EXHIBIT 10.16
EMPLOYMENT AGREEMENT
--------------------
EMPLOYMENT AGREEMENT made as of the 13th day of September, 1996 by and
between NU HORIZONS ELECTRONICS CORP., a Delaware corporation (hereinafter the
"Company") and ▇▇▇▇▇▇ ▇▇▇▇▇▇, residing at ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇ (hereinafter called the "Employee").
W I T N E S S E T H:
WHEREAS, the Company desires to enter into an Employment Agreement with
Employee to supersede the Employee's current Employment Agreement between the
Company and the Employee; and
WHEREAS, Employee desires to enter into an Employment Agreement with the
Company.
NOW, THEREFORE, it is agreed as follows:
1. PRIOR AGREEMENTS SUPERSEDED. This Agreement supersedes any employment
---------------------------
or consulting agreements, oral or written, entered into between Employee and the
Company prior to the date of this Agreement.
2. RETENTION OF SERVICES. The Company hereby retains the services of
---------------------
Employee, and Employee agrees to furnish such services, upon the terms and
conditions hereinafter set forth.
3. TERM. Subject to earlier termination on the terms and conditions
----
hereinafter provided, the term of this Agreement shall be for a continually
renewing five (5) year term so that Employee's unexpired term of employment
shall always be at least five (5) years from any notice of termination of his
employment without cause from the Company.
4. DUTIES AND EXTENT OF SERVICES DURING PERIOD OF
----------------------------------------------
EMPLOYMENT.
----------
During the term of employment, Employee shall be employed as President of
the Company. In such capacity, Employee agrees that he shall serve the Company
under the direction of the Board of Directors of the Company to the best of his
ability, shall perform all duties incident to his offices on behalf of the
Company and shall perform such other duties as may from time to time be assigned
to him by the Board of Directors of the Company. Employee shall also serve in
similar capacities of such of the subsidiary corporations of the Company as may
be selected by the Board of Directors and shall be entitled to such additional
compensation therefor as may be determined by the Board of Directors of the
Company. Notwithstanding the foregoing, it is understood and agreed that the
duties of Employee during the period of employment shall not be inconsistent
with (i) his position and title as a Senior Executive of the Company; or (ii)
with those duties ordinarily performed by a comparable executive officer. The
Company shall not require Employee to be employed in any location other than New
York City and Long Island, New York, unless he consents in writing to such
location.
5. REMUNERATION. (a) During the period of employment, Employee shall be
-------------
entitled to receive the following compensation for his services:
(i) The Company shall pay to Employee a salary at the rate of $226,545 per
annum, payable in weekly installments, or in such other manner as shall be
agreeable to the Company and Employee.
(ii) In addition to his salary, Employee shall receive an increment in an
amount equal to the cumulative cost of living on $226,545 as reported in the
"Consumer Price Index, New
2
York Northeastern New Jersey, all items" published by the United States
Department of Labor, Bureau of Labor Statistics (using January 1996 as the base
date for computation). Such cost of living increment with respect to the
aforesaid salary of Employee shall be made semi- annually as follows:
A. With respect to the first six months of each fiscal year of the
Company during the period of employment, such increment shall be calculated and
payable cumulatively on or before the first day of the eighth month of such
fiscal year; and
B. With respect to the last six months of each fiscal year of the
Company during the period of employment, such increment shall be calculated and
payable cumulatively on or before the first day of the second month of the
following fiscal year of the Company.
The first calculation shall be made on or before September 15, 1997 with
respect to the period September 13, 1996 through September 15, 1997. If
Employee's employment shall terminate during any six-month period referred to in
this sub- paragraph 5(ii), then the cost of living increment provided for herein
shall be prorated accordingly.
