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EXHIBIT 10.4
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is entered into as of the 1st
day of June, 2001, by and among Integrity Incorporated, a Delaware corporation,
("Employer") and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, an individual residing in Nashville,
Tennessee ("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 President and Chief Executive Officer of the Publishing
Division of Integrity Incorporated (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 President and
Chief Executive Officer of the Publishing Division and shall use his best
efforts in the performance of the same. 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 subject to the
terms of Section 1(b)(iii) of the Change in Control Agreement (as defined in
Section 6 hereof), if applicable. Employer and Employee acknowledge and agree
that Employee's initial duties in the Position shall consist of, among other
things, providing general oversight of the Publishing Division, which includes,
without limitation, direction of all product development, marketing and sales,
purchasing and inventory management, strategic planning, annual budgeting and
other customary duties of a division head.
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 Two Hundred Fifty Thousand Dollars and No Cents
($250,000.00), 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 to its employees, if any, to the same
extent and under the same conditions as other covered
employees.
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(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 1st day of June,
2001 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) 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 intentional 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 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)
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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. Severance Payment.
If Employee's employment with Employer is terminated pursuant to
Section 4(d), the Employee shall be entitled to receive as a severance benefit
aggregate Severance Payments in an amount equal to the amount of the Employee's
annual salary under this Employment Agreement at the time of termination
multiplied by 2, less any amount paid in lieu of termination notice under
Section 4(d). The Severance Payments may be made by the Employer as semi-monthly
salary continuation payments or as a lump sum payment within ninety (90) days
after termination of Employee's employment with Employer, as determined by the
Employer in its sole and absolute discretion. In addition, Employer will
reimburse Employee for the cost of COBRA health insurance continuation benefits
for 18 months after the termination of Employee's employment with Employer and,
thereafter for the remainder of the time that Employee is receiving severance
benefits, the Employer will reimburse Employee for the cost of health insurance
under Employee's own policy or plan up to the amount paid per month by the
Employer during the 18 month COBRA continuation period. Notwithstanding the
foregoing, Employee's rights to the foregoing health insurance 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). If Employee is entitled to severance benefits upon
termination of employment under the terms of a Key Employee Change in Control
Agreement with the Employer, the Employee shall not be entitled to any severance
benefits under this Agreement.
6. 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.
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
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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, 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
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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 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. Employee further agrees that 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.
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, 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.
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.
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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 books, spoken word audio and video products, and any other spoken
or written word text based Christian products; 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 will
have direct or indirect responsibility for, or supervision of, any position for
such Competitor which is the same or substantially similar to any position of
Employer over which Employee had direct or indirect responsibility or
supervisory authority; 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.
11. Relief.
Employee acknowledges and agrees: that the Company is in the business
of producing, publishing and distributing Christian books, spoken word audio and
video products and other spoken or written word (text based) Christian products
on a nationwide basis; and that by virtue of his employment, Employee will
receive access to the Company's Trade Secrets, Confidential Information,
training and experience; and that in his position as President and Chief
Executive Officer of the Publishing Division, Employee will be responsible for
all aspects of the product development, marketing and sales, purchasing and
inventory management, strategic planning, annual budgeting and related
activities of the Publishing Division; and that Employee will be directly or
indirectly involved in business relationships with all of the customers and
clients of the Publishing Division. As a consequence of the foregoing, Employee
acknowledges that great loss and irreparable harm and damage would be suffered
by the Company in the event of breach by him of the terms of this Agreement.
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. Employer agrees that
Employee will
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be entitled to seek a declaratory judgment as to the enforceability of any of
the covenants or promises contained in paragraphs 7, 8, 9 or 10.
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. Disputes and Governing Law.
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. 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
Tennessee and any applicable federal law. The place for the arbitration shall be
Mobile, Alabama.
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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.
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. 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.
IN WITNESS WHEREOF, the undersigned set their hands and seals as of the
1st day of June, 2001.
INTEGRITY INCORPORATED ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
/s/ P. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ [SEAL]
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NAME: P. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
TITLE: President
ATTEST:
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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Secretary
[CORPORATE SEAL]
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EXHIBIT B
"Restricted Territory" shall mean the United States of America.