Document:

fox-ex1037_933.htm

 

Exhibit 10.37

as of July 1, 2015

John P. Nallen

Senior Executive Vice President and Chief Financial Officer

Twenty-First Century Fox, Inc.

1211 Avenue of the Americas

New York, NY 10036

Dear John:

This letter agreement (the “Letter Agreement”) is intended to constitute a binding modification to your Employment Agreement (the “Agreement”) dated as of July 1, 2013, between 21st Century Fox America, Inc. (formerly known as News America Incorporated, the “Company”), a wholly owned subsidiary of Twenty-First Century Fox, Inc. (“21st Century Fox”), and shall confirm the terms and conditions which will apply to your Agreement as from July 1, 2015. All terms and conditions set forth in the Agreement remain applicable unless otherwise amended by the terms and conditions outlined below.  Capitalized terms used and not defined herein shall have the meanings given such terms in the Agreement.

The Company and you agree that the Agreement is hereby amended as follows:

	
1.
	
Duties.

	
 
	
The Company and you hereby agree that references to the Chief Operating Officer of 21st Century Fox in Section 1 shall be deleted and replaced with Lachlan K. Murdoch, an Executive Chairman of 21st Century Fox.

	
2.
	
Term.

	
a.
	
Section 2 of the Agreement states that the Term of Employment shall mean the period from July 1, 2013 through June 30, 2016. The Company and you hereby agree to extend the Term of Employment through June 30, 2018.

	
b.
	
Section 2 of the Agreement states that not later than March 1, 2016, the parties shall enter into discussion to determine whether they are interested in continuing your employment after the Term of Employment. The Company and you hereby agree that the reference to March 1, 2016 shall be deleted and replaced with March 1, 2018.

	
3.
	
Compensation.

	
a.
	
Section 4(b) of the Agreement states that you will be entitled to receive an Annual Bonus with a target of not less than $3,000,000 (the “Target Bonus”) 

1

 

with a maximum payout of not less than $6,000,000. The Company and you hereby agree that the Target Bonus for the fiscal years ending June 30, 2016, 2017 and 2018 will be not less than $4,000,000 with a maximum payout of not less than $8,000,000.

	
b.
	
Section 4(c) of the Agreement states that for each fiscal year during the Term of Employment, the target amount for your PSU Bonus for the applicable fiscal year shall be not less than $3,000,000 (the “PSU Target Value”). The Company and you hereby agree that, beginning with the fiscal year 2016-2018 performance cycle, the PSU Target Value shall be not less than $4,000,000.

	
c.
	
The last sentence of Section 4(c) shall be deleted in its entirety and replaced with the following: In the event that the Term of Employment expires during the performance period of a PSU Bonus (the “Performance Period”), the Executive shall continue to be eligible to earn the full value of the PSU Bonus.

	
4.
	
Compensation Upon Termination.

	
 
	
The language which states “subject to Section 4(c) of this Agreement” shall be deleted in its entirety from Sections 10(a)(v), 10(b)(iii), 10(c)(iv) and 10(d)(iii).

	
5.
	
Excises Taxes.

	
 
	
The Company and you hereby agree to add a new Section 19 to the Agreement as follows:

	
 
	
19. Excise Taxes.  In the event it shall be determined that any payment or distribution or any part thereof of any type to or for the benefit of the Executive whether pursuant to this Agreement or any other agreement between Executive and the Company or 21st Century Fox, or any person or entity that acquires ownership or effective control of the Company or 21st Century Fox or ownership of a substantial portion of the assets of the Company or 21st Century Fox (within the meaning of Section 280G of the Code) whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or any other plan or agreement (the “Total Payments”) is or will be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then the Total Payments shall be reduced to the maximum amount that could be paid to the Executive without giving rise to the Excise Tax (the “Safe Harbor Cap”), if the net after-tax payment to the Executive after reducing the Executive’s Total Payments to the Safe Harbor Cap is greater than the net after-tax (including the Excise Tax) payment to Executive without such reduction. The reduction of the amounts payable hereunder, if applicable, shall be made by reducing first the payment made pursuant to this Agreement and then to any other plan or agreement that 