(iii) Not later than one hundred twenty (120) days after the end of the
fiscal year of the Company and each subsequent fiscal year of the Company ending
during the period of employment, the Company shall pay to Employee, as incentive
compensation, an amount equal to THREE AND ONE-THIRD (3-1/3%) PERCENT of the
Consolidated Pretax Earnings of the Company. For purposes hereof, the term
"Consolidated Pretax Earnings" of the Company shall mean, with respect to any
fiscal year, the consolidated income, if any, of the Company for such fiscal
year as set forth in the audited, consolidated financial statements
3
of the Company and its subsidiaries included in its Annual Report to
Stockholders for such fiscal year, before deduction of taxes based on
income or of the incentive compensation to be paid to Employee for such
fiscal year under this Agreement.
6. EMPLOYEE BENEFITS; EXPENSES. (a) During the period of employment,
---------------------------
the Company shall continue to provide at its expense, life insurance to Employee
in the face amount of $1,000,000.
(b) During the period of employment, Employee shall be eligible to
participate in the Company's stock option and stock purchase plans to the extent
determined in the sole discretion of the Board of Directors of the Company or a
committee thereof.
(c) During the period of employment, Employee shall be furnished with
office space and facilities commensurate with his position and adequate for the
performance of his duties; he shall be provided with the perquisites customarily
associated with the position of a Senior Executive of the Company; and he shall
be entitled to regular vacations during each year of not less than four weeks in
the aggregate. Any such vacation time not used by Employee in any one year
shall accumulate to his benefit in the succeeding years and, to the extent not
previously used as of the termination of the period of employment, Employee
shall be paid in cash in lieu of such unused vacation.
(d) It is contemplated that during the period of employment, Employee
may be required to incur out-of-pocket expenses in connection with the
performance of his services hereunder, including expenses incurred for travel
and business entertainment. Accordingly, the Company shall pay, or reimburse
Employee for all out-of-pocket expenses reasonably incurred by Employee in the
performance of his duties hereunder in accordance with the usual procedures of
the
4
Company. Notwithstanding the foregoing, in recognition that Employee will be
required during the term of this Agreement to do a considerable amount of local
driving in connection with his services hereunder, the Company shall provide
Employee with the use of a suitable automobile and all expenses incidental
throughout the term of this Agreement.
(e) All benefits to Employee specifically provided for herein shall
be in addition to, and shall not diminish, (i) such other benefits and/or
compensation as may hereafter be granted to or afforded to Employee by the Board
of Directors of the Company, (ii) any rights which Employee may have or may
acquire under any hospitalization, life insurance, pension, profit sharing,
incentive compensation or other present or future employee benefit plan or plans
of the Company; and (iii) all medical reimbursement up to $5,000 per annum for
all medical expenses not covered by Company plans.
(f) In the event of the death of Employee during the course of his
employment hereunder, the Company shall continue to pay to Employee's widow, or
to such other person or persons as may be designated by Employee in his Will, or
to his Estate in the event of Employee's intestacy, one-half (1/2) of the
compensation to which Employee is entitled pursuant to paragraph 5 hereunder for
the balance of the period covered by this Agreement.
7. DISABILITY. If Employee, during the period of employment, becomes
----------
unable for nine consecutive months or more, due to ill health or other
incapacity, to perform his services hereunder, the Company may thereafter, upon
at least 90 days' written notice to Employee, place him on disability status.
After such action by the Company, Employee shall continue to receive one-half
(1/2) of the sum of the last salary paid to Employee under paragraph 5(a)(i) and
(ii) hereof and any
5
increment thereto payable under paragraph 5(a)(iii) hereof until the end of the
period of employment or until his disability ends.
8. CONFIDENTIAL INFORMATION. Employee recognizes and acknowledges that
------------------------
confidential information of various kinds, including marketing analysis and
product development information are valuable, special and unique assets of its
business. Accordingly, Employee will not, during the term of this Agreement,
except in the performance of his services hereunder, disclose any such
confidential information to any individual or entity for any reason or purpose
whatsoever and will not use any such confidential information for his own
benefit. The provisions of this paragraph 8 will not apply to information
available in trade or other publications, information known to Employee at the
time he entered the employ of the Company, and information which presently is or
shall become available without committing a tortious act.
