Exhibit 10.2
 
EMPLOYMENT AGREEMENT
 
This Employment Agreement (the “Agreement”) is entered into as of this 8th day
of April, 2008 (the “Effective Date”) by and between InfoSonics Corporation, a
Maryland corporation (the “Company”), and Joseph Ram (“Employee”). Employee and
Company are sometimes referred to individually as a “Party” and collectively as
the “Parties.”
 
In consideration of the mutual covenants, promises and agreements herein
contained, the Company and Employee hereby covenant, promise and agree to and
with each other as follows:
 
1. Employment. The Company shall employ Employee and Employee shall perform
services for and on behalf of the Company upon the terms and conditions set
forth in this Agreement.
 
2. Positions and Duties of Employment. Employee shall be required to devote his
full energy, skill and best efforts as required to the furtherance of his
managerial duties with the Company as the Company's Chief Executive Officer.
While serving in such capacity(ies), Employee shall have the responsibilities,
duties, obligations, rights, benefits and requisite authority as is customary
for his position and as may be determined by the Board of Directors (the
“Board”) of the Company.
 
Employee understands that his employment as Chief Executive Officer of the
Company involves a high degree of trust and confidence, that he is employed for
the purpose of furthering the Company's reputation and improving the Company's
operations and profitability, and that in executing this Agreement he undertakes
the obligations set forth herein to accomplish such objectives. Employee agrees
that he shall serve the Company fully, diligently, competently, and to the best
of his ability. Employee certifies that he fully understands his right to
discuss this Agreement with his attorney, that he has availed himself of this
right to the extent that he desires, that he has carefully read and fully
understands this entire Agreement, and that he is voluntarily entering into this
Agreement.
 
3. Duties. Employee shall perform the following services for the Company:
 
3.1 Employee shall serve as Chief Executive Officer of the Company, or in such
other position as determined by the Board, and in that capacity shall work with
the Company to pursue the Company's plans as directed by the Board.
 
3.2 Employee shall perform duties with the functions of a Chief Executive
Officer, subject to the direction of the Board Of Directors (the “Board”) of the
Company.
 

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3.3 During the term of this Agreement, Employee shall devote substantially all
of Employee's business time to the performance of Employee's duties under this
Agreement. Without limiting the foregoing, Employee shall perform services on
behalf of the Company for at least 40 hours per week, and Employee shall be
available at the request of the Company at other times, including weekends and
holidays, to meet the needs and requests of the Company's customers.
 
3.4 During the term of this Agreement, Employee will not engage in any other
activities or undertake any other commitments that conflict with or take
priority over Employee's responsibilities and obligations to the Company and the
Company's customers, including without limitation those responsibilities and
obligations incurred pursuant to this Agreement.
 
4. Term. Unless terminated earlier as provided for in this Agreement, the term
of this Agreement shall be for four years, commencing on the Effective Date and
ending on April 8, 2012 (the “Term”). If the employment relationship is
terminated by either Party, Employee agrees to cooperate with the Company and
with the Company's new management with respect to the transition of the new
management in the operations previously performed by Employee. Upon Employee's
termination, Employee agrees to return to the Company all Company documents (and
all copies thereof), any other Company property in Employee's possession or
control, and any materials of any kind that contain or embody any proprietary or
confidential material of the Company.
 
5. Compensation. Employee shall receive the following as compensation:
 
(a) A salary at an annual rate of $325,000, subject to periodic review by the
Board or the Compensation Committee of the Board, payable in accordance with the
Company's customary payroll practices.
 
(b) At the discretion of the Board or the Compensation Committee of the Board, a
performance-based bonus.
 
(c) Employer shall include Employee, if otherwise eligible, in any profit
sharing plan, executive stock option plan, pension plan, retirement plan,
medical and/or hospitalization plan, and/or any and all other benefit plans,
except for disability and life insurance, which may be placed in effect by
Employer for the benefit of Employer's executives during the Term. Except for
the fact that Employer at all times shall provide Employee with all or at least
a portion of Employee's medical and/or hospitalization insurance, which shall
not be less than that afforded to Employer's other executives, nothing in this
Agreement shall limit (i) Employer's ability to exercise the discretion provided
to it under any such benefit plan, or (ii) Employer's discretion to adopt, not
adopt, amend or terminate any such benefit plan at any time.
 

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(d) The Company shall provide Employee with four weeks vacation leave per each
year of Employee's employment (which vacation leave may carry over and accrue up
to an aggregate of twelve weeks at any time), sick leave, medical and dental
insurance coverage, and any other benefits consistent with Company plans and
policies in effect for executive Employees from time to time. The Company may
modify in its sole and absolute discretion such benefits from time to time as it
considers necessary or appropriate, provided that any such modification shall
not affect or modify Employee's then existing rights with respect to any
previously accrued vacation.
 
