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Exhibit 10.1
 

FORM OF CHANGE IN CONTROL AGREEMENT
 

AGREEMENT by and between Valassis Communications, Inc., a Delaware corporation
(the “Company”), and ____________(the “Executive”), dated as of ___________,
____ (“Effective Date”).
 
WHEREAS the Executive is a member of the Company’s leadership team;
 
WHEREAS, the Company has entered into an employment agreement with Executive, as
amended, (“Employment Agreement”);
 
WHEREAS the Board of Directors of the Company (the “Board”), has determined that
it is in the best interests of the Company and its shareholders to assure the
continued dedication of the Executive to the Company, notwithstanding the
possibility, threat or occurrence of a Change in Control (as defined below);
 
WHEREAS the Board believes it is imperative to (a) diminish the inevitable
distraction of the Executive by virtue of the personal uncertainties and risks
created by a threatened or pending Change in Control, (b) encourage the
Executive’s full attention and dedication to the Company currently and in the
event of any threatened or pending Change in Control, and (c) preserve the
Executive’s impartial judgment in the event of any threatened or pending Change
in Control;
 
NOW, THEREFORE, in order to accomplish these objectives and in consideration of
the mutual agreements, provisions, and covenants contained herein, and intending
to be legally bound hereby, the Board has authorized the Company to enter into
this Agreement as follows:
 
1. Duties.  In addition to the duties set forth in the Employment Agreement, the
Executive agrees that, subject to the Executive’s fiduciary duties to the
Company and its shareholders, the Executive will exercise the Executive’s best
efforts to bring about whatever result the Board determines to be in the best
interests of the Company and its shareholders relative to any impending Change
in Control (i.e., to help resist any such impending Change in Control if the
Board determines that to be in the best interests of the Company and its
shareholders, and to bring about such Change in Control if the Board determines
that to be the preferable alternative). The Executive agrees to use the
Executive’s best efforts at and after the occurrence of a Change in Control to
effect an orderly and beneficial transfer of control to the party or parties
comprising the new control group.
 
2. Change in Control as a Condition Precedent.  No amount or benefit shall be
payable under the terms of this Agreement unless there shall have been a Change
in Control that is actually consummated. A “Change in Control” shall mean the
first of the following to occur:
 
(a) any Person (as defined below) is or becomes the beneficial owner, as defined
in Rule 13d-3 under the Exchange Act, directly or indirectly, of securities of
the Company (not including in the securities beneficially owned by such Person
any securities acquired directly
 

 

 
 

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from the Company or its Affiliates) representing more than 50% of the combined
voting power of the Company’s then outstanding securities; or
 
(b) during any period of two consecutive years, individuals who at the beginning
of such period constitute the Board and any new director (other than a director
designated by a Person who has entered into an agreement with the Company to
effect a transaction described in clause (a), (c) or (d) of this paragraph)
whose election by the Board or nomination for election by the Company’s
stockholders was approved by a vote of a majority of the directors then still in
office who either were directors at the beginning of the period or whose
election or nomination for election was previously so approved, cease for any
reason to constitute a majority thereof; or
 
(c) the stockholders of the Company approve a merger or consolidation of the
Company with any other corporation, which merger or consolidation is
consummated, other than (A) a merger or consolidation which would result in the
voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity), in combination with newly
acquired ownership acquired in such transaction by any trustee or other
fiduciary holding securities under an employee benefit plan of the Company or an
Affiliate, at least 50% of the combined voting power of the voting securities of
the Company or such surviving entity outstanding immediately after such merger
or consolidation, or (B) a merger or consolidation effected to implement a
recapitalization of the Company (or similar transaction) in which no Person
acquires more than 50% of the combined voting power of the Company’s then
outstanding securities; or
 
(d) the stockholders of the Company approve a plan of complete liquidation of
the Company or an agreement for the sale or disposition by the Company to any
Person of all or substantially all the Company’s assets, which liquidation, sale
or disposition is consummated.
 
Notwithstanding the foregoing, in no event may there by more than one
transaction or occurrence treated as a “Change in Control” for purposes of this
Agreement. For purposes of this Section 2, the following terms shall have the
following meanings:
 
“Affiliate” means any entity that directly or indirectly through one or more
intermediaries, controls, is controlled by or is under common control with the
Company as determined by the Board in its discretion.
 
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
 
“Person” shall have the meaning as set forth in Sections 13(d) and 14(d) of the
Exchange Act; provided, however, that Person shall exclude (i) the Company or
any of its Affiliates, (ii) any trustee or other fiduciary holding securities
under an employee benefit plan of the Company or any of its Affiliates, (iii) an
underwriter temporarily holding securities pursuant to an offering of such
securities, and (iv) any corporation owned directly or indirectly, by the
shareholders of the Company in substantially the same proportion as their
ownership of stock of the Company.
 
