EXHIBIT B
EXHIBIT 10.67
SEPARATION AGREEMENT
THIS SEPARATION AGREEMENT (this "AGREEMENT") is made and entered into
on November 25, 2003 (the "EFFECTIVE DATE") by and between ValueVision Media,
Inc., a Minnesota corporation with its principal place of business in Eden
Prairie, Minnesota (the "COMPANY"), and Gene McCaffery, an Illinois resident
("MCCAFFERY").
BACKGROUND
A. McCaffery has been employed by the Company since March 30, 1998
and is currently employed by the Company as its President and Chief Executive
Officer.
B. McCaffery currently serves as a member of the Company's Board of
Directors (the "BOARD") and is the Board's Chairman.
C. The Company and McCaffery entered into an Employment Agreement
dated March 30, 1998, which was amended and restated by the Amended and Restated
Employment Agreement dated December 2, 1999 as amended by Amendment No. 1 to the
1999 Restated Employment Agreement dated October 9, 2000 and Amendment No. 2 to
the 1999 Restated Employment Agreement dated September 10, 2002 (as so amended,
the "AMENDED AND RESTATED EMPLOYMENT AGREEMENT").
D. The parties have agreed that McCaffery will resign as President
and Chief Executive Officer of the Company, effective upon the date and subject
to the terms and conditions set forth in this Agreement.
E. The parties desire to resolve all present and potential issues
between them relating to McCaffery's employment and termination of his
employment, and have agreed to a full resolution of any such issues as set forth
in this Agreement.
F. In consideration of the mutual promises and provisions contained
in this Agreement, the parties, intending to be legally bound, agree as follows:
AGREEMENTS
1. RESIGNATION AS PRESIDENT AND CHIEF EXECUTIVE OFFICER. McCaffery agrees
to resign as President and Chief Executive Officer of the Company
effective on such date set forth in a written notice signed by a
majority of the non-employee members of the Board and which effective
date will be at least 15 calendar days following the date of delivery
of the notice or such earlier date agreed to by McCaffery and the
Company. If McCaffery is still the President and Chief Executive
Officer of the Company on and after December 31, 2003, then McCaffery
will also have the right to resign from such position, at his
discretion, after providing the Company with written notice at least 30
calendar days prior to the effective date of such resignation. The
effective date of any such resignation under this Section 1 is referred
to in this Agreement as the "TRANSITION DATE".
2. RESIGNATION FROM THE BOARD. McCaffery agrees to resign his seat on the
Board immediately upon receipt of the written request of a majority of
the non-employee members of the Board. In addition, McCaffery may
resign voluntarily from the Board at any time.
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3. RELEASES.
(a) MCCAFFERY RELEASE. Within 21 days following the Transition
Date, McCaffery will execute and deliver to the Company a
release in the form attached to this Agreement as Exhibit A
(the "MCCAFFERY RELEASE").
(b) VALUEVISION RELEASE. Concurrent with receipt of the McCaffery
Release, the Company will execute and deliver to McCaffery a
release in the form attached to this Agreement as Exhibit B
(the "VALUEVISION RELEASE" and, together with the McCaffery
Release, collectively the "RELEASES").
(c) INTERPRETATION. This Agreement will not be interpreted or
construed to limit the Releases in any manner and the
existence of any dispute respecting the interpretation or
alleged breach of this Agreement will not nullify or otherwise
affect the validity or enforceability of the Releases.
4. CONTINUED EMPLOYMENT.
(a) EMPLOYMENT THROUGH TRANSITION DATE. From the date of this
Agreement through the Transition Date, McCaffery will remain
employed by the Company as President and Chief Executive
Officer. During such period he shall continue to report to the
Board and shall faithfully and to the best of his ability
devote his full time and skills to such employment as
President and Chief Executive Officer. While he serves as
President and Chief Executive Officer, McCaffery (1) shall be
paid a base salary at the current annual rate of $900,000,
such rate to increase to $950,000 effective April 1, 2004 if
McCaffery continues as President and Chief Executive Officer
on and after such date, (2) shall be paid an automobile
allowance of $600 per month, and (3) shall be eligible to
continue to participate in such employee benefit plans and
programs of the Company in which he is currently participating
in accordance with the terms of such plans and programs.
