EX-10.1






EXHIBIT 10.1




March 3, 2008



Rene G. Aiu


3352 Ocean Drive


Channel Islands, CA 93035



Dear Rene:



We are pleased to offer you the position of Chief Executive Officer of ValueVision Media! We look
forward to your partnership and leadership of our company in the delivery of results that meet or
exceed our shareholder’s expectations.



To follow is confirmation of your offer:



	 	 	 
	Position Title

 

	 	President & Chief Executive Officer

 
	Board Membership

 

	 	Member of the Board of Directors while serving as CEO

 
	Start Date

 

	 	March 3rd, 2008

 
	Reports To

 

	 	Board of Directors — ValueVision Media, Inc.

 
	Annualized Base Salary

 

	 	$600,000                                                                             

 
	Annual Cash Incentive

 

 

 

	 	Your incentive opportunity at the target performance level(s) will be 75% of your

base salary with the opportunity to achieve up to 150% of your base salary (200% of

target) if company financial performance meets or exceeds the maximum award level

goal(s). The annual incentive plan financial goal(s) are established annually and

approved by the Board of Directors. Any payments made under this plan to Company

Officers are made at the discretion of the Board of Directors, subject to the terms

of the approved plan. Your actual incentive payment for FY2008 will be pro-rated

based on your hire date. A portion of your FY2008 incentive payment will be

guaranteed at a minimum value of $300,000 with $150,000 paid upon hire and the

balance paid within 90 days of the end of the fiscal year. The FY2008 balance

payable following the end of the year will be the greater of 1) $300,000 less

$150,000 or 2) the actual incentive earned less $150,000.

 
	Long Term Incentive

	 	Subject to the terms and conditions applicable to options granted under the

Company’s Omnibus Stock Plan, applicable stock option agreement, and upon approval

of the Company’s Board of Directors you will be granted an option to purchase

750,000 shares of the Company’s common stock at a price per share equal to the

closing fair market value per share as of your date of hire. Your option to

purchase Company shares will vest in 1/3 increments upon each anniversary of your

employment start date (vests over 3 years) and exercisable for 10 years from the

date of grant. You will also receive an additional grant of an option to purchase

200,000 shares of the Company’s common stock at a price per share equal to the

closing fair market value per share on the date of grant, which grant will be made

at the first Board of Directors meeting following the first anniversary of your

start date with the Company, but in no event later than April 30, 2009, so long as

you remain the CEO at such time. Beginning in 2010, you will be eligible for

consideration for additional periodic long term incentive grants determined based on

a combination of competitive practice benchmarking, company performance and your

personal performance, in the discretion of and as determined by the Board of

Directors.

 
	Insurance & Benefits

	 	You will be eligible for the Company’s standard benefit package. Eligibility and

benefits are governed by the terms of each respective plan, which the Company may

change or terminate at any time.

 
	Vacation

	 	You will accrue 4 weeks of paid time off annually

 
	Severance Eligibility

	 	In the event your employment is terminated without Cause or you resign from

employment for Good Reason (as defined in Exhibit A), you would be eligible for the

greater of a) the severance pay and other transition benefits as defined in the

Company’s severance guidelines in effect at the time of your termination or b) 24

months of target cash compensation (monthly target cash compensation = 1/12 base

salary + 1/12 of the annual target incentive opportunity which is 75% of your base

salary) as of the date of your termination. In the event of your termination

without Cause or resignation for Good Reason within twelve months following a Change

of Control of the Company as defined in Exhibit A, in addition to payments set forth

above and otherwise due under any stock agreement, severance program, guidelines,

policy, or agreement, the Company shall pay or make available to you a pro-rata

portion of your target bonus opportunity amount for the fiscal year in which the

removal or resignation occurs. As defined in Exhibit A, any tax liability imposed

upon or incurred including tax liability relating to Section 280G, Section 4999 or

Section 409A of the Internal Revenue Code shall be solely your responsibility. The

Company agrees to cooperate with you and to reasonably modify any such payment terms

in order to minimize any taxes due under the aforementioned sections of the Code.

