EMPLOYMENT AGREEMENT
This Employment Agreement, is executed and effective for all purposes as of
October 1, 2005 by and between Synergx Systems Inc., a Delaware corporation
having its principal office at 000 Xxxxxxxxx Xxxxx, Xxxxxxx, Xxx Xxxx 00000 (the
"Company") and Xxxxxx X. Xxxxxx, an individual residing at 000 Xxxxx Xxxx,
Xxxxxxxxxx, Xxx Xxxx (the "Executive").
In consideration of the terms and conditions hereinafter set forth, the
parties hereto agree as follows:
1. Employment. The Company shall employ Executive to act as its Chairman
and Chief Executive Officer for a term (the "Term") effective as of the date
hereof (the "Commencement Date"), and continuing until either party delivers 90
days prior notice of its intention to terminate this Agreement. This Section 1
shall be subject to the provisions of Section 5. Each 12 consecutive month
period, beginning on the Commencement Date, within such term shall be referred
to as a "Year."
2. Duties. Executive agrees to use his best efforts to serve the Company
well and faithfully as Chairman and Chief Executive Officer or such other
positions or titles as assigned by the Board of Directors as are commensurate
with Executive's experience and capabilities. Executive shall devote his entire
business efforts to the affairs of the Company. Executive also agrees to serve
without additional compensation as an officer and director of such subsidiaries
of the Company as the Company may request from time to time and assume such
responsibility and authority for such entities as are comparable with
Executive's responsibilities and authority hereunder and is reasonable under the
circumstances. In his capacity as Chairman and Chief Executive Officer,
Executive will have such powers, authorities and responsibilities (directly or
via direct subordinates) consistent with this Agreement as determined by the
Board of Directors of the Company, including but not limited to the following,
which may be modified by the Board of Directors from time to time:
All activities of all subsidiaries, including Xxxxx Systems Inc. and
General Sound, including:
2.1 Supervise all operating management;
2.2 Together with the Company's Chief Financial Officer, develop a budget;
2.3 Together with the Company's Chief Financial Officer, develop and
supervise and evaluate the effectiveness of the design and operation of the
Company's SEC mandated disclosure controls and procedures;
2.4 Review all salary increases with operating management;
2.5 Direct and supervise all strategic planning, including identify and
negotiate any potential mergers and/or acquisitions;
2.6 Evaluate, supervise and negotiate the Company's banking needs and
relationships; and
2.7 Carrying out any directive that may be required by the Board of
Directors not inconsistent with this Agreement or applicable law.
3. Compensation. As compensation for all services to be rendered by
Executive hereunder, the Company agrees to pay to Executive a "Base Salary" at
the rate of $175,000 per Year. The following items will be provided in addition
to the Base Salary:
3.1 Automobile Expenses. Reimbursement, up to a maximum of $1,000 per month
or $12,000 per year of Executive's automobile cost of ownership and maintenance.
3.2 Payment. Executive's Base Salary shall be payable in weekly
installments or in such other installments as the Company institutes from time
to time. The Base Salary shall be calculated at the commencement of each Year
for purposes of determining Executive's monthly or other periodic rate of pay.
3.3 Salary revision. During the term of this Agreement, the provisions of
Section 3 (including the amount of and procedures relating to Base Salary) shall
remain in effect from Year to Year unmodified, unless modified pursuant to an
amendment to this Agreement executed by Executive and the Company. The Company
agrees that during the Term of this Agreement, the Board of Directors will
review the Base Salary annually to determine if an adjustment is warranted based
on all factors the Board of Directors deems relevant including, without
limitation, cost of living, the Company's financial condition and performance
and Executive's performance and contribution.
3.4 Expenses. The Company shall reimburse all of Executive's reasonable
business expenses in accordance with the Company's policies as in effect from
time to time.
3.5. Bonus. Each fiscal year the Board of Directors shall consider, and if
deems appropriate approve a bonus for Executive based on the Board of Directors
determination of the Executive's performance, the Company's performance and
financial condition and the Executive's contribution to the Company's
performance.
