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EXHIBIT 10.36
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is entered into as of the 1st
day of October, 2001, by and among INTEGRITY INCORPORATED, a Delaware
corporation, ("Employer") and XXXXXX X. XXXX, an individual currently residing
in MOBILE, ALABAMA ("Employee").
In consideration of the promises, covenants and conditions set forth
herein, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Employee and Employer agree as
follows:
1. Employment.
Employer hereby employs Employee and Employee hereby accepts employment
in the position of Executive Vice President, Creative Director (the "Position")
upon the terms and conditions hereinafter set forth.
2. Services and Appearances.
(a) General Services. During the term of employment hereunder and
except as otherwise provided herein, Employee shall devote his
full professional time and energy to the performance of his
duties as Executive Vice President, Creative Director and
shall use his best efforts in the performance of the same.
Employee will report directly to the Chief Operating Officer,
serve on the Executive Committee (defined herein as a
committee consisting of Employee, the President of Employer
and the Executive Vice President-Chief Operating Officer of
Employer), and participate in all Senior Management meetings.
Employer and Employee agree that Employee's duties in the
Position shall be determined by Employer and may be altered by
Employer from time to time at its sole discretion. Employer
and Employee acknowledge and agree that Employee's initial
duties in the Position shall consist of, among other things,
providing creative direction for the product planning and
production of all Employer's music and technology product
lines (and management control of the foregoing, except for
technology products); convening and coordinating Employer's
creative team; overseeing songwriter relationships and song
development; pioneering new product concepts and championing
research and development of those new concepts (searching for
new and fresh developments in music that Employer should
pursue, then developing and maintaining the relevant
relationships and contacts in these areas); participating on
creative teams (such as the PraiseGathering/Print Development
team) and in the various product development meetings, and
quarterly company-wide creative planning sessions.
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(b) Attendance at Industry and Employer Events. During the term of
employment hereunder, Employee agrees to attend various
industry and Employer events, as Employee and the Executive
Committee members of Employer (the "Executive Committee") deem
appropriate (e.g. CBA, GMA, NRB and choral reading sessions);
and Employee will perform at those events when in Employee's
judgment such performance is in the best interest of Employer
and Employee's career as an artist.
(c) Attendance at Other Events. As a corporate representative,
Employee will at times appear at certain events or on
television/radio programs, or provide material for published
articles proclaiming the mission of Employer, what God is
doing today and other ministry-related topics. Employee and
the Executive Committee will determine what events are
appropriate investments of Employee's time and energy.
(d) Participation as Host, Narrator or Worship Leader. Employee
acknowledges that in his Position, Employee will, from time to
time, be asked to participate in recorded and print projects
as a host, narrator or worship leader. Such projects are not
subject to the Artist Agreement, separately executed by and
between Employee and Employer as of the date hereof. Employee
and Employer will agree in writing, prior to the commencement
of any project on which Employee performs in any capacity,
whether or not the project will be subject to the Artist
Agreement.
(e) Availability to Tour.
(i) In addition to other appearances Employee makes as a
senior officer of Employer, if requested by Employer, Employee agrees
to make himself available to tour on behalf of Employer. Providing
Employee is in reasonable compliance with this touring provision,
Employee shall have the option to accept or reject any specific
opportunities or requests. Employer agrees that a minimum per concert
honorarium paid by the promoter or host is appropriate whenever
Employer uses Employee's name, image or likeness to promote a tour.
Employer will not require Employee to accept any concert appearances
where Employee will not receive an appropriate honorarium (e.g., for an
extended international tour, approximately $3,000 per concert). When it
is beneficial to Employer's mission (as to be determined by Employee
and the Executive Committee) for Xxxxx Xxxx to accompany Employee on
certain dates or tours, her reasonable travel expenses will be paid. If
the travel is international, Employer will pay (or require the promoter
or host to pay) for Business Class airfare for Xx. Xxxx.
(ii) In the event that Employer acts as promoter of a
tour, Employer shall agree in advance on a minimum per concert
honorarium. Following the tour,
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after gross revenue from the tour has been reduced by all expenses of
the tour, including Employee's honorarium, Employer will pay Employee
twenty percent (20%) of the profit, if any. If there is no profit, then
Employer shall have no further obligation to Employee.
