Asta Funding, Inc.
Form 10-KSB
September 30, 2001
Exhibit 10.3
EMPLOYMENT AGREEMENT
AGREEMENT, dated as of the 1st day of October, 2001 by and between ASTA
FUNDING, INC., a Delaware corporation, with offices at 000 Xxxxxx Xxx.,
Xxxxxxxxx Xxxxxx, XX 00000 (the "Company") and XXXXXXXX XXXXXX, an individual
residing at 00 Xxxxxxx Xxxxx, Xxxxxxxxx, XX 00000 ( the "Employee")
W I T N E S E T H:
WHEREAS, the parties desire to enter this agreement to set forth the
terms of the Employee's employment by the Company.
NOW, THEREFORE, in consideration of the mutual premises and covenants
set forth herein and for other good and value consideration, the receipt,
adequacy and legal sufficiency of which are hereby acknowledged, the Company and
the Employee mutually agree as follows:
1. Employment Duties.
(a) Employment. The Company agrees to employ the
Employee, and the Employee agrees to accept
employment with the Company, on the terms
and conditions set forth.
(b) Scope of Duties. During the term of this
Agreement, Employee shall devote his entire
business time, attention and energy to the
business, and to seeking improvement in the
profitability, of the Company. He shall
serve as Chief Financial Officer and
Secretary of the Company and its
subsidiaries and shall have the authority to
perform and shall perform all of the duties
that are customary for the offices of the
Chief Financial Officer and Secretary,
subject at all times to the control and
direction of the President and Board of
Directors of the Company, and shall perform
such services as typically are provided by
the Chief Financial Officer and Secretary of
a corporation and such other services
consistent therewith as shall be assigned to
him from time to time by the President of
the Board of Directors of the Company.
(c) Service. The Employee shall perform his
duties in a diligent manner; shall not
engage in activities, which are or could be
detrimental to the existing or future
business of the Company and its
subsidiaries; and shall observe and conform
to all laws, customs, and standards of
business ethics and honest business
practices. The Employee shall be requested,
and does hereby agree, to be a full time
employee of the Company. The Company
acknowledges, however, that the Employee may
serve as the Chief Financial Officer of Asta
Group, Incorporated. During the term of this
Agreement, Employee shall not engage in any
other business activity which, in the
reasonable judgement of the Company's Board
of Directors, conflicts with the duties of
Employee hereunder, whether or not such
activity is pursued for gain, profit or
other pecuniary advantage; provided,
however, that it is understood that this
Section 1 (c) shall not preclude Employee
from making passive investments in other
companies.
(d) Professional Standards. Recognizing and
acknowledging that it is essential for the
protection and enhancement of the name and
business of the Company and its subsidiaries
and the good will pertaining thereto, the
Employee shall perform his duties under this
Agreement professionally and in accordance
with the standards established by the
Company from time to time; and the Employee
shall not act, and shall refrain from
acting, in any manner that could harm or
tarnish the name, business or income of the
Company and its subsidiaries or the good
will pertaining thereto.
2. Compensation.
(a) Base Salary. For all services rendered by
the Employee during the term of this
Agreement, the Company shall pay the
Employee an annual base salary ("Base
Salary") of $200,000 payable in accordance
with the Company's customary payment
policies and periods. The Employee's annual
Base Salary may be increased as determined
by the Board of Directors in its sole
discretion.
(b) Bonuses. The employee shall be eligible to
receive bonuses as determined by the Board
of Directors in its sole discretion.
(c) Stock Options. The Employee shall be
eligible to receive stock options as
determined by the Board of Directors in its
sole discretion.
(d) Fringe Benefits. During the term of this
Agreement, the Company hall obtain and
maintain a term life insurance policy in the
amount of $600,000 naming the Employee's
designee as beneficiary, (ii) shall maintain
an excess disability insurance policy for
the Employee, (iii) shall provide to the
Employee and the Employee's family full
health insurance coverage and extended
medical coverage for the Employee and (iv),
shall provide to the Employee a leased
luxury automobile along with automobile
insurance.
(e) Vacation. The Employee shall be entitled to
an annual vacation of fifteen (15) working
days for each full calendar year of
employment hereunder, which may be taken all
at once or from time to time; provided,
however, that (i) the Employee shall
schedule such vacation time so as to
mitigate the adverse effects to the Company
of the Employee's absence; (ii) the Employee
shall give the Company at least thirty days
(30) days notice of consecutive vacation
days in excess of five (5) to be taken by
the Employee at any one time; and (iii) up
to one (1) week unused vacation time during
the calendar year may be carried over and
used by the Employee in the following
calendar year.
