AGREEMENT
AGREEMENT
THIS
AGREEMENT is entered into the 3rd
of
January, 2008 by and between Nu Horizons Electronics Corp. (the “Company”) and
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ (“Executive”).
W
I T N E
S S E T H:
WHEREAS,
the Executive is employed as the Company’s Executive Vice President and Chief
Financial Officer and is a valuable member of the management team;
and
WHEREAS,
the Company desires to provide for the payment to Executive of certain amounts
upon termination of employment following the occurrence of certain events during
his employment so as to reinforce the Executive’s continued attention to his
assigned duties without distraction if the possibility should arise of a change
in control of the Company; and
WHERAS,
the Executive and the Company understand that any deferred payments made to
the
Executive may be subject to the requirements of Section 409A of the Internal
Revenue Code of 1986, as amended (the “Code”);
NOW,
THEREFORE, in consideration of the premises and mutual covenants and agreements
herein contained, the Company and Executive hereby agree as
follows:
| 1. |
Employment.
|
Executive
agrees to continue to be employed as Executive Vice President and Chief
Financial Officer and to devote his full time and attention to the business
of
the Company. Executive’s duties shall be determined from time-to-time by both
the Chief Executive Officer and President of the Company. Executive shall report
on a day-to-day basis to both the Chief Executive Officer and President of
the
Company. The Executive shall also report to the Audit Committee of the Board
of
Directors of the Company.
| 2. |
Compensation
|
The
Company agrees that, during the time that Executive is employed by the Company,
it shall pay Executive a gross salary of Two Hundred Sixty-Five Thousand Dollars
($265,000) per annum (as such amount may be adjusted by the Board of Directors
of the Company from time to time during the Executive’s employment, “Base
Salary”). Such amount, net of all applicable tax deductions and withholdings
required by law, shall be paid to Executive in accordance with the Company’s
normal payroll practices.
1
| 3. |
Confidential
Information and
Non-Competition
|
(a) Executive
acknowledges that as a result of his employment by the Company, Executive will
obtain secret and confidential information as to the Company and its affiliated
entities, that the Company and its affiliated entities will suffer substantial
damage, which would be difficult to ascertain, if Executive shall enter into
Competition (as defined below) with the Company or any of its affiliated
entities and that because of the nature of the information that will be known
to
Executive it is necessary for the Company and its affiliated entities to be
protected by the prohibition against Competition set forth herein, as well
as
the confidentiality restrictions set forth herein. Executive acknowledges that
the provisions of this Agreement are reasonable and necessary for the protection
of the business of the Company and its affiliated entities and that part of
the
compensation paid to Executive is in consideration for the agreements in this
Section 3.
(b) Competition
shall mean:
(i) participating,
directly or indirectly, as an individual proprietor, partner, stockholder,
officer, Executive, director, joint venturer, investor, lender, consultant
or in
any capacity whatsoever in the State of New York in a business in competition
with the electronics components distribution business conducted by the Company
or its affiliated entities during the period that Executive is employed by
the
Company (the “Employment Term”); provided, however, that such prohibited
participation shall not include: (A) the mere ownership of not more than one
percent (1%) of the total outstanding stock of a publicly held company; (B)
the
performance of services for any enterprise to the extent such services are
not
performed, directly or indirectly, for a business in the aforesaid Competition;
or (C) any activity engaged in with the prior written approval of the Board
of
Directors of the Company.
(ii) recruiting,
soliciting or inducing any nonclerical employee or employee of the Company
or
its affiliated entities to terminate their employment with, or otherwise cease
their relationship with, the Company or its affiliated entities or hiring or
assisting another person or entity to hire any nonclerical employee of the
Company or its affiliated entities. Notwithstanding the foregoing, if requested
by an entity with which Executive is not affiliated, Executive may serve as
a
reference for any person who at the time of the request is not an employee
of
the Company or any of its affiliated entities.
If
any
restriction set forth in above items (i) and/or (ii) is found by any court
of
competent jurisdiction, or an arbitrator, to be unenforceable because it extends
for too long a period of time or over too great a range of activities or in
too
broad a geographic area, it shall be interpreted to extend over the maximum
period of time, range of activities or geographic area as to which it may be
enforceable.
