| Item 1.01 | Entry into a Material Agreement |
On June 6, 2023, P & F
Industries, Inc. (the “Company”) and Joseph A. Molino, Jr., the Company’s Vice President, Chief Operating Officer and
Chief Financial Officer (the “Executive”), entered into Amendment No. 3 (“Amendment No. 3”) to Executive Employment
Agreement, dated as of January 1, 2018, as amended (the “Employment Agreement).
Amendment No.3 amends the
Employment Agreement by providing that if the Executive remains continuously employed by the Company through December 31, 2023, the Executive
will be eligible for the following payments and benefits (the “Retention Benefits”), subject to the release requirement in the Employment Agreement:
(i) An
amount equal to eighteen (18) months of the Executive’s base salary, to be paid in equal ratable installments over eighteen (18)
months in accordance with the Company’s normal payroll policies (the “Retention Bonus”); provided, among other things,
in the event of a 409A Change in Control (as defined in the Employment Agreement”), the compensation committee of the Company’s
board of directors may, in its sole discretion, accelerate, any remaining installment payments of the Retention Bonus into a lump sum
solely to the extent permitted under Internal Revenue Code Section 409A; and
(ii) (A)
Accelerated vesting, as of December 31, 2023, of any unvested portion of any equity awards granted to the Executive prior to the effective
date of Amendment No. 3, (B) the Pro Rata Bonus, and (C) Termination COBRA Payments (each as defined in, and
provided by, the Employment Agreement).
The Executive will
forfeit all rights to the Retention Benefits upon either (i) the Executive’s termination of employment with the Company for
any reason (other than by the Company without Cause (as defined in the Employment Agreement) or due to Executive’s death or disability), prior to December 31, 2023, or
(ii) the Company’s termination of the Executive’s employment with the Company for Cause at any time prior to the full
and final payment of the Retention Benefits. In addition, if a Change in Control occurs within ninety (90) days after the
termination of the Executive’s employment by the Company without Cause, or if the Executive remains employed by the Company
through December 31, 2023 and a Change in Control (as defined in the Employment Agreement) occurs on or prior to March 31, 2024, the
Executive will receive both the Retention Benefits and the lump sum payment in respect of the Executive’s target annual bonus
as provided by the Employment Agreement, in each case, to the extent unpaid.
The Retention Benefits and the aforementioned lump sump target bonus are in lieu of, and not in addition to, other payments or benefits
otherwise provided for under the Employment Agreement in connection with the Executive’s termination of employment.
Additionally, in the event
the Executive’s employment is terminated due to the Executive’s death or disability, any unpaid portion of the Retention Benefits
payable to the Executive shall be provided by the Company to the Executive or if necessary, his representative, as applicable.
The foregoing description
of Amendment No. 3 is qualified in its entirety by reference to the full text of Amendment No. 3, attached as Exhibit 10.1 hereto.