EMPLOYMENT AGREEMENT
dated as of September 1, 2001 by and between
Alfa International Corp.
a New Jersey Corporation, with its address at
000 Xxxxxxxxxx Xxxxx
Xxxxxx Xxxx, Xxx Xxxxxx (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. Employee and the Company acknowledge that the Company is a
publicly held New Jersey corporation with two wholly owned
subsidiaries: Ty-Breakers Corp. ("Ty-Breakers") and Contact Sports,
Inc. ("Contact").
C. This Agreement supercedes and replaces that certain employment
agreement dated as of August 1, 1997 by and between Employee and
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 the
period beginning September 1, 2001 (the "Commencement Date") up to
and including December 31, 2010 (the "Employment Term"). Employee
may terminate this Agreement at any time after two years after the
Commencement Date 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 President and Chief Executive Officer and as a director
of the Company. In such capacities, 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 SERVICES 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
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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 $125,000 during each
year of the Employment Term. 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 Sales Commissions. For each of the Company's
fiscal years beginning after December 31, 2001 that fall, in whole
or in part, within the Employment Term, the Company shall pay
Employee sales commissions equal to one percent (1 %) of the
Company's total net sales, if any, as determined in accordance
with generally accepted accounting principles, ("Net Sales") in
such fiscal year, subject only to the limitations set forth in
paragraph 4.4 below.
4.3 Bonus For each of the Company's fiscal years
beginning after December 31, 2001 that fall, in whole or in part,
within the Employment Term, the Company shall pay Employee an
annual bonus equal to ten percent (10%) of the Company's earnings
before taxes ("EBT"), if any, as determined in accordance with
generally accepted accounting principles in such fiscal year.
4.4 Limitations; Payments. No sales commission shall
be paid to Employee on any sale for which the Company has not been
paid by the customer. If the Company should compromise with any
customer and accept less than payment in full for any invoiced
amount then the corresponding sales commission shall be
proportionately reduced, except that if such compromise results in
a reduction equal to or greater than twenty five percent (25%) of
the invoice value, then no sales commission shall be paid on such
invoice. Within 60 days after the end of each month, the Company
shall pay the sales commissions on paid sales as accrued on the
records of the Company as of the end of the month for which such
commissions are being paid. Within ten days after receipt by Alfa
from its auditors of its fiscal year end certified financial
statements, the Company shall pay Employee the bonus as called for
in Section 4.3 hereof. If the Employee's employment by the Company
ends prior to the expiration of the Employment Term then Incentive
Pay shall be adjusted proportionately to the last day of such
employment.
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4.5 Stock Options. The board of directors of the
Company has approved the adoption of the "Alfa International Corp.
2001 Stock Option Plan (the "Plan"). In order to become effective
the adoption of the Plan must be approved by the shareholders of
the Company. The Company will call a meeting of its shareholders
within the next six months for the purpose of, among other things,
adopting the Plan. Subject to adoption of the Plan as aforesaid,
Employee shall, in accordance with the terms and conditions of the
Plan, have the option to purchase up to 100,000 shares of the
Company's $0.01 par value common stock (the "Alfa Common Stock")
during each of the first five years of the Employment Term, at an
exercise price equal to $0.25 per share. 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 $3,000
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.
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. TERMINATION OF EMPLOYMENT / AGREEMENT.
8.1 Cause. 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
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jurisdiction involved, (ii) Employee commits any material act of
fraud against or materially breaches a fiduciary obligation to the
Company, (iii) the representation contained in paragraph 10 of this
Agreement is false or (iv) 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 commissions and bonus
described in paragraphs 4.2, 4.3 and 4.4, the Stock Options
described in paragraph 4.5 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.
8.2 Death or Permanent Disability. If, during the
Employment Term, Employee shall 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,
commissions and bonus provided for in Paragraphs 4.1 through 4.4
through the end of the sixth 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, commissions and
bonus provided for in Paragraphs 4.1 through 4.4 for a period of
six months or any part thereof for any continuous disability,
irrespective of 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.
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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 cause, if any, 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 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, 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, whether written or
verbal, between the parties with respect to the Company's
employment of Employee and constitutes the complete understanding
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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. Recitals A, B and C 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, or sent by registered, certified or
express mail, postage prepaid, and shall be deemed given when so
delivered personally, 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
60M Xxxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
To the Company: Alfa International Corp.
000 Xxxxxxxxxx Xxxxx
Xxxxxx Xxxx, XX 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.
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Alfa International Corp Employee
a New Jersey corporation
By_________________________ By:________________________
Xxxxxxx X. Xxxxxxxxx Xxxxx X. Xxxxxx
Vice-President &
Secretary
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