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Exhibit 10.4
AGREEMENT OF EMPLOYMENT
AGREEMENT made this 30th day of SEPTEMBER 1996, by and between
MANCHESTER EQUIPMENT CO., INC., a domestic Corporation maintaining its
principal place of business at 160 OSER AVENUE, HAUPPAUGE, NEW YORK, 11788,
[hereinafter called the "EMPLOYER"], and JOEL STEMPLE, residing at 46 OLD BROOK
ROAD, DIX HILLS, NEW YORK 11746, [hereinafter called the "EMPLOYEE"].
WHEREAS, the EMPLOYEE has been, prior hereto, associated with the
EMPLOYER, and they are mutually desirous of continuing as EMPLOYEE and EMPLOYER
in various accounting areas, and
WHEREAS, the EMPLOYER and EMPLOYEE are desirous of more particularly
defining the rights and obligations each to the other.
NOW, THEREFORE, in consideration of the mutual covenants and
conditions contained herein, and of the sum of TEN and 00/100 ($10.00) DOLLARS,
to each in hand paid by the other, it is agreed as follows:
1. EMPLOYMENT.
The EMPLOYER hereby hires the EMPLOYEE to perform such services as
hereinafter set forth in PARAGRAPH "2", and the EMPLOYEE does hereby accept
such employment and agrees to perform the duties required of him to the best of
his ability.
2. DUTIES.
The duties of the EMPLOYEE, pursuant to the within AGREEMENT, shall
consist of the following: Executive Vice President - Supervisor of Sales Staff
- - Supervisor of Product Purchasing and Inventory - Supervisor of Marketing and
Advertising.
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[a] In addition to the foregoing duties, the EMPLOYEE shall
do such other work as may be required of him from time to time by the EMPLOYER,
on, under and subject to the instructions, directions and control of the
EMPLOYER. It is specifically understood and agreed that no additional
compensation shall be paid to the EMPLOYEE in the event of such change or
amendment of the duties to be performed by the EMPLOYEE.
3. PLACE OF EMPLOYMENT
At the commencement of this Contract, the EMPLOYEE shall perform his
duties at the main office of the EMPLOYER, 160 Oser Avenue, Hauppauge, New
York. However, at any time that the EMPLOYER regards it as necessary for the
purposes of its business, the EMPLOYEE shall work at such a place or places as
he may be directed by the EMPLOYER; PROVIDED, HOWEVER, that in the event such
other place of employment is located outside of the Counties of Nassau, Suffolk
and Queens, such employment shall be on a temporary basis only. In the event
that such employment is deemed on a permanent basis, same shall be pursuant to
a written agreement mutually acknowledged by the EMPLOYER and EMPLOYEE.
4. TERM
The EMPLOYER hereby engages the EMPLOYEE to perform the duties as set
forth in the within Agreement for a period commencing as of August 1, 1996 and
ending July 31, 2001.
5. BEST EFFORTS AND SOLE EMPLOYMENT
That during the term of this Agreement, the EMPLOYEE shall devote his
entire time and energy, and give his best endeavors to the discharge of his
duties hereunder, and he shall not, during the term hereof, enter into the
services of, or be employed in any capacity, or for any purpose whatsoever, by
any person, partnership, firm or corporation, other than the EMPLOYER,
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and that he will not, during the said period of time, be engaged in any
business, enterprises or undertaking, other than his employment hereunder.
[a] The EMPLOYEE specifically acknowledges that he will receive no
overtime or other additional compensation, at such time or times during the
term hereof, as his duties hereunder may require additional work time beyond
the so-called normal work day or days.
[b] Specifically exempted from the restrictions of the within
Paragraph are:
1] the present or future ownership by the EMPLOYEE of certain
real estate or interests in various other business entities, on an investment
basis only;
2] and to certain endeavors of the EMPLOYEE in the areas of
lecturing, teaching, and the writing of articles, texts, etc.; PROVIDED,
HOWEVER, that such investments do not require any time or efforts by the
EMPLOYEE that will detract from the requirements of the EMPLOYER pursuant to
the within Agreement.
