FORM 10-QSB
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended: March 31, 1998
Commission File Number: 0-17264
ALFA International Corp.
(Exact name of registrant as specified in its charter)
New Jersey 22-2216835
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
50 South Buckhout Street, Irvington, New York
(Address of principal executive offices)
10533
(Zip Code)
(914) 591-1994
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. [x] Yes [ ] No
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a
plan confirmed by a court. [x] Yes [ ] No
As of March 31, 1998, the registrant had outstanding 6,268,898 shares of Common
tock, par value $.01 per share.
<PAGE>
ALFA INTERNATIONAL CORP.
INDEX
PART I - FINANCIAL INFORMATION
ITEM 1: FINANCIAL STATEMENTS
BALANCE SHEETS
DECEMBER 31, 1997
MARCH 31, 1998
STATEMENTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 1997
THREE MONTHS ENDED MARCH 31, 1998
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
THREE MONTHS ENDED MARCH 31,1998
STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 1997
THREE MONTHS ENDED MARCH 31, 1998
NOTES TO FINANCIAL STATEMENTS
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
PART II - OTHER INFORMATION
ITEM 2: CHANGES IN SECURITIES
ITEM 5: OTHER INFORMATION
ITEM 6: EXHIBITS AND REPORT ON FORM 8-K
<PAGE>
ALFA INTERNATIONAL CORP. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
ASSETS March 31, December 31,
1998 1997
CURRENT ASSETS: (Unaudited) Note 1
Cash and equivalents $ 31,300 $ 42,088
Accounts receivable 7,519 1,143
Inventory 106,249 96,045
Prepaid expenses and other
current assets 27,673 18,097
Total Current Assets 172,741 157,373
PROPERTY AND EQUIPMENT:
Office & Computer Equipment 35,841 35,296
Furniture & Fixtures 27,449 25,883
63,290 61,179
Less: Accumulated depreciation (27,750) (25,675)
35,540 35,504
Other Assets:
Goodwill 64,642 68,952
Other Assets 4,698 4,398
69,340 73,350
Total Assets $ 277,621 $ 266,227
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 85,071 $ 119,080
Royalties Payable 24,000 24,000
Accrued expenses and other current
liabilities 199 1,840
Total Current Liabilities 109,270 144,920
Other Liabilities 5,403 12,903
STOCKHOLDERS EQUITY:
Common Stock - $ .01 par value
Authorized - 15,000,000 shares
Issued - 6,268,898 shares at 3/31/98
and 6,018,898 shares at 12/31/97 62,689 60,189
Capital in excess of par value 4,009,177 3,886,677
Retained earnings (deficit) (3,908,918) (3,838,462
Total Stockholders' Equity 162,948 108,404
Total Liabilities & Equity $ 277,621 $ 266,227
<PAGE>
ALFA INTERNATIONAL CORP. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
THREE MONTHS ENDED
MARCH 31
1998 1997
REVENUES:
Net sales $ 22,013 $ 2,679
Interest Income 698 0
Other income 18,108 0
40,819 2,679
COST AND EXPENSES:
Cost of sales 9,886 250
Selling, general and administrative 101,389 47,147
Interest expense 0 2,675
111,275 50,072
NET LOSS $ (70,456) $(47,393)
WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING 6,268,018 3,543,898
NET INCOME (LOSS) PER SHARE $ (.01) $ ( .01 )
<PAGE>
ALFA INTERNATIONAL CORP. AND SUBSIDIARY
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
Common Stock Capital in Retained
Par Excess of Earnings
Shares Value Par Value (Deficit
Balances At
December 31,
1997 6,018,898 $ 60,189 $ 3,886,677 $ (3,838,462)
Issuance of Common
Stock 250,000 $ 2,500 $ 122,500
Net (loss) for
the Three
Months ended
March 31, 1998 $ ( 70,456)
Balances At
March 31,
1998 6,268,898 $ 62,689 $ 4,009,177 $ (3,908,918)
<PAGE>
ALFA INTERNATIONAL CORP. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Three Months Ended
March 31
1998 1997
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ ( 70,456) $ (47,393)
Adjustments to reconcile net loss to net cash
flows from operating activities:
Depreciation and amortization 6,384 2,230
Changes in operating assets and liabilities:
Accounts receivable (6,376) (985)
Inventories (10,204) (23,619)
Other current assets (9,576) (12,051)
Accounts payable (34,009) 182,272
Royalties Payable - -
Other assets (300) 4,128
Other Liabilities (7,500) -
Accrued expenses (1,641) 39,139
