Employment Agreement with Jeffrey T. Slovin

 

 

                            SCHICK TECHNOLOGIES, INC.

 

                              EMPLOYMENT AGREEMENT

 

      THIS AGREEMENT (the "Agreement") is made and entered into as of the 9th

day of June 2004, by and between Schick Technologies, Inc., a Delaware

corporation ("Schick Delaware") with a business address of 30-00 47th Avenue,

Long Island City, New York 11101, and Schick Technologies, Inc., a New York

corporation ("Schick New York"), also with a business address of 30-00 47th

Avenue, Long Island City, New York 11101 (Schick Delaware and Schick New York

are hereinafter collectively referred to as "Schick Technologies," "Schick" or

"Company"), and Jeffrey T. Slovin (hereinafter referred to as "Employee"),

residing at 321 E 69th St, New York, New York 10021.

 

                                   WITNESSETH:

 

      WHEREAS, Schick Delaware currently employs Employee as its President and

Chief Operating Officer, pursuant to an agreement entered into by and between

Schick Delaware and Employee as of November 9, 2001 (the "November 2001

Agreement"), and

 

      WHEREAS, Schick Technologies now wishes to employ Employee as Chief

Executive Officer and President of the Company; and

 

      WHEREAS, Employee consents to be employed as Chief Executive Officer and

President of the Company.

 

      NOW THEREFORE, in consideration of the premises, of the mutual covenants

herein contained, and for other good and valuable consideration, the receipt and

sufficiency of which are hereby acknowledged, the parties hereby agree as

follows:

 

I Employment

 

      Schick Technologies hereby employs Employee, and Employee hereby agrees to

be employed, as Chief Executive Officer ("CEO") and President of the Company,

effective June 15, 2004, upon the terms and conditions herein set forth.

Concurrent with the effectiveness of this Agreement, the November 2001 Agreement

shall expire by mutual agreement of the parties and shall have no further force

and effect, except that all unvested options granted to

 

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Employee under the November 2001 Agreement shall continue to vest in accordance

therewith.

 

II Duties and Responsibilities

 

      As CEO and President of the Company, Employee shall have such duties,

responsibilities and powers as are customary and appropriate for such offices

including, without limitation, the strategic oversight of the Company; directing

the day-to-day management and operations of the Company; and such other

responsibilities and duties that customarily appertain to the roles of CEO and

President.

 

      Employee agrees to devote his reasonable best diligence and his full time

to the performance of his duties hereunder. Employee's principal place of

employment shall be at the Company's headquarters in Long Island City, New York;

Employee shall travel as reasonably required in the performance of his duties

hereunder.

 

      Employee shall serve as a member of the Company's Board of Directors,

subject to election by the Company's shareholders. As a Director, Employee shall

have all the rights, responsibilities and obligations conferred and/or imposed

upon all employee members of the Board of Directors pursuant to relevant law,

rule and regulation, as well as the Company's Certificate of Incorporation and

By-Laws.

 

III Term

 

      The term of Employee's employment hereunder shall be three (3) years,

ending on June 15, 2007 (the "Initial Term of Employment"). This Agreement and

Employee's employment thereunder shall automatically renew thereafter for

successive periods of one (1) year, unless the Company or Employee give written

notice of termination to the other at least ninety (90) days before the end of

the then-current term.

 

IV Compensation & Benefits

 

      Schick Technologies shall pay Employee, as full consideration for the

services to be rendered hereunder, compensation consisting of the following:

 

(1)   (i) During the first year of the Initial Term of Employment, an annual

      base salary of three hundred twenty-five thousand dollars ($325,000);

 

      (ii) During the second year of the Initial Term of Employment, an annual

      base salary of three hundred thirty-seven thousand dollars ($337,000); and

 

      (iii) During the third year of the Initial Term of Employment, an annual

      base salary of three hundred fifty thousand dollars ($350,000).

 

      (iv) Employee's base salary shall be payable bi-monthly or in accordance

      with any other payment schedule as may be adopted generally for the

      payment of the Company's payroll.