 
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3. Obligations of the Company Upon Termination Due to a Change in Control
 
(a) Termination for Good Reason, Other Than for Cause On or After a Change in
Control.  If, within twenty-four (24) months on or after a Change in Control
(“Change in Control Period”), the Company terminates the Executive’s employment
Other Than for Cause (as defined below) or the Executive terminates employment
for Good Reason (as defined below), the Company shall provide to the Executive
the following payments and benefits:
 
(i) A cash lump sum payment equal to [one and one-half–two and one-half
(1.5-2.5)] times the sum of the Executive’s annual base salary determined at the
greater of the base salary on the date of the Change of Control or the base
salary on the Date of Termination;
 
(ii) A cash lump sum payment equal to the greater of (x) [one and one-half–two
and one-half (1.5-2.5)] times Executive’s maximum annual bonus opportunity
determined as if all targets had been met and the annual bonus had been fully
earned on the date of the Change of Control or (y) [one and one-half–two and
one-half (1.5-2.5)] times Executive’s maximum annual bonus opportunity
determined as if all targets had been met and the annual bonus had been fully
earned on the Date of Termination;
 
(iii) Continuation of health (including medical, dental, vision and prescription
drug benefits) benefits and life insurance benefits for the Executive and/or the
Executive’s family for [eighteen–thirty (18-30)] months following the Date of
Termination (“Continuation Benefits”).  Such Continuation Benefits shall be at
least equal to those which would have been provided if Executive had not been
terminated, such benefits to be in accordance with the most favorable benefit
plans, policies, practices or programs of the Company as in effect and
applicable generally to other executives of the Company and their families
during the 90-day period immediately preceding the Date of Termination. If the
Executive becomes employed with another employer and is eligible to receive
health (including medical, dental, vision and prescription drug benefits) and
life insurance benefits under another employer-provided plan, Continuation
Benefits provided by the Company shall cease. Upon cessation of the Continuation
Benefits, the Executive and/or the Executive’s family may elect continuation
health coverage under Section 4980B of the Internal Revenue Code of 1986, as
amended (“Code”) in accordance with applicable law.
 
(b) Termination Other Than for Cause Prior to a Change in Control. If the
Company terminates the Executive’s employment Other than For Cause within the
ninety (90) day period immediately prior to the execution of a definitive
agreement, the consummation of which actually results in such Change in Control,
the Executive will be entitled to the benefits and payments set forth in Section
3(a) above.
 
(c) Death, Disability, Termination for Cause.  If, prior to or during the Change
in Control Period, the Executive’s employment is terminated as a result of his
death, by the Executive or the Company due to the Executive’s Disability, by the
Company for Cause, or by the Executive without Good Reason, Executive shall not
be entitled to any payments under this Agreement.  For purposes of this
Agreement, “Cause” and “Disability” have same definition as in the Employment
Agreement and “Good Reason” is defined below.
 

 

 
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(d) Good Reason.  The Executive may terminate employment during the Change in
Control Period for Good Reason. For purposes of this Agreement, “Good Reason”
shall mean:
 
(i) A material diminution of the Executive’s base salary; or
 
(ii) A material diminution in the Executive’s authority, duties, or
responsibilities; or
 
(iii) A material change in the geographic location at which the Executive must
perform the services; or
 
(iv) A material breach by the Company of this Agreement.
 
The Executive may not terminate employment for Good Reason unless: (x) the
Executive has provided the Company with notice of the occurrence of the Good
Reason condition described in subsection (i)-(iv) within sixty (60) days of the
initial existence thereof; and (y) the Company has been provided with thirty
(30) days to remedy such Good Reason condition and has failed to remedy such
condition. The Executive’s employment shall be deemed to have been terminated
following a Change in Control by the Executive for Good Reason if the Executive
terminates the Executive’s employment prior to a Change in Control with Good
Reason if a Good Reason condition occurs at the direction of a person or entity
who has entered into an agreement with the Company, the consummation of which
will constitute a Change in Control.
 
(e) Termination Other Than for Cause.  The Company shall have the right, subject
to the terms of the Employment Agreement, to terminate the Executive’s
employment for any reason (other than for Cause or as the result of Executive’s
death or Disability) upon thirty (30) days’ prior written notice to the
Executive and such termination shall be referred to herein as a termination
“Other Than for Cause.” If the Executive resigns following a request by the
Company to terminate the Executive’s employment within twenty-four months on or
after a Change in Control, such resignation shall be deemed to be a termination
by the Company Other Than for Cause and Executive shall be entitled to the
benefits and payments set forth in Section 3(a) above.
 
