1
EXHIBIT 10.8
EMPLOYMENT AND CONSULTING AGREEMENT
This Employment and Consulting Agreement ("Agreement") is made and
entered into this 9th day of June, 1998 Xxxxxx X. Xxxxx ("Xxxxx"), Xxxxxxx X.
Xxxxxxx ("Xxxxxxx"), Anchor Advance Products, Inc., a Delaware corporation
("Anchor Advanced"), and Xxxx PlastiCrafters Limited Partnership, a Delaware
limited partnership ("Xxxx") (Anchor Advanced and Xxxx collectively referred to
as the "Companies" and each a "Company").
WHEREAS, due to the knowledge, experience and expertise of Xxxxxxx in
the custom injection molded plastics business in general and in the Companies'
business in particular (collectively, the "Business"), each of the Companies
desires to continue to make use of Xxxxxxx'x expertise.
WHEREAS, Xxxxxxx desires to work for the Companies on the terms and
conditions set forth herein.
WHEREAS, to induce Xxxxxxx to enter into that certain Take-Out Agree-
ment, of even date herewith, to which Xxxxxxx, Xxxxx and other the other
signatories thereto are parties ("Take-Out Agreement"), the parties agree to
enter into and perform this Agreement.
Capitalized terms used herein and not otherwise defined shall have the
same meanings herein as in the Take-Out Agreement.
NOW THEREFORE, in consideration of the mutual agreements contained
herein, the parties agree as follows:
1. Employment Services.
(a) Employment Duties. During the Employment Term (as defined
below), Xxxxxxx shall be employed by the Companies and serve the
Companies faithfully and to the best of his abilities in performing the
duties of Chief Operating Officer of each of the Companies. If, on July
16, 1998, Xxxxxxx owns equity in any of the Companies other than the
Excluded Interests, then Xxxxxxx shall be elected as one of two
directors on the Board of Directors of each Company.
2
(b) Term of Employment. Subject to Section 5, the term of
employment ("Employment Term") shall commence on the date of this
Agreement and continue so long as Xxxxxxx owns equity in any of the
Companies other than the Excluded Interests, except that the
Employment Term shall terminate upon the date the Notes are paid in
full provided that as of such date no Event of Default (as such term is
defined in the Notes) has occurred with respect thereto.
(c) Employment Consideration. Xxxxxxx shall receive from the
Companies at least the same compensation, including, without
limitation, base salary, bonus, health insurance, dental disability,
salary continuance, life, accidental death and travel accident
insurance, car, expenses, retirement benefits, fringe benefits and
other prerequisites (collectively "Compensation"), as Xxxxxxx receives
on the date hereof. In addition, Xxxxxxx shall receive such increases
to such compensation and such additional Compensation as is at least
equal to that received, in the aggregate, by Votis from the Companies
from time to time (and if Votis is not then the chief executive officer
("CEO") of any Company, then the CEO of such Company.
2. Consulting Services.
(a) Consulting Duties. During the Consultancy Term (as defined
below), Xxxxxxx will provide to any of the Companies advice and
consultation on issues relating to the Business as mutually agreeable
to Xxxxxxx and Votis, both in terms of time and location, including at
his home, up to a maximum of two hundred fifty (250) hours per year, in
the aggregate.
(b) Terms of Consultancy. The term of consultancy (the
"Consultancy Term") shall be for the five (5) year period commencing
on the last date of the Employment Term, unless sooner terminated in
accordance with Section 5. Each of the Companies and Xxxxxxx
acknowledge that Xxxxxxx, in his capacity as a consultant to the
Companies, is not an employee, agent or representative of the
Companies, and that in Xxxxxxx'x performance hereunder, Xxxxxxx is
acting in the capacity of an independent contractor.
