Exhibit 10.1


 


AMENDED AND RESTATED EXECUTIVE EMPLOYMENT
AGREEMENT (this “Agreement”), dated December 19,
2008, between P&F INDUSTRIES, INC., a
Delaware corporation (the “Company”), and RICHARD A.
HOROWITZ (the “Executive”).


 


W I T N E S S E T H


 


WHEREAS, the
Executive and the Company are parties to that certain Employment Agreement,
dated February 12, 2007 (the “Prior
Agreement”) pursuant to which the Executive is employed by the
Company as its Chairman, President and Chief Executive Officer; and


 


WHEREAS, the Company
and the Executive desire to amend and restate the Prior Agreement on the terms
and conditions set forth herein, including amendments that the parties agree
are intended to comply with the requirements of Section 409A of the
Internal Revenue Code of 1986, as amended (the “Code”), and the
regulations and guidance promulgated thereunder (collectively “Code Section 409A”);


 


NOW THEREFORE, in
consideration of the foregoing, the mutual promises contained herein and other
good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto hereby agree as follows:


 


1.                                       POSITION/DUTIES.


 


(a)                                  During the Employment Term (as
hereinafter defined), the Executive shall serve as the President and Chief
Executive Officer of the Company and, if elected by the Board of Directors of
the Company (the “Board”), Chairman. 
In this capacity, the Executive shall have such duties, authorities and
responsibilities commensurate with the duties, authorities and responsibilities
of persons in similar capacities in similarly sized companies, and such other
duties, authorities and responsibilities as the Board shall designate that are
consistent with the Executive’s positions. 
The Executive shall report to the Board.


 


(b)                                 During the Employment Term, the
Executive shall devote all of his business time, energy and skill and his best
efforts to the performance of his duties with the Company; provided, however,
that the foregoing shall not prevent the Executive from (i) serving on the
board of directors of non-profit organizations and, with the prior written
approval of the Board, other companies, (ii) participating in charitable,
civic, educational, professional, community or industry affairs or (iii) managing
his and his family’s passive personal investments so long as such activities in
the aggregate do not materially interfere or conflict with the performance of
his duties hereunder or create a potential business conflict.


 


2.                                       EMPLOYMENT TERM.  The Executive’s term of employment under this
Agreement shall be for a term commencing on January 1, 2007 (the “Effective
Date”) and, unless terminated earlier as provided in Section 6, ending
on December 31, 2011 (the “Employment Term”).


 


3.                                       BASE SALARY.  The Company agrees to pay the Executive a base
salary at an annual rate of not less than $975,000, payable in accordance with
the regular payroll practices of the Company. 
The Executive’s base salary shall be subject to annual review by the
Board (or a 


 

















 


committee
thereof) and may be increased, but not decreased, from time to time by the
Board.  The base salary as determined
herein from time to time shall constitute “Base Salary” for purposes of this
Agreement.


 


4.                                       BONUS.  During the Employment Term, the Executive
shall be eligible for an annual discretionary incentive payment under the
Company’s Executive 162(m) Bonus Plan, as amended or as may be amended
from time to time, or any successor annual bonus plan (the “Bonus Plan”),
with a target of 90% of the Executive’s then-current Base Salary (the “Target
Bonus”) (as prorated for partial years). 
Any annual bonus shall be paid in accordance the terms and conditions of
the Plan.


 


5.                                       EMPLOYEE
BENEFITS.


 


(a)                                  Benefit Plans.  The Executive shall be entitled to
participate in any employee benefit plan that the Company has adopted or may
adopt, maintain or contribute to for the benefit generally of its senior
executives at a level commensurate with his position, subject to satisfying the
applicable eligibility requirements. 
Notwithstanding the foregoing, the Company may modify or terminate any
employee benefit plan at any time.


 


(b)                                 Make-Up
Payments.  Through the earlier of (i) December 31,
2016, (ii) the Executive’s death, or (iii) the Executive’s
termination for Cause (as hereinafter defined) or resignation without Good
Reason (as hereinafter defined), the Company will pay the Executive $45,064.37
(each a “Make Up Payment”) on or before March 15 of each calendar
year to cover premiums on a life insurance policy (reflecting the prior change
in the split dollar arrangement).  This
provision shall survive any expiration of the Employment Term and any
termination of the Executive’s employment (other than due to the Executive’s
death or a termination of the Executive’s employment prior to the expiration of
the Employment Term by the Company for Cause or by the Executive without Good
Reason).


 


(c)                                  Vacations.  The Executive shall be entitled to an annual
paid vacation of six weeks per calendar year (as prorated for partial years) in
accordance with the Company’s policy on accrual and use applicable to senior
executives.


 


(d)                                 Business and
Entertainment Expenses.  Upon presentation of appropriate
documentation, the Executive shall be reimbursed in accordance with the Company’s
expense reimbursement policy for all reasonable and necessary business and
entertainment expenses incurred in connection with the performance of his
duties hereunder.


 


(e)                                  Automobile.  During the Employment Term, the Company will
provide the Executive, at the Company’s expense, with a current model
automobile similar to the automobile currently furnished to the Executive.  In addition, upon submission of appropriate
documentation, the Company shall pay or reimburse the Executive for the cost of
insurance, maintenance and gas incurred for business purposes and other
business related operating expenses incurred for such automobile during the
Employment Term.  The Executive shall be
entitled to request a new automobile at the end of each three (3) year
period commencing on the Effective Date.


 


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6.                                       TERMINATION. 
The Executive’s employment and the Employment Term shall terminate on
the first of the following to occur:


 


(a)                                  Disability.  Upon 30 days’ prior written notice by the
Company to the Executive of termination due to Disability if the Executive does
not return to full-time continuous employment with the Company within such 30
days.  For purposes of this Agreement, “Disability”
shall be defined as the Executive’s becoming physically or mentally disabled,
whether totally or partially, so that he has been unable to perform his
material duties hereunder for a period of 180 days (including weekends and
holidays) during any 365-day period.


 


(b)                                 Death. 
Automatically on the date of death of the Executive.


 


(c)                                  Cause.  The Company may terminate the Executive’s
employment hereunder for Cause immediately upon written notice by the Company
to the Executive of a termination for Cause. 
“Cause” shall mean the Executive’s:


 


(i)                                     refusal
or willful failure to attempt in good faith to perform his duties (other than
as a result of physical of mental incapacity);


 


(ii)                                  gross
negligence or willful misconduct with regard to the Company, its assets or
employees of a material nature or any fraud, theft or material dishonesty with
regard to the Company or in the performance of his duties;


 


(iii)                               willful
misconduct which in the good faith judgment of the Board has or may materially
damage the Company economically or reputation wise;


 


(iv)                              commission
of any felony or any other crime involving fraud, dishonesty, securities law
violations or moral turpitude, provided that any conviction for, or pleading
guilty or nolo contendere to, any such felony or other crime shall conclusively
be deemed acknowledgement by the Executive of commission thereof;


 


(v)                                 failure
to attempt in good faith to follow the written direction of the Board; or


 


(vi)                              material
breach of a material term of this Agreement or any other material agreement
with the Company that is not cured within 15 days of the giving of written
notice thereof.