(f) Notice of Termination.  Any termination by the Company for Cause shall be in
accordance with the Employment Agreement and no benefits under this Agreement
shall be paid in the event of a termination for Cause. A termination by the
Executive for Good Reason as defined herein shall be communicated by a Notice of
Termination to the Company in accordance with this Agreement. For purposes of
this Agreement, a “Notice of Termination” means a written notice that: (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 for Good Reason and (iii) if the Date of Termination (as defined
below) is other than the date of receipt of such notice, specifies the
termination date (which date shall be not more than thirty (30) days after the
giving of such notice). The failure by the Executive to set forth in the Notice
of Termination any fact or circumstance that contributes to a showing of Good
Reason shall not waive any right of the Executive or the Company, respectively,
hereunder or preclude the Executive or the Company, respectively,
 

 

 
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from asserting such fact or circumstance in enforcing the Executive’s or the
Company’s rights hereunder.
 
(g) Date of Termination.  “Date of Termination” means (i) if the Executive’s
employment is terminated by reason of death or Disability, the date of the
Executive’s death or the date the Company or the Executive terminates employment
as a result of the Executive’s Disability, as the case may be, (ii) if the
Executive’s employment is terminated by Executive for Good Reason, the date of
receipt of the Notice of Termination or any later date specified therein, as the
case may be, (iii) if the Executive is terminated by the Company for Cause, the
date of receipt of a Notice of Termination as provided under the Employment
Agreement, and (iv) if the Executive’s employment is terminated by the Company
Other than for Cause, the Date of Termination shall be thirty (30) days after
the date on which the Company notifies the Executive of such termination, or if
the Company chooses to pay the Executive thirty (30) days of base salary in lieu
of providing such 30-day notice, the date on which the Company notifies the
Executive of such termination.
 
4. Integration with Employment Agreement and Other Plans, Policies and
Programs.  The payments and benefits set forth in Section 3 of this Agreement
shall be in lieu of any cash severance payments and benefit continuation under
the Employment Agreement and any bonus payments due under any bonus or incentive
plan.  Executive expressly acknowledges that he/she shall not be entitled to any
cash severance payments or benefit continuation under the Employment Agreement
or bonus or incentive payments under any bonus or incentive plan if Executive
receives cash payments and benefit continuation under this Agreement. Except as
set forth directly above, nothing in this Agreement shall prevent or limit the
Executive’s continuing or future participation in any plan, program, policy or
practice provided by the Company or any of its affiliated companies and for
which the Executive may qualify, nor, except as set forth above, shall anything
herein limit or otherwise affect such rights as the Executive may have under any
contract or agreement with the Company or any of its affiliated companies.
Except as set forth above, amounts that are vested benefits or that the
Executive is otherwise entitled to receive under any plan, policy, practice or
program of, or any contract or agreement with, the Company or any of its
affiliated companies at or subsequent to the Date of Termination shall be
payable in accordance with such plan, policy, practice or program or contract or
agreement except as explicitly modified by this Agreement. The terms of any
equity compensation granted to Executive shall be governed by the terms of the
applicable equity plan and grant agreement and shall not be accelerated or
otherwise modified by this Agreement.
 
5. Full Settlement, Mitigation.  The Company’s obligation to make the payments
provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any set-off, counterclaim, recoupment,
defense or other claim, right or action that the Company may have against the
Executive or others.  In no event shall the Executive be obligated to seek other
employment or take any other action by way of mitigation of the amounts payable
to the Executive under any of the provisions of this Agreement and, except as
provided in Section 3(a)(iii), such amounts shall not be reduced whether or not
the Executive obtains other employment.
 

 

 
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6. Certain Additional Payments by the Company.
 
(a) Excess Parachute Payments.  In the event it shall be determined that any
payment or distribution by the Company to or for the benefit of the Executive
(whether paid or payable or distributed or distributable pursuant to the terms
of this Agreement or otherwise) (a “Payment” and collectively “Total Payments”)
would be subject to the excise tax imposed by Section 4999 of the Internal
Revenue Code of 1986, as amended (the “Code”) (or would be within $1,000 of
triggering such excise tax), then Total Payments shall be reduced (but not below
zero) so that the maximum amount of Total Payments (after reduction) shall be
$1,000 less than the amount that would cause the Total Payments to be subject to
the excise tax imposed by Section 4999 of the Code (as so reduced, the “280G
Limitation Amount”). Notwithstanding the foregoing, if the Executive would be
better off by at least $50,000 on an after-tax basis after taking into account
all taxes (including but not limited to the Section 4999 excise tax) receiving
the full amount of Total Payments as opposed to the 280G Limitation Amount the
Executive shall receive the full amount of Total Payments without
reduction.  References to Section 4999 of the Code shall include any successor
provision or any similar excise tax. The Executive shall not be entitled to an
increased payment from the Company for any excise, additional, or other tax,
penalty, or interest as a result of this Agreement. Any payment reductions under
this subsection (a) shall be made first from cash payments.
 
