Exhibit 10.5
SYSCOMM INTERNATIONAL CORPORATION
PRIVATE - EMPLOYMENT AGREEMENT
AGREEMENT dated as of the ___ day of June, 1997 by and between SysComm
International Corporation, a Delaware corporation with its principal office at
000 Xxxxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxx 00000 (hereinafter "SysComm" or the
"Company") and Xxxxxx X.
Xxxxxx (hereinafter the "Executive").
W I T N E S S E T H:
WHEREAS, SysComm, through its wholly owned subsidiary, Information
Technology Services, Inc. ("InfoTech"), is a supplier and systems integrator of
a broad range of computer and related products and provides professional
services ranging from basis equipment selection and procurement to complex
network design, integration and system support; and
WHEREAS, the Executive is currently employed by SysComm and InfoTech as
their Vice President and Chief Financial Officer; and
WHEREAS, SysComm and Executive wish to enter into an employment
agreement in order to assure the continued employment of the Executive by
SysComm for the period provided herein; and
WHEREAS, the Executive is willing to serve in the full-time employ of
SysComm for said period, and upon such other terms and conditions hereinafter
provided.
NOW, THEREFORE, SysComm and the Executive, intending to be legally
bound, agree as follows:
1. Term. The Executive will continue to be employed as Vice President
and Chief Financial Officer of SysComm and InfoTech for the term commencing on
the closing of the initial public offering by SysComm (the "Commencement Date")
and ending September 30, 1999 or thereafter as herein provided (the "Term").
This Agreement shall automatically self renew thereafter for one year unless at
least thirty days prior to expiration of the existing term either party gives
written notice of cancellation to the other effective at the end of the existing
term.
2. Extent of Services. The Executive shall devote his entire time,
attention and energies to his position and shall not, without the prior written
consent of SysComm, during the Term hereof, be engaged in any other business
activity, whether or not such business activity is competitive with the business
of SysComm; provided, that Executive may engage in personal investment
activities consistent, however, with SysComm's Conflict of Interest Policy then
in existence. Except for periodic travel assignments, Executive shall not,
without his consent, be required to perform services at any place other than on
Long Island, New York. Services required to be performed for SysComm hereunder
shall also include any of its subsidiaries.
3. Compensation.
A. Base Salary. As full compensation for all services to be rendered
by the Executive to SysComm hereunder (including services on the Board of
Directors of SysComm and any subsidiary), SysComm will pay, or cause to be paid,
to him an annual base salary which, for the first year of this Agreement, shall
be One Hundred Twenty Thousand ($120,000) Dollars (the "Base Salary"). The Base
Salary will be paid in equal monthly installments or such other normal periodic
payment schedule as SysComm may establish for its employees. Within ninety (90)
days following the end of SysComm's fiscal year, the Board of Directors (or a
Compensation Committee thereof) shall review the Executive's performance
hereunder and make any increases in the Executive's Base Salary as it shall deem
appropriate (and such adjusted amount shall be deemed to be the Base Salary),
taking into consideration such factors, without limitation, as the performance
of SysComm and the quality and extent of Executive's services.
B. Performance Incentive Plan. The Executive will be eligible to
receive a bonus (the "Bonus") for the first year of this Agreement as determined
by the Compensation Committee. Within ninety (90) days following the end of
SysComm's fiscal year, the Board of Directors (or a Compensation Committee
thereof) shall review the Executive's performance hereunder and make any
increases or decreases in the Executive's Bonus for the fiscal year as it shall
deem appropriate (and such adjusted amount shall be deemed to be the Base
Salary), taking into consideration such factors, without limitation, as the
performance of SysComm and the quality and extent of Executive's services.
C. Benefits. The Executive will be eligible to participate, on the
same basis as other executives of SysComm, in its employee benefit programs, if
any, including without limitation, group life, health, accident, hospitalization
and disability insurance programs.
D. Reimbursement of Expenses. SysComm shall reimburse or cause to be
reimbursed to the Executive, all reasonable out-of-pocket expenses incurred by
him in the performance of his duties hereunder or in furtherance of the business
and/or interests of SysComm; provided that Executive shall furnish to SysComm a
satisfactory itemized account thereof.
