AGREEMENT
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THIS AGREEMENT is entered into the 25th day of May 2006 effective as of
June 5, 2006 by and between Nu Horizons Electronics Corp.( the "Company") and
Kurt Freudenberg ("Executive").
W I T N E S S E T H:
WHEREAS, the Company has determined that it is in the best interests of the
Company to employ the Executive, and the Executive desires to be employed by the
Company; and
WHEREAS, the Company desires to provide for the payment to Executive of
certain amounts upon the occurrence of certain events during his employment.
NOW, THEREFORE, in consideration of the premises and mutual covenants and
agreements herein contained, the Company and Executive hereby agree as follows:
1. Employment
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Executive agrees to be employed as Vice President effective June 5, 2006
and, effective July 15, 2006, as Chief Financial Officer and to devote his full
time and attention to the business of the Company. Executive's duties shall be
determined from time-to-time by both the Chief Executive Officer and President
of the Company. Executive shall report on a day-to-day basis to both the Chief
Executive Officer and President of the Company. The Executive shall also report
to the Audit Committee of the Board of Directors of the Company.
2. Compensation
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The Company agrees that, during the time that Executive is employed by the
Company, it shall pay Executive a gross salary of Two Hundred Fifty-Five
Thousand Dollars ($250,000) per annum (as such amount may be adjusted by the
Board of Directors of the Company from time to time during the Executive's
employment, "Base Salary"). Such amount, net of all applicable tax deductions
and withholdings required by law, shall be paid to Executive in accordance with
the Company's normal payroll practices.
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3. Confidential Information and Non-Competition
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(a) Executive acknowledges that as a result of his employment by the
Company, Executive will obtain secret and confidential information as to the
Company and its affiliated entities, that the Company and its affiliated
entities will suffer substantial damage, which would be difficult to ascertain,
if Executive shall enter into Competition (as defined below) with the Company or
any of its affiliated entities and that because of the nature of the information
that will be known to Executive it is necessary for the Company and its
affiliated entities to be protected by the prohibition against Competition set
forth herein, as well as the confidentiality restrictions set forth herein.
Executive acknowledges that the provisions of this Agreement are reasonable and
necessary for the protection of the business of the Company and its affiliated
entities and that part of the compensation paid to Executive is in consideration
for the agreements in this Section 3.
(b) Competition shall mean:
(i) participating, directly or indirectly, as an individual proprietor,
partner, stockholder, officer, Executive, director, joint venturer, investor,
lender, consultant or in any capacity whatsoever in the State of New York in a
business in competition with the electronics components distribution business
conducted by the Company or its affiliated entities during the period that
Executive is employed by the Company (the "Employment Term"); provided, however,
that such prohibited participation shall not include: (A) the mere ownership of
not more than one percent (1%) of the total outstanding stock of a publicly held
company; (B) the performance of services for any enterprise to the extent such
services are not performed, directly or indirectly, for a business in the
aforesaid Competition; or (C) any activity engaged in with the prior written
approval of the Board of Directors of the Company.
(ii) recruiting, soliciting or inducing any nonclerical employee or
employee of the Company or its affiliated entities to terminate their employment
with, or otherwise cease their relationship with, the Company or its affiliated
entities or hiring or assisting another person or entity to hire any nonclerical
employee of the Company or its affiliated entities. Notwithstanding the
foregoing, if requested by an entity with which Executive is not affiliated,
Executive may serve as a reference for any person who at the time of the request
is not an employee of the Company or any of its affiliated entities.
If any restriction set forth in above items (i) and/or (ii) is found by any
court of competent jurisdiction, or an arbitrator, to be unenforceable because
it extends for too long a period of time or over too great a range of activities
or in too broad a geographic area, it shall be interpreted to extend over the
maximum period of time, range of activities or geographic area as to which it
may be enforceable.
