EXHIBIT 10.5
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (this "Agreement"), entered into as of this _____
day of July, 1997 by and between COMPASS PLASTICS & TECHNOLOGIES, INC., a
Delaware corporation (the "Company"), having its principal offices at 00000
Xxxxx Xxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxx 00000, XX PLASTICS CORPORATION, a
California corporation ("AB Plastics"), having its principal offices at 00000
Xxxxx Xxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxx 00000, and XXXXXXX X. XXXXX, an
individual residing at 15 Father Xxxxxx Xxxx, Xxx Xxxxxx, Xxxxxxxxxxx 00000 (the
"Employee" or "Xxxxx").
W I T N E S S E T H :
WHEREAS, the Employee (a) through a corporate affiliate, is presently
serving as a consultant to the Company and its wholly-owned subsidiary, AB
Plastics, under a management agreement dated as of October 1, 1996 (the
"Management Agreement"), (b) is currently serving in the capacity and with the
title of Chief Executive Officer of AB Plastics, and (c) has extensive knowledge
with respect to the business of AB Plastics;
WHEREAS, the Company and AB Plastics desire to supersede the Management
Agreement with this Agreement, and desire that the Company and AB Plastics have
access to the personal services of the Employee as President of the Company and
Chief Executive Officer of AB Plastics from and after the "Effective Date" (as
herein defined) of this Agreement;
WHEREAS, the Employee is willing and able to render his services to the
Company and AB Plastics on the terms and conditions of this Agreement; and
WHEREAS, it is understood that this Agreement shall become effective on
the effective date of the Company's proposed initial public offering of
securities (the "Effective Date");
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, and intending to be legally bound thereby, the
parties hereby agree as follows:
1. Nature of Employment.
1.1 Subject to the terms and conditions of this Agreement, the
Company and AB Plastics (hereinafter together referred to as the "Corporations")
shall, throughout the Term (as defined in Section 2.1) of this Agreement, retain
the Employee, and the Employee shall render services (a) to the Company, in the
capacity and with the title of President, and (b) to AB Plastics, in the
capacity and with the title of Chief Executive Officer, and such additional
titles
as may be assigned to the Employee from time to time by the Board of Directors
of the Company (the "Board"), which titles the Employee may be willing to
accept.
1.2 In such capacity, the Employee shall have and exercise
responsibility for overseeing and actively participating in all aspects of the
Corporations' businesses, including, without limitation, (a) the establishment
and implementation of corporate policy, (b) the initiation and negotiation of
opportunities for expansion in the areas of new product development,
acquisitions and other ventures, (c) responsibility for maintaining and
increasing the profitability of the Corporations, and (d) such other similar or
related duties customarily afforded a President or Chief Executive Officer as
may be assigned to the Employee from time to time by the Board.
1.3 Throughout the period of his employment hereunder, the
Employee shall: (a) devote not less than seventy-five (75%) percent of his
business and professional 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; (b) observe and
carry out such 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 (c) do such traveling at the Company's expense 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.
1.4 Subject to compliance with his covenants and agreements
set forth in Section 1.3 above and his fiduciary duties to the Corporations as
an executive officer and director thereof, the Employee may engage (a) in other
business and professional activities, and (b) in charitable, educational,
religious, civic and similar types of activities (all of which shall be deemed
to benefit the Company), speaking engagements, membership on the board of
directors of other organizations, and similar activities; provided, that the
foregoing business and other activities do not inhibit or prohibit the
performance of his duties hereunder or inhibit or conflict in any material way
with the businesses of the Corporations.
2. Term of Employment.
2.1 Subject to prior termination in accordance with Section
2.2 below, the term of this Agreement and the Employee's employment hereunder
shall commence as of the Effective Date and shall continue through October 31,
2000, and shall thereafter automatically renew (except to the extent otherwise
provided in this Agreement) for additional terms of 12 celendar months 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 such term (in which event
this Agreement shall terminate effective as of the close of such term), as the
same may be renewed (the "Term"). In addition, if this Agreement shall be
terminated on the expiration of its initial stated Term, the Employee shall
continue to render consulting services to the Company pursuant to the same terms
and conditions as are set forth in the Management Agreement.
