EX-10.1 2 ex101to8k03725_03202007.htm

sec document

                                                                    Exhibit 10.1


                              EMPLOYMENT AGREEMENT

      EMPLOYMENT  AGREEMENT,  effective  this  20th day of March,  2007,  by and
between The LGL Group,  Inc., an Indiana  corporation  (the "Company") and Steve
Pegg (the "Employee").

                                   WITNESSETH:

      WHEREAS, the parties hereto desire to enter into this Employment Agreement
to  define  and set forth the terms  and  conditions  of the  employment  of the
Employee by the Company;

      NOW,  THEREFORE,  in  consideration of the mutual covenants and agreements
set forth  below,  it is hereby  covenanted  and agreed by the  Company  and the
Employee as follows:

1.    POSITION: EMPLOYMENT PERIOD.

      The Company  hereby employs the Employee as its Chief  Financial  Officer,
and the  Employee  hereby  agrees  to serve  in such  capacity,  for the  period
beginning  March 20, 2007 and ending on the date that the Employee's  employment
is terminated in accordance with Paragraph 9 below (the "Employment Period").

2.    PERFORMANCE OF DUTIES.

      The Employee agrees that during the Employment  Period he shall devote his
full business time to the business  affairs of the Company and shall perform his
duties  faithfully  and  efficiently  subject to the  direction  of the Board of
Directors and Chief Executive Officer of the Company.  It is understood that the
employee will relocate,  at the Company's  expense,  to Orlando and will conduct
business from the MtronPTI office in Orlando, FL.

3.    COMPENSATION.

      Subject to the following provisions of this Employment  Agreement,  during
the Employment  Period,  the Employee  shall be compensated  for his services as
follows:

      (a) He shall receive an annual  salary,  payable in bi-weekly in an amount
which shall  initially be $175,000 per annum,  subject to such  increases as may
from time to time be determined by the Chief Executive Officer and. Compensation
Committee of the Company;

      (b) He shall receive a one-time grant of 10,000 shares of restricted stock
after  execution of this Employment  Agreement.  Such shares shall be subject to
the following vesting schedule: 5,000 shares on March 20, 2008 and an additional
1,250 shares on each of June 20, 2008, September 20, 2008, December 20, 2008 and
March 20, 2009.

      (c)  He  shall  participate  in  the  new  Company   Executive   Incentive
Compensation Plan, which will be completed by April 30, 2007.



      The  Employee  shall  be  entitled  to such  other  perquisites  as may be
customarily  granted by the Company to employees  of similar rank and  position.
The Employee is entitled to at least three weeks paid vacation per annum,

4.    DISABILITY

      Subject to the provisions of Paragraph 9, if the Employee's  employment is
terminated  during the Employment Period by reason of his Disability (as defined
below),  the Employee shall continue to receive an annual salary and benefits in
accordance  with  Paragraph  3(a) for the 180-day period after the occurrence of
such  Disability.   For  purposes  of  this  Employment   Agreement,   the  term
"Disability"  means a physical or mental  disability  which renders the Employee
incapable of  performing  his duties under this  Employment  Agreement and which
disability  has existed for at least one month,  as determined by an independent
physician  selected  by the Company  and agreed to by the  Employee.  Any salary
payments to the Employee shall be reduced by the amount of any benefits paid for
the same period of time under the Company's disability insurance programs.

5.    COMPETING BUSINESSES.

      During the period of his employment under this Employment  Agreement,  the
Employee shall not be employed by or otherwise engage in or be interested in any
business in competition  with the Company,  or with any of its  subsidiaries  or
affiliates, except that the Employee's investment in any such business shall not
be considered a violation of this  Paragraph if the Employee owns less than five
percent of the equity thereof.

6.    CONFIDENTIALITY.

      During and. after the Employment  Period, the Employee will not divulge or
appropriate  to his own use or to the use of  others,  in  competition  with the
Company,  any secret or confidential  information or knowledge pertaining to the
business of the Company,  or of any of its subsidiaries,  obtained by him in any
way while he was employed by the Company or by any of its subsidiaries.

7.    RESTRICTIVE COVENANT.

      In the event that the  Employee's  employment is terminated for any reason
during the 12-month  period  following such  termination,  the Employee will not
directly or indirectly (as a director,  officer,  executive  employee,  manager,
consultant,  independent contractor, advisor or otherwise) engage in competition
with,  or own any interest in,  perform any services for,  participate  in or be
connected with any business or organization that engages in competition with the
Company,  provided,  however, that the provisions of this Section 7 shall not be
deemed to prohibit  the  Employee's  ownership  of not more than 5% of the total
shares of all classes of stock outstanding of any publicly held company

8.    REMEDIES.

      If at any  time  the  Employee  materially  violates  any of the  terms or
covenants  set forth in  Paragraphs 5 and 6, the Company shall have the right to



terminate all of its obligations to make further  payments under this Employment
Agreement.  The  Employee  acknowledges  that the Company  would be  irreparably
injured by a violation of Paragraphs 5 or 6 and agrees that the Company shall be
entitled to an injunction restraining the Employee from any actual or threatened
breach of Paragraphs 5 or 6 or to any other appropriate equitable remedy without
any bond or other security being required.

9.    AMENDMENT AND TERMINATION.

      This  Agreement  may be amended or cancelled  by either party  without the
consent of any other  person  (employment  at will) and, so long as the Employee
lives, no person,  other than the parties hereto, shall have any rights under or
interest in this Employment Agreement or the subject matter hereof.

10.   NOTICES.

      Any  notice  required  or  permitted  to be given  under  this  Employment
Agreement  shall be sufficient  if in writing and if sent by registered  mail to
the Company at its  principal  executive  offices or to the Employee at the last
address filed by him in writing with the Company, as the case may be.

11.   NON-ASSIGNMENT.

      The  interests of the Employee  under this  Employment  Agreement  are not
subject  to  the  claims  of  his  creditors  and  may  not  be  voluntarily  or
involuntarily assigned alienated or encumbered.

12.   SUCCESSORS.

      This  Agreement  shall be binding  upon,  and inure to the benefit of, the
Company and its successors and assigns and upon any person acquiring, whether by
merger, consolidation, purchase of assets or otherwise, all or substantially all
of the Company's assets and business.

13.   APPLICABLE LAW.

      The  provisions  of  this  Employment  Agreement  shall  be  construed  in
accordance with the laws of the State of Florida.



14.   COUNTERPARTS.

      This Employment Agreement may be executed in two or more counterparts, any
one of which shall be deemed the original without reference to the others.

      IN WITNESS  WHEREOF,  the  Employee  has  hereunto  set his hand,  and the
Company has caused  these  presents to be executed in its name and on its behalf
all effective the day and year first above written.


                                     /s/ Steve Pegg
                                     -------------------------------------------
                                     STEVE PEGG


                                     THE LGL GROUP, INC.

                                     By: /s/ Jeremiah M. Healy
                                         ---------------------------------------
                                         Name:  Jeremiah M. Healy
                                         Title: President and Chief Executive
                                               Officer