2

 

triggers such Excise Tax, unless an alternative method of reduction is elected by Executive. All mathematical determinations, and all determinations as to whether any of the Total Payments are “parachute payments” (within the meaning of Section 280G of the Code), that are required to be made under this paragraph, including determinations as to whether the Total Payments to the Executive shall be reduced to the Safe Harbor Cap and the assumptions to be utilized in arriving at such determinations, shall be made by the outside accounting firm of the Company (the “Accounting Firm”). If the Accounting Firm determines that no Excise Tax is imposed on the Total Payments and it subsequently is established pursuant to a final determination of a court or an Internal Revenue Service proceeding which has been finally and conclusively resolved, that the Total Payments are in excess of the Safe Harbor Cap (hereinafter referred to as an “Excess Payment”), such Excess Payment shall be deemed for all purposes to be an overpayment to the Executive made on the date the Executive received the Excess Payment and the Executive shall repay the Excess Payment to the Company on demand; provided, however, if the Executive shall be required to pay an Excise Tax by reason of receiving such Excess Payment (regardless of the obligation to repay the Company), the Executive shall not be required to repay the Excess Payment (and if Executive has already repaid such amount, the Company shall refund the amount to Executive). This Section 19 shall supersede Section 10.4 of the 21st Century Fox 2005 Long-Term Incentive Plan and Section 10.4 of the 21st Century Fox 2013 Long-Term Incentive Plan.

	
6.
	
Miscellaneous.

	
 
	
All references in the Agreement to “News America Incorporated” shall be amended to be references to 21st Century Fox America, Inc.

3

 

By counter-signing this letter agreement, you acknowledge and agree to be bound by the terms hereof.

 

			
	
Sincerely,

 

	
21ST CENTURY FOX AMERICA, INC.

 

	
By:
	
/s/ Janet Nova

	
Name:
	
Janet Nova

	
Title: 
	
EVP and Deputy General Counsel

 

	
	
Acknowledged and Agreed:

 

/s/ John P. Nallen

	
John P. Nallen

 

4

 

Guaranty

The undersigned guarantees the performance of the foregoing amendment in all respects.

 

		
	
TWENTY-FIRST CENTURY FOX, INC.

 

	
By:
	
/s/ Janet Nova

	
Name:
	
Janet Nova

	
Title: 
	
EVP and Deputy Group General Counsel

 

5Exhibit

THIS WARRANT AND THE SECURITIES ISSUABLE UPON THE CONVERSION HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR UNDER ANY APPLICABLE STATE SECURITIES LAWS.  ALL SUCH SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE OFFERED FOR SALE, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED (A “TRANSFER”) WITHOUT REGISTRATION UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR WITHOUT AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER THAT SUCH REGISTRATION IS NOT REQUIRED BECAUSE THE TRANSFER IS EXEMPT FROM REGISTRATION OR THE TRANSFER MAY BE MADE PURSUANT TO RULE 144 OR RULE 144A UNDER THE ACT.  INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.
               Warrant Certificate No. 4    

COMMON STOCK WARRANT

For the Purchase of Shares of Common Stock 
of 
CVSL INC.

