Exhibit 10.1


 


 


EXECUTIVE EMPLOYMENT AGREEMENT


 


                                AGREEMENT (this
“Agreement”) dated as of June 27, 2003 between Strategic Distribution, Inc., a
corporation organized and existing under the laws of the State of Delaware with
an address at 3220 Tillman Drive, Suite 200, Bensalem, PA  19020 (the “Company” or “SDI”), and Richard
S. Martin, an individual residing at the address set forth on the signature
page of this Agreement (hereinafter called the “Executive”).


 


                                1.             Employment.  The Company hereby employs the Executive and
the Executive, in consideration for the mutual understandings set forth in this
Agreement, hereby accepts the Company’s offer of employment upon the terms and
conditions hereinafter set forth.


 


                                2.             Term.  The term of this Agreement shall be for a
period of three (3) years commencing on May 19, 2003 (the “Employment Term”),
subject to early termination as set forth herein.


 


                                3.             Termination:  (a) 
This Agreement shall automatically terminate upon the death of the
Executive and upon such event, the Executive’s estate shall be entitled to
receive the amounts set forth in Section 3(e)(i) below.


 


                                (b)  The Company may terminate this Agreement in
the event that the Executive becomes ill or is injured so that he is unable to
perform the duties required of him hereunder for a period of 90 consecutive
days, or periods aggregating 90 days during any 180 consecutive day period, and
such inability is continuing on the date the notice referred to in the next
sentence shall be given.  The Company
shall give the Executive thirty (30) days’ prior notice of termination pursuant
to this paragraph, such notice to be given upon the expiration of such 90 day
period.  The Company shall continue to
make payments hereunder to the Executive notwithstanding such illness or injury
until the expiration of such thirty (30) day period, provided that the amount
of such payments shall be reduced by any amounts payable to the Executive under
any group disability program sponsored by the Company.  In addition, in the event that the Company
terminates this Agreement pursuant to this Section 3(b), the Executive shall be
entitled to receive the amounts set forth in Section 3(e)(i) below.


 


                                (c)  The Company may terminate the Executive’s
employment hereunder for “Cause”.  For
purposes of this Agreement, the Company shall have “Cause” to terminate
Executive’s employment hereunder upon (a) the Executive having been convicted
of any felony; (b) the continued and habitual use of narcotics or alcohol to an
extent which materially impairs the Executive’s performance of his duties
hereunder; (c) the willful malfeasance or gross negligence by the Executive in
the performance of his duties hereunder; (d) the knowing violation by the
Executive of any material provision of this Agreement; or (e) any regulatory
agency having jurisdiction over the Company shall have required or recommended,
in writing, that the Executive be terminated or that his responsibilities 


 


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hereunder
be diminished in a material respect.  In
the event that the Executive’s employment hereunder shall be terminated for
Cause, the Executive shall be entitled to receive the amounts specified in
Section 3(e)(i) hereof.


 


                                (d)  The Company may terminate the Executive’s
employment hereunder at any time without Cause, in which case the Executive
shall be entitled to receive the amounts specified in Section 3(e)(ii) hereof.


 


                                (e)  (i) If the Executive’s employment hereunder
terminates for any reason, including the death of the Executive, the Company
shall promptly pay to the Executive all amounts accrued but unpaid hereunder
through the date of termination with respect to the Salary (as defined in
Section 5 hereof) and for reimbursement of any expenses pursuant to Section 6
hereof.  Unless the Executive’s
employment has been terminated by the Company pursuant to Section 3(d), the
Company shall have no obligations to the Executive for Salary, Bonus or other
benefits herein provided accruing on or after the date of termination except as
set forth in the preceding sentence or as may be otherwise provided by law.


 


                                (ii)  If the Executive’s employment with the
Company is terminated during the Employment Term, by the Company pursuant to
Section 3(d), in addition to the amounts specified in Section 3(e)(i), the
Executive shall continue to receive the Salary at the rate in effect hereunder
on the date of such termination periodically, in accordance with the Company’s
prevailing payroll practices, until the first anniversary of the termination date.  Without intending to limit the generality of
Section 9, if the Executive accepts other employment or engages in his own
business prior to the last date that the Company is otherwise obligated to pay
Salary to the Executive under this Section 3(e)(ii), the Executive shall
forthwith notify the Company and the Company shall be entitled to set off from
amounts due the Executive under this Section 3(e)(ii) in respect of his Salary
the amounts paid to or earned by the Executive in respect of such other employment
or business activity.


 


                                (f)  In the event that the Executive’s employment
under this Agreement is terminated for any reason, all of the obligations and
duties of the Executive under this Agreement shall cease except for the
obligations of the Executive under Section 9 hereof.


 


                                4.  Duties. The Executive is engaged as
Chief Financial Officer of the Company and hereby promises to perform and
discharge faithfully the duties which may be assigned to him from time to time
by the Board of Directors or the Chief Executive Officer of the Company.


