Exhibit 10.1
EMERSON RADIO CORP. 9 Entin Road, P.O. Box 430, Parsippany, New Jersey
07054-0430 (973) 884-5800
October 1, 2009
Mr. Duncan Hon
Present
Re: Offer of Employment
Dear Duncan:
On behalf of Emerson Radio Corp. (the “Company”), I am pleased to extend to you
an offer of employment with the Company. The purpose of this letter is to
confirm the terms and conditions of your employment.
1. Period of Employment. Subject to Paragraph 4, below, the Company shall employ
you, and you shall serve the Company during the period commencing on October 1,
2009, and continuing through and including September 30, 2010 (the “Term”).
After expiration of the Term, this Agreement may be terminated by the Company
upon ninety (90) days advance written notice of intent to terminate the
Agreement. After expiration of the Term, and prior to and during any such ninety
(90) day notice period (all such periods after expiration of the Term shall be
referred to hereinafter, individually and collectively, as the “Term
Extension”), this Agreement shall remain in full force and effect. You shall
have the right to terminate this Agreement on or prior to September 30, 2010
with 90 days notice and at any time thereafter with 90 days notice.
     2. Position, Duties and Responsibilities.
(a) During the Term and Term Extension, you shall be employed by the Company as,
and shall have the title of, Deputy Chief Executive Officer. As such, you shall
be responsible for the management of the Company and shall have such other
duties and responsibilities as are normal and customary for a chief executive
officer of a public United States company. You also will have such other duties
and responsibilities as may from time to time be assigned to or vested in you by
the Company’s Board of Directors or any duly-constituted Committee of the
Company’s Board of Directors, or by the Chairman of the Company’s Board of
Directors, or by the Chief Executive Officer. You will report to the Chairman of
the Company’s Board of Directors and the Chief Executive Officer. Further, you
will serve as a member of the Company’s Board of Directors.
(b) You will devote the portion of your business time, attention, skill and
efforts to the business and affairs of the Company and the promotion of its
interests as is necessary to the performance of your duties and obligations
hereunder. During the Term and

 

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Term Extension you will be permitted to be employed on a part-time basis by
Grande Holdings or any of its subsidiaries and engage in other business
activities approved in advance by the Chairman of the Company’s Board of
Directors, provided that, in each such instance, you comply at all times with
Section 5 of this Agreement and such other business activities do not
(i) conflict with the interests of the Company, (ii) inhibit, conflict with, or
limit your ability to perform your duties to the Company, or (iii) otherwise
violate your obligations under the Company’s Code of Ethics for Senior Financial
Officers or the Company’s Code of Conduct for Officers, Directors, and
Employees. You shall, except during periods of vacation, sick leave, or other
duly authorized leave of absence and except as otherwise permitted in the
preceding sentence, devote your time, attention, skill, and ability during usual
business hours (and outside those hours when reasonably necessary to your duties
hereunder) to the faithful and diligent performance of the duties and
responsibilities described in this Paragraph 2.
(c) It shall not be a violation of this Agreement for you to serve as an officer
or director of a cooperative housing corporation or condominium, or civic or
charitable organization or committee, to perform speaking engagements, or to
manage personal passive investments, so long as such activities (individually or
collectively) do not conflict or interfere with the performance of your duties
under this Agreement. With the exception of the Company, you may serve as a
director of a corporation only with the prior written approval of the Company’s
Board of Directors.
     3. Compensation.
(a) During the Term and Term Extension, as compensation for services rendered
hereunder and in consideration of this Agreement, the Company shall pay you a
salary, in accordance with the Company’s then-prevailing payroll practices, at
the annual rate of Three Hundred Thousand United States Dollars $300,000.00 or
such greater amount as the Company may from time to time and in its sole
discretion determine.
(b) During the Term and Term Extension, as additional compensation, you shall be
entitled (i) to four (4) weeks of paid vacation per calendar year (which
vacation shall accrue, and may be used, in accordance with the Company’s
vacation policies and procedures in place from time to time), and (ii) to
participate in and receive all benefits under any welfare benefit plan or
program, any retirement savings plan or program, and such other benefits or
perquisites of office (including, without limitation, paid holidays) as the
Company may, from time to time and in its sole discretion, make available
generally to executive employees of the Company. Such participation shall be
subject to the terms and conditions of such plans or programs, including, but
not limited to, such generally applicable eligibility provisions as may be in
effect from time to time.
(c) The Company shall reimburse you for all reasonable business expenses
incurred in the performance of your duties hereunder in accordance with and
subject to the terms and conditions of the Company’s then-prevailing expense
policy. As a condition precedent to obtaining such reimbursement, you shall
provide to the Company any and all statements, bills, or receipts evidencing the
expenses for which you seek reimbursement, and such other related information or
materials as the Company may from time to time reasonably require. In no event