9. NON-COMPETITION. Employee agrees that, during the term of this
---------------
Agreement, he will not, without the prior written approval of the Board of
Directors of the Company, directly or indirectly, through any other individual
or entity, (a) become an officer or employee of, or render any services,
including consulting services, to, any competitor of the Company, (b) solicit,
raid, entice or induce any customer of the Company to cease purchasing goods or
services from the Company or to become a customer of any competitor of the
Company, and Employee will not approach any customer for any such purpose or
authorize the taking of any such actions by any other individual or entity, or
(c) solicit, raid, entice or induce any employee of the Company, and Employee
will not approach any such employee for any such purpose or authorize the taking
of any such action by any other individual or entity. However, nothing
contained in this paragraph 9 shall be construed as preventing Employee from
investing his assets in such form or manner as will not
6
require him to become an officer or employee of, or render any services (in-
cluding consulting services) to, any competitor of the Company.
10. TERMINATION FOR CAUSE. (a) The Company recognizes that, for a
---------------------
period of several years during which Employee has been employed and/or
associated with the Company, the Company has been intimately familiar with the
ability, competence and judgment of Employee, which are acknowledged to be of
the highest caliber. Accordingly, the Company and Employee agree that
Employee's services hereunder may be terminated by the Company for an act of
moral turpitude materially adversely affecting the financial interest of the
Company.
(b) If the Company terminates Employee's employment hereunder for any
reason other than as set forth in paragraph 10(a) hereof, Employee's
compensation shall continue to be paid to him as provided in paragraph 5
hereunder for the remainder of the term of this Agreement. Employee shall have
no duty to mitigate the Company's damages hereunder. Therefore, no deduction
shall be made by the Company for any compensation earned by Employee from other
employment or for monies or property otherwise received by Employee subsequent
to such termination of his employment hereunder. Employee and the Company
acknowledge that the foregoing provisions of this paragraph 10(b) are reasonable
and are based upon the facts and circumstances of the parties at the time of
entering into this Agreement, and with due regard to future expectations.
11. CONSOLIDATION OR MERGER. In the event of any consolidation or
-----------------------
merger of the Company into or with any other corporation during the term of this
Agreement, or the sale of all or substantially all of the assets of the Company
to another corporation during the term of this Agreement, such successor
corporation shall assume this Agreement and become obligated to
7
perform all of the terms and provisions hereof applicable to the Company, and
Employee's obligations hereunder shall continue in favor of such successor
corporation.
12. NOTICES. Any notice to be given to the Company hereunder shall
-------
be deemed sufficient if addressed to the Company in writing and delivered or
mailed by certified or registered mail to its offices at ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇., ▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or such other address as the Company may
hereafter designate. Any notice to be given to Employee hereunder shall be
delivered or mailed by certified or registered mail to him at: ▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or such other address as he may hereafter
designate.
13. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon
----------------------
and inure to the benefit of the successors and assigns of the Company, unless
clearly inapplicable, reference herein to the Company shall be deemed to include
any such successor. In addition, this Agreement shall be binding upon and inure
to the benefit of the Employee and his heirs, executors, legal repre-sentatives
and assigns; provided, however, that the obligations of Employee hereunder may
not be delegated without the prior written approval of the Board of Directors
of the Company.
14. AMENDMENTS. This Agreement may not be altered, modified,
----------
amended or terminated except by a written instrument signed by each of the
parties hereto.
15. APPLICABLE LAW. This Agreement shall be governed by, construed
--------------
and enforced in accordance with the laws of the State of New York, without
regard to conflicts of laws.
8
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
NU HORIZONS ELECTRONICS CORP.
By:
___________________________
Name:
Title:
-------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇, EMPLOYEE
9
AGREEMENT
---------
AGREEMENT made as of the 13th day of September, 1996 by and between NU
HORIZONS ELECTRONICS CORP., a Delaware corporation (hereinafter called the
"Company") and ▇▇▇▇▇▇ ▇▇▇▇▇▇, residing at ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇ (hereinafter called the "Employee").