(b) TRANSITION EMPLOYMENT AGREEMENT. The Company agrees to
continue to employ McCaffery from and after the Transition
Date as Special Advisor to the Board on the terms and subject
to the conditions set forth in the form of Transition
Employment Agreement attached to this Agreement as Exhibit C
(the "TRANSITION EMPLOYMENT AGREEMENT"). The existence of any
dispute under the Transition Employment Agreement will not
affect the rights or obligations of the parties under this
Agreement.
(c) DELIVERY REQUIREMENT. The Transition Employment Agreement will
become legally binding on McCaffery and the Company only if
McCaffery executes and delivers to the Company the Transition
Employment Agreement within 5 calendar days after the
Transition Date. At such time, the Company will execute and
deliver to McCaffery the Transition Employment Agreement.
(d) LEGAL EFFECT. Upon execution and delivery to the Company by
McCaffery of the Transition Employment Agreement in compliance
with Section 4(c):
(1) McCaffery's employment by the Company will be deemed
to have been continued as of the Transition Date
without interruption;
(2) the resignation of McCaffery as President and Chief
Executive Officer of the Company will not be deemed
to constitute a termination of employment under the
terms of that certain Promissory Note dated June 23,
2000 (the "PROMISSORY
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NOTE") given by McCaffery to the Company and no
accelerated repayment of the Promissory Note would be
required as a result thereof;
(3) the resignation of McCaffery as President and Chief
Executive Officer of the Company will not be deemed
to constitute a termination of employment under the
terms of any stock option agreement or restricted
stock agreement between McCaffery and the Company;
and
(4) any references to termination of employment in
Sections 5(d) or 9 will be deemed to refer to the
termination of McCaffery's employment by the Company
under the Transition Employment Agreement.
5. SEVERANCE.
(a) AMOUNTS. The total amounts to be paid to or on behalf of
McCaffery under this Agreement will be equal to the sum of the
following:
(1) an amount equal to the aggregate base salary that
would have been paid to McCaffery under Section 4(a)
of the Amended and Restated Employment Agreement if
he had remained employed as President and Chief
Executive Officer of the Company for the period from
the Transition Date through December 31, 2005, less
required deductions and withholdings;
(2) $1,583,000, less required deductions and
withholdings, in consideration of the first and
second extended term retention bonuses the Company
was required to pay McCaffery under Section 4(f) of
the Amended and Restated Employment Agreement;
(3) $291,666, less any required deductions and
withholdings, in consideration of the second extended
term signing bonus the Company was required to pay
McCaffery under Section 4(b) of the Amended and
Restated Employment Agreement; and
(4) the amount of the performance bonus for fiscal year
2003 that McCaffery would be entitled to, if any,
under the Company's 2002 Management Incentive Plan if
he had remained employed through January 31, 2004,
under the terms of such plan as determined based on
achievement of Company financial objectives
established by the Company's Compensation Committee,
less any required deductions and withholdings, such
amount to be prorated by the Company through the
Transition Date to reflect the actual portion of the
fiscal year during which McCaffery served as
President and Chief Executive Officer of the Company.
(b) TIMING OF PAYMENTS. The Company will pay the amounts set forth
in Section 5(a) to McCaffery as follows:
(1) the payments described in Sections 5(a)(1), (2) and
(3) will be paid as soon as practicable after
satisfaction by McCaffery of each of the conditions
precedent in Section 6, but not earlier than January
2, 2004; and
(2) the payment described in Section 5(a)(4), if any,
will be paid on the later of the date that each of
the conditions precedent in Section 6 are satisfied
by McCaffery and the date that other senior
executives of the Company are paid their
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performance bonuses for fiscal year 2003 under the
Company's 2002 Management Incentive Plan.