(b) Consultant.  All determinations required to be made under this Section 6,
including whether and when Total Payments should or should not be reduced and
the assumptions to be utilized in arriving at such determination, shall be made
by a “Consulting Firm,” which shall be a law firm, a certified public accounting
firm, and/or a firm of recognized executive compensation consultants selected by
the Company. The Consulting Firm shall provide detailed supporting calculations
regarding such determination both to the Company and the Executive within
fifteen (15) business days of the receipt of notice from the Executive that
there has been a Payment, or such earlier time as is requested by the Company.
All fees and expenses of the Consulting Firm shall be borne solely by the
Company. Any determination by the Consulting Firm shall be binding upon the
Company and the Executive, and no later determination shall obligate the Company
to make any payment or adjustment to the Total Payments made to the Executive.
 
7. Conditions to Payments and Benefits.
 
(a) The Executive’s entitlement to receive the payments and benefits hereunder
shall be conditioned upon:
 
(i) the Executive having complied to the best of the Executive’s abilities with
the commitments contained in Section 1 and in Section 2 of the Employment
Agreement;
 
(ii) delivery to the Company of a resignation from all offices, directorships
and fiduciary positions with the Company, its affiliates and employee benefit
plans; and
 
(iii) delivery to the Company of an executed agreement and general release,
executed by the Executive (or by an individual authorized to act on behalf of
the Executive’s
 

 

 
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estate if the Executive is deceased or authorized to act on the Executive’s
behalf by reason of the Executive’s Disability) which shall be executed
substantially in the form attached hereto as Exhibit A (with such changes
therein or additions thereto as needed under then applicable law to give effect
to its intent and purpose) within thirty-five (35) days of presentation thereof
by the Company to the Executive (and which is not subsequently revoked by the
Executive or such authorized individual), and the Company shall be obligated to
deliver a final form of release to the Executive’s address set forth in Section
below (including copy to counsel) within 5 business days after an employment
termination.  Any benefits described in Section 3 are contingent on the release
becoming effective and irrevocable by the 35th day following the termination of
the Executive’s employment provided that the release agreement is timely
delivered in accordance with this Section. Payment of any benefits described in
Section 3 will commence, if at all, on the 45th day following the Executive’s
termination of employment and all payments described in Section 3 that otherwise
would have been paid or provided during the 45 days following the Executive’
termination of employment, but for this sentence, shall instead be paid or
provided on the 45th day following the Executive’s termination of employment.
 
(b) If the Executive fails to materially comply with any obligation or covenant
under Section 1 or Section 2 of the Employment Agreement or is the Company
subsequently determines that it has terminated Executive for Cause (in
accordance with the Employment Agreement), the Company’s obligations to make any
payments or provide any benefits or other rights or entitlements to Executive
pursuant to any provision of this Agreement shall immediately cease and
Executive shall be required to immediately repay to the Company all amounts
theretofore paid or otherwise provided to Executive pursuant to any section of
this Agreement. The Company may recover amounts under this Section 7(b) by
set-off from any amounts otherwise due to Executive under any other plan,
program or arrangement if the Executive fails to make any required repayment
within 15 business days after written demand to the Executive.
 
8. Confidential Information.  The Confidential Information and Competitive
Conduct provisions in the Employment Agreement shall continue to apply to
Executive and to any termination under this Agreement.
 
9. Successors.
 
(a) This Agreement is personal to the Executive and without the prior written
consent of the Company 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.
 
(b) This Agreement shall inure to the benefit of and be binding upon the Company
and its successors and assigns.
 
(c) The Company will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the
business and/or assets of the Company to assume expressly and agree to perform
this Agreement in the same manner and to the same extent that the Company would
be required to perform it if no such succession had taken place. As used in this
Agreement, “Company” shall mean the Company as defined and any
 

 

 
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successor to its business and/or assets as aforesaid that assumes and agrees to
perform this Agreement by operation of law, or otherwise.
 