E. Perquisites. SysComm shall reimburse or cause to be reimbursed to
the Executive up to $6,000 for the utilization of an automobile for company
business.
4. SysComm Policies. Executive agrees to be bound by all of SysComm'
policies in effect from time to time applicable to its employees, including but
not limited to, policies related to business ethics, conflicts of interest,
proprietary information and antitrust compliance, and Executive agrees to sign
any documents that SysComm requests evidencing such agreement.
5. Indemnification. SysComm undertakes, to the extent permitted by law,
to indemnify and hold Executive harmless from and against all claims, damages,
losses and expenses, including reasonable attorneys' fees and disbursements
arising out of the performance by the Executive of his duties pursuant to this
Agreement, in furtherance of SysComm's business and within the scope of his
employment.
6. Termination.
A. If the Executive becomes disabled during the Term, his Base
Salary and all other rights under this Agreement shall terminate at the end of
the month during which disability occurs except, however, the Executive shall be
entitled to receive a Bonus if the Plan so provides. For purposes of this
Agreement, the Executive shall be deemed "disabled" if he has been unable to
perform his duties for six (6) consecutive months or an aggregate of nine (9)
months in any consecutive twelve (12) month period, all as determined in good
faith by the Board of Directors of SysComm.
B. If the Executive dies during the Term, the Corporation shall pay
to his estate, the Executive's then current Base Salary for a period of one year
from the date of death.
C. SysComm shall, in the manner described in Section 6.D, have the
right to terminate the employment of the Executive under this Agreement for
"cause" and the Executive shall forfeit the right to receive any and all further
payments hereunder, other than the right to receive any compensation then due
and payable to the Executive pursuant to Section 3 hereof through the date of
termination. "Cause" shall be deemed to be the commission of any of the
following acts by the Executive:
(i) The Executive shall have committed any material breach of any
of the provisions or covenants of this Agreement;
(ii) The Executive shall have willfully refused or habitually
neglected to perform his duties or obligations under this Agreement;
(iii) The Executive shall have committed any material act of
willful misconduct, dishonesty or breach of trust which directly or indirectly
causes SysComm or any of its subsidiaries to suffer any loss, fine, civil
penalty, judgment, claim, damage or expense; or
(iv) The Executive shall have been convicted of, or shall have
plead guilty or nolo contendere to, a felony or indictable offense (unless
committed in the reasonable, good faith belief that the Executive's actions were
in the best interests of SysComm and its stockholders and would not violate
criminal law).
D. If SysComm elects to terminate the Executive's employment for
cause as set forth in Section 6.C, above, it shall deliver written notice (the
"Termination Notice") thereof to the Executive, describing with reasonable
detail the "cause" giving rise to termination, and thereupon no further payments
of any type shall be made or shall be due or payable to Executive hereunder,
except as provided in the first sentence of Section 6.C; provided, however, that
with respect to any act of default set forth in clauses (i) and (ii) of Section
6.C, prior to termination by SysComm, the Executive shall have thirty (30) days
following the Termination Notice to cure or remedy the act of default giving
rise to such termination.
E. Either party shall have the right to terminate this Agreement and
the Executive's employment hereunder without cause upon thirty (30) days prior
written notice.
F. If SysComm terminates the Executive's employment during the Term
hereof without cause, it shall pay to the Executive an amount equal to the sum
of (i) and (ii) below at the rate and on the terms specified therein: (i) his
total Base Salary for the remainder of the existing Term in the amount and at
the times required by Paragraph 3.A hereof or one year, whichever is greater;
and (ii) the value of incentive compensation under the plans and policies then
in effect (including, but not limited to, the right to participate in the Plan)
and to receive bonuses and performance awards and similar incentive compensation
benefits to which he would have been entitled hereunder at the time or times it
would otherwise have been payable, under the terms of such plans had he remained
in the employ of SysComm for the remainder of the remainder of the quarter in
which the termination without cause accrued. The term "without cause" includes
reasons other than the acts of default enumerated in Section 6.C. (i) through
(iv) above, and does not include the failure by the Company to set a bonus for
the Executive at any particular pay level, pursuant to Section 3.B., above.
