SEPARATION AGREEMENT AND GENERAL RELEASE
EXHIBIT 10.11
SEPARATION AGREEMENT AND
GENERAL RELEASE
This Separation Agreement and General
Release (the “Agreement”) is made on this 2nd day of June, 2008 by and between
Xxxxxx X. Xxxxxx (“Xxxxxx”), an individual residing at 000 Xxxxx Xxxx,
Xxxxxxxxx, Xxx Xxxx 00000, and Synergx Systems Inc. (“Synergx” or the
“Company”), a Delaware corporation having its principal office at 000 Xxxxxxxxx
Xxxxx, Xxxxxxx, Xxx Xxxx 00000.
WITNESSETH
THAT:
WHEREAS Xxxxxx has been employed by the
Company since October 1991, and has been employed as the Company’s Chairman and
Chief Executive Officer since 1997;
WHEREAS Xxxxxx and the Company are
parties to an Employment Agreement dated October 1, 2005 (the “Employment
Agreement”); and
WHEREAS Xxxxxx and the Company wish to
end their employment relationship on mutually acceptable terms,
NOW, THEREFORE, in consideration of the
mutual covenants and promises provided herein and of the actions taken or to be
taken pursuant thereto, Xxxxxx and the Company (individually, a “Party” and
collectively, the “Parties”) agree as follows:
1. Termination
Date. On the Effective Date of this Agreement, as defined in
paragraph 15(d) below, Xxxxxx’x employment with the Company shall terminate,
Xxxxxx shall resign as Chief Executive Officer and from all positions held by
him at the Company and its Affiliates (as defined herein), and Xxxxxx thereafter
shall have no further obligations to the Company except as set forth in this
Agreement.
Xxxxxx shall continue to receive his
base salary through the Effective Date, and shall be paid for his accrued but
unused vacation days as soon a practicable thereafter.
2. Payments and Benefits Upon
Termination. Upon the Effective Date, Xxxxxx shall be entitled
to the following payments and benefits:
(a) a lump
sum payment of $200,000, less applicable tax and payroll withholdings, payable
on the Effective Date;
(b) twelve
(12) monthly payments of $8,333.33, totaling $100,000, less applicable tax and
payroll withholdings, payable on the first day of each month following the
Effective Date;
(c) six (6)
monthly payments of $1,000, as payment of Xxxxxx’x monthly automobile lease
payments and maintenance costs, payable in accordance with existing Synergx
policies and procedures applicable to Xxxxxx;
(d) reimbursement
for up to twelve (12) months for the cost of continuing Xxxxxx’x existing health
insurance benefits coverage under COBRA; and
(e) the
option for Xxxxxx to elect COBRA coverage for a period of up to eighteen (18)
months from the Effective Date, with the last six months of such COBRA coverage
to be paid for by Xxxxxx.
Each Party’s original executed
Agreement shall be held in escrow by counsel for that Party until the Effective
Date. A copy of each Party’s original executed Agreement, clearly
marked as such, shall be provided to counsel for the other Party upon
execution. On the Effective Date, counsel for the Parties shall
simultaneously exchange the $200,000 payment under subsection (a) of this
paragraph and the original Agreements as executed by their respective
Parties.
In the
event the Company fails to make timely payment of any of the amounts set forth
in this paragraph, and such failure remains uncured following five (5) business
days’ written notice from Xxxxxx, the balance of all unpaid amounts under
subsections (a) through (c) of this paragraph shall immediately be due in a lump
sum payment to Xxxxxx.
3. Resignation from Board of
Directors. Xxxxxx shall tender his resignation as a director
of the Company and as Chairman of the Board of the Company on the Effective
Date.
4. Definitions. For
the purposes of this Agreement, the terms set forth below shall have the
following meanings:
(a) 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.
(b) Confidential
Information: That secret proprietary information of the Company or
any Affiliate of whatever kind or nature disclosed to Xxxxxx or known by Xxxxxx
(whether or not discovered or developed by Xxxxxx) as a consequence of or
through his employment with the Company. Such proprietary information
shall include without limitation, all customers lists, costs, price lists, price
quotations, 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 or any Affiliate) in the United States and Canada
and shall specifically include all information contained in manuals,
communications with customers and suppliers, 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.
(c) 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 Xxxxxx by reason of his
employment with the Company).
(d) Affiliate: An
entity controlling, controlled by or under common control, or in joint venture
with the Company.
5. Inventions. All
Inventions which are at any time developed by Xxxxxx acting alone or in
conjunction with others, during the period commencing with his employment by the
Company until the Effective Date (or, if based on or related to Xxxxxx’x
activities with the Company or on behalf of any Affiliate or any Confidential
Information or Invention(s) made by Xxxxxx within one year after the Effective
Date) shall be the property of the Company, free of any reserved or other rights
of any kind on Xxxxxx’x part in respect thereof. Xxxxxx agrees to
make full disclosure of any such undisclosed Inventions to the Company on or
before the Effective Date, and at the Company’s 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 paragraph 5.
