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EXHIBIT 10.28
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is entered into as of the 28th ay
of March, 1996, by and among Integrity Incorporated, a Delaware corporation,
("Employer") and Xxxxx Xxxxxx, an individual 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.
Employee hereby employs Employee and Employee hereby accepts employment in
the position of Executive Vice President/Chief Operating Officer (the
"Position") upon the terms and conditions hereinafter set forth.
2. Services.
During the term of employment hereunder, Employee shall devote his full
professional time and energy to the performance of his duties as Executive Vice
President/Chief Operating Officer and shall use his best efforts in the
performance of the same; provided that, in addition to annual paid vacation to
which Employee will be entitled as provided in paragraph 3(c), Employee may take
up to four weeks of unpaid leave per fiscal year to work with Inspiration
Cruises, the scheduling of such leave to be subject to the approval of the Chief
Executive Officer of Employer. 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, general oversight of the following areas of the
Employer's business: product development; sales and marketing; and operations
and distribution.
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) Salary. Employer shall pay to Employee an annual salary in the amount
of One Hundred Seventy Five Thousand Dollars and No Cents
($175,000.00), less taxes and other normal withholdings. Said salary
shall be paid to Employee in equal semi-monthly installments.
(b) Benefits. Employee shall be entitled to receive or participate in all
employment benefits or benefit plans generally made available by
Employer
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to its employees, if any, to the same extent and under the same
conditions as other covered employees.
(c) Vacation. Employee shall be entitled to four weeks of paid vacation
per fiscal year.
(d) Bonus. As long as Employee holds an executive officer position with
Employer, Employee shall be eligible to receive cash bonuses under the
executive cash bonus compensation system established from time to time
by the Employer. Under such system, cash bonuses are awarded in the
judgment of the Compensation Committee of the Board of Directors of
the Employer based on the achievement of budgeted targets and the
individual performance of the Employee.
4. Term and Termination.
Employee's employment with Employer shall begin on the 28th day of March,
1996 and shall continue until 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 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;
(c) Mutual written agreement between Employer and Employee to terminate;
(d) After Employee has been employed by Employer for at least eighteen
(18) months, upon six (6) months prior written notice of termination
from Employer to Employee for any reason or no reason at all.
Provided: Employer, at its sole discretion, may elect to pay to
Employee an amount equal to Employee's salary for six (6) months in
lieu of providing the notice set forth in this subparagraph; or
(e) Immediately upon written notice of termination from Employer "for
cause." For purposes of this Agreement, a termination shall be
considered to be "for cause" if it occurs in conjunction with a
determination by Employer that Employee has committed or engaged in
either (i) any act that constitutes, on the part of Employee, fraud,
dishonesty, breach of fiduciary duty, a felony or gross misfeasance of
duty; or (ii) conduct by Employee in his office with the Employer that
is grossly inappropriate and demonstrably likely to lead to material
injury to Employer, as determined by the Board
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of Directors of Employer acting reasonably and in good faith;
provided, that in the case of (ii) above, such conduct shall not
constitute "cause" unless Employer's Board of Directors shall have
delivered to 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 thirty
(30) days) within which Employee may take such remedial action, and
Employee shall not have taken such specified remedial action within
the specified time.
5. Change in Control.
Contemporaneously with their execution of this Agreement, 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 A, is hereby expressly
incorporated into and made a part of this Agreement as if its terms were set
forth in full herein.
6. 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, 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 a legal right of Employer.
(ii) "Confidential Information" means information, other than
Trade Secrets, which relates to Employer, Employer's activities,
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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.
(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.
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7. Inventions and Other Developments.
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
that result from work performed by Employee for Employer are the sole and
exclusive property of Employer; provided, that Employee shall retain all rights
to, and may copyright in his name, all songs written by Employee. Employee
further agrees that, subject to the proviso in the immediately preceding
sentence, upon request by Employer, he will assign title to any such inventions,
formulas, techniques, processes, concepts, systems and programs, and lists and
compilations to Employer and will sign any and all documents necessary to effect
such assignment.