(c) ADDITIONAL BENEFITS. Subject to the satisfaction by McCaffery
of each of the conditions precedent in Section 6, the Company
will continue to provide health, dental and life insurance
benefits to McCaffery. If continuation of any coverage under
the Company's plans requires an election by McCaffery pursuant
to COBRA or similar laws, then the Company will pay for
coverage only if McCaffery elects to continue it in accordance
with such laws and the applicable plans. In the event that
McCaffery's participation in such plans is not possible under
any of the applicable plans and laws (for reasons other than
McCaffery's failure to comply with the election requirements
for continuation coverage), the Company will purchase
substantially similar coverage until the earlier of (1)
December 31, 2005, and (2) the date on which McCaffery becomes
eligible under another group plan for such particular type of
coverage that is substantially similar to the coverage
provided under the plans provided by the Company. McCaffery
and the Company agree to cooperate in good faith to seek the
most favorable rate for comparable coverage for McCaffery once
COBRA continuation coverage ends. The Company will be
obligated to comply with its obligations under this Section
5(c) whether or not McCaffery is employed by the Company under
the Transition Employment Agreement, except that the Company
will no longer have any obligations under this Section 5(c)
after December 31, 2005.
(d) VESTING OF RESTRICTED STOCK. Subject to the satisfaction by
McCaffery of each of the conditions precedent in Section 6,
the restricted stock granted to McCaffery pursuant to that
certain Restricted Stock Agreement effective February 1, 2003
shall vest in full upon termination of McCaffery's employment
with the Company.
(e) EFFECT OF PAYMENTS. The payment by the Company of the amounts
set forth in Section 5(a) and the fulfillment by the Company
of its obligations under Sections 5(c) and (d) will be in lieu
of any further payments or compensation that McCaffery would
otherwise be entitled to receive under the Amended and
Restated Employment Agreement but shall not affect any rights
of McCaffery under any stock option agreement with the
Company, whether or not such option grant was provided for
under the Amended and Restated Employment Agreement.
6. CONDITIONS PRECEDENT. McCaffery will be entitled to the consideration
described in Sections 5(a), (c) and (d) only if and when the following
conditions are satisfied by McCaffery:
(a) Within 21 days after the Transition Date McCaffery has
executed and delivered to the Company the McCaffery Release
(or, in the event of the earlier death or disability of
McCaffery, his estate or personal representative, as
applicable, has executed and delivered to the Company a
release substantially in the form of the McCaffery Release and
approved by the Company in the reasonable exercise of its
discretion);
(b) the rescission period set forth in the McCaffery Release has
expired, McCaffery has not rescinded the McCaffery Release,
and McCaffery confirms in writing to the Company after the
expiration of such rescission period that McCaffery has not
and will not rescind the McCaffery Release;
(c) McCaffery's employment with the Company prior to the
Transition Date or under the Amended and Restated Employment
Agreement has not been terminated for Cause (as such term is
defined under Transition Employment Agreement, whether or not
the Transition Employment Agreement has become effective),
there exists no event or
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circumstance that constitutes Cause and McCaffery has not
voluntarily resigned his employment with the Company except as
specifically provided pursuant to Section 1 of this Agreement;
(d) The representations and warranties of McCaffery contained in
this Agreement are true and correct in all material respects
as of the date of this Agreement and will be true and correct
in all material respects on the Transition Date, as if made on
the Transition Date.
(e) McCaffery will have observed and performed in all material
respects all covenants and agreements required by this
Agreement to be observed or performed by McCaffery on or prior
to the Transition Date, except where such covenants and
agreements are qualified as to materiality, in which case
McCaffery will have observed and performed such covenants and
agreements in all respects; and
(f) McCaffery will have delivered to the Company a certificate
executed by McCaffery and dated the Transition Date to the
effects set forth in Sections 6(d) and (e).
7. EFFECT ON CERTAIN BENEFITS.
(a) EXISTING STOCK OPTIONS; RESTRICTED STOCK. Except as
specifically provided in Section 5(d), this Agreement will not
affect or alter any of the previous agreements in effect
between the Company and McCaffery pertaining to any stock
options or restricted stock granted to McCaffery by the
Company.
