EXHIBIT 10.8
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into as of
the 14th day of December, 1998 (the "Effective Date"), by and between XXXXXX
XXXXXXX, an individual ("Executive"), and ASD SYSTEMS, INC., a Texas corporation
("Employer").
RECITALS:
WHEREAS, Employer desires to employ Executive upon the terms set forth in
this Agreement; and
WHEREAS, Executive desires to be employed by Employer upon the terms set
forth in this Agreement.
NOW, THEREFORE, in consideration of the premises and covenants herein
contained, Employer and Executive agree as follows:
AGREEMENTS:
1. EMPLOYMENT.
Subject to the terms and conditions stated in this Agreement, Employer
hereby employs Executive and Executive hereby accepts such employment.
2. DUTIES OF EXECUTIVE.
(a) During the Term of Employment (hereinafter defined), Executive shall
be employed as the President and Chief Executive Officer of the Company and
shall perform customary functions and duties with respect to such positions.
Executive shall devote all of his working time and attention to the management,
consulting, product design, marketing, customer development or other duties
related to the business of Employer that the Board of Directors of Employer may
from time to time specify.
(b) Employee shall perform his obligation within the Dallas, Texas
metropolitan area. Executive acknowledges and agrees that the performance of his
duties may entail travel and other promotional activities on behalf of Employer.
(c) Executive acknowledges and agrees that the conduct of the business of
Employer shall, at all times, be within the exclusive control of the Board of
Directors of Employer.
3. COMPENSATION.
As compensation for Executive's services rendered hereunder, Employer shall
pay Executive a minimum aggregate annual base salary equal to $250,000 per annum
commencing on the Effective Date. On each anniversary date following the
Effective Date and during the Term of Employment, the annual base salary paid to
Executive hereunder will be increased by $10,000. Such salary shall be paid in
accordance with customary payroll practices of Employer from time to time in
effect but no less frequently than in equal monthly payments. Executive shall
also be entitled to such bonus determined at the discretion of the Board of
Directors. During the Term of Employment, Executive will be entitled to all
benefits, if any, ordinarily accorded to, and will participate in all employee
plans ordinarily participated in by full-time employees of Employer, to the
extent Executive is eligible under the terms of such plans, including, without
limitation, all health, medical, dental, retirement, life and disability
insurance plans established by Employer, in accordance with the terms of such
plans. During the Term of Employment, Executive shall be entitled to
participate in any pension and retirement plans, stock option or ownership plans
and other fringe benefit plans as are or may be made available from time to time
to executive or other salaried employees of Employer to the extent that
Executive is eligible under the terms of such plans. In addition, Executive
shall be entitled to such vacation time each year during the Term of Employment
(all of which vacation must be utilized in the respective calendar year
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EMPLOYMENT AGREEMENT - Page 1
in which it accrues) which senior executives of Employer are afforded pursuant
to Employer's standard policies and practices and other benefits afforded to
Executive prior to the date hereof.
4. EXPENSES.
Employee is authorized, in carrying out all of his responsibilities and
duties hereunder, to incur reasonable expenses while promoting the business of
Employer in accordance with the policies of Employer from time to time in
effect. Employer will either pay such expenses directly or promptly reimburse
Employee for such reasonable out-of-pocket expenses incurred at the request or
on behalf of Employer upon receipt by Employer of appropriate documentation
thereof.
5. TERM OF EMPLOYMENT.
Unless sooner terminated in accordance with this Agreement, the Term of
Employment (herein so called) shall become effective as of the Effective Date
and shall continue through any and all times through and including December 31,
2001, provided, however, that the Term of Employment shall automatically be
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renewed for successive one-year terms unless either Employer or Employee gives
the other party hereto written notice of its or his intention to terminate this
Agreement at least thirty (30) days prior to the date the Term of Employment
would otherwise expire.
6. TERMINATION BY EMPLOYER.
(a) With Notice. The Term of Employment may be terminated by Employer at
any time, by written notice to Executive for cause. Cause shall mean (i) gross
negligence or willful misconduct or malfeasance by Executive in the performance
of his services by or on behalf of the Employer that has a material adverse
effect on the financial condition or business of the Employer or which is to the
material detriment of Employer; (ii) the failure by Executive to perform his
duties as reasonably assigned to him from time to time; (iii) any violation by
Executive of the covenants set forth in paragraphs 7 or 8; or (iv) Executive
becomes mentally or physically incapacitated to such extent that Executive is
unable to substantially perform his duties under this Agreement for a period of
more than one hundred eighty (180) consecutive days.