8. 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, any employee of the Employer to terminate his or her relationship with
Employer or to enter into an employment or agency relationship with Employee or
with any other person or entity other than Employer.
9. 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 6 of this Agreement), or in which Employee has 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
direct response business or Employer's praise and worship music business; and
"Restricted Territory" is the geographical area set forth in Exhibit B 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.
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10. 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 6, 7, 8 or 9 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. Employer agrees that
Employee will be entitled to seek a declaratory judgment as to the
enforceability of any of the covenants or promises contained in paragraphs 6, 7,
8 or 9.
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.
11. 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.
12. Disputes and Governing Law.
Employer and Employee agree that, except as provided in paragraph 10
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. The parties shall
thereafter attempt in good faith to resolve their differences within the thirty
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(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 in the state of Alabama.
13. 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.
14. 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.
15. 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. Except as expressly noted herein, this Agreement supersedes any
former agreements between the Parties governing the same subject matter. This
Agreement 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 ___
day of May, 1996.
INTEGRITY INCORPORATED XXXXX XXXXXX
/s/ P. Xxxxxxx Xxxxxxx /s/ Xxxxx Xxxxxx [SEAL]
-------------------------------- -------------------------
NAME: P. Xxxxxxx Xxxxxxx XXXXX XXXXXX
TITLE: Chairman, President and
Chief Executive Officer
ATTEST:
/s/ Xxxxxx X. Xxxxxxxxxx
-------------------------------
Secretary
[CORPORATE SEAL]
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EXHIBIT A
KEY EMPLOYEE CHANGE IN CONTROL AGREEMENT
THIS AGREEMENT is made and entered into as of the 28th day of March, 1996,
by and between INTEGRITY INCORPORATED (the "Company") and Xxxxx Xxxxxx (the
"Employee").
W I T N E S S E T H:
WHEREAS Employee is entering the employ of Company in the position of
Executive Vice President/Chief Operating Officer; and
WHEREAS Company wants to induce Employee to remain in said position and to
retain his objectivity during circumstances relating to potential changes in
control by providing Employee a measure of security; and
WHEREAS Company wants to have the benefits of the Employee's full time and
attention directed to the affairs of Company without diversion due to concerns
about a possible change in control; and
WHEREAS, the Company wants to position itself to attract and retain able
managers by adopting compensation practices competitive with peer companies by
providing similar severance benefits consistent with its policy of competitive
employment and compensation practices;
NOW, THEREFORE, in consideration of ONE DOLLAR and other good and valuable
considerations from each to the other, receipt whereof being hereby
acknowledged, Company and Employee agree as follows:
1. Supplemental Employment Benefit. In the event that Employee is employed
by Company at the time of a Change in Control (as hereinafter defined in Section
6) Employee shall be entitled to the supplemental employment benefits
hereinafter provided if Employee's employment with Company terminates within 18
months after the Change in Control has occurred,
(a) involuntarily, other than an involuntary termination for cause and
other than occurring as the result of the death, disability, or
termination at or after attaining normal retirement age,
(b) voluntarily, following
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(i) any reduction of more than 10% in Employee's combined base
salary and annual bonus from that for the calendar year immediately
preceding the Change in Control,
(ii) any relocation to an office of the Company or an affiliate
of the Company more than 100 surface miles (i.e., surface miles using
standard surface transportation such as public streets, roads and
highways by the shortest route available) from the office where
Employee was principally located at the time of the Change in Control
or any increase in Employee's required travel of more than 100 surface
miles (as defined above) due to a reassignment of Employee to another
office of the Company or to an affiliate of the Company,
(iii) any material reduction in the level of responsibility,
position (including status, office, title, reporting relationships or
working conditions), authority or duties of Employee from that held by
the Employee immediately preceding the Change in Control, or
(iv) any material reduction in the aggregate fringe benefits and
perquisites available to Employee immediately preceding the Change in
Control not offset by salary or annual bonus increases, or
(c) voluntarily if, following a Change in Control, any successor
or acquiror of Company either announces that it will not honor or
cause Company to honor the terms of this Agreement or if, at any time,
fails to confirm in writing to Employee within fifteen (15) business
days of a written request by Employee that it will honor and will
cause Company to honor the terms of this Agreement.