 


The Executive may only be terminated for Cause by a vote of a majority
of the full Board (excluding the Executive for purposes of determining the
number necessary to constitute a majority) and, prior to any termination for
Cause, the Executive will be given 5 business days written notice specifying
the alleged Cause event and will be entitled to appear (with counsel) before
the full Board to present information regarding his views on the Cause event.  After providing the notice in foregoing
sentence, the Board may suspend the Executive with pay until a final
determination pursuant to this paragraph has been made.  In the event of a Cause termination after a
Change in Control, the Company shall bear the burden of proof by a preponderance
of the evidence.


 


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(d)                                 Without Cause. 
Upon written notice by the Company to the Executive of an involuntary
termination without Cause, other than for death or Disability.


 


(e)                                  Good Reason.  Upon written notice by the Executive to the
Company of a termination for Good Reason provided that such notice is given
within 60 days of the Good Reason event. 
“Good Reason” shall mean the occurrence of any of the following
events, without the express written consent of the Executive, unless such
events are cured by the Company within 30 days following written notification
by the Executive to the Company that he intends to terminate his employment
hereunder for one of the reasons set forth below:


 


(i)                                     any reduction or diminution in
the Executive’s title, including non-election or removal from the position of
Chairman unless the separation of the positions of Chairman and Chief Executive
Officer is required by applicable law;


 


(ii)                                  any material reduction or diminution
in the Executive’s then authorities, duties, or responsibilities;


 


(iii)                               a material reduction in the
Executive’s Base Salary or benefits (but not including any reduction related to
a broader compensation reduction by the Company that is not limited to any
particular employee or executive);


 


(iv)                              a relocation of the Executive’s
principal business location to an area outside of a 35 mile radius of both the
Executive’s principal business location and the Executive’s principal residence
at the time of such relocation; or


 


(v)                                 a material breach of the
Agreement by the Company.


 


Notwithstanding the
foregoing, the Executive agrees that, during any period of incapacity, the
Company may appoint or temporarily assign his duties to another or others
without such action resulting in Good Reason.


 


(f)                                    Without Good
Reason.  Upon 60 days’ prior written notice by the
Executive to the Company of the Executive’s voluntary termination of employment
without Good Reason (which the Company may, in its sole discretion, make
effective earlier than any notice date).


 


7.                                       CONSEQUENCES OF
TERMINATION.


 


(a)                                  Disability.  In the event the Executive’s employment is
terminated due to Disability the Company shall pay or provide the Executive (i) any
unpaid Base Salary through the date of termination paid in accordance with the
Company’s normal payroll policies as if the Executive were an employee; (ii) any
annual bonus earned but unpaid with respect to the fiscal year ending on or
preceding the date of termination, paid when such annual bonus would have
ordinarily been paid in accordance with the Bonus Plan; (iii) reimbursement
for any unreimbursed expenses through the date of termination incurred and paid
in accordance with the Company’s normal reimbursement procedures; (iv) any
other amounts and benefits the Executive is entitled to receive under any
employee benefit plan in accordance with the terms of the applicable plan
(collectively items (i) through (iv) shall be hereafter referred to
as the “Accrued Amounts”); (v) a pro-rata portion of the Executive’s
annual bonus for the fiscal year in 


 


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which the Executive’s termination occurs
based on actual results for the fiscal year (determined by multiplying the
amount of such bonus which would be due for the full fiscal year by a fraction,
the numerator of which is the number of days during the fiscal year of
termination that the Executive is employed by the Company and the denominator
of which is 365), paid when such annual bonus would have ordinarily been paid
in accordance with the Bonus Plan (the “Pro Rata Bonus”); (vi) full
vesting of all equity awards granted to the Executive on or after the Effective
Date; (vii) Subject to Section 25(b) hereof and solely to the
extent the Executive does not otherwise receive such coverage under any other
medical benefits available to the Executive as a result of his Disability,
continued coverage at the Company’s expense (other than as set forth below)
under the Company’s group health insurance plans in which the Executive
participated immediately prior to the date of termination, with the Company
portion of the premium for any such coverage paid on a monthly basis, for the
Executive and the Executive’s dependents until the earliest of (i) the
Executive’s 65th birthday and (ii) the
Executive’s ceasing to have a physical or mental disability that would have
prevented him from performing his material duties hereunder, which coverage
period shall run concurrently with the applicable continuation coverage for the
Executive and the Executive’s dependents pursuant to the Consolidated Omnibus
Budget Reconciliation Act of 1985 (“COBRA”); provided that the Executive
pays the same premium amount for such coverage as the Executive would pay if an
active employee under the Company health plans (as determined based on the
premium rate in effect for the Executive on the Executive’s date of termination
and excluding, for purposes of calculating cost, an employee’s ability to pay
premiums with pre-tax dollars); and (viii) continued payment of the
Make-Up Payments in accordance with Section 5(b) (including payment
timing).  Following a termination due to
Disability all equity awards granted to the Executive prior to the Effective
Date shall be governed in accordance with the terms of the applicable grant
agreements.


 


(b)                                 Death. 
In the event the Executive’s employment is terminated due to the
Executive’s death, the Company shall pay or provide to the Executive’s estate (i) the
Accrued Amounts; (ii) the Pro Rata Bonus; (iii) full vesting of all
equity awards granted to the Executive on or after the Effective Date; and (iv) subject
to the Executive’s dependents timely election of continuation coverage under
COBRA, continued coverage pursuant to COBRA at the Company’s expense under the
Company’s group health insurance plans in which the Executive participated
immediately prior to the date of termination, with the premium for any such
coverage paid on a monthly basis, for the Executive’s dependents until the
earlier of (i) 3 years from the date of the Executive’s death and (ii) the
Executive’s dependents ceasing to be eligible for COBRA coverage.  Following a termination due to the Executive’s
death all equity awards granted to the Executive prior to the Effective Date
shall be governed in accordance with the terms of the applicable grant
agreements.


 


(c)                                  Termination For
Cause Or Without Good Reason.  In the event the Executive’s employment is
terminated (i) by the Company for Cause, or (ii) by the Executive
without Good Reason, the Company shall pay or provide to the Executive the
Accrued Amounts.  Following any such
termination all equity awards granted to the Executive shall be governed in
accordance with the terms of the applicable grant agreements.


 


(d)                                 Termination
Without Cause Or For Good Reason.  In the event the
Executive’s employment is terminated (x) by the Company other than for
Cause or (y) by the 


 


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Executive for Good Reason, and Section 8(a) does
not apply, the Company shall pay or provide to the Executive (i) the
Accrued Amounts; (ii) continued payment of the Make-Up Payments paid in
accordance with Section 5(b) (including payment timing); and (iii) subject
to Section 9:


 


(A)                  subject to Section 25(b),
continued payments of Base Salary for 18 months following the date of
termination (the “Severance Payment”) paid in accordance with the
Company’s normal payroll policies as if the Executive were an employee (but off
employee payroll); provided, that unless subject to further
delay as set forth in Section 25(b), the first payment of the Severance
Payment will made on the sixtieth (60th)
day after the date of termination and will include payment of any amounts that
would otherwise be due prior thereto;


 


(B)                    the Pro Rata Bonus; and


 


(C)                    subject to the Executive’s
timely election of continuation coverage under COBRA, continued coverage of the
Executive and his dependents pursuant to COBRA at the Company’s expense under
the Company’s group health insurance plans in which the Executive participated
immediately prior to the date of termination, with the premium for any such
coverage paid on a monthly basis until the earliest of (I) 18 months from
the date of termination, (II) the Executive becoming eligible for medical
benefits from a subsequent employer, or (III) the Executive otherwise
becoming ineligible for COBRA (the “COBRA Benefit”).