10. Disputes.
 
(a) Any dispute or controversy arising under or in connection with this
Agreement may, at the Executive’s election, be settled by arbitration, conducted
before a panel of three arbitrators in accordance with the rules of the American
Arbitration Association then in effect.  Judgment may be entered on the
arbitrator’s award in any court having jurisdiction.
 
(b) The Company agrees to pay as incurred, to the full extent permitted by law,
all legal fees and expenses that the Executive may reasonably incur as a result
of any contest (regardless of the outcome) by the Company, the Executive or
others of the validity or enforceability of, or liability under, any provision
of this Agreement or any guarantee of performance thereof (including as a result
of any contest by the Executive about the amount of any payment pursuant to this
Agreement), plus in each case, interest on any delayed payment at the applicable
Federal rate provided for in Section 7872(f)(2)(A) of the Code; provided,
however, that the Company shall have no obligation to reimburse the Executive
for, or pay on behalf of the Executive’s account, any fees or expenses that the
Executive incurs in connection with a contest initiated by the Executive that is
found by a court of competent jurisdiction or arbiter, as applicable, to be
frivolous.  In this circumstance, if the Company has previously paid any fees or
expenses, the Executive shall promptly repay to the Company the amount of such
fess and expenses.
 
11. Amendment.  No provision of this Agreement may be amended, modified or
waived unless such amendment, modification or waiver shall be authorized by the
Board or any authorized committee of the Board and shall be agreed to in
writing, signed by the Executive and by an officer of the Company thereunto duly
authorized; provided, however, that either the Board or the applicable committee
may amend this Agreement at any time as necessary to comply with applicable laws
and regulations without the Executive’s written consent prior to a Change in
Control; provided, further, however, that (1) the Company’s unilateral power to
amend this Agreement shall be limited to technical, ministerial, and regulatory
requirements generally applicable to all public company officers, and (2) no
such amendment would constitute Good Reason as presently defined by this
Agreement.
 
12. Cooperation.  The Executive agrees to reasonably cooperate with the Company
at any times in any internal investigation, any administrative, regulatory or
judicial investigation or proceeding or any dispute with a third party as
reasonably requested by the Company (including, without limitation, the
Executive being available to the Company upon reasonable notice and at
reasonable times for interviews and factual investigations, appearing at the
Company’s request upon reasonable notice and at reasonable times to give
testimony without requiring service of a subpoena or other legal process,
delivering to the Company requested information and relevant documents which are
or may come into the Executive’s possession, all at times and on schedules that
are reasonably consistent with the Executive’s other permitted activities and
commitments).  The obligations under this Section shall survive expiration of
this Agreement. If the Executive’s cooperation under this Section is requested
after the Executive’s termination of employment, the Company shall (i) provide
the Executive reasonable advance notice after giving due considera
 

 

 
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13. tion to the Executive’s then current employment obligations, and (ii)
reimburse the Executive for all reasonable travel expenses and other reasonable
out-of-pocket expenses upon submission of receipts.
 
14. Miscellaneous.
 
(a) This Agreement shall be governed by and construed in accordance with the
laws of the State of Michigan, 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.
 
(b) All notices and all other communications hereunder shall be in writing and
shall be deemed to have been duly given (i) on the date of delivery if delivered
by hand, (ii) on the date of transmission, if delivered by confirmed facsimile,
(iii) on the first business day following the date of deposit if delivered by
guaranteed overnight delivery service, or (iv) on the fourth business day
following the date delivered or mailed by United States registered or certified
mail, return receipt requested, postage prepaid, addressed as set forth below:
 
To the Executive:
{Address of Executive}
To the Company:
 
Fax: ______________________

or to such other address as either party shall have furnished to the other in
writing in accordance herewith.
 
(c) The invalidity or unenforceability of any provision of this Agreement shall
not affect the validity or enforceability of any other provision of this
Agreement.
 
(d) This Agreement may be executed in one or more counterparts (including via
facsimile), each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument and shall become effective
when one or more counterparts have been signed by each of the parties and
delivered to the other parties.
 
(e) The Company may withhold from any amounts payable under this Agreement such
Federal, state, local or foreign taxes required to be withheld pursuant to any
applicable law or regulation.
 
(f) The Executive’s or the Company’s failure to insist upon strict compliance
with any provision hereof or any other provision of this Agreement or the
failure to assert any right the Executive or the Company may have hereunder,
including, without limitation, the right of the Executive to terminate
employment for Good Reason or the right of the Company to terminate the
Executive for Cause or Other Than for Cause, shall not be deemed to be a waiver
of such provision or right or any other provision or right of this Agreement.
 