As soon as practicable and in no event more than sixty (60) days after
a termination described in (a), (b) or (c) above, Company shall pay to Employee
the Severance Payment specified in Section 2 and shall provide the Benefits
specified in Section 3 on an uninterrupted basis. For purposes hereof a
termination shall be considered to be "for cause" if it occurs in conjunction
with a determination by Company that Employee has committed or engaged in either
(i) any act that constitutes, on the part of Employee, (A) fraud, dishonesty, a
felony or gross malfeasance of duty, and (B) that directly results in material
injury to the Company; or (ii) conduct by Employee in his office with the
Company that is grossly inappropriate and demonstrably likely to lead to
material injury to the Company, as determined by the Board of Directors of the
Company (the "Board") acting reasonably and in good faith; provided, however,
that in the case of (ii) 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
thirty (30) days) within which the Employee may take such remedial action, and
the Employee shall not have taken such specified remedial action within such
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specified reasonable time. For purposes hereof, (i) the Employee shall be
considered "disabled" if Employee is eligible for benefits under the Company's
long term disability plan (or would be eligible if not for an applicable
exclusion period, waiting period, preexisting condition, reduction in benefits
due to other sources of funds such as social security or worker's compensation,
and any other similar limitation) and (ii) "normal retirement age" shall mean
age 65. In the event Company takes the position that a termination has occurred
"for cause" it shall so notify Employee in writing at the time of such
termination. If for any reason, or no reason, Company takes the position that
some or all of the benefits provided hereunder are not due and owing to Employee
or that it will not pay Employee any or all of the benefits provided hereunder,
either Employee or Company may submit the resolution of such dispute to
arbitration as provided in Section 5. Notwithstanding any dispute regarding this
Agreement, however, Company shall pay to Employee the Severance Payment and
continue to make the Benefits available during the period specified herein,
unless and until it is determined by arbitration proceedings pursuant to Section
5 that Employee is not entitled to all or a portion of the amount paid and/or to
continuation of the Benefits, at which time Employee shall reimburse Company all
amounts to which Employee is determined not to be entitled, plus an amount equal
to the legal rate of interest specified under the laws of the State of Alabama
for situations where there is an obligation to pay interest and no express
contract to pay interest at a specified rate.
2. Amount of Severance Payment. Subject to the limitation of Section 4, the
Severance Payment shall be an amount equal to the greater of (i) the aggregate
amount the Employee was to receive as salary under his Employment Agreement, of
which this Agreement is a part, for the first two years of the term of the
Employment Agreement, less all amounts actually paid to the Employee pursuant
thereto and (ii) one-half of Employee's annual base salary. For purposes of this
section, Employee's annual base salary shall be the greater of (i) his salary
immediately prior to the Change in Control, or (ii) his salary at the time of
his termination. In the event that, but for the payment of any or all of the
Severance Payment, Company would qualify for favorable pooling accounting
treatment with respect to the transaction constituting a Change in Control or
any other transaction, Employee shall not be entitled to payment of the portion
of the Severance Payment that would create the failure to so qualify.
3. Life, Medical and Other Benefits.
For a period of six (6) months following a termination of employment under
circumstances entitling Employee to payment of the Severance Payment, Company
shall make available to Employee (and his spouse and other qualified dependents)
basic life insurance, long-term disability insurance and benefits, health
insurance and other medical benefits ("Benefits") available to Employee
immediately preceding the Change in Control and such Benefits shall be made
available under the same terms and conditions (e.g., employee contributions for
certain benefits that are in effect for active employees who are similarly
situated) as continue to be available for comparable employees of Company during
the period provided in this Section 3 with such changes as may be applicable to
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such other employees. Notwithstanding the foregoing, Company shall not be
entitled to reduce the coverage available to the Employee, his spouse and other
qualified dependents or modify any of the terms and conditions thereof without
the written consent of Employee provided, however, that Company may provide a
substantially equivalent form of Benefit for any particular Benefit.