(iii) While Employee will be allowed great personal
latitude in setting Employee's appearance and travel schedule, Employee
agrees to submit himself to the review and counsel of the Executive
Committee with regard to all decisions regarding allocation of
Employee's professional time and energies.
(f) Employee will be allowed to make personal appearances, not to
exceed one weekend each month, for which Employee shall not be
financially accountable to Employer and for which Employee can
retain any fees or honorariums, provided Employee is
personally responsible for all direct costs of such
appearances. Employee's secretary, provided by Employer, may
assist Employee in the booking and coordination of these
events, at no cost or expense to Employee.
(g) Employee will be expected to maintain reasonable office hours
and when away from the office, to communicate with Employee's
staff and secretary at reasonable intervals. Executive
Committee members should always be able to reach Employee by
telephone within twenty-four (24) hours. Employee is, however,
allowed and encouraged to schedule and take up to five (5)
days per month away from the office to devote concentrated
time to Employee's songwriting activities.
3. Compensation.
For and in consideration of the promises and covenants made herein and
the services to be provided hereunder, Employer agrees to compensate Employee as
follows:
(a) Signing Bonus. Employer has paid to Employee a non-refundable,
non-recoupable cash bonus of Twenty-Five Thousand Dollars and
No Cents ($25,000), less taxes and other normal withholdings.
(b) Base Compensation. Employer shall pay to Employee an annual
base salary in the amount of One Hundred and Seventy Thousand
Seven Hundred and Seventy-Five Dollars and No Cents
($170,775), less taxes and other normal withholdings. Said
salary shall be paid to Employee in equal semi-monthly
installments. The annual base salary referred to in this
Section 3(a) shall hereinafter be referred to as the "Annual
Base Compensation."
(c) Benefits. Employee shall be entitled to receive or participate
in all employment benefits or benefit plans as generally made
available by
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Employer to its employees, if any, to the same extent and
under the same terms and conditions as other covered employees
having comparable position and stature.
(d) Vacation.
(i) Employee shall be entitled to four weeks (20 days) of
paid vacation per fiscal year.
(ii) Employee will also be allowed up to three (3) weeks
per year for touring and personal engagements, independent of Employer.
While Employee will have great latitude in determining the advisability
and time of such engagements, these dates will be subject to the
approval by the Executive Committee in advance, taking into account
Employee's executive responsibility and recording and writing
commitments to Employer. In such event, Employee shall pay all costs
associated with these dates and after deduction of all expenses,
Employee shall pay twenty percent (20%) of any profits to Employer.
(e) Bonus. Employee shall become a participant in Employer's
Senior Management Bonus Plan, at fifteen percent (15%) of
Employee's Annual Base Compensation, and in accordance with
the terms of such Bonus Plan as such terms are defined
therein.
(f) Options. Employer has granted to Employee incentive stock
options to purchase 100,000 shares of the Employer's Class A
Common Stock pursuant to the Integrity Incorporated Amended
and Restated Long-Term Incentive Plan, effective as of
February 11, 1999, at an exercise price equal to the fair
market value of the Class A Common Stock as of the date of
grant.
4. Term and Termination.
Employee's employment with Employer shall continue for a period of
three (3) years from the 1st day of October, 2001, unless earlier terminated as
provided in this Agreement. Employee acknowledges and agrees that this
Agreement, and his employment with Employer, shall be terminated upon the
occurrence of any of the following events:
(a) Employee's death;
(b) Employee becoming or remaining Disabled for a substantially
continuous period of six months. For purposes of this
Paragraph, the term "Disabled" shall mean Employee's inability
to perform the essential functions of his position with or
without reasonable accommodation;
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(c) Mutual written agreement between Employer and Employee to
terminate; or
(d) Immediately upon written notice of termination from Employer
for "cause." For purposes of this Agreement, "cause" shall
mean (i) Employee's conviction of, confession to, or plea of
guilty or nolo contendere to, any felony or any crime
involving an act of dishonesty, fraud, misappropriation,
embezzlement, or moral turpitude; (ii) any fraudulent,
dishonest or disloyal conduct by Employee that results in an
injury, monetary or otherwise, to the Employer; (iii)
Employee's possession of illegal drugs or excessive use of
drugs, intoxicating liquors or narcotics; (iv) misconduct or
gross negligence by Employee in connection with the
performance of his duties hereunder that results in an injury,
monetary or otherwise, to the Employer; (v) failure by the
Employee to substantially perform his duties hereunder within
a reasonable time after receiving written notice of
non-performance from Employer; or (vi) a material breach of
this Agreement by Employee; provided, however, that in the
case of (ii) through (vi) above, the determination that
Employee's conduct constitutes "cause" shall be made by the
Board of Directors of the Employer acting reasonably and in
good faith and; provided further, that in the case of (vi)
above, such conduct shall not constitute "cause" unless the
Board shall have delivered to the Employee notice setting
forth with specificity (A) the conduct deemed to qualify as
"cause", (B) reasonable action that would remedy such
objection, and (C) a reasonable time (not less than fifteen
(15) days) within which the Employee may take such remedial
action, and the Employee shall not have taken such specified
remedial action within such specified reasonable time.
