EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (this "Agreement"), entered into as of this 27th
day of September, 1996, by and between AB PLASTICS CORPORATION, a California
corporation having offices at 00000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxx
00000 (the "Company"), and XXXXX XXXXX, an individual residing at
____________________ _____________________ (the "Employee");
W I T N E S S E T H :
WHEREAS, the Employee has extensive experience relating to the
technical and production elements (including assembly line operations) of
injection molding of plastics products; and
WHEREAS, the Company is engaged in the manufacture, distribution and
sale of custom injection-molded plastic products and related goods and services;
and
WHEREAS, to promote the ongoing business of the Company, the Company
desires to assure itself of the right to the Employee's services on the terms
and conditions of this Agreement; and
WHEREAS, the Employee is willing and able to render his services to the
Company on the terms and conditions of this Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereby agree as follows:
1. Nature of Employment.
(a) Subject to the terms and conditions of this Agreement, the
Company shall, throughout the term of this Agreement, retain the Employee, and
the Employee shall render services to the Company, in the capacity and with the
title of Vice President-Manufacturing of the Company. In such capacity, the
Employee shall have and exercise responsibility for supervising and overseeing
all manufacturing operations of the Company, together with such other similar or
related duties as may be assigned to the Employee from time to time by the Board
of Directors of the Company (the "Board").
(b) Throughout the period of his employment hereunder, the
Employee shall: (i) devote his full business time, attention, knowledge and
skills, faithfully, diligently and to the best of his ability, to the active
performance of his duties and responsibilities hereunder on behalf of the
Company; (ii) observe
and carry out such reasonable rules, regulations, policies, directions and
restrictions as may be established from time to time by the Board, including but
not limited to the standard policies and procedures of the Company as in effect
from time to time; and (iii) do such traveling as may reasonably be required in
connection with the performance of such duties and responsibilities; provided,
however, that the Employee shall not be assigned to regular duties that would
reasonably require him to relocate his permanent residence from that first set
forth above.
2. Term of Employment.
(a) Subject to prior termination in accordance with paragraph
2(b) below, the term of this Agreement and the Employee's employment hereunder
shall be for a term of approximately three (3) years commencing on the date
hereof and continuing through September 30, 1999, and shall thereafter
automatically renew for additional terms of one (1) year each unless either
party gives written notice of termination to the other party not less than
ninety (90) days prior to the end of any term (in which event this Agreement
shall terminate effective as of the close of such term).
(b) This Agreement may be terminated:
(i) upon mutual written agreement of the Company and
the Employee;
(ii) at the option of the Employee, upon fourteen
(14) days' prior written notice to the Company, in the event that the Company
shall (A) fail to make any payment to the Employee required to be made under the
terms of this Agreement within thirty (30) days after payment is due, or (B)
fail to perform any other material covenant or agreement to be performed by it
hereunder or take any action prohibited by this Agreement, and fail to cure or
remedy same within thirty (30) days after written notice thereof to the Company;
(iii) at the option of the Company, upon written
notice to the Employee, "for cause" (as hereinafter defined);
(iv) at the option of the Company in the event of
the "permanent disability" (as hereinafter defined) of the
Employee; or
(v) upon the death of the Employee.
(c) As used herein, the term "for cause" shall mean and be
limited to: (i) any willful and material breach of this Agreement (including,
without limitation, the covenants contained in paragraph 5 below) by the
Employee which in any case is not fully corrected within thirty (30) days after
written notice of same from the Company to the Employee; (ii) gross neglect by
the
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Employee of his duties and responsibilities hereunder; (iii) any fraud, criminal
misconduct, breach of fiduciary duty, dishonesty, or gross and willful
misconduct by the Employee in connection with the performance of his duties and
responsibilities hereunder; (iv) the Employee being legally intoxicated during
business hours or while on call, or being habitually drunk or addicted to drugs
(provided that this shall not restrict the Employee from taking
physician-prescribed medication in accordance with the applicable prescription);
(v) the commission by the Employee of any felony or crime of moral turpitude, or
any other action by the Employee which may materially impair or damage the
reputation of the Company; or (vi) habitual breach by the Employee of any of the
material provisions of this Agreement (regardless of any prior cure thereof).