3. Confidentiality and Non-Solicitation.
(a) Confidentiality. During the Employment Term and Consul-
tancy Term, Xxxxxxx shall not, directly or indirectly, disclose,
divulge or make
2
3
use of any trade secrets or other confidential and proprietary
information of any Company, including, without limitation, information
of others that any Company has agreed to keep confidential and of which
Xxxxxxx has been advised in writing by such Company to keep
confidential. No information shall be deemed for purposes hereof to
constitute trade secrets or confidential and proprietary information if
such information was or becomes public knowledge or generally available
to the public other than by breach of this Agreement or Xxxxxxx, or was
or becomes available to Xxxxxxx on a non-confidential basis prior to
disclosure to Xxxxxxx by any Company, or was or becomes available to
Xxxxxxx on a non-confidential basis from a source other than any
Company or its agents or employees. Nothing herein shall preclude
Xxxxxxx and Xxxxxxx shall be authorized as necessary to file tax
returns or other required reports with governmental agencies or to
divulge trade secrets or other confidential and proprietary information
as may otherwise be required by any law, rule, regulation, order or
other legal requirement as determined by Xxxxxxx'x counsel.
Notwithstanding the foregoing, in the event Xxxxxxx is requested (by
oral questions, interrogatories, requests form information or
documents, subpoena, civil investigative demand or similar process) to
disclose confidential and proprietary information, he shall use all
reasonable efforts to notify the applicable Company promptly of such
request so that such Company my seek an appropriate protective order.
In addition, Xxxxxxx agrees not to copy or take with him upon
termination of the Employment Term any documents reflecting or
containing confidential and proprietary information relating to the
Companies; provided, however, that the Companies recognize that Xxxxxxx
has accumulated knowledge and expertise relating to the business of all
of the Companies over the years, which the parties agree cannot be
readily identified, and, accordingly, the parties agree that nothing
contained in this Agreement shall be construed to prevent Xxxxxxx from
utilizing such knowledge and expertise during and after the Employment
Term and Consultancy Term in a manner which does not violate Section
3(b) below. The parties further acknowledge and agree that this Section
3(a) of this Agreement shall not preclude Xxxxxxx from engaging in any
business, whether directly or indirectly, which is not prohibited by
Section 3(b).
(b) Noncompetition. During the Employment Term and Consul-
tancy Term, (i) Xxxxxxx will not, directly or indirectly, as a
stockholder, partner, employee, consultant or other owner or
participant in any business entity other than the Companies, engage in
or assist any other person or entity
3
4
to engage in any business which operates a custom injection thermal
plastic molding business at a plant located within a 300-mile radius or
within the state of any plant located in the United States and owned or
operated by any Company on the date hereof (each such area being called
"Restricted Area") and (ii) Xxxxxxx will not solicit or endeavor to
entice away from any Company any person who has been a customer of any
Company within the past two years; provided, however, that nothing
contained herein shall (A) preclude Xxxxxxx from owning less than five
percent (5%) of any class of publicly-traded securities of any
corporation, (B) preclude Xxxxxxx, whether as a stockholder, partner,
employee, consultant, or other owner or participant, or in any other
capacity, from engaging in the business of any entity which conducts or
owns a business which would be prohibited by clause (i) if such entity
also owns or conducts one or more other material businesses and Xxxxxxx
provides no advice, consultation, financial resources or services
whatsoever to such entity's business which would be prohibited by
clause (i), or (C) preclude Xxxxxxx from soliciting a customer
described in clause (ii) above if such customer also has operations
outside the Restricted Area relating to the Company plant which ships
to such customer and such customer is being solicited solely for sales
to be delivered to a location outside the Restricted Area relating to
such plant.
(c) Non-Solicitation. During the Employment Term and Consul-
tancy Term, as the case may be, Xxxxxxx will not, directly or
indirectly, solicit or endeavor to entice away from any Company or
induce or attempt to induce the termination of relationships with any
Company, any person who is an employee of any Company or was an
employee within one year of such solicitation and whose employment is
terminated other than by the Company or with the Company's consent.
Nothing contained herein shall preclude Xxxxxxx from hiring any
relative of his, whether as employee, consultant, independent
contractor or otherwise, notwithstanding that such relative may also be
an employee, consultant or independent contractor of any Company.