 

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shall a reimbursement be made later than December 31 of the year following the
year in which the expense was incurred.
(d) The Company’s Board of Directors shall grant you a discretionary bonus at
the end of the Company’s fiscal year.
(e) To the extent that you incur income taxes in the United States for a taxable
year as a result of the compensation you receive from the Company while working
in the United States, the Company will pay you a “Tax Equalization Amount” equal
to the excess, if any, of (i) the income taxes that you actually incur for such
taxable year, over (ii) the sum of (x) the income taxes that you would have
incurred for such taxable year had you received such compensation solely for
services rendered in Hong Kong, and (y) the income taxes, if any, that you would
have incurred in the United States even if you had not performed services for
the Company in the United States. Each such Tax Equalization Amount, if any,
shall be paid to you in one single payment within sixty (60) days after you file
your United States federal and, if applicable, state income return(s) for such
taxable year, subject to the Company’s verification of the amount payable;
provided that you must file such income tax returns by no later than October 15
of the year following such taxable year. In addition to such Tax Equalization
Amount, the Company shall at the same time calculate and pay you an amount (a
“Tax Gross-Up Payment”) such that, after payment of any and all United States
income taxes on such Tax Equalization Amount and the Tax Gross-Up Payment, the
net amount received by you shall be equal to the Tax Equalization Amount.
4. Termination. Unless your employment is terminated pursuant to Paragraph 1 of
this Agreement or this Paragraph 4, the Company shall continue to employ you and
you shall continue to serve the Company throughout the Term and Term Extension.
(a) This Agreement and your employment shall terminate automatically if (i) you
do not obtain your L-1A visa and enter the United States in L-l visa status on
or before November 30, 2009, (ii) your L-1A visa or visa status expires and has
not been extended, or (iii) your L-l A visa or visa status otherwise terminates.
In such event, the Company shall have no further obligation hereunder except
with respect to payment to you of any and all salary, benefits, and expense
reimbursements applicable to the period of your employment, under this
Agreement. Such payments shall be made in accordance with then-prevailing
Company policy and practice.
(b) This Agreement and your employment shall terminate automatically upon your
death. In such event, the Company shall have no further obligation hereunder
except with respect to payment to your estate of any and all salary, benefits,
and expense reimbursements applicable to the period of your employment, under
this Agreement. Such payments shall be made in accordance with then-prevailing
Company policy and practice.
(c) Upon your “Disability”, the payment of benefits under the Company’s
short-term and long-term disability insurance programs, if any, shall satisfy
the Company’s obligations under Paragraph 3(a) above. For purposes of this
Agreement, you shall be deemed to be under a Disability if you shall be unable,
by virtue of illness or physical or mental incapacity

 