(b) PREVIOUS SIGNING BONUSES. McCaffery will have no obligation to
return to the Company any portion of any signing bonus paid to
him under the Amended and Restated Employment Agreement prior
to the date of this Agreement.
8. REPAYMENT OF PROMISSORY NOTE; PLEDGE AGREEMENT. Notwithstanding
anything contained in this Agreement, the Promissory Note will continue
to remain payable according to its terms and that certain Pledge
Agreement dated as of June 23, 2000 ("PLEDGE AGREEMENT") will continue
in full force and effect. McCaffery understands and agrees that he must
continue to comply with the collateral requirements of the Note and
Pledge Agreement in accordance with their terms. In the event McCaffery
becomes a full-time employee of an employer other than the Company,
then any amounts to which McCaffery becomes entitled to receive under
either of this Agreement or the Transition Employment Agreement
subsequent to the commencement date of such other employment will be
applied first to repay any amounts payable under the Promissory Note.
9. NON-DISCLOSURE, NON-COMPETITION, AND NON-SOLICITATION AGREEMENTS.
(a) NON-DISCLOSURE AGREEMENT. McCaffery acknowledges that the
confidential information and data obtained by him during the
course of his employment concerning the business or affairs of
the Company, or any entity related thereto, are the property
of the Company and will be confidential to the Company. 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 McCaffery's
general business or direct marketing knowledge (the
"CONFIDENTIAL INFORMATION"). All the Confidential Information
shall remain the property of the Company and McCaffery agrees
that he will not disclose to any unauthorized persons or use
for his
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own account or for the benefit of any third party any of the
Confidential Information without the Board's written consent.
McCaffery agrees to deliver to the Company at the termination
of his employment or at such earlier date requested by the
Company, all memoranda, notes, plans, records, reports, video
and audio tapes and any and all other documentation (and
copies thereof) relating to the business of the Company, 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 McCaffery and others by proper means, readily
ascertainable from public sources known to McCaffery at the
time the information was disclosed or which is rightfully
obtained from a third party. It shall not be a breach of this
Section 9(a) for McCaffery to disclose Confidential
Information (1) as required by law, provided McCaffery
provides notice to the Company enabling it to seek a
protective order before disclosure; or (2) to his attorney
regarding litigation with the Company or other matters,
provided that McCaffery instructs his attorney not to disclose
such Confidential Information except with the advance written
consent of McCaffery and the Company or to the extent
necessary in connection with any dispute or potential dispute
between McCaffery and the Company.
(b) NON-COMPETITION AGREEMENT. McCaffery agrees that during his
employment with the Company and for a period of 6 months
following the date on which his employment with the Company
terminates for any reason, he will not, directly or
indirectly,
(1) 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 (a) the television home shopping business, or (b)
subject to the limitation set forth in the next
sentence, any business in which the Company competes
as of the date of termination of McCaffery's
employment with the Company or in which the Company
(upon authorization of the Board) has invested
significant research and development funds or
resources and contemplates entering into during the
following 12 months (the "RESTRICTED BUSINESS"), in
any country that the Company or any of its affiliates
operates during the term of McCaffery's employment
with the Company (the "RESTRICTED AREA"); or
(2) have any interest in any business engaged in the
Restricted Business in the Restricted Area other than
the Company (provided that nothing herein will
prevent McCaffery from owning in the aggregate not
more than 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 McCaffery has no participation in the management
or conduct of business of such corporation).
Notwithstanding any other provision of this Section 9,
"RESTRICTED BUSINESS" shall not include an internet- or
e-commerce-related business that is not also engaged in the
television home shopping business.
(c) COVENANT NOT TO HIRE OR RECRUIT EMPLOYEES. McCaffery agrees
that during his employment with the Company and for a period
of 12 months following the date on which his employment with
the Company terminates for any reason, he will not, directly
or indirectly, induce or attempt to induce any employee of the
Company or any entity related to the Company to leave his, her
or their employ, or in any other way interfere with the
relationship between the Company or any entity related to the
Company and any other employee of the Company or any entity
related to the Company.
