AGREEMENT made as of May 1, 2012 between Conolog Corporation, a Delaware corporation with offices at 5 Columbia Road, Somerville, New Jersey 08876 (hereinafter called the Company), and Marc R. Benou, residing at 564 Lawrence Avenue, Westfield, New Jersey 07090 (hereinafter referred to as the Executive).
W I T N E S S E T H:
WHEREAS, the Company is engaged in the design, production (directly and/or through subcontractors) and distribution of small electronic and electromagnetic components and sub-assemblies for use in telephone, radio and microwave transmission and reception and other communication areas that are used in both military and commercial applications; and
WHEREAS, the Companys Board of Directors (the Board or the Board of Directors) believes that the Executive possesses the skills and abilities necessary for the Company to meet its current and future objectives; and
WHEREAS, the Executive desires to provide such services to the Company in such capacities, on and subject to the terms and conditions hereof;
NOW, THEREFORE, in consideration of the premises and the mutual promises contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:
Subject to all of the terms and conditions hereof, the Company does hereby employ the Executive and the Executive does hereby accept such employment.
(a) Initial Term. The term of this Agreement shall commence on the date hereof and shall continue until May 1, 2016 (the Initial Term), unless sooner terminated as herein provided including termination under any of the subsections described in Section 7.
(b) Renewal Term. This Agreement is intended to provide for a constantly renewing (or evergreen) one-year term. As a result, on each day after the commencement of the Initial Term, without further action on the part of Company or Executive, this Agreement shall be automatically renewed for a new one-year term from that day forward (a Renewal Term). Nevertheless, Company may notify Executive, or Executive may notify Company, at any time upon thirty days written notice, that there shall be no renewal of this Agreement. If this notice of non-renewal is given, the Agreement shall immediately cease to renew and shall terminate naturally at the end of the Initial Term or the current Renewal Term, as the case may be. No
severance or other post-termination compensation will be due or payable in the event of a termination resulting from non-renewal. The period of time commencing as of the date of this Agreement and ending on the effective date of the termination of employment of Executive under this or any successor Agreement shall be referred to as the Employment Period.
(a) Base Salary. The Company agrees to pay the Executive during the Employment Period hereof a salary at the annual rate of One Hundred Ninety Nine Thousand Dollars ($199,000). The Company shall make all salary payments in equal bi-weekly installments in arrears. Unless otherwise determined by the Board, Executives Base Salary at the commencement of the second and each subsequent year shall be adjusted to increase at a rate of 3% per annum. All salary, bonus, or other compensation payable to the Executive shall be subject to the customary withholding, FICA, medical and other tax and other employment taxes and deductions as required by federal, state and local law with respect to compensation paid by an employer to an employee.
(b) Accrued Salary. All unpaid salary to Executive shall accrue as debt on the Companys books and financial statements and shall be paid to Executive as soon practicable.
(c) Bonus. Commencing with the year ended July 31, 2012, Executive shall receive, with respect to each full fiscal year during the term hereof, an annual bonus (the Profit Bonus) equal to 6% of the Companys annual Income Before Income Tax Provision as stated on the Companys annual report on form 10-K. The Profit Bonus shall be payable within 120 days after the end of the Companys fiscal year.
The Executive is hereby employed as President of the Company and shall perform the following services in connection with the general business of the Company:
(a) Duties as President. Except as otherwise determined from time to time by the Board of Directors, Executive shall have primary responsibility for the operation of the business including the responsibility for recruiting and managing the management team and other employees of such business, preparing and implementing the budget for such business, and such other duties, responsibilities and authority, commensurate with such position as shall be assigned to him by the Board of Directors (the Board).
(b) Compliance. The Executive hereby agrees to observe and comply with such reasonable rules and regulations of the Company as may be duly adopted from time to time by the Board and otherwise to carry out and perform those orders, directions and policies stated to him from time to time by the Board, either as specified in the minutes of the proceedings of the Board of the Company or otherwise in writing that are reasonably necessary and appropriate to carry out his duties hereunder. Such orders, directions and policies shall be legal and shall be consistent with the Executives position as President of the Company.