(g) The language used in this Agreement will be deemed to be the language chosen
by the parties hereto to express their mutual intent, and no rule of strict
construction will be applied against any party hereto. Neither the Executive nor
the Company shall be entitled to any pre
 

 

 
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sumption in connection with any determination made hereunder in connection with
any arbitration, judicial or administrative proceeding relating to or arising
under this Agreement.
 
(h) The Executive represents and warrants to the Company that the Executive has
the legal right to enter into this Agreement and to perform all of the
obligations on the Executive’s part to be performed hereunder in accordance with
its terms and that the Executive is not a party to any agreement or
understanding, written or oral, which could prevent the Executive from entering
into this Agreement or performing all of the Executive’s obligations hereunder.
 
(i) The Executive and the Company acknowledge that this Agreement supersedes all
prior agreements covering the subject matter of payments and benefits due to a
termination Other than For Cause by the Company or a termination by the
Executive for Good Reason within twenty-four (24) months on or after a Change in
Control or, in some circumstances, within ninety days (90) days prior to a
Change in Control, and, except as may otherwise be provided under any other
written agreement between the Executive and the Company, the employment of the
Executive by the Company is “at will” and, prior to the Effective Date, the
Executive’s employment and this Agreement may be terminated by either the
Executive or the Company at any time prior to the Effective Date, in which case
the Executive shall have no further rights under this Agreement. From and after
the date hereof, this Agreement shall supersede any other agreement between the
parties with respect to the subject matter hereof.
 
(j) If the Executive should die while any cash amounts are due and payable to
the Executive hereunder, all such amounts, unless otherwise provided herein,
shall be paid to the Executive’s surviving spouse, or if there is no surviving
spouse, the Executive’s estate.
 
15. 409A.
 
(a) To the extent required by Section 409A of the Code, all references to
“termination of employment,” “Date of Termination” and correlative phrases for
purposes of this Agreement shall be construed to require a “separation from
service” (as defined in Section 1.409A-1(h) of the Treasury regulations after
giving effect to the presumptions contained therein).
 
(b) To the extent that (i) any payments or benefits to which the Executive
becomes entitled under this Agreement, or under any other plan, program or
agreement maintained by the Company, in connection with the Executive’s
termination of employment with the Company constitute deferred compensation
subject to Section 409A of the Code and (ii) the Executive is deemed at the time
of such termination of employment to be a “specified employee” under Section
409A of the Code, then such payments or benefits shall not be made or commence
until the earliest of (x) the expiration of the six (6) month and one day period
measured from the date of the Executive’s separation from service (as defined in
Section 14(a) above) from the Company; or (y) the date of the Executive’s death
following such separation from service; provided, however, that such deferral
shall only be effected to the extent required to avoid adverse tax treatment to
the Executive, including (without limitation) the additional twenty percent
(20%) tax for which the Executive would otherwise be liable under Section
409A(a)(1)(B) of the Code in the absence of such deferral. Upon the expiration
of the applicable deferral period, any payments which would have otherwise been
made during that period (whether in a single sum or in in
 

 

 
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stallments) in the absence of this paragraph shall be paid to the Executive or
the Executive’s beneficiary in one lump sum. For the purposes of this Section
18, the term “specified employee” means an individual determined by the Company
to be a specified employee under Treasury regulation Section 1.409A-1(i) in
accordance with the policies of the Company.
 
(c) It is intended that each installment of any benefits or payments provided
hereunder constitute a separate payment for purposes of Treasury Regulation
Section 1.409A-2(b)(2)(i). It is further intended that payments hereunder
satisfy, to the greatest extent possible, the exemptions from the application of
Section 409A of the Code (and any state law of similar effect) provided under
Treasury Regulations Section 1.409A-1(b)(4) (as a “short-term deferral”) and
Section 1.409A-1(b)(9) (as “separation pay due to involuntary separation”). The
parties intend that all the benefits and payments provided under this Agreement
shall be exempt from, or comply with, the requirements of Section 409A of the
Code.
 
(d) To the extent any expense reimbursement or the provision of any in-kind
benefit under this Agreement is determined to be subject to Section 409A of the
Code, the amount of any such expenses eligible for reimbursement, or the
provision of any in-kind benefit, in one calendar year shall not affect the
expenses eligible for reimbursement in any other taxable year (except for any
lifetime or other aggregate limitation applicable to medical expenses), in no
event shall any expenses be reimbursed after the last day of the calendar year
following the calendar year in which the Executive incurred such expenses, and
in no event shall any right to reimbursement or the provision of any in-kind
benefit be subject to liquidation or exchange for another benefit.
 
IN WITNESS WHEREOF, the Executive has hereunto set the Executive’s hand and,
pursuant to the authorization from its Board of Directors, the Company has
caused these presents to be executed in its name on its behalf, all as of the
day and year first above written.
 