7. Restrictive Covenants.
A. Covenant not to Disclose; Confidential Information. The Executive
covenants and agrees that he will not at any time during or after the
termination of his employment hereunder reveal, divulge, or make known to any
person, firm, corporation or other business organization (other than SysComm or
its subsidiaries), or use for his own account any customer lists, trade secrets,
or any secret or confidential information of any kind used by SysComm during his
employment, and made known (whether or not with the knowledge and permission of
SysComm, whether or not developed, devised, or otherwise created in whole or in
part by the efforts of the Executive, and whether or not a matter of public
knowledge unless as a result of authorized disclosure) to the Executive by
reason of his employment by SysComm. The Executive further covenants and agrees
that the knowledge and information which he has acquired or hereafter shall
acquire during his employment respecting such customer lists, trade secrets, and
secret or confidential information shall be held by him in trust for the sole
benefit of SysComm, its successors and assigns.
B. Covenant Not to Compete.
(i) The Executive covenants and agrees that, during the Term
hereof and for the period during which the Executive is receiving payments
pursuant to Paragraph 6 hereof, he will not, without the prior written consent
of SysComm, directly or indirectly, and whether as principal, agent, officer,
director, employee, consultant, or otherwise, alone or in association with any
other person, firm, corporation, or other business organization, carry on, or be
engaged, concerned, or take part in, or render services to, or own, share in the
earnings of, or invest in the stock, bonds, or other securities of any person,
firm, corporation, or other business organization (other than SysComm) engaged
in a business in the Continental United States which is similar to or in
competition with any of the businesses carried on by SysComm (a "Similar
Business") except in the course of his employment hereunder; provided, however,
that the Executive may invest in stock, bonds, or other securities of any
Similar Business (but without otherwise participating in the activities of such
Similar Business) if (i) such stock, bonds, or other securities are listed on
any national or regional securities exchange or have been registered under
Section 12(g) of the Securities Exchange Act of 1934; and (ii) his investment
does not exceed, in the case of any class of the capital stock of any one
issuer, 5% of the issued and outstanding shares, or in the case of bonds or
other securities, 5% of the aggregate principal amount thereof issued and
outstanding.
(ii) The Executive covenants and agrees that, during the Term
hereof, or if following the Term, the Executive is not receiving payments by
SysComm, then for a period of twelve months thereafter, with respect to any
person who was a SysComm customer during a period of twelve months prior to the
termination of Executive's employment, Executive will not, without the prior
written consent of SysComm, directly or indirectly, and whether as principal,
agent, officer, director, employee, consultant, or otherwise, do business with
such person (including, for compensation or otherwise, provide any consulting
advice to such person) which is of a nature that is (or which could be )
competitive to or similar to the business carried on by SysComm with such person
during such twelve month period. The foregoing non-competition provision shall
include any person for whom SysComm had (or has) an expectation of becoming a
customer during such twelve month period or the twelve month period following
the termination of the Executive's employment. The foregoing customers or
potential customers are called "Excluded Persons". The foregoing non-competition
provision shall not prevent the Executive from investing in stock, bonds, or
other securities of any Excluded Person but without otherwise participating in
the activities of such Excluded Person if (i) such stock, bonds, or other
securities are listed on any national or regional securities exchange or have
been registered under Section 12(g) of the Securities Exchange Act of 1934; and
(ii) his investment does not exceed, in the case of any class of the capital
stock of any one issuer, 5% of the issued and outstanding shares, or in the case
of bonds or other securities, 5% of the aggregate principal amount thereof
issued and outstanding.