3. Non-Competition.
(a) In view of the Employee's knowledge of the
trade secrets and other proprietary
information relating to the business of the
Company and its subsidiaries and their
customers which the Employee has heretofore
obtained and is expected to obtain during
the term the Employee is employed under this
Agreement (the "Employment Period"), and in
consideration of the compensation to be
received hereunder, the Employee agrees: (i)
that he will not during the Employment
Period Participate In (as such term
hereinafter defined) any other business or
organization if such business or
organization now is or shall then be
competing with or be of a nature similar to
the business of the Company or its
subsidiaries and (ii) (A) for a period of
twelve (12) months after the Termination
Date (as defined in Section 7) due to a
termination of this Agreement for Cause or
(B) for such period as the Company shall
continue to pay to the Employee his Base
Salary and insurance benefits in accordance
with Section 9(b) after a termination of the
Employee's employment Without Cause, he will
not in any geographic area in which the
Company does business as of the Termination
Date compete with or be engaged in the same
business as, or Participate In, any other
business or organization which competes with
or is engaged in the same business as, the
Company or its subsidiaries with respect to
any service offered or activity engaged in
up to the Termination Date, except that in
each case the provisions of this Section 3
will not be deemed breached merely because
the Employee owns not more than 2% of the
outstanding common stock of a corporation,
if, at the time of its acquisition by the
Employee, such stock is listed on a national
securities exchange, is reported on NASDAQ,
or is regularly traded in the
over-the-counter market by a member of a
national securities exchange.
(b) The term "Participate In" shall mean:
"directly or indirectly, for his own
benefit, firm, or corporation, own, manage,
operate, control or loan money to (provide,
that an investment in debt instruments
issued pursuant to an effective registration
statement under the Securities Act of 1993,
as amended shall not be deemed to be a
loan), or participate in the ownership,
management, operation, or control of, or be
connected as a director, officer, employee,
partner, agent, or otherwise with, or
acquiesce in the use of his name in."
(c) During the Employment Period and, in the
case of the termination of the Employee's
employment for Cause only, for a period one
(1) year after the Termination Date, the
Employee will not directly or indirectly:
(i) Reveal the name of, solicit, use or
interfere with, or endeavor to
entice away from the Company (or any
of its subsidiaries) any of their
customers, vendors, or employees, or
(ii) Employ any person who, at any time
up to the Termination Date, was an
employee of the Company or its
subsidiaries without the written
consent of the Company.
(d) The Employee agrees that the provisions of
this Section 3 are necessary and reasonable
to protect the Company in the conduct of its
business. If any restriction contained in
this Section 3 shall be deemed to be
invalid, illegal, or unenforceable by reason
of the extent, duration, or geographical
scope thereof, or otherwise, then the court
making such determination shall have the
right to reduce such extent, duration,
geographical scope, or other provisions
hereof, and in its reduced from such
restriction shall then be enforceable in the
manner contemplated hereby.
4. Confidential Information. All confidential
information which the employee may now possess, may
obtain during or after the Employment Period, or may
create prior to the end of the Employment Period
relating to the business of the Company or its
subsidiaries or of any of their respective customers
or vendors shall not be published, disclosed, or made
accessible by him except to any other person, firm or
corporation either during or after the Employment
Period or used by him during the Employment Period in
the business and for the benefit of the Company or
its subsidiaries without the prior written consent of
the Company. The Employee shall return all tangible
evidence of such confidential information to the
Company prior to or at the end of the Employment
Period.
5. Rights of the Company.
(a) Any interest in copyrights, copyrightable
works, developments, discoveries, designs
and processes, patents, patent applications,
inventions and technological innovations
(collectively, "Inventions") which the
Employee (i) owns, conceives of or develops,
alone or with others, (A) relating to the
business of the Company or its subsidiaries
or any business in which the Company (or its
subsidiaries) contemplates being engaged or
(B) which anticipate research or development
of the Company or its subsidiaries, or (ii)
conceives of or develops utilizing the time,
material, facilities or information of the
Company or its subsidiaries, in either case
during the Employment Period, shall belong
to the Company.
(b) As soon as the Employee owns, conceives of
or develops any Invention, the Employee
shall immediately communicate such fact in
writing to the Board of Directors of the
Company. Upon the request of the Company,
the Employee shall, without further
compensation but at the Company's expense
(subject to clause (i) below) execute all
such assignments and other documents
(including applications for trademarks,
copyrights and patents and assignments
thereof) and take all such other action as
the Company may reasonably request,
including obtaining spousal consents or
waivers, (i) to vest in the Company all
right, title and interest of the Employee in
and to such Inventions, free and clear of
all liens, mortgages, security interests,
pledges, charges and encumbrances ( the
Employee to take such action, at his
expense, as is necessary to remove all such
liens) and (ii) if patentable or
copyrightable, to obtain patents or
copyrights (including extensions and
renewals) therefor in any and all
jurisdictions in and outside the United
States in the name of the Company or in such
other names(s) as the Company shall
determine.
