time to time be
required to do such travelling as the Board of Directors of the Company may
reasonably request. If the Company should require Executive to relocate more
than 30 miles, Executive may terminate his employment and such termination shall
be deemed to be a termination by Company without "Cause," thereby entitling
Executive to receive the base salary payable hereunder, plus medical/health
benefits, through December 31, 1998.
2. COMPENSATION, BENEFITS AND RESPONSIBILITIES.
(a) The Merger shall not result in any diminution of, or adverse change in,
(i) the scope of Executive's duties and responsibilities for the Company, (ii)
Executive's title, organizational position and reporting relationship(s) within
the Company, (iii) Executive's base salary (using the annual rates in effect on
October 9, 1995), target bonus, bonus plan parameters and employee benefits (it
being understood that the changes, if any, employee benefits shall be viewed in
their entirety and not on a plan by plan basis). Notwithstanding the foregoing,
it is understood and acknowledged that Executive intends to devote only a
portion of his business time to the Company on and after July 1, 1997 and will
relinquish his title and responsibilities as chief executive officer at such
time.
(b) Executive's bonus with respect to the year ended December 31, 1995 shall
be paid in accordance with the terms of the bonus plan as in effect on the date
hereof and shall exclude any financial impact resulting from the Merger or the
costs associated with the Company's cancelled public equity offering.
(c) With respect to periods on and after July 1, 1997, Executive will be
reimbursed for normal travel expenses from his residence to and from St. Louis
(or such other requested location for the performance of his services).
3. STOCK OPTIONS. Executive shall be entitled, in his sole discretion, to
elect to "roll-over" (in whole or in part) his fully-vested outstanding employee
stock options granted under the Company's stock option plans into an equivalent
dollar amount of fully-vested employee stock options under Parent's
non-qualified stock option plan. Such rolled-over options will be structured to
expire 10 years from the date of original grant by the Company; however, such
options will terminate upon the Executive's retirement from his employment with
the Company pursuant to the terms of Parent's stock option plan. Executive has
advised Parent that his present intention is to make an affirmative election to
participate in such roll-over on the Effective Date.
4. COVENANT NOT TO COMPETE.
(a) Executive hereby agrees that for a period commencing on the date hereof
and ending two years after the date on which Executive's employment with the
Company terminates, unless the prior written approval of the Board of Directors
of the Company is obtained, the Executive will not, directly or indirectly, as
an officer, employee, consultant, partner, beneficial or record stockholder or
otherwise, participate, engage in, own or invest in any business (other than as
a holder of not more than 5% of the capital stock of a publicly held
corporation) which is engaged, in providing direct marketing services in the
United States.
(b) Executive acknowledges that compliance with the provisions of Section
4(a) hereof is necessary to protect the goodwill and other proprietary rights of
the Company and that failure to comply with the provisions of Section 4(a)
hereof will result in irreparable and continuing damage to the Company for which
there would be no adequate remedy at law. In the event that Executive shall fail
to comply with the provisions of Section 4(a) hereof, the Company and its
successors and assigns shall be entitled to injunctive relief in addition to
such other relief as may be appropriate at law in order to ensure compliance
with the provisions of Section 4(a) hereof.
(c) Executive shall be released from the restrictions of this Section 4(a)
if the Company terminates Executive's employment hereunder without "Cause."
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5. ASSIGNMENT; SUCCESSORS IN INTEREST. The terms and conditions of this
Agreement shall inure to the benefit of and be binding upon the successors and
assigns (whether direct or indirect, by purchase, merger or reorganization) to
all or substantially all of the business or assets of the Company and/or the
Parent, and the heirs, executors and personal representatives of Executive.
6. WAIVER. Failure to insist upon strict compliance with any of the terms,
covenants or conditions of this Agreement shall not be deemed a waiver of such
term, covenant or condition, nor shall any waiver or relinquishment of any right
or power hereunder at any one or more times be deemed a waiver or relinquishment
of such right or power at any other time or times.
7. ATTORNEY'S FEES. If Executive prevails with respect to the resolution
of any dispute hereunder, he shall be entitled to reasonable attorney's fees,
arbitration costs and any court costs associated with any legal action brought
by him to enforce his rights under this Agreement.
8. SEVERABILITY. If any provision of this Agreement is held to be illegal,
invalid or unenforceable under present or future law, such provision shall be
fully severable, and this Agreement shall be construed and enforced as if such
illegal, invalid or unenforceable provision were never a part hereof, and the
remaining provisions shall remain in full force and effect and shall not be
affected by the illegal, invalid or unenforceable provision or by its severance.
9. NOTICE. Any notice, consent, demand, request, approval or other
communication to be given hereunder by any party to another shall be deemed to
have been duly given if given in writing and personally delivered or sent by
overnight delivery service, telegram, facsimile transmission, telex or United
States mail, registered or certified, postage prepaid, with return receipt
requested, to the following addresses:
If to the Company: Xxx Xxxxxxxxx Xxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: President
If to the Parent: One Galleria Tower
00000 Xxxx Xxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
If to Executive: Such address as indicated on the
payroll records of the Company
Notice so given shall, in the case of notice so given by mail, be deemed to be
given and received on the third calendar day after posting, in the case of
notice so given by overnight delivery service, on the date of actual delivery
and, in the case of notice so given by telegram, facsimile transmission, telex
or personal delivery, on the date of actual transmission or, as the case may be,
personal delivery.
10. ENTIRE AGREEMENT. This Agreement contains the entire agreement between
the parties with respect to its subject matter and supersedes any and all prior
understandings, agreements or correspondence between the parties.
11. TERMINATION OF AGREEMENT. In the event that the Merger is not
consummated, then either the Company or the Executive may terminate this
Agreement without liability, whereupon it shall become void and of no further
force or effect.
12. AMENDMENT OF AGREEMENT. This Agreement may not be amended or extended
in any respect except by a writing signed not only by all parties hereto.
13. ARBITRATION. All disputes, differences and controversies arising under
or in connection with this Agreement shall be settled and finally determined by
arbitration in the city of St. Louis, Missouri under the prevailing rules of the
American Arbitration Association. Any party hereto shall be entitled to cause
judgment on the decision or award of the arbitrator(s) to be entered by any
court of competent jurisdiction.
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14. GOVERNING LAW. The laws of the State of Missouri shall govern this
Agreement, its terms and conditions, and the rights and obligations of the
parties hereto.
THIS AGREEMENT CONTAINS ARBITRATION PROVISIONS WHICH MAY BE ENFORCED BY THE
PARTIES HERETO.
IN WITNESS WHEREOF, this Agreement has been executed by the undersigned as
of the date first above written.
DIMAC Corporation
By: /s/ XXXXXXX X. XXXXX
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Heritage Media Corporation
By: /s/ XXXXX X. XXXXXXXX
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/s/ XXXXXXX X. XXXXXXXXX
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XXXXXXX X. XXXXXXXXX
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