The Executive agrees to serve the Company faithfully and to the best of his ability and shall devote his full time, attention and energies to the business of the Company. The Executive agrees to carry out his duties in a competent and professional manner and to at all times promote the best interests of the Company. The Executive shall not, during the term of his employment hereunder, engage in any other business, whether or not pursued for profit. Nothing contained herein shall be construed as preventing the Executive from investing in any other business or entity which is not in competition with the business of the Company. Nothing contained herein shall be construed as preventing the Executive from engaging in (1) personal business affairs and other personal matters and (2) serving on civic or charitable boards or committees.
During the Employment Period of this agreement Executive shall be entitled to, and the Company shall provide, the following benefits in addition to those specified in Section 3:
(a) Vacation. The Executive shall be entitled to four (4) weeks vacation in each twelve (12) month period during the Term. Vacation may be taken at such time(s) as Executive may determine provided that such vacation does not interfere with the Companys business operations. The Executive shall not be entitled to compensation for unused vacation except that, upon termination of his employment, the Company shall pay to the Executive for all of his accrued, unexpired vacation time.
(b) Expense Reimbursement. The Company shall reimburse the Executive upon submission of vouchers for his out-of-pocket expenses for travel, entertainment, meals and the like reasonably incurred by him pursuant to his employment hereunder in accordance with the general policy of the Company as adopted by the Board from time to time.
(c) Automobile Expenses. The Company will provide to the Executivean automobile during the Employment Period. In addition, the Company shall pay or reimburse Executive for all such insurance, gasoline, maintenance, repair and all other expenses incurred in use of the automobile upon submission of appropriate invoices, vouchers, receipts and other supporting documentation.
(d) Health Insurance. The Company shall provide the Executive with health insurance in the coverage consistent with those provided to other key executives of the Company as determined by the Board from time to time.
(e) Disability. If the Company maintains disability insurance, thenthe Company shall provide a disability policy for the Executive comparable to the policies in force for other similar executives in the Company. If the Company does not maintain a disability policy, then the Executive may obtain such a policy in amounts equal to his salary and be reimbursed by the Company for all premium payments thereunder.
(a) Termination for Cause. The Company shall have the right to terminate the Executives employment hereunder:
(1) For cause upon ten (10) business days prior written notice to Executive. Upon such termination, Executive shall have no further duties or obligations under this Agreement (except as provided in Section 8) and the obligations of the Company to Executive shall be as set forth below. For purposes of this Agreement, cause shall mean:
Notwithstanding the foregoing, the Executive may, within ten (10) business days following delivery of the notice of termination referred to in the preceding paragraph, by written notice to the Board, cause the matter of the termination of his employment by the Company to be discussed at the next regularly scheduled meeting of the Board or at a special meeting of the Board requested by a majority of the members of the Board who are not employees of the Company or any of its subsidiaries. The Executive shall be entitled to be present and to be represented by counsel at such meeting which shall be conducted according to a procedure
deemed equitable by a majority of the directors present. If, at such meeting, it shall be determined that the employment of the Executive had been terminated without proper cause, the provisions of this Agreement shall be reinstated with the same force and effect as ifthe notice of termination had not been given;and the Executive shall be entitled to receive the compensation and other benefits provided herein for the period from the date of the delivery of the notice of termination through the date of such reinstatement.
In the event, the Company terminates the Executives employment for cause, then the Executive shall be entitled to receive through the date of termination: (1) his base salary as defined in Section 3(a) hereof and (2) the benefits provided in Section 6 hereof including all accrued but unpaid vacation and salary.
In the event that Executives employment is terminated by the Company without cause including but not limited to an involuntary change in position or termination of the Executive as a result of a material breach of this Agreement by the Company (any of the foregoing, an Involuntary Termination), Executive shall receive from the Company, through the effective date of the Involuntary Termination: (1) his base salary as defined in Section 3(a) hereof and (2) the benefits provided in Section 6 hereof including all accrued but unpaid vacation.
(c) Disability. The Company shall have the right to terminate the Executives employment hereunder:
(1) By reason of the Executives becoming Disabled for an aggregate period of ninety (90) days in any consecutive three hundred sixty (360) day period (the Disability Period).
(d) Death. The Companys employment of the Executive shall terminate upon his death and all payments and benefits shall cease upon such date provided, however, that under this Agreement the estate of such Executive shall be entitled to receive through the date of termination (1) his base salary as defined in Section 3(a) hereof and (2) the benefits provided in Section 6 hereof including all accrued but unpaid vacation.
(e) Termination by the Executive.
