NU HORIZONS ELECTRONICS CORP. KEY EMPLOYEE CHANGE-IN-CONTROL SEVERANCE AGREEMENT
KEY
EMPLOYEE CHANGE-IN-CONTROL SEVERANCE AGREEMENT
This
Agreement is effective as of the 3rd day of April, 2008 by and between Nu
Horizons Electronics Corp., a Delaware corporation with its principal place of
business at 00 Xxxxxx Xxxx, Xxxxxxxx, Xxx Xxxx 00000 (the “Company”), and
Xxxxxxx X. Xxxxxxxxxx (the “Employee”). Any reference to “Company” herein shall
mean Nu Horizons Electronics Corp. or any successor thereto.
WHEREAS,
the Employee holds a key position with the Company; and
WHEREAS,
the Company recognizes the substantial contributions the Employee has made to
the Company in such position; and
WHEREAS,
the Company now wishes to provide reasonable severance protection to the
Employee in the event of any future “Change-in-Control” of the Company as
defined herein; and
WHERAS,
the Employee and the Company understand that any severance payments made to the
Employee 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 continued service of the Employee and the
mutual covenants and agreements herein contained, the Company and the Employee
hereby agree as follows:
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1.
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Term
of Agreement; Employment Status
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(a) This
Agreement shall be in effect from the effective date hereof throughout the
period of the Employee’s employment with the Company. In the event of
a “Change-in-Control” of the Company (as defined herein), this Agreement shall
remain in effect until the later of (i) twelve months following the date of such
“Change-in-Control” or (ii) the date on which the Employee receives payment in
full of the severance compensation payable to Employee by the Company pursuant
to Section 2 of this Agreement.
(b) Notwithstanding
the above, the parties hereby agree that the Employee’s employment is “at-will”
and can be terminated by either party (with or without cause) at any
time. The benefits provided hereunder shall be in addition to the
Employee’s annual salary, as determined by the Board of Directors of the
Company, and shall not (i) affect the right of the Employee to participate in
any current or future Company retirement plan or in any supplemental
compensation arrangement which constitutes a part of the Company’s regular
compensation structure, or (ii) be deemed salary or other compensation to the
Employee for the purpose of computing benefits to which the Employee may be
entitled under any retirement plan or other arrangement maintained by the
Company for the benefit of its employees.
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2.
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Payments
to Employee Following a
Change-in-Control
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In the
event of the complete termination by the Company of Employee’s employment (as
contemplated under Code Section 409A) within one year following a
“Change-in-Control” (as defined below) of the Company, the Company shall pay
Employee, within thirty (30) days of the termination of employment (subject to
Section 4 below), an amount equal to the average of the base salary paid to the
Employee for the three (3) preceding fiscal years (calculated by adding the base
salary paid for each of the three (3) preceding completed fiscal years and
dividing the sum by three (3), with the quotient equaling the amount to be
paid). All amounts
paid to the Employee under this Section shall be paid in twelve equal
installments over the twelve-month period commencing on the date of such
termination, 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.
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3.
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Definition
of Change in Control
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As used
herein “Change-in-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) (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 Employee's employment, individuals who at the beginning of such period
constitute the Board of Directors of the Company cease for any reason to
constitute at least a majority thereof.
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4.
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Specified
Employee
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In the
event the Employee 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 2 hereof is determined to be subject to Code Section 409A, then
notwithstanding the terms of Section 2, such payment shall commence on the first
day of the seventh month following the date of the Employee’s termination of
employment.
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5.
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Entire
Agreement; Modification
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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.
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6.
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Severability
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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.
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7.
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Notices
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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 Employee, 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 Employee
Officer. Either party may change the notice address by notice given
as aforesaid.
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8.
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Assignability;
Binding Effect
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This
Agreement shall be binding upon and inure to the benefit of Employee and
Employee’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
Employee. 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.
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9.
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Governing
Law; Jurisdiction
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(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 and by the provisions of the Code, including without
limitation, Section 409A of the Code, the Treasury Regulations promulgated
thereunder, and any other applicable pronouncements issued by the Internal
Revenue Service (“IRS”). This Agreement is intended to comply, and be
administered and interpreted in a manner consistent, with the requirements of
Section 409A of the Code, the Treasury Regulations promulgated thereunder, and
any other applicable pronouncements issued by the IRS, and are intended to be a
good faith, reasonable interpretation thereof.
(b) Employee
hereby irrevocably submits to the jurisdiction of the state or Federal courts
located in Nassau County, New York in connection with any suit, action or other
proceeding arising out of or relating to this Agreement and hereby agrees not to
assert, by way of motion, as a defense, or otherwise in any such suit, action or
proceeding that the suit, action or proceeding is brought in an inconvenient
forum, that the venue of the suit, action or proceeding is improper or that this
agreement or the subject matter hereof may not be enforced by such
courts.
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10.
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Headings
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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.
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11.
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Counterparts
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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.
IN
WITNESS WHEREOF, the Company has caused this Agreement to be duly executed by an
authorized officer and Employee has hereunto set his or her hand as of the date
first set forth above.
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By:
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/s/
Xxxx Xxxxxxxxxxx
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Name:
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Xxxx
Xxxxxxxxxxx
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Title:
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Executive
Vice President
and
Chief Financial Officer
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/s/
Xxxxxxx X. Xxxxxxxxxx
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Employee:
Xxxxxxx X. Xxxxxxxxxx
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