4. Employee Benefits. During the term of this Agreement, and subject to his
eligibility, Executive shall be entitled receive a $2,000 medical reimbursement,
and to participate in any employee benefit programs made generally applicable to
all senior executives of the Company, now or hereafter in effect, on the same
basis, and under the same terms and conditions as the Company's other senior
executives. The Company's employee benefit programs for senior executives shall
include, but not be limited to, long term disability insurance, family health
insurance, life insurance, dental, 401-K, paid vacations and holidays. The
Company will also cover the Executive under the Company's Directors and Officers
Liability Insurance Policy as in effect from time to time.
5. Termination of Employment.
5.1 For Cause. The Board of Directors of the Company may terminate
Executive's employment hereunder and remove Executive from his position with the
Company at any time for cause. The term "Cause" as used in this Agreement shall
be deemed to refer to and include only:
5.1.1 The willful and continued failure by Executive to substantially
perform his duties pursuant to the terms of this Agreement without good cause,
after a written demand for substantial performance is delivered to Executive by
the Board of Directors, which notice specifically identifies the manner in which
Executive has not substantially performed his duties (other than as a result of
his death or incapacity, as defined in Section 5.3 below); or 5.1.2 The willful
engaging by Executive in misconduct or inaction materially injurious to the
Company. For purposes of this Section an act or failure to act shall not be
considered "willful", unless done or omitted in bad faith without reasonable
belief on Executive's part that his action or omission was in the best interest
of the Company.
For purposes of Section 5.1 of this Agreement, termination for Cause will
not be deemed to have occurred unless there shall have been duly adopted by the
Board of Directors of the Company at a meeting called and held for that purpose,
a resolution finding that in the good faith opinion of the Board of Directors,
Executive was guilty of conduct set forth in those Sections.
5.2 Without Cause. The Board of Directors of the Company may terminate
Executive's employment hereunder and remove Executive from his position with the
Company without cause by written notice to Executive (the "Termination Notice"),
in which case the provisions of Section 5.4 shall apply. The Company failing to
renew this Agreement under the provision of Section 1 shall also be subject to
this Section 5.2. In addition, a sale of all or substantially all of the assets
or the Company, or if a non-Affiliate acquires a majority of the voting stock of
the Company or is able to designate a majority of the board of directors (Change
of Control) will be subject to this Section 5.2 in which case, the Executive, at
his option within 30 days of the closing of any such transaction, may cause the
provisions of this Section 5.2. to apply and terminate this Agreement as if the
Company had terminated the Executive without cause.
5.3 Disability or Death. If, in the judgment of the Company's Board of
Directors, Executive fails to render services of the character contemplated
hereby because of illness or other incapacity for a period of six (6)
consecutive months, or for shorter periods aggregating more than six (6) months
in any consecutive twelve (12) months, the Board of Directors may determine that
Executive had become disabled and may elect to terminate his employment
hereunder, effective as of the date of such determination. In the event of
Executive's death during the term hereof, this Agreement shall terminate
forthwith.
5.4 Severance. If Executive's employment hereunder is terminated under
Section 5.2, (I) the Company shall pay Executive as severance pay, subject to
appropriate deductions, a sum equal to twice the sum of the then current Base
Salary and the most recent bonus determined in accordance with section 3.6
hereof; and (ii) for two (2) years, Executive shall continue to be entitled to
benefits under Section 4 and the automobile expense allowance under Section 3.1.
5.5 Voluntary Termination. If Executive voluntarily terminates his
employment hereunder other than as provided in Section 5.6, he shall (i) give
three (3) months written notice and (ii) be paid Base Salary through the date of
his termination and shall receive other compensation and benefits, if any, as
provided under the Company's applicable plans and programs.
5.6 Certain Changes Affecting Executive's Employment. "Certain changes
affecting Executive's employment" shall mean any material diminution in benefits
or employment conditions as a result of which Executive terminates his
employment hereunder, including any of the following (in which case Sections 5.2
and 5.4 shall apply):
5.6.1 the Company's failure to pay to Executive, without his consent, any
portion of his Base Salary or other amounts due to Executive under Section 4
within ten (10) days of the date such payment is due;
5.6.2 the Company's failure to continue in effect or continue Executive's
participation in any compensation plan which is material to his total
compensation or its failure to continue to provide him with benefits
substantially similar to those provided to all senior executives;
5.6.3 the shifting of Executive's principal office to a location that would
require Executive to relocate his residence; or
5.6.4 a material breach by the Company of its obligations under this
Agreement.
