EMPLOYMENT AGREEMENT
--------------------
THIS
EMPLOYMENT AGREEMENT
(hereinafter sometimes
called this "Agreement")
is made effective
as of the 1st day of
January in the year 2006 by and between
AMERICAN LOCKER
GROUP INCORPORATED, a Delaware corporation (hereinafter
sometimes called the "Company"), of the one part,
a
n
d
EDWARD F. RUTTENBERG,
an individual resident of Tarrant County, Texas
(hereinafter sometimes called the "Employee"), of the other
part.
Recitals
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WHEREAS, the Employee
has heretofore
served as Chairman,
President and
chief executive
and operating officer of the Company which, directly or
indirectly through one or more subsidiary corporations,
is engaged primarily
in
the business of the
production,
distribution and sale
of locker products
and
postal products (hereinafter sometimes called the "Company
Business");
WHEREAS, the
Employee has heretofore served the Company under the
provisions of the
Employment
Agreement dated November 18, 1999, as amended
(hereinafter sometimes
called the
"Prior Agreement"), which, by its terms,
expired on December 31, 2005, and desires to continue to serve the
Company as an
executive employee
thereof under the terms, and subject to the conditions,
of
this Agreement; and
WHEREAS, the Company
wishes to continue to
employ the Employee
under the
terms, and subject to the conditions, of this Agreement;
<PAGE>
Agreement
---------
NOW,
THEREFORE, for and in
consideration of the mutual covenants set forth
herein, the Company
and the Employee, each
intending to be legally bound, do
hereby agree as follows:
Section 1. Employment.
The Company hereby
agrees to continue to employ the
Employee and the Employee hereby agrees to continue to work for and
on behalf of
the Company under the
terms, and subject to
the conditions,
hereinafter
set
forth. The Company hereby releases the Employee and the Employee
hereby releases
the Company from any and all further obligations arising from, out of, or in
connection with the Prior Agreement.
Section 2. Term of
Employment. The term
of the employment of the Employee
by the Company hereunder (hereinafter sometimes called the "Employment
Term")
shall commence on the
date hereof and shall
continue indefinitely, subject,
however, to termination as provided in Section 11 hereof.
Section 3. Scope of Duties. During the Employment Term, the
Employee shall
serve as a
full-time employee of the Company and in the capacity of its
Chairman, President
and chief executive and chief operating officer and shall
perform such duties as the Borad of Directors of the Company shall reasonably
require for the conduct of the Company Business from time to time. During the
Employment Term, the Employee shall devote his skill, energy and
best efforts to
the faithful
discharge of his duties as a full-time
employee of the
Company,
and, in the performance of his services to the Company hereunder, the Employee
shall comply with and follow all lawful policies, standards, regulations and
directives as
established
from time to time by
the Board of Directors
of
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<PAGE>
the Company and shall report to such Board of Directors.
Section 4.
Representations and Warranties.
(a)
In order to induce the Employee to execute and deliver this Agreement
and perform the covenants made thereby hereunder, the Company represents and
warrants that (i) it is a corporation duly organized, validly existing and in
good standing
under the laws of the
State of Delaware, (ii) this Agreement
constitutes the legal, valid and binding obligation of the Company,
enforceable
against the Company in accordance with its terms, and (iii) the Company has the
absolute and unrestricted right, power and authority to execute and
deliver this
Agreement and to perform its obligations hereunder.
(b)
In order to induce the Company to execute and deliver this Agreement
and perform the covenants made thereby hereunder, the Employee represents and
warrants that (i) the Employee is under no contractual or other
restrictions or
obligations which limit the performance of his obligations
hereunder or prohibit
or limit the use by the Employee of any information which directly
or indirectly
relates to the Company
Business or the services rendered by the Employee under
this Agreement, (ii)
this Agreement
constitutes the legal,
valid and binding
obligation of the Employee enforceable against the Employee in accordance
with
its terms, and (iii) the Employee has the absolute and unrestricted
right, power
and authority
to execute and deliver this Agreement and to perform his
obligations hereunder.
Section 5. Facilities
of the Company.
During the
Employment
Term, the
Company shall make
available for the use of the Employee in the performance of
his duties hereunder
office space and other
support facilities in
the central
office maintained in the vicinity of Grapevine, Tarrant County, Texas, for the
conduct of the Company
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<PAGE>
Business, reasonably suitable for such performance.
Section 6. Compensation. During the Employment Term, the
Company shall pay
to the Employee a base annual salary (hereinafter sometimes called
the "Salary")
in an amount no less than One Hundred Sixty Thousand Dollars
($160,000), payable
in periodic installments in accordance with the customary payroll
practices from
time to time adopted
by the Company for its
employees generally, subject to
deduction of any withholding, payroll and other taxes required to
be withheld or
deducted therefrom under applicable law.
Section 7. Bonus.