 


Following any such termination all equity
awards granted to the Executive shall be governed in accordance with the terms
of the applicable grant agreements. 
Payments and benefits provided in this Section 7(d) shall be
in lieu of any termination or severance payments or benefits for which the
Executive may be eligible under any of the plans, policies or programs of the
Company.


 


8.                                       CHANGE IN
CONTROL.


 


(a)                                  Notwithstanding anything herein
to the contrary, subject to Sections 8(d), in the event the Executive’s
employment is terminated by the Company without Cause or the Executive resigns
for Good Reason within two years following a Change in Control, then in lieu of
the amounts and benefits under Section 7(d), the Company shall pay or
provide to the Executive (i) the Accrued Amounts; (ii) continued
payment of the Make-Up Payments paid in accordance with Section 5(b) (including
payment timing); and (iii) subject to Section 9:


 


(A)                              subject to Section 25(b),
payment in an amount equal to the greater of (I) and (II) where (I) equals
18 months Base Salary and (II) equals the lesser of:


 


(1)                                  two times the sum of (X) the
Executive’s Base Salary plus (Y) the amount of any annual bonus the
Executive received for the year prior to the Change in Control; or


 


(2)                                  3% of the value on the date of
the Change in Control of the Company’s outstanding shares on a fully diluted
basis on the date of such Change in Control (without regard for any outstanding
options with an 


 


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exercise price less than the consideration
paid for the Company’s shares in the Change in Control);


 


such payment to be made as follows:  (x) if the Change in Control is not as a
result of an event that constitutes a “change in control event” within the
meaning of Code Section 409A (a “409A Change in Control”), then an amount
equal to 18 months Base Salary shall be paid to the Executive in the form and
manner set forth in Section 7(d)(iii)(A) above and the remainder of
such payment shall be paid to the Executive in a lump sum on the date that is
six months and one day after the date of termination, and (y) if the
Change in Control does result from an event that constitutes a 409A Change in
Control, then the full amount of such payment shall be paid to the Executive in
a lump sum on the 60th day after the date of termination;


 


(B)                                the Pro Rata Bonus; and


 


(C)                                the COBRA Benefit.


 


Following any such termination all equity
awards granted to the Executive shall be governed in accordance with the terms
of the applicable grant agreements.


 


(b)                                 Notwithstanding anything herein
to the contrary, subject to Sections 8(d), in the event the Executive’s
employment is terminated by the Company without Cause or the Executive resigns
for Good Reason within six months prior to a Change in Control but which the
Executive reasonably demonstrates (x) was at the request of a third party
who is the acquirer in the Change in Control or (y) otherwise arose in
connection with, or in anticipation of, the Change in Control which actually
occurs, then in addition to the amounts and benefits provided under Section 7(d),
the Company shall, subject to Sections 9 and 25(b), pay to the Executive the
excess of the amount that would be payable under Section 8(a)(iii)(A) above
18 months Base Salary, which excess amount shall be paid to the Executive in a
lump sum on the date that is six months and one day after the date of
termination.


 


(c)                                  For purposes of this Agreement, “Change
in Control” will mean the occurrence of one of the following events:


 


(i)                                     any “person” (as such term is
defined in Section 3(a)(9) of the Securities Exchange Act of 1934,
as amended (the “Exchange Act”) and as
used in Sections 13(d)(3) and 14(d)(2) of the Exchange Act) is or
becomes, after the Effective Date, a “beneficial owner” (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of the Company
representing 50% or more of the combined voting power of the Company’s then
outstanding securities eligible to vote for the election of the Board (the “Company
Voting Securities”); provided, however, that an event described in this
subsection (i) shall not be deemed to be a Change in Control if any of
following becomes such a beneficial owner:


 


(A)                              the Company or any majority-owned subsidiary (provided, that
this exclusion applies solely to the ownership levels of the Company or the
majority-owned subsidiary),


 


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(B)                                any tax-qualified, broad-based employee benefit plan
sponsored or maintained by the Company or any majority-owned subsidiary,


 


(C)                                any underwriter temporarily holding securities pursuant to
an offering of such securities, or


 


(D)                               any person pursuant to a Non-Qualifying Transaction (as
defined below);


 


(ii)                                  individuals who, on the
Effective Date, constitute the Board (the “Incumbent Directors”) cease for any reason to
constitute at least a majority of the Board, provided that any person becoming
a director subsequent to the Effective Date whose election or nomination for
election was approved by a vote of at least two-thirds of the Incumbent
Directors then on the Board (either by a specific vote or by approval of the
proxy statement of the Company in which such person is named as a nominee for
director, without objection to such nomination) shall be an Incumbent Director.


 


(iii)                               the consummation of a merger, consolidation, statutory share
exchange or similar form of corporate transaction involving the Company or any
of its Subsidiaries that requires the approval of the Company’s stockholders,
whether for such transaction or the issuance of securities in the transaction
(a “Business Combination”), unless immediately following such Business
Combination:


 


(A)                              50% or more of the total voting power of:


 


(x)                                   the corporation
resulting from such Business Combination (the “Surviving Corporation”),
or


 


(y)                                 if applicable, the
ultimate parent corporation that directly or indirectly has beneficial
ownership of 100% of the voting securities eligible to elect directors of the
Surviving Corporation (the “Parent Corporation”),


 


is represented by Company Voting Securities
that were outstanding immediately prior to such Business Combination (or, if
applicable, is represented by shares into which such Company Voting Securities
were converted pursuant to such Business Combination), and such voting power
among the holders thereof is in substantially the same proportion as the voting
power of such Company Voting Securities among the holders thereof immediately
prior to the Business Combination;


 


(B)                                no person (other than any employee benefit plan (or related
trust) sponsored or maintained by the Surviving Corporation or the Parent
Corporation), is or becomes the beneficial owner, directly or indirectly, of
50% or more of the total voting power of the outstanding voting securities
eligible to elect directors of the Parent Corporation (or, if there is no
Parent Corporation, the Surviving Corporation); and


 


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(C)                                at least a majority of
the members of the board of directors of the Parent Corporation (or if there is
no Parent Corporation, the Surviving Corporation) following the consummation of
the Business Combination were Incumbent Directors at the time of the Board’s
approval of the execution of the initial agreement providing for such Business
Combination


 


(any Business Combination which satisfies all of the criteria specified
in (A), (B) and (C) above shall be deemed to be a “Non-Qualifying
Transaction”); or


 


(iv)                              consummation of the
sale of all or substantially all of the Company’s assets or stockholder
approval of a liquidation or dissolution of the Company, unless the voting
common equity interests of the acquirer of such assets or an ongoing entity
(other than a liquidating trust), as the case may be, based on total voting
power, are at least more than 50% beneficially owned, directly or indirectly,
by the Company’s shareholders in substantially the same proportions as such shareholders
owned the Company’s outstanding voting common equity interests immediately
prior to such sale or liquidation and, if a plan of liquidation or dissolution,
such ongoing entity assumes all existing obligations of the Company under this
Plan.