(b) Automatic. This Agreement shall automatically terminate upon the death
of Executive.
(c) Effect. Upon termination of the Term of Employment, whether by
Executive or Employer, all continuing rights and obligations hereunder shall
cease except for (i) the rights and obligations arising under Paragraph 3 of
this Agreement to the extent the agreements governing any such benefits and
plans so require, (ii) the rights and obligations under Paragraph 4 of this
Agreement with respect to expenses incurred prior to the date of termination,
(iii) the rights and obligations under this Subparagraph 6(c), and (iv) the
rights and obligations under Paragraphs 7, 8 and 9 hereof. The covenants set
forth in Xxxxxxxxxx 0, 0 xxx 0 xxxxx xx construed as agreements ancillary to but
independent of any other provision of this Agreement. The existence of any claim
or cause of action against Employer, whether predicated on this Agreement or
otherwise, shall not constitute a defense to the enforcement of said covenants.
Executive expressly authorizes Employer to deduct from any compensation payable
to Executive on the expiration or termination of this Agreement, the value of
any monetary advances or loans received by Executive from Employer, the value of
any personal expenses of Executive borne by Employer which are outstanding, and
the value of any property or materials belonging to Employer which are not
returned to Employer upon expiration or termination.
7. CONFIDENTIALITY COVENANTS.
During the Term of Employment (except with respect to disclosures occurring
during the normal course of Executive performing his services in accordance
herewith) and continuing in perpetuity, Executive shall:
(a) preserve as confidential all knowledge and information pertaining to
the business, affairs, directors, officers, shareholders, employees, and other
personnel of Employer, all affiliates of Employer and any predecessors of
Employer (including, without limitation, Athletic Supply of Dallas, Inc. and
Athletic Supply of Dallas,
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EMPLOYMENT AGREEMENT - Page 2
L.L.C.) obtained by Executive from any source whatsoever and which is not a
matter of public knowledge, unless disclosure is otherwise required by
applicable law, and
(b) not, except on behalf of Employer during the Term of Employment, use
Employer's records, documents, contracts, writings, data or other information,
whether or not in written or other recorded form, unless they are a matter of
public knowledge.
Without limiting the generality of the foregoing, the prohibitions
contained above shall be operative, whether inside or outside the United States,
with respect to any information or knowledge that Employer or any affiliate of
Employer now or hereafter may deem to be confidential, including, without
limitation, the following information with respect to Employer: (i) directors,
officers, shareholders, employees, and other personnel; (ii) operations or
planning, including customer lists, lists of suppliers, and information
pertaining to potential customers or suppliers; (iii) bids or progress under, or
negotiations pursuant to, government or other contracts, or with respect to
facilities and equipment, including contents of any manual, practice or
procedure, or operating revenue, expense, private or public debt or equity
financing or banking, accounting, or financial matters; (iv) advertising or
promotional plans or programs; (v) matters contained in applications to or
matters or proceedings pending under the jurisdiction of any regulatory agency
or court, including those that are only threatened; (vi) any system, procedure,
or administrative operation; (vii) plans for the extension of the present
business or commencement of a new business; (viii) any copyrights, trade
secrets, know-how, proprietary information, patents, inventions, marks,
software, licenses or technology, and any registrations or applications for
registration relating to the foregoing, owned or utilized by Employer, or any
affiliate of Employer, or work in progress with respect to such items and (ix)
plans with respect to business combinations or reorganizations.
8. INDUCEMENT OF CLIENTS.
During the Term of Employment and continuing during the Restricted Period
(as defined below), Executive hereby agrees that he shall not, directly or
indirectly, solicit or interfere, for the benefit of any Competing Business or
in any manner materially detrimental to Employer, with the Clients (as defined
below), employees and business relationships of Employer. The term "Restricted
Period" shall mean, in the event of the termination of the Term of Employment
for any reason, any and all times through and including the date which is one
(1) year following the termination of this Agreement. The term "Competing
Business" shall mean any business enterprise which is engaged in the Business of
Employer (as defined below) in any area of the world in which Employer or any of
its affiliates are then conducting business. The term "Clients" shall mean any
individual, proprietorship, partnership, corporation, association, or other
entity that is solicited or served by Employer or its affiliates during the Term
of Employment. The term "Business of Employer" shall mean the type of business
engaged in or proposed to be engaged in by Employer at the time of Executive's
termination, including, without limitation, the software and systems development
and operations related to the telemarketing or fulfillment business for the
direct mail or catalog business. Without in any manner limiting the scope of the
foregoing provisions, if the Executive engages in any of the following acts he
shall be considered to have violated this covenant:
(a) induces or attempts to induce any Client or prospective Client to
withdraw, curtail, divert, or cancel its business or any agreements with
Employer or its affiliates;
(b) induces or attempts to induce any employee of Employer or its
affiliates to terminate his or her employment therewith;
(c) induces or attempts to induce any independent contractor providing
services on behalf of Employer or its affiliates to terminate his or her
business relationship therewith;
(d) develops any materials utilizing the confidential information of
Employer or its affiliates, except for the benefit of Employer or its
affiliates; or
(e) disrupts in any manner whatsoever any of Employer's or its
affiliate's existing business relationships.