July 22, 2015 

THIS CERTIFIES THAT, Randy Schroeder, for value received, and  successors and assigns (collectively, “Warrantholder”), is entitled to subscribe for and purchase, subject to the terms hereof, from CVSL Inc., a Florida corporation (the “Company”), Fifty Thousand (50,000) fully-paid and non-assessable shares (the “Shares”) of the Company’s Common Stock, par value $0.0001 per share (“Common Stock”), at a price per share equal to One Dollar and Sixteen Cents ($1.16) (the “Warrant Exercise Price”), such price (i) representing the average closing price of a share of the Common Stock for the 10 trading days prior to the grant of this Warrant and (ii) being subject to adjustment upon the occurrence of the contingencies set forth in this Warrant.
This Warrant is granted in connection with the Exclusivity Agreement, of even date herewith, by and between the Company and Warrantholder (the “Exclusivity Agreement”).
1.Term.  Except as otherwise provided for herein, the Fifty Thousand (50,000) Shares represented by this Warrant shall be exercisable, in whole or in part, at any time and from time to time, upon the expiration of 720 days of the date of the original issuance of this Warrant and ending at 5:00 p.m., Dallas, Texas time, on the first anniversary of the original issuance date of this Warrant (the “Expiration Date”); provided, however, unless on the Expiration Date stated above either (i) the Shares are subject to an effective registration statement of the Company under the Securities Act of 1933, as amended, or (ii) the Common Stock is listed or included for quotation on at least one of the Nasdaq National Market, the New York Stock Exchange or the New York Stock Exchange 

EXECUTION COPY 07022014

Amex (and such listed trading has not been suspended or otherwise restricted pursuant to an effective order of such exchange), then the Expiration Date shall be extended through, and the term “Expiration Date” shall be deemed to mean, the next following anniversary of the original issuance date of this Warrant upon which one of the foregoing conditions has been met.    
2.    Number of Shares; Vesting of Shares.  Subject to the terms and conditions set forth herein, including the Expiration Date, the Warrantholder is entitled, upon surrender of this Warrant, to purchase from the Company the Shares represented by this Warrant as follows:  Fifty Thousand (50,000) Shares represented by this Warrant shall be exercisable, in whole or in part, at any time and from time to time, 720 days after the original issuance date of this Warrant, unless the Warrantholder is in breach of, or has breached, the Consultancy Agreement between the parties hereto of the same date on or before the time of such exercise.  In the event of such breach determinable in the sole discretion of the CVSL Board of Directors, this Warrant shall be null and void and of no force or effect.
3.    Method of Exercise; Net Issue Exercise.
(a)    Method of Exercise; Payment; Issuance of New Warrant.  The purchase right represented by this Warrant may be exercised by the holder hereof, in whole or in part and from time to time, by the surrender of this Warrant (together with the notice of exercise form attached hereto as Exhibit A, duly executed) at the principal office of the Company and by the payment to the Company, by check or bank draft, of an amount equal to the then applicable Warrant Exercise Price per share multiplied by the number of Shares then being purchased.  The person or persons in whose name(s) any certificate(s) representing the Shares shall be issuable upon exercise of this Warrant shall be deemed to have become the holder(s) of record of, and shall be treated for all purposes as the record holder(s) of, the Shares represented thereby (and such Shares shall be deemed to have been issued) immediately prior to the close of business on the date or dates upon which this Warrant is exercised.  In the event of any exercise of the rights represented by this Warrant, certificates for the Shares of stock so purchased shall be delivered to the holder hereof as soon as possible and in any event within 45 days of receipt of such notice and, unless this Warrant has been fully exercised or expired, a new Warrant representing the portion of the Shares, if any, with respect to which this Warrant shall not then have been exercised shall also be issued to the holder hereof as soon as possible and in any event within such 45-day period.

(b)    Share Issuance/Restrictive Legends/Representations.  Notwithstanding the foregoing, (i) the Company shall not be obligated to deliver any shares of Common Stock during any period when the Company determines that the exercisability of the Warrant or the delivery of shares hereunder would violate any federal, state or other applicable laws and/or may issue shares subject to any restrictive legends that, as determined by the Company’s counsel, is necessary to comply with securities or other regulatory requirements, and (ii) the date on which shares are issued may include a delay in order to provide the Company such time as it determines appropriate to address administrative matters.  Warrantholder is an accredited investor within the meaning of Rule 501 of Regulation D promulgated under the Act, is aware of the Company’s business affairs and financial condition and has acquired sufficient information about the Company to reach an informed 