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2.2 This Agreement may be terminated:
(a) upon mutual written agreement of the Company and
the Employee;
(b) at the option of the Employee, upon thirty (30)
days' prior written notice to the Company, in the event that
(i) 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 (including the failure to re-appoint or
re-elect the Employee to the offices described in
Section 1.1 of this Agreement or causes any material
change in the duties of the Employee which reduces
the scope or importance of such position) 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; provided, however,
that if any periodic salary payment is not paid
within ten (10) days of its due date, the Employee
shall only be required to provide fifteen (15) days'
prior written notice of termination; or
(ii) the Company is declared insolvent,
liquidates, dissolves or discontinues the Company
Business (as defined below).
(c) at the option of the Company, upon written notice
to the Employee, "for cause" (as defined below);
(d) at the option of the Company, in the event of the
"permanent disability" (as defined below) of the Employee; or
(e) upon the death of the Employee, or as a result of
the voluntary resignation by the Employee for any reason other than as specified
in Section 2(b)(ii) above.
2.3 As used herein, the term "for cause" shall mean and be
limited to:
(a) any material breach of any of the material
covenants and agreements of the Employee contained in this Agreement, including
those provided in Section 5 below, which, in any case, is not corrected in all
material respects (if so correctable) within thirty (30) days after written
notice of same from the Company to the Employee;
(b) any material breach by the Employee of his
fiduciary duties and obligations to the Corporations which is not corrected in
all material respects (if so correctable) within thirty (30) days after written
notice of same from the Company to the Employee; or
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(c) conduct constituting fraud or embezzlement or
gross dishonesty by Employee in connection with the performance of his duties
under this Agreement, or a formal charge or indictment of the Employee for or
conviction of the Employee of a felony or, if it shall materially and adversely
damage or bring into disrepute the business, reputation or goodwill of the
Corporations, any crime involving moral turpitude.
Any notice required pursuant to this Section 2.3 shall specify with
particularity the covenant or agreement alleged to have been breached by the
Employee and action necessary to be taken by the Employee to cure the breach to
the satisfaction of the Company.
2.4 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 four (4)
consecutive months or one hundred eighty (180) non-consecutive days within any
period of three hundred sixty five (365) calendar days. 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.
2.5 Upon any termination of this Agreement as provided above,
the Employee (or his estate or legal representatives, as the case may be) shall
be entitled to receive any and all earned but unpaid Base Salary (as defined in
Section 3.1) prorated through the effective date of termination, and any other
amounts and benefits then accrued or due and payable to the Employee hereunder;
provided that:
(a) if such termination is as a result of the death
of the Employee, his estate shall continue to receive the Base
Salary for a period of four (4) full months following the date
of the Employee's death; and
(b) the Employee's participation in any benefit or
welfare plans of the Company (including, without limitation,
the Stock Options described below and any profit-sharing
plans) shall terminate upon the effective date of termination
of employment except to the extent otherwise required by law
or provided under the express terms of the applicable plan.
All such payments shall be made on the next applicable payment
date therefor (as provided in Section 3 below) following the
effective date of termination. Except when termination is (i)
by the Employee pursuant to Section 2.2(b) above, or (ii) by
the Company other than "for cause" (any termination described
in clauses (i) or (ii) of this Section 2.5(b) being sometimes
hereinafter referred to as a "Non-Cause Termination"), the
foregoing constitutes all amounts to which the Employee shall
be entitled upon termination of this Agreement. In the case
of a Non-Cause Termination, the amount to which the Employee
shall be entitled is not so limited and shall include the
Option Benefit (defined below).
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2.6 In the event that there shall be a dispute among the
parties hereto as to whether or not a termination shall constitute a Non-Cause
Termination, during the pendency of such dispute the Company will place in
escrow with a third party attorney or financial institution in an
interest-bearing escrow account all subject periodic Base Salary payments and
the value of the Option Benefit (as hereinafter defined) and fringe benefits
which shall be disbursed to the appropriate party or parties upon the final
resolution or settlement of such dispute from which no appeal can or shall have
been taken. As used herein, the term Option Benefit means all the Option Shares
vested pursuant to Section 3.5(c) of this Agreement.