Net cash flows from operating activities (133,678) 143,721
CASH FLOWS FROM INVESTING ACTIVITIES:
Cash Received in Acquisition - 874
Acquisitions of property and equipment (2,110) 14,690
Net cash flows from investing activities (2,110) 15,564
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of Common Stock 125,000 (204,386)
Collection of Subscription Receivable - 25,000
Advance to Affiliate, net of Investment - (10,489)
Proceeds of Note Payable - 33,828
Net cash flows from financing activities 125,000 (156,047)
NET CHANGE IN CASH AND EQUIVALENTS (10,788) 3,238
CASH AND EQUIVALENTS, BEGINNING OF PERIOD 42,088 57
CASH AND EQUIVALENTS, END OF PERIOD $ 31,300 $ 3,295
SUPPLEMENTAL CASH FLOW INFORMATION:
Income taxes paid (refunded) 0 0
Interest paid $ 0 $ 0
<PAGE>
NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
NOTE 1 - BASIS OF PRESENTATION:
The balance sheet for Alfa International Corp. ("Alfa" or ,the "Company") at
the end of the preceding fiscal year has been derived from the audited
balance sheet and notes thereto contained in the Company's annual report on
Form 10-KSB for the fiscal year ended December 31, 1997 and is presented herein
for comparative purposes. All other financial statements are unaudited. In the
opinion of management all adjustments which include only normal recurring
adjustments necessary to present fairly the financial position, results of
operations and changes in financial position for all periods presented have
been made. The results of operations for interim periods are not necessarily
indicative of operating results for the full year. Alfa presently has one
wholly-owned subsidiary through which it conducts all operations. All
intercompany transactions have been eliminated in its consolidation with Alfa.
Footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been omitted in
accordance with the published rules and regulations of the Securities and
Exchange Commission. These financial statements should be read in conjunction
with the financial statements and notes thereto included in the Company's
annual report on Form 10-KSB for the fiscal year ended December 31, 1997.
NOTE 2 - COMMON STOCK
During the first quarter of 1998, the Company issued 250,000 shares of its
ommon Stock and 125,000 warrants as a result of the sale of ten units ("Units")
of its securities in a private placement ("Private Placement") as described in
the Company's Report on Form 10-KSB for the fiscal year ended December 31,
1997. The Company has engaged the services of Continental International Trading
Corp. ("Continental") as placement manager for the Private Placement. Each Unit
consists of 25,000 shares of Common Stock and 12,500 Warrants. Each Warrant is
exercisable for the purchase of one share of Common Stock.
ALFA INTERNATIONAL CORP. AND SUBSIDIARY
ITEM 2 - Management's Discussion and Analysis of Financial Condition and Results
Of Operations
All of the Company's operations are conducted through its wholly owned
Subsidiary, Ty-Breakers Corp. ("Ty-Breakers"). Ty-Breakers is engaged in the
business of manufacturing and marketing apparel, mostly jackets, made from
Tyvek and Kensel. Tyvek is a registered trademark of the Du Pont Company.
Kensel is a trademark of Ty-Breakers used to identify Ty-Breakers' patented
fabric material. The Company began implementing its sales and marketing plan
for its Ty-Breakers subsidiary in July of 1997. These marketing efforts
continue to date.
<PAGE>
RESULTS OF OPERATIONS:
THREE MONTHS ENDED MARCH 31,1998 vs.
THREE MONTHS ENDED MARCH 31,1997
The Company experienced an increase in net revenue of $ 38,140 for the first
quarter of 1998 as compared to the same period in the previous year. This
revenue increase resulted from an increase in Ty-Breakers' sales of $ 19,334
as a result of initial orders received from Ty-Breakers' direct mail campaign
to retail stores which was initiated in November 1997, interest income and a
non-recurring increase in other income of $ 18,108. The cost of sales
percentage for the first quarter of 1998 was 45% and the gross profit
percentage was 55%.
