EXHIBIT 10.19
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is made and entered into
as of the 2nd day of June, 1999, by and between ASD Group, Inc., a Delaware
corporation with its principal office at ▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇ (the "Company"), and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, an individual with a
principal place of residence of ▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
(the "Executive").
Recitals
A. The Board of Directors of the Company desires to retain the
Executive and to compensate him therefore.
B. The Executive is willing to make his services available to the
Company on the terms and conditions hereinafter set forth.
Agreement
NOW, THEREFORE, in consideration of the premises and mutual covenants
set forth herein, the parties hereby agree as follows:
1. Employment.
1.1 Employment and Term. The Company shall employ the Executive
and the Executive shall serve the Company, on the terms and conditions set forth
herein, for the period commencing June 2, 1999 (the "Commencement Date") and
expiring on the third anniversary of the Commencement Date, unless sooner
terminated as hereinafter set forth (the "Term").
1.2 Duties of Executive. During the Term, the Executive shall
serve as the Company's Chief Operating Officer. During the Term, the Executive
will have such authority and responsibility and perform such duties as may be
reasonably assigned to him from time to time at the direction of the Board of
Directors of the Company, and in the absence of such assignments, such duties
customarily carried out by Executive immediately prior to this Agreement as are
necessary to the business and operations of the Company. During the Term, the
Executive's employment shall be full time and the Executive shall perform his
duties honestly, diligently, competently, in good faith and in the best
interests of the Company and shall use his best efforts to promote the interests
of the Company.
2. Compensation.
2.1 Base Compensation. In consideration for the Executive's
services hereunder and the restrictive covenants contained herein, during the
Term, the Executive shall receive an annual base salary in the amount of
$115,000 (the "Salary"), payable in accordance with the Company's customary
payroll practices, which Salary may be reviewed annually for increase by the
Compensation Committee of the Board of Directors of the Company.
2.2 Benefits. During the Term, Executive shall be entitled to
participate in any insurance programs, bonus plans, pension plans and other
fringe benefit plans and programs as are from time to time established and
maintained for the benefit of the Company's employees with responsibilities
comparable to those of the Executive, subject to the provisions of such plans
and programs.
2.3 Expenses. In addition to the salary and benefits described
above, during the Term, the Company shall reimburse the Executive for all
reasonable and necessary expenses and disbursements incurred by the Executive
for and on behalf of the Company in the performance of his duties during the
Term. For such purposes, the Executive shall submit to the Company, not less
than once in each calendar month, reports of such expenses and other
disbursements in the form and manner normally used by the Company.
2.4 Stock Options. In addition to the salary and benefits
described above, by March 31, 1999, the Company shall grant to the Executive
options to purchase shares of the Company's common stock. The number of shares
underlying the options and and the exercise price shall be mutually agreed upon
between the Executive and the Company on or before March 31, 1999. The option
agreement granting such options shall provide, among other things, that such
options shall vest in equal installments over a three-year period commencing on
the first anniversary of the date of this Agreement.
3. Termination.
3.1 Termination for Death, Disability or Cause. At any time
during the Term, the Company shall have the right to terminate this Agreement
and to discharge the Executive for Cause (as defined below) effective upon
delivery of written notice to the Executive. If the Executive dies during the
Term, this Agreement and the Term shall automatically terminate. Upon any such
termination by the Company for Cause or automatic termination upon death, the
Executive or his legal representative shall be entitled to (A) that portion of
the Salary prorated through the date of termination, (B) reimbursement of
expenses properly incurred by the Executive prior to the date of termination and
not previously reimbursed, (C) any death or disability benefits specified in any
of the Company's employee benefit plans in which the Executive participates as
in effect at such time, and (D) any benefits which are required by law, and,
except as provided above, the Company shall have no further obligations
hereunder from and after the date of such termination. Termination for Cause
shall mean termination because of (i) any action or omission of the Executive
which constitutes a material breach of this Agreement, (ii) the Executive's
failure or refusal to perform the duties and responsibilities required to be
performed by the Executive under the terms of this Agreement, which failure or
refusal continues for a period of ten (10) days after written notice thereof is
given to the Executive by the Company, (iii) the Executive's gross negligence or
willful misconduct in the performance of his duties hereunder, (iv) the
Executive's commission of an act of dishonesty affecting the Company, or the
commission of an act constituting common law fraud or a felony, (v) the
Executive's commission of an act (other than the good faith exercise of his
business judgment in the exercise of his responsibilities) resulting in damages
to the Company, or (vi) the Executive's inability to perform is duties and
responsibilities as provided herein due to his physical or mental disability or
sickness extending for, or reasonably expected to extend for, greater than sixty
(60) days. If the Executive shall resign or otherwise terminate his employment
with the Company, the Executive shall be deemed for purposes of this Agreement
to have been terminated for Cause.