 


Notwithstanding the foregoing, a Change in
Control of the Company shall not be deemed to occur solely because any person
acquires beneficial ownership of more than 50% of the Company Voting
Securities, based on total voting power, as a result of the acquisition of
Company Voting Securities by the Company which reduces the number of Company
Voting Securities outstanding; provided, that, if after such acquisition by the
Company such person becomes the beneficial owner of Company Voting Securities
that increases the percentage of outstanding Company Voting Securities
beneficially owned by such person, a Change in Control of the Company shall
then occur.


 


(d)                                 Notwithstanding anything else
herein, if any payment or benefit, within the meaning of Section 280G(b)(2) of
the Code, to the Executive or for Executive’s benefit paid or payable or
distributed or distributable pursuant to the terms of this Agreement or
otherwise in connection with, or arising out of, Executive’s employment with
the Company or a change in ownership or effective control of the Company or of
a substantial portion of its assets, would be subject to the excise tax imposed
by Section 4999 of the Code or any interest or penalties are incurred by
the Executive with respect to such excise tax (such excise tax, together with
any such interest and penalties, are hereinafter collectively referred to as
the “Excise Tax”), the amounts and benefits provided under this
Agreement or otherwise that are subject to Section 280G of the Code as a
result of the transaction will be automatically reduced to an amount that
equals the product of 2.99 multiplied by the Executive’s “base amount” (as
determined in accordance with Sections 280G and 4999 of the Code by the Company’s
certified public accountants unless the Company and the Executive mutually
agree to the appointment of an independent certified public accounting firm),
such that the Executive will not be subject to the Excise Tax.  Unless otherwise elected by the Executive, to
the extent permitted under Code Section 409A, such reduction shall first
be applied to any severance payments payable to the Executive under this
Agreement in reverse order of receipt, then to the vesting on any equity, with
underwater stock options first net withholding, and thereafter any in-the-money
stock options starting from the 


 


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stock options with smallest spread between
fair market value and exercise price, and thereafter any restricted stock or
restricted stock units.


 


9.                                       RELEASE.  Any and all amounts payable and benefits or
additional rights provided pursuant to Sections 7(d)(iii), 8(a)(iii) or 8(b) shall
only be payable or provided if the Executive executes and delivers to the
Company a general release of all claims against the Company in the form
attached to the Agreement as Appendix A (the “Release”) (with
such changes as the Company may request to support the legality and
effectiveness of the Release).  The
Company shall provide the Executive with a copy of the Release within seven (7) days
following the Executive’s date of termination and the Executive will be
required to provide the Company with an executed copy of the Release that has become effective within
sixty (60) days following the Executive’s date of termination.


 


10.                                 RESTRICTIVE
COVENANTS.


 


(a)                                  Confidentiality. 
The Executive agrees that he shall not, directly or indirectly, use,
make available, sell, disclose or otherwise communicate to any person, other
than in the reasonable good faith performance of his duties and for the benefit
of the Company, either during the period of the Executive’s employment or at
any time thereafter, any nonpublic, proprietary or confidential information,
knowledge or data relating to the Company, any of its subsidiaries, affiliated
companies or businesses, which shall have been obtained by the Executive during
the Executive’s employment by the Company. 
The foregoing shall not apply to information that (i) was known to
the public prior to its disclosure to the Executive; (ii) becomes
generally known to the public subsequent to disclosure to the Executive through
no wrongful act of the Executive or any representative of the Executive; or (iii) the
Executive is required to disclose by applicable law, regulation or legal
process (provided that the Executive provides the Company with prior notice of
the contemplated disclosure and reasonably cooperates with the Company at its
expense in seeking a protective order or other appropriate protection of such
information).


 


(b)                                 Nonsolicitation.  During the Executive’s employment with the
Company and for the 18 month period thereafter, the Executive agrees that he
will not, except in the furtherance of his duties hereunder, directly or
indirectly, individually or on behalf of any other person, firm, corporation or
other entity, (i) solicit or hire any employees, representatives or agents
of the Company (or any of its affiliates) or (ii) solicit any of the
Company’s customers.


 


(c)                                  Noncompetition.  The Executive acknowledges that he performs
services of a unique nature for the Company that are irreplaceable, and that
his performance of such services to a competing business will result in
irreparable harm to the Company. 
Accordingly, during the Executive’s employment hereunder and for the 18
month period thereafter, the Executive agrees that the Executive will not, (i) enter
the employ of (whether as an employee, consultant, independent contractor or
otherwise, and whether or not for compensation), or render any services to, any
person, firm, corporation or other entity, in whatever form, engaged or
actively planning to be engaged in any Competitive Business, (ii) directly
or indirectly, own, manage, operate, control or otherwise engage in such a
Competitive Business for his own account, or (iii) directly or indirectly,
become interested in a Competitive Business as an individual, partner,
shareholder, director, officer, principal, agent, trustee or in any other
relationship or capacity.  “Competitive
Business” will mean, as of any date, any business competitive with any
business 


 


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then being conducted by the Company and
operating in some or all of the same geographic areas; provided that, upon the
termination of the Executive’s employment such determinations shall thereafter
be determined as of the date of the termination.  The foregoing shall not be violated by the
Executive’s providing services to a noncompetitive portion of a group of
related businesses which noncompetitive portion consists of less than 20% of the
overall revenues of such group of related businesses measured based on the
fiscal year prior to the fiscal year in which the Executive had his initial
relationship with such noncompetitive portion, nor by ownership of less than 2%
of public company stock or debt or a passive interest of less than 2% in a
pooled account, such as a hedge fund, private equity fund or mutual fund.


 


(d)                                 Nondisparagment. During the Employment Term and
thereafter, the Executive agrees not to disparage or encourage or induce others
to disparage the Company or any of its affiliates or any of its and their past
and present officers, directors, employees, products or services.  For purposes of this Agreement, the term “disparage”
includes, without limitation, comments or statements to the press, to the
Company or any of its affiliates or any of its or thier officers, directors, or
employees or to any individual or entity with whom the Company or any of its
affiliates has a business relationship (including, without limitation, any vendor,
supplier, customer or distributor of the Company or any of its affiliates) that
would adversely affect in any manner: (i) the conduct of any business of
the Company or any of its affiliates (including, without limitation, any
business plans or prospects) or (ii) the business reputation of the
Company or any of its affiliates or any of its and their officers, directors,
employees, products or services. 
Notwithstanding the foregoing, this Section 10(d) shall not
apply to truthful statements made in the course of sworn testimony in
administrative, judicial or arbitral proceedings or normal competitive
statements.