All transition and severance pay or benefits are conditional upon your execution of

an effective agreement substantially in the form annexed hereto that complies with

applicable laws in which you release the Company and all related parties from any

and all claims against them.






In addition, the Company will provide you with an additional payment of $50,000 net after
applicable taxes for the purpose of covering additional transitional expenses, in addition to the
regular relocation expenses. It is understood and agreed that in connection with accepting this
offer you will relocate to the greater Minneapolis/St. Paul area of Minnesota sometime during 2008.



As with all ValueVision employment offers, this offer is conditional upon criminal background check
and employment verification. We also require non-compete, confidentiality and inventions
agreements be executed by you upon employment. For the purposes of federal immigration law, you
will be required to provide documentary evidence of your identity and eligibility for employment in
the United States. Should you have any questions, please feel free to contact me at 952-943-6143.
Thank you for treating the terms of your employment offer with Value Vision Media confidentially.



Rene, we are excited to have you join our team and are confident that you have the skills and
experience to effectively lead our organization.  



Sincerely,



/s/ John Buck



John Buck


Interim CEO & Chairman of the Board


Value Vision Media, Inc.








1





Renee Aiu Offer Letter Dated March 3, 2008



Exhibit A




Definitions:




	 	A.	 	Termination For Cause (not severance eligible): The Company may
terminate Executive’s employment immediately for Cause. Cause shall mean: (i) a
material act which results in, or is intended to result in, Executive’s personal
enrichment at the expense of the Company, including theft or embezzlement; (ii) public
conduct by Executive materially detrimental to the reputation of the Company; (iii)
material willful violation by Executive of any Company policy, regulation or practice
known to the Executive, including but not limited to the Executive’s willful or grossly
negligent failure to adequately perform the duties of his or her position to the
material detriment of the Company; (iv) conviction of, or a plea of guilty or no
contest to, a felony; (v) Executive’s Disability (as defined below); or (vi)
Executive’s death. Disability shall mean that the Executive (vii) is unable to engage
in any substantial gainful activity by reason of any medically determinable physical or
mental impairment which can be expected to result in death within 12 months or can be
expected to last for a continuous period of not less than 12 months; (viii) by reason
of any medically determinable physical or mental impairment which can be expected to
result in death within 12 months or can be expected to last for a continuous period of
not less than 12 months, is receiving income replacement benefits for a period of not
less than three months under an accident and health plan covering employees of the
Company; or (ix) has been determined to be totally disabled by the Social Security
Administration. Disability under subsections (vii) and (viii) shall be determined by a
physician selected by the Company. Executive shall cooperate with the Company,
including making Executive reasonably available for examination by physicians at the
Company’s request and at the Company’s expense to determine whether or not Executive
has a Disability.






	 	B.	 	Benefit Eligibility. Executive will be eligible to receive severance
pay in the amounts specified in the Offer Letter if the Executive:






	 	i.	 	Is terminated Without Cause, including, without
limitation, due to position elimination, reduction in workforce,
reorganization, consolidation or Resigns for Good Reason in the
event that:






	 	a.	 	The Executive is impacted by a
mandatory relocation of the Executive’s principal place of
employment to a location more than 50 miles from Executive’s
current office location






	 	b.	 	The Company reduces the
Executive’s total compensation opportunity (excluding equity)
(unless part of an across-the-board compensation opportunity or
benefit plan reduction applicable on a similar basis to all
other senior executive officers of the Company and, in that
event, provided that such reduction does not exceed 5% of
Executive’s total compensation opportunity)






	 	c.	 	The Company materially breaches
its obligations to pay the Executive, unless the failure to pay
is a result of a good faith dispute between the Company and the
Executive






	 	d.	 	The Company substantially
diminishes the duties, responsibilities or title of the
Executive such that the position held is no longer the chief
executive officer






	 	e.	 	The Company alters the
Executive’s reporting relationship, currently the Board of
Directors of the Company






	 	ii.	 	Continues to satisfactorily perform job duties as assigned and
continues in employment through the date established by ValueVision
Media, Inc. as the Executive’s last day of employment






	 	iii.	 	Provides the Company written notice (in the case of a Good
Reason resignation) that details the reason that Good Reason exists.
The Company shall have thirty (30) days following receipt of this notice
to correct the occurrence. Only if the company fails to correct the
occurrence does Good Reason exist.