(d) Injunctive Relief. Xxxxxxx acknowledges that any breach or
threatened breach of the provisions of this Section 3 will cause
irreparable injury to any of the Companies for which an adequate
monetary remedy does not exist. Accordingly, at any time after such
breach, any Company shall be entitled, in addition to the exercise of
other remedies, to seek and (subject to court approval), obtain
injunctive relief, without necessity of posting a bond, restraining
Xxxxxxx from committing such further breach.
4
5
4. Consultancy Consideration.
(a) Compensation. During the Consultancy Term, the Companies
shall be obligated to pay Xxxxxxx an amount equal to $250,000, in
aggregate, per annum, as payment in full for such consultancy services
to be rendered, payable no less frequently than monthly. The foregoing
consideration is being paid to Xxxxxxx in part for the opportunity to
consult with Xxxxxxx, whether or not any of the Companies avails itself
of the opportunity.
(b) Health Benefits. During the Consultancy Term, Xxxxxxx and
Xxxxxxx'x family shall be entitled to health insurance benefits equal
to those made available from time to time to Votis (or other senior
executive officers of the Companies) under the health insurance plans
of the Companies or their successors and assigns.
(c) Expenses. Each of the Companies or their successors and
assigns will reimburse Xxxxxxx for Xxxxxxx'x reasonable expenses
incurred in the performance of Xxxxxxx'x consulting duties hereunder,
pursuant to the Companies ordinary reimbursement policies.
5. Resignation and Termination.
(a) Voluntary Resignation. Xxxxxxx shall have the right to
voluntarily resign from his employment or consultancy at any time upon
at least (3) months' prior notice to Xxxx, as representative of the
Companies. In such event, Xxxxxxx shall perform his employment or
consultancy duties during the three-month period thereafter, and if
Xxxxxxx resigns from his employment, the Consultancy Term shall
commence. If, however, Xxxxxxx resigns from his consultancy, the
Consultancy Term shall end and Xxxxxxx shall have no continuing
obligation under this Agreement, including, without limitation, Section
3; provided, however, that if no Company is in breach of this Agree-
ment and there is no breach by any Company ("as defined in the Take-Out
Agreement") (or their affiliates) under the Take-Out Agreement or any
other agreement contemplated by the Take-Out Agreement at the time of
Xxxxxxx'x resignation from his consultancy (for purposes hereof, breach
means a breach which is incapable of cure or which has not been cured
within 30 days of such occurrence), and the Companies wish to cause
Xxxxxxx to continue to be bound by Section 3 following his resignation,
then Xxxxxxx shall continue to
5
6
be bound by Section for one year following the date of his resignation
so long as the Companies perform hereunder and Xxxxxxx receives during
such one year term the compensation and other benefits provided for in
Section 4 of this Agreement.
(b) Termination of Cause. The Companies may only terminate
Xxxxxxx'x employment or consultancy for Cause. If Xxxxxxx'x employment
or consultancy is terminated for Cause, Xxxxxxx shall only be entitled
to the accrued and unpaid Compensation due him through the effective
date of such termination and reimbursement of all expenses incurred
prior to the effective date of termination in accordance with the terms
hereof, except that if the Companies wish for Xxxxxxx to remain bound
by Section 3 of this Agreement, the Companies shall continue to pay and
provide him with the amounts and benefits provided in Section 4. The
term "Cause" shall mean the commission of a felony involving fraudulent
acts or embezzlement against any Company as proven in a court of
competent jurisdiction.
(c) Termination on Death or Disability. If Xxxxxxx dies or be
comes Disabled during the Employment or Consultancy Term, Xxxxxxx, his
legal representative or the beneficiary selected by Xxxxxxx in the
event of Xxxxxxx'x death, (i) shall be entitled to accrued and unpaid
Compensation due and owing him through the effective date of such
termination and reimbursement of all expenses incurred prior to the
effective date of termination in accordance with the terms hereof and
(ii) shall continue to receive all amounts and all benefits set forth
in Section 4 for the duration of the Consultancy Term, provided, that,
if such death or Disability occurs during the Employment Term, the
Consultancy Term shall commence on the date of Xxxxxxx'x death or the
date such Disability is determined by a physician mutually acceptable
to Xxxxxxx and Votis. The term "Disability" or "Disabled" shall mean
the complete and permanent physical or mental complete and permanent
inability to perform the essential functions of Xxxxxxx'x obligations
under this Agreement for a consecutive six (6) month period.