6. Non-Disclosure. Xxxxxx
represents that he has not, and agrees that following the Effective Date he will
never directly or indirectly use, publish, disseminate or otherwise disclose any
Confidential Information or Inventions without the prior written consent of the
Company.
7. Return of Proprietary
Materials. Xxxxxx agrees that upon the Effective Date, 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 Xxxxxx or others, will be left with or
promptly returned by Xxxxxx to the Company.
8. Non-Disparagement. Each
Party agrees not to make any disparaging statements or remarks, whether orally
or in writing (including by e-mail) to any person or entity regarding the other
Party. For a period of one year commencing on the Effective Date,
Xxxxxx shall not participate in any solicitation (which solicitation has not
been approved or authorized by the Company’s Board of Directors) of proxies or
consents with respect to any securities of the Company which are, or may be,
entitled to vote in the election of the Company’s Board of
Directors. For a period of one year commencing on the Effective Date,
Xxxxxx shall not participate in any way, directly or indirectly, in any hostile
takeover of Synergx.
9. Non-Competition. Xxxxxx
agrees that he shall, for a period of one year commencing on the Effective Date,
be bound to not solicit or accept work from any competitor of the
Company. Xxxxxx acknowledges and agrees that he shall, for a period
of one year commencing on the Effective Date, be bound to not solicit or accept
work of a type performed by the Company (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 Effective Date. Xxxxxx further agrees that
for a period of one year commencing on the Effective Date, he shall not recruit,
solicit the employment or services of, or induce employees of the Company or any
subsidiary or affiliate to terminate their employment. Xxxxxx hereby
acknowledges and agrees that the provisions contained in this paragraph 9 are
necessary for the Company’s legitimate protection of its business interests, are
reasonable, and will not prevent him form obtaining other employment or a
livelihood.
10. General
Releases.
(a) In
consideration of the payments and promises made or to be made by Synergx under
this Agreement, which represent consideration for signing this Agreement and are
not salary, wages, or benefits to which Xxxxxx was already entitled in
connection with his employment with Synergx, Xxxxxx, on behalf of each of his
heirs, executors, administrators, legal representatives, successors and assigns,
and any other person or entity acting through his or on his behalf, releases and
forever discharges Synergx, its present and former parent companies,
subsidiaries, divisions, affiliated entities, predecessor entities, and their
respective present and former officers, directors, trustees, administrators,
executors, agents, owners, shareholders, attorneys, employees, successors and
assigns, individually and in their official capacities, and their employee
benefit plans and programs and their administrators and fiduciaries, together
with their heirs, successors, assigns, executors, and legal representatives
(collectively, the “Synergx Releasees”), from any and all claims, debts,
obligations, liabilities, promises, grievances, agreements, liens, charges,
demands, complaints, causes of action, damages or injuries of any kind or
nature, whether arising under equity or at law, whether sounding in contract,
tort or otherwise, whether known or unknown, arising out of any event,
occurrence, or omission to date, which Xxxxxx had, has or may have against the
Synergx Releasees, from the beginning of the world until the Effective Date of
this Agreement, including, without limitation, all claims for personal injury,
negligence, wage-hour, wage-payment (and all wage orders and interpretations),
pension, employee benefits, discrimination on the basis of gender, disability,
age, sexual orientation, race, religion, creed, national origin or any other
basis upon which denial of benefits, harassment, discrimination or retaliation
in employment is prohibited by any federal, state or local statute, law,
regulation or ordinance, including, but not limited to, Title VII of the Civil
Rights Act of 1964, as amended, the Civil Rights Act of 1991, Age Discrimination
in Employment Act of 1967, as amended, the Older Workers Benefits Protection
Act, as amended, the Equal Pay Act of 1963, the Family and Medical Leave Act,
the Americans with Disabilities Act, the Rehabilitation Act of 1973, as amended,
the Employee Retirement Income Security Act, as amended, the Civil Rights Act of
1991, as amended, Sections 1981 through 1988 of Title 42 of the United States
Code, the Consolidated Omnibus Budget Reconciliation Act of 1985, the Labor
Management Relations Act, as amended, the Xxxxxxxx-Xxxxx Act of 2002, the Worker
Adjustment and Retraining Act of 1989, the New York Executive Law, the New York
Labor Law, and the New York City Administrative Code. Xxxxxx intends
that the release contained in this paragraph 10(a) shall discharge Synergx and
Synergx Releasees to the maximum extent permitted by
law. Notwithstanding the foregoing, nothing herein shall release
Xxxxxx’x rights pursuant to this Agreement. Xxxxxx acknowledges and
agrees that he is competent to execute this Agreement and knowingly and
willingly waives any claims he may have against Synergx Releasees.