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or disability (from any cause or causes whatsoever), to perform your essential
job functions hereunder, whether with or without reasonable accommodation, in
substantially the manner and to the extent required hereunder prior to the
commencement of such disability, for a period exceeding ninety (90) days. In
light of the unique nature of your services, and the undue burden on the Company
that would result from your long term absence, the Company shall have the right
to terminate this Agreement and your employment in the event you shall remain
under a Disability for a period exceeding ninety (90) days, such action to be
taken only upon at least ten (10) days prior written notice to you. In such
event, the Company shall have no further obligation hereunder except with
respect to payment to you of any and all benefits, and expense reimbursements
applicable to the period of your employment hereunder until the date on which
the Term would have expired but for the termination of your employment by reason
of Disability. Such payments shall be made in accordance with then-prevailing
Company policy and practice.
(d) The Company shall have the right to terminate this Agreement and your
employment for Cause at any time and without prior notice. For purposes of this
Agreement, Cause shall include: (i) material default or other material breach by
you of your obligations hereunder; (ii) willful failure by you to perform
material duties hereunder that are reasonably assigned to you by the Company;
(iii) gross negligence or willful misconduct in the performance of your duties
hereunder; or (iv) dishonesty, insubordination, or other willful act by you
detrimental to the Company or its good will or damaging to its relationships
with its customers, investors, suppliers, or employees, including, without
limitation, (A) use of alcohol or illegal drugs such as to interfere with the
performance of your obligations hereunder, (B) conviction of or plea of guilty
or no contest to a felony or any crime involving moral turpitude, dishonesty, or
theft, and (C) material failure by you to comply with applicable laws or
governmental regulations with respect to Company operations or the performance
of your duties. In the event that the Company seeks to terminate your employment
pursuant to Paragraph 4(d) (i), (ii), or (iii), the Company shall give you
reasonably detailed written notice stating the reasons for the proposed
termination for Cause and the act(s) or failure(s) to act which give rise to the
Cause in reasonable detail, and you shall have thirty (30) days from the giving
of such notice to cure the default, defect, or other for Cause for termination,
to the Company’s reasonable satisfaction. In the event of a termination for
Cause, the Company shall have no further obligation hereunder except with
respect to payment to you of any and all salary, benefits, and expense
reimbursements applicable to the period of your employment hereunder, in
accordance with then-prevailing Company policy and practice.
(e) In the event of termination of this Agreement for any reason specified in
this Paragraph 4, the payments (if any) required to be provided to you pursuant
to this Paragraph 4 shall be in full and complete satisfaction of any and all
obligations owing to you pursuant to this Agreement.
5. Confidential Information. Both during and after the Term and Term Extension,
you shall not, directly or indirectly, divulge, publish, communicate, or make
available to any person, corporation, governmental agency, or other entity
(except in performing your duties hereunder), or use for your own or any other
person or entity’s purposes or benefit, any trade secret, confidential business
information, or any other information, know how, designs,

 

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specifications, techniques, methods, concepts, inventions, developments,
discoveries, improvements, knowledge, or data of the Company or any affiliate
which is not generally known to the public (separately and collectively,
“Information”) (including, but not limited to, Information relating to research,
product development or design, manufacturing or manufacturing processes,
maintenance or repair processes, purchasing, product or material costs, sales or
sales strategies or prospects, pricing or pricing strategies, advertising or
promotional programs, product information, or mailing or customer lists,
finances (including prices, costs, and revenues), and other business
arrangements, plans, procedures and strategies), and shall use your best efforts
to prevent the publication or disclosure by any other person or entity of any
such Information. The Company shall not be under any obligation to identify
specifically by any notice or other action any Information to which this
Paragraph 5 shall apply. While you are employed by the Company, all documents
and Information compiled, received, held, or used by you in connection with the
business of the Company shall remain the Company’s property, and shall be
delivered by you to the Company upon the termination of your employment, for
whatever reason, or at any earlier time requested by the Company. Information
does not include information in the public domain through no fault of yours.
Notwithstanding this paragraph you may disclose Information as required by law
or pursuant to any court order.
6. Additional Obligations. Both during and after the Term and Term Extension,
you shall, upon reasonable notice, furnish the Company with such information as
may be in your possession, and cooperate with the Company, as may reasonably be
requested by the Company (and, if you are no longer employed by the Company,
with due consideration for your obligations with respect to any new employment
or business activity) in connection with any litigation in which the Company or
any affiliate is or may become a party. The Company shall reimburse you for all
reasonable expenses, including but not limited to reasonable counsel fees,
incurred by you in ful filling your obligations under this Paragraph 6.
7. Notice. Any notice or other communication required or permitted under this
Agreement by either party hereto to the other shall be in writing, and shall be
deemed effective upon (a) personal delivery, if delivered by hand, (b) three
days after the date of deposit in the mails, postage prepaid, if mailed by
certified or registered United States mail, or (c) the next business day, if
sent by a prepaid overnight courier service, and in each case addressed as
follows:
If to you:
Mr. Duncan Hon
456 Alexandra Road
#12-01 NOL Building
Singapore 119962
If to the Company:
Emerson Radio Corp.
9 Entin Road
Parsippany, New Jersey 07054