The Executive may elect, by written notice to the Company, such notice to be effective immediately upon receipt by the Company, to terminate his employment hereunder if:
If the Executive elects to terminate his employment hereunder pursuant to this Section 7(e), then (1) the Company shall continue to pay to the Executive his salary as provided in Section 3(a) hereof through the end of the Employment Period and (2) the Company shall continue to provide to the Executive the benefits provided in Section 6 hereof through the end of the Employment Period.
(f) Resignation. If the Executive voluntarily resigns during the term of this Agreement other than pursuant to Section 7(e) hereof, then all payments and benefits shall cease on the effective date of resignation, provided that under this Agreement the Executive shall be entitled to receive through the date of such resignation: (1) his base salary as defined in Section 3(a) hereof and (2) the benefits provided in Section 6 hereof including all accrued but unpaid vacation.
(g) Mitigation. In the event of the termination of this Agreement by the Executive as a result of a material breach by the Company of any of its obligations hereunder, or in the event of the termination of the Executives employment by the Company in breach of this Agreement, the Executive shall not be required to seek other employment in order to mitigate his damages hereunder.
(a) Non-Disclosure of Information. (1) The Executive recognizes and acknowledges that by virtue of his position as a key executive, he will have access to the lists of the Companys referral sources, suppliers, advertisers and customers, financial records and business procedures, sales force and personnel, programs, software, selling practices, plans, special methods and processes for electronic data processing, special techniques for testing commercial and sales materials and products, custom research services in product development, marketing strategy, product manufacturing techniques and formulas, and other unique business information and records (collectively Proprietary Information), as same may exist from time to time, and that they are valuable, special and unique assets of the Companys business. The Executive also may develop on behalf of the Company a personal acquaintance with the present and potential future clients and customers of the Company, and the Executives acquaintance may constitute the Companys sole contact with such clients and customers.
(a)(2) The Executive will not during the Employment Period, and at any time following the end of the Employment Period or earlier termination of this Agreement regardless of the reason therefor, disclose trade secrets or other confidential information about the Company, including but not limited to Proprietary Information, to any person, firm, corporation, association or other entity for any reason or any purpose whatsoever or utilize such Proprietary Information for his own benefit or the benefit of any third party; provided, however, that nothing contained herein shall prohibit the Executive from using his personal acquaintance with any clients or customers of the Company at any time in a manner that is not inconsistent with their remaining as clients or customers of the Company.
(a)(3) All equipment, records, files, memoranda, computer print-outs and data, reports, correspondence and the like, relating to the business of the Company which Executive shall use or prepare or come into contact with shall remain the sole property of the Company. The Executive shall immediately turn over to the Company all such material in Executives possession, custody or control at such time as this Agreement is terminated.
(a)(4) Proprietary Information shall not include information that was a matter of public knowledge on the date of this Agreement or subsequently becomes public knowledge other than as a result of having been revealed, disclosed or disseminated by Executive, directly or indirectly, in violation of this Agreement.
(b) Non-Solicitation. The Executive covenants and agrees that during the Employment Period, and for a six (6) month period immediately following the end of the Employment Period or earlier termination of this Agreement, regardless of the reason therefor, the Executive shall not solicit, induce, aid or suggest to: (1) any employee to leave such employ, (2) any contractor, consultant or other service provider to terminate such relationship, or (3) any customer, agency, vendor, or supplier of the Company to cease doing business with the Company.
(c) Enforcement. In view of the foregoing, the Executive acknowledges and agrees that it is reasonable and necessary for the protection of the good will, business, trade secrets, confidential information and Proprietary Information of the Company that he makes the covenants in this Section 8 and that the Company will suffer irreparable injury if the Executive engages in the conduct prohibited by Section 8 (a) or (b) of this Agreement. The Executive agrees that upon a breach, threatened breach or violation by him of any of the foregoing provisions of this Section 8, the Company, in addition to all other remedies it may have including an action at law for damages, shall be entitled as a matter of right to injunctive relief, specific performance or any other form of equitable relief in any court of competent jurisdiction without being required to post bond or other security and without having to prove the inadequacy of the available remedies at law, to enjoin and restrain the Executive and each and every other person, partnership, association, corporation or organization acting in concert with the Executive, from the continuance of any action constituting such breach. The Company shall also be entitled to recover from the Executive all of its reasonable costs incurred in the enforcement of this Section 8 including its reasonable legal fees. The Executive acknowledges that the terms of Section 8(a) or (b) are reasonable and enforceable and that, should there be a violation or attempted or threatened violation by the Executive of any of the provisions contained in these subsections, the Company shall be entitled to relief by way of injunction, specific performance or other form of equitable relief. In the event that any of the foregoing covenants in Sections 8 (a) or (b) shall be deemed by any court of competent jurisdiction, in any proceedings in which the Company shall be a party, to be unenforceable because of its duration, scope, or area, it shall be deemed to be and shall be amended to conform to the scope, period of time and geographical area which would permit it to be enforced.
