EMPLOYMENT AGREEMENT
dated as of January 2, 1997 by and between
Alfa Acquisition Corp.
a New York corporation, with its address at
00 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx-Xx-Xxxxxx
Xxx Xxxx 00000 (the "Company")
and Xxxxx X. Xxxxxx (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. Subject to the terms and conditions of that certain
merger agreement of even date with this Agreement among
Alfa International Corp, a publicly traded New Jersey
corporation ("Alfa"), Ty-Breakers (NY) Corp., a New York
corporation ("TYBR"), and the Company which is a wholly
owned subsidiary of Alfa; TYBR intends to merge with and
into the Company (the "Merger"). As soon as practicable
after the consummation of the Merger, Alfa intends to
make an offering of up to $1,000,000 of its securities
(the "Offering") to non U.S. residents. Notwithstanding
anything to the contrary contained elsewhere in this
Agreement, Employee and the Company agree that the
conditions precedent to all of the Company's obligations
under this Agreement are (i) the receipt by Alfa of gross
proceeds of at least $500,000 from the Offering, and (ii)
the advance by Alfa to the Company of an aggregate of
$500,000. The day that the Company receives all or the
final installment of such $500,000 from Alfa is
hereinafter defined as the "Receipt Date". Until the
Receipt Date, neither Employee nor the Company shall have
any obligations under this Agreement.
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. Subject to the satisfaction of the
conditions precedent required by Recital B hereof, the Company
agrees to employ Employee, and Employee agrees to enter the
Company's employment, for a period of five years commencing on the
first business day subsequent to the Receipt Date (the "Employment
Term"). 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 thirty 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
President and Chief Executive Officer. In such capacity, Employee
shall exercise all rights and powers of those offices as set forth
in the Company's Articles of Incorporation and Bylaws. Employee
also shall perform such other duties and exercise such powers as
the Company's Board of Directors may reasonably require.
3. Extent of Service and Other Business Activities. Employee
agrees that he shall devote a majority of his business time and
attention to the Company's business and affairs. Nothing in this
Agreement shall prevent Employee from directly or indirectly,
engaging, participating, or investing in, or consulting or offering
other services in connection with, or being employed by, any other
business enterprise. During the Employment Term, Employee shall not
directly or indirectly engage, participate, or invest in, or
consult or offer other services in connection with, any business
enterprise that competes with the Company's business.
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 $100,000 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 $100,000 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. 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 pay Employee a bonus equal to ten percent of the Company's
consolidated net income before taxes (i.e. including net income of
any subsidiary companies, if any, which the Company may acquire at
any time) in such fiscal year, as determined in accordance with
generally accepted accounting principles. The Company shall pay
each bonus within ninety days after its fiscal year ends. 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. Subject to the satisfaction of the
conditions precedent required by Recital B hereof, 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 50,000 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.
In addition the Company shall pay the premiums on Employee's
Disability Insurance policy (currently approximately $2,962
annually) and on the Employee's Life Insurance policies (currently
approximately $10,700 annually).
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
Alfa'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 Alfa.
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 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.
7. Vacations. Employee shall be entitled to and shall accrue
vacation time at the rate of four weeks per year of the Employment
Term. Employee's vacation time shall accumulate from year to year.
8. Payments on Death. 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, irrespective of the expiration date of this Agreement, 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
sixth month after the month in which Employee's death occurs.
9. Termination of Employment. The Company may terminate
Employee's employment for cause upon thirty days written notice
only 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 material act of
fraud against or materially breaches a fiduciary obligation to the
Company, or (iii) Employee fails or refuses in any material respect
to perform his material 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, the stock
options described in paragraph 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.
10. Miscellaneous.
10.1 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.
However, 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, transfer, pledge,
encumber or hypothecate without such consent shall be null and
void.
10.2 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.
10.3 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.
10.4 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
constitutes the complete understanding between the parties with
respect to the Company's 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.
10.5 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.
10.6 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.
10.7 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: Xxxxx X. Xxxxxx
000 Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxx Xxxx 00000
To the Company: Alfa Acquisition Corp.
00 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx-Xx-Xxxxxx
Xxx Xxxx 00000
ATT: President
10.8 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.
10.9 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.
10.10 Termination of Agreement. Notwithstanding
anything to the contrary contained elsewhere in this Agreement, if
the Receipt Date shall not have occurred on or before February 28,
1997, then this Agreement and all obligations of the parties to
each other hereunder shall automatically terminate on March 1,
1997.
Alfa Acquisition Corp., Employee
a New York corporation
By ________________________ By ________________________
Xxxxxxx X. Xxxxxxxxx Xxxxx X. Xxxxxx
Vice-President &
Secretary
As to Paragraphs 4.3 and 5.3 only,
Alfa International Corp.,
a New Jersey corporation
By _________________________
Xxxxxxx X. Xxxxxxxxx
Vice-President &
Secretary