3.2 Termination without Cause. At any time during the Term, the
Company shall have the right to terminate the Term and to discharge the
Executive without Cause effective upon delivery of written notice to the
Executive. Upon any such termination by the Company without Cause, the Executive
shall be entitled to (A) continue to receive his Salary payable in accordance
with Section 2.1 for twelve (12) months following the date of such notice, (B)
reimbursement of expenses properly incurred by Executive prior to the date of
termination and not previously reimbursed, and (C) any benefits which are
required by law. Except as
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specifically provided herein, the Company shall have no further obligations from
and after the date of such termination, provided, however, that the Executive
shall only be entitled to such payments as long as (i) he is in compliance with
Sections 4 and 5 below; and (ii) the Executive executes a release reasonably
acceptable to the Company releasing the Company from any and all claims arising
out of the Executive's employment with the Company other than a claim for
benefits required pursuant to the terms of this Section of the Agreement.
4. Restrictive Covenants. In consideration for the foregoing, the
Executive agrees that the Executive shall not directly or indirectly:
(a) for the Term and for a period of one year from the Term
(the "Noncompete Period"), directly or indirectly, alone or as a partner, joint
venture, officer, director, employee, consultant, agent, independent contractor,
or security holder, of any company or business, engage in, or finance, or
provide financial assistance with respect to, any business activity in
competition with the Employer in the business of contract manufacturing (the
"Business") in Dutchess County, of New York (the "Territory"); provided,
however, that the beneficial ownership of less than five percent of any class of
securities of any entity having a class of securities actively traded on a
national securities exchange or over-the-counter market shall not be deemed, in
and of itself, to violate the prohibitions of this Section;
(b) during the Noncompete Period, directly or indirectly,
(i) induce any customer of the Company or any of its affiliates, subsidiaries,
successors, or assigns (the "Companies") to patronize any business which is
directly or indirectly in competition with the Business conducted by any of the
Companies; (ii) canvass, solicit or accept from any person which is a customer
of the Business conducted by any of the Companies, any such competitive
business, or (iii) require or advise any customer or other business relationship
of the Business conducted by the Companies to withdraw, curtail or cancel any
such person's business with the Companies or their successors; and
(c) during the Noncompete Period, directly or indirectly,
employ any person who was employed by the Companies or in any manner seek or
induce any employee of the Companies to leave his or her employment.
5. Confidentiality; Non-Disparagement.
5.1 Confidentiality. The Executive agrees that at all times
during and after the Term, the Executive shall (i) hold in confidence and
refrain from disclosing to any other party all information, whether written or
oral, tangible or intangible, of a private, secret, proprietary or confidential
nature, of or concerning the Companies and the business and operations, and all
files, letters, memoranda, reports, records, computer disks or other computer
storage medium, data, models, or any photographic or other tangible materials
containing such information ("Confidential Information"), including without
limitation, any sales, promotional or marketing plans, programs, techniques,
practices or strategies, any expansion plans (including existing and entry into
new geographic and/or product markets), and any customer lists, (ii) use the
Confidential Information solely in connection with his employment with the
Companies and for no other purpose, (iii) take all precautions necessary to
ensure that the Confidential Information shall not be, or be permitted to be,
shown, copied or disclosed to third parties, without the prior written consent
of the Company, and (iv) observe all security policies implemented by the
Companies from time to time with respect to the Confidential Information.
Confidential Information shall not include any information, which
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becomes generally available to the public or lawfully obtainable from other
sources (except by reason of any unauthorized disclose by the Executive). In the
even that the Executive is ordered to disclose any Confidential Information,
whether in a legal or regulatory proceeding or otherwise, the Executive shall
provide the Company with prompt notice of such request or order so that the
Company may seek to prevent disclosure. In the case of any disclosure, the
Executive shall disclose only that portion of the Confidential Information that
he is ordered to disclose.
5.2 Non-Disparagement. The Executive agrees that at all times
during and after the Term, the Executive will not engage in any conduct that is
injurious to the Companies' reputation and interests, including, but not limited
to, making disparaging comments (or inducing or encouraging others to make
disparaging comments) about the Companies or any of the Companies, directors,
officers, employees or agents, or the Companies' operations, financial
condition, prospects, products or services.
6. Acknowledgement of the Parties. The parties agree and acknowledge
that the restrictions contained in Sections 4 and 5 are reasonable in scope and
duration and are necessary to protect the Companies. If any provisions of
Section 4 or 5 as applied to any party or any circumstance is adjudged by a
court to be invalid or unenforceable, the same shall in no way affect any other
circumstance or the validity or enforceability of any other provision of this
Agreement. If any such provision, or any part thereof, is held to be
unenforceable because of the duration of such provision or the area covered
thereby, the parties agree that the court making such determination shall have
the power to reduce the duration and/or area of such provision, and/or to delete
specific words or phrases, and in its reduced form, such provision shall then be
enforceable and shall be enforced. It is expressly acknowledged and agreed that
the restrictions contained in Sections 4 and 5 herein shall survive and continue
to be in effect, in accordance with the terms hereof, following the expiration
or termination for any reason of the Executive's relationship with the Company.