6. Compensation.
As compensation for his services as aforesaid, and as salary in
connection with the duties to be performed by him, the EMPLOYER shall pay to
the EMPLOYEE the salaries as hereinafter set forth, such sums to be paid in
equal weekly installments each:
August 1, 1996 - July 31, 1998 - $450,000.00 per annum payable
$8,653.84 per week.
Subsequent to July 31, 1998, the EMPLOYEE shall receive such salary
that is negotiated as between the EMPLOYEE and the Board of Directors of the
EMPLOYER.
It is specifically understood and agreed that the EMPLOYEE will not be
eligible for any so-called "BONUS" during either the 1997 or 1998 Fiscal Years
of the EMPLOYER.
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[a] As additional compensation to be paid to the EMPLOYEE, the
EMPLOYER shall provide an automobile for the use of the EMPLOYEE, which said
automobile shall be provided and maintained, including insurance, at the
expense of the EMPLOYER.
[b] The EMPLOYER shall pay the EMPLOYEE, on the last day of each
month, all expenses actually incurred by him for the entertainment of
customers, traveling expenses and other necessary expenses of the business. The
EMPLOYEE shall furnish to the EMPLOYER an itemized list of all expenses of the
business. The EMPLOYEE shall furnish to the EMPLOYER an itemized list of all
expenses so incurred by him during that month, setting forth the dates, the
purpose for which incurred, and the amounts thereof, together with such
receipts showing such payments as the EMPLOYEE has reasonably been able to
obtain.
[c] As additional compensation for the performance of his duties
hereunder, the EMPLOYEE and his family shall be included in the existing
medical and hospital insurance plans presently maintained by the EMPLOYER, or
any substitutions or additions thereto. Such coverage shall be at no charge or
cost to the EMPLOYEE.
[d] As additional compensation for the performance of his duties
hereunder, the EMPLOYEE shall be entitled to 30 days sick days with salary,
during each year of the within Agreement.
[e] As additional compensation for the performance of his duties
hereunder, the EMPLOYER shall deposit, on behalf of the EMPLOYEE, $4,500.00 per
annum (or the maximum amount allowed by pertinent laws), whichever is greater,
in a fund which shall be one hundred (100%) percent vested in the EMPLOYEE,
each year of such employment. This compensation shall be in the form of a
"Pension Plan" pursuant to Section 401K of the Internal Revenue Code.
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(f) As further additional compensation for the performance of
his duties hereunder, the EMPLOYER shall obtain and institute a policy or
policies of life insurance on the life of the EMPLOYEE, the beneficiaries of
which shall be as designated by the EMPLOYEE. Said policy or policies shall be
in the total amount of $1,500,000.00. The premiums therefor shall be paid by the
EMPLOYER and chargeable to the EMPLOYEE as additional income to the EMPLOYEE.
In the event such policy or policies are either not obtainable, or once
obtained, become non-renewable or cancelled due to health conditions of the
EMPLOYEE, this additional compensation to the EMPLOYEE shall be deemed
cancelled, and the premium cost for such policies shall not be payable to the
EMPLOYEE as additional compensation.
7. DISABILITY PROVISIONS.
As additional compensation for the performance of his duties hereunder,
the EMPLOYER, at its own cost and expense, shall obtain and maintain a
disability insurance policy as to the EMPLOYEE, such disability policy to
contain no less than the following policy limits:
Commencement of payments to be no more than ninety (90)
days from the first day of total disability --
disability payments to be fifty (50%) percent of salary
for life, provided that the cause of disability is
"accidental"; disability payments to be fifty (50%)
percent of salary to the age of sixty-five (65) years,
provided that the cause of disability is "illness".
(i) Said disability policy shall be owned by the EMPLOYER, with
the benefits thereof payable to the EMPLOYER, except as hereinafter set forth.
(ii) In the event the EMPLOYER elects to terminate the within
Agreement pursuant to the provisions of the within Paragraph, the EMPLOYER
shall assign all of the
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proceeds of said disability policy, or the policy itself, to the EMPLOYEE, to
the end that the EMPLOYEE shall receive all of such disability insurance
benefits commencing the week subsequent to such termination by the EMPLOYER,
and upon such assignment the EMPLOYEE shall assume the premium payments
thereof, if any.