In the event that Employee's employment with Employer terminates pursuant to a
change of control, the terms and conditions of the Key Employee Change in
Control Agreement, set forth in Section 6 to this Agreement, shall govern,
including but not limited to the definition of "cause" therein.
5. Severance.
Employer and Employee have agreed to and executed a separate agreement
entitled Severance Agreement ("Severance Agreement"). The Severance Agreement,
which is attached hereto as Exhibit B, is hereby expressly incorporated into and
made a part of this Agreement as if its terms were set forth in full herein;
provided that to the extent there are inconsistencies between the terms of the
Severance Agreement and the terms of this Agreement, including defined terms,
the provisions of this Agreement shall govern.
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6. Change in Control.
Employer and Employee have agreed to and executed a separate agreement
entitled Key Employee Change in Control Agreement ("Change in Control
Agreement"). The Change in Control Agreement, which is attached hereto as
Exhibit C, is hereby expressly incorporated into and made a part of this
Agreement as if its terms were set forth in full herein.
7. Non-disclosure of Confidential Information.
(a) Definitions.
The following definitions shall apply to this Agreement:
(i) "Trade Secrets" means all secret,
proprietary or confidential information regarding Employer or
its business, including any and all information not generally
known to, or ascertainable by, persons not employed by
Employer, the disclosure or knowledge of which would permit
those persons to derive actual or potential economic value
therefrom or to cause economic or financial harm to Employer.
Such information shall include, but not be limited to, new
product concepts and ideas under consideration or planned for
development, financial information, strategic plans and
forecasts, marketing plans and forecasts, customer lists,
mailing lists, computer software (including without
limitation, source code, object code and manuals), customer
billing or order information, technical information regarding
Employer's products or services, prices offered to or paid by
customers, purchase and supply information, current and future
development and expansion or contraction plans of Employer,
sales and marketing plans and techniques, information
concerning personnel assignments and operations of Employer
and matters concerning the financial affairs, future plans and
management of Employer. "Trade Secrets" shall not include
information that has become generally available to the public
by the act of one who has the right to disclose such
information without violating any legal right of Employer.
(ii) "Confidential Information" means
information, other than Trade Secrets, which relates to
Employer, Employer's activities, Employer's business or
Employer's suppliers or customers that is not generally known
by persons not employed by Employer and which is or has been
disclosed to Employee or of which Employee became aware as a
consequence of or through his relationship to Employer.
"Confidential Information" shall not include information that
has become generally available to the public by the act of one
who has the right to disclose such information without
violating any legal right of Employer.
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(iii) "Documents" means originals or copies of handbooks,
manuals, files, memoranda, correspondence, notes, photographs, slides,
overheads, audio or visual tapes, cassettes, or disks, and records
maintained on computer or other electronic media.
(b) Covenant Regarding Non-disclosure of Trade Secrets or
Confidential Information.
Employee covenants and agrees that: (i) during his employment with
Employer he will not use or disclose any Trade Secrets or Confidential
Information of Employer other than as necessary in connection with the
performance of his duties as an employee of Employer; and (ii) for a
period of two (2) years immediately following the termination of his
employment with Employer, Employee shall not, directly or indirectly,
transmit or disclose any Trade Secret or Confidential Information of
Employer to any person and shall not make use of any such Trade Secret
or Confidential Information, directly or indirectly, for himself or
others, without the prior written consent of Employer, except for a
disclosure that is required by any law or order, in which case Employee
shall provide Employer prior written notice of such requirement and an
opportunity to contest such disclosure. However, to the extent that
such information is a "trade secret" as that term is defined under a
state or federal law, this subparagraph is not intended to, and does
not, limit Employer's rights or remedies thereunder and the time period
for prohibition on disclosure or use of such information is until such
information becomes generally known to the public through the act of
one who has the right to disclose such information without violating a
legal right of Employer.