(d) As used herein, the term "permanent disability" shall
mean, and be limited to, any physical or mental illness, disability or
impairment that prevents the Employee from continuing the performance of his
normal duties and responsibilities hereunder for a period in excess of three (3)
consecutive months. For purposes of determining whether a "permanent disability"
has occurred under this Agreement, the written determination thereof by two (2)
qualified practicing physicians selected and paid for by the Company (and
reasonably acceptable to the Employee) shall be conclusive.
(e) Upon any termination of this Agreement as hereinabove
provided, the Employee (or his estate or legal representatives, as the case may
be) shall be entitled to receive any and all unpaid Base Salary and Bonus
appropriately prorated to and as of the effective date of termination (based on
the number of days elapsed prior to the date of termination), and any other
amounts then due and payable to the Employee hereunder; provided, however, that
if the Employee's employment hereunder is terminated "for cause", then the
Employee shall not be entitled to receive any Bonus in respect of the fiscal
year of the Company in which such termination occurs. All such payments shall be
made on the next applicable payment date therefor (as provided in paragraph 3
below) following the effective date of termination. Such payments shall
constitute all amounts to which the Employee shall be entitled upon termination
of this Agreement.
3. Compensation and Benefits.
(a) Base Salary. As compensation for his services to be
rendered hereunder, the Company shall pay to the Employee a base salary at the
rate of One Hundred Forty Thousand ($140,000) Dollars per annum (the "Base
Salary"), which shall be payable in periodic installments in accordance with the
standard payroll practices of the Company in effect from time to time.
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(b) Bonus. In addition to the Base Salary, the Employee shall
be eligible to participate in a bonus pool for the executive employees of the
Company, the terms and conditions of which shall hereafter be established by the
Board. Subject to the Company achieving certain levels of performance criteria
to be established by the Board, the Employee may receive, within such bonus
pool, a bonus (the "Bonus") in respect of each fiscal year of the Company in an
amount up to (but not exceeding) one-half of the Employee's Base Salary in the
subject fiscal year. Any such Bonus, to the extent earned, shall be payable
within a reasonable period of time after the close of each fiscal year of the
Company, and after calculation of whether and to what extent the applicable
performance criteria have been achieved in the subject fiscal year.
(c) Fringe Benefits. The Company shall also make available to
the Employee, throughout the period of his employment hereunder, such benefits
and perquisites as are generally provided by the Company to its executive
employees, including but not limited to eligibility for participation in any
group life, health, dental, vision, disability or accident insurance, pension
plan, profit-sharing plan, retirement savings plan, 401(k) plan, or other such
benefit plan or policy which may presently be in effect or which may hereafter
be adopted by the Company for the benefit of its employees generally; provided,
however, that nothing herein contained shall be deemed to require the Company to
adopt or maintain any particular plan or policy. Participation in such benefit
plans may be subject to standard waiting periods following the commencement of
full-time employment.
(d) Expenses. Throughout the period of the Employee's
employment hereunder, the Company shall also reimburse the Employee, upon
presentment by the Employee to the Company of appropriate receipts and vouchers
therefor, for any reasonable out-of-pocket business expenses incurred by the
Employee in connection with the performance of his duties and responsibilities
hereunder; provided, however, that no reimbursement shall be required to be made
for any expense which is not properly deductible (in whole or in part) by the
Company for income tax purposes, or for any expense item which has not
previously been approved if and to the extent required in accordance with the
Company's standard policies and procedures in effect from time to time.
4. Vacation, etc.
(a) The Employee shall be entitled to take, from time to time,
up to three (3) weeks of paid vacation per year, to be taken at such times as
shall be mutually convenient to the Employee and the Company, and so as not to
interfere unduly with the conduct of the business of the Company.
(b) The Employee shall further be entitled to paid
holidays, personal days and sick days in accordance with the
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Company's standard policies and procedures in effect from time to time.