During the Employment
Term, the Employee may receive an
annual bonus
(hereinafter sometimes
called the "Bonus") if
the Stock Option -
Executive Compensation
Committee of the Board of Directors of the Company
recommends, and such
Board of Directors
authorizes the payment
of, the Bonus.
The Employee shall be deemed to have earned the Bonus in full on
the last day of
the fiscal year of the Company with respect to which the Bonus is
determined and
paid, regardless
of the date of
determination
or payment
of the Bonus,
the
amount of which, if
any, shall be
determined by such
Stock Option - Executive
Compensation Committee
and may be payable in cash, or partly in cash and partly
by the issue to the
Employee of shares of capital stock of the Company under
such terms, and
subject to such
conditions, as such
Stock Option -
Executive
Compensation Committee
may from time to time, in its discretion, impose. The
Bonus shall be payable
with respect to each
fiscal year of the Company during
the Employment Term
within the period of
seventy-five (75) days
following the
end of such fiscal year, subject to deduction of any
withholding,
payroll and
other taxes required to be withheld or deducted therefrom under applicable
law;
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provided, however,
that nothing contained
herein shall prohibit the prepayment
by the Company
during such fiscal
year in advance of a portion of the Bonus as
then estimated by the Company.
Section 8. Automobile.
During the
Employment
Term, the Company shall
provide to the Employee for his use, in the performance of his
duties hereunder,
at the cost of the Company, a suitable automobile leased by the Company
from a
third-party lessor, under standard terms and conditions; provided,
however, that
the Employee shall reimburse the Company for any personal use of
such automobile
in accordance with,
and subject to, the policies, standards, regulations and
directives as
established
from time to time by
the Board of Directors
of the
Company.
Notwithstanding the foregoing , nevertheless, in the event that
during
the Employment Term the Company shall no longer provide to the
Employee, for his
use hereunder, such
automobile,
the Salary payable to
the Employee
hereunder
during the Employment Term thereafter shall increase by an amount equal
to the
cost incurred by the Company for the lease of such automobile on an
annual basis
immediately prior to
the date when the
Company shall no
longer provide
such
automobile to the Employee hereunder.
Section 9. Other Benefits. During the Employment Term, the Employee shall
be entitled to participate in any and all fringe benefit and similar programs
maintained by the Company from time to time for its full-time
salaried employees
generally, including but not limited to pension, profit sharing,
life insurance,
hospitalization, and major medical programs.
Section 10. Employment
Expenses. The Company
shall reimburse the Employee
for any and all
reasonable travel and
other out-of-pocket
business expenses
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<PAGE>
incurred by the
Employee during the
Employment
Term in connection with his
employment under this
Agreement under and in
accordance with, and
subject to,
the policies, standards, regulations and directives,
including but not
limited
to the filing of expense reports, as established from time to time
by the Board
of Directors of the Company.
Section 11. Termination. The Employment Term shall terminate upon
the first
to occur of any of the events as follows:
(a) upon the death of the Employee;
(b) upon the
disability of the
Employee as referred to in Section
12(b) hereof;
(c) upon the
retirement of the
Employee as referred to in Section
12(c) hereof;
(d) for cause, as
defined hereafter in
this Section 11,
immediately
upon
notice from the Company to the Employee, or at such later time as
such
notice may specify;
(e) for good reason, as defined hereafter in this Section 11, upon
not
less
than thirty (30) days' prior notice from the Employee to the
Company;
or
(f) for any reason upon not less than one hundred eighty (180) days'
prior written notice
from the Company to the Employee or from the Employee
to
the Company, effective at any time after December 31, 2008.
For the purposes of
this Section
11, the phrase
"for cause" shall mean the
material breach
by the Employee of this Agreement, the appropriation (or
attempted
appropriation) by the Employee of a material business opportunity of
the Company, including
attempting to
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<PAGE>
secure or securing
any personal profit in connection with any transaction
entered into on behalf
of the Company, the misappropriation (or attempted
misappropriation) by
the Employee of any of the funds or other property of the
Company, or
the conviction of the Employee, his indictment for (or its
procedural equivalent), or his entering of a guilty plea,
or plea of no contest
with respect
to, a felony,
the equivalent thereof, or any other crime with
respect to which imprisonment is a possible punishment. For the
purposes of this
Section 11, the phrase "for good reason" shall mean the material
breach by the
Company of this Agreement, the assignment of the Employee,
without his
consent,
to a position,
responsibilities, or
duties of a materially
lesser status or
degree of responsibility than his position, responsibilities or duties at the
commencement of the Employment Term, or the relocation of the
central business
office of the Company
more than twenty (20)
miles outside of
Tarrant County,
Texas.
Section 12. Effects of
Termination. Effective
upon the termination of
the Employment
Term, the employment of the Employee hereunder and any
obligations of the
Employee under Section
3 hereof and any
obligations of the
Company hereunder shall terminate, except, however, that the Company shall be
obligated to pay to the Employee (or, in the event of the death of
the Employee,
to the personal representative of the estate of the Employee) only such
compensation as shall be provided in this Section 12 or in Sect