	 	iv.	 	Returns to the Company, no later than the last day of
employment, all ValueVision Media, Inc. property in the Executive’s
possession; and






	 	v.	 	Signs an effective agreement, substantially in the form annexed
hereto, that complies with applicable laws in which the Executive
releases ValueVision Media, Inc. and all related parties from any and
all claims against them. Payment of severance will be made on the next
regularly scheduled pay date after the applicable rescission period
expires, unless the provisions of any applicable section(s) of the tax
code would otherwise indicate.






	 	vi.	 	Complies with the terms of any non-compete, confidentiality,
invention or other written agreements






	 	C.	 	Change in Control. “Change in Control” means any of the following:






	 	(i)	 	the acquisition by any individual, entity or group (within the meaning
of the Securities Exchange Act of 1934 (“Exchange Act”) Sections 13(d)(3) or
14(d)(2)) of beneficial ownership (within the meaning of Exchange Act Rule
13d-3) of (a) more than 50% of the then-outstanding shares of common stock of
the Company (the “Outstanding Company Common Stock”) or (b) 30% or more of the
combined voting power of the then-outstanding voting securities of the Company
entitled to vote generally in the election of the Board (the Outstanding
Company Voting Securities); notwithstanding the above, the following
acquisitions will not constitute a Change in Control: (A) any acquisition of
common stock or voting securities of the Company directly from the Company, (B)
any acquisition of common stock or voting securities of the Company by the
Company or any of its wholly owned subsidiaries, (C) any acquisition of common
stock or voting securities of the Company by any employee benefit plan (or
related trust) sponsored or maintained by the company or any of its
subsidiaries, or (D) any acquisition by any corporation with respect to which
immediately following such acquisition, more than 70% of, respectively, the
then-outstanding voting securities of such corporation entitled to vote
generally in the election of directors is then beneficially owned, directly or
indirectly, by all or substantially all of the individuals and entities who
were the beneficial owners, respectively, of the Outstanding Company Common
Stock and Outstanding Company Voting Securities immediately before such
acquisition in substantially the same proportions as was their ownership,
immediately before such acquisition, of the Outstanding Company Common Stock
and Outstanding Company Voting Securities, as the case may be.






	 	(ii)	 	Individuals who, as of a date within the 12 months preceding the date
that it is determined whether a Change in Control has occurred, constitute the
Board (the “Incumbent Board”) cease for any reason to constitute at least a
majority of the Board. However, any individual who becomes a director of the
Board whose election, or nomination for election by the Company’s shareholders,
was approved by a vote of at least a majority of the directors then comprising
the Incumbent Board will be considered a member of the Incumbent Board.






	 	(iii)	 	A reorganization, merger, consolidation or statutory exchange of
Outstanding Company Voting Securities, unless immediately following such
reorganization, merger, consolidation or exchange, all or substantially all of
the individuals and entities who were the beneficial owners, respectively, of
the Outstanding company Common Stock and Outstanding Company Voting Securities
immediately before such reorganization, merger, consolidation or exchange
beneficially own, directly or indirectly, more than 70% of, respectively, the
then-outstanding shares of common stock and the combined voting power of the
then-outstanding voting securities entitled to vote generally in the election
of directors, as the case may be, of the corporation resulting from such
reorganization, merger, consolidation or exchange in substantially the same
proportions as was their ownership, immediately before such reorganization,
merger, consolidation or exchange, of the Outstanding Company Voting Securities






	 	(iv)	 	A reorganization, merger, consolidation or statutory exchange of
Outstanding Company Common Stock, unless immediately following such
reorganization, merger, consolidation or exchange, all or substantially all of
the individuals and entities that were the beneficial owners of the Outstanding
Company Common Stock immediately before such reorganization, merger
consolidation or exchange beneficially own, directly or indirectly more than
50% of the then outstanding shares of common stock of the corporation resulting
from such reorganization, merger, consolidation, or exchange in substantially
the same proportion as was their ownership immediately before such
reorganization, merger, consolidation or exchange of the Outstanding Company
Common Stock.