 


(e)                                  Reformation.  If it is determined by a court of competent
jurisdiction in any state that any restriction in this Section 10 is
excessive in duration or scope or is unreasonable or unenforceable under the
laws of that state, it is the intention of the parties that such restriction
may be modified or amended by the court to render it enforceable to the maximum
extent permitted by the law of that state.


 


(f)                                    Survival of
Provisions.  The obligations contained in this Section 10
shall survive the termination or expiration of the Executive’s employment with
the Company and shall be fully enforceable thereafter.


 


11.                                 COOPERATION.  Upon the receipt of reasonable notice from
the Company (including outside counsel), the Executive agrees that while
employed by the Company and thereafter, the Executive will respond and provide
information with regard to matters in which he has knowledge as a result of his
employment with the Company, and will provide reasonable assistance to the
Company, its affiliates and their respective representatives in defense of any
claims that may be made against the Company or its affiliates, and will assist
the Company and its affiliates in the prosecution of any claims that may be
made by the Company or its affiliates, to the extent that such claims may
relate to the period of the Executive’s employment with the Company.  The Executive agrees to promptly inform the
Company if he becomes aware of any lawsuits involving such claims that may be
filed or threatened against the Company or its affiliates.  The Executive also agrees to promptly inform
the Company (to the extent he is legally permitted to do so) if he is asked to
assist in any investigation of the Company or its affiliates (or 


 


11

















 


their
actions), regardless of whether a lawsuit or other proceeding has then been
filed against the Company or its affiliates with respect to such investigation,
and shall not do so unless legally required. 
Upon presentation of appropriate documentation, the Company shall pay or
reimburse the Executive for all reasonable out-of-pocket travel, duplicating or
telephonic expenses incurred by the Executive in complying with this Section 11.


 


12.                                 EQUITABLE
RELIEF AND OTHER REMEDIES.


 


(a)                                  The Executive acknowledges and
agrees that the Company’s remedies at law for a breach or threatened breach of
any of the provisions of Section 10 or Section 11 would be inadequate
and, in recognition of this fact, the Executive agrees that, in the event of
such a breach or threatened breach, in addition to any remedies at law, the
Company, without posting any bond, shall be entitled to obtain equitable relief
in the form of specific performance, temporary restraining order, a temporary
or permanent injunction or any other equitable remedy which may then be
available.


 


(b)                                 In the event of a violation of Section 10
or 11 of this Agreement, any severance being paid to the Executive by the
Company pursuant to this Agreement (or any successor agreement) or otherwise
shall immediately cease.


 


13.                                 NO ASSIGNMENTS.


 


(a)                                  This Agreement is personal to
each of the parties hereto.  Except as
provided in Section 13(b) below, no party may assign or delegate any
rights or obligations hereunder without first obtaining the written consent of
the other party hereto.


 


(b)                                 The Company may assign this
Agreement to any successor to all or substantially all of the business and/or
assets of the Company provided the Company shall require such successor to
expressly assume and agree to perform this Agreement and, if applicable, any
Change in Control Agreement (but without creating any rights on a second change
in control), in the same manner and to the same extent that the Company would
be required to perform it if no such succession had taken place.


 


14.                                 NOTICE. 
For the purpose of this Agreement, notices and all other communications
provided for in this Agreement shall be in writing and shall be deemed to have
been duly given (i) on the date of delivery if delivered by hand, (ii) on
the date of transmission, if delivered by confirmed facsimile, (iii) on
the first business day following the date of deposit with the overnight
delivery service if delivered by guaranteed overnight delivery service, or (iv) on
the fourth business day following the date mailed by United States registered
or certified mail, return receipt requested, postage prepaid, addressed as
follows:


 


If to the Executive:


 


At the last address (or to the facsimile number) shown on the records
of the Company;


 


With a copy to:


 


Sonnenschein Nath & Rosenthal LLP


 


12

















 


1301 K Street, N.W.


Suite 600, East Tower


Washington, DC  20005


Facsimile: (202) 408-6399


Attn:  Michael R. Maryn, Esq.


 


If to the Company:


 


P&F Industries, Inc.


445 Broadhollow Road


Suite 100


Melville, New York  11747


Facsimile: (631) 773-4230


Attn:  Chief Operating Officer


 


With a copy to:


 


Certilman Balin Adler & Hyman, LLP


90 Merrick Avenue


East Meadow, New York  11554


Facsimile: (516) 296-7111


Attn:  Steven J. Kuperschmid, Esq.


 


and


 


Proskauer Rose LLP


1585 Broadway


New York, New York  10036-8299


Facsimile: (212) 969-2900


Attn:  Michael Sirkin, Esq.


 


or to such other address as either party may
have furnished to the other in writing in accordance herewith, except that
notices of change of address shall be effective only upon receipt.


 


15.                                 SECTION HEADINGS; INCONSISTENCY.  The section headings
used in this Agreement are included solely for convenience and shall not
affect, or be used in connection with, the interpretation of this
Agreement.  In the event of any
inconsistency between the terms of this Agreement and any form, award, plan or
policy of the Company, the terms of this Agreement shall control.


 


16.                                 SEVERABILITY.  The provisions of this Agreement shall be
deemed severable and the invalidity of unenforceability of any provision shall
not affect the validity or enforceability of the other provisions hereof.


 


17.                                 COUNTERPARTS. 
This Agreement may be executed in several counterparts, each of which
shall be deemed to be an original but all of which together will constitute one
and the same instruments.


 


13
















 


18.                                 ARBITRATION.  Any dispute or controversy arising under or
in connection with this Agreement or the Executive’s employment with the
Company, other than injunctive relief under Section 12 hereof, shall be
settled exclusively by arbitration, conducted before a single arbitrator in New
York, New York (applying New York law) in accordance with the National Rules for
the Resolution of Employment Disputes of the American Arbitration Association
then in effect.  The decision of the
arbitrator will be final and binding upon the parties hereto.  Judgment may be entered on the arbitrator’s
award in any court having jurisdiction. 
The parties acknowledge and agree that in connection with any such
arbitration and regardless of outcome (a) each party shall pay all its own
costs and expenses, including without limitation its own legal fees and
expenses, and (b) joint expenses shall be borne equally among the parties;
provided, however, in the event that the arbitrator determines that the
Executive is the prevailing party, then the Company shall pay or reimburse all
reasonable legal fees and expenses incurred by the Executive.


 


19.                                 INDEMNIFICATION.  The Company hereby agrees to indemnify the
Executive and hold him harmless to the extent provided under the by-laws of the
Company against and in respect to any and all actions, suits, proceedings,
claims, demands, judgments, costs, expenses (including reasonable attorney’s
fees), losses, and damages resulting from the Executive’s good faith
performance of his duties and obligations with the Company.  This obligation shall survive the termination
of the Executive’s employment with the Company.


 


20.                                 LIABILITY
INSURANCE.  The Company shall cover the Executive under
directors and officers liability insurance both during and, while potential
liability exists, after the term of this Agreement in the same amount and to
the same extent as the Company covers its other officers and directors.