(d) Independent Covenants. The Company and the Executive agree that the
covenants contained in this Section 8 shall each be construed as a separate agreement independent of any of the other terms and conditions of this Agreement, and the existence of any claim by the Executive against the Company, whether predicated on this Agreement or otherwise, shall not constitute a defense by the Executive to the Companys enforcement of any of the covenants of this Section 8.
(e) Exclusion from Arbitration. The terms and conditions of this Section 8 including the enforcement thereof by the Company are specifically excluded from the arbitration of all other matters under this Agreement as provided in Section 13 hereof.
9. DISCLOSURE AND ASSIGNMENT OF RIGHTS.
(a) Disclosure. The Executive agrees that he will promptly assign to the Company or its nominee(s) all right, title and interest of the Executive in and to any and all ideas, inventions, discoveries, secret processes, and methods and improvements, together with any and all patents or other forms of intellectual property protection that may be obtainable in connection therewith or that may be issued thereon, such as trademarks, service marks and copyrights, in the United States and in all foreign countries, which the Executive may invent, develop, or improve or cause to be invented developed or improved, on behalf of the Company while engaged in Company related decisions, during the Term or within six (6) months after the Employment Period or earlier termination of this Agreement, which are or were related to the scope of the Companys business or any work carried on by the Company or to any problems and projects specifically assigned to the Executive. All works and writings which relate to the Companys business are works for hire under the Copyright Act, and any and all copyrights therefor shall be placed in the name of and inure to the benefit of the Company.
(b) Assignment of Interest. The Executive agrees to disclose immediately to duly authorized representatives of the Company any ideas, inventions, discoveries, processes, methods and improvements covered by the terms of this Section 9 and to execute, at the Companys expense, all documents reasonably required in connection with the Companys application for appropriate protection and registration under the federal and foreign patent, trademark, and copyright law and the assignment thereof to the Companys nominee (s). The Executive hereby appoints the Companys Chairman as true and lawful attorney in fact with full powers of substitution and delegation to execute acknowledge and deliver any such instruments and assignments, which the Executive shall fail or refuse to execute or deliver.
The Company shall indemnify the Executive to the maximum extent permitted under the Delaware Corporation Law, or any successor thereto, and shall promptly advance any expenses incurred by the Executive prior to the final disposition of the proceeding to which such indemnity relates upon receipt from the Executive of a written undertaking to repay the amount so advanced if it shall be determined ultimately that the Executive is not entitled to indemnity under the standards set forth in the Delaware General Corporation Law or its successor. The Employer shall use commercially reasonable efforts to obtain and maintain throughout the Term
of the employment of the Executive hereunder directors and officers liability insurance for the benefit of the Executive. The indemnificationobligations of the Company under this Section 10 shall survive the termination of the Term or of this Agreement for any reason whatsoever unless the Agreement is terminated for cause.
(a) Any and all notices or other communications given under this Agreement shall be in writing and shall be deemed to have been duly given on (1) the date of delivery, if delivered in person to the addressee, (2) the next business day if sent by overnight courier, or (3) three (3) days after mailing, if mailed within the continental United States, postage prepaid, by certified or registered mail, return receipt requested, to the party entitled to receive same, at his or its address set forth below:
(b) The parties may designate by notice to each other any new address for the purposes of this Agreement as provided in this Section 11.
(a) Applicable Law. This document shall, in all respects, be governed by the laws of the State of New Jersey excluding any conflicts of law provisions. The parties acknowledge that substantially all of the negotiations relating to this Agreement were conducted in, and that this Agreement has been executed by both parties in State of New Jersey.
(b) Survival. The parties agree that the covenants contained in Section 3 hereof shall survive any termination of employment by the Executive and any termination of this Agreement. In addition, the parties agree that any compensation or right which shall have accrued to the Executive as of the date of any termination of employment or termination hereof shall survive any such termination and shall be paid when due to the extent accrued on the date of such termination.