(e) Any payments which the Company shall make to Employee pursuant to this
Agreement shall be reduced by standard withholding and other applicable payroll
deductions, including but not limited to federal, state or local income or other
taxes, Social Security and Medicare Taxes, State Unemployment Insurance, State
Disability Insurance, and the like.
 
(f) During the term of his employment, Employee shall be reimbursed for
reasonable expenses that are authorized by the Company and that are incurred by
Employee for the benefit of the Company in accordance with the standard
reimbursement practices of the Company; provided, however, that, with respect to
reimbursements, if any, not otherwise excludible from the Employee’s gross
income, to the extent required to comply with the provisions of Section 409A of
the Internal Revenue Code of 1986, as amended (the “Code”), no reimbursement of
expenses incurred by the Employee during any taxable year shall be made after
the last day of the following taxable year, and the right to reimbursement of
such expenses shall not be subject to liquidation or exchange for another
benefit.  Any direct payment or reimbursement of expenses shall be made only
upon presentation of an itemized accounting conforming in form and content to
standards prescribed by the Internal Revenue Service relative to the
substantiation of the deductibility of business expenses.
 
6. Confidentiality. Employee hereby warrants, covenants and agrees that, without
the prior express written approval of Employer or unless required by law or
court order, Employee shall hold in the strictest confidence, and shall not
disclose to any person, firm, corporation or other entity, any and all of
Employer's data, including but not limited to (a) information, drawings,
sketches, plans or other documents concerning Employer's business or development
plans, customers or suppliers, (b) Employer's development, design, construction
or sales and marketing methods or techniques, or (c) Employer's trade secrets
and other “know-how” or information not of a public nature, regardless of how
such information came to the custody of Employee. For purposes of this
Agreement, such information shall include, but not be limited to, information,
including a formula, pattern, compilation, program, device, method, technique or
process, that (i) derives independent economic value, present or potential, from
not being generally known to, and not being readily ascertainable by proper
means by, other persons who can obtain economic value from its disclosure or
use, and (ii) is the subject of efforts that are reasonable under the
circumstances to maintain its secrecy. The warranty, covenant and agreement set
forth in this paragraph shall not expire, shall survive this Agreement, and
shall be binding upon Employee without regard to the passage of time or other
events.
 

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7. Non-Compete. Employee acknowledges and recognizes the highly competitive
nature of the Company's business and that Employee's duties hereunder justify
restricting Employee's further employment following any termination of
employment. The Employee agrees that so long as the Employee is employed by the
Company, and (i) for a period of two years following the termination of this
Agreement, Employee, except when acting at the request of the Company on behalf
of or for the benefit of the Company, will not induce customers, agents or other
sources of distribution of the Company's business under contract or doing
business with the Company to terminate, reduce, alter or divert business with or
from the Company, and (ii) for a period of one year following the termination of
this Agreement, Employee shall not, directly or indirectly, either as a
principal, agent, employee, employer, consultant, partner, member or manager of
a limited liability company, shareholder of a company that does not have
securities registered under the Securities Exchange Act of 1934 (the “1934
Act”), or shareholder in excess of one percent of a company that has securities
registered under the 1934 Act, corporate officer or director, or in any other
individual or representative capacity, engage or otherwise participate in any
manner or fashion in any business that is in competition in any manner
whatsoever with the business activities of Employer, in or about any market in
which Employer has, or has publicly announced a plan for doing business.
Employee further covenants and agrees that the restrictive covenant set forth in
this paragraph is reasonable as to duration, terms, and geographical area and
that the same protects the legitimate interests of Employer, imposes no undue
hardship on Employee, and is not injurious to the public. The covenant set forth
under (ii) above shall not apply if Employee's employment is terminated within
twelve months of a Change in Control as defined in of this Agreement. Ownership
by Employee, for investment purposes only, of less than one percent of any class
of securities of a corporation if said securities are listed on a national
securities exchange or registered under the 1934 Act shall not constitute a
breach of the covenant set forth under (ii) above. It is the desire and intent
of the Parties that the provisions of this paragraph be enforced to the fullest
extent permissible under the laws and public policies applied in each
jurisdiction in which enforcement is sought. Accordingly, if any particular
portion of paragraph shall be adjudicated to be invalid or unenforceable, this
paragraph shall be deemed amended to apply in the broadest allowable manner and
to delete therefrom the portion adjudicated to be invalid or unenforceable, such
amendment and deletion to apply only with respect to the operation of paragraph
in the particular jurisdiction in which that adjudication is made.
 

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8. Termination.
 