 
VALASSIS COMMUNICATIONS, INC.

Date:                        Date:

 

 
 
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EXHIBIT A
FORM OF RELEASE AGREEMENT
 
AGREEMENT AND GENERAL RELEASE
 

Valassis Communications, Inc., its affiliates, parents, subsidiaries, divisions,
successors and assigns in such capacity, and the current, future and former
employees, officers, directors, trustees and agents thereof (collectively
referred to throughout this Agreement as the “Employer”), and {executive’s
name}(the “Executive”), the Executive’s heirs, executors, administrators,
successors and assigns (collectively referred to throughout this Agreement as
the “Employee”) agree:
 
1. Last Day of Employment.  The Executive acknowledges that [his]/[her]
employment with Employer has been terminated and that the Executive’s last day
of employment with Employer is [DATE].  Effective as of [DATE], Executive
resigns from the Executive’s position as __________________and will not be
eligible for any benefits or compensation after [DATE], except as otherwise
specifically provided under the Change in Control Agreement between the Employer
and Executive dated «Dated». (the “Change in Control Agreement”) or under the
terms of any other employee benefit plan maintained by the Employer.  The
Executive further acknowledges and agrees that, after [DATE], the Executive will
not represent the Executive as being a director, employee, officer, trustee,
agent or representative of Employer for any purpose. In addition, effective as
of [DATE], Executive resigns from all offices, directorships, trusteeships,
committee memberships and fiduciary capacities held with, or on behalf of,
Employer or any benefit plans of Employer. These resignations will become
irrevocable as set forth in Section 3 below.
 
2. Consideration.  The parties acknowledge that this Agreement and General
Release is being executed in accordance with Section 7(a) of the Change in
Control Agreement.
 
3. Revocation.  Executive may revoke this Agreement and General Release for a
period of seven (7) calendar days following the day Executive executes this
Agreement and General Release. Any revocation within this period must be
submitted, in writing, to Employer and state, “I hereby revoke my acceptance of
our Agreement and General Release.” The revocation must be personally delivered
to Employer’s ___________________________, and postmarked within seven (7)
calendar days of execution of this Agreement and General Release. This Agreement
and General Release shall not become effective or enforceable until the
revocation period has expired. If the last day of the revocation period is a
Saturday, Sunday, or legal holiday in Michigan, then the revocation period shall
not expire until the next following day which is not a Saturday, Sunday, or
legal holiday.
 
4. General Release of Claim.  Subject to the full satisfaction by the Employer
of its obligations under the Change in Control Agreement, Employee knowingly and
voluntarily releases and forever discharges Employer from any and all claims,
causes of action, demands, fees and liabilities of any kind whatsoever, whether
known and unknown, against Employer, Employee
 

 

 
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has, has ever had or may have as of the date of execution of this Agreement and
General Release, including, but not limited to, any alleged violation of:
 
 
-
Title VII of the Civil Rights Act of 1964, as amended;

 
 
-
The Civil Rights Act of 1991;

 
 
-
Sections 1981 through 1988 of Title 42 of the United States Code, as amended;

 
 
-
The Employee Retirement Income Security Act of 1974, as amended;

 
 
-
The Immigration Reform and Control Act, as amended;

 
 
-
The Americans with Disabilities Act of 1990, as amended;

 
 
-
The Age Discrimination in Employment Act of 1967, as amended;

 
 
-
The Older Workers Benefit Protection Act of 1990;

 
 
-
The Worker Adjustment and Retraining Notification Act, as amended;

 
 
-
The Occupational Safety and Health Act, as amended;

 
 
-
The Family and Medical Leave Act of 1993;

 
 
-
Any wage payment and collection, equal pay and other similar laws, acts and
statutes of the State of _______;

 
 
-
Any other federal, state or local civil or human rights law or any other local
state or federal law, regulation or ordinance,

 
 
-
Any public policy, contract, tort, or common law; or

 
 
-
Any allegation for costs, fees, or other expenses including attorneys’ fees
incurred in these matters.

 
For California employees only:  Employee expressly waives any benefits of
Section 1542 of the Civil Code of the State of California, which provides as
follows:
 
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH
IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH
THE DEBTOR.
 
Notwithstanding anything herein to the contrary, the sole matters to which the
Agreement and General Release do not apply are: (i) Employee’s express rights to
accrued vested benefits under any other employee benefit plan, policy or
arrangement maintained by Employer or under
 

 

 
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COBRA (the “Accrued Amounts”); (ii) Employee’s rights under the provisions of
the Change in Control Agreement which are intended to survive termination of
employment; or (iii) the Employee’s rights as a stockholder.
 