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(d) COVENANT NOT TO SOLICIT CUSTOMERS. McCaffery agrees that
during his employment with the Company and for a period of 6
months following the date on which his employment with the
Company terminates for any reason, he will not, directly or
indirectly, induce or attempt to induce any customer,
supplier, franchisee, licensee, other business relation or any
affiliate of the Company or any entity related to the Company
to cease doing business with the Company or any entity related
to the Company, or in any way interfere with the relationship
between any customer, franchisee or other business relation
and the Company or any entity related to the Company, without
the prior written consent of the Board.
(e) ACKNOWLEDGMENT. McCaffery acknowledges that the provisions of
this Section 9 are reasonable and necessary to protect the
legitimate interests of the Company and that any violation of
this Section 9 by McCaffery will cause substantial and
irreparable harm to the Company to such an extent that
monetary damages alone would be an inadequate remedy therefor.
Therefore, in the event that McCaffery violates any provision
of this Section 9, the Company will be entitled to an
injunction, in addition to all the other remedies it may have,
restraining McCaffery from violating or continuing to violate
such provision.
(f) BLUE PENCIL DOCTRINE. If the duration of, scope of, or any
business activity covered by this Section 9 is in excess of
what is valid and enforceable under applicable law, such
provision will be construed to cover only that duration,
scope, or activity that is valid and enforceable. McCaffery
acknowledges that this Section 9 will be given the
construction which renders its provisions valid and
enforceable to the maximum extent, not exceeding its express
terms, possible under applicable laws.
10. MCCAFFERY'S REPRESENTATIONS AND WARRANTIES.
(a) GOOD FAITH. At all times that he was an employee, officer, or
director of the Company, McCaffery acted in good faith, had no
reasonable cause to believe that his conduct was unlawful, and
reasonably believed that his conduct was in or not opposed to
the best interests of the Company.
(b) CAPACITY: ENFORCEABILITY. McCaffery has the legal capacity to
execute and deliver this Agreement and the McCaffery Release
and to perform his obligations hereunder and thereunder. This
Agreement is, and upon execution and expiration of the
applicable revocation period the McCaffery Release will be,
the legal, valid and binding obligation of McCaffery,
enforceable in accordance with their respective terms.
(c) COMPANY STATEMENTS. McCaffery has not relied upon any
statements or representations made by the Company or its
attorneys, written or oral, including but not limited to
statements regarding tax or legal matters pertaining to
actions contemplated by this Agreement, other than the
statements set forth in this Agreement and the ValueVision
Release.
11. COMPANY'S REPRESENTATIONS AND WARRANTIES.
(a) CAPACITY: ENFORCEABILITY. The undersigned director of the
Company has the legal capacity to execute and deliver this
Agreement and the ValueVision Release on behalf of the
Company. This Agreement is, and upon execution the ValueVision
Release will be (subject to expiration of the rescission
period applicable to the McCaffery Release), the legal, valid
and binding obligation of the Company, enforceable in
accordance with their respective terms.
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(b) MCCAFFERY STATEMENTS. The Company has not relied upon any
statements or representations made by McCaffery or his
attorneys, written or oral, pertaining to actions contemplated
by this Agreement, other than the statements set forth in this
Agreement and the McCaffery Release.
12. ADDITIONAL BONUS. The Board will consider, in its sole and absolute
discretion, whether to pay an additional bonus to McCaffery under the
terms of this Agreement based on the Company's financial performance
for the fiscal year ending January 31, 2005 (FY2004). For purposes of
providing general guidance to the Board only, if the Company's earnings
before interest, taxes, depreciation and amortization ("EBITDA") for
FY2004 is greater than $35 million, the additional bonus to be paid to
McCaffery would be no greater than the lower of $250,000 or the amount
of any performance bonus under Section 5(a)(4), and if the EBITDA for
such fiscal year were in excess of $50 million, the additional bonus to
be paid to McCaffery would be no greater than the lower of $500,000 or
the amount of any performance bonus under Section 5(a)(4). The Board
may determine in its sole and absolute discretion whether any bonus
under this Section 11 will be paid to McCaffery and, if so, the form
and timing of payment of any such bonus.