Notwithstanding the foregoing, Employee's rights to the foregoing benefits shall
terminate as to any benefit for which he becomes eligible that provides
substantially similar benefits on substantially similar terms through a program
of a subsequent employer or otherwise (such as through coverage obtained by
Employee's spouse).
4. Limitation.
(a) It is intended that all amounts payable hereunder, together with
all other amounts payable to Employee upon or in connection with a
Change in Control, are reasonable compensation for Employee's service
to Company and its subsidiaries. Notwithstanding the foregoing, if the
independent accounting firm that was approved by the shareholders in
the annual shareholders' meeting immediately prior to the Change in
Control ("Accounting Firm"), opines that payment of any or all of the
Severance Payment and the Benefits together with any other amounts
received by Employee that must be included in such determination,
would result in the denial of any deduction or the imposition of an
excise tax under Sections 280G and 4999 of the Code, then Company will
reduce the amount otherwise due and owing to Employee under this
Agreement by the smallest amount necessary to avoid the imposition of
any excise tax or the denial of any deduction. Such opinion shall be
based upon the proposed regulations under Code Sections 280G and 4999
or substantial authority within the meaning of Code Section 6662, and
shall set forth with particularity the smallest amount by which the
payment due Employee hereunder would have to be reduced to avoid the
imposition of any excise tax or the denial of any deduction pursuant
to Code Sections 280G and 4999 and shall demonstrate the relation of
such amount to the amounts set forth above.
(b) Company may reduce the Severance Payment and Benefits pursuant to
this Section 4 only if within sixty (60) days following the Employee's
termination it provides Employee with the opinion of the Accounting
Firm described in paragraph (a) above. Employee shall, if he agrees
with the determination of Accounting Firm, notify Company in writing
of the payments and/or Benefits that he wishes to have reduced in
order to comply with the provisions of this Section 4. In the event
that Employee fails to designate an order of priority for the
application of any such reduction, such reduction shall be made in the
order of priority determined by Company. In the event that Employee
does not agree with the opinion or calculation presented and he is
unable to resolve any dispute with
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Company regarding such disagreement within a period of thirty (30)
days of receipt of the opinion referenced above, Employee may submit
the resolution of this matter to arbitration pursuant to Section 5 or
take such other steps as he may deem advisable to enforce his
position.
5. Arbitration. The parties agree that all disputes that may arise
between them relating to the interpretation or performance of this Agreement,
including matters relating to any funding arrangements for the benefits provided
under this Agreement, to the maximum extent allowed by applicable law, shall be
determined by binding arbitration through an arbitrator chosen as provided in
this Section 5. Either party may notify the other party of the existence of a
dispute by written notice in accordance with Section 12 herein. The arbitration
shall proceed in accordance with the provisions of the Federal Arbitration Act
and the rules and procedures of the American Arbitration Association. If the
parties can agree to an arbitrator, the dispute may be resolved by a single
arbitrator. Otherwise, each party shall designate an arbitrator and a third
arbitrator shall be appointed by the two arbitrators selected by the parties. If
either party shall fail to appoint an arbitrator within thirty (30) days after
it is notified to do so, then the arbitration shall be conducted by a single
arbitrator. All arbitrators shall be selected from a panel proposed by the
American Arbitration Association. The parties agree that the arbitrators shall
apply the laws of the State of Alabama and any applicable federal law. Unless
otherwise agreed by the parties, all arbitration proceedings shall be held in
Mobile, Alabama. The award of the arbitrators shall be issued within sixty (60)
days of the close of the hearing or the submission of post-hearing memoranda,
whichever is later, and shall include each arbitrator's individual vote. The
award of the arbitrators 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 in the State of Alabama. At least thirty (30) days
prior to the arbitration, the Company shall provide Employee with an offer to
resolve the dispute and to pay Employee whatever benefits to which the Company
believes he is entitled. If the arbitrators' award is greater than the amount of
the Company's offer, Employee shall be entitled to payment by the Company of all
of his attorneys' fees, expenses and costs incurred in connection with the
arbitration, including the Employee's portion of the arbitrators' fees. If the
arbitrators' award is equal to or less than the Company's offer, the parties
shall be responsible for their own attorneys' fees, expenses and costs and shall
share the expenses of the arbitrators.