2

COMMON STOCK WARRANT

EXECUTION COPY 07022014

and knowledgeable decision to acquire the Common Stock, and Warrantholder is acquiring the Shares for his own account for the purpose of investment and not with a view to distribute the same, or for resale in connection with any distribution thereof, within the meaning of the Act.
(c)    Piggyback Registration.  If, during the Term of this Agreement, the Company proposes to register any shares of its Common Stock in connection with a shelf registration statement under Rule 415 of Regulation C of the Act (“Shelf Registration”), the Company shall promptly, and in any event at least ten days prior to the filing of the registration statement, give written notice to the Warrantholder of its intention to effect such registration.  Upon the written request of the Warrantholder given within ten days after the mailing of such notice by the Company, the Company shall, subject to the provisions of this Section 3, cause to be registered under the Act all of the Common Stock that such Investor has requested to be registered.  The Company shall have the right to terminate or withdraw any registration initiated by it under this Section 3 prior to the effectiveness of such registration whether or not the Warrantholder has elected to include any Common Stock in such registration and shall promptly notify the Warrantholder of such termination or withdrawal.  The piggyback registration rights set forth herein relate solely to those that may be available under a Shelf Registration by the Company, if any, and expressly exclude (i) the registration of any securities of the Company in connection with an underwritten public offering; (ii) a registration relating solely to an employee benefit plan, (ii) a registration relating solely to a transaction under Rule 145 of the Securities Act, or (iv) a registration in which the only securities being registered is common stock issuable upon conversion of debt securities which are also being registered.

4.    Stock Fully Paid; Reservation of Shares.  All Shares that may be issued upon the exercise of the rights represented by this Warrant shall, upon issuance, be fully paid and nonassessable, and free from all taxes, liens and charges with respect to the issue thereof.  During the period within which the rights represented by the Warrant may be exercised, the Company shall at all times have authorized and reserved for the purpose of issuance upon exercise of the purchase rights evidenced by this Warrant, a sufficient number of shares of its Common Stock to provide for the exercise of the rights represented by this Warrant.
5.    Adjustment of Warrant Exercise Price and Number of Shares.  The number and kind of securities purchasable upon the exercise of the Warrant and the Warrant Exercise Price shall be subject to adjustment from time to time upon the occurrence of certain events, as follows:
(a)    Reclassification or Merger.  In case of any reclassification, change or conversion of securities of the class issuable upon exercise of this Warrant (other than a change in par value, or from par value to no par value, or from no par value to par value, or as a result of a subdivision or combination), or in case of any merger of the Company with or into another corporation (other than a merger with another corporation in which the Company is a continuing corporation and which does not result in any reclassification or change of outstanding securities issuable upon exercise of this Warrant), or in case of any sale of all or substantially all of the assets of the Company, the Company, or such successor or purchasing corporation, as the case may be, shall execute a new Warrant (in form and substance satisfactory to the Warrantholder) providing 