13. COOPERATION.
(a) OBLIGATION TO COOPERATE. At the Company's request and upon
reasonable prior notice, McCaffery will, from time to time,
both during and after his employment with the Company:
(1) timely execute and deliver such acknowledgements,
instruments, certificates, and other ministerial
documents (including without limitation,
certification as to specific actions performed by
McCaffery in his capacity as an officer or director
of the Company) as may be necessary or appropriate to
formalize and update applicable corporate records;
(2) cooperate with the Company and otherwise perform such
actions as reasonably requested by the Company in
connection with any legal proceedings, investigations
or litigation in which the Company is involved or
otherwise has an interest; and
(3) discuss and consult with the Company regarding
business matters that he was involved with while
employed by the Company.
(b) PAYMENT. To the extent that cooperation under Section 13(a) is
required by the Company after McCaffery is no longer employed
by the Company, the Company will compensate McCaffery for his
time as well as any expenses he incurs in connection with any
actions taken to comply with Section 13(a) after termination
of McCaffery's employment with the Company, at a per diem
amount of $2,000. Such payment by the Company will be made as
soon as practicable after the Company requests his cooperation
under Section 13(a).
(c) EXCEPTION. Notwithstanding Section 13(a), McCaffery may refuse
to comply with a request for his cooperation by the Company
under Section 13(a) if McCaffery reasonably believes that his
cooperation would be unlawful or unethical or would require
him to make any inaccurate statement of fact.
(d) EFFECT OF BREACH. Any action or omission by McCaffery in
violation of Section 13(a) shall not constitute a breach of
this Agreement unless and until the Company has provided
written notice to McCaffery describing the alleged violation
and, if such
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violation is curable, McCaffery has failed to cure it within
five (5) calendar days following the date such notice is
given.
14. MUTUAL CONFIDENTIALITY.
(a) GENERAL STANDARD. It is the intent of the parties that the
terms of this Agreement and the Releases (collectively
"CONFIDENTIAL SEPARATION INFORMATION"), will be forever
treated as confidential. Accordingly, McCaffery and the
Company will not disclose or discuss such Confidential
Separation Information to or with anyone at any time, except
as provided in Section 14(b) below.
(b) EXCEPTIONS.
(1) It will not be a violation of this Agreement for
the parties to disclose Confidential Separation
Information in reports to governmental agencies as
required by law or regulation, including but not
limited to, disclosure as required by federal
securities laws and regulations or any federal or
state tax authority.
(2) It will not be a violation of this Agreement for
the parties to acknowledge the existence of this
Agreement or the Transition Employment Agreement, if
in effect, in response to any inquiry regarding the
termination of McCaffery's employment with the
Company or his status as President and Chief
Executive Officer.
(3) It will not be a violation of this Agreement for
McCaffery to disclose Confidential Separation
Information to his spouse, attorneys, accountants or
tax advisors.
(4) It will not be a violation of this Agreement for
McCaffery to disclose to employers and prospective
employers that he is constrained from certain
activities as a result of the terms of this
Agreement. Nor will it be a violation of this
Agreement for McCaffery to inform Company employees
who ask him about employment opportunities outside
the Company that the terms of Section 9(c) preclude
him from engaging in certain activities that could
interfere with their employment with the Company.
(5) It will not be a violation of this Agreement for
either party to disclose Confidential Separation
Information to the Company's auditors, its attorneys,
or its directors, officers, employees, and agents who
have a legitimate reason to obtain the Confidential
Separation Information in the course of performing
their duties or responsibilities for the Company.
(6) It will not be a violation of this Agreement for
either party to disclose Confidential Separation
Information in connection with any litigation or
arbitration proceeding involving the parties' rights
or obligations under this Agreement or the Releases.
