AB PLASTICS CORPORATION
00000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
September 27, 1996
Xx. Xxxxx X. Xxxxx
00 Xxxxxxxxxxxx Xxxx
Xxxxxx Xxxxx Xxxxxx, Xxxxxxxxxx 00000
Dear Xxx:
This will confirm our agreement with respect to your continued
employment with AB Plastics Corporation (the "Company"), primarily in connection
with customer relations and strategic long-term planning, subject to the terms
and conditions set forth herein.
1. The Company has agreed to employ you, and you have agreed
to be employed with the Company, in a management capacity, primarily in
connection with customer relations and strategic long-term planning, from the
date hereof through and including June 30, 1999. You will initially have the
title of President of the Company, but the Company reserves the right to change
your title at any time in the Company's sole discretion and/or to assign you
other or additional titles at any time and from time to time. You will perform
your services hereunder from time to time, at the Company's reasonable request,
at such times and in such manner as shall be mutually agreeable, including (a)
attending meetings at the Company's offices, (b) working with the Company's
personnel in customer relations and development matters, developing long-term
strategy and new business ideas, and fostering business relationships on behalf
of the Company, and (c) participating in such other projects and functions as
may be mutually agreeable. Throughout the term of this agreement, you will have
the non-assignable right, at your discretion, to serve on the Board of
Directors of the Company (the "Board"). You will report directly to an Executive
Committee of the Board comprised of Xxxxxxx X. Xxxxx and Xxxxxxxx X. X. Xxxxxx,
provided that if either of Messrs. Xxxxx or Xxxxxx is not serving on the Board
at any time, then his replacement shall be as determined by a majority of the
members of the Board.
2. Although your services hereunder will require a significant
portion of your business time, the Company will not require your full-time
services, and will endeavor to be flexible as to the specific times and manner
in which your services will be required. In particular, it is expected that you
will provide substantial services hereunder to the Company during the first year
of this agreement, but that, during the balance of the term of this
agreement, your services will be substantially reduced and will generally be
provided at times primarily within your discretion. You may perform services for
other businesses provided that same do not (a) interfere with your commitments
and responsibilities to the Company hereunder, and (b) violate the provisions of
the Non-Competition and Non-Disclosure Agreement of even date herewith by and
among AB Plastics Holding Corporation, the Company and yourself (the
"Non-Competition Agreement").
3. As compensation for all of your services hereunder, the
Company will pay you a salary at the rate of $100,000 per annum, which will be
payable periodically (but in no event less frequently than monthly) in
accordance with the Company's standard payroll practices from time to time.
During the period of your employment hereunder, the Company will also continue
to make payments, consistent with past practice, in respect of the leasing of
your Company-provided automobile. The Company will also make available to you
(and, with respect to health and medical insurance, members of your immediate
family in the manner and to the extent provision therefor is included in the
subject benefit plan), throughout the period of your employment hereunder, such
further benefits and perquisites as are generally provided by the Company to its
management employees, including but not limited to eligibility for participation
in any group life, health, dental or accident insurance, pension plan,
profit-sharing plan, or other such benefit plan or policy maintained by the
Company from time to time; provided, however, that nothing herein contained
shall be deemed to require the Company to adopt or maintain any particular plan
or policy.
4. In order to assist you in providing your services
hereunder, the Company will, as and to the extent reasonably required by you in
connection with such services, provide you with the use of an office, telephone,
fax and other reasonable and customary administrative support at the Company's
offices. The Company will also reimburse you for any and all reasonable expenses
(including travel, transportation, meals and lodging) which you may incur from
time to time in connection with your services hereunder; provided, however, that
no reimbursement shall be made for any expenses that are not deductible (in
whole or in part) for federal income tax purposes; and further provided, that
any individual expense item in excess of $500, and any and all expense items
over and above $1,500 (in the aggregate) in any calendar month, shall first be
approved by the Chairman of the Company, or by the President of the Company
(unless you are then serving as the President of the Company).
5. The Company reserves the right to terminate this agreement
in the event that (a) you commit any fraud, criminal misconduct, self-dealing,
or gross or willful misconduct in connection with the performance of your
responsibilities hereunder, (b) you die or become physically or mentally
disabled or impaired
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so as to prevent you from continuing the normal performance of your
responsibilities hereunder for a period in excess of three (3) consecutive
months, (c) you commit or suffer any breach of the Non-Competition Agreement,
or (d) you repeatedly fail, refuse or are unable to perform services requested
hereunder as and to the extent contemplated hereby. You will have the right to
terminate this agreement upon 14 days' prior written notice to the Company in
the event that the Company fails to make any required payment hereunder within
20 days after written notice of non-payment is given to the Company. In the
event of any termination of this agreement, the Company will be liable for, and
will pay to you or your estate or personal representative, as the case may be,
all salary and other compensation hereunder accrued through the effective date
of termination; provided, that in the event that this agreement is terminated by
reason of your death or disability, the Company will nonetheless continue to
provide you with your salary and health and medical benefits (including medical
insurance for yourself and your family, subject to the terms of the applicable
benefit plan) for the remainder of the stated term of this agreement (i.e.,
through June 30, 1999). Termination shall be without prejudice to any other
rights and remedies of the parties, subject to any applicable requirements to
mitigate damages.
6. In the event of any suit, action or proceeding brought
against you as a direct result of your performance of your duties under this
agreement, unless the suit, action or proceeding arose out of your own
negligence, misconduct or other ultra xxxxx act, or in any other instance in
which there may be a conflict of interest between the Company's defense and your
defense, the Company will defend, indemnify and hold you harmless from and
against all damages, losses, costs and expenses (including reasonable costs of
defense) sustained or incurred by you in respect of such action, suit or
proceeding or the subject matter thereof.
7. You will not assign or attempt to assign any of your rights
or obligations hereunder without the express prior written consent of the
Company. You will notify the Company of any change in your permanent residence
from that indicated above, or of any anticipated absence from your permanent
residence for a period in excess of one (1) month; provided, however, that your
failure to give any such notice will not affect the Company's obligations
hereunder.
8. Any amendment or modification of this agreement, or any
waiver hereunder, must be in writing and signed by the party to be charged
therewith.
9. This agreement will be governed by and construed in
accordance with the laws of the State of California.
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If the foregoing accurately reflects our agreement and
understanding with respect to the subject matter hereof, kindly acknowledge same
by countersigning and returning a counterpart copy of this letter, whereupon
same shall become an agreement between us which shall be binding upon and inure
to the benefit of us and our respective heirs, executors, administrators,
personal representatives, successors and permitted assigns.
Very truly yours,
AB PLASTICS CORPORATION
By:/s/ Xxxxxxx X. Xxxxx
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Acknowledged and Agreed To:
/s/Xxxxx X. Xxxxx
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Xxxxx X. Xxxxx
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