3

COMMON STOCK WARRANT

EXECUTION COPY 07022014

that the holder of this Warrant shall have the right to exercise such new Warrant and upon such exercise to receive, the kind and amount of shares of stock, other securities, money and property receivable upon such reclassification, change or merger by a holder of one share of Common Stock.  Such new Warrant shall provide for adjustments that shall be as nearly equivalent as may be practicable to the adjustments provided for in this Section 5, and appropriate adjustments shall be made to the purchase price per share payable hereunder, provided the aggregate purchase price shall remain the same.  The provisions of this subsection (a) shall similarly apply to successive reclassification, changes, mergers and transfers.
(b)    Subdivisions or Combination of Shares.  If the Company at any time while this Warrant remains outstanding and unexpired shall subdivide or combine its Common Stock, the Warrant Exercise Price and the number of shares of Common Stock issuable upon exercise hereof shall be proportionately adjusted such that the aggregate exercise price of this Warrant shall at all times remains equal.  Any adjustments under this subsection (b) shall become effective at the close of business on the date the subdivision or combination becomes effective.
(c)    Stock Dividends.  If the Company at any time while this Warrant is outstanding and unexpired shall pay a dividend payable in shares of Common Stock (except any distribution specifically provided for in the foregoing subsections (a) and (b)), then the Warrant Exercise Price shall be adjusted, from and after the date of determination of shareholders entitled to receive such dividend or distribution, to that price determined by multiplying the Warrant Exercise Price in effect immediately prior to such date of determination by a fraction, (i) the numerator of which shall be the total number of shares of Common Stock outstanding immediately prior to such dividend or distribution and (ii) the denominator of which shall be the total number of shares of Common Stock outstanding immediately after such dividend or distribution and the number of shares of Common Stock subject to this Warrant shall be proportionately adjusted.  Any adjustment under this subsection (c) shall become effective as of the record date of such dividend, or in the event that no record date is fixed, upon the making of such dividend.
(d)    No Impairment.  The Company will not, by amendment of its Articles of Incorporation (as amended, restated, supplemented or otherwise modified from time) or through any reorganization, recapitalization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Company, but will at all times in good faith assist in the carrying out of all the provisions of this Section 5 and in the taking of all such action as may be necessary or appropriate in order to protect the rights of the holder of this Warrant against impairment.
6.    Notice of Adjustments.  Whenever the Warrant Exercise Price shall be adjusted pursuant to the provisions hereof, the Company shall within 20 days of such adjustment deliver a certificate signed by its chief executive officer of chief financial officer to the registered holder(s) hereof setting forth, in reasonable detail, the event requiring the adjustment, the amount of the adjustment, the method by which such adjustment was calculated and the Warrant Exercise Price after giving effect to such adjustment.

4

COMMON STOCK WARRANT

EXECUTION COPY 07022014

7.    Fractional Shares.  No fractional shares will be issued in connection with any exercise hereunder, but in lieu of such fractional shares, the Company shall make a cash payment therefor upon the basis of the Warrant Exercise Price then in effect.
8.    Transfers and Exchanges.  This Warrant may be transferred upon the prior written consent of the Company, which consent shall not be unreasonably withheld, provided that no such consent shall be required for the transfer of this Warrant by operation of law.
9.    Rights as Shareholders.  No holder of this Warrant, as such, shall be entitled to vote or receive dividends or be deemed the holder of Common Stock, nor shall anything contained herein be construed to confer upon the holder of this Warrant, as such, any of the rights of a shareholder of the Company or any right to vote for the election of directors or upon any matter submitted to shareholders at any meeting thereof, or to receive notice of meetings, or to receive dividends or subscription rights or otherwise until this Warrant shall have been exercised and the shares of Common Stock purchasable upon the exercise hereof shall have become deliverable, as provided herein.  However, nothing in this Section 9 shall limit the right of the Warrantholder to be provided the notices required under this Warrant.
10.    Modification and Waiver.  Any term of this Warrant may be amended and the observance of any term of this Warrant may be waived (either generally or in a particular instance and either retroactively or prospectively), with the written consent of the Company and the holders of a majority of shares of Common Stock issued or issuable upon exercise of this Warrant.  Any waiver or amendment effected in accordance with this Section shall be binding upon each holder of any Shares issuable upon exercise of this Warrant.    
11.    Notices.  Any notice, request or other document required or permitted to be given or delivered to the holder hereof or the Company shall be delivered, or shall be sent by certified or registered mail, postage prepaid, to each such holder at his, her or its address as shown on the books of the Company or to the Company at the address indicated on the signature page of this Warrant.
12.    Assumption of Warrant.  If at any time, while this Warrant, or any portion thereof, is outstanding and unexpired there shall be (i) an acquisition of the Company by another entity by means of a merger, consolidation or other transaction or series of related transactions resulting in the exchange of the outstanding shares of the Company’s capital stock such that shareholders of the Company prior to such transaction own, directly or indirectly, less than 50% of the voting power of the surviving entity or (ii) a sale or transfer of all or substantially all of the Company’s assets to any other person, then, as a part of such acquisition, sale or transfer, lawful provision shall be made so that the Warrantholder shall thereafter be entitled to receive upon exercise of this Warrant, during the period specified herein and upon payment of the Warrant Exercise Price then in effect, the number of shares of stock or other securities or property of the successor corporation resulting from such acquisition, sale or transfer which a holder of the shares deliverable upon exercise of this Warrant would have been entitled to receive in such acquisition, sale or transfer if this Warrant had been exercised immediately before such acquisition, sale or transfer, all subject to further adjustment as provided in this Section 12; and in any such case, appropriate adjustment (as determined in good faith by the Company’s Board of Directors) shall be made in the application of the provisions herein set forth with respect to the rights and interests thereafter of the Warrantholder to the end that the 