6. Insurance. The Employee agrees to submit to such
medical examinations as may be reasonably required by
the Company to enable the Company to obtain, at its
opinion, key man life insurance on the life of the
Employee in such amount and with such insurer as the
Company may determine in its sole discretion.
7. Employment Period. The Employment Period shall
commence on the date of this Agreement and shall
continue for a term ending on September 30, 2004 or
such earlier date on which any of the following
events occurs (the "Termination Date"):
(a) the death of the Employee;
(b) the voluntary resignation of the Employee;
(c) the termination by the Board of Directors of
the Employee's employment for Disability (as
hereinafter defined);
(d) the termination by the Board of Directors of
the Employee's employment for Cause (as
hereinafter defined); or
(e) the termination by the Board of Directors of
the Employee's employment Without Cause (as
hereafter defined)
8. Definitions Relating to Termination
(a) Disability
The term "Disability" shall mean any
physical or mental condition f the Employee
which, in the reasonable discretion of the
Board of Directors, after consultation with
the Employee's physician, materially impairs
the Employee's ability to render the
services to be performed by him hereunder
for a period of 180 consecutive days or for
at least 240 days in any consecutive 360 day
period.
(b) Cause
The term "Cause" shall mean the good faith
finding by the Board Directors of the Company upon resolution adopted by it of
the existence of any one of the following:
(i) The Employee's failure or refusal to perform
specific written directives consistent with
his duties and responsibilities as set forth
in Section 1 hereof, which lack of
performance is not cured within 15 days
after written notice thereof or 30 days if
at the 15th day and thereafter the Employee
is diligently attempting to cure;
(ii) Excessive use of alcohol or the use of
illegal drugs, which interferes with the
performance of the Employee's obligations
under this Agreement;
(iii) Conviction of a felony or of any crime
involving moral turpitude or fraud;
(iv) The commission by the Employee of any
willful or intentional act which the
Employee reasonably should have contemplated
would have the effect of injuring the
reputation, financial condition, business or
business relationships of the Company (and
its subsidiaries, individually or taken as a
whole) and / or the Employee; or
(v) Any material breach (not covered by any of
the clauses (i) through hereof) of any of
the provisions of this Agreement, if such
breach is not cured within 30 days after
written notice thereof to by the Board of
Directors.
(c) Without Cause
The term "Without Cause" shall mean a
determination of the Board of Directors to
terminate the Employee for any reason other
than death, Disability or for Cause.
9. Effect of Termination
(a) If the Employee's employment is terminated
for Disability, for Cause or upon his death,
the Employee or his estate shall be paid the
Employee's Base Salary and other benefits
hereunder through the Termination Date.
(b) If the Employee's employment is terminated
Without Cause, the Employee or his estate
shall be paid the Employee's Base Salary and
other benefits hereunder for a maximum
period of 18 months after the date of
termination or until such time the Employee
becomes a full time employee of another
employer if this occurs prior to the 18
months.
(c) Irrespective of the basis for the
termination of the Employee's Employment
with the Company, all benefits (including
fringe benefits), if any, due the Employee
hereunder shall cease as of the Termination
Date, other than (i) COBRA rights which
shall continue to the extent provided
thereunder, (ii) Base Salary as provided in
Section 9(b), (iii) insurance as provided in
Section 9(b) and (iv) rights under any stock
options the Employee may have been granted.
10. Arbitration. Any controversy or claim arising out of
or relating to this Agreement, or any breach or
termination thereof, shall be settled by arbitration
in New Jersey, in accordance with the laws of the
State of New Jersey and the then current rules of the
American Arbitration Association or any successor
thereto. Within ten (10) days after a request for
arbitration by one party to the other, the Company
and the Employee shall each select one arbitrator.
Within ten (10) days after the second of such
arbitrators has been selected, the two arbitrators
thereby selected shall choose a third arbitrator who
shall be the Chairman of the panel. If the first two
arbitrators selected cannot agree upon a third
arbitrator, the American Arbitration Association
shall name the third arbitrator. The arbitrators may
grant injunctions or other relief in such dispute or
controversy. In the arbitration, the parties shall be
entitled to pre-hearing discovery. The decision of
the arbitrators shall be final, conclusive and
binding on the parties to the arbitration. In
connection with such arbitration and the enforcement
of any award rendered as a result thereof, the
parties hereto irrevocably consent to the personal
jurisdiction of the federal and state courts located
in New Jersey, and further consent that any process
or notice of motion or other application to the said
Courts or Judges thereof may be served inside or
outside the State of New Jersey by registered mail or
personal service, provided a time period of at least
twenty (20) days for appearance is allowed. The
Company shall not be required to seek injunctive
relief from the arbitrators but may seek such
injunctive relief in a court proceeding. This Section
6 shall survive the termination (by expiration or
otherwise) of this Agreement.