 


21.                                 MISCELLANEOUS. 
No provision of this Agreement may be modified, waived or discharged
unless such waiver, modification or discharge is agreed to in writing and
signed by the Executive and such officer or director as may be designated by
the Board.  No waiver by either party
hereto at any time of any breach by the other party hereto of, or compliance
with, any condition or provision of this Agreement to be performed by such
other party shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time.  This Agreement supersedes any and all other
agreements, either oral or in writing, between the parties hereto (including
without limitation the Prior Agreement) with respect to the employment of the
Executive by the Company and, together with all exhibits hereto sets forth the
entire agreement of the parties hereto in respect of the subject matter
contained herein.  No agreements or
representations, oral or otherwise, express or implied, with respect to the
subject matter hereof have been made by either party which are not expressly
set forth in this Agreement.  The
validity, interpretation, construction and performance of this Agreement shall
be governed by the laws of the State of New York without regard to its
conflicts of law principles.


 


22.                                 NO MITIGATION;
TERMINATION CLAIM LIMIT.  In no event shall the Executive be obliged to
seek other employment or take any other action by way of mitigation of the
amounts payable to the Executive under any of the provisions of this Agreement,
nor shall the amount of any payment hereunder be reduced by any compensation
earned by the Executive as a result of employment by another employer, except
as provided in Section 12(b) hereof. 
Any claim by the Executive for damages as a result of a termination
based on Section 6(c)(iv) shall 


 


14

















 


not
be brought prior to resolution of the criminal case and the Executives damages
shall be limited to (a) the monetary amounts the Executive would have
received in the event of a termination without Cause and (b) the intrinsic
value on the termination date of any equity vested at, or upon, such
termination that the Executive forfeited or did not receive because of the
classification of the termination for Cause (and the Executive shall have no
right to the equity, which shall be cancelled upon the termination for Cause).


 


23.                                 REPRESENTATIONS.  The Executive represents and warrants to the
Company that he has the legal right to enter into this Agreement and to perform
all of the obligations on his part to be performed hereunder in accordance with
its terms and that he is not a party to any agreement or understanding, written
or oral, which could prevent him form entering into this Agreement or
performing all of his obligations hereunder.


 


24.                                 WITHHOLDING. 
The Company may withhold from any and all amounts payable under this
Agreement such federal, state and local taxes as may be required to be withheld
pursuant to any applicable law or regulation.


 


25.                                 SECTION 409A
COMPLIANCE.


 


(a)                                  The intent of the parties is
that payments and benefits under this Agreement comply with, or be exempt from,
Code Section 409A and, accordingly, to the maximum extent permitted, this
Agreement shall be limited, construed and interpreted in accordance with such
intent.  If the Executive notifies the
Company (with specificity as to the reason therefore) that the Executive
believes that any provision of this Agreement (or of any award of compensation,
including equity compensation or benefits) would cause the Executive to incur
any additional tax or interest under Code Section 409A and the Company
concurs with such belief or the Company (without any obligation whatsoever to
do so) independently makes such determination, and modifying such provision
would avoid such additional tax or interest, the Company shall, after
consulting with the Executive, reform such provision to try to comply with Code
Section 409A through good faith modifications to the minimum extent
reasonably appropriate to conform with Code Section 409A.  To the extent that any provision hereof is
modified in order to comply with Code Section 409A, such modification
shall be made in good faith and shall, to the maximum extent reasonably
possible, maintain the original intent and economic benefit to the Executive
and the Company of the applicable provision without violating the provisions of
Code Section 409A.


 


(b)                                 A termination of employment
shall not be deemed to have occurred for purposes of any provision of this
Agreement providing for the payment of any amounts or benefits upon or
following a termination of employment unless such termination is also a “Separation
from Service” within the meaning of Code Section 409A and, for purposes of
any such provision of this Plan, references to a “termination,” “termination of
employment” or like terms shall mean Separation from Service.  Notwithstanding any provision to the contrary
in this Agreement, if the Executive is deemed on the date of his termination to
be a “specified employee” within the meaning of that term under Code Section 409A(a)(2)(B) and
using the identification methodology selected by the Company from time to time,
or if none, the default methodology set forth in Code Section 409A, then
with regard to any payment or the providing of any benefit that constitutes “non-qualified
deferred compensation” pursuant to Code Section 409A that is 


 


15

















 


payable due to the Executive’s Separation
from Service, to the extent required to be delayed in compliance with Code Section 409A(a)(2)(B),
such payment or benefit shall not be made or provided to the Executive (subject
to the last sentence of this Section 25(b)) prior to the earlier of (i) the
expiration of the six (6)-month period measured from the date of the Executive’s
Separation from Service, and (ii) the date of the Executive’s death (the “Delay
Period”).  For avoidance of doubt, the
Severance Payment shall not be treated as non-qualified deferred compensation
that is required to be delayed in compliance with Code Section 409A(a)(2)(B) to
the extent that it meets the exemption set forth in Department of Treasury
Regulation Section 1.409A-1(b)(9)(iii) (for separation pay due to
involuntary separation from service) and only that portion, if any, of the
Severance Payment that exceeds the exempt amount shall be subject the delay, if
any, required pursuant to the preceding sentence.  On the first day of the seventh month
following the date of the Executive’s Separation from Service or, if earlier,
on the date of the Executive’s death, all payments delayed pursuant to this Section 25(b) (whether
they would have otherwise been payable in a single sum or in installments in
the absence of such delay) shall be paid or reimbursed to the Executive in a
lump sum, and any remaining payments and benefits due to the Executive under
this Agreement shall be paid or provided in accordance with the normal payment
dates specified for them herein. 
Notwithstanding the foregoing, to the extent that the provision of any
welfare benefits provided to the Executive following his Separation from
Service will be treated as non-qualified deferred compensation that is required
to be delayed (after taking into account the exemption in Department of
Treasury Regulation Section 1.409A-1(b)(9)(v)) but would not be required
to be delayed if the premiums therefor were paid by the Executive, the
Executive shall pay the full cost of the premiums for such welfare benefits
during the Delay Period and the Company shall pay the Executive an amount equal
to the amount of such premiums paid by the Executive during the Delay Period
promptly after its conclusion.


 


(c)                                  In no event whatsoever shall the
Company be liable for any additional tax, interest or penalties that may be
imposed on the Executive by Code Section 409A or any damages for failing
to comply with Code Section 409A.


 


(d)                                 To the extent any reimbursement
of costs and expenses provided for under this Agreement constitutes taxable
income to the Executive for Federal income tax purposes, such reimbursements
shall be made no later than December 31 of the calendar year next
following the calendar year in which the expenses to be reimbursed are
incurred.


 


(e)                                  With regard to any provision
herein that provides for reimbursement of expenses or in-kind benefits, except
as permitted by Code Section 409A, (i) the right to reimbursement or
in-kind benefits is not subject to liquidation or exchange for another benefit,
(ii) the amount of expenses eligible for reimbursement, or in-kind
benefits, provided during any taxable year shall not affect the expenses eligible
for reimbursement, or in-kind benefits to be provided, in any other taxable
year, provided that the foregoing clause (ii) shall not be violated
with regard to expenses reimbursed under any arrangement covered by Section 105(b) of
the Code solely because such expenses are subject to a limit related to the
period the arrangement is in effect.