5

COMMON STOCK WARRANT

EXECUTION COPY 07022014

provisions set forth herein (including provisions with respect to changes in and other adjustments of the number of Shares of the Warrantholder is entitled to purchase) shall thereafter by applicable, as nearly as possible, in relation to any shares of Common Stock or other securities or other property thereafter deliverable upon the exercise of this Warrant.
13.    Binding Effect on Successors.  This Warrant shall be binding upon any corporation succeeding the Company by merger, consolidation or acquisition of all or substantially all of the Company’s assets, and all of the obligations of the Company relating to the Common Stock issuable upon the exercise of this Warrant shall survive the exercise and termination of this Warrant and all of the covenants and agreements of the Company shall inure to the benefit of the successors and assigns of the Warrantholder.  The Company will, at the time of the exercise of this Warrant, in whole or in part, upon request of the Warrantholder but at the Company’s expense, acknowledge in writing its continuing obligation to the Warrantholder in respect of any rights to which the Warrantholder shall continue to be entitled after such exercise in accordance with this Warrant; provided, that the failure of the Warrantholder to make any such request shall not affect the continuing obligation of the Company to the Warrantholder in respect of such rights.
14.    Lost Warrants or Stock Certificates.  The Company covenants to the holder hereof that upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant or any stock certificate and, in the case of any such loss, theft or destruction, upon receipt of an indemnity reasonably satisfactory to the Company, or in the case of any such mutilation upon surrender and cancellation of such Warrant or stock certificate, the Company will make and deliver a new Warrant or stock certificate, or like tenor, in lieu of the lost, stolen, destroyed or mutilated Warrant or stock certificate.
15.    Descriptive Headings.  The descriptive headings of the several sections of this Warrant are inserted for convenience only and do not constitute a part of this Warrant.
16.    Governing Law.  This Warrant shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the laws of the State of Texas if not otherwise in conflict with the laws governing matters of corporate concern in the State of the Company’s incorporation.
17.    Counterparts.  This Common Stock Warrant may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

REMAINDER OF PAGE
INTENTIONALLY LEFT BLANK

6

COMMON STOCK WARRANT

EXECUTION COPY 07022014

IN WITNESS WHEREOF, this Common Stock Warrant is executed effective as of the date first above written.

CVSL INC.

By:    /s/ John P. Rochon    

Name: John P. Rochon

Title: Chief Executive Officer
                                                    

Address:    
2400 Dallas Parkway, Suite 230
Plano, Texas  75093

Accepted and Agreed:

/s/ Randy Schroeder                        
Randy Schroeder

Address:  
6821 Calle Portone
Rancho Santa Fe, California 92091

SIGNATURE PAGE

EXECUTION COPY 07022014

EXHIBIT A

NOTICE OF EXERCISE

To:    CVSL Inc.
2400 Dallas Parkway, Suite 230
Dallas, Texas  75093

Attn:    Ryan C. Mack, Deputy CFO

The undersigned hereby elects to purchase ___________ shares of Common Stock of CVSL Inc. pursuant to the terms of the attached Warrant, and tenders herewith payment of the purchase price of such shares in full.
Such payment is hereby made in the amount of ___________ by wire transfer or by certified or bank check.
Please issue a certificate or certificates representing said shares in the name of the undersigned or in such other name or names as are specified below 
Name:       

Address:        

            

            

    
_______________________        
(Date)    (Signature)

COMMON STOCK WARRANT – NOTICE OF EXERCISE

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00248-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00248-of-00352.parquet"}]]