C. Covenant of Non-Interference. The Executive covenants and agrees
that during the Term hereof and for one (1) year thereafter he will not, whether
for his own account or for the account of any other person, firm, corporation or
other business organization, interfere with SysComm' relationship with, or
endeavor to entice away from SysComm or diminish SysComm's business activities
with, any person, firm, corporation or other business organization who or which
at any time during the term of the Executive's employment with SysComm was an
employee, consultant, agent, supplier, or a customer of, or in the habit of
dealing with, SysComm.
D. Covenant Modification. If any provision of this Article 7 is held
by any court of competent jurisdiction to be unenforceable because of the scope,
duration or area of applicability, such provision shall be deemed modified to
the extent such court modifies the scope, duration or area of applicability of
such provision to make it enforceable.
E. Covenant to Report. The Executive shall promptly communicate and
disclose to SysComm all inventions, discoveries improvements and new writings,
in any form whatsoever (hereinafter "Inventions"), including, without
limitation, all software, programs, routines, techniques, procedures, training
aides and instructional manuals conceived, developed or made by him during his
employment by SysComm, whether solely or jointly with others, and whether or not
patentable or copyrightable, (i) which relate to any matters or business of the
type carried on or being developed by SysComm, or (ii) which result from or are
suggested by any work done by him in the course of his employment by SysComm.
The Executive shall also promptly communicate and disclose to SysComm all other
data obtained by him concerning the business or affairs of SysComm in the course
of his employment by SysComm.
All written materials, records and documents made by the Executive
or coming into his possession during the Term concerning the business or affairs
of SysComm shall be the sole property of SysComm; and, upon expiration of the
Term or upon the request of SysComm during the Term, the Executive shall
promptly deliver the same to SysComm. The Executive agrees to render to SysComm
such reports of the activities undertaken by the Executive or conducted under
the Executive's direction pursuant hereto during the Term as SysComm may
request.
The Executive will assign to SysComm all right in the Inventions and
will assist SysComm or its designee during or subsequent to his employment, at
SysComm' sole expense, in filing patent and/or copyright applications on, and
obtaining for SysComm' benefit, patents and/or copyrights for, such Inventions
in any and all countries, and will assign to SysComm all such patent and/or
copyright applications, all patents and/or copyrights which may issue thereon,
said Inventions to be and remain the sole and exclusive property of SysComm or
its designee whether or not patented and/or copyrighted.
8. Injunction. It is recognized and hereby acknowledged by the
Executive that a breach or violation by the Executive of any of the covenants or
agreements contained in this Agreement may cause irreparable harm and damage to
SysComm, the monetary amount of which may be virtually impossible to ascertain.
As a result, the Executive recognizes and acknowledges that SysComm shall be
entitled to an injunction, without posting any bond or security in connection
therewith, from any court of competent jurisdiction enjoining and restraining
any breach or violation of any of the restrictive covenants contained in Article
7 hereof by the Executive or his associates, partners or agents, either directly
or indirectly, and that such right to injunction shall be cumulative and in
addition to whatever other rights or remedies SysComm may possess. Nothing
contained in this Article 8 shall be construed to prevent SysComm from seeking
and recovering from the Executive damages sustained as a result of any breach or
violation by the Executive of any of the covenants or agreements contained in
this Agreement, and that in the event of any such breach, SysComm shall avail
itself of all remedies available both at law and in equity.
9. Executive's Representations. Executive represents to SysComm that to
the best of his knowledge he is under no obligation to any employer or third
party which would preclude the full, complete and unfettered discharge of his
duties under this Agreement.
10. Relationship to the Plan. Nothing herein contained shall be deemed
to modify the Plan in any respect except as specifically modified herein, and
except as so specifically modified the Plan shall in all respects be effective
according to its terms and conditions.
11. Notices.Any notice or other communication to a party under this
Agreement shall be in writing and delivered personally or by overnight mail,
with written receipt therefor, or by certified mail, return receipt requested,
and if delivered by certified mail, notice shall be considered given five (5)
days after it is mailed by certified mail, return receipt requested, to the
party at the following address or at such other address as the party may specify
by notice to the other:
If to the Executive:
00 Xxxxxx Xxxxx Xxxx
Xxxxxxxxx, XX 00000
If to the Company:
SysComm International Corporation
000 Xxxxxx Xxxxxxxxx
Xxxxxxxxx, XX 00000
Attention: Chief Financial Officer
With a copy to:
Ruskin Moscou Xxxxx & Faltischek, P.C.