 


(f)                                    If under this Agreement, an
amount is to be paid in two or more installments, for purposes of Code Section 409A,
each installment shall be treated as a separate payment.


 


16

















 


(g)                                 Whenever a payment under the
Agreement specifies a payment period with reference to a number of days, the
actual date of payment within the specified period shall be within the sole
discretion of the Company.


 


(h)                                 To the extent that this
Agreement provides for your indemnification by the Company and/or the payment
or advancement of costs and expenses associated with indemnification, any such
amounts shall be paid or advanced to the Executive only in a manner and to the
extent that such amounts are exempt from the application of Code Section 409A
in accordance with the provisions of Treasury Regulation 1.409A-1(b)(10) or
that are provided in accordance with Code Section 409A.


 


26.                                 SARBANES-OXLEY.  The Executive hereby acknowledges and agrees
that he is subject to Section 304 of the Sarbanes-Oxley Act of 2002, and
that pursuant thereto he may under certain circumstances be obligated to pay
back to the Company certain amounts previously received by him.


 


[End of text - Signature page follows]


 


17

















 


IN WITNESS WHEREOF,
the parties hereto have executed this Agreement as of the date first written
above.


 


	
   

  	
   

  	
  P&F
  INDUSTRIES, INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Joseph
  A. Molino, Jr.

  
	
   

  	
   

  	
  Name:

  	
  Joseph A.
  Molino, Jr.

  
	
   

  	
   

  	
  Its:

  	
  VP and Chief Operating
  Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ Richard
  A. Horowitz

  
	
   

  	
   

  	
  Richard A.
  Horowitz

  



 


18

















 


APPENDIX A


 


FORM OF RELEASE


 


AGREEMENT  AND GENERAL RELEASE AND WAIVER, dated as of
                            
(the “Agreement”), by and between RICHARD A. HOROWITZ
(the “Employee”) and P&F INDUSTRIES, INC.,
a Delaware corporation (the “Company”).


 


The Employee and the Company mutually want to enter into this Agreement
concerning the Employee’s separation from the Company.  Where appropriate in the context of this
Agreement, the term “Company” includes, the Company’s past, present and future
subsidiaries, affiliates, divisions, parents, and any of its or their
respective predecessors, successors, assigns, assets, employee benefit plans or
funds and its or their past, present and future directors, officers,
fiduciaries, trustees, administrators, representatives, shareholders, agents,
employees, and independent contractors, whether acting on behalf of the Company
or in their individual capacities.


 


1.                                       The
Employee acknowledges and agrees that (a) his last date of employment with
the Company was                     
(the “Termination Date”), (b) the Termination Date was the
termination date of his employment with the Company for purposes of
participation in and coverage under all benefit plans and programs sponsored by
or through the Company, (c) the Company shall have no obligation to rehire
the Employee, or to consider him for employment, after the Termination Date,
and (d) he will not seek employment with the Company at any time in the
future.


 


2.                                       The
Employee acknowledges that he has carefully read this Agreement in its
entirety, the terms and implications of this Agreement have been fully
explained to the Employee, the Employee has had answered to his satisfaction
any questions he has asked with regard to the meaning and significance of any
provision of this Agreement, and that he fully understands the significance of
all of the terms and conditions of this Agreement.


 


3.                                       The
Employee acknowledges that he has been given the opportunity to consider this
Agreement for twenty-one (21) days and decide for himself whether or not he
wants to sign it.


 


4.                                       The
Employee acknowledges that he has been advised to consult with an attorney of
his choice concerning this Agreement and the implications to the Employee of
signing or not signing it.


 


5.                                       The
Employee acknowledges that he has carefully considered other alternatives to executing
this Agreement, and has decided that he wants to sign it.


 


6.                                       The
Employee may accept this Agreement by signing it and returning it to
                          ,
P&F Industries, Inc., 445
Broadhollow Road, Suite 100, Melvile, New York, 11747, within twenty-one (21) days of his
receipt of this Agreement.  The Employee
is entitled to change his mind and revoke this Agreement by indicating his
desire to do so in writing 


 

















 


delivered to
                    
at the address above (or by fax at (     )
   -     ) by no later than 5:00 p.m.
EST on the seventh (7th) day after the date he signs this Agreement (the “Revocation
Period”).  This Agreement will not become
effective and the Employee will not receive any of the benefits set out below
until the eighth (8th) day after the Employee signs it (the “Effective Date”).  If the last day of the Revocation Period
falls on a Saturday, Sunday or holiday, the last day of the Revocation Period
will be deemed to be the next business day.


 


7.                                       In
consideration for the Employee’s signing and not revoking this Agreement, the
Company has agreed to pay the Employee the consideration set forth in Section [IF
TERMINATION IS NOT IN CONNECTION WITH A CHANGE IN CONTROL - 7(d)(iii) and
if applicable, 8(b)] [IF TERMINATION IS IN CONNECTION WITH A CHANGE IN CONTROL –
8(a)(iii)] of that certain Executive Employment Agreement, dated as of December     ,
2008, by and between the Company and the Employee (the “Employment Agreement”).  The Company and the Employee expressly agree
that the Company is not otherwise obligated to pay such consideration; that the
Employee is not otherwise entitled to receive any of such consideration; and
that, if the Employee does not sign this Agreement or revokes this Agreement
during the Revocation Period, the Company will have no further obligations to
the Employee under this Agreement, including, without limitation, the
obligation to make the payments set forth in Section 7 of this Agreement.


 


8.                                       By
entering into this Agreement, the parties do not admit, and specifically deny,
any liability or wrongdoing, or violation of any law, statute, order,
regulation or policy.  It is expressly
understood and agreed that this Agreement is being entered into solely for the purpose
of avoiding the costs of litigation and amicably resolving all matters in
controversy, disputes, causes of action, claims, contentions and differences of
any kind whatsoever which have been or could have been alleged by the
respective parties against each other.


 


9.                                       The
Employee acknowledges that he knows that there are various state and federal
laws which prohibit employment discrimination on the basis of age, sex, race,
color, creed, national origin, marital status, religion, disability or veteran
status and that these laws are enforced through the Federal Equal Employment
Opportunity Commission, the New York State Division of Human Rights and various
city, county and local human rights agencies.  In addition, the Employee
acknowledges that he knows that there are other federal, state, and local laws
of other types or description regarding employment, including, but not limited
to, claims arising from or derivative of the Employee’s employment with the
Company.


 


10.                                 The
consideration set forth in Section 7 of this Agreement is in full and
complete satisfaction of all claims whatsoever the Employee may have against
the Company arising from the Employee’s employment and/or separation from
employment with the Company, or from any other matter whatsoever up to and
including the date of this Agreement, whether known or unknown.  Without limiting the generality of the
foregoing, the Employee hereby releases, waives, and forever discharges any and
all claims of any kind against the Company arising from the Employee’s
employment and/or separation from employment with the Company, or from any
other matter whatsoever up to and including the date of this Agreement, whether
known or unknown, that he may have or had, including, but not limited to,
fraud, claims arising under Age Discrimination in Employment Act of 1967, as
amended, 29 U.S.C. §621 et. 


