EMPLOYMENT AGREEMENT
dated as of August 1, 1997 by and between
Alfa International Corp.
a New Jersey Corporation, with its address at
00 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx-Xx-Xxxxxx
Xxx Xxxx 00000 (the "Company")
and Xxxxxxx X. Xxxxxxxxx (the "Employee")
(the "Agreement")
RECITALS:
A. The Company desires to secure the services of Employee, and
Employee desires to furnish services to the Company, on the terms
and conditions set forth in this Agreement.
B. This Agreement replaces and supersedes that certain employment
agreement dated as of January 2, 1997 by and between the Employee
and Alfa Acquisition Corp., a New York Corporation and wholly owned
subsidiary of the Company.
AGREEMENT:
In consideration of the mutual promises contained in this
Agreement and other good and valuable consideration, the receipt
and sufficiency of which the parties acknowledge, the parties agree
as follows:
1. Employment Term. The Company agrees to employ Employee,
and Employee agrees to enter the Company's employment, for a period
of five years (the "Employment Term") commencing on August 1, 1997
(the "Commencement Date"). Employee may terminate this Agreement at
any time after two years after the first day of the Employment Term
by giving the Company at least sixty days prior written notice.
2. Office and Duties. During the Employment Term, the Company
shall employ Employee and Employee shall serve as the Company's
Secretary and as the Vice-President of Sales of the Company's
wholly owned subsidiary, Ty-Breakers Corp. ("Ty-Breakers"). In such
capacities, Employee shall exercise all rights and powers of those
offices as set forth in the Company's and Ty-Breakers' Articles of
Incorporation and Bylaws. Employee also shall perform such other
duties and exercise such powers as the Company's President or Board
of Directors may reasonably require.
3. Sole Employment. Employee agrees that his employment by the
Company as set forth herein shall be his sole employment and he
shall not perform any advisory, or in any other capacity, work for
any other individual, firm or company, other than the Company and
Ty-Breakers, without the prior written consent of the Company.
Employee shall devote all of his business time and attention to the
Company's and/or Ty-Breakers's business and affairs.
4. Compensation.
4.1 Salary. In consideration of the services to be
rendered by Employee, the Company agrees to pay Employee, and
Employee agrees to accept, an annual salary of $45,000 during each
year of the Employment Term. On each anniversary of the first day
of the Employment Term, the Company shall increase the salary that
the Company must pay Employee during the year following such
anniversary by multiplying $45,000 by the following fraction: The
fraction's denominator shall be the "consumer price index" in
effect on the first day of the Employment Term and the fraction's
numerator shall be the "consumer price index" in effect on the
anniversary date on which Employee's salary is recomputed. For
purposes of this paragraph 4.1, the "consumer price index" shall
mean the "consumer price index" for all urban consumers--U.S. city
average (all items; 1967 = 100 base) as published by the United
States Bureau of Labor Statistics (or any successor agency) or any
other index that the Bureau of Labor Statistics may employ in lieu
of the "consumer price index". In no year shall the Company
decrease Employee's salary prevailing at the end of the preceding
year, but, upon approval of the Board of Directors, the Company
may, based on Employee's performance, increase the employee's
salary any time during the Employment Term. The Company shall pay
Employee's salary in accordance with the Company's regular payroll
practices.
4.2 Bonus. For each of the Company's fiscal years that
fall, in whole or in part, within the Employment Term, the Company
shall, based upon Ty-Breakers' sales performance in such fiscal
year, pay Employee an annual bonus equal to a percentage of the
Employee's salary for such fiscal year, based on Ty-Breakers' total
net sales, as determined in accordance with generally accepted
accounting principles, ("Net Sales") in such fiscal year, as
follows:
Net Sales do not include sales of any subsidiary company(s),
if any, which the Company may acquire at any time, unless such
subsidiary company(s) are in substantially the same business
as the business presently being conducted by Ty-Breakers, in
which case the net sales of such similar subsidiary(s) will be
included in Net Sales. During each fiscal year within the
Employment Term the Company will pay Employee a bonus
calculated by multiplying the Employee's salary for such
fiscal year by a fraction rounded to the nearest hundredth.
The numerator of this fraction is the Net Sales for such
fiscal year, rounded to the nearest thousand dollars and the
denominator is 4,000. For example; if Ty-Breakers had Net
Sales of $1,836,279 in its 1997 fiscal year, then the
Employee's bonus for the 1997 fiscal year would be calculated
as follows:
Bonus = 1,836 divided by 4,000 times $45,000
= 0.459 x $45,000
= 0.46 x $45,000
= $20,700
The Company shall pay each annual bonus on a quarterly basis
as such bonus accrues, within two months after the end of each
quarter. If the Employment Term begins on a day other than the
first day of the Company's fiscal year, the bonus for fiscal years
ending immediately after the beginning and the end of the
Employment Term shall be prorated.