6. Change in Control. "Change in Control" means and includes each of the
following:
(a) A change of control of the Company of a nature that would be
required to be reported in response to Item 6(e) of Schedule 14A of
the 1934 Act regardless of whether the Company is subject to such
reporting requirement;
(b) A change of control of the Company through a transaction or series
of transactions, such that any person (as that term is used in Section
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and 14(d)(2) of the 1934 Act), excluding affiliates of the Company as
of the date of this Agreement, is or becomes the beneficial owner (as
that term is used in Section 13(d) of the 0000 Xxx) directly or
indirectly, of securities of the Company representing 50% or more of
the combined voting power of the Company's then outstanding
securities;
(c) Any consolidation, merger or share exchange involving the Company
in which the Company is not the continuing or surviving corporation or
pursuant to which shares of Company stock would be converted into
cash, securities or other property, other than a merger of the Company
in which the holders of the shares of Company stock immediately before
the merger have the same proportionate ownership of common stock of
the surviving corporation immediately after the merger;
(d) The stockholders of the Company approve any plan or proposal for
the liquidation or dissolution of the Company; or
(e) Substantially all of the assets of the Company are sold or
otherwise transferred to parties that are not within a "controlled
group of corporations" (as defined in Section 1563 of the Code) in
which the Company is a member.
7. Other Employee Benefits. The benefits hereunder shall not be affected
by or reduced because of any other benefits to which Employee may be entitled by
reason of his continuing employment with Company or the termination of his
employment with Company, and no other such benefit by reason of such employment
shall be so affected or reduced because of the benefits bestowed by this
Agreement except as hereinafter specifically provided. Employee shall not be
entitled to duplicative health, medical, life, disability and other insurance
benefits or to severance payments specifically made only with respect to
termination of employment under any employment, retention or severance pay
agreement, plan or other arrangement. In addition, the payment of benefits to
Employee under Section 2 shall not entitle Employee to payments under the other
plans or arrangements providing similar benefits except to the extent such other
plans or arrangements provide additional benefits to those provided herein.
8. Withholding; Set-off. All amounts payable by Company hereunder shall
be subject to withholding of such amounts related to taxes as Company may be
legally obligated to withhold. The right of Employee to receive benefits under
this Agreement, however, shall be absolute and shall not be subject to any
set-off, counterclaim, recoupment, defense, duty to mitigate or other rights
Company may have against him or anyone else.
9. Subsequent Employment. Employee's right to receive benefits under
this Agreement shall not be reduced by reason of Employee's employment with any
other employer after terminating employment with the Company (except as set
forth in Section
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3). Any compensation for services rendered or consulting fees earned after the
date of termination shall not diminish Employee's right to receive all amounts
due hereunder.
10. Employee's Indemnity. Employee shall be entitled to the benefits of the
indemnity provided by Company's articles of incorporation, bylaws or otherwise
immediately prior to the Change in Control, and any subsequent changes to the
articles of incorporation, bylaws, or otherwise reducing the indemnity granted
to officers shall not affect the rights granted hereunder. Company may not
reduce these indemnity benefits confirmed to Employee hereunder without the
written consent of Employee.