 
(a)
If Employee's employment is terminated by the Company without Cause (as defined
below), or if Employee terminates his employment for Reasonable Basis (as
defined below), then the Company shall, in exchange for Employee's execution
within 45 days of the termination date of a general release and waiver of claims
against the Company as of the termination date in a form reasonably acceptable
to the Company, continue to pay as severance Employee's salary for 18 months or
one-half the remaining term of the Agreement, whichever is greater. Such
payments shall be made in accordance with the Company's customary payroll
practices and shall be subject to applicable withholding and payroll deductions.
Each such payment shall be treated as a separate payment for purposes of Section
409A of the Code. In the event of any such termination set forth in this
section 8(a), Employee will not be entitled to any additional compensation or
benefits beyond what is provided in the first sentence of this section 8(a).

 
(i) For purposes of this Agreement, “Cause” shall mean that the Board, acting in
good faith based upon the information then known to the Company, determines that
Employee has engaged in or committed any of the following: willful misconduct,
gross negligence, theft, fraud, or other illegal conduct; refusal or
unwillingness to perform Employee's duties; performance by Employee of
Employee's duties determined by the Board to be inadequate in a material
respect; breach of any applicable non-competition, confidentiality or other
proprietary information or inventions agreement between Employee and the
Company; inappropriate conflict of interest; insubordination; failure to follow
the directions of the Board or any committee thereof; or any other material
breach of this Agreement. Indictment or conviction of any felony, or any entry
of a plea of nolo contendre, under the laws of the United States or any State
shall also be considered “Cause” hereunder. “Cause” shall be specified in a
notice of termination to be delivered by the Company no later than the date as
of which termination is effective.
 
(ii) For purposes of this Agreement, “Reasonable Basis” shall mean (A) a
material breach of this Agreement by the Company, provided that Employee shall
have first given written notice of such default to the Company and if within
thirty days after receipt of such notice, the Company has not cured such
default; or (B) termination of Employee's employment by the Company without
Cause during the term hereof; or (C) a reduction in Employee's salary except to
the extent that a majority of the other executive officers of the Company incur
reductions of salary that average no less than the percentage reduction incurred
by Employee; or (D) termination of the Employee's employment by the Employee
within 12 months after a “Change Of Control,” with Change Of Control being
defined as follows:
 

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“Change in Control” shall mean any of the following:
 
(1) any consolidation or merger of Employer in which Employer is not the
continuing or surviving corporation, other than a merger of Employer in which
the holders of Employer common stock immediately prior to the merger own a
majority of the voting common stock of the surviving corporation immediately
after the merger;
 
(2) any sale, lease, exchange or other transfer (in one transaction or a series
of related transactions) of all or substantially all the assets of Employer;
 
(3) any approval by the stockholders of Employer of any plan or proposal for the
liquidation or dissolution of Employer;
 
(4) the acquisition by any person or entity, or any group of persons and/or
entities of a majority of the stock entitled to elect a majority of the
directors of the Company; or
 
(5) subject to applicable law, in a Chapter 11 bankruptcy proceeding, the
appointment of a trustee or the conversion of a case involving Employer to a
case under a Chapter 7 bankruptcy proceeding.
 
(b) In the event that Employee's employment with the Company is terminated for
Cause, by reason of Employee's death or disability, or due to Employee's
resignation or voluntary termination (other than for Reasonable Basis), then all
compensation and benefits will cease as of the effective date of such
termination, and Employee shall receive no severance benefits, or any other
compensation; provided that Employee shall be entitled to receive all
compensation earned and all benefits and reimbursements due through the
effective date of termination.
 
(c) Employee agrees that the payments contemplated by this Agreement shall
constitute the exclusive and sole remedy for any termination of employment, and
Employee covenants not to assert or pursue any other remedies, at law or in
equity, with respect to any termination of employment.
 
(d) Any party terminating this Agreement shall give prompt written notice
(“Notice of Termination”) to the other party hereto advising such other party of
the termination of this Agreement stating in reasonable detail the basis for
such termination. The Notice of Termination shall indicate whether termination
is being made for Cause (if Employer has terminated the Agreement) or for
Reasonable Basis (if the Employee has terminated the Agreement).
 