(c) Return of Information.
Employee agrees that he shall return all Trade Secrets, Confidential
Information or other property of Employer immediately upon the
termination of his employment with Employer, including all handbooks,
training materials, reports, policy statements, programs, customer
lists, mailing lists and other documents provided by Employer or
acquired by Employee as a result of his employment with Employer, and
all copies thereof.
8. Inventions and Other Developments.
All rights and obligations relating to all inventions, formulas,
techniques, processes, concepts, systems and programs, mailing lists and
customer lists and compilations, whether or not patented or patentable, or
subject to copyright, made or conceived, individually or in conjunction with
others, by Employee during the term of his employment with Employer that relate
to activities or proposed activities of Employer or
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that result from work performed by Employee for Employer shall be the property
of the Employer and, to the extent covered, shall be as set forth in the
Exclusive Artist Agreement and the Exclusive Songwriter Agreement, each of which
has been executed contemporaneously with this Agreement and is hereby expressly
incorporated into and made part of this Agreement as if its terms were set forth
in full herein.
9. Non-recruitment of Employees Covenant.
Employee agrees that he will not, for so long as he is employed by
Employer, and for a period of two (2) years immediately following the
termination of his employment, solicit or induce, or attempt to solicit or
induce, (i) any employee of the Employer to terminate his or her relationship
with Employer or (ii) any current or former employee to enter into an employment
or agency relationship with Employee or with any other person or entity other
than Employer.
10. Covenant Not to Compete.
Employee expressly covenants and agrees that during the term of his
employment with Employer and for a period of two (2) years immediately following
the termination of said employment for any reason, he will not, directly or
indirectly, seek, obtain or accept a "Competitive Position" in the "Restricted
Territory" with a "Competitor" of Employer. For purposes of this Agreement, a
"Competitor" of Employer is any business, individual, partnership, joint
venture, association, firm, corporation or other entity engaged, wholly or in
part, in the production, publishing or distribution of Christian music or
Christian videos; a "Competitive Position" is any employment with a "Competitor"
of Employer in a position in which Employee will use or is likely to use any
Confidential Information or Trade Secrets (as those terms are defined in
Paragraph 7 of this Agreement), or in which Employee has creative or managerial
duties for such "Competitor" of Employer that are the same as or substantially
similar to those actually performed by Employee for Employer with respect to
Employer's music business (including Employee being an executive producer,
producer or creating any like product of Employer for any Competitor of
Employer, but excluding any activities pursuant to the Exclusive Songwriter
Agreement and Exclusive Artist Agreement); and "Restricted Territory" is the
geographical area set forth in Exhibit D to this Agreement. Nothing contained in
this Paragraph is intended to prevent Employee from investing in stock or other
securities listed on a national securities exchange or actively traded on the
over the counter market of any Competitor; provided, however, that Employee
shall not hold more than a total of five percent (5%) of all issued and
outstanding stock or other securities of any such corporation. In consideration
of Employee's full compliance with all the terms and conditions of this
provision, Employer shall pay to Employee, for the corresponding two (2) year
period, Employee's Annual Base Compensation (at the annual rate in effect during
the last full year of Employee's employment) and shall provide fully paid
medical and dental benefits, equal to or equivalent to the coverage then
currently provided to Employer's senior management personnel.
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11. Relief.
Employee acknowledges that the covenants and promises contained in this
Agreement are reasonable and necessary means of protecting and preserving
Employer's goodwill and its interest in the confidentiality and proprietary
value of its Trade Secrets and Confidential Information. Employee further
acknowledges that the same are reasonable and necessary means of protecting
Employer from unfair competition by Employee. Employee agrees that any breach of
the covenants or promises contained in paragraphs 7, 8, 9 or 10 will leave
Employer with no adequate remedy at law and may cause Employer to suffer
irreparable damage and injury. Employee further agrees that any breach of these
covenants or promises will entitle Employer to injunctive relief in any court of
competent jurisdiction without the necessity of posting any bond. Employee also
agrees that any such injunctive relief shall be in addition to any damages that
may be recoverable by Employer as a result of such breach.
