EMPLOYMENT AGREEMENT
This Employment Agreement, is executed and effective for all purposes as of
February 15, 2005, by and between ▇▇▇▇▇ Systems Inc., a New York corporation
having its principal office at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (the
"Company") and ▇▇ ▇▇▇▇▇▇, an individual residing at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇,
▇▇▇ ▇▇▇▇ (the "Executive").
In consideration of the terms and conditions hereinafter set forth, the
parties hereto agree as follows:
ss.1. Employment. The Company shall employ Executive to act as its
President for a term (the "Term") of one (1) year effective as of February 15,
2005, or such earlier date as the Company may determine (the "Commencement
Date"), as such Term may be extended as set forth below. The Term shall be
automatically extended for successive one year periods unless either party
delivers notice of its intention to terminate this Agreement within 30 days
prior to the termination of the pending Year. This Section 1 shall be subject to
the provisions of Section 5. Each 12 month period within such term shall be
referred to as a "Year."
ss.2. Duties. Executive agrees to use his best efforts to serve the Company
well and faithfully as President or such other positions or titles as assigned
by the Board of Directors as are commensurate with Executive's experience and
capabilities. Executive shall devote his entire business efforts to the affairs
of the Company. Executive also agrees to serve without additional compensation
as an officer and director of such subsidiaries of the Company as the Company
may request from time to time and assume such responsibility and authority for
such entities as are comparable with Executive's responsibilities and authority
hereunder and is reasonable under the circumstances. In his capacity as
President. Executive will have such powers, authorities and responsibilities
(directly or via direct subordinates) consistent with this Agreement as
determined by the Board of Directors, the Chief Executive Officer of the
Company's Parent Synergx Systems Inc (Synergx), or the Chairman of the Board of
the Company, including but not limited to the following, which may be modified
by the Board of Directors, the Chief Executive Officer of Synergx or the
Chariman from time to time:
2.1, Develop and supervise operational business processes and coordinate
and control the day to day business of the Company.
2.2 Supervise and direct all sales and marketing activities and
2.3 Reviewing and approving all significant customer purchase orders and
sales orders for technical purposes and proper margins.
2.4 Together with the Chairman and the Company's Chief Financial Officer,
prepare and monitor a budget and report on any deviation from same to the Board
of Directors and to the CEO of Synergx.
2.5 Reviewing all salary increases with associated department heads for
compliance with the Budget. Reporting any deviation from Company policy to the
the Board of Directors of Synergx. Submitting recommendations for any proposed
change affecting the Budget.
2.6 Responsible for the integrity, consistency and operation of all
computer systems
2.7 Supervise and direct all project engineering and project management
activities and personnel to ensure projects are delivered as cost efficiently as
possible and in compliance with specifications, code, etc.
2.8 Supervising the activities of the Company's service organization and
personnel including, without limitation, monitoring proper work practices,
health and safety, compliance with law, compliance with union responsibilities
and maximizing efficiency of personnel.
2.9 Reviewing and approving all capital expenditures.
2.10 Supervising the activities of the Company's support personnel and
other departments (excluding the research and development, Comco and
financial/accounting departments) including without limitation, secretarial
support, material control, shipping and receiving, shop and quality control.
2.11 Carrying out any directive that may be required by the Chairman or the
Board of Directors not inconsistent with this Agreement or applicable law.
2.12 Cost Review. Ensure review and analysis of costs (labor, material,
etc.) on projects and service contracts as well as all manufactured items.
2.13 Inventory. Together with the Chief Financial Officer, supervision and
control of all inventory including all procurement and shipments as well as
direction of appropriate inventory levels
2.14 Suppliers/Contractors. Supervise relationships and agreements with all
suppliers, subcontractors, etc..
2.15 Review and and approve all expenses and expense reports.
ss.3. Compensation. As compensation for all services to be rendered by
Executive hereunder, the Company agrees to pay to Executive a "Base Salary" at
the rate of $150,000 per Year. The following items will be provided in addition
to the Base Salary:
3.1 Automobile Expenses. Reimbursement, up to a maximum of $850 per month
or $10,200 per year of Executive's automobile cost of ownership and maintenance.
3.2 Payment. Executive's Base Salary shall be payable in weekly
installments or in such other installments as the Company institutes from time
to time. The Base Salary shall be calculated at the commencement of each Year
for purposes of determining Executive's monthly or other periodic rate of pay.