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(e) Notwithstanding anything herein to the contrary, this Agreement is intended
to be interpreted and operated to the extent possible so that the payments set
forth herein either shall be exempt from the requirements of Section 409A of the
Code or shall comply with the requirements of such provision; provided however
that in no event shall the Company be liable to the Employee for or with respect
to any taxes, penalties or interest which may be imposed upon the Employee
pursuant to Section 409A.  To the extent that any amount payable pursuant to
this Agreement constitutes a “deferral of compensation” subject to Section 409A
(a “409A Payment”), then, if on the date of the Employee’s “separation from
service,” as such term is defined in Treas. Reg. Section 1.409A-1(h)(1), from
the Company (his “Separation from Service”), the Employee is a “specified
employee,” as such term is defined in Treas. Reg. Section 1.409-1(i), as
determined from time to time by the Company, then such 409A Payment shall not be
made to the Employee earlier than the earlier of (i) six (6) months after the
Employee’s Separation from Service; or (ii) the date of his death.  The 409A
Payments under this Agreement that would otherwise be made during such period
shall be aggregated and paid in one lump sum, without interest, on the first
business day following the end of the six (6) month period or following the date
of the Employee’s death, whichever is earlier, and the balance of the 409A
Payments, if any, shall be paid in accordance with the applicable payment
schedule provided in this Section 8.  The Employee hereby acknowledges that he
has been advised to seek and has sought the advice of a tax advisor with respect
to the tax consequences to the Employee of all payments pursuant to this
Agreement, including any adverse tax consequences or penalty taxes under Code
Section 409A and applicable State tax law.  Employee hereby agrees to bear the
entire risk of any such adverse federal and State tax consequences and penalty
taxes in the event any payment pursuant to this Agreement is deemed to be
subject to Code Section 409A, and that no representations have been made to the
Employee relating to the tax treatment of any payment pursuant to this Agreement
under Code Section 409A and the corresponding provisions of any applicable State
income tax laws. If payments under this Section 8 constitute 409A Payments,
references within this Section 8 to termination of employment shall mean
Employee's "separation from service" as defined in Treas. Reg. Section
1.409A-1(h), including the default presumptions thereunder.
 
9. Remedies. If there is a breach or threatened breach of any provision of
Section 6 or Section 7 of this Agreement, the Company will suffer irreparable
harm and shall be entitled to an injunction restraining Employee from such
breach. Nothing herein shall be construed as prohibiting the Company from
pursuing any other remedies for such breach or threatened breach.
 
10. Severability. It is the clear intention of the Parties to this Agreement
that no term, provision or clause of this Agreement shall be deemed to be
invalid, illegal or unenforceable in any respect, unless such term, provision or
clause cannot be otherwise construed, interpreted, or modified to give effect to
the intent of the Parties and to be valid, legal or enforceable. The Parties
specifically charge the trier of fact to give effect to the intent of the
Parties, even if in doing so, information of a specific provision of this
Agreement is required consistent with the foregoing stated intent. In the event
that such a term, provision, or clause cannot be so construed, interpreted or
modified, the validity, legality and enforceability of the remaining provisions
contained herein and other application(s) thereof shall not in any way be
affected or impaired thereby and shall remain in full force and effect.
 

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11. Waiver of Breach. The waiver by the Company or Employee of the breach of any
provision of this Agreement by the other Party shall not operate or be construed
as a waiver of any subsequent breach by that Party.
 
12. Entire Agreement. This document contains the entire agreement between the
Parties and supersedes all prior oral or written agreements, if any, concerning
the subject matter hereof or otherwise concerning Employee's employment by
Employer (except for options to purchase shares of Employer's restricted stock
previously granted to Employee). This Agreement may not be changed orally, but
only by agreement in writing signed by the Parties.
 
13. Governing Law. This Agreement, its validity, interpretation and enforcement,
shall be governed by the laws of the State of Maryland, excluding conflict of
laws principles. Employee hereby expressly consents to personal jurisdiction in
the state and federal courts located in San Diego, California for any lawsuit
filed there against him by the Company arising from or relating to this
Agreement.
 
14. Notices. Any notice pursuant to this Agreement shall be validly given or
served if that notice is made in writing and delivered personally or sent by
certified mail or registered, return receipt requested, postage prepaid, to the
following addresses:
 
If to Company:
 
InfoSonics Corporation
4350 Executive Drive,
Suite 100, San Diego,
CA 92121
Attention: Chairperson,
Compensation
Committee
 
If to Employee:
 
 
 
To the address for
Employee set forth below
his signature.

 
All notices so given shall be deemed effective upon personal delivery or, if
sent by certified or registered mail, five business days after date of mailing.
Either party, by notice so given, may change the address to which his or its
future notices shall be sent.
 
15. Assignment and Binding Effect. This Agreement shall be binding upon Employee
and the Company and shall benefit the Company and its successors and assigns.
This Agreement shall not be assignable by Employee.
 

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16. Headings. The headings in this Agreement are for convenience only; they form
no part of this Agreement and shall not affect its interpretation.
 
17. Construction. Employee represents he has (a) read and completely understands
this Agreement and (b) had an opportunity to consult with such legal and other
advisers as he has desired in connection with this Agreement. This Agreement
shall not be construed against any one of the Parties.
 
18. Insurance. The company is to maintain directors' and officers' insurance in
an amount determined reasonably by the Board of Directors of the Company.
 
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed the
day and year first above written.

EMPLOYEE
 
INFOSONICS CORPORATION
           
Joseph Ram, Individually
 
Abraham Rosler, Executive
   
Vice President
Address:    
             

 

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