5. Restrictive Covenants.
(a) The Employee hereby acknowledges and agrees that (i) the
business contacts, customers, suppliers, technology, manufacturing methods and
processes, know-how, trade secrets, marketing techniques, promotional methods
and other aspects of the business of the Company have been and are of value to
the Company, and have provided and will hereafter provide the Company with
substantial competitive advantage in the operation of its business, and (ii) by
reason of his employment with the Company, he will have detailed knowledge and
will possess confidential information concerning the business and operations of
the Company. The Employee hereby further acknowledges that his business skills
are not uniquely suited to businesses of the type conducted by the Company, and
that, if required, he could readily adapt and utilize such skills in one or more
other types of businesses.
(b) The Employee shall not, directly or indirectly, for
himself or through or on behalf of any other person or entity:
(i) at any time, divulge, transmit or otherwise
disclose or cause to be divulged, transmitted or otherwise disclosed, any
business contacts, client or customer lists, technology, know-how, trade
secrets, marketing techniques, contracts or other confidential or proprietary
information of the Company of whatever nature, whether now existing or hereafter
created or developed (provided, however, that for purposes hereof, information
shall not be considered to be confidential or proprietary if (A) it is a matter
of common knowledge or public record, (B) it is generally known in the industry,
or (C) the Employee can demonstrate that such information was already known to
the recipient thereof other than by reason of any breach of any obligation under
this Agreement or any other confidentiality or non-disclosure agreement); and/or
(ii) at any time during the period from the date
hereof through and including the date of the termination of the Employee's
employment with the Company, and for an additional period of one (1) year
thereafter (collectively, the "Restrictive Period"), (A) invest, carry on,
engage or become involved, either as an employee, agent, advisor, officer,
director, stockholder (excluding ownership of not more than 3% of the
outstanding shares of a publicly held corporation if such ownership does not
involve managerial or operational responsibility), manager, partner, joint
venturer, participant or consultant, in any business enterprise (other than the
Company and/or its affiliates, successors or assigns) which derives any material
revenues from the manufacture or sale in the United States of any custom
injection-molded plastic products or other goods or services offered or sold by
the Company
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or its affiliates, successors or assigns from time to time during the
Restrictive Period, or which engages in any other business similar to or
competitive with the business of the Company or its subsidiaries, affiliates,
successors or assigns (as such business is constituted at the time that the
Employee proposes to become involved in such other business enterprise), and/or
(B) induce or attempt to induce any employee of the Company to leave the employ
of the Company, or in any way interfere with the Company's relationship with any
of its employees.
(c) The Employee and the Company hereby acknowledge and agree
that, in the event of any breach by the Employee, directly or indirectly, of the
foregoing restrictive covenants, it will be difficult to ascertain the precise
amount of damages that may be suffered by the Company by reason of such breach;
and accordingly, the parties hereby agree that, as liquidated damages (and not
as a penalty) in respect of any such breach, the breaching party or parties
shall be required to pay to the Company, on demand from time to time, cash
amounts equal to any and all gross revenues derived by the breaching party or
parties, directly or indirectly, from any and all violative acts or activities
(such gross revenues being limited, in the case of the Employee, to any and all
salary, bonuses, other compensation, dividends and other payments actually
received by him in connection with the violative acts or activities). The
parties hereby agree that the foregoing constitutes a fair and reasonable
estimate of the actual damages that might be suffered by reason of any breach of
this paragraph 5 by the Employee, and the parties hereby agree to such
liquidated damages in lieu of any and all other measures of damages that might
be asserted in respect of any subject breach.
(d) The Employee and the Company hereby further acknowledge
and agree that any breach by the Employee, directly or indirectly, of the
foregoing restrictive covenants will cause the Company irreparable injury for
which there is no adequate remedy at law. Accordingly, the Employee expressly
agrees that, in the event of any such breach or any threatened breach hereunder
by the Employee, directly or indirectly, the Company shall be entitled, in
addition to any and all other remedies available (including but not limited to
the liquidated damages provided for in paragraph 5(c) above), to seek and obtain
injunctive and/or other equitable relief to require specific performance of or
prevent, restrain and/or enjoin a breach under the provisions of this paragraph
5.
(e) In the event of any dispute under or arising out of this
paragraph 5, the prevailing party in such dispute shall be entitled to recover
from the non-prevailing party or parties, in addition to any damages and/or
other relief that may be awarded, its reasonable costs and expenses (including
reasonable attorneys' fees) incurred in connection with prosecuting or defending
the subject dispute.