W I T N E S S E T H:
WHEREAS, the Company desires to continue to employ the Employee, and the
Company acknowledges that its entering into this agreement is a condition to the
Employee's willingness to continue such employment; and
WHEREAS, Employee desires to continue to be employed by the Company, and
the Employee acknowledges that his entering into this agreement is a condition
to the Company's willingness to continue such employment;
NOW, THEREFORE, it is agreed as follows:
1. CHANGE OF CONTROL. (a) In the event there shall be a change in the
-----------------
present control of the Company as hereinafter defined, or in any person directly
or indirectly presently controlling the Company, as hereinafter defined,
Employee shall have the option, exercisable within six (6) months of his
becoming aware of such event, to terminate his employment by the Company
pursuant to the Employment Agreement dated September 13, 1996 between the
Company and the Employee forthwith. Upon such termination, Employee shall have
the right to immediately receive as a lump sum payment an amount equal to,
subject to Section 1(b) below, three (3) times the average of the total annual
compensation paid by the Company to Employee, with respect to the five fiscal
years of the Company prior to the change of control, minus $100.00.
(b) The payment to be made pursuant to Section 1(a) above shall be made
by the Company to the Employee in an amount (net of the Federal and State income
tax thereon computed at the marginal regular Federal and State income tax rates
of the Employee in the tax year in which this payment is made and also net of
any excise, penalty or other similar tax) which shall cause the net after tax
amount (calculated as provided in the foregoing parenthetical clause) received
by the Employee with respect to the payment made under Section 1(a) to be equal
to the amount set forth in Section 1(a) above, at the time of such payment and
without consideration for the time value of money.
(c) For purposes of this Agreement, a change in control of the Company,
or in any person directly or indirectly controlling the Company, shall mean:
10
(i) 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
(ii) if any "person" (as such term is used in Sectiom 13(d) and 14(d)
of the Exchange Act) other than the Company or 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 fifteen (15%) percent of
the voting power of the Company's then outstanding securities; or
(iii) if during any period of two (2) consecutive years during the
term of this Agreement, individuals who at the beginning of such period
constitute the Board of Directors cease for any reason to constitute at least a
majority thereof.
2. CONSOLIDATION OR MERGER. In the event of any consolidation or merger
-----------------------
of the Company into or with any other corporation during the term of this
Agreement, or the sale of all or substantially all of the assets of the Company
to another corporation, person or entity during the term of this Agreement, such
successor corporation shall assume this Agreement and become obligated to
perform all of the terms and provisions hereof applicable to the Company, and
Employee's obligations hereunder shall continue in favor of such successor
corporation.
3. NOTICES. Any notice to be given to the Company hereunder shall be
-------
deemed sufficient if addressed to the Company in writing and delivered or mailed
by certified or registered mail to its offices at ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or such other address as the Company may hereafter
designate. Any notice to be given to Employee hereunder shall be delivered or
mailed by certified or registered mail to him at: ▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ or such other address as he may hereafter designate.
4. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
----------------------
inure to the benefit of the successors and assigns of the Company, and unless
clearly inapplicable, all references herein to the Company shall be deemed to
include any such successor. In addition, this Agreement shall be binding upon
and inure to the benefit of the Employee and his heirs, executors, legal
representatives and assigns; provided, however, that the obligations of Employee
hereunder may not be delegated without the prior written approval of the Board
of Directors of the Company.
5. AMENDMENTS. This Agreement may not be altered, modified, amended or
----------
terminated except by a written instrument signed by each of the parties hereto.
6. APPLICABLE LAW. This Agreement shall be governed by, construed and
--------------
enforced in accordance with the laws of the State of New York, without regard to
conflicts of laws.
11
7. NO RIGHT TO EMPLOYMENT. This Agreement shall not be construed to
-----------------------
grant to the Employee any right to continue to be employed by the Company.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
NU HORIZONS ELECTRONICS CORP.
By:
--------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Vice President
------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇
12