3.3 Salary revision. During the term of this Agreement, the provisions of
Section 3 (including the amount of and procedures relating to Base Salary) shall
remain in effect from Year to Year unmodified, unless modified pursuant to an
amendment to this Agreement executed by Executive and the Company. The Company
agrees that during the Term of this Agreement, the Board of Directors will
review the Base Salary annually to determine if an adjustment is warranted based
on all factors the Board of Directors deems relevant including, without
limitation, cost of living, the Company's financial condition and performance
and Executive's performance and contribution.
3.4 Stock Options. Promptly after execution of this Agreement, the Company
shall grant to Executive, pursuant to the terms and conditions of the Company's
Non-Qualified Stock Option Plan as may be in effect from time to time, options
to purchase 20,000 shares of the Company's common stock, $.001 par value per
share at an exercise price of $2.50per share
3.5 Expenses. The Company shall reimburse all of Executive's reasonable
business expenses in accordance with the Company's policies as in effect from
time to time, including without limitation, cellular phone, home DSL,
transportation, travel, entertainment, tolls, gasoline, parking and similar
expenses.
3.6. Bonus. Each fiscal year the Board of Directors shall consider, and if
deems appropriate approve a bonus for Executive based on the Board of Directors
determination of the Executive's performance, the Company's performance and
financial condition and the Executive's contribution to the Company's
performance.
ss.4. Employee Benefits. During the term of this Agreement, and subject to
his eligibility, Executive shall be entitled to participate in any employee
benefit programs made generally applicable to all senior executives of the
Company, now or hereafter in effect, on the same basis, and under the same terms
and conditions as the Company's other senior executives. The Company's employee
benefit programs for senior executives shall include, but not be limited to,
long term disability insurance, family health insurance, life insurance, dental,
401-K, paid vacations and holidays. The Company will also cover the Executive
under the Company's Directors and Officers Liability Insurance Policy as in
effect from time to time.
ss.5. Termination of Employment.
5.1 For Cause. The Board of Directors of the Company may terminate
Executive's employment hereunder and remove Executive from his position with the
Company at any time for cause. The term "Cause" as used in this Agreement shall
be deemed to refer to and include only:
5.1.1 The willful and continued failure by Executive to substantially
perform his duties pursuant to the terms of this Agreement without good cause,
after a written demand for substantial performance is delivered to Executive by
the Board of Directors, which notice specifically identifies the manner in which
Executive has not substantially performed his duties (other than as a result of
his death or incapacity, as defined in Section 5.3 below); or
5.1.2 The willful engaging by Executive in misconduct or inaction
materially injurious to the Company. For purposes of this Section an act or
failure to act shall not be considered "willful", unless done or omitted in bad
faith without reasonable belief on Executive's part that his action or omission
was in the best interest of the Company.
For purposes of Section 5.1 of this Agreement, termination for Cause will
not be deemed to have occurred unless there shall have been duly adopted by the
Board of Directors of the Company at a meeting called and held for that purpose,
a resolution finding that in the good faith opinion of the Board of Directors,
Executive was guilty of conduct set forth in those Sections.
5.2 Without Cause. The Board of Directors of the Company may terminate
Executive's employment hereunder and remove Executive from his position with the
Company without cause by written notice to Executive (the "Termination Notice"),
in which case the provisions of Section 5.4 shall apply. The Company failing to
renew this Agreement under the provision of Section 1 shall also be subject to
this Section 5.2. In addition, a sale of all or substantially all of the assets
or the Company, or the acquisition by a non-Affiliate of a majority of the
voting stock of the Company (Change of Control) will be subject to this Section
5.2 in which case, the Executive, at his option within 30 days of the closing of
any such transaction, may cause the provisions of this Section 5.2. to apply and
terminate this Agreement as if the Company had terminated the Executive without
cause.
5.3 Disability or Death. If, in the judgment of the Company's Board of
Directors, Executive fails to render services of the character contemplated
hereby because of illness or other incapacity for a period of six (6)
consecutive months, or for shorter periods aggregating more than six (6) months
in any consecutive twelve (12) months, the Board of Directors may determine that
Executive had become disabled and may elect to terminate his employment
hereunder, effective as of the date of such determination. In the event of
Executive's death during the term hereof, this Agreement shall terminate
forthwith.