15. NON-DISPARAGEMENT. McCaffery will not malign, defame or disparage the
reputation, character, image, products, or services of the Company, or
the reputation or character of the Company's directors, officers,
employees, or agents. The Company will not authorize any of its
officers, directors, employees or agents acting on its behalf to
malign, defame or disparage the reputation or character of McCaffery,
and will take appropriate and reasonable actions to prevent any such
person from doing so. Nothing in this Section 15 will be interpreted to
limit in any manner the
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exercise of fiduciary responsibilities of any person as an officer or
director of the Company, or to prohibit any person from giving truthful
information in response to a valid subpoena or court order.
16. FULL COMPENSATION. McCaffery acknowledges and understands that the
payments made and other consideration provided by the Company under
this Agreement will fully compensate McCaffery for and extinguish any
and all of the potential claims McCaffery is releasing in the McCaffery
Release, including without limitation, any claims for attorneys' fees
and costs and any and all claims for any type of legal or equitable
relief.
17. LEGAL REPRESENTATION. McCaffery acknowledges that he consulted with his
own attorney before executing this Agreement and the McCaffery Release,
that he has had a full opportunity to consider this Agreement and the
Releases, and that he has had a full opportunity to ask any questions
that he may have concerning this Agreement, the Releases, and the
settlement of his potential claims against the Company.
18. EXPENSES. As soon as practicable after satisfaction by McCaffery of
each of the conditions precedent set forth in Section 6, the Company
will reimburse McCaffery up to $35,000 for the reasonable legal fees
and expenses incurred by McCaffery in connection with the negotiation
and execution of this Agreement and the Releases.
19. TAXES. The Company will deduct from any payments made to McCaffery
under this Agreement any withholding or other taxes that the Company is
required to deduct, if any, under applicable law. Except to the extent
taxes are withheld by the Company, McCaffery shall be solely
responsible for the payment of all taxes due and owing with respect to
wages, benefits, and other compensation provided to him hereunder. So
long as the Company reasonably believes McCaffery is a legal resident
of the State of Illinois, the Company shall treat McCaffery as a
resident of the State of Illinois for state income tax withholding
purposes and shall allocate any compensation reportable with respect to
the payments made to him under Section 5 and any compensation income
realized by him from the exercise of stock options to Illinois.
McCaffery agrees to promptly advise the Company should his residence
change from that of Illinois.
20. ASSIGNMENT. The rights and obligations of the Company under this
Agreement will inure to the benefit of and be binding upon the
successors and assigns of the Company. McCaffery may not assign this
Agreement or any rights hereunder. Any purported or attempted
assignment or transfer by McCaffery of this Agreement or any of
McCaffery's duties, responsibilities, or obligations hereunder will be
void. Notwithstanding the forgoing sentence:
(a) in the event of McCaffery's death prior to the Transition
Date, McCaffery's estate will be eligible to receive the
consideration payable under Sections 5(a) and (c) if and only
if McCaffery's estate satisfies the conditions precedent in
Section 6, and the date of McCaffery's death will be the
Transition Date; and
(b) in the event of McCaffery's total incapacity prior to the
Transition Date, McCaffery will be eligible to receive the
consideration payable under Sections 5(a) and (c) if and only
if McCaffery's duly authorized representative satisfies the
conditions precedent in Section 6, and the date of McCaffery's
total incapacity will be the Transition Date.
21. MISCELLANEOUS.
(a) NOTICES. Notices required to be given under this Agreement
must be in writing and will be deemed to have been given when
personally served, sent by courier or mailed by United States
registered or certified mail, return receipt requested,
postage prepaid, to the
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last known residence address of McCaffery or, in the case of
the Company, to its principal office, to the attention of the
Board, or to such other address as either party may have
furnished to the other in writing in accordance herewith,
except that notice of change of address will be effective only
upon receipt by the other party.