Selling , general and administrative expenses increased by $ 54,242 during the
first quarter of 1998 compared to the same period in the previous year. This
increase is attributable to the increase in personnel and marketing expenses
associated with Ty-Breakers' marketing efforts in support of sales to retail
stores which were first introduced during the fourth quarter of 1997.
The Company experienced a net loss of $70,456 for the first quarter of 1998 as
compared to a net loss of $ 47,393 during the same period in the previous
fiscal year. This increase of $ 23,063 is attributable to the increased
expenses mentioned above and the failure to attain a sufficient level of
sales. Management believes that a profitable level of sales will be attained
if the Company continues its marketing efforts. The continuation of these
marketing efforts is contingent upon the successful conclusion of the Company's
ongoing Private Placement.
LIQUIDITY AND CAPITAL RESOURCES:
At March 31, 1998 the Company had working capital of $ 63,471 as compared to
$ 12,453 at December 31, 1997. This increase is primarily attributable to
receipt during the period by the Company of the net proceeds of $125,000 from
the sale of ten Units in the Private Placement. Approximately 60% of current
assets are invested in inventory, 18% is held in cash and the balance invested
in accounts receivable and pre-paid expenses.
The Company is continuing the Private Placement and will use the net proceeds
therefrom to finance further marketing efforts for its Ty-Breakers subsidiary.
A successful completion of the Private Placement and / or an increase in Ty-
Breakers' level of sales is necessary to continue to carry out the Ty-Breakers'
sales and marketing plan. It is necessary for the Company to increase its
levels of sales as well as succeed in selling additional equity in order to
allow continued operations. No assurances can be given, however, that adequate
financing can be obtained from the Private Placement or other such sources or
generated from operations.
<PAGE>
PART II - OTHER INFORMATION
ITEM 2: CHANGES IN SECURITIES
Between January 1st and March 31st of 1998, the Company sold 10 Units in the
Private Placement. Each Unit consists of 25,000 shares of Common Stock and
12,500 common stock purchase warrants. Each warrant is exercisable for the
purchase of one share of Common Stock at a price of $2.00 per share. The price
of each Unit is $25,000 and the Company paid Continental a placement fee of 50%
of the sale price of the ten Units sold. The Units in the Private Placement
are being offered without any registration pursuant to the exemptions from
registration contained in Rule 506 of Regulation D promulgated by the
Securities & Exchange Commission under the Securities Act of 1933, as amended.
ITEM 5: OTHER INFORMATION
The Company's President and the Company's Vice-President and Secretary are each
parties to five-year employment agreements dated August 1, 1997 with the
Company. In addition, Ty-Breakers' National Sales Manager is a party to a one-
year employment agreement dated November 1997 with Ty-Breakers. Copies of these
agreements were inadvertently not attached as exhibits to the Company's annual
report on Form 10-KSB for the fiscal year ended December 31, 1997 and are
therefore attached hereto.
ITEM 6: EXHIBITS AND REPORT ON FORM 8-K
(A) Exhibits - (numbered in accordance with Item 601 of Regulation SB)
Exhibit
Number
10.1 Drohan Employment Agreement
10.2 Kuczynski Employment Agreement
10.3 Blumberg Employment Agreement
(B) Reports on Form 8 - K
Amendment dated April 13, 1998 to the Report on Form 8-K dated
January 27, 1997 disclosing the acquisition of Ty-Breakers (NY) Corp. by the
Company. The amendment provides the required certified financial statements of
Ty-Breakers (NY) Corp. for the two fiscal years prior to its acquisition by the
Company.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
DATED: May 15 1998 ALFA INTERNATIONAL CORP.