000 Xxx Xxxxxxx Xxxx
Xxxxxxx, XX 00000
Attention: Managing Partner
12. Amendment. This Agreement may be amended only in writing signed by
both parties hereto.
13. Successors and Assigns. This Agreement shall inure to the benefit
of and be binding upon SysComm, its successors and assigns. Executive may not
assign, transfer, pledge or hypothecate any of his rights or obligations
hereunder, or money to which he may be entitled hereunder.
14. Waiver of Breach. The failure of a party to insist on strict
adherence to any term of this Agreement on any occasion shall not be considered
a waiver or deprive that party of the right thereafter to insist upon strict
adherence to that term or any term of this Agreement. Any waiver hereto must be
in a writing signed by both parties.
15. Severability. The invalidity or unenforceability of any other
provision hereof shall in no way affect the validity or enforceability of any
other provision hereof.
16. Conflicts of Interest. Annexed hereto as Schedule A, and made a
part hereof is a statement of SysComm' policy concerning conflicts of interest.
The Executive agrees to avoid any conflict between the Executive's own interests
and those of SysComm, including, without being limited thereto, the specific
situations and transactions set forth in Schedule A.
17. Business Ethics. Annexed hereto as Schedule B, and made a part
hereof is a statement of SysComm's policy on business ethics. The Executive
agrees to adhere to standards of business ethics set forth in Schedule B.
18. Breach of Executive's Obligations Set forth in Schedules A and B.
The failure by the Executive to observe and perform the obligations of the
Executive as set forth in Schedules A and B attached hereto shall be deemed a
material breach of this Agreement.
19. Entire Agreement. This Agreement, together with the attached
Schedules, constitutes the entire Agreement between the parties, and supersedes
all existing agreements between them with respect to the subject matter hereof.
It may only be changed or terminated by an instrument in writing signed by both
parties. Any covenants of the Executive contained in the Prior Agreement shall
survive the termination thereof.
20. Governing Law. This Agreement shall be governed by, construed and
interpreted in accordance with the laws of the State of New York.
21. 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 instrument.
22. Paragraph Headings. Paragraph headings are inserted herein for
convenience only and are not intended to modify, limit or alter the meaning of
any provision of this Agreement.
IN WITNESS WHEREOF, the parties hereto have set their hands and
executed this Agreement as of the day and year first above written.
SYSCOMM INTERNATIONAL CORPORATION
By:__________________________________________
Title:_______________________________________
--------------------------------------------
/s/ Xxxxxx X. Xxxxxx
--------------------------------------------
XXXXXX X. XXXXXX, Executive
SCHEDULE A
SYSCOMM INTERNATIONAL CORPORATION
POLICY GOVERNING CONFLICTS OF INTEREST
The policy of SysComm International Corporation (including all
subsidiaries) (herein referred to as the "Company") with respect to conflicts of
interest requires that directors, officers and employees avoid any conflict
between their own interests and the interests of the Company, in dealing with
suppliers, customers and all other organizations or individuals doing or seeking
to do business with the Company. Moreover, the policy requires that all such
persons should avoid any conflict between their own interests and the interests
of the Company in the conduct of their personal affairs, including transactions
in securities of the Company or any affiliate or of any unaffiliated corporation
having a business relationship with the Company.
While it is not practicable to enumerate all situations which might
give rise to a violation of this policy, the examples given below indicate some
which should be avoided. Moreover, there will be situations which, while perhaps
justifiable, involve the appearance of a conflict of interest and they should be
carefully weighed.
