Exhibit 10.22
PROFESSIONAL SERVICES AGREEMENT
Below are the terms and condition of an agreement for the professional
services of Barnet X. Xxxxx.
Whereas, Barnet X. Xxxxx (Executive) has over 30 years of industry
experience; is knowledgeable about all products distributed by Valley Media,
Inc. (Company); is recognized, trusted, and respected by industry vendors and
customers; has substantial leadership experience; and, is generally recognized
as an industry leader, and
whereas, as Valley Media, Inc., lacks substantial depth in the
aforementioned skills and knowledge,
it is hereby agreed that Valley Media, Inc., engage Barnet X. Xxxxx to
provide certain professional services in accordance with the terms and
conditions precluded herein.
I. Term.
This agreement is made July 1, 2001, and is for a nine-month
period, concluding March 30, 2002, which coincides with the last day of
Valley Media's fiscal year. This agreement shall automatically be
renewed for a period of one year, and subsequent years thereafter
unless cancelled by either party under terms and conditions described
below.
II. Duties and Responsibilities.
Barnet X. Xxxxx shall provide leadership, guidance, and
industry insight to the sales, operations, and general administration
of VMIX. Including, but not limited to, new and continuing issues and
initiatives relating to customer and vendor development, customers and
vendor relations, market development, new product development,
operational management and systems, finance administration, and
personnel management and recruiting.
III. Termination of Agreement.
A. This agreement may be cancelled by Barnet X. Xxxxx at any
time. In the event Barnet X. Xxxxx terminates said agreement,
compensation shall be paid through date of termination.
B. This agreement can be cancelled by the Chief Executive Officer
of Valley Media, Inc., with a 30-day written notice in the
event of cause. For purposes of the foregoing, "cause" shall
mean (1) a material breach by the Executive of the Executive's
obligations of confidentiality or loyalty; (2) the Executive's
willful and repeated failure to comply with the lawful
directives of the Board of Directors of the Company; (3)
negligence or willful misconduct by the Executive in the
performance of the Executive's duties to the Company; (4) the
commission by the Executive of an
act (including, but not limited to, a felony or a crime
involving moral turpitude) causing material harm to the
standing and reputation of the Company, as determined in good
faith by the Board; (5) misappropriation, breach of trust or
fraudulent conduct by the Executive with respect to the assets
or operations of the Company or any of its subsidiaries; (6)
the continued use by the Executive of alcohol or drugs to an
extent that, in the good faith determination of the Board,
materially interferes with the performance by the Executive of
the Executive's employment responsibilities; (7) the repeated
threat by the Executive to cause, or the actual occurrence of,
damage to the relations of the Company or any of its
subsidiaries with customers, suppliers, lenders, advisors or
employees which damage is materially adverse to the business
or operations of the Company or any of its subsidiaries; or
(8) continued unauthorized absence from work. Termination
without cause shall not include termination by voluntary
resignation, death or disability, and no severance amounts
shall be payable upon the occurrence of any of the foregoing.
In the event of termination for cause, compensation will be
paid through the 30-day period.
C. This agreement can be cancelled by VMI without cause. In the
event of cancellation without cause, this action can only be
initiated by Valley Media's Chief Executive Officer and the
written concurrence of a majority of the outside directors of
Valley Media's Board. In the event of termination without
cause, compensation will be paid for six months following date
of notice of termination (which may precede or follow date(s)
of concurrence by outside directors), or to the end of this
agreement, whichever is less.
D. In the event this agreement is cancelled by either party, all
authorized expenses incurred by Barnet X. Xxxxx shall be fully
reimbursed.
IV. Compensation.
Compensation shall be paid on a schedule mutually acceptable
to both parties. This may be via normal salary or 1099 payments.
Annual amount of compensation shall be $200,000 (compensation
for the period July 1, 2001, through March 30, 2002, shall be
$150,000).
V. Expenses.
All expenses relating to the services provided in this
agreement shall be reimbursed by Valley Media, Inc. Monthly expenses,
up to $3,000, relating to this agreement, do not require prior approval
and should be submitted directly to Valley Media, Inc., for payment. In
the event extraordinary or greater expenses are required, Barnet X.