4.3 Stock Options. Employee shall, in accordance with
the terms and conditions of the "Alfa International Corp. 1987
Stock Option Plan (the "Plan"), have the option to purchase up to
25,000 shares of Alfa's $0.01 par value common stock (the "Alfa
Common Stock") during each year of the Employment Term, at an
exercise price equal to $1.00. Employee's right to purchase the
aforesaid Alfa Common Stock shall be governed by the terms and
conditions of the Plan, all of which are incorporated herein by
reference.
5.Employee Benefits.
5.1 Insurance. During the Employment Term, the Company
shall, in accordance with then prevailing Company policy, provide
Employee with health and life insurance coverage under its group
policies, if and when such group policies come into effect.
5.2 Other Benefits. The Company shall provide Employee
with any pension plan that the Company offers any of its executives
at any time during the Employment Term. The Company shall offer
such pension plan to Employee on the most favorable terms and under
the most favorable conditions as such plan is offered to any other
Company executive.
5.3 Deferred Compensation. Subject to the approval
of the Company's Board of Directors, Employee may, if offered to
him by the Company and at his option, enter into a "Deferred
Compensation Plan" with the Company whereby Employee may defer some
portion of his compensation. The terms and conditions of any such
Deferred Compensation Plan, if any, will control the rights and
obligations of the parties thereto and will be determined by and
approved by the Board of Directors of the Company.
6.Expenses. The Company agrees to pay, or reimburse
Employee for, all travel, entertainment and other business expenses
incurred or expended by Employee in performing his duties and
responsibilities on behalf of the Company and Ty-Breakers under
this Agreement. Employee agrees to provide proof of the expenses
for which he seeks reimbursement in accordance with the Company's
present expense reporting policies.
0.Xxxxxxxxx. Employee shall be entitled to and shall
accrue vacation time at the rate of three weeks per year of the
Employment Term. Employee's vacation time shall accumulate from
year to year.
8.Termination of Employment / Agreement.
8.1Cause The Company may terminate Employee's
employment for cause upon thirty days written notice if (i)
Employee is convicted, by a court of competent and final
jurisdiction, of any crime which constitutes a felony in the
jurisdiction involved, (ii) Employee commits any act of fraud
against or breaches a fiduciary obligation to the Company, (iii)
Employee shall incur any liability on the Company's behalf not in
the ordinary course of the Company's business (iv) the
representation contained in paragraph 10 of this Agreement is false
or (v) Employee fails or refuses in any respect to perform his
duties under this Agreement. If, for any reason, the Company
terminates Employee's employment without cause, Employee shall be
entitled to receive the salary provided for in paragraph 4.1, the
bonus described in paragraph 4.2, and the stock options described
in paragraphs 4.3 and the benefits (to the full extent not
disallowed by the terms of their contracts) described in paragraph
5 until the end of the Employment Term, and to retain the signing
bonus described in paragraph 4.4 hereof.
8.2 Death or Permanent Disability. If, during the Employment
Term, Employee shall die or become permanently disabled (as defined
in sub paragraph 8.3) his Employment under this Agreement shall
terminate. In the event of Employee's death during the Employment
Term and in addition to any payments to Employee's beneficiary or
estate made with respect to any insurance contracts entered under
the terms of this Agreement, the Company shall pay the personal
representative of Employee's estate the salary and bonus provided
for in Paragraphs 4.1 and 4.2 through the end of the month after
the month in which Employee's death occurs. Thereafter this
Agreement will automatically terminate.
8.3 Disability. If, during the Employment Term, Employee
shall become physically or mentally disabled so as to be unable to
perform any of his material duties hereunder, he shall nonetheless
continue to receive his full salary (but not his bonus) for a
period of six months or any part thereof for any continuous
disability, less any amounts received by him from any disability
insurance policy then in effect for his benefit. At any time
subsequent to the expiration of such six month period, the Company
may cancel this Agreement upon ten days written notice to the
Employee.
No disability shall be deemed to exist until after the
Employee shall have been unable to perform any of his duties
hereunder for a period of thirty consecutive days, but if such
disability continues for sixty consecutive days, then the same
shall be deemed to have existed from the first day of such
disability.