 


                                5.  Salary.  For all services rendered by the Executive under this Agreement,
the Company shall pay the Executive during the Employment Term at a salary rate
(the “Salary”) of not less than $180,000 per annum.  Any increases in salary beyond the amounts described in the
preceding sentence shall be based upon the performance of the Executive and the
Company.  All amounts payable to the
Executive as Salary hereunder shall be paid in accordance with the Company’s then
current payroll practice.


 


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                                6.  Expenses.  The Company will promptly reimburse the Executive for such
out-of-pocket travel, entertainment and other business expenses incurred by the
Executive during the term of this Agreement and in the performance of his
duties hereunder as authorized by, and in accordance with, the Company’s
reimbursement policies in effect from time to time.


 


                                7.  Bonus.  The Executive shall be eligible to receive bonus compensation (i)
in accordance with any management incentive plan or plans which may be
established by the Board of Directors of the Company for its executive
officers, and (ii) at such times as the other executive officers of the Company
receive bonus compensation.  The amount
of bonus compensation, if any, to be received by the Executive from time to
time shall be determined by the Board of Directors of the Company in its
discretion.


 


                                8.  Extent of Services.  (a) 
The Executive shall devote his full time, attention and energies to the
business of the Company and shall not during the term of this Agreement be
engaged in any other substantial business activity, whether or not such
business activity is pursued for gain, profit or other pecuniary advantage; but
this shall not be construed as preventing the Executive from investing his
personal assets in businesses which do not compete with the Company or its
affiliates in such form or manner as will not require any substantial services
on the part of the Executive in the operation of the affairs of the companies
in which such investments are made and in which his participation is solely
that of an investor and except that the Executive may purchase securities in
any corporation whose securities are regularly traded, provided that such
purchases shall not result in his collectively owning beneficially at any time
more than 5% of any class of securities of any corporation engaged in a
business competitive with that of the Company. 
As used in this Agreement, “affiliate” shall mean any person, firm or
corporation that, directly or indirectly, through one or more intermediaries,
controls, is controlled by, or is under common control with, the Company,
whether such control is through stock ownership, contract or otherwise.


 


                                9.  Disclosure of Information.  (a) 
Executive recognizes and acknowledges that the Company’s confidential or
proprietary information, including such trade secrets or information as may
exist from time to time, and information as to the customers, vendors, suppliers,
training programs, manuals or materials, technical information, contracts,
systems, procedures, mailing lists, know-how, improvements, price lists,
financial or other data (including the revenues, costs and profits associated
with any of the Company’s products or services), business plans, code books,
invoices and other financial statements, computer programs, software systems,
databases, discs and printouts, plans (business, technical or otherwise),
customer and industry lists, correspondence, internal reports, personnel files,
sales and advertising material, telephone numbers, names, addresses or any
other compilation of information, written or unwritten, which is or was used in
the business of the Company, and other similar items (collectively,
“Confidential Information”), are valuable, special and unique assets of the
Company’s business, access to and knowledge of which are essential to the
performance of the duties of Executive hereunder.  The Executive agrees and acknowledges that all Confidential
Information, in any form, and copies and extracts thereof, are and shall remain
the sole and exclusive property of the Company and upon termination of his
employment with the Company, the Executive shall return to SDI the originals
and all 


 


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copies
of any Confidential Information provided to or acquired by the Executive in
connection with the performance of his duties for the Company, and shall return
to the SDI all files, correspondence and/or other communications received,
maintained and/or originated by the Executive during the course of his
employment.  Executive will not, during
or after the term hereof, in whole or in part, disclose, and has not prior to the
commencement of the term hereof disclosed, Confidential Information to any
person, firm, corporation, association or other entity for any reason or
purpose whatsoever, except in furtherance of Executive’s duties under this
Agreement.  Executive will not make use
of any Confidential Information for his own purposes or for the benefit of any
person, firm, corporation or other entity (except the Company) under any
circumstances, during or after the term hereof, and Executive has not prior to
the commencement of the term hereof made such use.


 


                                (b)  During the term of this Agreement and for a
period of two (2) years following the date of termination of the Executive’s
employment with the Company (the “Restricted Period”), the Executive shall not,
whether for his own account or for the account of any other individual,
partnership, firm, corporation or other business organization (other than the
Company), directly or indirectly, solicit, endeavor to entice away from the
Company, or otherwise directly interfere with the relationship of the Company, with
(i) any person who is employed by or otherwise engaged to perform services for
the Company (including without limitation any manufacturer or distributor of
industrial supplies) at the time of the solicitation, enticement or
interference (or any person who was an employee or otherwise engaged to perform
services for the Company within six months prior to the solicitation,
enticement or interference), or (ii) any person or entity that is a customer of
the Company at the time of the solicitation, enticement or interference (or any
person or entity that was a customer of the Company within six months prior to
the solicitation, enticement or interference).


 


                                (c)  For purposes of this Section 9, the term
“Company” shall include the affiliates and subsidiaries of Strategic
Distribution, Inc.