6. Miscellaneous.
(a) Amendments and Waivers. No failure or delay by any of the
parties hereto in exercising any right, power or privilege hereunder
shall operate as a waiver thereof, nor shall any single or partial
exercise preclude any other or future exercise of any rights, power or
privilege. This Agree-
6
7
ment contains the full, final and exclusive statement of our agreement
with respect to the matters contained herein, and no promises,
agreements or presentation shall be binding upon us unless set forth
herein. This Agreement may be amended or modified in whole or in part
only by an instrument in writing signed by Xxxxxxx and an authorized
representative of each of the Companies.
(b) Successors and Assigns. This Agreement shall inure to the
benefit of, and be binding upon each of the Companies and any of its
successors and assigns and Votis and Xxxxxxx, and their legal
representatives and heirs.
(c) Assignment. Xxxxxxx shall have the right to assign and
delegate Xxxxxxx'x rights and obligations relating to the Consultancy
Term to a corporation or limited liability company wholly-owned by
Xxxxxxx; provided, however, that Xxxxxxx shall nonetheless remain
personally obligated to perform services hereunder on behalf of such
entity as expressly provided herein. Except as provided in the
foregoing, no party may assign this Agreement without the prior
written consent of the parties hereto.
(d) Limitation of Scope of Agreement. If any provision of this
Agreement shall be found by a court of competent jurisdiction to be
invalid or unenforceable, the invalidity or unenforceability of such
provision shall not affect the other provisions of this Agreement and
all provisions not affected by such invalidity shall remain in full
force and effect. If any one or more of the provisions contained in
this Agreement shall for any reason be held to be excessively broad as
to duration, geographical scope, activity or subject, such provision
shall be construed by limiting and reducing it so as to be enforceable
to the maximum extent compatible with applicable law.
(e) Obligations of the Companies. All obligations of the
Companies shall be joint and several obligations of each Company.
(f) Governing Law. The provisions of this Agreement shall be
construed according to the laws of the State of Illinois, without
regard to the laws of conflict.
(g) Counterparts. This Agreement may be executed in two or
more counterparts, all of which shall together constitute one and the
same
7
8
instrument, and shall become effective when counterparts have been
signed by Xxxx and Xxxxxxx.
7. Indemnity. The Companies hereby agree, jointly and severally, to
indemnify and hold harmless Xxxxxxx from acts or omissions, regardless of when
the claim is asserted, relating to Xxxxxxx'x serving as an officer, director,
employee, consultant or fiduciary of any Company, to the maximum extent
permitted under applicable state laws of the relevant jurisdiction under which
such Company is organized.
8. Survival. All obligations which are contemplated to be performed
after the end of the Employment Term and/or Consultancy Term shall survive for
the period specified herein, if any, and otherwise, indefinitely.
[Signatures appear on the following page.]
8
9
IN WITNESS WHEREOF, the undersigned have hereunto executed this
Agreement on the date first written above.
XXXX PLASTICRAFTERS LIMITED
PARTNERSHIP
By: Textek Plastics, Inc.,
its general partner
By: /s/ Xxxxxx X. Xxxxx
-----------------------------------
Xxxxxx X. Xxxxx, President and CEO
ANCHOR ADVANCED PRODUCTS, INC.
By: /s/ Xxxxxx X. Xxxxx
-----------------------------------
Title: CEO
/s/ Xxxxxxx X. Xxxxxxx
----------------------------------------
XXXXXXX X. XXXXXXX
/s/ Xxxxxx X. Xxxxx
----------------------------------------
XXXXXX X. XXXXX
9
s