3. Compensation and Benefits.
3.1 Base Salary. As compensation for his services to be
rendered hereunder, the Corporations shall pay to the Employee a base salary of
Two Hundred Seventy-Five Thousand ($275,000) Dollars per annum (the "Base
Salary"), which shall be payable in periodic installments in accordance with the
standard payroll practices of the Corporations in effect from time to time, but
not less than twice each month.
3.2 Annual Bonus.
(a) In addition to his Base Salary, not later than
ninety (90) days after the end of each "Fiscal Year" (as herein defined) of the
Company, the Corporations shall pay to the Employee an annual cash bonus in
respect of such Fiscal Year (the "Bonus") in the amounts set forth below in the
event and to the extent that the "EBITDA" (as herein defined) of the "Compass
Group" (as herein defined) for the Fiscal Year in question shall equal or exceed
the amounts set forth below:
Fiscal Year Minimum EBITDA Amount of Bonus
----------- -------------- ---------------
1998..................... $12.0 million $100,000;
12.0-15.0 million 100,000;
15.0 million 140,000;
15.0-18.0 million 140,000, plus $1.00 for
each $50 of EBITDA over
$15.0 million;
18.0-21.0 million 200,000;
21.0-24.0 million 200,000, plus $1.00 for
each $30 EBITDA over
$21.0 million;
Over $24.0 million 300,000.
1999.................... 15.0 million $40,000;
15.0-18.0 million 40,000, plus $1.00 for
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each $18.75 of EBITDA
over $15.0 million;
18.0-21.0 million 200,000;
21.0-24.0 million 200,000, plus $1.00 for
each $30 of EBITDA over
$21.0 million;
Over $24.0 million 300,000.
2000.................... 21.0 million $ 40,000;
21.0-24.0 million 40,000, plus $1.00 for
each $11.54 of EBITDA
over $21.0 million.
(b) As used in this Agreement, the following terms
shall have the meanings set forth herein:
(i) "Fiscal Year" shall mean the fifty-two
weeks ended on the last business day of
October of each year, or such other fiscal
year end as shall be established by the
Board;
(ii) "EBITDA" shall mean consolidated net
income before deduction or application of
bonuses payable to executives and other
designated employees (including the Bonus
payable to the Employee hereunder), federal
and state income taxes, interest,
depreciation, amortization and other
non-cash charges, all as calculated in
accordance with generally accepted
accounting principles, consistently applied;
(iii) "Compass Group" shall mean the
Company, AB Plastics and any other direct or
indirect Subsidiary or division of the
Company or AB Plastics hereafter created or
acquired.
(iv) "Subsidiary" shall mean any person,
firm, corporation, partnership or other
entity, more than 50% of the capital stock
or equity of which shall be owned directly
or indirectly by either of the Corporations
or any of their Subsidiaries.
3.3 Fringe Benefits. The Corporations shall also make
available to the Employee, throughout the period of his employment hereunder,
such benefits and perquisites as are generally provided either of the
Corporations to other senior management employees (which benefits shall, in the
aggregate, be at least as generous as those supplied to the senior executive
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officers of AB Plastics), including but not limited to eligibility for
participation in any group life, health, dental, disability or accident
insurance, pension plan, 401(k) plan, profit-sharing plan, or other such benefit
plan or policy, if any, which may presently be in effect or which may hereafter
be adopted by AB Plastics for the benefit of its employees generally.
3.4 Expenses. Throughout the period of the Employee's
employment hereunder, the Corporations shall also reimburse the Employee,
reasonably promptly after presentment by the Employee to the Corporations of
appropriate receipts and vouchers therefor and related information in such form
and detail as the Corporations may reasonably request, for any reasonable
out-of-pocket business expenses incurred by the Employee in connection with the
performance of his duties and responsibilities hereunder.
