EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (this "Agreement"), entered into this 27th day of
September, 1996, by and between AB PLASTICS CORPORATION, a California
corporation having offices at ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ (the "Company), and ▇▇▇▇▇▇▇ ▇▇▇▇▇, an individual residing at ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (the "Employee");
W I T N E S S E T H :
WHEREAS, the Employee has heretofore and to the date hereof been a
substantial stockholder and principal officer of the Company, and as such has
substantial and valuable knowledge and experience relating to the business of
the Company; and
WHEREAS, on the date hereof, pursuant to that certain Stock Purchase
Agreement dated as of July 11, 1996 by and among AB Plastics Holding Corporation
(the "Buyer"), the Employee and the other parties thereto (the "Purchase
Agreement"), the Buyer is acquiring all of the issued and outstanding capital
stock of the Company and the business of the Company as a going concern; and
WHEREAS, to promote the ongoing business of the Company (particularly
relating to the continued operation of the Company under the ownership of the
Buyer), the Company desires to assure itself of the ongoing right to the
Employee's services from and after the date hereof, on the terms and conditions
of this Agreement; and
WHEREAS, the Employee is willing and able to render his services to the
Company from and after the date hereof, 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-Technology of the Company, with primary responsibility
for the day-to-day supervision of the technical aspects of the Company's
business. 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, (ii)
observe and carry out such reasonable rules, regulations, policies, directions
and restrictions as may be established from time to time by the Board of
Directors of the Company (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 his duties and responsibilities; provided, however, that the
Employee shall not, without his prior written consent, be assigned to duties
which would reasonably require his to relocate her permanent residence from that
first set forth above. The Employee shall not, without the express prior written
approval of the Board in each instance, directly or indirectly accept employment
or compensation from, or perform services of any nature for, any person, firm,
corporation or business enterprise other than the Company.
(b) For so long as the Employee is in the full-time employ of the
Company hereunder, the Employee shall have the right, at his discretion, to
serve on the Board, provided that the Employee shall not be entitled to any
additional compensation by reason of any such service.
(c) The Employee shall report directly to an Executive Committee of
the Board comprised of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ ▇. ▇. ▇▇▇▇▇▇, provided that
if either of Messrs. ▇▇▇▇▇ or ▇▇▇▇▇▇ is not serving on the Board at the time in
question, then his replacement shall be as determined by a majority of the
members of the Board.
2. Term of Agreement.
(a) Subject to prior termination in accordance with paragraph 2(b)
below, the term of this Agreement shall commence on the date hereof and shall
continue through June 30, 1999.
(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 have
failed to make any payment to the Employee required to be made under the terms
of this Agreement within ten (10) days after written notice of non-payment is
given to the Company, or shall fail to perform any other material covenant or
agreement to be performed by it hereunder or shall take any action prohibited by
this Agreement and shall fail to cure or remedy same within thirty (30) days
after written notice thereof to the Company;
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(iii) at the option of the Company, upon written notice to the
Employee, "for cause" (as such term is hereinafter defined);
(iv) at the option of the Company in the event of the "permanent
disability" (as such term is 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 material breach of this Agreement by the Employee which in any case
is not fully corrected within thirty (30) days after written notice of same from
the Board to the Employee; (ii) gross neglect by the 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 under the influence of alcohol or drugs during business
hours, or being habitually drunk or addicted to drugs; (v) the commission by the
Employee of any crime of moral turpitude; (vi) material breach by the Employee
of any of his obligations under that certain Non-Competition and Non-Disclosure
Agreement of even date herewith by and among the Buyer, the Company, the
Employee and ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (the "Non-Competition Agreement"), which
breach is not fully cured within thirty (30) days after written notice of same
from the Board to the Employee; or (vii) habitual breach by the Employee of any
of the material provisions of this Agreement or the Non-Competition 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 has
prevented and/or will prevent the Employee from continuing the performance of
his normal duties and responsibilities hereunder for a period in excess of six
(6) 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, on the effective date of termination, any and all unpaid
Base Salary (as hereinafter defined) 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. Such rights and obligations are in addition and without prejudice to
any other rights and remedies which the parties
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may have at the time of termination, subject to any applicable requirements for
each party to mitigate damages in any instance.
3. Compensation and Benefits.
(a) Base Salary. As compensation for his services to be rendered
hereunder, the Company shall pay to the Employee compensation at the rate of One
Hundred Thousand ($100,000) Dollars per annum (the "Base Salary"). Such Base
Salary shall be payable in periodic installments in accordance with the standard
payroll practices of the Company in effect from time to time, and shall be
subject to payroll deductions and other withholdings as and to the extent
required by law from time to time.
(b) Fringe Benefits. The Company shall also make available to the
Employee, throughout the period of his 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 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.
(c) Expenses. 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 (unless such expense was specifically directed
or authorized by the Chairman or the President of the Company), or for any
expense item which has not previously been approved in accordance with the
Company's standard policies and procedures in effect from time to time.
4. Vacation.
The Employee shall be entitled to take, from time to time, up to
four (4) weeks of paid vacation per year. Such vacations shall be taken at such
times as shall be mutually convenient to the Company and the Employee, and so as
not to interfere unduly with the normal and orderly operation of the Company's
business.
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5. 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.
6. 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 when mailed by certified mail, return
receipt requested, addressed to the party being notified at the address of such
party first set forth above (with copies in accordance with Section 16.2 of the
Purchase Agreement), 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.
7. 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 any number of 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) Any dispute involving the interpretation or application of this
Agreement shall be resolved by final and binding arbitration in accordance with
Section 12.3(b) of the Purchase Agreement.
(h) Except as otherwise set forth or referred to in this Agreement,
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.
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/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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/s/▇▇▇▇▇▇▇ ▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇▇▇▇▇
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The undersigned, AB Plastics Holding Corporation (the "Parent"), being
the parent corporation of AB Plastics Corporation (the "Company"), hereby agrees
that it will (and will cause any transferee of such voting securities to agree
to) vote all voting securities of the Company which the Parent owns from time to
time in favor of the election of ▇▇▇▇▇▇▇ ▇▇▇▇▇ to the Board of Directors of the
Company as contemplated by paragraph 1(b) of the foregoing Agreement.
AB PLASTICS HOLDING CORPORATION
By:/s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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