 

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(2)   (i) In the event that the Company's Diluted Earnings Per Share ("Diluted

      EPS"), for any fiscal year completed during the term of this Agreement, as

      reported on the Company's audited Statement of Operations for such fiscal

      year (the "P&L") and subject to clause (iii) below, exceeds the Company's

      Diluted EPS for the immediately preceding fiscal year by more than 10%,

      Employee shall receive a bonus payment from the Company, calculated as a

      percentage of his annual base salary as in effect as of the last day of

      the Company's fiscal year to which the bonus relates, in accordance with

      the formula set forth in the following table; provided, however, that the

      bonus payment shall in no event exceed 75% of such annual base salary:

 

                                               Bonus Multiplier (as a

      Year-Over-Year Diluted EPS Growth        percentage of annual salary)*

      ---------------------------------        -----------------------------

 

                     0-9.99%                                 0%

                10.00-25.00%                               2.5%

                     >25.00%                               3.0%

 

      (ii) To illustrate the application of the foregoing bonus formula: in the

      event that the Company's year-over-year Diluted EPS growth during any

      fiscal year completed during the term of this Agreement is 20%, the bonus

      payment to Employee shall equal 25% of his then-current annual base

      salary; in the event that the Company's year-over-year Diluted EPS growth

      during any fiscal year completed during the term of this Agreement is 30%,

      the bonus payment to Employee shall equal 52.5% of his then-current annual

      base salary; in the event that the Company's year-over-year Diluted EPS

      growth during any fiscal year completed during the term of this Agreement

      is 40%, the bonus payment to Employee shall equal 75% of his then-current

      annual base salary; and in the event that the Company's year-over-year

      Diluted EPS growth during any fiscal year completed during the term of

      this Agreement is 50%, the bonus payment to Employee shall equal 75% of

      his then-current annual base salary.

 

      (iii) For the purposes of calculating the Company's Diluted EPS in

      connection with this bonus provision, the Company's "Income Before Income

      Taxes" (as reported in the P&L) shall be divided by the "weighted average

      common shares (diluted)" (as reported in the P&L); in addition, all

      "extraordinary items" (as such term is defined by GAAP, as reasonably

      determined by the Audit Committee of the Board of Directors) and

      non-operating items (as reasonably determined by the Audit Committee of

      the Board of Directors) included in the Company's Income Before Income

      Taxes shall be excluded therefrom.

 

      (iv) Any bonus payment shall be made within 15 days after the date on

      which the Company's report on Form 10-K, for the year to which the bonus

      relates, shall have been filed with the S.E.C.

 

----------

* The figures listed in the "Bonus Multiplier" column represent percentage

points for each one percent of Diluted EPS growth in excess of 10% or 25%, as

the case may be. For example, EPS growth of 15% will result in a bonus payment

equal to 12.5% of Employee's annual salary.

 

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(3)   Four hundred thousand (400,000) employee stock options, to be issued as of

      June 9, 2004, pursuant to the terms of the Company's 1996 Stock Option

      Plan for Employees and of the Company's standard stock option agreement.

      Said stock options shall each have an exercise price of $10.50 (which

      equals the closing sale price of the Company's Common Stock on June 9,

      2004, as recorded on the Over-The-Counter Bulletin Board); shall vest in

      arrears in equal monthly increments, commencing June 2004, over a period

      of forty-eight (48) months; and, upon termination of Employee's employment

      hereunder, shall immediately expire, in the case of unvested options, or

      shall expire ninety (90) days following such termination, in the case of

      vested options. (For the purposes of applying the foregoing provision, all

      options which are to "immediately vest" subject to Paragraph (5)(ii) of

      this Section shall be considered to be vested options.)

 

(4)   Participation in any incentive compensation plan, pension or

      profit-sharing plan, annuity or group insurance plan previously adopted by

      the Company or which may be adopted by the Company at some future date, on

      terms and in amounts no less favorable than provided for other Schick

      employees similarly employed. Notwithstanding this provision, Employee

      shall not be granted any stock options pursuant to the Company's 1996

      Employee Stock Option Plan, other than those granted under Section IV (3)

      of this Agreement.