(b) In
consideration of the promises made by Xxxxxx herein, the receipt and sufficiency
of which is hereby acknowledged, Synergx releases and discharges Xxxxxx,
together with his heirs, successors, assigns, executors, and legal
representatives (collectively, the “Xxxxxx Releasees”), from all actions, causes
of action, suits, debts, dues, sums of money, accounts, reckonings, extents,
executions, claims, and demands whatsoever, in law or equity, whether known or
unknown, which against the Xxxxxx Releasees, or any of them, Synergx ever had,
now has or hereafter can, shall, or may have, for, upon, or by reason of any
matter, cause, or thing whatsoever from the beginning of the world until the
Effective Date of this Agreement. In addition, to the extent allowed
by law, Synergx releases and discharges Xxxxxx and the Xxxxxx Releasees from all
the aforesaid claims as could be made by any of Synergx’s present and former
parent companies, subsidiaries, divisions, affiliated entities, predecessor
entities, and their respective present and former officers, directors, trustees,
administrators, executors, agents, owners, shareholders, attorneys, employees,
successors and assigns, individually and in their official capacities, and their
employee benefit plans and programs and their administrators and fiduciaries,
together with their heirs, successors, assigns, executors, and legal
representatives. Synergx intends that the release contained in this
paragraph 10(b) shall discharge Xxxxxx and the Xxxxxx Releasees to the maximum
extent permitted by law. Notwithstanding the foregoing, nothing
herein shall release Synergx’s rights pursuant to this Agreement.
11. No Other
Claims. The Parties represent that they have not filed,
directly or indirectly, nor caused to be filed and will not file or cause to be
filed, any legal proceeding in any state or federal court or in arbitration,
asserting any claims arising out of or related to Xxxxxx’x employment with
Synergx or termination of employment.
12. Indemnification.
(a) Xxxxxx
shall continue to be indemnified for acts and omissions occurring on or prior to
the Effective Date to the fullest extent permitted under applicable law and
pursuant to the Company’s corporate governance documents and the Company’s
existing policies and procedures, unless such acts and omissions occurred due to
Xxxxxx’x fraud, gross negligence, willful misconduct or bad
faith. Xxxxxx will continue to be covered under the Company’s
directors’ and officers’ insurance for matters occurring during Xxxxxx’x tenure
as an officer or employee of the Company. Xxxxxx represents that
there are no proceedings or claims now pending or threatened against him which
would give rise to the application of these indemnification rights.
(b) For a
period of one year commencing on the Effective Date, Xxxxxx agrees that, upon
reasonable notice from the Company, he shall reasonably cooperate with the
Company in the defense, including the preparation of any defense, of any
litigation or administrative proceedings or appeals brought against the Company
of which he has any personal knowledge.
13. Confidentiality of
Agreement. The Parties agree to keep confidential and not
disclose orally or in writing directly or indirectly to any person, except as
required by law and except to Xxxxxx’x spouse and each Party’s respective
attorneys or accountants (who shall be instructed to comply with the terms of
this paragraph), any and all information concerning this Agreement and any of
its terms.
14. No Admission of
Liability. The Parties understand and agree that by entering
into this Agreement, neither Party admits any liability whatsoever to the other
Party arising out of any claims that have been or hereafter are asserted
regarding Xxxxxx’x employment with Synergx or termination of employment, and
that both parties expressly deny any and all such liability.
15. Acknowledgements.
(a) The
Parties acknowledge that they have each been advised by competent and
independent legal counsel of their own choosing in connection with the execution
of this Agreement, that they understand their respective rights and obligations
hereunder, and that they are entering into this Agreement of their own free
will. The Parties each agree to bear their own costs and attorneys’
fees which have been or may be incurred in connection with the negotiation and
consummation of this Agreement or any action to enforce the provisions of this
Agreement.
(b) The
drafting and negotiation of this Agreement have been participated in by the
Parties, and this Agreement shall be deemed for all purposes to have been
drafted jointly by the Parties, and not to be construed against either Party to
this Agreement.
(c) Xxxxxx
acknowledges and understands that he has twenty-one (21) days from his receipt
of this Agreement to review it and to consider his decision to sign it; agrees
and acknowledges that the waiver or release herein of his rights under the New
York Executive Law, the New York City Administrative Code, the Age
Discrimination in Employment Act, as amended, Title VII of the Civil Rights Act,
The Equal Pay Act, the Employee Retirement Income Security Act, the Americans
with Disabilities Act and/or any other local, state or federal law is knowing
and voluntary. Xxxxxx further acknowledges that he may waive such
21-day consideration period by signing the waiver in the form attached as
Exhibit A to this Agreement.