 

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Attn: Mr. Greenfield Pitts
With a copy to:
John D. Schupper, Esq.
Lowenstein Sandler PC
65 Livingston Avenue
Roseland, New Jersey 07068
Either party may change the address or addresses to which notices are to be sent
by giving notice of such change of address in the manner provided by this
Paragraph 7.
8. Entire Agreement. This Agreement represents the entire agreement between the
Company and you with respect to your employment with the Company, and supersedes
and is in full substitution for any and all prior agreements or understandings,
whether oral or written, relating to your employment.
9. Amendment. This Agreement may not be canceled, changed, modified, or amended
orally, and no cancellation, change, modification or amendment hereof shall be
effective or binding unless in a written instrument signed by the Company and
you. A provision of this Agreement may be waived only by a written instrument
signed by the party against whom or which enforcement of such waiver is sought.
10. No Waiver. The failure at any time either of the Company or you to require
the performance by the other of any provision of this Agreement shall in no way
affect the full right of such party to require such performance at any time
thereafter, nor shall the waiver by either the Company or you of any breach of
any provision of this Agreement be taken or held to constitute a waiver of any
succeeding breach of such or any other provision of this Agreement.
11. Assignment. This Agreement is binding on and for the benefit of the Company
and you and the Company’s and your respective successors, heirs, administrators,
and other legal representatives. Neither this Agreement nor any right or
obligation hereunder may be sold, transferred, assigned, or pledged by the
Company (except to an affiliate) or by you without the prior written consent of
the other. However, nothing in this Agreement shall preclude the Company from
consolidating or merging into or with, or transferring all or substantially all
of its assets to, another entity which assumes this Agreement and all
obligations and undertakings of the Company hereunder.
12. Interpretation and Severability. In the event any provision of this
Agreement, or any portion thereof, is determined by any court of competent
jurisdiction to be unenforceable as written, such provision or portion thereof
shall be interpreted so as to be enforceable. In the event any provision of this
Agreement, or any portion thereof, is determined by any court of competent
jurisdiction to be void, the remaining provisions of this Agreement

 

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shall nevertheless be binding upon the Company and you with the same effect as
though the void provision or portion thereof had been severed and deleted.
13. Governing Law. This Agreement shall be governed by, construed and applied,
and all disputes relating to or arising from this Agreement shall be resolved,
in accordance with the substantive laws of the State of New Jersey, without
application of its conflict or choice of law provisions.
14. Execution. This Agreement may be executed in counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.
15. Survival. Your obligations as set forth in Paragraphs 5 and 6 above,
represent independent covenants by which you are and shall remain bound
notwithstanding any breach or claim of breach by the Company, and shall survive
the termination or expiration of this Agreement for two years.
16. Headings. The headings contained in this Agreement are for reference
purposes only, and shall not affect the meaning or interpretation of this
Agreement.

          Very truly yours,

EMERSON RADIO CORP.
      By:   /s/ Adrian Ma         Adrian Ma        

Offer Of Employment Accepted:

            I accept employment with
Emerson Radio Corp. on the terms and
conditions stated above.

        /s/ Duncan Hon         Duncan Hon     Date