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 Xxxxx X. Xxxxxx (the "Employee")
(the "Agreement")
RECITALS:
A The Company desires to secure the services of Employee, and the
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 commencing on August 1, 1997 (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. 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 policy (currently
approximately $2,400 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 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 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. 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.
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 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.
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 International 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.
Alfa International Corp., Employee
a New Jersey corporation
By By
Xxxxxxx X. Xxxxxxxxx Xxxxx X. Xxxxxx
Vice-President &
Secretary