5.4 Severance. If Executive's employment hereunder is terminated under
Section 5.2, the Company shall pay Executive as severance pay, subject to
appropriate deductions, one-twelfth (1/12) of his annual Base Salary for each
full month occurring after his employment termination (hereinafter "Monthly
Severance Payment") during the period (the "Severance Period") ending on the
earlier of (I) the date Executive obtains new employment, either directly or
indirectly, at an annual compensation in whatever form of not less than the
annual Base Salary then in effect or (ii) twelve (12) months from the date of
the Termination Notice; provided, however, that should Executive obtain new
employment, directly or indirectly (through a corporation or other entity of
which Executive or any family member is an employee, shareholder, etc.), at an
annual compensation less than the Base Salary provided hereunder, each Monthly
Severance Payment after such new employment commences shall be reduced by
one-twelfth (1/12) of Executive's annual salary under such new employment; and
provided further, that Executive shall make available to the Company, any and
all documents pertaining to Executive's annual salary under such new employment,
including, without limitation, pay stubs, W-2's and the appropriate portions of
any income tax returns, that Company may reasonably request in order to make
such adjustments. On the second anniversary of the Commencement Date, the
Severance Period shall be modified to be the earlier of (I) the date Executive
obtains new employment, either directly or indirectly, at an annual compensation
in whatever form of not less than the annual Base Salary then in effect
consistent with the foregoing or (ii) fiveteen (15) months from the date of the
Termination Notice. On the third anniversary of the Commencement Date, the
Severance Period shall be modified to be the earlier of (I) the date Executive
obtains new employment, either directly or indirectly, at an annual compensation
in whatever form of not less than the annual Base Salary then in effect
consistent with the foregoing or (ii) eighteen (18) months from the date of the
Termination Notice. In the event that Executive's employment shall be terminated
pursuant to Sections 5.2 in connection with or resulting from Change of Control,
then the Severance Period shall be eighteen (18) months without regard to any
other employment or compensation which Executive might secure from a third party
but reduced by any other compensation paid by the Purchaser of the Company or
substantially all of its assets. For the duration of any period set forth in
this Section 5.4, Executive shall continue to be entitled to benefits under
Section 4 and the automobile expense allowance under Section 3.1.
5.5 Voluntary Termination. If Executive voluntarily terminates his
employment hereunder other than as provided in Section 5.6, he shall (i) give
three (3) months written notice and (ii) be paid Base Salary through the date of
his termination and shall receive other compensation and benefits, if any, as
provided under the Company's applicable plans and programs.
5.6 Certain Changes Affecting Executive's Employment. "Certain changes
affecting Executive's employment" shall mean any material diminution in benefits
or employment conditions as a result of which Executive terminates his
employment hereunder, including any of the following (in which case Sections 5.2
and 5.4 shall apply):
5.6.1 the Company's failure to pay to Executive, without his consent, any
portion of his Base Salary or other amounts due to Executive under Section 4
within ten (10) days of the date such payment is due;
5.6.2 the Company's failure to continue in effect or continue Executive's
participation in any compensation plan which is material to his total
compensation or its failure to continue to provide him with benefits
substantially similar to those provided to all senior executives;
5.6.3 the shifting of Executive's principal office to a location that would
require Executive to relocate his residence; or
5.6.4 a material breach by the Company of its obligations under this
Agreement.
ss.6. Assignment; Survival. Except as provided below, neither party shall
have the right to assign this Agreement or any rights or obligations hereunder
without the consent of the other party; provided, however, that this Agreement
shall inure to the benefit of and shall be binding upon the successors and
assigns of the Company, and their respective successors and assigns, upon
liquidation, dissolution or winding up of the Company, or upon any sale of all
or substantially all of the assets of the Company, or upon any merger or
consolidation of the Company, as though successors and assigns of the Company
and their respective successors and assigns were the Company. The respective
rights and obligations of the parties hereunder will survive any termination of
this Agreement to the extent necessary to the intended preservation of such
rights and obligations. Executive's executor or successors by will or descent
shall have the right to enforce any of Executive's rights under the Agreement
which survive termination.
ss.7. Definitions. For purposes of this Agreement, the terms set forth
below shall have the following meanings:
7.1.1 Products. Finished and other products being, or being contemplated to
be, manufactured, assembled, processed, distributed or marketed, in whole or in
part, by the Company or any Affiliate.