3.5 Stock Options. Pursuant to the Company's 1997 Stock Option
Plan, approved by the stockholders and the Board on July 5, 1997 (the "1997
Plan"), and subject to the provisions of subsection (g) of this Section 3.5, the
Employee has been awarded options (the "Options") to purchase a maximum
aggregate of two hundred twenty two thousand two hundred and twenty two
(222,222) shares of common stock, par value $.001 per share (the "Common
Stock"), of the Company (the "Option Shares") at an exercise price equal to the
initial offering price per share (the "Exercise Price"), estimated to be between
$8.50 and $9.50 per share, that shares of Common Stock have been offered to the
public pursuant to the Company's prospectus, declared effective by the
Securities and Exchange Commission (the "SEC"). The number of Option Shares and
Exercise Price of the Options are subject to adjustment for stock dividends on
and/or subdivisions or splits, combinations, or reclassifications of the Common
Stock; provided, however, that all Options awarded hereunder are subject to the
terms and conditions hereinafter set forth including, without limitation, the
forfeiture provisions set forth below. The maximum number of Options that are
permissible under Section 422 of the Internal Revenue Code of 1986, as amended,
shall be deemed to be incentive stock options ("ISOs"), and the remaining
Options shall be non-qualified stock options.
(a) Term of Options. The Options shall have a term
expiring on October 31, 2002 (the "Option Expiration Date").
(b) Exercisability and Vesting. Subject to
termination of the Options prior to vesting as provided in Section 3.5(c) below,
the Options shall be exercisable and vest only, to the extent, and upon
occurrence of any of the events specified below:
(i) as to 74,074 Option Shares, in the event
that for any period of thirty (30) consecutive
trading days ending prior to the Option Expiration
Date, the average of the closing prices of the
Company's publicly traded Common Stock, as reported
on The Nasdaq Stock Market or any other national
securities exchange, shall equal or exceed $17.00
per share;
(ii) as to 148,148 Option Shares, in the
event that for any period of thirty (30) consecutive
trading days ending prior to the Option
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Expiration Date, the average of the closing prices of
the Company's publicly traded Common Stock, as
reported on The Nasdaq Stock Market or any other
national securities exchange, shall equal or exceed a
price per share which shall equal or exceed $25.50
per share;
(iii) as to 222,222 Option Shares, in the
event that for any period of thirty (30) consecutive
trading days ending prior to the Option Expiration
Date, the average of the closing prices of the
Company's publicly traded Common Stock, as reported
on The Nasdaq Stock Market or any other national
securities exchange, shall equal or exceed $34.00 per
share;
(iv) if the Company shall effect a sale of
all or substantially all of the shares of the capital
stock or assets of the Company to any unaffiliated
third party, whether by merger, consolidation, stock
sale, asset sale or like transaction; or
(v) if the Employee's employment pursuant to
this Agreement is terminated by the Company for
reasons other than "for cause" or pursuant to Section
2(b)(i) of this Agreement.
(c) Termination of Options. Options not previously
vested and immediately exercisable pursuant to their terms shall immediately
terminate:
(i) if the Employee's employment with the
Company shall terminate "for cause";
(ii) if, for any reason other than a breach
by the Company of its obligations to the Employee
hereunder, prior to the expiration of the Term of
this Agreement, the Employee shall resign or
otherwise voluntarily terminate (except arising from
constructive termination) his employment with the
Company or any other member of the Compass Group, and
shall not thereafter continue to devote at least
seventy-five (75%) percent of his business and
professional time as a consultant to the Compass
Group; or
(iii) on the Option Expiration Date.
(d) Assignment of Options. Subject to the limitations
on transfer of ISOs as provided in the 1997 Plan, the Options may only be
transferred, assigned or otherwise disposed of by the Employee to the extent
they have become vested and are then immediately exercisable into Option Shares;
provided that the Employee shall have the right to assign all or any portion of
his Options which are not ISOs to any member of his family; provided, further,
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that any such permitted assignee shall execute a joinder or similar agreement
with the Company agreeing to be bound by all of the terms and conditions of this
Section 3.5.
(e) Reservation of Option Shares; Registration of
Options. The Company hereby covenants and agrees to:
(i) take all steps necessary and appropriate
to keep a sufficient number of Option Shares reserved
for issuance upon exercise of the Options; and
(ii) to the extent that the same have vested
and are then currently exercisable in accordance with
this Agreement, Company shall, at its sole cost and
expense, include the Options and underlying Option
Shares in any one or more Registration Statements on
Form S-8 filed by Company with the SEC to register
stock options for any executive officers, directors
or key employees of Company or any of its
subsidiaries.
