Document:

exv10w28

 

Exhibit 10.28

ValueVision Media, Inc.

Compensation of Directors*

(Effective April 17, 2008)

1.       Compensation for service on the Board:

	 	•	 	$65,000 per annum cash compensation
	 
	 	•	 	Annual grant of 8,000 shares of restricted stock made immediately following
election of the director at each annual shareholders meeting. The shares of
restricted stock vest on the day immediately prior to the next following annual
shareholders meeting after the date of grant.

2.       Additional Compensation for Chairman of the Board:

	 	•	 	Additional cash compensation of $65,000 per annum
	 
	 	•	 	Annual grant of 20,000 stock options per annum, with the option grant made
immediately following the annual shareholders meeting
	 
	 	•	 	Monthly retainer of $10,000 per month for transitional assistance to incoming CEO
during the period of March 2008 through January 2009

3.       Additional Cash Compensation for service on Committees of the Board:

	 	•	 	$12,000 per annum for serving as Chairman of Compensation or Governance Committee
	 
	 	•	 	$20,000 per annum for serving as Chairman of Audit Committee; and
	 
	 	•	 	$10,000 for other members of the Audit Committee

4.       Per Meeting Fees:

	 	•	 	No per meeting fees

 

			
	*	 	Directors who are a member of ValueVision Media, Inc. management or who are elected by the
holders of the Series A Preferred Stock (currently the sole holder is GE Equity Investments, Inc.)
do not receive any compensation for their service on the Board of Directors or the Committees
thereof.exv10w35

 

Exhibit 10.35

Glenn K. Leidahl

Bloomington, MN

March 25, 2008

Dear Glenn:

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

To follow is confirmation of your offer:

	 	 	 	 	 
	Position Title
	 	Chief Operating Officer
	 
	 	 	 	 
	Employment Start Date
	 	April 1st, 2008
	 
	 	 	 	 
	Reports To
	 	Rene Aiu -- President and CEO
	 
	 	 	 	 
	Annualized Base Salary
	 	
    $350,000	 
	 
	 	 	 	 
	Signing Bonus
	 	$50,000 -- one time payment on employment start date
	 
	 	 	 	 
	Annual Cash Incentive
	 	Your incentive opportunity at the
target performance level(s) will be 50% of your base salary with the
opportunity to achieve up to 100% 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 or its Human
Resources and Compensation Committee, subject to the terms of the
approved plan.  Your actual incentive payment for FY2008 will be pro-rated based on your employment start date.
A portion of your FY2008 incentive payment will be guaranteed at
$80,000, to be paid upon your employment start date.  The FY2008
balance payable following the end of the year will be the actual incentive earned less $80,000.
	 
	 	 	 	 
	Long Term Incentive
	 	Subject to the terms and conditions
applicable to options granted under the Company’s
Omnibus Stock Plan, the applicable stock option agreement, and upon
approval of the Company’s Board of Directors or its Human
Resources and Compensation Committee, you will be granted an option to purchase 225,000 shares of the
Company’s common stock at a price per share equal to the closing
fair market value per share as of your employment start date.  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.
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 or its Human Resources and Compensation Committee.
	 
	 	 	 	 
	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),

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	 	you would be eligible for the
greater of (a) the severance pay and other transition benefits as
defined in the Company’s severance guidelines for executive
officers in effect at the time of your termination or (b) 12 months
of your base salary and 12 months of Company-subsidized medical
coverage under COBRA (you would still be required to pay the employee
contribution portion that you were paying prior to termination) (base
salary shall be determined as of the day immediately preceding your termination or the first day of
 the fiscal year in which you are terminated, whichever is greater).
At the current time, certain enhanced severance
guidelines for executive officers are in effect that will expire at
the end of FY2008, at which time it is expected that the guidelines
will revert to the severance guideline referred to in clause (b)
above.  As defined in Exhibit A, any tax liability imposed upon you
or incurred by you in connection with the severance payments and
medical coverage payments, 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 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.

With this offer you will be receiving our Company relocation package. 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 952-943-6163.
Thank you for treating the terms of your employment offer with Value Vision Media confidentially.

We are excited to have you join our team and are confident that you have the skills and experience
to be an effective leader in our organization.

	 	 	 	 	 
	Sincerely

 	 
	/s/ Rene Aiu
 	 
	Rene Aiu 	 
	President & CEO
ValueVision Media, Inc. 	 
	 
	 	 	 	Agreed and Accepted

 	 
	 	 	 	/s/ Glenn K. Leidahl
 	 
	 	 	 	Date: 3/25/08 	 
	 	 	 	 	 
	 

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Exhibit A to Glenn Leidahl Offer Letter Dated March 25, 2008

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 or in the applicable severance guidelines in effect at
such for executive officers 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)
	 
	 	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.

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	 	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.

A-2

 

	 	(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).

A-3

 

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 this Agreement, “termination of employment”
shall mean a separation from service under Code Section 409A and guidance
issued thereunder.

A-4

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