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Exhibit 10.1
EXECUTIVE AGREEMENT between Sono-Tek Corporation, a New York
corporation (the "Company") and R. Stephen Harshbarger
("Executive"), dated as
of the Fifth day of March, 2008.
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Executive is an employee of the Company and is an
integral
part of its management; and
WHEREAS, it is in the best interest of the Company that
Executive
continue in the service of the Company without the benefits which
would accrue
to Executive pursuant to an employment agreement; and
WHEREAS, the Company wishes to assure itself of continuity of
management during the critical period of any actual or threatened
change in
control of the Company.
NOW, THEREFORE, it is hereby agreed by and between the parties
as
follows:
1.
Employment
Status.
In consideration of the benefits provided to Executive pursuant
to
this Executive Agreement, Executive hereby agrees to continue to be
employed by
the Company as an employee-at-will without the benefit of an
employment
agreement. Nothing expressed or implied herein shall create any
right or duty
(on the part of the Company or Executive) to have Executive remain
in the
employment of the Company, each reserving all rights to terminate
the employment
relationship at any time, with or without "Cause" (as hereinafter
defined).
2. Term.
The term of this Executive Agreement shall commence on the date
hereof and shall terminate on the earlier to occur of (i)
termination of
Executive's employment for whatever reason, unless a Change of
Control (as
hereinafter defined) shall have occurred prior to such termination
or (ii)
twelve months following written notice of termination of this
Executive
Agreement given by the Company or Executive.
3.
Payment
Subsequent to Change of Control.
(a) Except as may otherwise be required in accordance with Section
8
hereof, in the event that a Change of Control of the Company shall
occur during
the time Executive is employed by the Company, there shall be
payable to
Executive upon the termination of Executive's employment without
Cause or
Executive's Resignation for Good Reason (as hereinafter defined)
within 18
months following such Change of Control a lump sum (net of any
required tax or
other withholding) equal to one year of Executive's annual base and
bonus
compensation paid by the Company for the previous calendar year (or
such lesser
period as Executive shall have been employed by the Company)
immediately
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preceding the Change of Control as reflected in Executive's Forms
W-2 in respect
of such year. Payment made in accordance with this Section 3(a)
shall represent
full satisfaction of all of the obligations of the Company under
this Executive
Agreement and concurrent with receipt of such payment Executive
shall execute a
document satisfactory to the Company to that effect.
(b) For the purpose of this Executive Agreement, a "Change of
Control" of the Company shall mean any of the following:
(i) The sale to
a "Non-Affiliate" (as defined below) of all or
substantially all of the assets of the Company;
(ii) The merger of the
Company with or into a Non-Affiliate where
immediately following such transaction 50% or more of the
outstanding voting stock of the remaining entity is not owned
by persons who were shareholders of the Company immediately
prior to such transaction;
(iii) The acquisition by any person who is not on the date hereof
an
Affiliate or Major Shareholder (as such terms are defined
below) of 50% or more of the issued and outstanding stock of
the Company; or
(iv) The Board of
Directors of the Company shall cease to be a
"Qualified Board" (as defined below).
(c) For purposes
of this Executive Agreement:
(i) Persons or
entities shall be "Affiliates" if one controls the
other or if they are under common control. "Control" shall
mean the ownership of 50% or more of the issued and
outstanding stock of any such entity.
(ii) "Major
Shareholder" shall mean any person or entity who
directly or indirectly currently owns as of the date of this
Agreement 25% of the issued and outstanding stock of the
Company.
(iii) "Qualified Board" shall mean the Board of Directors of
the
Company which is comprised of no fewer than five persons at
least a majority of whose membe
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