[a] During the first one hundred eighty (180) days of such total
disability, the EMPLOYEE shall receive his full salary at the rate set forth in
the within Agreement, together with all other consideration and benefits
accruing to the EMPLOYEE, pursuant to the within Agreement; it being understood
and agreed that the proceeds of any disability policy or policies provided by
the EMPLOYER shall be deemed the sole property of the EMPLOYER.
[b] In the event such total disability shall continue for a period
longer than one hundred eighty (180) days, the EMPLOYEE shall receive
seventy-five (75%) percent of his salary at the rate set forth in the within
Agreement from the one hundred eight-first (181st) day of such disability
through the three hundred sixty-fifth (365th) day of such disability, together
with all other consideration and benefits accruing to the EMPLOYEE, pursuant to
the within Agreement; it being understood and agreed that the proceeds of any
disability policy or policies provided by the EMPLOYER shall be deemed the sole
property of the EMPLOYER.
[c] In the event that the EMPLOYEE shall become ill, or be injured,
and such illness or injury shall be so serious as to prevent the EMPLOYEE from
performing the services required of him pursuant to this Agreement, and such
non-performance by the EMPLOYEE shall be for a period of fifty-two (52) weeks
in any given sixty-two (62) week period, then, at the option of the EMPLOYER,
and upon fifteen (15) days notice, in writing, to the EMPLOYEE by the EMPLOYER,
this Agreement shall cease and terminate, and the EMPLOYER
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shall be under no obligation or liability to the EMPLOYEE, other than the
payments as hereinafter set forth. Such termination of the within Agreement by
the EMPLOYER is herein deemed to be a "NO CAUSE" termination.
8. TERMINATION OF AGREEMENT.
This Agreement may be cancelled by either party hereto, upon ninety
(90) days prior notice in writing, certified mail, return receipt requested,
given to the other party, without any reason whatsoever, and without giving any
reason therefor.
[a] In the event such termination shall be at the request of the
EMPLOYEE, the EMPLOYER shall be under no obligation or liability to the
EMPLOYEE, except to pay him the compensation to which he may be entitled under
this Agreement solely up to the time of such termination date.
[b] In the event such termination shall be at the request of the
EMPLOYER, the EMPLOYEE shall receive such compensation to which he may be
entitled under this Agreement for a period of twelve (12) months after the
effective termination date. Such compensation is herein defined as salary only.
All additional compensation to the EMPLOYEE as set forth herein, such as
automobile, expense account, etc., shall cease and terminate on the effective
date of the termination notice: PROVIDED, HOWEVER, medical and hospital
insurance coverage as to the Employee will continue for a period of twelve (12)
months subsequent to the effective termination date.
9. RENEWAL OF AGREEMENT.
In the event the EMPLOYER and EMPLOYEE shall fail to agree upon
mutually satisfactory terms for the renewal of the within Agreement, same shall
be deemed the equivalent to termination of the within Agreement by the
EMPLOYER. In such event, the EMPLOYEE shall
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receive twelve (12) months salary as more particularly set forth in PARAGRAPH
"8[b]" of the within Agreement.
10. EMPLOYEE RESTRICTIONS.
The EMPLOYEE makes the following agreements as part and parcel of the
consideration required of the EMPLOYEE pursuant to the terms of the within
Agreement, and in exchange for the consideration to be received by the EMPLOYEE
pursuant to the terms of the within Agreement.
[a] The EMPLOYEE agrees that he will not at any time, either
during the term of this Agrement or thereafter, divulge to any person, firm,
partnership or corporation, any information received by the EMPLOYEE during the
course of his employment, with regard to the personal, financial or any other
business affairs of the EMPLOYER, and all such information of any nature shall
be kept confidential, and shall not in any manner be revealed whatsoever,
unless the EMPLOYEE is so directed by an order of a Court of competent
jurisdiction.