2
(c) During
and after the Employment Term, Executive shall hold in a fiduciary capacity
for
the benefit of the Company and its affiliated entities all secret or
confidential information, knowledge or data relating to the Company and its
affiliated entities, and their respective businesses, including any confidential
information as to customers or vendors of the Company or its affiliated
entities, (i) obtained by Executive during his employment by the Company or
its
affiliated entities; and (ii) not otherwise public knowledge or known within
the
Company's or its affiliated entities’ industries. Executive shall not, without
prior written consent of the Company, unless compelled pursuant to the order
of
a court or other governmental or legal body having jurisdiction over such
matter, communicate or divulge any such information, knowledge or data to anyone
other than the Company and those designated by it. In the event Executive is
compelled by order of a court or other governmental or legal body to communicate
or divulge any such information, knowledge or data to anyone other than the
Company and those designated by it, Executive shall promptly notify the Company
of any such order and shall cooperate fully with the Company in protecting
such
information to the extent possible under applicable law.
(d) Upon
termination of Executive's employment with the Company, or at any other time
as
the Company may request, Executive will promptly deliver to the Company all
documents which Executive may possess or have under his direction or control
(whether prepared by the Company, an affiliated entity, Executive or a third
party) relating to the Company or its affiliated entities or any of their
respective businesses or properties.
(e) During
the Employment Term and for a period of one (1) year following termination
thereof, Executive shall not enter into Competition with the Company or any
of
its affiliated entities.
(f) In
the
event of a breach or potential breach of this Section 3, Executive acknowledges
that the Company and its affiliated entities will be caused irreparable injury
and that money damages may not be an adequate remedy and agree that the
affiliated entities shall be entitled to injunctive relief (in addition to
its
other remedies at law) to have the provisions of this Section 3
enforced.
| 4. |
Change
of Control
|
In
the
event of the complete termination of Executive’s employment (as contemplated
under Code Section 409A) within one year following a “Change of Control” (as
defined below) of the Company which termination is by the Company, or by the
Executive for “Good Reason” as defined below, the Company shall pay Executive,
within thirty (30) days of the termination of employment (subject to Section
5
below), a lump sum in an amount equal to his annual Base Salary in effect at
the
time of such event, plus a pro-rata portion of his annual bonus, based on the
bonus paid to Executive for the immediately preceding fiscal year. All amounts
paid to the Executive under this paragraph shall be treated as additional
compensation and the Company shall have the right to deduct any taxes required
by law to be withheld with respect to such amounts. As used herein “Change of
Control” means (a) a change in control as such term is presently defined in
Regulation 240.12b-2 under the Securities Exchange Act of 1934 ("Exchange Act");
or (b) if any “person” (as such term is used in Section 13(d) and 14(d) of the
Exchange Act) of the Company (other than any “person” who on the date of this
Agreement is a director or officer of the Company), becomes the “beneficial
owner” (as defined in Rule 13(d)-3 under the Exchange Act), directly or
indirectly, of securities of the Company representing twenty (20%) percent
of
the voting power of the Company’s then outstanding securities, as the case may
be, other than as a result of an acquisition of such securities from or by
the
Company; or (c) if during any period of two (2) consecutive years during the
term of Executive's employment, individuals who at the beginning of such period
constitute the Board of Directors of either the Company cease for any reason
to
constitute at least a majority thereof. For the purposes of this Agreement,
“Good Reason” shall mean (i) reduction in the Executive’s (then) current Base
Salary immediately preceding the Change in Control; (ii) the Company’s failure
to pay the Executive any amounts otherwise earned, vested or due under any
compensation plan or human resources policy of the Company immediately preceding
the Change in Control; (iii) material reduction in the responsibilities assigned
to the Executive, or assignment to the Executive of duties incompatible with
the
position occupied by the Executive, in each case immediately preceding the
Change in Control; or (iv) relocation of the Executive’s position to a location
more than 50 miles from the location to which the Executive was assigned
immediately preceding the Change in Control. To the extent the payment required
under this Section 4 would constitute a "parachute payment" within the meaning
of Section 280G of the Code, then notwithstanding any other provision of this
Section 4, in no event shall the amount to be paid to the Executive under this
paragraph, exceed 2.99 times the Executive’s “base amount” (as defined in
Section 280G(b)(3) of the Code).