Employee further agrees that no failure or delay by Employer in
exercising, enforcing or asserting any right, power or privilege hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise thereof
preclude any other or further exercise of any such right, power or privilege.
12. Severability.
The covenants and other provisions set forth in this Agreement shall be
considered and construed as separate and independent covenants and provisions.
Should any covenant or provision, or any part thereof, be held invalid, void or
unenforceable in any court of competent jurisdiction, such invalidity, voidness
or unenforceability shall not render invalid, void or unenforceable any other
part, covenant or provision of this Agreement. If any portion of the foregoing
covenants or provisions is found to be invalid or unenforceable by a court of
competent jurisdiction because its duration, territory, definition of activities
or definition of information covered is invalid or unreasonable in scope, the
invalid or unreasonable term shall be eliminated, redefined, or replaced with a
new enforceable term such that the intent of Employer and Employee in agreeing
to the covenants and provisions of this Agreement will not be impaired and the
covenant or provision in question shall be enforceable to the fullest extent of
the applicable laws.
13. Governing Law and Disputes.
This Agreement shall be governed and construed in accordance with the
laws of the State of Alabama.
Employer and Employee agree that, except as provided in paragraph 11
hereof, any dispute arising in connection with, or relating to, this Agreement
or the termination of this Agreement, to the maximum extent allowable by
applicable law, shall be subject to resolution through informal methods and,
failing such efforts, through arbitration. Either party may notify the other
party of the existence of a dispute by written notice.
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The parties shall thereafter attempt in good faith to resolve their differences
within the thirty (30) days after the receipt of such notice. If the dispute
cannot be resolved within the thirty (30) day period, either party may file a
written demand for arbitration with the other party. The arbitration shall
proceed in accordance with the terms of the Federal Arbitration Act and the
rules and procedures of the American Arbitration Association. The parties will
attempt to choose an arbitrator acceptable to the Employer and Employee, but if
agreement on an arbitrator cannot be reached within ten (10) days after either
party files a written demand for arbitration, a single arbitrator shall be
appointed through the American Arbitration Association's procedures to resolve
the dispute.
Employer and Employee agree that in the event that arbitration is
necessary, the arbitrator shall apply the substantive laws of the state of
Alabama and any applicable federal law. The place for the arbitration shall be
Mobile, Alabama.
The award of the arbitrator shall be binding and conclusive upon the
parties. Either party shall have the right to have the award made the judgment
of a court of competent jurisdiction.
14. Assignment.
This Agreement may not be assigned by Employee to any other person or
entity but may be assigned by Employer at its discretion to any successor to
all, or any part, of the stock or assets of Employer or to any lender of
Employer.
15. Titles.
The titles, headings and captions used in this Agreement are for
convenience of reference only and shall in no way limit, define, expand, or
otherwise affect the meaning or construction of any provision of this Agreement.
16. Entire Agreement.
This Agreement is intended by the Parties hereto to be the final
expression of their agreement with respect to the subject matter hereof and
represents the complete and exclusive statement of the terms of their agreement,
notwithstanding any representations, statements or agreements to the contrary
heretofore made. This Agreement supersedes any former agreements between the
Parties governing the same subject matter during the term hereof, and may be
modified only by a written instrument signed by each of the Parties hereto.
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IN WITNESS WHEREOF, the undersigned set their hands and seals as of the
1st day of October, 2001.
INTEGRITY INCORPORATED XXX XXXX
/s/ P. Xxxxxxx Xxxxxxx /s/ Xxx Xxxx [SEAL]
------------------------------ --------------------------------
NAME: P. Xxxxxxx Xxxxxxx XXX XXXX
TITLE: President
ATTEST:
/s/ Xxxxxx X. Xxxxxxxxx
------------------------------
Secretary
[CORPORATE SEAL]
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EXHIBIT A
(Intentionally omitted)
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EXHIBIT B
SEVERANCE AGREEMENT
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EXHIBIT C
CHANGE IN CONTROL AGREEMENT
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EXHIBIT D
"RESTRICTED TERRITORY" shall mean: The United States of America and
Canada.