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9. INTELLECTUAL PROPERTY RIGHTS.
(a) Executive agrees that he will make prompt and full disclosure to
Employer, will hold in trust for the sole right and benefit of Employer, and
will promptly assign to Employer, all of Executive's right, title and interest
in and to any trademarks, service marks, trade names, patents and copyrights,
all applications therefor and registrations thereof in the United States and all
foreign countries, all trade secrets, know-how, works of authorship, inventions,
innovations, improvements, developments, methods, designs, analyses, drawings,
reports and similar or related information, which Executive solely or jointly
conceives, develops, or reduces to practice, causes to be conceived, developed
or reduced to practice, or with respect to which Executive or any entity with
which Executive is affiliated obtains any ownership interest in, during the Term
of Employment (the "Executive Property"). To the extent any of the
intellectual property rights of the type noted in this subparagraph 9(a) have
not been acquired by Employer, Executive shall promptly assign all of his right,
title and interest in such property to Employer.
(b) Executive acknowledges that all works of authorship which are made
by him (solely or jointly with others) within the scope of his employment and
during the Term of Employment shall be deemed "works made for hire", as that
term is defined in the United States Copyright Act (17 U.S.C. 101 et. seq.),
such that Employer shall be considered the author of such works and owner of all
copyrights therein. Executive warrants and represents that all works of
authorship which he made (solely or jointly with others) within the scope of his
employment and during all times he was employed by the predecessors-in-interest
to Employer were likewise deemed to be "works made for hire," such that the
respective predecessors-in-interest to Employer were considered the authors of
such works and owners of all copyrights therein. In the event that any such
works made during the Term of Employment with Employer, or made during
Executive's employment with the predecessors-in-interest to Employer, are for
any reason not held to be works made for hire, Executive hereby irrevocably
assigns to Employer all of Executive's right, title and interest in and to such
works and all copyrights therein, whether now existing or hereafter created.
(c) Executive agrees to assist and cooperate with Employer as may be
necessary or desirable from time to time in furtherance of the purposes of this
paragraph 9, including, without limitation, the execution, verification and
delivery of documents and the doing or taking of such lawful actions as Employer
may reasonably request in the United States and all foreign countries. Without
limiting the generality of the foregoing, Executive agrees without further
compensation to execute and deliver such documents and take such actions
(including appearing as a witness) as may be useful to enable Employer to apply
for, register, obtain, assign, perfect, evidence, sustain, record and enforce
any of the Executive Property and/or other rights assigned or to be assigned to
Employer pursuant to this Agreement, in the United States and all foreign
countries, and in connection with the assignments (and recording thereof) of
such Executive Property and/or other rights to Employer or its designee. The
obligations of Executive pursuant to this paragraph 9(c) shall continue beyond
the Term of Employment, but following the Term of Employment with Employer,
Employer shall compensate Executive at a reasonable rate after Executive's
termination for the time actually spent by Executive in this connection at
Employer's request.
(d) Executive hereby assigns to Employer any and all claims, of any
nature whatsoever, which Executive may now or hereafter have for infringement,
including past infringement, of any rights assigned or to be assigned to
Employer pursuant to this Agreement.
10. REMEDIES.
Without limiting any other rights of Employer, in the event of breach
or threatened breach by Executive of any provision in Paragraphs 7, 8 or 9
hereof, Employer shall be entitled to (i) relief by temporary restraining order,
temporary injunction, permanent injunction or otherwise, as issued by a court of
law or equity, (ii) recovery of all attorneys' fees and costs incurred by
Employer in obtaining such relief, and (iii) any other legal and equitable
relief to which it may be entitled, including any and all monetary damages which
any Employer may incur as a result of said breach or threatened breach or
violation. Employer may pursue any remedy available to it, including declaratory
relief, concurrently or consecutively in any order as to any breach, violation,
or threatened breach or violation, and the pursuit of one such remedy at any
time will not be deemed an election of remedies or waiver of the right to pursue
any other remedy. Employer has the right to pursue partial enforcement and/or to
seek declaratory relief regarding the enforceable scope of this Agreement
without penalty and without waiving Employer's right to pursue any other
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available remedy subsequent to or concurrently with declaratory relief. The
provisions of this Paragraph 10 shall not in any manner limit the rights and
remedies available to Employer for any breach of the terms of this Agreement.
