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 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. 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:
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1. Employment Term. Subject to the satisfaction of the
conditions precedents 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 (the "Employment
Term") commencing on the first business day subsequent to the
Receipt Date (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
Vice President of Sales and Secretary. 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 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 Alfa, without the
prior written consent of the Company. Employee shall devote all of
his business time and attention to the Company's and/or Alfa'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.
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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 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 the Company's 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 or Alfa may acquire at any time,
unless such subsidiary company(s) are in substantially the
same business as the business presently being conducted by
TYBR, 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 the
Company 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. 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 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.
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4.4 Signing Bonus. Subject to the satisfaction of the
conditions precedent required by Recital B hereof, and in order to
induce Employee to enter into and perform this Agreement, the
Company agrees that, in addition to any other compensation called
for by this paragraph 4, Employee shall be paid a one time bonus
of $25,000 as follows: $12,500 on the Commencement Date and $12,500
on the first day of the month of the sixth month subsequent to the
Commencement Date, provided Employee is still employed by the
Company on such date.
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
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 three weeks per year of the Employment
Term. Employee's vacation time shall accumulate from year to year.
8. Termination of Employment / Agreement.
8.1 Cause 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)
Page E-07
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.
Page E-08
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.
8.4 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 thereupon automatically terminate.
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 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.
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.
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.
Page E-09
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
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.
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 Acquisition Corp.
00 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx-Xx-Xxxxxx
Xxx Xxxx 00000
ATT: President
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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 Acquisition Corp., Employee
a New York corporation
By By
Xxxxx X. Xxxxxx Xxxxxxx X. Xxxxxxxxx
President
As to Paragraphs 4.3 and 5.3 only,
Alfa International Corp.,
a New Jersey corporation
By
Xxxxx X. Xxxxxx
President
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