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6. Non-Assignability.
In light of the unique personal services to be performed by
the Employee hereunder, it is acknowledged and agreed that any purported or
attempted assignment or transfer by the Employee of this Agreement or any of his
duties, responsibilities or obligations hereunder shall be void.
7. Notices.
Any notices, requests, demands or other communications
required or permitted under this Agreement shall be in writing and shall be
deemed to have been given when delivered personally or three (3) days after
being mailed by certified mail, return receipt requested, addressed to the party
being notified at the address of such party first set forth above, or at such
other address as such party may hereafter have designated by notice; provided,
however, that any notice of change of address shall not be effective until its
receipt by the party to be charged therewith. Copies of any notices or other
communications to the Company shall simultaneously be sent by first class mail
to AB Plastics Holding Corporation, c/o Xxxxxxx X. Xxxxx, 15 Father Xxxxxx Xxxx,
Xxx Xxxxxx, Xxxxxxxxxxx 00000, and Private Equity Partners, L.L.C., 000
Xxxxxxxxx Xxxxxx - 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attn: Xxxxxxxx X. X.
Xxxxxx.
8. General.
(a) Neither this Agreement nor any of the terms or conditions
hereof may be waived, amended or modified except by means of a written
instrument duly executed by the party to be charged therewith. Any waiver or
amendment shall only be applicable in the specific instance, and shall not
constitute or be construed as a waiver or amendment in any other or subsequent
instance. No failure or delay on the part of either party in respect of any
enforcement of obligations hereunder shall in any manner affect such party's
right to seek or effect enforcement at any other time or in respect of any other
required performance.
(b) Neither this Agreement nor any rights or obligations
hereunder may be assigned by either party without the express prior written
consent of the other party.
(c) The captions and paragraph headings used in this Agreement
are for convenience of reference only, and shall not affect the construction or
interpretation of this Agreement or any of the provisions hereof.
(d) This Agreement, and all matters or disputes relating to
the validity, construction, performance or enforcement hereof, shall be
governed, construed and controlled by and under the laws of the State of
California.
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(e) This Agreement shall be binding upon and shall inure to
the benefit of the parties hereto and their respective heirs, executors,
administrators, personal representatives, successors and permitted assigns.
(f) This Agreement may be executed in counterparts, each of
which shall be deemed to be an original hereof, but all of which together shall
constitute one and the same instrument.
(g) Except for any legal or judicial proceeding which may be
brought for injunctive and/or any other equitable relief as contemplated by
paragraph 5(d) above, any dispute involving the interpretation or application of
this Agreement shall be resolved by final and binding arbitration before one or
more arbitrators designated by the American Arbitration Association in Los
Angeles, California. The award of such arbitrator(s) may be enforced in any
court of competent jurisdiction. The prevailing party in any action or
proceeding hereunder shall be entitled to an award for its costs and reasonable
attorneys' fees in connection with such action or proceeding, and the
arbitrator(s) in any arbitration hereunder shall be empowered and directed to
make such an award in his, her or their discretion.
(h) This Agreement constitutes the sole and entire agreement
and understanding between the parties hereto as to the subject matter hereof,
and supersedes all prior discussions, agreements and understandings of every
kind and nature between them as to such subject matter.
(i) This Agreement is intended for the sole and exclusive
benefit of the parties hereto and their respective heirs, executors,
administrators, personal representatives, successors and permitted assigns, and
no other person or entity shall have any right to rely on this Agreement or to
claim or derive any benefit herefrom absent the express written consent of the
party to be charged with such reliance or benefit.
(j) If any provision of this Agreement is held invalid or
unenforceable, either in its entirety or by virtue of its scope or application
to given circumstances, such provision shall thereupon be deemed modified only
to the extent necessary to render same valid, or not applicable to given
circumstances, or excised from this Agreement, as the situation may require; and
this Agreement shall be construed and enforced as if such provision had been
included herein as so modified in scope or application, or had not been included
herein, as the case may be.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
and as of the date first set forth above.
AB PLASTICS CORPORATION
By: /s/ Xxxxxxx X. Xxxxx CEO
-----------------------------------
(Title)
/s/ Xxxxx Xxxxx
-----------------------------------
Xxxxx Xxxxx
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