(f) Cashless Exercise. The Employee shall have the
right to exercise his Options upon vesting pursuant to a "cashless" exercise.
Pursuant to such cashless exercise, the exercise price for such Option Shares
shall be paid by the Company's withholding of a number of Option Shares with an
aggregate fair market value equal to the aggregate exercise price.
Example: By way of example, if 74,074 Options shall
have vested at an exercise price of $9.00 per share and the closing price of the
Company's publicly traded Common Stock shall be $18.00 per share, the Employee
shall, upon exercise of all 74,074 vested Options, receive 37,037 shares of
Common Stock, with the remaining 37,037 shares being withheld by the Company as
payment of the aggregate exercise price.
4. Vacation.
The Employee shall be entitled to take, from time to time,
normal and reasonable vacations with pay, consistent with the Company's standard
policies and procedures in effect from time to time, at such times as shall be
mutually convenient to the Employee and the Corporations, and so as not to
interfere unduly with the conduct of the business of the Corporations.
5. Restrictive Covenants.
5.1 The Employee hereby acknowledges and agrees that (i) the
business contacts, customers, suppliers, technology, product designs and
specifications, know-how, trade secrets, marketing techniques, promotional
methods and other aspects of the business of AB Plastics are and will be of
value to AB Plastics and the Company, and have provided AB Plastics and the
Company with substantial competitive advantage in the operation of its business,
and (ii)
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the Employee has and will continue to have detailed knowledge and possesses and
will possess confidential information concerning the business and operations of
AB Plastics and the Company.
5.2 Unless otherwise approved in writing by Company or its
Chairman of the Board after full disclosure by the Employee to the Board of all
relevant facts and circumstances, the Employee shall not, directly or
indirectly, for himself or through or on behalf of any other person or entity,
at any time during the "Restrictive Period" (as defined in paragraph (b) below):
(a) divulge, transmit or otherwise disclose or cause
to be divulged, transmitted or otherwise disclosed, any clients or customer
lists, technology, know-how, trade secrets, marketing techniques, contracts or
other confidential or proprietary information of the Company or AB Plastics 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 (i) the information, and its
relevance in the applicable instance, is a matter of common knowledge or public
record, (ii) the information, and its relevance in the applicable instance, is
generally known in the industry, (iii) the information is disclosed to Employee
after termination of his employment by another person not prohibited from making
such disclosure, (iv) the information is required to be disclosed by law
pursuant to court order or subpoena, or (v) the Employee can demonstrate that
such information, and its relevance in the particular instance, 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
(b) unless the Employee's employment with the Company
shall be terminated by reason of a Non-Cause Termination, at any time during the
period commencing on the Effective Date and continuing through and including the
date which shall be three (3) years following the voluntary resignation by the
Employee of his employment with the Company or his termination by the Company
"for cause," but in no event longer than 12 calendar months following the end of
the initial Term (the "Restrictive Period"), invest, carry on, engage or become
involved, either as an employee, agent, advisor, officer, director, stockholder
(excluding ownership of not more than 5% 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 or any of its Subsidiaries,
affiliates, successors or assigns) which derives 15% or more of its consolidated
revenues from the manufacture and sale in the western United States (comprised
of the states of California, Arizona, Oregon and Washington) of custom
injection-molded plastics products for original equipment manufacturers of
televisions, computers and other consumer electronics products (the "Company
Business"), or which engages in any other business substantially similar to and
directly competitive with the Company Business.
5.3 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
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by the Company and/or AB Plastics 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 or AB Plastics (as the case may be), on demand from time to
time, cash amounts equal to any and all gross revenues derived by the Employee
or his affiliate(s), directly or indirectly, from any and all 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 Section 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.
5.4 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 and/or AB Plastics
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
or AB Plastics (as the case may be) shall be entitled, in addition to the
liquidated damages provided for in Section 5.3 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 Section 5,
in any such case without the necessity of proving actual damages or posting
bond.