11. NO BREACH.
Executive represents and warrants that the execution and delivery of this
Agreement and his performance and consummation of the transactions contemplated
under those documents, do not, and will not, conflict, breach, or constitute a
default under any other agreement, instrument, covenant or restriction that
Executive is a party to or is otherwise bound.
12. NOTICES.
Any notice or request herein required or permitted to be given to either
party hereunder shall be given in writing and shall be personally delivered or
sent to such party by prepaid mail at the address of such party set forth below
or at such other address as such party may designate by written communication to
the other parties to this Agreement:
If to Executive: Xxxxxx Xxxxxxx
0000 Xxxxxxxxx Xx.
Xxxxxx, Xxxxx 00000
If to Employer: ASD Systems, Inc.
0000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attention: President
Telefax: (000) 000-0000
Each notice given in accordance with this paragraph shall be deemed to have been
given, if personally delivered, on the date personally delivered or, if mailed,
on the fifth day following the day on which it is deposited in the United States
mail, certified or registered mail, return receipt requested, with postage
prepaid.
13. HEADINGS.
The headings of the paragraphs of this Agreement have been inserted for
convenience of reference only and shall in no way restrict or modify any of the
terms or provisions hereof.
14. SEVERABILITY.
If any provision of this Agreement is held to be illegal, invalid, or
unenforceable under present or future laws effective during the term hereof,
such provision shall be fully severable and this Agreement shall be construed
and enforced as if such illegal, invalid, or unenforceable provision had never
comprised a part of this Agreement; and the remaining provisions of this
Agreement shall remain in full force and effect and shall not be affected by the
illegal, invalid, or unenforceable provision or by its severance from this
Agreement. Furthermore, in lieu of each such illegal, invalid, or unenforceable
provision, there shall be added automatically as a part of this Agreement a
provision as similar in terms to such illegal, invalid, or unenforceable
provision as may be possible and be legal, valid, and enforceable.
15. ENTIRE AGREEMENT; SURVIVAL.
This Agreement embodies the entire agreement and understanding between the
parties hereto with respect to the subject matter hereof and supersedes all
prior agreements and understandings, if any, relating to the subject matter
hereof. The covenants, agreements, representations and warranties contained in
or made pursuant to this Agreement shall survive Executive's termination of
employment and the termination of this Agreement.
16. BINDING EFFECT.
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This Agreement shall be binding upon and inure to the benefit of each of
the parties hereto and their respective successors, heirs, assigns, and legal
representatives, but Executive may not assign this Agreement nor any rights or
obligations hereunder without the prior consent in writing of Employer. This
Agreement may be assigned by Employer to any party who acquires substantially
all of the assets of Employer or who merges or consolidates with Employer;
provided that such party agrees to assume and be liable for all of the
obligations of Employer hereunder.
17. ATTORNEYS' FEES.
If any action at law or in equity is necessary to enforce or interpret the
terms of this Agreement, the prevailing party shall be entitled to reasonable
attorneys' fees, costs, and necessary disbursements in addition to any other
relief to which he or it may be entitled.
18. WAIVERS.
One or more waivers of any covenant, term, or provision of this Agreement
by either party hereto shall not be construed as a waiver of the breach of any
other covenant, term, or provision or of any subsequent breach of the same or
any other covenant, term, or provision. The consent or approval of either party
hereto with respect to the act of the other party hereto shall not be deemed to
waive or render unnecessary consent to or approval of any subsequent similar
act. No custom or practice of the parties shall constitute a waiver of either
party's rights to insist upon strict compliance with the terms hereof.
19. GOVERNING LAW.
This Agreement shall be governed in all respects, including validity,
interpretation and effect by the laws of the State of Texas.
[Signature page follows]
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EXECUTED to be effective as of the date first above written.
EMPLOYER:
ASD SYSTEMS, INC.
By: /s/ XXXXXX XXXXXXX
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Xxxxxx Xxxxxxx, President
EXECUTIVE:
/s/ XXXXXX XXXXXXX
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XXXXXX XXXXXXX
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