(Registrant)
By: /s/ Frank J. Drohan
Frank J. Drohan
Chief Executive Officer
and Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1998
<CASH> 31,300
<SECURITIES> 0
<RECEIVABLES> 7,519
<ALLOWANCES> 0
<INVENTORY> 106,249
<CURRENT-ASSETS> 172,741
<PP&E> 63,290
<DEPRECIATION> (27,750)
<TOTAL-ASSETS> 277,621
<CURRENT-LIABILITIES> 109,270
<BONDS> 0
0
0
<COMMON> 62,689
<OTHER-SE> 100,259
<TOTAL-LIABILITY-AND-EQUITY> 277,621
<SALES> 22,013
<TOTAL-REVENUES> 40,819
<CGS> 9,886
<TOTAL-COSTS> 111,275
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> (70,456)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (70,456)
<EPS-PRIMARY> (.01)
<EPS-DILUTED> (.01)
</TABLE>
EMPLOYMENT AGREEMENT
dated as of November 3, 1997 by and between
Ty-Breakers Corp.
a New York Corporation, with its address at
50 South Buckhout Street
Irvington-On-Hudson
New York 10533 (the "Company")
and Jerry Blumberg
whose residence address is
4 Hearth Court, Coram, N.Y. 11727 (the "Employee")
(the "Agreement")
RECITAL:
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.
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 one year commencing on the third day of November, 1997 (the
"Employment Term").
2. Duties. During the Employment Term, the Company shall
employ Employee and Employee shall serve as the Company's National
Accounts Sales Manager. In such capacity, Employee shall be
responsible for the sales and marketing of the Company's Kensel(r)
and Tyvek(r) jacket products to the retail stores identified in
Exhibit A hereto (the "Target Accounts"). Employee will be
responsible for direct selling to the Target Accounts and the
attendance at and management of the appropriate trade shows.
Employee also shall perform such other duties and exercise such
powers as the Company's President, Vice President of Sales 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 without the prior written
consent of the Company. The Company hereby consents to Mr.
Blumberg's present and continued involvement in his personal
business project of selling a neon sign product to the Home
Shopping Network and other interested parties. Mr. Blumberg
warrants that his involvement in such project will not materially
detract from the time and attention he devotes to his duties under
this Employment Agreement. Other than the foregoing, Employee shall
devote all of his business time and attention to the Company'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 $25,000 during the
Employment Term. 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. In addition to the salary mentioned in
paragraph 4.1 above, for each of the Company's fiscal years that
fall, in whole or in part, within the Employment Term, the Company
shall, based upon the Company's net sales (i.e. exclusive of any
shipping and handling charges) to the Target Accounts for which
payment in full has been received by the Company as determined in
accordance with generally accepted accounting principles ("Net Paid
Target Sales"), pay Employee an annual bonus equal to a percentage
of $25,000 for such fiscal year, as follows:
the Company will pay Employee a bonus calculated by
multiplying $25,000 by a fraction rounded to the nearest
hundredth. The numerator of this fraction is the Company's Net
Paid Target Sales for such fiscal year rounded to the nearest
thousand dollars and the denominator is 1,000. For example; if
the Company had Net Paid Target Sales of $1,836,279 in its
1998 fiscal year, then the Employee's bonus for the 1998
fiscal year would be calculated as follows:
Bonus = 1,836 divided by 1,000 times $25,000
= 1.836 x $25,000
= 1.84 x $25,000
= $46,000
The Company shall pay each annual bonus on a quarterly
basis as such bonus accrues, within two months after the end of
each fiscal 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. The Company and Employee
agree that the term Net Paid Target Sales means exclusively those
sales made to the prospective customers identified as Target
Accounts on Exhibit A attached to this Agreement and does not
include sales made to any other customer. Notwithstanding the
foregoing sentence, the Company and Employee recognize that, from
time to time, the Employee may sell a "custom" project to a
customer who may or may not be a Target Account and in such cases
the Company and Employee shall mutually agree upon Employee's
commission on such sale.
4.3 Stock Options. The Company is a wholly owned
subsidiary of Alfa International Corp., a publicly held New Jersey
corporation ("Alfa"). 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 10,000 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 the then prevailing Company policy, offer
to provide Employee with health insurance coverage under its group
policy, provided such group policy remains in force. If Employee
elects not to participate in such group policy, he shall execute
and deliver to the Company a certificate to that 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.