 

















 


seq., Title VII of the Civil Rights Act of
1964, as amended, 42 U.S.C. §2000 et. seq., the Civil Rights Act
of 1866, 42 U.S.C. §1981, 42 U.S.C. §1983, The Equal Pay Act, as amended, 29
U.S.C. §206(d)(1), the Fair Labor Standards Act of 1938, as amended, 29 U.S.C.
§201 et. seq., the Family and Medical Leave Act of 1993, 29
U.S.C. §2601 et. seq., the Employee Retirement Income Security
Act of 1974, as amended, 29 U.S.C. §1001 et. seq., the Americans
with Disabilities Act, 42 U.S.C. §12101 et. seq., the Civil
Rights Act of 1991, 105 Stat. 1071, Executive Order 11246, the Sarbanes-Oxley
Act of 2002 (a federal whistleblower law), the New York State Human Rights Law,
New York City Human Rights Law, New York Equal Pay Law and N.Y. Lab. Law,
Section’s 201-c (adoptive parent leave) and 740 (whistle blower statute
(private employees)), all as amended, and any other federal, state and local
fair employment practice law, workers’ compensation law, unemployment insurance
law, and any other employee relations duties and obligations, whether imposed
by express or implied contract, tort (including, but not limited to, all
intentional torts, negligence, negligent hiring, training, supervision or
retention), common law, equity, public policy statute, executive order or law,
any claims for physical or emotional distress or injuries, or any other duty
obligation of any kind or description, as well as any rights or claims the
Employee or his attorney or other representative have or may have for costs,
expenses, attorneys’ fees or otherwise. 
The foregoing shall not apply to the Employee’s right to receive the
payments and benefits provided under Sections [IF TERMINATION IS NOT IN
CONNECTION WITH A CHANGE IN CONTROL - 7(d)(i) and (ii)] [IF TERMINATION IS
IN CONNECTION WITH A CHANGE IN CONTROL – 8(a)(i) and (ii)] of the
Employment Agreement, nor to the Employee’s rights, if any, to indemnification
as an officer of the Company or a fiduciary of any Company benefit plan.  In addition, nothing in this Agreement shall
be construed to prevent the Employee from filing a charge with, or
participating in an investigation conducted by, any governmental agency,
including, without limitation, the Equal Employment Opportunity Commission or
applicable state/city fair employment practices agency, to the extent required
or permitted by law, or to prevent any challenge by the Employee to the waiver
and release of any claims as set forth herein.


 


11.                                 The
Employee agrees to keep this Agreement confidential and not to reveal its
contents to anyone except his attorney, his immediate family or his financial
consultant, or as required by law.  The
Employee will be responsible for any disclosure by them.  The Company agrees to keep this Agreement
confidential and not to reveal the contents to anyone except its attorneys,
accountants, officers, directors and human resources director.  The foregoing will not prohibit disclosure of
this Agreement as required by law or regulation, including, but not limited to,
those of the U.S. Securities And Exchange Commission and the rules of any
exchange, quotation system and/or self regulatory organization on which or with
which the Company’s securities are quoted, listed and/or traded, as the case
may be; provided that if the Employee is required to make a disclosure pursuant
to the foregoing he agrees to give the Company prompt written notice thereof
and cooperate with the Company’s efforts to seek a protective order.


 


12.                                 The
Employee represents and warrants that he has returned all property belonging to
the Company and has deleted from his home or personal computer, personal e-mail
accounts and electronic filings all Company information.


 


13.                                 The
parties hereto agree and acknowledge that Sections [IF 


 

















 


TERMINATION IS NOT IN CONNECTION WITH A CHANGE IN CONTROL - 7(d)] [IF
TERMINATION IS IN CONNECTION WITH A CHANGE IN CONTROL – 8(a)], 10, 11, 12, 16,
18, 19, 20, 21, 22, 25 and 26 of the Employment Agreement shall remain in full
force and effect and shall remain fully enforceable following the Effective
Date.


 


14.                                 The
payments set forth in Section 7 of this Agreement are subject to taxes and
all applicable withholding requirements.


 


15.                                 Except
as specifically set forth in this Agreement, this Agreement constitute the
entire agreement between the Employee and the Company with respect to the
subject matter hereof and may only be modified, altered or changed in writing,
signed by both the Company and the Employee.


 


16.                                 This
Agreement has been executed freely, knowingly and voluntarily by the Employee
without duress, coercion, or undue influence, with a full understanding of its
terms.  The Employee acknowledges and
agrees that, prior to executing this Agreement, he has been provided with sufficient
time in which to consider this Agreement and that, in deciding to execute this
Agreement, he has relied on his own judgment and further acknowledges that he
is fully aware of its contents and of its legal effects.  The parties to this Agreement agree that no
fact, evidence or transaction currently unknown to them but which may hereafter
become known to them shall affect in any way or manner the final or
unconditional nature of this Agreement.


 


17.                                 This
Agreement shall be interpreted and construed and enforced in accordance with
the laws of the State of New York, excluding choice of law principles thereof.


 


18.                                 This
Agreement shall be binding upon, and shall inure to the benefit of, the parties
hereto and their respective successors, assigns and legal representatives.


 


19.                                 The
waiver by either party of a breach of any provision of this Agreement shall not
operate or be construed as a waiver of any subsequent breach. If any provision
of this Agreement, or part thereof, shall be held to be invalid or
unenforceable, such invalidity or unenforceability shall attach only to such
provision and not in any way affect or render invalid or unenforceable any
other provisions of this Agreement, and this Agreement shall be carried out as
if such invalid or unenforceable provision, or part thereof, had been reformed,
and any court of competent jurisdiction is authorized to so reform such invalid
or unenforceable provision, so that it would be valid, legal and enforceable to
the fullest extent permitted by applicable law.


 


20.                                 BY SIGNING THIS AGREEMENT, THE EMPLOYEE STATES THAT: HE HAS READ IT; HE
UNDERSTANDS IT AND KNOWS THAT HE IS GIVING UP IMPORTANT RIGHTS; HE AGREES WITH
EVERYTHING IN IT; HE WAS TOLD, IN WRITING, TO CONSULT AN ATTORNEY BEFORE
SIGNING IT; HE HAS HAD [21] [45] DAYS TO REVIEW THE AGREEMENT AND THINK ABOUT
WHETHER OR NOT HE WANTED TO SIGN IT; AND HE HAS SIGNED IT KNOWINGLY AND
VOLUNTARILY.


 


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WHEREFORE, the
Employee and the Company now voluntarily and knowingly execute this Agreement
as of the day and year first written above.


 


	
   

  	
  P&F INDUSTRIES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
  (Please print)

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Richard A. Horowitz

  
					



 


Sworn to by Richard A. Horowitz before me this
         day of
                            ,
200      .


 


 


	
   

  	
   

  
	
  Notary Public