(b) CONSTRUCTION AND SEVERABILITY. The validity, interpretation,
performance, and enforcement of this Agreement will be
governed by the laws of the State of Minnesota without regard
to conflicts-of-laws provisions that would require application
of any other law. In the event any provision of this Agreement
is held illegal or invalid for any reason, such illegality or
invalidity will not in any way affect the legality or validity
of any other provision hereof and, subject to Section 9(f),
such illegal or invalid provision will be deemed severed from
this Agreement. It is the intention of the parties hereto that
the Company be given the broadest possible protection
respecting its confidential information and trade secrets; and
respecting competition by McCaffery following his resignation
from the Company.
(c) REMEDIES.
(1) ACKNOWLEDGEMENT REGARDING INJUNCTIVE AND OTHER
EQUITABLE RELIEF. McCaffery acknowledges that it
would be difficult to fully compensate the Company
for monetary damages resulting from any breach by him
of the provisions of Sections 9 and 14. Accordingly,
in the event of any actual or threatened breach of
any such provisions, the Company will, in addition to
any other remedies it may have, be entitled to
injunctive and other equitable relief to enforce such
provisions, and such relief may be granted without
the necessity of proving actual monetary damages.
(2) JURISDICTION AND VENUE. McCaffery and the
Company consent to jurisdiction of the Hennepin
County, Minnesota district court and/or United States
District Court for the District of Minnesota, for the
purpose of resolving all claims for injunctive
relief. Any such actions for injunctive relief must
be brought in such courts. Each party consents to
personal jurisdiction over such party in the state
and/or federal courts of Minnesota and hereby waives
any defense of lack of personal jurisdiction.
(d) ENTIRE AGREEMENT. Except for any and all agreements or
understandings related to McCaffery's stock options and
restricted stock (which have not been affected or altered by
this Agreement except as provided in Section 5(d)), this
Agreement, the Releases, the Transition Employment Agreement,
the Promissory Note and the Pledge Agreement set forth the
entire understanding between the Company and McCaffery, and
there are no understandings other than as set forth in this
Agreement, the Releases, the Transition Employment Agreement,
the Promissory Note and the Pledge Agreement. This Agreement
may not be altered or amended, except by a writing executed by
the party against whom such alteration or amendment is to be
enforced. This Agreement, the Releases and the Transition
Employment Agreement supercede the Amended and Restated
Employment Agreement.
(e) COUNTERPARTS. This Agreement may be simultaneously executed in
any number of counterparts, and such counterparts executed and
delivered, each as an original, will constitute but one and
the same instrument.
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(f) CAPTIONS AND HEADINGS. The captions and section headings used
in this Agreement are for convenience of reference only, and
will not affect the construction or interpretation of this
Agreement or any of the provisions hereof.
(g) WAIVERS. No failure on the part of either party to exercise,
and no delay in exercising, any right or remedy hereunder will
operate as a waiver thereof; nor will any single or partial
exercise of any right or remedy hereunder preclude any other
or further exercise thereof, or the exercise of any other
right or remedy granted hereby or by any related document or
by law. No single or partial waiver of rights or remedies
hereunder, nor any course of conduct of the parties, will be
construed as a waiver of rights or remedies by either party
(other than as expressly and specifically waived).
(h) RELIANCE BY THIRD PARTIES. This Agreement is intended for the
exclusive benefit of the parties hereto and their respective
heirs, executors, administrators, personal representatives,
successors, and permitted assigns, and no other person or
entity has any right to rely on this Agreement or to claim or
derive any benefit therefrom, absent the express written
consent of the party to be charged with such reliance or
benefit.
The parties have signed this Agreement as of the dates set forth below
their respective signatures below.
VALUEVISION MEDIA, INC. GENE MCCAFFERY
By: Nathan E. Fagre /s/ Gene McCaffery
------------------------------- -------------------------------
Print Name Signature
Its: Senior Vice President,
General Counsel and Secretary Dated: November 25, 2003
------------------------------- -------------------------------
Title
/s/ Nathan E. Fagre
-------------------------------
Signature
Dated: November 25, 2003
-------------------------------
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