 


                                10.  Intellectual Property.  (a) 
Executive has no proprietary, financial or other interest, direct or
indirect, in whole or in part, in any Intellectual Property or in any
application therefor which the Company (or any of its affiliates) owns,
possesses or uses in its business as now and heretofore conducted.  As used in this Section 10, “Intellectual
Property” shall mean all letters patent, trademarks, service marks, trade
names, brands, private labels, copyrights, know-how, trade secrets and licenses
and rights with respect to the foregoing that the Company (or any of its
affiliates) owns or possesses the rights to use.


 


                                (b)  The Executive shall make full and prompt
disclosure to the Company of all inventions, improvements, discoveries,
methods, developments, software, source code, object code and works of
authorship, whether patentable, copyrightable, or not, which relate to the
Company’s business and which are created, made or conceived by the Executive or
under his direction or jointly with others during his employment as an employee
of the Company, whether or not during normal working hours or on the premises
of the Company (all of which are collectively referred to in this Employment
Agreement as “Developments”).


 


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                                (c)  The Executive (i) agrees to assign and does
hereby assign to the Company (or any person or entity designated by the
Company) all of his right, title and interest in and to all Developments and
all related patents, patent applications, copyrights and copyright
applications; and (ii) agrees to assign and does hereby assign to any third
party designated by the Company any Developments which are subject to the terms
and provisions of an intellectual property license or other similar agreement
approved by the Company’s Board of Directors between the Company and such third
party.  The Executive also hereby waives
all claims to moral rights in any Developments.


 


                                (d)  The Executive agrees to cooperate fully with
the Company, both during and after his employment as an employee of the
Company, with respect to the procurement, maintenance and enforcement of
copyrights, patents and other intellectual property rights (both in the United
States and foreign countries) relating to Developments, provided that the
Company shall reimburse the Executive for any costs or expenses incurred in
connection with the procurement, maintenance and enforcement of such
copyrights, patents and other intellectual property.  The Executive shall sign all papers, including, without
limitation, copyright applications, patent applications, declarations, oaths,
formal assignments, assignments of priority rights, and powers of attorney,
which the Company reasonably may deem necessary or desirable in order to
protect its rights and interests in any Development and which shall be prepared
by the Company or its counsel.  Company
agrees to indemnify Executive for his actions in helping Company procure and/or
maintain enforcement of copyrights, patents, and other intellectual property
rights, except to the extent that any such actions taken by the Executive were
taken in bad faith or constituted gross negligence or willful misconduct on the
part of the Executive.


 


                                11.  Employee Benefits.  (a) During the term of this Agreement,
Executive shall participate in all employee benefit plans of the Company as of
the date hereof or which are hereafter implemented, or the employee benefit
plans of any present or future affiliated corporation which are made generally
available to employees of the Company, subject to the eligibility, enrollment
and other requirements of such plans. 
Without limiting the generality of the foregoing, the Company shall
maintain (i) a profit sharing plan qualified under Section 401(k) of the
Internal Revenue Code of 1986, as amended, and (ii) a medical insurance plan
(excluding dental coverage) the cost of which shall be partially paid by the
Company.


 


                                (b)  Executive shall be entitled to a minimum of
three weeks vacation per annum during the Employment Term.


 


                                12.  Notices.  Any notice required or permitted to be given under this Agreement
shall be in writing and shall be deemed to have been duly given or delivered if
delivered personally or mailed by registered or certified mail, return receipt
requested, with first class postage prepaid, to his residence in the case of
Executive and to its principal office in the case of the Company.


 


                                13.  Breach, Waiver of Breach.  The waiver by the Company or Executive of a
breach of any provision of this Agreement by the Company or Executive shall not
operate or be construed as a waiver of any subsequent breach by the Company or
Executive.


 


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                                14.  Law to Govern.  This Agreement shall be governed by and
construed and enforced in accordance with the laws of the Commonwealth of
Pennsylvania, without regard to principles of conflict of laws.


 


                                15.  Assignment.  The rights and obligations of the Company under this Agreement
shall inure to the benefit of and shall be binding upon the successors of the
Company and may be assigned, for all or any part of the term hereof, by the
Company to any corporation, (a) which at the time controls the capital stock of
the Company, (b) which succeeds to substantially all the assets of the Company,
or (c) the controlling capital stock of which is at the time owned by the
Company.  In the event of such
assignment, any and all references to the “Company” in other paragraphs of this
Agreement shall be deemed to mean and include such assignee corporation.  This Agreement shall not be assignable by
Executive.


 


                                16.  Entire Agreement.  This instrument contains the entire
agreement of the parties with respect to employment.  It may not be changed orally but only by an agreement in writing
signed by the party against whom enforcement of any waiver, change,
modification, extension or discharge is sought.


 


                IN WITNESS WHEREOF, the parties
have executed this Agreement as of the day first hereinabove written.


 


STRATEGIC DISTRIBUTION, INC.


 


	
  By:

  	
  /s/Donald
  C. Woodring

  
	
   

  	
  Donald
  C. Woodring, President and

  
	
   

  	
  Chief
  Executive Officer

  
	
   

  	
   

  
	
  /s/
  Richard S. Martin

  	
   

  
	
  RICHARD S. MARTIN

  	
   

  
			



 


3140
Brierfield Road


Alpharetta,
GA  30004