[b] The EMPLOYEE further agrees that he will not divulge,
publish or otherwise in any manner reveal, either directly or indirectly, or
through another, to any person, firm or corporation, partnership or business
entity, either during the term of his employment or thereafter, any knowledge
or information whatsoever or any facts concerning any formulas, business
methods, inventions, devices, accounting systems, financial software packages
or systems, or other items of similar nature, used by the EMPLOYER during the
term of this Agreement, which have been disclosed to the EMPLOYEE by the reason
of his employment, and the EMPLOYEE shall retain all such knowledge and
information which he shall acquire during his said employment respecting said
items and the business of the EMPLOYER in trust, in a fiduciary capacity, for
the sole benefit of the EMPLOYER.
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[c] The EMPLOYEE further agrees that he will not, during his
employment or after the end thereof, irrespective of the time, manner or cause
of the termination of his said employment, directly or indirectly, disclose to
any person, firm, partnership, corporation or other business entity, the name,
address or business requirements of any customer of the EMPLOYER, whether same
is a present customer of the EMPLOYER or a future customer acquired during the
term of the within Agreement, and further, the EMPLOYEE will not divulge any
other information that he has, or will have acquired during his period of
employment.
[i] All persons, firms, corporations and partnerships, or
other business entities, and each and every one thereof, for whom the EMPLOYER
performs services, or engages in any transactions of whatsoever nature, in the
course of the EMPLOYER's business, are and shall de deemed the customers of the
EMPLOYER, during the employment of the EMPLOYEE as well as after the
termination of the employment of the EMPLOYEE, notwithstanding that some or all
of said business entities may have been induced to give their patronage and
business to the EMPLOYER by the solicitation of the EMPLOYEE.
[d] The EMPLOYEE further agrees that upon the termination of his
employment, irrespectful of the time, manner or cause of such termination, the
EMPLOYEE will surrender to the EMPLOYER all lists, books and records of any
nature, or in connection with the EMPLOYER'S customers and business, and all
other property belonging to the EMPLOYER.
[e] The EMPLOYEE restrictions set forth in the prior sub-divisions
of the within Paragraph, shall not apply as to matters pertaining to the
EMPLOYER that are either public knowledge, or have been disclosed to the public
by the EMPLOYER.
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11. RESTRICTIVE COVENANTS.
The EMPLOYEE makes the following agreements as part and parcel of the
consideration required of the EMPLOYEE pursuant to the terms of the within
Agreement, and in exchange for the consideration to be received by the EMPLOYEE
pursuant to the terms of the within Agreement.
[a] The EMPLOYEE specifically acknowledges that the
services to be rendered by him pursuant to this Agreement, are special, unique
and of extraordinary character. The EMPLOYEE therefore agrees that for a period
of two (2) years from the date of termination of the employment of the
EMPLOYEE, the EMPLOYEE will not, within the area and territory as hereinafter
designated, directly or indirectly, own, manage, operate, join, control, be
employed or participate in the management, operation or control of, or be
connected in any manner whatsoever, with any business of the type and character
of the business engaged in by the EMPLOYER at the time of such termination.
TERRITORY AND AREA RESTRICTION
All areas of the Continental United States located
East of the Mississippi River.
[i] In the event of termination of the within Agreement, by
the EMPLOYER, pursuant to the terms of the within Agreement, and such
termination by the EMPLOYER is for any reason other than "cause", the
provisions of this PARAGRAPH "11.[a]" shall not apply, and the EMPLOYEE shall
not be restricted thereby; PROVIDED, HOWEVER, that the restrictions of
PARAGRAPH 10 [ALL PARTS] of the within Agreement shall apply and the EMPLOYEE
shall be restricted and bound thereby.
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12. LIFE INSURANCE.
The EMPLOYER shall have the right, from time to time, to apply for a
take out in its name, and at its own expense, life, health, disability or other
types of insurance upon the EMPLOYEE, in the sum or sums which may be deemed
necessary by the EMPLOYER to protect its interest pursuant to this Agreement,
and the EMPLOYEE shall do all such things as may be necessary to assist in the
procuring of such insurance, by making proper applications therefor, as may be
required by the insurance company, and submitting to the usual and customary
medical examinations. The EMPLOYEE shall have no right, title or interest in or
to such insurance, and/or the proceeds thereof, and the same shall be solely
for the benefit of the EMPLOYER, and any amounts payable thereunder shall be
solely payable to such EMPLOYER.