6. Expenses. The Company agrees to pay, or reimburse
Employee for, all travel, entertainment and other business expenses
properly 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.
6.1 Home Office. The Company and Employee agree that
Employee will maintain an office in his residence from which
the Employee will conduct a large portion of his business
activities on behalf of the Company. The Company and Employee
acknowledge that the business expenses to be reimbursed to
Employee in accordance with this paragraph 6 shall include the
actual cost of telephone calls made by the Employee from his
home on behalf of the Company but shall not include any costs
associated with maintaining telephone lines nor any costs
(other than the actual costs of telephone calls) associated
with maintaining such home office. The Company will arrange
and pay for the installation of Tele-Magic Enterprise software
on Employee's computer in his home office. Such software and
all data (including, but not limited to, databases of customer
and potential customer lists and associated information)
provided therewith or subsequently added thereto during the
Employment Term, whether by the Company or Employee, shall at
all times be and remain the exclusive and proprietary property
of the Company. Employee shall return all such software and
data to the Company at the end of the Employment Term and
shall not make or retain any copies thereof at any time during
or after the Employment Term without the express written
permission of the Company. Employee specifically acknowledges
that all such software and data that he receives from the
Company or creates during the Employment Term is a part of the
"Confidential Information" described more fully in paragraph 9
of this Agreement.
7. Vacations. Employee shall be entitled to and shall
accrue vacation time at the rate of two weeks per year of the
Employment Term.
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) 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) in the sole determination of the Company, Employee fails or
refuses in any respect to perform his duties under this Agreement,
including but not limited to, the Company's determination that
sales to the Target Accounts are insufficient. If 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.
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, 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 three 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 three 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 / Non-Disclosure. 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.
Employee's work for the Company will give Employee access to
"Confidential Information" about the Company and its products and
business affairs. For the purpose of this Agreement, "Confidential
Information" means all confidential or proprietary information
owned by the Company whether now existing or created by the
Employee or the Company during the Employment Term, including
without limitation all customer lists and pricing information, all
sales and marketing strategies, all inventions and discoveries, all
designs, techniques, methods, processes, know how, ideas and
concepts, all computer programs, records and files, all
manufacturing and cost data, and all other confidential or
proprietary information in any form, whether copyrighted,
copyrightable, or uncopyrightable, patented or unpatented,
patentable or unpatentable, and all patents, copyrights,
trademarks, trade secrets and other intellectual property rights.
Employee agrees that during the Employment Term and after the
termination or expiration of this Agreement, he will not use any
Confidential Information or disclose any Confidential Information
to anyone else except to the extent necessary to perform his duties
to the Company and Employee will take all measures reasonably
necessary to preserve and protect the confidentiality of, and to
avoid any violation of the Company's proprietary rights with
respect to, all Confidential Information. Employee hereby
acknowledges that the Company will be the sole owner of all
Confidential Information that Employee may create, develop, acquire
or learn after the commencement date of this Agreement and Employee
hereby assigns to the Company all right, title and interest that
Employee may acquire with respect to any Confidential Information
at any time after that date. Employee agrees not to make or
maintain any duplicate or back-up copies of any Confidential
Information and agrees to return all Confidential Information to
the Company within ten (10) days after the expiration or
termination of the Employment Term. Upon request, Employee will
execute any instrument or assignment that the Company reasonably
deems necessary to assign to the Company any rights that Employee
may acquire to any Confidential Information.
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,
other than the fact that the Company may, in its sole discretion,
assign this Agreement in its entirety to Alfa, 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
to Alfa), transfer, pledge, encumber or hypothecate without such
consent shall be null and void.
11.2 Governing Law; Jurisdiction; Venue. This Agreement
shall be governed by, and construed and enforced in accordance
with, the laws of the State of New York applicable to contracts
made and to be entirely performed therein and without regard to
principles of conflict of laws. Any litigation based hereon, or
arising out of, under or in connection with this Agreement shall be
brought and maintained exclusively in the courts of the State of
New York in Westchester County New York or in the United States
District Court for the Southern District of New York. Each of
Employee, the Company and Alfa hereby expressly and irrevocably
submit to the jurisdiction of the courts of the State of New York
in Westchester County New York and of the United States District
Court for the Southern District of New York for the purpose of any
such litigation set forth above. Each of the Employee, the Company
and Alfa hereby expressly and irrevocably waives, to the fullest
extent permitted by law, any objection which they have or hereafter
may have to the laying of venue of any such litigation brought in
any such court referred to above and any claim that any such
litigation has been brought in an inconvenient forum.