5. No Claims Permitted.  Employee waives Executive’s right to file any charge or
complaint against Employer arising out of Executive’s employment with or
separation from Employer before any Federal, state or local court or any state
or local administrative agency, except where such waivers are prohibited by law.
 
6. Affirmations.  Employee affirms Executive has not filed, has not caused to be
filed, and is not presently a party to, any claim, complaint, or action against
Employer in any forum. Employee further affirms that the Executive has been paid
and/or has received all compensation, wages, bonuses, commissions, and/or
benefits to which Executive may be entitled and no other compensation, wages,
bonuses, commissions and/or benefits are due to Executive, except for the
Accrued Amounts, if any. The Employee also affirms Executive has no known
workplace injuries.
 
7. Cooperation; Return of Property.  Employee agrees to reasonably cooperate
with Employer and its counsel in connection with any investigation,
administrative proceeding or litigation relating to any matter that occurred
during Executive’s employment in which Executive was involved or of which
Executive has knowledge.  Employee represents that Executive has returned any
and all property belonging to the Employer, including any confidential
information with respect to the Employer or its operations.
 
8. Governing Law and Interpretation.  This Agreement and General Release shall
be governed and conformed in accordance with the laws of the State of
Michigan without regard to its conflict of laws provisions. In the event
Employee or Employer breaches any provision of this Agreement and General
Release, Employee and Employer affirm either may institute an action to
specifically enforce any term or terms of this Agreement and General Release.
Should any provision of this Agreement and General Release be declared illegal
or unenforceable by any court of competent jurisdiction and should the provision
be incapable of being modified to be enforceable, such provision shall
immediately become null and void, leaving the remainder of this Agreement and
General Release in full force and effect. Nothing herein, however, shall operate
to void or nullify any general release language contained in the Agreement and
General Release.
 
9. No Admission of Wrongdoing.  Employee agrees neither this Agreement and
General Release nor the furnishing of the consideration for this Release shall
be deemed or construed at any time for any purpose as an admission by Employer
of any liability or unlawful conduct of any kind.
 
10. Amendment.  This Agreement and General Release may not be modified, altered
or changed except upon express written consent of both parties wherein specific
reference is made to this Agreement and General Release.
 

 

 
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11. Entire Agreement.  This Agreement and General Release sets forth the entire
agreement between the parties hereto and fully supersedes any prior agreements
or understandings between the parties; provided, however, that notwithstanding
anything in this Agreement and General Release, the provisions in the Change in
Control Agreement which are intended to survive termination of the Executive’s
employment shall survive and continue in full force and effect.  Employee
acknowledges Executive has not relied on any representations, promises, or
agreements of any kind made to Executive in connection with Executive’s decision
to accept this Agreement and General Release.
 
EMPLOYEE HAS BEEN ADVISED THAT EXECUTIVE HAS UP TO THIRTY-FIVE (35) CALENDAR
DAYS TO REVIEW THIS AGREEMENT AND GENERAL RELEASE AND HAS BEEN ADVISED IN
WRITING TO CONSULT WITH AN ATTORNEY PRIOR TO EXECUTION OF THIS AGREEMENT AND
GENERAL RELEASE.
 
EMPLOYEE AGREES ANY MODIFICATIONS, MATERIAL OR OTHERWISE, MADE TO THIS AGREEMENT
AND GENERAL RELEASE DO NOT RESTART OR AFFECT IN ANY MANNER THE ORIGINAL
THIRTY-FIVE (35) CALENDAR DAY CONSIDERATION PERIOD.
 
HAVING ELECTED TO EXECUTE THIS AGREEMENT AND GENERAL RELEASE, TO FULFILL THE
PROMISES SET FORTH HEREIN, AND TO RECEIVE THE SUMS AND BENEFITS SET FORTH IN THE
SEVERANCE AGREEMENT, EMPLOYEE FREELY AND KNOWINGLY, AND AFTER DUE CONSIDERATION,
ENTERS INTO THIS AGREEMENT AND GENERAL RELEASE INTENDING TO WAIVE, SETTLE AND
RELEASE ALL CLAIMS EXECUTIVE HAS OR MIGHT HAVE AGAINST EMPLOYER.
 
IN WITNESS WHEREOF, the parties hereto knowingly and voluntarily executed this
Agreement and General Release as of the date set forth below:
 

VALASSIS COMMUNICATIONS, INC.

By:                                                               

Name:                                                               
Title:                                                               
Date:                                                               

EMPLOYEE

Date:                                                               

 

 
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