	 	(v)	 	The sale or other disposition of all or substantially all of the
assets of the Company, other than to a corporation with respect to which,
immediately following such sale or other disposition, more than 50% of,
respectively, the then-outstanding shares of common stock of such corporation
or the combined voting power of the then-outstanding voting securities of such
corporation entitled to vote generally in the election of directors is then
beneficially owned, directly or indirectly, by all or substantially all of the
individuals and entities who were the beneficial owners, respectively, of the
Outstanding Company Common Stock and Outstanding Company Voting Securities
immediately before such sale or other disposition in substantially the same
proportion as was their ownership, immediately before such sale or other
disposition, of the Outstanding Company Common Stock and Outstanding Company
Voting Securities, as the case may be.






	 	(vi)	 	Notwithstanding the above, a Change of Control shall not be deemed to
occur with respect to Executive if the acquisition of the interests referred to
above is by a group, acting in concert, that includes the Executive or if at
least 30% of the then-Outstanding Common Stock or Outstanding Company Voting
Securities of the surviving corporation or other entity acquiring all or
substantially all of the assets of the Company is beneficially owned, directly
or indirectly, immediately thereafter by a group, acting in concert, that
includes Executive.






	 	(vii)	 	In no event shall a Change of Control be deemed to have occurred if
it does not constitute a Change in Control under Section 409A of the Internal
Revenue Code and guidance issued thereunder.






D. Notwithstanding any other provision of this Exhibit A to the contrary, if any of the
payments or benefits received or to be received by Executive (whether pursuant to the
terms of Offer Letter or any other plan, arrangement or agreement with the Company, any
person whose actions result in a Change in Control or any person affiliated with the
Company or such person) (all such payments and benefits being hereinafter referred to as
the “Total Payments”) will be subject to the excise tax under Code Section 4999 (“Excise
Tax”), the following provisions shall apply:




(i) If the Total Payments, reduced by the sum of (a) the Excise Tax and (b) the
total of the Federal, state, and local income and employment taxes payable by
Executive on the amount of the Total Payments which are in excess of the Threshold
Amount, are greater than or equal to the Threshold Amount, Executive shall be
entitled to the full benefits payable under this Agreement.




(ii) If the Threshold Amount is less than (a) the Total Payments, but greater than
(b) the Total Payments reduced by the sum of (1) the Excise Tax and (2) the total of
the Federal, state and local income and employment taxes on the amount of the Total
Payments which are in excess of the Threshold Amount, then the benefits payable
under this Agreement shall be reduced (but not below zero) to the extent necessary
so that the maximum Total Payments shall not exceed the Threshold Amount. To the
extent that there is more than one method of reducing the payments or benefits to
bring them within the Threshold Amount, Executive shall determine which method shall
be followed; provided that if Executive fails to make such determination within
fifteen (15) days after the Company has sent Executive written notice of the need
for such reduction, the Company may determine the amount of such reduction in its
sole discretion.




“Threshold Amount” shall mean three times Executive’s “base amount” within the
meaning of Code Section 280G(b)(3), less one dollar ($1.00).




The determination as to which of subsections (i) or (ii) above shall apply to
Executive shall be made by a nationally recognized accounting firm selected by the
Company (the “Accounting Firm”), which shall provide detailed supporting
calculations both to the Company and Executive within fifteen (15) business days of
the Date of Termination, if applicable, or at such earlier time as is reasonably
requested by the Company or Executive. For purposes of determining which of
subsections (i) or (ii) above shall apply, Executive shall be deemed to pay Federal
income taxes at the highest marginal rate of Federal income taxation applicable to
individuals for the calendar year in which the determination is to be made, and
state and local income taxes at the highest marginal rates of individual taxation in
the state and locality of Executive’s residence on the Date of Termination, net of
the maximum reduction in Federal income taxes which could be obtained from deduction
of such state and local taxes. Any determination by the Accounting Firm shall be
binding upon the Company and Executive.