(c) During and after the Employment Term, Executive shall hold in a
fiduciary capacity for the benefit of the Company and its affiliated entities
all secret or confidential information, knowledge or data relating to the
Company and its affiliated entities, and their
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respective businesses, including any confidential information as to customers or
vendors of the Company or its affiliated entities, (i) obtained by Executive
during his employment by the Company or its affiliated entities; and (ii) not
otherwise public knowledge or known within the Company's or its affiliated
entities' industries. Executive shall not, without prior written consent of the
Company, unless compelled pursuant to the order of a court or other governmental
or legal body having jurisdiction over such matter, communicate or divulge any
such information, knowledge or data to anyone other than the Company and those
designated by it. In the event Executive is compelled by order of a court or
other governmental or legal body to communicate or divulge any such information,
knowledge or data to anyone other than the Company and those designated by it,
Executive shall promptly notify the Company of any such order and shall
cooperate fully with the Company in protecting such information to the extent
possible under applicable law.
(d) Upon termination of Executive's employment with the Company, or at any
other time as the Company may request, Executive will promptly deliver to the
Company all documents which Executive may possess or have under his direction or
control (whether prepared by the Company, an affiliated entity, Executive or a
third party) relating to the Company or its affiliated entities or any of their
respective businesses or properties.
(e) During the Employment Term and for a period of one (1) year following
termination thereof, Executive shall not enter into Competition with the Company
or any of its affiliated entities.
(f) In the event of a breach or potential breach of this Section 3,
Executive acknowledges that the Company and its affiliated entities will be
caused irreparable injury and that money damages may not be an adequate remedy
and agree that the affiliated entities shall be entitled to injunctive relief
(in addition to its other remedies at law) to have the provisions of this
Section 3 enforced.
4. Change of Control
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Upon any termination of Executive's employment within six months following
a "Change of Control" (as defined below) of the Company, the Company shall pay
Executive, within thirty (30) days of such event, a lump sum equal to the amount
of his Base Salary in effect at the time of such event, plus a pro-rata portion
of his annual bonus, based on the bonus paid to Executive for the immediately
preceding fiscal year. As used herein "Change of 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) of the Company
(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
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during the term of Executive's employment, individuals who at the beginning of
such period constitute the Board of Directors of either the Company cease for
any reason to constitute at least a majority thereof.
5. Termination
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The parties agree that Executive's employment is "at-will" and can be
terminated by either party at any time on two weeks' notice. Upon any such
termination, Executive shall be entitled to receive any accrued but unpaid
salary and benefits under Section 2 hereof through the time of such termination.
Upon any such termination within six months following a Change in Control,
Executive shall be entitled to the amounts set forth in Section 4 hereof.
6. 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.
7. 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.
8. Waiver of Breach
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The waiver by any party of a breach of any provisions of this Agreement,
which waiver must be in writing to be effective, shall not operate as or be
construed as a waiver of any subsequent breach.
9. 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 Executive, to the address as listed in the Company's records;
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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 Executive Officer. Either party
may change the notice address by notice given as aforesaid.
10. Assignability; Binding Effect
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This Agreement shall be binding upon and inure to the benefit of Executive
and Executive'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 Executive. 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.
11. Governing Law
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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.
(b) The Company and Executive each irrevocably consent that any legal
action or proceeding against any of them under, arising out of or in any manner
relating to, this Agreement or any other document delivered in connection
herewith, may be brought in any court of the State of New York located within
Nassau County or Suffolk County or in the United States District Court for the
Eastern District of New York. The Company and Executive by the execution and
delivery of this Agreement, expressly and irrevocably consent and submit to the
personal jurisdiction of any of such courts in any such action or proceeding.
The Company and Executive further irrevocably consent to the service of any
complaint, summons, notice or other process relating to any such action or
proceeding by delivery thereof to it by hand or by any other manner provided for
in Section 9. The Company and Executive hereby expressly and irrevocably waive
any claim or defense in any such action or proceeding based on any alleged lack
of personal jurisdiction, improper venue or forum non convenient or any similar
basis. Nothing in this Section shall affect or impair in any manner or to any
extent the right of the Company to commence legal proceedings or otherwise
proceed against the Executive in any jurisdiction or to serve process in any
manner permitted by law.
12. 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.
13. 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.
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IN WITNESS WHEREOF, the Company has caused this Agreement to be duly
executed by an authorized officer and Executive has hereunto set his hand as of
the date first set forth above.
NU HORIZONS ELECTRONICS CORP.
By: /s/Richard Schuster
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Name: Richard Schuster
Title: President
/s/Kurt Freudenberg
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Kurt Freudenberg
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