6. Assignment; Survival. Except as provided below, neither party shall have
the right to assign this Agreement or any rights or obligations hereunder
without the consent of the other party; provided, however, that this Agreement
shall inure to the benefit of and shall be binding upon the successors and
assigns of the Company, and their respective successors and assigns, upon
liquidation, dissolution or winding up of the Company, or upon any sale of all
or substantially all of the assets of the Company, or upon any merger or
consolidation of the Company, as though successors and assigns of the Company
and their respective successors and assigns were the Company. The respective
rights and obligations of the parties hereunder will survive any termination of
this Agreement to the extent necessary to the intended preservation of such
rights and obligations. Executive's executor or successors by will or descent
shall have the right to enforce any of Executive's rights under the Agreement
which survive termination.
7. Definitions. For purposes of this Agreement, the terms set forth below
shall have the following meanings:
7.1.1 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.
7.1.2 Confidential Information. That secret proprietary information of the
Company or any Affiliate of whatever kind or nature disclosed to Executive or
known by Executive (whether or not discovered or developed by Executive) as a
consequence of or through his employment with the Company. Such proprietary
information shall include without limitation, all customers lists, costs, price
lists, 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 of any Affiliate) in the United States and Canada
and shall specifically include all information contained in manuals, 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.
7.1.3 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 Executive by reason of his employment with the Company).
7.1.4 Affiliate. An entity controlling, controlled by or under common
control, or in joint venture with the Company.
7.2 Inventions. All Inventions which are at any time developed by Executive
acting alone or in conjunction with others, during the period commencing with
his employment by the Company, until the termination of this Agreement (or, if
based on or related to Executive's activities with the Company or on behalf of
any Affiliate or any Confidential Information or Invention(s) made by Executive
within one year after the termination of Executive's employment) shall be the
property of the Company, free of any reserved or other rights of any kind on
Executive's part in respect thereof. Executive agrees promptly to make full
disclosure of any such Inventions to the Company, and at its 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 section 7.
7.3 Non-Disclosure. Except as required by his duties hereunder, Executive
agrees that he will never, during or after his employment with the Company,
directly or indirectly, use, publish, disseminate or otherwise disclose any
Confidential Information or Inventions without the prior written consent of the
Company.
7.4 Return of Proprietary Materials. Upon termination of his employment
with the Company, 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 Executive or
others, will be left with or promptly returned by Executive to the Company.
7.5 Non-Competition. For a period of two years from the termination of this
Agreement, Executive will 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
date the Commencement Date or the date of termination of this Agreement.
7.6 Survival of Obligations. The Company's obligations under Section 5 and
the Executive's obligations under this Section 7 shall survive termination of
this Agreement.
8. Severability. The invalidity or unenforceability of any term or
provision of this Agreement shall not affect the validity or enforceability of
the remaining terms or provisions thereof, which shall remain in force and
effect, and, should any tribunal having jurisdiction determine that any such
term or provision is unenforceable, by reason of its overbreadth, whether as to
time, geographical scope or otherwise, then such term or provision shall be
deemed to be amended to reduce its scope by the degree of such overbreadth.
9. Notices. All notices required or permitted hereunder shall be given or
made in writing and shall be sufficiently given ten (10) days after sending by
registered mail as follows, or to such other address as either party shall
designate by notice so given to the other:
If to the Company, at the address set forth on page 1 hereof;
with a copy to:
Dolgenos Xxxxxx & Xxxxxx LLP
1001 Avenue of the Americas
Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx XxXxxxxxx, Esq.
Facsimile (000) 000-0000
If to Executive, at the address set forth on page 1
10. Governing Law. This Agreement shall be interpreted and construed under
the laws of the State of New York applicable to contracts executed and to be
performed wholly within that state.
IN WITNESS WHEREOF, the parties have executed this agreement as of the date
first above written.
Synergx Systems Inc.
By:_______________________________
Name: Xxxx Xxxxxxxx
Title: Chief Financial Officer
__________________________________
Xxxxxx X. Xxxxxx