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,
whether written or oral, 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. Exhibit A attached hereto is 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. Unless otherwise specifically provided in
this Agreement, all notices, requests, consents, approvals,
agreements or other communications required or permitted to be
given under this Agreement shall be in writing and shall be
delivered in of the following means: (a) by hand; (b) by facsimile
transmission to those parties with fax numbers indicated below
(with subsequent written confirmation by another means in
compliance with this Section 11.7); (c) by registered or certified
mail, first class postage prepaid, return receipt requested; or (d)
by nationally recognized overnight courier, addressed to the
respective addresses of the parties as follows:
If to the Company:
Ty-Breakers Corp.
50 South Buckhout Street
Irvington-on-Hudson, NY 10533
Fax: (914) 591-1997
ATT: President
If to Employee:
Jerry Blumberg
4 Hearth Court
Coram, N.Y. 11727
or to such other address as any party shall designate for himself
or itself by notice to the other parties given in accordance
herewith. Any such notice or other communication shall be deemed
to have been given or made (i) upon delivery, if delivered
personally, (ii) one (1) business day after transmission, if
delivered by facsimile transmission during normal business hours,
(iii) three (3) business days after mailing, if mailed, or (iv) one
(1) business day after delivery to the courier, if delivered by
overnight courier service.
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.
Ty-Breakers Corp., Employee
a New York corporation
By By
Frank J. Drohan Jerry Blumberg
President
As to Paragraph 4.3 only,
Alfa International Corp.,
a New Jersey corporation
By
Frank J. Drohan
President
Exhibit A
List of Target Accounts
The Target Accounts consist of the 3,750 potential customers
named on those two certain listings ("Listings") of 1,402
Department Stores and 2,348 Specialty Stores which the Company
purchased from The Salesman's Guide and are identified thereon as
Job # 19364.
The Company has delivered the Listings to Employee concurrent
with the execution of this Employment Agreement by the parties
hereto.
The cover sheets of the Listings are attached hereto for
identification purposes.
Jerry Blumberg
4 Hearth Court
Coram, New York 11727
November 3, 1997
Mr. Frank J. Drohan
Ty-Breakers Corp.
50 South Buckhout Street
Irvington, N.Y 10533
Dear Frank,
This is to confirm to you that I have been made aware of and been
offered participation in the company's group medical insurance
plan.
At the present time I have my own coverage and therefore decline
to participate in such group coverage offered by the Company.
Should circumstances change and I wish to participate in the
future I will so inform you.
Best regards,
Jerry Blumberg
EMPLOYMENT AGREEMENT
dated as of August 1, 1997 by and between
Alfa International Corp.
a New Jersey corporation, with its address at
50 South Buckhout Street
Irvington-On-Hudson
New York 10533 (the "Company")
and Frank J. Drohan (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: Frank J. Drohan
119 Hartsdale Avenue
Hartsdale, New York 10530
To the Company: Alfa International Corp.
50 South Buckhout Street
Irvington-On-Hudson
New York 10533
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
Charles P. Kuczynski Frank J. Drohan
Vice-President &
Secretary
EMPLOYMENT AGREEMENT
dated as of August 1, 1997 by and between
Alfa International Corp.
a New Jersey Corporation, with its address at
50 South Buckhout Street
Irvington-On-Hudson
New York 10533 (the "Company")
and Charles P. Kuczynski (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.
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.
8.1Cause 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: Charles P. Kuczynski
20 West 13th Street
Bayonne, New Jersey 07002
To the Company: Alfa International Corp.
50 South Buckhout Street
Irvington-On-Hudson
New York 10533
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
Frank J. Drohan Charles P. Kuczynski
President