	 	E.	 	If Executive shall be a specified employee, as defined in Code Section 409A and
guidance issued thereunder as of the date of separation from service, then the maximum
amount that can be paid to Executive during the first six months following the
separation from service is the least of the following amount: (i) the amount otherwise
required under the Agreement to be paid during such six month period; (ii) twice the
annualized base salary of Executive as of the last day of the year immediately
preceding the separation from service; (iii) twice the compensation limit for the year
in which the separation from service occurs under Section 401(a)(17) of the Code; or
(iv) the maximum amount permitted to be paid under Section 409A(a)(2)(B)(i) of the Code
during such six month period. Any amounts not otherwise permitted to be paid during the
six month period shall be paid in a lump sum without interest on the first day of the
month following the six month anniversary of the date of the separation from service.






	 	F.	 	For purposes of the Offer Letter and this Exhibit A, “termination of
employment,” “severance from employment,” “separation from employment,” and similar
terms shall mean a separation from service under Code Section 409A and guidance issued
thereunder.




2









Renee Aiu Offer Letter Dated March 3, 2008



Form of Mutual Waiver and Release




The Company recommends that you consult an attorney before signing this Mutual Waiver and
Release



MUTUAL WAIVER AND RELEASE




THIS MUTUAL WAIVER AND RELEASE (this “Waiver and Release”) is entered into by and between
ValueVision Media, Inc., a Minnesota corporation (the “Company”) and      (the
“Employee”). The Company and the Employee hereby agree knowingly and voluntarily as follows:



In consideration of the mutual release given below and of the payments and benefits pursuant
to the Severance Agreement (the “Benefits”), which Employee acknowledges are consideration for this
Waiver and Release to which the Employee would not otherwise be entitled and are in lieu of any
rights or claims that the Employee may have with respect to separation or severance benefits or
other remuneration from the Company or its affiliates; and after the opportunity to consult legal
counsel; the Employee hereby for him or herself, and his or her heirs, agents, executors,
successors, assigns and administrators (collectively, “Related Parties”), forever releases,
remises, and discharges, in all their capacities, the Company and all of its affiliates or
subsidiaries, and any of their present or former directors, employees, fiduciaries,
representatives, officers and agents, successors and assigns (collectively, the “Releasees”)
individually and in their official capacities, of and from all covenants, obligations, liabilities
and agreements, and forever waives all claims, rights and causes of action whatsoever, in law or in
equity, whether known or unknown, asserted or unasserted, suspected or unsuspected, that the
Employee or any Related Parties ever had, may have in the future or have now; including, without
limitation, any claims, rights and causes of action under United States federal, state or local
law, regulation or decision, and the national or local law (statutory or decisional) of any foreign
country, including, without limitation, those under the Age Discrimination in Employment Act, as
amended 29 U.S.C. §§621 et. seq., the Older Workers Benefit Protection Act, 29 U.S.C. §626 (f)(1),
Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Americans with
Disabilities Act, 42 U.S.C. §§12101-12213, the Employee Retirement Income Security Act of 1974, as
amended (“ERISA”), the Family and Medical Leave Act of 1993, the Fair Labor Standards Act, the
Minnesota Human Rights Act, and any other similar or related law, regulation or decision relating
to or dealing with discrimination including, without limitation, any claims, rights or causes of
action for punitive damages, attorney’s fees, expenses and costs of litigation. Notwithstanding the
foregoing, the Employee and Related Parties do not release or waive any right or claim (i) the
Employee and Related Parties may have for non-payment of the Benefits, other than payments of any
severance benefits or



pursuant to any written stock option agreement or restricted stock agreement between the Company
and the Employee that are superseded by the terms of the Severance Agreement; (ii) under ERISA to
obtain post-employment payments and benefits under any employee benefit plan (as defined in ERISA);
(iii) for indemnification under any agreement with or policy of the Company or its affiliates
relating to indemnification of directors or officers or under any provision of the Company’s
articles or by-laws relating to indemnification of directors or officers; (iv) under any policy of
directors’ or officers’ liability insurance; (v) the Employer may have under the Executive
Separation Agreement; (vi) that arises against the Company after the date of this Waiver and
Release; and (vi) to obtain contribution as permitted by law in the event of entry of judgment
against the Employee and the Company as a result of any act or failure to act for which the
Employee and the Company are jointly liable.