11. Modification. This Agreement sets forth the entire
understanding of the parties with respect to the
subject matter hereof, supersedes all existing
agreements between them concerning such subject
matter, and may be modified only by a written
instrument duly executed by each party.
12. Notices. Any notice or communication to be given
hereunder by any party to the other shall be in
writing and shall be deemed to have been given when
personally delivered or transmitted by facsimile, or
three (3) days after the date sent by registered or
certified mail, postage prepaid, as follows:
(a) if to the Company, addressed to it at:
000 Xxxxxx Xxxxxx
Xxxxxxxxx Xxxxxx, XX 00000
Attention: President
with copies to:
Xxxxxxxxxx Xxxxxxx P.C.
00 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attn: Xxxx X. Xxxxxxxx, Esq.
(b) If to the Employee, addressed to him at:
00 Xxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
or to such other persons or addressed as may be designated in writing
by the party to receive such notice.
13. Waiver. Any waiver by either party of a breach of any
provision of this Agreement shall not operate as or
be construed to be a waiver of any other breach of
such provision or of any breach of any other
provision of this Agreement. The failure of a party
to insist upon strict adherence to any term of this
Agreement on one or more occasions shall not be
considered a waiver or deprive that party of the
right thereafter to insist upon strict adherence to
that term or any other term of this Agreement. Any
waiver must be in writing.
14. Assignment. The Employee's rights and obligations
under this Agreement shall not be transferable by
assignment or otherwise. The Company may assign its
rights and obligations hereunder to any of its
subsidiaries or affiliates. The Company will provide
notice of such assignment to the Employee.
15. Successors and Assigns. The provisions of this
Agreement shall be binding upon and inure of the
benefit of the Employee and his heirs and personal
representatives, and shall be binding upon and inure
to the benefit of the Company and its successors and
assigns.
16. Headings. The headings in this Agreement are solely
for the convenience of reference and shall be given
no effect in the construction or interpretation of
this Agreement.
17. Injunctive Relief. As it would be very difficult to
measure the damages, which would result to the
Company from a breach of any of the covenants
contained in Section 3, 4 or 5 of this Agreement, in
the event of such a breach the Company shall have the
right to have such covenants specifically enforced by
a court of competent jurisdiction. Employee hereby
recognizes and acknowledges that irreparable injury
or damage shall result to the business of the Company
in the event of a breach or threatened breach by
Employee of the terms and provisions of Section 3, 4
or 5. Therefore, Employee agrees that the Company
shall be entitled to an injunction-restraining
Employee from engaging in any activity constituting
such breach or threatened breach. Nothing contained
herein shall be construed as prohibiting the Company
from pursuing any other remedies available to the
Company at law or in equity for such breach or
threatened breach, including, but not limited to,
recovery of damages from Employee and, if Employee is
still employed by the Company, terminating the
employment of Employee in accordance with the terms
and provisions hereof.
18. Jurisdiction. The validity and interpretation of this
Agreement shall be construed in accordance with and
be governed by the laws of the State of New Jersey.
19. Attorney's Fees. If a legal action or other
proceeding is brought for enforcement of this
Agreement because of an alleged dispute, breach,
default, or misrepresentation in connection with any
of the provisions of this Agreement, the successful
or prevailing party shall be entitled to recover
reasonable attorney's fees and cost incurred, in
addition to any other relief to which they may be
entitled.
20. Severability. The provisions of this Agreement are
severable and should any provision hereof be void,
voidable or unenforceable under any applicable law,
such void, voidable or unenforceable provision shall
not affect or invalidate any other provision of this
Agreement, which shall continue to govern the
relative rights and duties of the parties as though
the void, voidable or unenforceable provision were
not a part hereof.
21. Survival. All warranties, representations,
indemnities, covenants and other agreements of the
parties hereto shall survive the execution, delivery
and termination of this Agreement and shall,
notwithstanding the execution, delivery and
termination of this Agreement, continue in full force
and effect.
22. Acknowledgement. The Employee specifically
acknowledges that: the Employee has read and
understands all of the terms of this Agreement; in
executing this Agreement, the Employee does not rely
on any inducements, agreements, promises or
representations of the Company or any agent of the
Company, other than the terms and conditions
specifically set forth in this Agreement; the
Employee has had an opportunity to consult with
independent counsel with respect to the execution of
this Agreement; and that the Employee has made such
investigation of the facts pertaining to this
Agreement and of all the matters pertaining hereto as
he deems necessary.
IN WITNESS WHEREOF, the Company and the Employee have executed
this Agreement on the day and year first above written.
ASTA FUNDING, INC.
By:___________________________
Xxxx Xxxxx, President & CEO
______________________________
Xxxxxxxx Xxxxxx