The provisions of Sections 4 and 5 shall be construed as an agreement on the
party of Executive independent of any other party of this Agreement or any other
agreement, and the existence of any claim or cause of action or Executive
against the Company, whether predicated on this Agreement or otherwise, shall
not constitute a defense to the enforcement by the Company of the provisions of
Sections 4 and 5.
7. Binding Effect. Except as herein otherwise provided, this
Agreement shall inure to the benefit of and shall be binding upon the parties
hereto, their personal representatives, successors, heirs and assigns.
8. Further Assurances. At any time, and from time to time, each party
will take such action as may be reasonably requested by the other party to
carry out the intent and purposes of this Agreement.
9. Entire Agreement. This Agreement constitutes the entire agreement
between the parties hereto with respect to the subject matter hereof. It
supersedes all prior negotiations, letters and understandings relating to the
subject matter hereof.
10. Amendment. This Agreement may not be amended, supplemented or
modified in whole or in part except by an instrument in writing signed by the
party or parties against whom enforcement of any such amendment, supplement or
modification is sought.
11. Assignment. This Agreement, and the Executive's rights and
obligations hereunder, the may not be assigned or delegated by the Executive.
The Company may assign its rights, and delegate its obligations, hereunder
without the prior written consent of the Executive.
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12. Choice of Law. This Agreement will be interpreted, construed
and enforced in accordance with the laws of the State of New York, without
giving effect to the application of the principles pertaining to conflicts of
laws.
13. Mediation and Arbitration of Disputes.
(a) Mediation. If a dispute arises under this Agreement and if
the dispute cannot be settled through direct discussions, the parties agree to
endeavor first to settle the dispute in an amicable manner by nonbonding
mediation administered by the American Arbitration Association under its
Commercial Mediation Rules.
(b) Arbitration. Any dispute, unresolved through the mediation
process, arising under this Agreement shall be submitted by the parties to
binding arbitration, with any such arbitration proceeding being conducted in
accordance with the rules of the American Arbitration Association. Any
arbitration panel presiding over any arbitration proceeding hereunder is hereby
empowered to render a decision in respect of such dispute, to award costs and
expenses (including reasonable attorneys' fees) as it shall deem equitable and
to enter its award in any court of competent jurisdiction. Each of the parties
submits to the jurisdiction of any state or federal court sitting in New York,
New York, for purposes of any arbitration award hereunder. Each party also
agrees not to bring any action or proceeding out of or relating to this
Agreement in any other court. Each of the parties waives any defense of
inconvenient forum to the maintenance of any action or proceeding so brought and
waives any bond, surety or other security that might be required of any other
party with respect thereto.
14. Enforcement. Should it become necessary for any party to institute
legal action to enforce the terms and conditions of this Agreement, the
prevailing party will be awarded reasonable attorneys' fees, expenses and costs.
15. Effect of Waiver. The failure of any party at any time or times to
require performance of any provision of this Agreement will in no manner affect
the right to enforce the same. The waiver by any party of any breach of any
provision of this Agreement will not be construed to be a waiver by any such
party of any succeeding breach of that provision or a waiver by such party of
any breach of any other provision.
16. Construction. This Agreement shall be construed as a whole
according to its fair meaning and not strictly for or against any party. The
parties acknowledge that each of them has reviewed this Agreement and has had
the opportunity to have it reviewed by their respective attorneys and that any
rule of construction to the effect that ambiguities are to be resolved against
the drafting party shall not apply to the interpretation of this Agreement.
17. Severability. The invalidity, illegality or unenforceability of any
provision or provisions of this Agreement will not affect any other provision of
this Agreement, which will remain in full force and effect, nor will the
invalidity, illegality or unenforceability of a portion of any provision of this
Agreement affect the balance of such provision. In the event that any one or
more of the provisions contained in this Agreement or any portion thereof shall
for any reason be held to be invalid, illegal or unenforceable in any respect,
this Agreement shall be reformed, construed and enforced as if such invalid,
illegal or unenforceable provision had never been contained herein.
18. Binding Nature. This Agreement will be binding upon and will inure
to the benefit of any successor or successors of the parties hereto.
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19. No Third-Party Beneficiaries. No person shall be deemed to possess
any third-party beneficiary right pursuant to this Agreement. It is the intent
of the parties hereto that no direct benefit to any third party is intended or
implied by the execution of this Agreement.
20. Counterparts. This Agreement may be executed in one or more
counterparts, each of which will be deemed an original.
21. Notice. Any notice required or permitted to be delivered hereunder
shall be deemed to be delivered when sent by facsimile with receipt confirmed or
when deposited in the United States mail, postage prepaid, registered or
certified mail, return receipt requested, or by overnight courier, addressed to
the parties at the addresses first stated herein, or to such other address as
either party hereto shall from time to time designate to the other party by
notice in writing as provided herein.
IN WITNESS WHEREOF, this Agreement has been duly signed by the parties
hereto on the day and year first above written.
ASD GROUP, INC., a Delaware corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, President
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
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