 

(5)   Immediate vesting of the Company stock options issued to Employee

      hereunder and under the November 2001 Agreement in the event that, and at

      such time as: (i) Schick Technologies has a change in control or is

      acquired by another entity or company. (For purposes of this Agreement,

      "control" is defined as any event or circumstance that would require

      disclosure under Item 1 or 5.01 of S.E.C. Form 8-K or any comparable

      requirement of the Securities and Exchange Commission.); or (ii)

      Employee's employment hereunder is terminated by the Company without

      cause, but only if such termination takes place following a fiscal year in

      which the Company's year-over-year Diluted EPS growth, calculated pursuant

      to Section IV (2) above, was twenty percent (20%) or greater.

 

(6)   Employment benefits generally provided to Schick employees, including

      medical and dental insurance, on terms and in amounts no less favorable

      than provided for other Schick employees similarly employed.

 

(7)   Twenty (20) business days per year for vacation time, and five (5)

      business days per year for sick or personal leave, during which times

      Employee will be compensated the normal pro-rated portion of his base

      salary.

 

(8)   Reimbursement for all expenses incurred by Employee in the ordinary course

      of his performance of duties hereunder and submitted by him with

      supporting documentation to the Company's accounting department, in terms

      no less favorable than provided for other Schick employees similarly

      employed.

 

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(9)   A leased automobile (up to a maximum monthly lease payment of $750 per

      month) throughout the term of Employee's employment with the Company.

      Additionally, the Company shall make full payment of automobile insurance

      premiums and operating expenses relating to said automobile.

 

V Termination For Cause / Cure Period

 

      The Company shall have "cause" to terminate this Agreement in the event

that: (i) a majority, plus at least one, of the members of the Company's Board

of Directors, excluding Employee, determines that (a) the Employee has committed

an act of fraud against the Company, or (b) the Employee has committed an act of

malfeasance, recklessness or gross negligence against the Company that is

injurious to the Company or its customers; or (ii) the Employee has materially

breached the terms of this Agreement; or (iii) the Employee is indicted for, or

convicted of, or pleads no contest to, a felony or a crime involving the

Employee's moral turpitude. If Employee's termination for cause hereunder is

based upon Employee's material breach of the terms of this Agreement, then

Employee shall be given 30 days' notice of such termination and shall have the

opportunity to cure such material breach during said 30-day period.

 

VI Severance

 

      In the event that Employee is terminated by the Company for "cause,"

pursuant to the terms of Section V above, he shall receive no severance payments

from the Company.

 

      In the event that Employee's employment hereunder is terminated by the

Company without cause, he shall continue to receive the annual base salary set

forth in Section IV (1) above for a period of twelve (12) months following such

termination, and, if applicable, a Prorated Bonus (as defined below), even if

such termination of employment is made effective at the end of the Initial Term

of Employment or of any renewal term pursuant to Section III hereof or

otherwise, provided that Employee does not violate any provision of Section VII

or VIII during such 12-month severance period. For this purpose, "Prorated

Bonus" shall mean a bonus calculated pursuant to Section IV (2) above, except

that (i) the relevant Diluted EPS growth shall be determined by comparing the

year-to-date Diluted EPS reported on the Company's Form 10-Q filed with the SEC

for the quarter ending closest to (whether before or after) the effective date

of such termination with the Diluted EPS reported in the Company's Form 10-Q for

the counterpart period of the prior fiscal year, (ii) the salary amount being

multiplied by the relevant Bonus Multiplier shall be prorated based on the

number of days elapsed from June 15 most recently preceding such effective date

to such effective date, and (iii) such bonus shall be paid within 15 days after

the filing of the Form 10-Q first mentioned above.

 

VII Non-Disclosure

 

(1)   Employee recognizes that the Company possesses and will continue to

      possess non-public information that has been created, discovered,

      developed, or otherwise become known to it, and/or in which property

      rights have been assigned or otherwise conveyed to

 

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      it, which information has commercial value in the business in which it is

      engaged or may become engaged. All of the aforementioned information is

      hereinafter called "Proprietary Information."

 

(2)   By way of illustration, but not limitation, Proprietary Information

      includes trade secrets, processes, structures, formulas, data, know-how,

      improvements, inventions, product concepts, techniques, marketing plans,

      strategies, forecasts, customer lists and information about the Company's

      employees and/or consultants.