It is considered to be in conflict with the Company's interest for a
director, officer or employee:
(a) or any dependent member of his or her family to have an interest in
any organization which has, or is seeking to have, business dealings with the
Company where there is an opportunity for preferential treatment to be given or
received, except (i) with the knowledge and written consent of a senior officer
(President or Corporate Vice President) of the Company, or (ii) in any case
where such an interest comprises securities in widely held corporations which
are quoted and sold on the open market [or in private corporation where the
interest in not material, [subject to paragraph (d)];
(b) or any dependent member of his or her family to buy, sell or lease
any kind of property, facilities or equipment from or to the Company or to any
company, firm or individual who is or is seeking to become a contractor,
supplier or customer, except with the knowledge and written consent of a senior
officer (President or Corporate Vice President) of the Company;
(c) to serve as an officer or director of any other company, or in any
management capacity for, or as a consultant to any individual, firm or other
company doing or seeking to do business with the Company, except with the
knowledge and written consent of a senior officer (President or Corporate Vice
President) of the Company;
(d) without proper authority to give or release to anyone not employed
by the Company any data or information of a confidential nature concerning the
Company such as that relating to decisions, plans, earnings, financial or
business forecasts, discoveries or competitive bids or otherwise use such
information which is not generally known to the public for personal advantage
and not in the best interests of the Company, as, for example, by acquiring or
selling, or inducing others to acquire or sell, any interest in securities of
the Company, or any other company involved in, or which may become involved, in
any transaction with the Company.
Notwithstanding the foregoing, the Company shall not unreasonably
withhold its consent to the release of such information as may have been
requested and reasonably needed by a prospective purchaser of the Executive's
stock.
(e) or any dependent member of his or her family to accept commissions;
a share in profits; gifts in cash; a gift certificate; travel or other payments;
loans or advances (other than form established banking or financial institutions
on normal commercial terms); materials, services, repairs or improvements at no
cost or at unreasonably low prices; excessive or extravagant entertainment; or
gifts of merchandise of more than nominal value from any organization, firm or
individual doing or seeking to do business with the Company, or for personal
advantage and not in the best interest of the Company, to provide any of the
foregoing to any such organization, firm or individual.
Date:__________________ _______________________________
Executive's Name (please print)
/s/
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Executive's Signature
SCHEDULE B
SYSCOMM INTERNATIONAL CORPORATION
POLICY STATEMENT ON BUSINESS ETHICS
The policy of SysComm International Corporation with respect to
business ethics is one of strict observance of all laws applicable to its
business.
Our policy does not stop there. Even where the law is permissive,
SysComm International Corporation chooses the course of the highest integrity.
Local customs, traditions and mores differ from place to place and those must be
recognized. But honesty is not subject to criticism in any culture. Shades of
dishonesty simply invite demoralizing and reprehensible judgments.
A well-founded reputation for scrupulous dealing is itself a priceless company
asset.
An overly ambitious employee might have the mistaken idea that we do
not care how results are obtained, as long as he gets results. He might think it
best not to tell higher management all that he is doing, not to record all
transactions accurately in his books and records, and to deceive the company's
internal and external auditors. He would be wrong on all counts.
We do care how we get results. We expect compliance with our standard
of integrity throughout the organization. We will not tolerate an employee who
achieves results at the cost of violation of laws or unscrupulous dealing. By
the same token, we will support, and we expect you to support, an employee who
passes up an opportunity or advantage which can only be secured at the sacrifice
of principle.
Equally important, we expect candor from managers at all levels, and
compliance with accounting rules and controls. We don't want liars for managers,
whether they are lying in a mistaken effort to protect us or to make themselves
look good. One of the kinds of harm which results when a manager conceals
information from higher management and the auditors is that subordinates within
his organization think they are being given a signal that company policies and
rules, including accounting and control rules, can be ignored whenever
inconvenient. This can result in corruption and demoralization of an
organization. Our system of management will not work without honesty, including
honest bookkeeping, honest budget proposals and honest economic evaluation of
projects.
It has been and continues to be SysComm International Corporation's
policy that all transactions shall be accurately reflected in its books and
records. This, of course, means that falsification of its books and records and
any off-the-record bank accounts are strictly prohibited.
Date:__________________ _______________________________
Executive's Name (please print)
/s/
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Executive's Signature