11. Term. Without the consent of the Employee, the terms of this Agreement
may be terminated or amended by Company following the first anniversary of the
date hereof at any time prior to the first to occur of (i) a Change in Control,
(ii) the public announcement of a proposal for a transaction that, if
consummated, would constitute a Change in Control, or (iii) the Board of
Directors learns of a proposal for a transaction that, if consummated, would
constitute a Change in Control. Upon the occurrence of any of the foregoing
events, this Agreement shall continue as in effect at such time without
termination or further change by Company until the earlier of (x) 18 months
following any Change in Control, or (y) the final withdrawal or termination of a
proposal under item (ii) or (iii) that, had it been consummated, would have
constituted a Change in Control, at which time this Agreement may, once again,
be amended or terminated by Company until one of the events in (i), (ii) or
(iii) occurs. Notwithstanding the foregoing, in the event of a Change in
Control, upon Employee's termination of employment entitling him to benefits
under Sections 1 and 2, this Agreement may not be amended or terminated by
Company until all of the obligations and liabilities are satisfied. For purposes
of Sections 1, 2 and 3, Employee's base salary and benefits, and for purposes of
Section 10, Employee's indemnity immediately prior to an event causing this
Agreement to be non-amendable by Company alone shall be considered to be
Employee's base salary, benefits or indemnity immediately prior to the Change in
Control if such salary, benefits or indemnity prior to the event is greater. In
addition, action that would be described in Section 1(b)(ii) or (iii) if
occurring following a Change in Control shall be considered to have so occurred
if occurring following an event causing this Agreement to become non-amendable
if there ultimately is a Change in Control.
12. Notices. Notices, which must be in writing, will be considered
effective upon receipt and shall be sent to Company at its headquarters office,
attention Chief Executive Officer, or to Employee at the address set forth
below. Either party may notify the other of any change in the address for
notice. If the Employee is the Chief Executive Officer, notice to the Company
shall be sent to any outside director of the Company's Board of Directors.
13. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Alabama applicable to agreements made
and entirely to be performed therein.
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14. Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of the successors (including any successor to Company by reason
of any Change in Control), heirs, personal representatives and assigns of the
parties hereto.
15. Employment With Related Parties. Employment with any present or future
parent, subsidiary or affiliate of Company or any successor to substantially all
of the business of Company shall be considered employment with Company for all
purposes of this Agreement.
16. Not Contract for Employment. Nothing in this Agreement shall be deemed
to give Employee the right to be retained in the service of Company or to deny
Company any right it may have to discharge, or demote Employee at any time.
17. Severability. The invalidity and unenforceability of any particular
provision of this Agreement shall not affect any other provision of the
Agreement and the Agreement shall be construed in all respects as if the invalid
or unenforceable provision were omitted.
18. No Assignment or Alienation of Benefits by Employees. The Employee
shall not have any power or right to transfer, assign, anticipate, hypothecate,
mortgage, commute, modify or otherwise encumber in advance any of the benefits
payable under this Agreement, nor shall these benefits be subject to seizure for
the payment of debt, judgment, alimony or separate maintenance owed by the
Employee, or any person claiming through the Employee, or be transferable by
operation of law in the event of bankruptcy, insolvency or otherwise. Any
attempted assignment, anticipation, hypothecation, transfer, or other disposal
of the benefits hereunder, shall be void.
19. Miscellaneous. No provisions of this Agreement may be waived or
discharged unless such waiver or discharge is agreed to in writing signed by
Employee and Company. No waiver by either party hereto at any time of any breach
by the other party hereto of, or compliance with any condition or provision of
this Agreement to be performed by the other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time. No agreements or representations, oral or otherwise, expressed
or implied, with respect to the subject matter hereof have been made by either
party which are not set forth expressly in this Agreement.
20. Headings. The headings herein are for convenience only and shall have
no significance in the interpretation of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
under their respective seals as of the date written above.
INTEGRITY INCORPORATED
By: /s/ P. Xxxxxxx Xxxxxxx
-----------------------------
Title: Chairman, President and
------------------------------
Chief Executive Officer
------------------------------
ATTEST:
By: /s/ Xxxxxx Xxxxxxx
-------------------------
[CORPORATE SEAL]
XXXXX XXXXXX
/s/ Xxxxx Xxxxxx
--------------------------------
Address: 0000 Xxxxxxxx Xxxx E.
------------------------
Xxxxxx, Xxxxxxx 00000
--------------------------------
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EXHIBIT B
"Restricted Territory" shall mean the United States.