[a] Upon the termination of the within Agreement, the EMPLOYE shall
be entitled to purchase from the EMPLOYER any of the policies owned by it on
the EMPLOYEE's life, upon payment therefor of an amount equal to the
interpolated terminal reserve under the policy or policies as of the date of
the assignment thereof, less any indebtedness to which any such policy is
subject, and increased by a proportion of the premium which has been paid in
advance of such date.
13. VACATION.
The EMPLOYEE shall be entitled to a vacation of four weeks [4] duration
at full pay, during each year of the within Agreement. The time or times for
such vacation shall be such as are agreed to by the EMPLOYER and the EMPLOYEE.
14. NON-ASSIGNMENT.
The EMPLOYEE herein agrees that he will not assign, transfer, convey,
pledge or encumber in any manner, the within Contract or his right, title and
interest therein, or his power
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to execute the same or any renewals thereof, or any monies or other
consideration due, or to become due hereunder, without the specific consent in
writing of the EMPLOYER; it being understood and agreed that the within
Agreement is intended to secure the personal services of the EMPLOYEE.
15. INJUNCTION.
The EMPLOYEE agrees that a violation on his part of any covenant,
condition or provision of the within Agreement, will cause such damage to the
EMPLOYER as will be irreparable and the exact amount of which will be
impossible to ascertain and for that reason further agrees that the EMPLOYER
shall be entitled, as a matter of right, to an injunction in any Court of
competent jurisdiction, restraining any further violation of the said covenants
and conditions and provisions of the within Agreement by the EMPLOYEE. This
right to injunctive relief shall be cumulative, and in addition to whatever
other remedies the EMPLOYER may have, including actions for damages.
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17. ENTIRE AGREEMENT.
The foregoing contains the entire Agreement of the parties hereto, and
no modification thereof shall be binding upon the parties unless the same is in
writing, duly executed by the respective parties hereto.
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18. This Agreement shall bind, inure and benefit the parties hereto, and their
respective legal representatives, executives, administrators, successors and
assigns.
IN WITNESS WHEREOF, the parties hereto have set their hands and seals
the day and year first above written.
IN THE PRESENCE OF: MANCHESTER EQUIPMENT CO., INC.
/s/ JOSEPH LOONEY BY: /s/ BARRY R. STEINBERG
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BARRY R. STEINBERG, PRESIDENT
/s/ ELAINE STOCK /s/ JOEL STEMPLE
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JOEL STEMPLE
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EMPLOYMENT AGREEMENT RIDER
RIDER as to "AGREEMENT OF EMPLOYMENT" between MANCHESTER EQUIPMENT CO.,
INC., as the EMPLOYER and JOEL STEMPLE, as the EMPLOYEE.
FIRST: The Employer and the Employee herein acknowledge that Manchester
Equipment Co., Inc. is presently contemplating an "Initial Public Offering".
SECOND: It is specifically understood and agreed that provisions of the said
"EMPLOYMENT AGREEMENT" of SEPTEMBER 30, 1996 are expressly conditioned upon the
successful conclusion of the "Initial Public Offering" as contemplated by the
Letter of Intent between Ladenburg, Thalmann & Co., Inc. as the Underwriter,
and Manchester Equipment Co., Inc. In the event the said "Initial Public
Offering" is not concluded for any reason whatsoever, the terms and conditions
of the said Employment Agreement of September 30, 1996 shall be deemed null and
void, and of no further force and effect.
DARED: SEPTEMBER 30, 1996
IN THE PRESENCE OF: MANCHESTER EQUIPMENT CO., INC.,
/s/ Joseph Looney By: /s/ B. Steinberg
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Barry R. Steinberg, President
/s/ Elaine Stock /s/ Joel Stemple
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Joel Stemple