(d) Xxxxxx
acknowledges and understands that for a period of 7 calendar days after he
executes this Agreement, he is entitled to revoke it, and this Agreement will
not become effective or enforceable until that 7-day period has expired without
a revocation by him (the “Effective Date”). To revoke this Agreement,
Xxxxxx understands that he must deliver to Synergx a writing requesting
revocation. The writing must be physically received by Synergx at the
address set forth in paragraph 16 below within 7 calendar days of the date of
Xxxxxx’x signature on this Agreement. Xxxxxx understands that if he
revokes this Agreement, it shall not become effective, he shall not be entitled
to any of the consideration provided for herein, and the Parties will be fully
restored to the positions they were in prior to the execution of this
Agreement.
(e) In the
event of a material breach by Xxxxxx of paragraphs 5, 6, 7, 8, or 9 of this
Agreement, and such material breach remains uncured following five (5) business
days’ written notice from the Company, the Company shall be entitled to pursue
all available legal and equitable remedies, subject to satisfaction of all legal
or equitable requirements for such relief, including an injunction, to be issued
by any court of competent jurisdiction, restraining Xxxxxx from committing or
continuing any violation of these provisions, without the necessity of showing
actual damage and without any bond or other security being
required. If Xxxxxx continues to breach any of the provisions of this
Agreement and such material breach remains uncured following five (5) business
days’ written notice from the Company, the Company may suspend making any
payments under subsections (a) through (c) of paragraph 2 to Xxxxxx without
triggering the acceleration of the remaining payments pursuant to paragraph
2.
16. Notices. Any
notices or other communications under this Agreement shall be in writing and
shall be given by personal delivery, certified mail/return receipt requested,
overnight delivery service, or by facsimile if receipt is
confirmed. Notices shall be sent to the Parties at the following
addresses and shall be deemed effective upon receipt:
If
to
Synergx: Synergx
Systems Inc.
000
Xxxxxxxxx Xxxxx
Xxxxxxx,
Xxx Xxxx 00000
Attention: Xxxx
X. Xxxxxxxx
With
a courtesy copy to: Xxxxx XxXxxxxx
Sichenzia,
Ross, Friedman, Xxxxxxx
00
Xxxxxxxx
Xxx
Xxxx, Xxx Xxxx
(000)
000-0000 – facsimile
If
to
Xxxxxx: 000
Xxxxx Xxxx
Xxxxxxxxx, Xxx Xxxx
00000
With
a courtesy copy to: Xxxxxxx X. Xxxxxx, Esq.
Law
Offices of Xxxxxxx X. Xxxxxx
000
Xxxx Xxxxxx, 00xx Xxxxx
Xxx
Xxxx, Xxx Xxxx 00000
(000)
000-0000 – facsimile
17. Severability. The
provisions of this Agreement are severable. If a court or tribunal of
competent jurisdiction rules that any provision of this Agreement is invalid or
unenforceable, such ruling shall not affect the validity or enforceability of
any other provision in the Agreement.
18. Governing
Law. This Agreement and any disputes concerning its
interpretation or application shall be governed by and construed in accordance
with the laws of the State of New York without regard to principles of conflicts
of law or where the Parties are located at the time a dispute
arises.
19. Counterparts. This
Agreement may be executed in one or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
Agreement. A signature by facsimile shall be deemed to have the same
effect as an original signature.
20. Headings. The
headings in this Agreement are for convenience of reference only and shall not
limit or otherwise affect the meaning of terms contained herein.
21. Entire Agreement and Binding
Effect. This Agreement contains the entire agreement between
Xxxxxx and Synergx relating to the rights herein granted and the obligations
herein assumed, and it completely supersedes any prior written or oral
agreements or representations concerning the subject matter hereof, including
but not limited to the Employment Agreement. Any oral representation
or modification concerning this Agreement shall be of no force or
effect. This Agreement can be waived or modified only by a writing
signed by Xxxxxx and Synergx. This Agreement shall bind and inure to
the benefit of all heirs, executors, administrators, successors and assigns of
the Parties.
IN
WITNESS WHEREOF, the Parties have executed this Agreement as of the date first
above written.
|
By: /s/XXXX X.
XXXXXXXX
|
|
Xxxx
X. Xxxxxxxx
|
Treasurer, Vice President,
Chief Financial Officer and
Director
|
/s/
XXXXXX X. XXXXXX
|
|
Xxxxxx
X. Xxxxxx
|
EXHIBIT
A
WAIVER
OF TWENTY-ONE DAY CONSIDERATION PERIOD
I acknowledge and understand that I
have been given twenty-one (21) days from June 2, 2008 to review and consider
the Agreement attached hereto, and hereby waive the balance of such
consideration period.
June
2,
2008 XXXXXX X. XXXXXX