5.5 In the event of any dispute under or arising out of this
Section 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 and court costs) incurred in connection with
prosecuting or defending the subject dispute.
5.6 Upon the termination of the Employee's employment with the
Company, the Employee shall immediately surrender and deliver to the Company all
notes, drawings, diagrams, models, prototypes, lists, books, records, documents
and data of every kind or description, in whatever written or other media
(including, without limitation, electronic, tape, or other form of storage)
relating to or connected with the business contacts, client or customer lists,
technology, know-how, trade secrets, marketing techniques, contracts or other
confidential or proprietary information of the Company, its business, its
properties, or its customers referred to in Section 5.2(a) above.
6. Inventions; Intellectual Property.
6.1 The Employee shall promptly communicate to AB Plastics and
disclose to AB Plastics in such form as AB Plastics requests from time to time,
all drawings, sketches, models, records, information, details and data (in
whatever media the same may be created or recorded including, without
limitation, print, tape, electronic or otherwise) pertaining to all ideas,
processes, trademarks, inventions, improvements, discoveries and improvements,
product designs and specifications, and other intellectual property, whether
patented or unpatented, and
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copyrightable or uncopyrightable, made, conceived, developed, acquired or
implemented by the Employee, solely or jointly, during the period of his
employment hereunder, whether or not conceived during regular working hours
through the use of AB Plastics' time, material or facilities or otherwise (each
of the foregoing hereinafter referred to, individually and collectively, as a
"Development"). The Employee hereby assigns, transfers, conveys and sells to AB
Plastics all right, title and interest in and to all Developments, whether now
existing or created, and acknowledges that the same, whether now existing or
hereafter created, are the sole and exclusive property of AB Plastics for which
the Employee is being adequately compensated hereunder. At any time and from
time to time, upon the request of AB Plastics and at its expense, the Employee
will execute and deliver to AB Plastics any and all applications, assignments,
instruments, documents and papers, give evidence and do any and all other acts
which, in the opinion of AB Plastics, are or may be necessary or desirable to
document such transfer or to enable AB Plastics to file and prosecute
applications for and to acquire, maintain and enforce any and all patents,
trademark or tradename registrations, copyrights or other rights under United
States, foreign, state or local law with respect to any such Developments or to
obtain any extension, validation, reissue, continuance, division or renewal of
any of the same, in whole or in part, and otherwise to establish, protect and
enforce AB Plastics' rights in and to such intellectual property.
6.2 Notwithstanding anything to the contrary contained in this
Agreement, the foregoing Section 6.1 shall only apply and be effective to the
extent permitted under applicable law. In this regard, the provisions of Section
6.1 which provide that the Employee shall assign or offer to assign to AB
Plastics any of the Employee's rights in an invention shall not apply to any
invention for which no equipment, supplies, facility or trade secret information
of AB Plastics or the Company was used and which was developed entirely on the
Employee's own time, unless (a) the invention relates (i) directly to the
business of AB Plastics or the Company, or (ii) to AB Plastics' or the Company's
actual or demonstrably anticipated research or development, or (b) the invention
results from any work performed by the Employee for AB Plastics or the Company.
7. 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.
8. 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, one (1) day after being
sent by recognized overnight courier service will all charges prepaid or charged
to the sender's account, 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
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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.
9. General.
9.1 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 any 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.
9.2 The captions and section 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.
9.3 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
Connecticut applicable to contracts entered into and performed wholly within
Connecticut.
9.4 This Agreement shall be binding upon and shall inure to
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; provided, that
neither this Agreement nor any rights or obligations hereunder may be assigned
by any party without the express prior written consent of each other party.
9.5 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.
9.6 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.
9.7 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
13
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.
COMPASS PLASTICS & TECHNOLOGIES, INC.
By: /s/ Xxxxxxxx X.X. Xxxxxx
-------------------------
Xxxxxxxx X.X. Xxxxxx
Chairman of the Board
AB PLASTICS CORPORATION
By: /s/ Xxxxx X. Xxxxx
-------------------------
Xxxxx X. Xxxxx
President
EMPLOYEE:
/s/ Xxxxxxx X. Xxxxx
-------------------------
Xxxxxxx X. Xxxxx
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