Xxxxx shall obtain the prior approval of any member of Valley Media's
Executive Staff. Executive staff shall be defined as all officers of
the corporation who are an Executive Vice President or higher.
Expenses should be submitted directly to accounting along with
appropriate "project" reference and approval name and date.
VI. Confidentiality and Non-Compete.
Confidential Information; Company Property. Executive
acknowledges that the information, observations, and data obtained by
him while employed by the Company and its subsidiaries concerning the
product, efforts, business, and affairs of the Company, its
subsidiaries and any predecessor to the business of the Company that
are not generally available to the public other than as a result of
breach of this Agreement by Executive ("Confidential Information") are
the property of the Company and its subsidiaries. Executive agrees that
he shall not disclose to any unauthorized person, or use for his own
account, any Confidential Information without the prior written consent
of the Company unless, and in such case only to the extent that, such
matters become generally known to and available for use by the public
other than as a result of Executive's acts or omissions to act.
Notwithstanding the foregoing, in the event Executive becomes legally
compelled to disclose Confidential Information pursuant to judicial or
administrative subpoena or process or other legal obligation, Executive
may make such disclosure only to the extent required, in the opinion of
counsel for Executive, to comply with such subpoena, process, or other
obligation. Executive shall, as promptly as possible and in any event
prior to the making of such disclosure, notify the Company of any such
subpoena, process, or obligation and shall cooperate with the Company
in seeking a protective order or other means of protecting the
confidentiality of the Company Information. Executive shall deliver to
the Company at the termination of the Employment Period, or at any time
the Company may reasonably request, all memoranda, notes, plans,
records, reports, computer tapes, software, other documents, and data
(and copies hereof) containing, relating to, or derived from the
Confidential Information or the business of the Company or its
subsidiaries which he may then possess or have under his control.
Executive agrees that he will not retain after the termination of the
Employment Period any copies of any Confidential Information including,
without limitation, any software, documents, or other materials
originating with and/or belonging to the Company or any subsidiary of
the Company.
Executive acknowledges that in the course of his employment
with the Company he will become familiar with the Company's trade
secrets and with other confidential information concerning the Company
and its predecessors and that his services have been, and will be of
special, unique, and extraordinary value to the Company. Executive
agrees that, during the period in which Executive is receiving
compensation hereunder (the "Non-Compete Period"), he shall not
directly or indirectly own, manage, control, participate in, consult
with, render services for, or in any manner engage in any business in
the United States that is engaged in the sale and/or distribution of
audio or video recordings, irrespective of format. Nothing herein shall
prohibit Executive from being a passive owner of not more
than 1% of the outstanding stock of another corporation, so long as
Executive has no active participation in the management or the business
of such corporation. Executive acknowledges that the Company plans to
rapidly expand its business and conduct such business throughout the
United States and ultimately throughout the world.
Executive shall not directly or indirectly (1) induce or
attempt to induce any employee of the Company or any subsidiary of the
Company to leave the employ of the Company or such subsidiary, or in
any way interfere with the relationship between the Company or any such
subsidiary and any employee thereof; (2) induce or attempt to induce
any customer, supplier, licensee or other business relationship of the
Company or any subsidiary of the Company to cease doing business with
the Company or such subsidiary, or in any way interfere with the
relationship between any such customer, supplier, licensee or business
relationship and the Company or any such subsidiary; or (3) make an
oral or written disparaging statement, comment, or remark about the
Company or any of its subsidiaries to any employee, customer, supplier,
licensee, or other business relationship of the Company, or any of its
subsidiaries, or to or for the intended use of any member of the press.
IN WITNESS WHEREOF, this Agreement has been signed and sealed the day
first above written.
COMPANY:
Valley Media, Inc.
\s\ Xxxxx Xxxxxx
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By: Xxxxx Xxxxxx,
Chief Executive Officer
August 9, 2001
\s\ Barnet X. Xxxxx
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Barnet X. Xxxxx
Chairman of the Board
August 9, 2001