 

(3)   At all times, both during Employee's employment by the Company and after

      its termination, Employee shall keep in confidence and trust all

      Proprietary Information, and Employee shall not use or disclose any

      Proprietary Information or anything directly relating to it without the

      written consent of a majority of the members of the Board of Directors of

      the Company, except as may be necessary in the ordinary course of

      Employee's performing his duties as an employee of the Company and only

      for the benefit of the Company.

 

VIII Non Competition and Non Solicitation

 

      During the period of Employee's employment by the Company and for a period

of twelve months following the termination of the Employee's Employment with the

Company, Employee shall not: (i) engage or become interested in any way (whether

as an owner, stockholder, partner, lender, investor, director, officer,

employee, consultant or otherwise) in any activity, business or enterprise,

located within the geographical area of the United States or Canada, that is

competitive with any significant part of the business conducted by the Company

or contemplated to be conducted by it (except that passive ownership of not more

than 5% of the outstanding securities of any class of any corporation that are

listed on a national securities exchange or traded in the over-the-counter

market shall not be considered a breach of this Section); or (ii) solicit or

hire for any purpose any employee of the Company, or any employee who has left

such employment within the previous six months.

 

IX Miscellaneous Provisions

 

(1)   Acknowledgments and Affirmations. Employee recognizes, understands, agrees

      and acknowledges that the Company has a legitimate and necessary interest

      in protecting its goodwill and Proprietary Information. Employee further

      affirms, represents, and acknowledges that in the event of Employee's

      termination of employment with the Company, Employee's experience and

      capabilities are such that the enforcement of this Agreement will not

      prevent him from obtaining employment in another line of business

      different from that carried on by the Company and permitted under this

      Agreement. Employee further affirms, represents and acknowledges that

      Employee has received good and valuable consideration for entering into

      this Agreement.

 

(2)   Remedies for Breach. Employee agrees that any breach of this Agreement by

      Employee would cause irreparable damage to the Company and that, in the

      event of such breach, the Company shall have, in addition to any and all

      remedies at law, the

 

<PAGE>

 

      right to an injunction, specific performance or other equitable relief to

      prevent or redress the violation of Employee's obligations hereunder.

 

(3)   Separability. If any provision hereof shall be declared unenforceable for

      any reason, such unenforceability shall not affect the enforceability of

      the remaining provisions of this Agreement. Further, such provision shall

      be reformed and construed to the extent permitted by law so that it would

      be valid, legal and enforceable to the maximum extent possible.

 

(4)   Applicable Law. Any dispute arising under or related in any manner to this

      Agreement or to Employee's employment by the Company or to the termination

      of said employment shall in all respects be governed by, adjudicated,

      construed and enforced in accordance with the laws of the State of New

      York.

 

(5)   Jurisdiction and Venue. Employee irrevocably and unconditionally submits

      to the exclusive jurisdiction of any United States federal, state or city

      court sitting in New York in any action or proceeding relating in any

      manner to this Agreement or to Employee's employment by the Company or to

      the termination of said employment. Further, Employee irrevocably and

      unconditionally agrees that all claims relating in any manner to this

      Agreement or to Employee's employment by the Company or to the termination

      of said employment may be heard and determined in any such court and

      waives any objection Employee may now or hereafter have as to venue of any

      such action or proceeding brought in such court or the fact that such

      court is an inconvenient forum.

 

SCHICK TECHNOLOGIES, INC.               JEFFREY T. SLOVIN

A Delaware Corporation

                                        321 E 69th Street

30-00 47th Avenue                       New York, New York 10021

Long Island City, New York 11101

 

 

By: /s/ William K. Hood                 /s/ Jeffrey T. Slovin

    -----------------------------       ------------------------------

                                        (signature)

Name: William K. Hood

 

Title: Chairman of the Board

 

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SCHICK TECHNOLOGIES, INC.

A New York Corporation

 

30-00 47th Avenue

Long Island City, New York 11101

 

 

By: /s/ William K. Hood

    -----------------------------

 

Name: William K. Hood

 

Title: Chairman of the Board