7.1.2 Confidential Information. That secret proprietary information of the
Company or any Affiliate of whatever kind or nature disclosed to Executive or
known by Executive (whether or not discovered or developed by Executive) as a
consequence of or through his employment with the Company. Such proprietary
information shall include without limitation, all customers lists, costs, price
lists, employee information, supplier information, marketing information and
strategies and all information relating to the Products, processing,
manufacturing, assembly, quality control, know-how, research and development,
sources of supplies and materials, operating and other cost data, distribution
arrangements and Product proposals and marketing, any of which information is
not generally known in the industry or in related industries in which the
Company or any Affiliate engages in business (including industries supplying to
or purchasing from the Company of any Affiliate) in the United States and Canada
and shall specifically include all information contained in manuals, memoranda,
formulae, plans, drawings and designs, specifications, equipment and machinery
configurations, and records of the Company and any Affiliate legend or otherwise
identified by the Company or any Affiliate as Confidential Information.
7.1.3 Inventions. Those discoveries, developments, concepts and ideas
whether or not patentable, relating to the Products and to the present and
prospective activities of the Company or any Affiliate (which activities are
known to Executive by reason of his employment with the Company).
7.1.4 Affiliate. An entity controlling, controlled by or under common
control, or in joint venture with the Company.
7.2 Inventions. All Inventions which are at any time developed by Executive
acting alone or in conjunction with others, during the period commencing with
his employment by the Company, until the termination of this Agreement (or, if
based on or related to Executive's activities with the Company or on behalf of
any Affiliate or any Confidential Information or Invention(s) made by Executive
within one year after the termination of Executive's employment) shall be the
property of the Company, free of any reserved or other rights of any kind on
Executive's part in respect thereof. Executive agrees promptly to make full
disclosure of any such Inventions to the Company, and at its cost and expense to
execute formal applications for patents and also to do all other acts and things
(including, among others, the execution and delivery of instruments of further
assurance or confirmation) deemed by the Company to be necessary or desirable at
any time or times in order to effect the full assignment to the Company of his
rights and title to such Inventions and otherwise to carry out the purposes of
this section 7.
7.3 Non-Disclosure. Except as required by his duties hereunder, Executive
agrees that he will never, during or after his employment with the Company,
directly or indirectly, use, publish, disseminate or otherwise disclose any
Confidential Information or Inventions without the prior written consent of the
Company.
7.4 Return of Proprietary Materials. Upon termination of his employment
with the Company, all equipment, models, prototypes, designs, plans, drawings,
documents, procedural manuals, specifications, guides and similar materials,
records, notebooks and similar repositories of or containing Confidential
Information or Inventions, including all whether prepared by Executive or
others, will be left with or promptly returned by Executive to the Company.
7.5 Non-Competition. For a period of two years from the termination of this
Agreement, Executive will not solicit or accept work of a type peformed by the
Company from {directly as an employee, partner, sub-contractor, consultant or
otherwise} from any customer of the Company or on or with respect to any
project, facility or installation to which the Company provides services on the
date the Commencement Date or the date of termination of this Agremeent.
7.6 Survival of Obligations. The Company's obligations under Section 5 and
the Executive's obligations under this Section 7 shall survive termination of
this Agreement.
ss.8. Severability. The invalidity or unenforceability of any term or
provision of this Agreement shall not affect the validity or enforceability of
the remaining terms or provisions thereof, which shall remain in force and
effect, and, should any tribunal having jurisdiction determine that any such
term or provision is unenforceable, by reason of its overbredth, whether as to
time, geographical scope or otherwise, then such term or provision shall be
deemed to be amended to reduce its scope by the degree of such overbredth.
ss.9. Notices. All notices required or permitted hereunder shall be given
or made in writing and shall be sufficiently given ten (10) days after sending
by registered mail as follows, or to such other address as either party shall
designate by notice so given to the other:
If to the Company, at the address set forth on page 1 hereof;
with a copy to:
Dolgenos ▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Esq.
Facsimile (▇▇▇) ▇▇▇-▇▇▇▇
If to Executive, at the address set forth on page 1 hereof with a copy to:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Attorney at Law
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ , ▇▇ ▇▇▇▇▇
Facsimile ▇▇▇-▇▇▇-▇▇▇▇ Fax
ss.9. Governing Law. This Agreement shall be interpreted and construed
under the laws of the State of New York applicable to contracts executed and to
be performed wholly within that state.
IN WITNESS WHEREOF, the parties have executed this agreement as of the date
first above written.
▇▇▇▇▇ Systems Inc. .
By:_______________________________
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Chairman of the Board
__________________________________
▇▇ ▇▇▇▇▇▇