If the Employee shall have been disabled and shall have
returned to work after the end of such disability, any new
disability commencing within ninety days of the termination of the
prior disability shall be deemed a continuation of the prior
disability, and the period of all such disabilities shall be added
together to determine the rights of the Employee and the Company
hereunder.
At the end of any temporary disability, Employee shall return
to work and this Agreement shall continue as though such disability
had not occurred, except where specifically provided to the
contrary herein. During any period of disability, Employee shall
not receive any allowance for expenses.
9. Non-Competition Covenant. For a period of one year after
the termination (for any reason whatsoever) or expiration of this
Agreement, Employee shall not, directly or indirectly, solicit or
service any accounts, customers, vendors, suppliers or other
persons or entities with which Employee or the Company or Ty-
Breakers has done business, negotiated or otherwise had business
dealings, at any time during the three years prior to such
termination or expiration date. In the event of Employee's actual
or threatened breach of provisions of this paragraph, the Company
shall be entitled to any injunction restraining Employee therefrom.
Nothing contained herein shall be construed as prohibiting the
Company from pursuing any other available remedies for such breach
or threatened breach, including recovery of damages from Employee.
10.Representation. Employee, in order to induce the Company
to enter into and perform this Agreement, hereby represents and
warrants to the Company that he is not a party to any contract,
agreement or understanding which prevents or prohibits, or with
notice or the passage of time or both, would prevent or prohibit
Employee from entering into this Agreement or fully performing all
of his obligations hereunder or which would be breached thereby.
11.Miscellaneous
11.1 Assignment. This Agreement shall inure to the
benefit of and shall be binding upon the heirs and personal
representative of Employee and shall inure to the benefit of and be
binding upon the Company and its successors and assigns. Neither
party may assign, transfer, pledge, encumber, hypothecate or
otherwise dispose of this Agreement or any of its or his rights
hereunder without the prior written consent of the other party, and
any such attempt to assign (other than the Company assigning this
Agreement by operation of law in a merger), transfer, pledge,
encumber or hypothecate without such consent shall be null and
void.
11.2 Governing Law. This Agreement is executed and
delivered in New York. The laws of the state of New York shall
govern its validity, interpretation and enforcement.
11.3 Attorney's Fees. If a dispute arises from this
Agreement, the prevailing party shall be entitled to collect its
reasonable costs and expenses, including reasonable attorneys'
fees, from the losing party.
11.4 Complete Agreement. This Agreement supersedes any
and all prior agreements and understandings between the parties
with respect to the Company's employment of Employee and with
respect to any subsidiary of the Company's employment of Employee
and constitutes the complete understanding between the parties with
respect to the Company's, or any of its subsidiaries', employment
of Employee. No statement, representation, warranty or covenant
made by either party with respect to Employee's employment will be
binding unless expressly set forth in this Agreement. This
Agreement may not be altered, modified or amended except by written
instrument signed by each of the parties. Recital A and Recital B
set forth in the beginning of this Agreement are incorporated
herein as if set forth in the body of this Agreement.
11.5 Counterparts. The parties may execute this
Agreement in counterparts, each of which shall constitute an
original, but all of which together shall constitute one and the
same instrument.
11.6 Headings. The paragraph headings of this Agreement
are for convenience of reference only and shall not expand, modify,
limit or define the text of this Agreement.
11.7 Notices. Any notice or other communication
required or made under this Agreement shall be in writing and shall
be delivered personally, telegraphed, or sent by registered,
certified or express mail, postage prepaid, and shall be deemed
given when so delivered personally, telegraphed, or, if mailed, two
days after the date of mailing, to the recipient at the following
address (or to such other address as the recipient may designate by
giving written notice):
To Employee: Xxxxxxx X. Xxxxxxxxx
00 Xxxx 00xx Xxxxxx
Xxxxxxx, Xxx Xxxxxx 00000
To the Company: Alfa International Corp.
00 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx-Xx-Xxxxxx
Xxx Xxxx 00000
ATT: President
11.8 Severability. In the event that any one or more of
the provisions of this Agreement shall be deemed to be invalid,
illegal or unenforceable in any respect, in whole or in part, the
validity, legality and enforceability of the remainder of the
provisions of this Agreement shall not in any way be affected.
11.9 Waivers. A written waiver, or successive written
waivers, by either party of any breach or default by the other
party of any of the terms and provisions of this Agreement, shall
not operate as a waiver, or custom of waiver, of any other breach
or default, whether similar to or different from the breach or
default waived. No waiver shall be effective unless in writing and
signed by the party to be charged.
Alfa International Corp., Employee
a New Jersey corporation
By By
Xxxxx X. Xxxxxx Xxxxxxx X. Xxxxxxxxx
President