(c) Assignability. All of the terms and provisions contained herein shall inure to the benefit of and shall be binding upon the parties and their respective heirs, personal representatives, successors and assigns. The obligations of the Executive may not be delegated, except as set forth herein, however, and the Executive may not, without the Companys written consent thereto, assign, transfer, convey, pledge, encumber, hypothecate or otherwise dispose of this Agreement or any interest therein. Any such attempted delegation or disposition shall be null and void and without effect. The Company and the Executive agree that this Agreement and all of the Companys rights and obligations hereunder may be assigned or transferred by the Company to and may be assumed by and become binding upon and may inure to the benefit of any affiliate of or successor to the Company. The term successor shall mean, with respect to the Company or any of its subsidiaries, and any other corporation or other business entity which, by merger, consolidation, purchase of the assets, or otherwise, acquires all or a material part of the assets of the Company. Any assignment by the Company of its rights and obligations hereunder to any affiliate of or successor shall not be considered a termination of employment for purposes of this Agreement.
(d) Modifications or Amendments. No amendment, change or modification of this document shall be valid unless in writing and signed by each of the parties herein.
(e) Waiver. No reliance upon or waiver of one or more provisions of this Agreement shall constitute a waiver of any other provisions hereof.
(f) Severability. If any provision of this Agreement as applied to either party or to any circumstances shall be adjudged by a court of competent jurisdiction to be void or unenforceable, the same shall in no way affect any other provision of this Agreement or the
validity or enforceability of this Agreement. If any court construes any of the provisions to be unreasonable because of the duration of such provision or the geographic or other scope thereof, such court may reduce the duration or restrict the geographic or other scope of such provision and enforce such provision as so reduced or restricted.
(g) Separate Counterparts. This document may be executed in one or more separate counterparts, each of which, when so executed, shall be deemed to be an original. Such counterparts shall, together, constitute and shall be one and the same instrument.
(h) Headings. The captions appearing at the commencement of the sections hereof are descriptive only and are for convenience of reference. Should there be any conflict between any such caption and the section at the head of which it appears the substantive provisions of such section and not such caption shall control and govern in the construction of this document.
(i) Specific Performance. It is agreed that the rights granted to the parties hereunder are of a special and unique kind and character and that, if there is a breach by either party of any material provision of this document, the other party would not have any adequate remedy at law. It is expressly agreed, therefore, that the rights of the parties may be enforced by an action for specific performance and other equitable relief.
(j) Further Assurances. Each of the parties shall execute and deliver any and all additional papers, documents and other assurances, and shall do any and all acts and things reasonably necessary in connection with the performance of their obligations hereunder and to carry out their intentions as set forth herein.
(k) Entire Agreement. This Agreement constitutes the entire understanding and agreement of the parties with respect to the subject matter of this Agreement, and any and all prior agreements, understandings or representations are hereby terminated and canceled in their entirety.
(l) Neutral Construction. Neither party may rely on any drafts of this Agreement in any interpretation of the Agreement. Each party to this Agreement has reviewed this Agreement and has participated in its drafting and, accordingly, neither party shall attempt to invoke the normal rule of construction to the effect that ambiguities are to be resolved against the drafting party in any interpretation of this Agreement.
(m) Attorneys Fees. In the event that either party hereto commences litigation against the other to enforce such partys rights hereunder, the prevailing party shall be entitled to recover all costs, expenses and fees, including reasonable attorneys fees (including in-house counsel), paralegals fees, and legal assistants fees through all appeals.
Except as hereinafter expressly provided, every difference or dispute, of whatever nature,
between the Company and the Executive involving (1) any breach of this Agreement or (2) any other difference or dispute arising out of, related to, under or having any connection with this Agreement, shall be settled and finally determined by arbitration in Somerville, New Jersey in accordance with the then current commercial arbitration rules of the American Arbitration Association, and judgment upon any award rendered may be entered in any court having jurisdiction, including but not limited to the courts of the State of South Carolina, and the determination of such arbitration proceeding shall be binding and conclusive upon the parties. Any claim by the Company against the Executive arising out of, under, or related to, Section 8 of this Agreement, whether for equitable relief or monetary damages or any combination, is specifically excluded from arbitration under this Section 13.
IN WITNESS WHEREOF, the parties hereto have executed this Employment Agreement on the date first above written.
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