3
| 5. |
Specified
Employee
|
In
the
event the Executive is classified as a “Specified Employee” as of the date of
termination of employment, as such term is defined in Code Section 409A and
the
regulations thereunder, and provided that the payment required pursuant to
Section 4 hereof is determined to be subject to Code Section 409A, then
notwithstanding the terms of Section 4, such payment shall be made on the first
day of the seventh month following the date of the Executive’s termination of
employment.
| 6. |
Termination
|
The
parties agree that Executive’s employment is “at-will” and can be terminated by
either party at any time on two weeks’ notice. Upon any such termination,
Executive shall be entitled to receive any accrued but unpaid salary and
benefits under Section 2 hereof through the time of such termination. Upon
any
such termination within one year following a Change in Control, Executive shall
be entitled to the amounts set forth in Section 4 hereof.
4
| 7. |
Entire
Agreement; Modification
|
This
Agreement constitutes the full and complete understanding of the parties hereto
and will supersede all prior agreements and understandings, oral or written,
with respect to the subject matter hereof. Each party to this Agreement
acknowledges that no representations, inducements, promises or agreements,
oral
or otherwise, have been made by either party, or anyone acting on behalf of
either party, which are not embodied herein and that no other agreement,
statement or promise not contained in this Agreement shall be valid or binding.
This Agreement may not be modified or amended except by an instrument in writing
signed by the party against whom or which enforcement may be
sought.
| 8. |
Severability
|
Any
term
or provision of this Agreement which is invalid or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such invalidity or unenforceability without rendering invalid or unenforceable
the remaining terms and provisions of this Agreement or affecting the validity
or enforceability of any of the terms of provisions of this Agreement in any
other jurisdiction.
| 9. |
Waiver
of Breach
|
The
waiver by any party of a breach of any provisions of this Agreement, which
waiver must be in writing to be effective, shall not operate as or be construed
as a waiver of any subsequent breach.
| 10. |
Notices
|
All
notices hereunder shall be in writing and shall be deemed to have been duly
given when delivered by hand, or one day after sending by express mail or other
"overnight mail service," or three days after sending by certified or registered
mail, postage prepaid, return receipt requested. Notice shall be sent as
follows: if to Executive, to the address as listed in the Company's records;
and
if to the Company, to the Company at its office as set forth at the head of
this
Agreement, to the attention of its Chief Executive Officer. Either party may
change the notice address by notice given as aforesaid.
5
| 11. |
Assignability;
Binding Effect
|
This
Agreement shall be binding upon and inure to the benefit of Executive and
Executive’s legal representatives, heirs and distributees, and shall be binding
upon and inure to the benefit of the Company, its successors and assigns. This
Agreement may not be assigned by the Executive. This Agreement may not be
assigned by the Company except in connection with a merger or a sale by the
Company of all or substantially all of its assets and then only provided the
assignee specifically assumes in writing all of the Company's obligations
hereunder.
| 12. |
Governing
Law
|
(a) All
issues pertaining to the validity, construction, execution and performance
of
this Agreement shall be construed and governed in accordance with the laws
of
the State of New York, without giving effect to the conflict or choice of law
provisions thereof.
(b) The
Company and Executive each irrevocably consent that any legal action or
proceeding against any of them under, arising out of or in any manner relating
to, this Agreement or any other document delivered in connection herewith,
may
be brought in any court of the State of New York located within Nassau County
or
Suffolk County or in the United States District Court for the Eastern District
of New York. The Company and Executive by the execution and delivery of this
Agreement, expressly and irrevocably consent and submit to the personal
jurisdiction of any of such courts in any such action or proceeding. The Company
and Executive further irrevocably consent to the service of any complaint,
summons, notice or other process relating to any such action or proceeding
by
delivery thereof to it by hand or by any other manner provided for in Section
10. The Company and Executive hereby expressly and irrevocably waive any claim
or defense in any such action or proceeding based on any alleged lack of
personal jurisdiction, improper venue or forum non convenient or any similar
basis. Nothing in this Section shall affect or impair in any manner or to any
extent the right of the Company to commence legal proceedings or otherwise
proceed against the Executive in any jurisdiction or to serve process in any
manner permitted by law.
| 13. |
Headings
|
The
headings in this Agreement are intended solely for convenience of reference
and
shall be given no effect in the construction or interpretation of this
Agreement.
| 14. |
Counterparts
|
This
Agreement may be executed in several counterparts, each of which shall be deemed
to be an original but all of which together shall constitute one and the same
instrument.
6
IN
WITNESS WHEREOF, the Company has caused this Agreement to be duly executed
by an
authorized officer and Executive has hereunto set his hand as of the date first
set forth above.
| NU HORIZONS ELECTRONICS CORP. | ||
| |
|
|
| By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ | ||
|
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ |
||
| Title: President | ||
| /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ | ||
|
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ |
||
7