In consideration for the Employee’s release and waiver of claims herein and other good and
valuable consideration, the Company, on behalf of itself and the Releasees, forever releases,
remises and discharges, in all their capacities, the Employee and the Related Parties, individually
and in their official capacities, of and from all covenants, obligations, liabilities and
agreements, and forever waives all claims, rights and causes of action whatsoever, in law or in
equity, whether known or unknown, asserted or unasserted, suspected or unsuspected, that the
Company or any of the Releasees ever had, may have in the future or have now; including, without
limitation, any claims, rights and causes of action under United States federal, state or local
law, regulation or decision, and the national or local law (statutory or decisional) of any foreign
country. Notwithstanding the foregoing, the Company and the Releasees do not release or waive (i)
any right or claim that arises against the Employee from facts or events occurring after the date
of this Waiver and Release, (ii) any claim against the Employee based on intentional misconduct,
fraud, misappropriation or gross neglect that the Company has no knowledge of on the date of this
Waiver and Release, or (iii) any right the Company and the Releasees may have to seek contribution
as permitted by law in the event of entry of judgment against the Employee and the Company as a
result of any act or failure to act for which the Employee and the Company are jointly liable,
provided that nothing herein shall be deemed to modify or otherwise affect Employee’s entitlement
to indemnification under any liability policy carried by the Company insuring its officers and
directors.



The Employee acknowledges that the Release includes all claims the Employee is legally
permitted to release and as such does not preclude the Employee from filing a charge of
discrimination with the state Department of Human Rights or the federal Equal Employment
Opportunity Commission although the Employee may not be able to recover any damages if the Employee
files such a charge. This Waiver and Release includes but is not limited to all claims relating to
the Employee’s employment and separation from employment.



The Employee and the Company understand and agree that the payments by the Company to the
Employee and the signing of this Waiver and Release by the Employee and the Company do not in any
way indicate that the Employee or the Company has any viable claims against the other or that the
Employee or the Company admits any liability whatsoever to the other under such claims. This
agreement contains a release of certain legal rights which Employee may have under the Age
Discrimination in Employment Act and the Minnesota Human Rights Act. The Employee affirms that,
prior to the execution of this Waiver and Release, the Company has advised him or her to consult
with an attorney of the Employee’s choice concerning the terms and conditions set forth herein,
that the Employee has had an opportunity to ask any questions he or she might have about this
Wavier and Release, and that the Employee has twenty-one (21) days following the Employee’s signing
of this Waiver and Release to consider this Waiver and Release and its consequences and to revoke
and cancel the terms and conditions contained herein, and the terms and conditions of this Waiver
and Release shall not become effective or enforceable until such revocation period has expired.
The Employee acknowledges that the Benefits will not be paid or provided, and the Company’s release
above will not be effective, if he or she revokes this Waiver and Release.



After the Employee has accepted this agreement by signing it, he or she may revoke his or her
acceptance for a period of fifteen (15) days after the date he or she signed this agreement. This
agreement will not be effective, and severance payments will not be made, until this fifteen (15)
day revocation period has expired. If the Employee wishes to revoke his or her acceptance of this
agreement, he or she must notify the Company in writing within the fifteen (15) day revocation
period. Such notice must be delivered to the Company in person or mailed by certified mail, return
receipt requested, to: General Counsel ShopNBC / ValueVision Media, Inc., 6740 Shady Oak Road,
Eden Prairie, MN 55344 If the Employee fails to properly deliver or mail such written revocation
as instructed, the revocation will not be effective.



IN WITNESS WHEREOF, the parties hereto have executed this Waiver and Release this      th day of
     ,      .



By                                             



 .                                                   



VALUEVISION MEDIA, INC.



By:                                        



Name:                                   



Its:                                        




3